The importance of balanced scorecards in hospitals

Abstract

Purpose – The purpose of this study is to examine the importance of balanced scorecard (BSC) in Swedish emergency hospitals, that is, to describe its prevalence and its use in these hospitals.

Methodology/approach – The study is based on a questionnaire administered to financial managers in all of Sweden's emergency hospitals. The questionnaire investigates the prevalence of the BSC, the reasons for its implementation, and how BSC is used.

Findings – The study shows that 65% of Swedish emergency hospitals use the BSC. The use of the BSC was motivated by a need to make strategy clear and to obtain a more comprehensive view of organizational performance. BSC is used mainly for measurements connected to the organizations' strategy and to create goal congruence. Performance monitoring is only of secondary importance, even though emergency hospitals with more than five years' experience with the BSC tend to use it for that purpose. The BSC is almost never used in the hospitals' reward systems.

Research implications – The findings suggest that BSC in hospitals is mainly important for implementing strategy and stimulating strategy discussions that create goal congruence. Performance monitoring is only of secondary importance, but becomes increasingly important for seasoned BSC users.

Originality/value of paper – Few studies have surveyed the importance of BSC in healthcare organizations. By pointing out the importance of BSC in Swedish healthcare, this paper calls for similar studies in other healthcare contexts.

Citation

Aidemark, L.-G., Baraldi, S., Funck, E.K. and Jansson, A. (2010), "The importance of balanced scorecards in hospitals", Epstein, M.J., Manzoni, J.-F. and Davila, A. (Ed.) Performance Measurement and Management Control: Innovative Concepts and Practices (Studies in Managerial and Financial Accounting, Vol. 20), Emerald Group Publishing Limited, Leeds, pp. 363-385. https://doi.org/10.1108/S1479-3512(2010)0000020016