Rebalancing the Balanced Scorecard: A Sequel to Kaplan and Norton
Abstract
Despite the widespread support the Balanced Scorecard (BSC) has enjoyed since its introduction by Kaplan and Norton, (1992), the various modifications it has been subjected to (Kaplan and Norton, 1996; 1996a; 2001; 2004; 2008); Niven, 2006; 2008; Olve et al., 1999; Zingales and Hockerts, 2003) and the inroads it has made in the corporate world in its adoption and application (Neely et al, 2004; Johnson and Beiman, 2007; Bengtsson et al. 2000; (cf. Dabhilakar & Bengtsson 2002); Toivanen, 2001; Nielsen & Sorensen 2004), some critics have argued that BSC has failed to balance the interests of the stakeholders, (Gering and Mntambo (2000); that there has been little evidence indicating that its adoption results in improved financial performance, (Angel and Rampersad, 2005); that the cause-effect relationship touted by Kaplan and Norton (1996) is not established; that the great interest towards it is largely due to promotional rhetoric rather than substance as an innovative and practical theory based on sound or logical arguments (Norreklit, 2000; 2003) and that the cause-effect should not be the starting point for strategy scorecards in all circumstances, (Bukh and Malmi, 2001). This paper examines the various arguments that have been put forth in critique of the BSC and is presented in form of a sequel to Kaplan and Norton’s work. The author argues for the rebalancing the balanced scorecard in view of the insights presented by various critics.
Keywords: The balanced scorecard, learning and growth, financial perspective, customers, business processes, performance measures
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