Facilitating a team culture: a collaborative balanced scorecard as an open reporting system

Advances in Management Accounting

ISBN: 978-1-84950-754-7, eISBN: 978-1-84950-755-4

ISSN: 1474-7871

Publication date: 10 February 2010

Abstract

The balanced scorecard (BSC) allows firms to place importance on both financial and nonfinancial performance measures in four perspectives for developing and implementing corporate strategy and performance evaluation. The BSC literature however provides minimal insight on how to set targets, how to weigh measures when evaluating managers and the firm, and how to resolve conflicts that arise in the BSC process. Researchers have attempted to fill these gaps using two contending approaches. In particular, Datar et al. (2001) uses an agency model to select the optimal set of weights and more recently Herath et al. (2009) develop a mathematical programming–based collaborative decision model to find the optimal (or approximately optimal) set of target and weights considering inputs from two parties. In this article, we apply the Herath et al. (2009) model to a detailed BSC example. We demonstrate how the collaborative BSC model can be implemented in Microsoft Excel by practitioners to minimize BSC conflicts. Finally, we discuss how the model facilitates alignment and a culture of open reporting (information sharing) around the BSC that is necessary for its effective implementation.

Citation

Herath, H.S.B., Bremser, W.G. and Birnberg, J.G. (2010), "Facilitating a team culture: a collaborative balanced scorecard as an open reporting system", Epstein, M.J. and Lee, J.Y. (Ed.) Advances in Management Accounting (Advances in Management Accounting, Vol. 18), Emerald Group Publishing Limited, Bingley, pp. 149-173. https://doi.org/10.1108/S1474-7871(2010)0000018009

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Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited

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