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Analysis of balanced scorecard usage by private companies

Divesh Sharma (School of Accountancy, Coles College of Business, Kennesaw State University, Kennesaw, Georgia, USA)
Umesh Sharma (Waikato Management School, University of Waikato, Hamilton, New Zealand)

Pacific Accounting Review

ISSN: 0114-0582

Article publication date: 20 March 2020

Issue publication date: 4 August 2021




The purpose of this paper is to examine the factors related to the use of the balanced scorecard (BSC) by private companies. Specifically, the authors examine how foreign ownership, focus on a global market beyond the local company’s geographic region and other sophisticated management accounting practices (MAPs) (activity-based costing, just-in-time and total quality management) are related to the use of the BSC.


The paper takes a contingency theoretic perspective. The data in this study is based on responses to a survey questionnaire that was mailed to 300 non-listed private companies in Singapore. A total of 135 responses were received, but 23 were incomplete, and thus, rendered unusable. Therefore, the final sample for the study is 112 private companies yielding a 37.3 per cent response rate that is considered high for survey research.


The authors find significant associations between the use of BSC and foreign ownership, focus on a global market and other sophisticated MAPs. The authors find that foreign ownership and a global market focus are significantly and consistently related to the extent to which the BSC is used across seven different management control purposes. The authors also find some evidence of associations between other sophisticated MAPs and the extent to which the BSC is used for management control purposes.

Practical implications

Private companies can use the BSC to better manage risks and use it for purposes such as communicating strategy and objectives, setting targets, evaluating performance, rewarding employees and managers, motivating employees and managers, controlling performance and coordinating across activities, departments and/or functional areas. The study has limitations such as the model is limited and excludes the effects of other significant contingency factors such as organisational culture. It may be appropriate to interview organisational participants to learn more about how their national and organisational culture affects the decision to use the BSC.


The findings fill a critical void in the literature by providing new evidence on the determinants of the use of the BSC by private companies.



This paper forms part of a special section “Performance measurement and management”, guest edited by Ralph Adler and Rakesh Pandey.

The authors thank Steven Cahan, Charl de Villiers and Stewart Lawrence for their comments and suggestions.


Sharma, D. and Sharma, U. (2021), "Analysis of balanced scorecard usage by private companies", Pacific Accounting Review, Vol. 33 No. 1, pp. 36-63.



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