The Balanced Scorecard as a Strategy-Evaluation Tool: The Effects of Responsibility and Causal-Chain Focus

This paper uses an experiment to examine whether involvement in scorecard implementation can mitigate the effects of motivated reasoning when the scorecard is framed as a strategic tool, rather than merely as a balanced set of measures. Psychological research on motivated reasoning suggests that managers will evaluate and interpret data in ways consistent with their preferences, increasing the tendency for managers to arrive at conclusions that are consistent with their preferences (Kunda 1990). Accordingly, results show that managers who are involved in selecting strategic initiatives perceive those initiatives as having been more successful than managers who are not involved in the strategy-selection process (holding constant actual scorecard performance). The effects of motivated reasoning are mitigated by giving managers responsibility for the selection of scorecard measures; but this mitigation only occurs if the balanced scorecard is framed as a hypothesized causal chain of performance, rather than as the classic four separate balanced-scorecard performance perspectives.