Balanced scorecard and causal model development: preliminary findings

Abstract

Purpose The purpose of this research is to show a preliminary examination of the effects of the development of the causal model of the strategy in the implementation of the Balanced Scorecard. Studies on the Balanced Scorecard adoption show that many organizations that adopted the Balanced Scorecard did not develop a causal model of their strategy. The study seeks to examine the differences in Balanced Scorecard implementation of adopters who developed a causal model of their strategy and those who did not. Design/methodology/approach Mailed survey was used to collect the data. Findings It was found that Balanced Scorecard adopters who did not develop a causal model of their strategy experienced specific problems more than those who developed a causal model of their strategy. It affected the outcomes and ease of implementation of the Balanced Scorecard. Research limitations/implications The small number of responses obtained in this study due to the relatively recent adoption of the Balanced Scorecard in Malaysia limits the generalizability of this study. However, it does provide insights on the hypotheses to be examined in future studies. Practical implications The findings of this survey suggest that the successful implementation of the Balanced Scorecard requires that organizations develop and articulate a causal model of their strategy. Originality This study is probably the first attempt to examine the role of causal model development in effective implementation of the Balanced Scorecard.

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