Balanced Scorecard Implementation in SMEs: Addressing the Moderating Role of Environmental Uncertainty

Abstract

Originally developed as a performance measurement instrument, the balanced scorecard (BSC) has been successfully used by leaders in large organizations to implement their strategic initiatives. Very little research, however, has been conducted on the use of the BSC in small and medium enterprises (SMEs). These firms are particularly vulnerable to the external market and often lack the resources that their larger counterparts use to respond to and shape it. Grounded in contingency theory, an evaluation of the moderating role that environmental uncertainty plays in the relationship between BSC implementation and performance in SMEs points to the value of gathering accurate and timely information about emerging conditions that interact with management systems. Such relevant data can help business leaders identify business patterns, reduce uncertainty, guide personnel in recognizing opportunities for achieving scorecard targets, and ultimately align day‐to‐day processes and strategic efforts with organizational objectives. © 2016 Wiley Periodicals, Inc.

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