Development of a balanced scorecard: An integrated approach of Interpretive Structural Modeling (ISM) and Analytic Network Process (ANP)

Abstract

Purpose

The purpose of this paper is to propose an integrated qualitative and quantitative approach to the development of a balanced scorecard (BSC) for a real life case company KVIC (Khadi and Village Industries Commission, organic food sector, India).

Design/methodology/approach

In this paper the semi‐structured interviews with director, managers, professional consultant, review of published reports and observations made during research work are considered as basis.

Findings

This paper illustrates how the use of a mix approach of cause and effect diagram, Interpretive Structural Modeling (ISM) and Analytic Network Process (ANP) can address some of the shortcomings related to the development of BSC in the light of a real life case company KVIC (Khadi Village and Industry Commission, organic food sector India). The paper delivers a complete framework of BSC for the case company.

Research limitations/implications

The paper outlines the limitations of proposed approach in regard to validity of present logical relationships among various objectives of organization in the futuristic environment and indicates the need for a computer software system, which can improve the efficiency of proposed approach.

Practical implications

In the paper a number of case studies report the fact that companies have attempted to derive measures from strategy, based on cause‐and‐effect reasoning, but the claimed link between strategy and measures appeared weak in analysis (Malmi, 2001). The paper establishes the basis for integrating organization's strategic intent with the identification of performance measures and at large development of BSC.

Originality/value

The paper shows that present work demonstrates the use of an innovative approach to the development of performance measurement system at one end while to deliver a workable framework of balanced scorecard for a real life case company is the objective of the other end. The present work encapsulates the philosophy of strategy maps using a mix of quantitative and qualitative approach for a real life case.

Citation

Thakkar, J., Deshmukh, S.G., Gupta, A.D. and Shankar, R. (2007), "Development of a balanced scorecard: An integrated approach of Interpretive Structural Modeling (ISM) and Analytic Network Process (ANP)", International Journal of Productivity and Performance Management, Vol. 56 No. 1, pp. 25-59. https://doi.org/10.1108/17410400710717073