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.
Taking a pragmatic-constructivist position, analytical and empirical evidence was included on controllability to analyse the normative literature on the BSC.
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.
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.
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).
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).
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
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