The Effects of Balanced Scorecard and Related Systems on Organisational Performance

Balanced Scorecard (BSC) performance reporting systems have become popular in recent times. This has been due to problems associated with traditional financial systems. The BSC reports performance information about four perspectives (learning and growth, internal business processes, customer, and financials) that, it is argued, have a cause and effect relationship from the first to the last perspective. There are related systems in practice that commonly have two additional perspectives to these four – social and environmental. Atkinson et al. (1997) have argued that the BSC “is among the most significant developments in management accounting” and that it “deserves intense research attention.” However, although these systems are an important development, research in the area has only just scratched the surface. This paper aims to make some contribution in that regard. An objective of this research is to (1) explore the dimensions of performance reporting in the BSC, (2) explore the dimensions of organisational performance, and (3) study the effects of (1) on (2). A possible problem with BSC performance reporting systems is that they may cause information/data/redundant cue (I/D/C) overload problems and thus detrimentally affect performance. A further research objective is to study this issue. Our study found 11 dimensions of performance reporting, two of (I/D/C) load/overload, and 13 of organisational performance. In general, BSC and related performance reporting systems are positively associated with organisational performance. I/D/C overload is negatively associated with performance although the effect is not strong