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Examining the construct validity of the balanced scorecard using the multitrait–multimethod matrix

Performance Measurement and Management Control: Measuring and Rewarding Performance

ISBN: 978-0-7623-1479-9, eISBN: 978-1-84950-571-0

Publication date: 4 August 2008

Abstract

The Balanced Scorecard (BSC) proposes four dimensions to represent business performance: Financial, Customer, Innovation and Internal Business, and Learning and Growth. Surprisingly, little attention has been paid to the BSC as a valid construct representing performance. Despite surveys reporting that a growing number of firms use the BSC, little is known about the reliability and validity of the measures and dimensions it proposes. Validity problems impact on the importance and credibility allocated by management to certain BSC measures.

This study's objective is to empirically examine the construct validity of the BSC. Through a literature review and field study, a set of measures associated with all four BSC dimensions is selected. Next, survey research is conducted to examine the reliability of selected measures and the structure of BSC dimensions. Lastly, we examine the convergent and discriminate validity of the BSC's measures using the multitrait–multimethod (MTMM) matrix.

Results show that the BSC – with its four dimensions and related measures – represents a valid construct. This study responds to research calls on the importance of validating the BSC framework – and its associated measures – in order to enhance consistency on BSC research.

Citation

Boulianne, E. (2008), "Examining the construct validity of the balanced scorecard using the multitrait–multimethod matrix", Epstein, M.J. and Manzoni, J.-F. (Ed.) Performance Measurement and Management Control: Measuring and Rewarding Performance (Studies in Managerial and Financial Accounting, Vol. 18), Emerald Group Publishing Limited, Bingley, pp. 227-251. https://doi.org/10.1016/S1479-3512(08)18010-8

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited