A Critical Analysis of the Article : "For Which Purposes Do Managers Use Balanced Scorecards?: an Empirical Study"

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1. Summary
Resulting from the constantly changing environment, the accounting information systems transform and renovate continuously, for instance, the development from traditional costing system to activity-based costing or the Balanced Scorecard (BSC) which is an up-to-date system that connects non-financial and financial performance measures to a company's overall strategy (Kaplan and Norton 1996). The article aims at demonstrating the specific purposes for which managers use the Balanced Scorecard, instead of simply measuring the adoption rates or the degree of BSC usage. Therefore, BSC usage at the individual management level is emphasized by the author. First, the author explores the purpose for which managers use the BSC. According to the author, the purpose for communicating the firm's strategy to the employees and helping implement that strategy are mainly at the organizational or business unit level. Thus, the author employs exploratory factor analysis to identify the purposes of BSC usage. Besides, data was collected from a survey administered in 19 Dutch firms which constitute 224 respondents from managers who in charge of the BSC in their departments. From the author's analysis, three different purposes of BSC usage are indicated, i.e. for decision-making and decision-rationalizing, for coordination of activities within the organizational unit, and for self-monitoring purposes. Second, the author identifies the drivers of BSC usage for different purposes. Three types of drivers are analyzed: (1) dimensions of evaluation style----in addition to Hopwood's instrument, namely, the dimensions of extent and manner, the three potential dimensions in control styles are identified: i.e. appropriateness of non-financial versus financial measures use, the appropriateness of qualitative versus quantitative measure use and the rigid versus flexible use of evaluations; (2) alternative controls used in the organizational unit----whether alternative controls...
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