20 years of studies on the balanced scorecard: Trends, accomplishments, gaps and opportunities for future research

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Abstract

Robert Kaplan and David Norton introduced the Balanced Scorecard in their 1992 Harvard Business Review article. 2012 marks 20 years since that article. This anniversary has motivated me to review the state of research on the balanced scorecard, to highlight gaps in that research and to outline some ideas for further research. To this end, I reviewed 114 articles published in 25 accounting journals and 67 articles in business and management journals in the period 1992–2011. The findings of this literature review are presented in three parts. First, the reviewed articles are categorised by topics, research settings, theories, research method, and primary data analysis techniques. Second, the contributions of research to the field and the lessons learned from these studies are discussed. Third, knowledge gaps in existing balanced scorecard research are identified, leading to consideration of several ideas for future research. The last section offers my final remarks.

Introduction

2012 marks 20 years since the first publication of the balanced scorecard article by Robert Kaplan and David Norton in the January–February issue of Harvard Business Review. After a year's research activity inside 12 companies, Kaplan and Norton (1992) disseminated their findings through a performance measurement framework which they developed and called the Balanced Scorecard. Kaplan and Norton's original version of the balanced scorecard expanded on mere financial performance measures and incorporated operational performance measures categorised by three perspectives: customer satisfaction, internal business processes, and innovation and learning. Following that article, and examining more than 300 organisations, Kaplan and Norton produced a series of articles (Kaplan, 2009, Kaplan and Norton, 1993, Kaplan and Norton, 1996a, Kaplan and Norton, 1996b, Kaplan and Norton, 2000, Kaplan and Norton, 2001a, Kaplan and Norton, 2001b, Kaplan and Norton, 2004a, Kaplan and Norton, 2006a, Kaplan and Norton, 2008a) and several books (Kaplan and Norton, 1996c, Kaplan and Norton, 2001c, Kaplan and Norton, 2004b, Kaplan and Norton, 2006b, Kaplan and Norton, 2008b) to advance the knowledge base of the balanced scorecard. About 15 years ago, in a review essay, Atkinson, Balakrishnan, Booth, Cote, Grout, Mali, Roberts, Ulan, & Wu noted that “the balanced scorecard is among the most significant developments in management accounting and thus, deserves intense research attention” (1997, p. 94). In its 20 years of existence the balanced scorecard has generated enormous interest in academic and industrial communities (Barnabe and Busco, 2012, Kraus and Lind, 2010, Malina et al., 2007, Norreklit et al., 2012, Salterio, 2012).

The 20th anniversary of the balanced scorecard provides the opportunity to explore the status of related research from 1992 to 2011. Several notable prior reviews1 of the management accounting research (e.g., Chenhall, 2003, Chenhall, 2009, Chenhall and Smith, 2011, Hesford et al., 2009, Langfield-Smith, 2008, Merchant and Otley, 2007, Selto and Widener, 2004, Shields, 1997, Wagenhofer, 2006) have provided useful insights into the role of management accounting and performance measurement systems in organisations, yet these reviews have not taken the balanced scorecard as their primary focus. My aim here is to expand upon these previous reviews and to contribute to the performance management research literature in the following way. First, I tabulate, review, and synthesise studies related to the balanced scorecard published in accounting, business and management journals. Using this summative account of published research, I discuss how prior balanced scorecard studies have contributed to the field. Next, I identify gaps in published research, which suggest some opportunities for future research. In the final section, I offer my conclusion. My review in this article will provide future balanced scorecard researchers with much food for thought, leading to a “new” knowledge base for the balanced scorecard research field.

Section snippets

Review approach

In this review, I used 25 highly ranked2

Conceptual foundations of the balanced scorecard

In the late 1980s, many scholars expressed concern about traditional performance measures that focused solely on financial metrics (Johnson and Kaplan, 1987, Kaplan and Norton, 1992, Lynch and Cross, 1991). Scholars prior to Kaplan and Norton (e.g., Berliner and Brimson, 1988, Bromwich and Bhimani, 1989, Johnson, 1988, McNair et al., 1990) criticised such measures for encouraging managers to focus on short-term financial results while sacrificing long-term prospects. These and other scholars

Balanced scorecard studies published in accounting journals

Here, I examine the 114 articles published in 25 accounting journals that deal with the balanced scorecard.

Balanced scorecard studies published in business and management journals

Business and management research has also established a strong tradition in researching balanced scorecard practices in various settings. As with the accounting studies, in this section I present a review of balanced scorecard articles published by business and management journals.

Knowledge gained from existing studies on the balanced scorecard

This section identifies and discusses several themes emerged from this review. Appendix C, Appendix D summarise the key issues addressed in some notable articles published in leading journals. These articles were selected on the basis of their citation in the literature (this list is merely illustrative, not exhaustive).

The debate, knowledge gaps and recommendations for further studies

Despite its usefulness, the balanced scorecard has also received considerable criticism. For example, Butler, Letza, and Neale (1997) considered its concept to be too general, pointing out that it might not fit in an organisation's culture and could ignore corporate missions. In a similar vein, Laitinen (2003) found the selection of the four basic dimensions and their interrelationships problematic, because the measures in practical applications appeared to connect loosely to each other and

Final remarks

The aim of this article has been to explore the status of research on the balanced scorecard with a view to identify gaps and to sketch ideas for future research. Reviewing 114 articles published in 25 accounting journals and 67 articles in business and management journals over a 20-year period, this article provides an overview of the balanced scorecard implementation and usage, theoretical orientations, and methods of investigation and analysis.

From a positive stance, many quantitative

Acknowledgements

An earlier version of this paper was presented as a keynote speech at the 2011 New Zealand Management Accounting Conference (Wellington, New Zealand, 17–18 November). I am grateful to Paul Andon, Jan Bell, David Brown, Robert Chenhall, Mandy Cheng, Clinton Free, Kerry Humphreys, Steven Salterio, Mike Shields, Ken Trotman, and research seminar participants at La Trobe University (Melbourne, Australia), University of New South Wales (Sydney, Australia), University of Technology Sydney

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