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Transcribing the balanced scorecard into system dynamics: from idea to design

Transcribing the balanced scorecard into system dynamics: from idea to design The purpose of this paper is to show how a system dynamics modelling approach can be integrated into the balanced scorecard (BSC) for a case company with special focus on the handling of causality in a dynamic perspective. The BSC model includes five perspectives and a number of financial and non-financial measures. The overall idea of BSC is to make the strategy operational, as proposed by Kaplan and Norton (2007) and to use the strategy for simulation. Our results indicate that a company may gain great insight from simulation studies. The hypothesised model may be used as the first step in quantifying the cause-and-effect relationships of an integrated BSC model. Including dynamic aspects of BSCs into the discussion is only in its infancy, so the aim of our work is also to contribute to both scholars’ and practitioners’ general understanding of how such delayed dynamic effects propagate through system and time. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Business and Systems Research Inderscience Publishers

Transcribing the balanced scorecard into system dynamics: from idea to design

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1751-200X
eISSN
1751-2018
DOI
10.1504/IJBSR.2013.050618
Publisher site
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Abstract

The purpose of this paper is to show how a system dynamics modelling approach can be integrated into the balanced scorecard (BSC) for a case company with special focus on the handling of causality in a dynamic perspective. The BSC model includes five perspectives and a number of financial and non-financial measures. The overall idea of BSC is to make the strategy operational, as proposed by Kaplan and Norton (2007) and to use the strategy for simulation. Our results indicate that a company may gain great insight from simulation studies. The hypothesised model may be used as the first step in quantifying the cause-and-effect relationships of an integrated BSC model. Including dynamic aspects of BSCs into the discussion is only in its infancy, so the aim of our work is also to contribute to both scholars’ and practitioners’ general understanding of how such delayed dynamic effects propagate through system and time.

Journal

International Journal of Business and Systems Research – Inderscience Publishers

Published: Jan 1, 2013

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