The Balanced Scorecard Examination Investigation of Cause-and-Effect Relationships Assumtion
SURYA E.K. PAMBUDI, Prof. Rob van der Wal and Prof. M.W. Guah, PhD
Since the balanced scorecard was invented it has gained so much attention both from practitioners and academics due to its strategic use of non-financial measurement together with the conventional management accounting system, which is traditional financial metrics. What makes the balanced scorecard different from other strategic measurements is that it contains outcome measures and the performance drivers of outcome linked together in cause-and-effect relationships, making the performance measurement system a feed-forward control system (Kaplan and Norton, 1996). By utilizing the balanced scorecard in drawing a strategy map, it enables the company to create focus for the future instead of a simple measure of the past. The non-financial measures that complement the conventional financial measures allow the company to indentify the most important actions that lead the company to achieve the desired outcomes. The main objective for this paper is observing the relationship between perspectives within balanced scorecard, whether it is really a cause-and-effect relationship, or other kinds of links that hold. This study first discusses the fundamental information concerning the balanced scorecard and its cause-and-effect principle. The study then re-examines some of the Norreklits assumption (2000) related to the causal relationship. Finally, it discusses the alternative interpretation regarding the cause-and-effect relationship.
Kata Kunci : relationships Assumtion, balance Scorecard
