TY - JOUR

T1 - Balanced scorecard and controllability at the level of middle managers

T2 - The case of unintended breaches

AU - Jakobsen, Morten

AU - Lueg, Rainer

PY - 2014/10/28

Y1 - 2014/10/28

N2 - Purpose - This paper aims to analyse how the inherent design of the Balanced Scorecard (BSC) violates the controllability principle. The management control literature provides convincing examples of actors who breach controllability without intention. This discussion was extended by the example of the BSC. This paper focusses on the breaches that occur when actors lack the awareness or the skills to re-enforce controllability. Design/methodology/approach - Taking a pragmatic-constructivist position, analytical and empirical evidence was included on controllability to analyse the normative literature on the BSC. Findings - It was found that the BSC causes several unintended breaches of the controllability principle at the level of middle managers, both ex ante (control rationale) and ex post (fairness rationale). These breaches are not only situational or induced by how managers in the field design a BSC. They appear to be inherent in the BSC due to the way Kaplan and Norton have conceptualised it. Practical implications - Practitioners are alerted that the intuitive appeal of popular management fashions such as the BSC covers their conceptual flaws. It was also proposed that failed implementations and dysfunctional applications can be due to the inherent characteristics of the concepts themselves. Originality/value - This paper contributes by uncovering the unintended violations of the controllability principle by the inherent characteristics. The authors suggest using our conceptual contribution to conduct empirical research on the issues of controllability and management control systems in general. Thereby, the theory-based discussion on the BSC is advanced (Nørreklit, 2000, 2003; Nørreklit et al., 2012a).

AB - Purpose - This paper aims to analyse how the inherent design of the Balanced Scorecard (BSC) violates the controllability principle. The management control literature provides convincing examples of actors who breach controllability without intention. This discussion was extended by the example of the BSC. This paper focusses on the breaches that occur when actors lack the awareness or the skills to re-enforce controllability. Design/methodology/approach - Taking a pragmatic-constructivist position, analytical and empirical evidence was included on controllability to analyse the normative literature on the BSC. Findings - It was found that the BSC causes several unintended breaches of the controllability principle at the level of middle managers, both ex ante (control rationale) and ex post (fairness rationale). These breaches are not only situational or induced by how managers in the field design a BSC. They appear to be inherent in the BSC due to the way Kaplan and Norton have conceptualised it. Practical implications - Practitioners are alerted that the intuitive appeal of popular management fashions such as the BSC covers their conceptual flaws. It was also proposed that failed implementations and dysfunctional applications can be due to the inherent characteristics of the concepts themselves. Originality/value - This paper contributes by uncovering the unintended violations of the controllability principle by the inherent characteristics. The authors suggest using our conceptual contribution to conduct empirical research on the issues of controllability and management control systems in general. Thereby, the theory-based discussion on the BSC is advanced (Nørreklit, 2000, 2003; Nørreklit et al., 2012a).

KW - Accountability and responsibility

KW - Balanced scorecards

KW - Performance measurement

KW - Pragmatic constructivism

KW - Qualitative research methodology

KW - Value drivers

KW - Management studies

UR - http://www.scopus.com/inward/record.url?scp=84926637062&partnerID=8YFLogxK

U2 - 10.1108/JAOC-03-2013-0023

DO - 10.1108/JAOC-03-2013-0023

M3 - Journal articles

AN - SCOPUS:84926637062

VL - 10

SP - 516

EP - 539

JO - Journal of Accounting and Organizational Change

JF - Journal of Accounting and Organizational Change

SN - 1832-5912

IS - 4

ER -