An empirical investigation on the links within a sustainability balanced scorecard (SBSC) framework and their impact on financial performance

Purpose – This study aims to investigate the feasibility of integrating the social, environmental and innovation processes within the four-perspective sustainability balanced scorecard (SBSC) model by determining the extent of linkages between and within the four SBSC perspectives. Design/methodology/approach – A survey collected responses from senior management and middle management of large Australian companies. Findings – The findings support several positive significant associations. Direct associations are found between value-creating processes within the internal process perspective. These results support the feasibility of integrating environmental, social and innovation-orientated value-creating process into the internal process of the four-perspective SBSC model. The results also provide evidence about the extent to which direct or indirect associations exist between the four SBSC perspectives: first, direct association of human capital (learning and growth perspective) with value-creating processes (internal processes perspective); second, direct association of value-creating (internal processes perspective) with customer value (customer perspective); and third, direct and indirect associations of value-creating (internal processes perspective) with financial performance (FP; financial perspective). Research limitations/implications – Several limitations are acknowledged related to cross-sectional data, senior and middle managers’ perceptions and assumptions underpinning structural equation modelling. Practical implications – The implications for practice from this study concern how organisational management should relate to their stakeholders while providing value in their FP. Social implications – These associations reflect the influence of stakeholders’ recognised needs on process and product innovation. These needs highlight the benefits of focusing on future-orientated environmental budgets and ongoing employee training that lead to customer value and FP. Originality/value – This is an initial in-depth study of a four-perspective SBSC model that provides an effective means of integrating social, environmental and innovation processes within the traditional four SBSC perspectives