Journal article
Reducing conflict in balanced scorecard evaluations
Accounting, organizations and society, Vol.32(4), pp.363-377
2007
Handle:
https://hdl.handle.net/2376/112883
Abstract
Recent studies [Ittner, C., & Larcker, D. (2003). Coming up short on nonfinancial performance measurement.
Harvard Business Review(November) 88–95; Ittner, C., Larcker, D., & Randall, T. (2003b). Performance implications of strategic performance measurement in financial services firms.
Accounting,
Organizations and Society,
28, 715–741] provide evidence of companies’ tendency to overlook the validity of the causal links between driver and outcome measures of the balanced scorecard (BSC), and to ignore the underlying strategically-linked causal business models. It is posited that this propensity leads to conflict between top management and divisional managers because of the failure of the former to evaluate and consider strategy effectiveness in performance evaluation. The present study hypothesizes that individuals in the top-manager role do not take into account strategy effectiveness unless they are explicitly required to do so. In contrast, individuals in the store-manager role automatically consider the quality of strategy without being prompted to do so. A study using 63 evening MBA students provides support for the hypotheses. The results have implications for the study of evaluation biases in BSC as well as in other performance measurement systems, and for devising means to mitigate them.
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Details
- Title
- Reducing conflict in balanced scorecard evaluations
- Creators
- Bernard Wong-On-Wing - Department of Accounting, Washington State University, P.O. Box 644729, Pullman, WA 99164-4729, USALan Guo - Department of Accounting, Washington State University, P.O. Box 644729, Pullman, WA 99164-4729, USAWei Li - Department of Accounting, Kent State University, Kent, OH 44242-0001, USADan Yang - Southwestern University of Finance and Economics, 55 Guanghuacun, Chengdu 610074, Sichuan, China
- Publication Details
- Accounting, organizations and society, Vol.32(4), pp.363-377
- Academic Unit
- Accounting, Department of
- Publisher
- Elsevier Ltd
- Identifiers
- 99900547585201842
- Language
- English
- Resource Type
- Journal article