The Relationship of Organizational Culture to Balanced Scorecard Effectiveness

The Balanced Scorecard (BSC), developed by Robert S. Kaplan and David P. Norton in the early 1990s, is a powerful management tool for assisting an organization to focus on its strategy and establish and track performance against objectives in pursuit of that strategy. There have been many examples of successful implementations of the BSC. However, the literature indicates that the vast majority of BSC implementations fail. It is proposed that organizational culture is a mediating factor which contributes to success or failure in BSC implementations. Further, organizational learning, a driving force behind successful BSC implementations, is mediated by organizational culture as well. This dissertation reports on an empirical study to investigate the relationship between organizational culture and Balanced Scorecard effectiveness. This study involved collecting survey data from employees working in the various departments of a large County government organization. The survey instrument employed included a self-assessment for BSC effectiveness as well as an organizational culture assessment based on the Denison Organizational Culture Survey Instrument (OCSI). Organizational Learning was measured by the Organizational Learning index included in the OSCSI. The survey results show that each of the four organizational traits - Involvement, Consistency, Adaptability, and Mission - as measured by the Denison OCSI are significantly related to BSC effectiveness. Similarly, organizational learning, as measured by the Organizational Learning index, is significantly related to BSC effectiveness. Accordingly, it is concluded that an interrelationship among organizational culture, organizational learning, and BSC effectiveness exists