Exploring the blurred nature of strategic linkages across the BSC: The relevance of "loose" causal relationships. Issue 4 (28th October 2014)

• Record Type: Journal Article
• Authors: Francioli, Francesca; Cinquini, Lino
• Editors: Mitchell, Falconer; Nørreklit, Hanne
• Is Part Of: Journal of accounting & organizational change. Volume 10:Issue 4(2014)
• Page Start: 486
• Page End: 515
• Publication Date: 2014-10-28
• Subjects: Management control systems -- Balanced scorecard -- Strategic performance management systems -- Banking industry -- Causal relationships; Organizational change -- Periodicals; Accounting -- Periodicals; 658.1511
• DOI: 10.1108/JAOC-02-2013-0016
• Languages: English
• ISSNs: 1832-5912

Abstract

Abstract : Purpose: – The research aims at addressing the way in which linkages based on qualitative causality could be preferred in designing a balanced scorecard (BSC), by applying a cost-benefit judgment with respect to the complexity of defining strong, statistically reliable cause-and-effect relations among performance measures. Design/methodology/approach: – The authors review the way in which cause-and-effect relations across the BSC have been developed based on a case study of BSC implemented in an Italian bank collecting data by in-depth interviews and company's internal archives. Findings: – The research reveals how the ambiguity, or "blurred nature", of strategic linkages is recognized in the empirical setting of an bank, facing a highly uncertain and complex environment and how the orthodox tools of strategy maps and explicit cause-and-effect linkages prescribed by the theoretical literature are avoided by the human actors. Despite these omissions, the BSC is nevertheless effective. As the case shows, it generated a "democracy" where individuals and departments communicate, commit and collaborate in an effort to implement strategy. The research also shows the role of the BSC in heightening the importance and awareness of performance evaluation among the actors. Practical implications: – The research provides practitioners with insights into how to design and manage cause-and-effect relationships in BSC. In particular, evidence is provided that finality linkages in BSC may be successful in use and predictive capabilities, according with expectations and purposes of the organization's "climate of control", in a context in which the cost-benefit philosophy in implementing BSC is followed. Originality/value: – The paper addresses an issue of practical relevance in the implementation of BSC showing a discrepancy between theoretical and practical meaning of causality. Besides the research highlights, the extent to which linkages across the BSC perspectives (and related measures and variables) can only be based on individual assumptions about the means to an end and based on qualitative assertions (finality).