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The Balanced Scorecard: Judgmental Effects of Performance Measures Linked to Strategy
Journal article   Peer reviewed

The Balanced Scorecard: Judgmental Effects of Performance Measures Linked to Strategy

Rajiv D. Banker, Hsihui Chang and Mina J. Pizzini
The Accounting review, v 79(1), pp 1-23
01 Jan 2004

Abstract

Balanced scorecards Clothing Corporate strategies Customer satisfaction Marketing strategies Means tests Performance metrics Retail stores Retail trade Sales growth
The balanced scorecard provides a framework for selecting multiple performance measures that supplement traditional financial measures with operating measures of customer satisfaction, internal processes, and learning and growth activities. An essential aspect of the balanced scorecard lies in its articulation of the linkage between performance measures and business strategy. This study conducts an experiment to assess how individuals' evaluations of the performance of business unit managers depend on strategically linked performance measures of a balanced scorecard. Statistical test results indicate that performance evaluations are influenced by strategically linked measures more than non-linked measures only when evaluators are provided detailed information about business unit strategies. The results also confirm Lipe and Salterio's (2000) finding that evaluators rely more on common measures than on unique measures. Evaluators rely more on strategically linked measures than on common measures when they are provided information on strategic linkages, but the reverse relation holds when they are not.

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291 citations in Scopus

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Collaboration types
Domestic collaboration
Web of Science research areas
Business, Finance
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