Performance consequences of balanced scorecard adoptions: Claim for large-scale evidence and propositions for future research

Purpose – Since the introduction of the concept of the balanced scorecard (BSC) in the early 1990s, researchers and practitioners have been discussing its impact on managerial and organizational performance. However, there are still few empirical results available in favor of the effectiveness of the BSC to justify its high rate of diffusion among companies. The central aim of this paper is to substantiate the claim for more empirical studies on performance implications of BSC use and to derive recommendations how to conduct such research effectively. Approach – We review existing research on costs and benefits of the BSC in order to pinpoint to the necessity to do more large-scale empirical work on this topic. Moreover, we discuss important methodological challenges researchers are confronted with when analyzing performance consequences of the system. Findings – Empirical studies have found both, evidence in favor and against the BSC by investigating specific elements constituting the system. However, no large-scale empirical evidence exists so far that unambiguously shows that companies using a fully developed BSC outperform non-users. We argue in the paper that this might be explainable by the holistic nature of the concept and particularly the methodological difficulties associated with analyzing its effects on performance. Contribution – The paper is supposed to motivate researchers to conduct more large-sale empirical studies in the area and offers recommendations how to effectively design such studies. It emphasizes the opportunities structural equation modeling offers to investigate possible indirect effects and moderating effects stemming from the BSC.