Abstract:
In recent years academic literature has given increased consideration to the adoption and use
of performance measurement systems, notably the Balanced Scorecard (BSC). However,
there has been limited empirical investigation into the particular benefits that result from the
use of the BSC (Ittner & Larcker, 1998). Furthermore, while the normative literature has seen
a shift in the conceptualisation of the BSC from an information system towards one of
strategic control, little is known about whether these normative developments are being
mirrored in practice and if so, are these developments reflected in benefits that BSCs produce.
This study empirically examines how the BSC has been applied in practice and whether
different BSC designs result in varying performance outcomes. Data is from a cross sectional
survey, which provided a sample of92 Australian firms using BSC. It is hypothesised that the
BSC provides greater benefits when I) cause and effect logic is used between measures 2) its
non-financial measures are tied to compensation and 3) it is implemented at multiple levels
within the organisation. Results support the first proposition, although cause and effect logic
appears to be more important if the BSC is tied to compensation. These results are discussed,
and implications for practice and future research are presented.
