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Book ChapterDOI

Putting the balanced scorecard to work

01 Sep 1993-Harvard Business Review (HARVARD BUSINESS REVIEW)-Vol. 71, Iss: 5, pp 134-142
TL;DR: The balanced scorecard as discussed by the authors shows four different perspectives in which to choose measures that can redefine a company's processes measurement system so short term and long term objectives are in balance with each other.
Abstract: In this article Robert S. Kaplan and David P. Norton report on the Balance Scorecard. Before the Balanced Scorecard companies have used various measurement systems that have made incremental improvements and concentrated mostly on the company's financials. The Balanced Scorecard shows you four different perspectives in which to choose measures that can redefine a company's processes measurement system so short term and long term objectives are in balance with each other. When using the Balanced Scorecard a company is no longer needs to worry about small incremental improvements, but a new processes measurement system that will allow a company to get where it wants to go.
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Journal ArticleDOI
TL;DR: Following a comprehensive review of the literature, proposes a research agenda that focuses on the process of performance measurement system design, rather than the detail of specific measures.
Abstract: The importance of performance measurement has long been recognized by academics and practitioners from a variety of functional disciplines. Seeks to bring together this diverse body of knowledge into a coherent whole. To ensure that the key issues are identified, focuses on the process of performance measurement system design, rather than the detail of specific measures. Following a comprehensive review of the literature, proposes a research agenda.

3,290 citations

Journal ArticleDOI
TL;DR: The authors developed a conceptual framework of the marketing-finance interface and discussed its implications for the theory and practice of marketing, and proposed that marketing is concern, concern, and concern.
Abstract: The authors develop a conceptual framework of the marketing–finance interface and discuss its implications for the theory and practice of marketing. The framework proposes that marketing is concern...

1,900 citations

Journal ArticleDOI
TL;DR: The Balanced Scorecard as mentioned in this paper was developed to measure both current operating performance and the drivers of future performance, and it has been used to measure customer, process, and employee satisfaction.
Abstract: The Balanced Scorecard was developed to measure both current operating performance and the drivers of future performance. Many managers believe they are using a Balanced Scorecard when they supplement traditional financial measures with generic, non-financial measures about customers, processes, and employees. But the best Balanced Scorecards are more than ad hoc collections of financial and non-financial measures. The objectives and measures on a Balanced Scorecard should be derived from the business unit's strategy. A scorecard should contain outcome measures and the performance drivers of those outcomes, linked together in causeand-effect relationships.

1,606 citations

Journal ArticleDOI
TL;DR: It is concluded that knowledge of the relationship between MCS and strategy is limited, providing considerable scope for further research.
Abstract: This paper reviews research that studies the relationship between management control systems (MCS) and business strategy. Empirical research studies that use contingency approaches and case study applications are examined focusing on specific aspects of MCS and their relationship with strategy. These aspects include cost control orientation, performance evaluation and reward systems, the effect of resource sharing, the role of MCS in influencing strategic change and the choice of interactive and diagnostic controls. More contemporary approaches to the relationship between performance measurement systems and strategy are also considered. It is concluded that our knowledge of the relationship between MCS and strategy is limited, providing considerable scope for further research. A series of future research questions is presented.

1,313 citations


Cites background from "Putting the balanced scorecard to w..."

  • ...Effectiveness has been presented as a necessary dependent variable in contingency research as it provides the means for determining the appropriate fit between MCS and organizational variables (Otley, 1980; Merchant & Simons, 1986). However, Simons (1987a) defined firm performance as the dependent variable, whereas in Merchant (1985b) it was an independent variable. Effectiveness can be considered an independent variable (Otley & Wilkinson, 1988). For example, the adoption of certain controls or of a particular strategy might be in response to low (or high) effectiveness. However, in this situation what is the appropriate dependent variable? And how can “the proper fit” between organizational aspects and strategy be assessed if there is reverse causation? While Simons (1987a) and Merchant (1985b) defined effectiveness as financial performance, it can be argued that this is not always an appropriate definition....

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  • ...Effectiveness has been presented as a necessary dependent variable in contingency research as it provides the means for determining the appropriate fit between MCS and organizational variables (Otley, 1980; Merchant & Simons, 1986). However, Simons (1987a) defined firm performance as the dependent variable, whereas in Merchant (1985b) it was an independent variable....

    [...]

Journal ArticleDOI
TL;DR: The change in hospital funding with diagnosis related groups (DRG), medical advances as well as demographic changes will call for new quantitative and qualitative standards imposed on German hospitals.
Abstract: The change in hospital funding with diagnosis related groups (DRG), medical advances as well as demographic changes will call for new quantitative and qualitative standards imposed on German hospitals. Increasing costs and competition in the health care sector requires new and innovative strategies for resource management. Today's policy is mainly defined by rationing and intensified workload. The introduction of DRGs will presumably further constrict management perspectives on pure financial aspects. However, to ensure future development, compassionate services and continued existence of hospitals, a balance of seemingly conflicting perspectives, such as finance, customer, process, learning and growth are of utmost importance. Herein doctors and nurses in leading positions should play a key role in changing management practice. For several years the balanced scorecard has been successfully used as a strategic management concept in non-profit organizations, even in the health care sector. This concept complies with the multidimensional purposes of hospitals and focuses on policy deployment. Finally it gives the opportunity to involve all employees in the original development, communication and execution of a balanced scorecard approach.

1,258 citations