Communicating and Controlling Strategy: An Empirical Study of the Effectiveness of the Balanced Scorecard

Journal of Management Accounting Research - Tập 13 Số 1 - Trang 47-90 - 2001
Mary A. Malina1, Frank H. Selto2,3
1a Naval Postgraduate School.
2b University of Colorado at Boulder.
3c University of Melbourne.

Tóm tắt

This paper reports evidence on the effectiveness of the Balanced Scorecard (BSC) as a strategy communication and management-control device. This study first reviews communication and management control literatures that identify attributes of effective communication and control of strategy. Second, the study offers a model of communication and control applicable to the BSC. The study then analyzes empirical interview and archival data to model the use and assess the communication and control effectiveness of the BSC. The study includes data from multiple divisions of a large, international manufacturing company. Data are from BSC designers, administrators, and North American managers whose divisions are objects of the BSC. The study accumulates evidence regarding the challenges of designing and implementing the BSC faced by even a large, well-funded company. These findings may be general-izable to other companies adopting or considering adopting the BSC as a strategic and management control device.Data indicate that this specific BSC, as designed and implemented, is an effective device for controlling corporate strategy. Results also indicate disagreement and tension between top and middle management regarding the appropriateness of specific aspects of the BSC as a communication, control, and evaluation mechanism. Specific results include evidence of causal relations between effective management control, motivation, strategic alignment, and beneficial effects of the BSC. These beneficial effects include changes in processes and improvements in both the BSC and customer-oriented services. In contrast, ineffective communication and management control cause poor motivation and conflict over the use of the BSC as an evaluation device.

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Journal of Management Accounting Research

Tập 13 Số 1

47-90

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