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Balanced scorecard and controllability at the level of middle managers – the case of unintended breaches

Morten Jakobsen (Department of Economics and Business, School of Business and Social Sciences, Aarhus University, Aarhus, Denmark)
Rainer Lueg (Department of Economics and Business, School of Business and Social Sciences, Aarhus University, Aarhus, Denmark)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 28 October 2014

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Abstract

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).

Keywords

Acknowledgements

The authors are thankful for the many helpful comments on this work from the editor Hanne Nørreklit, and the two anonymous reviewers. Early ideas of this paper have been presented at the workshop of the Research Group for Actor-Reality Construction at NHH in Bergen (Jakobsen and Lueg, 2012).

Citation

Jakobsen, M. and Lueg, R. (2014), "Balanced scorecard and controllability at the level of middle managers – the case of unintended breaches", Journal of Accounting & Organizational Change, Vol. 10 No. 4, pp. 516-539. https://doi.org/10.1108/JAOC-03-2013-0023

Publisher

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Emerald Group Publishing Limited

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