Review on Studies of Bsc
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Review on Studies of BSC
Yang Liang
Department of Humanities and Economic Management China University of Geosciences Beijing, PRC 100083 Liangyang22@163.com
Yan Wang
Department of accounting and finance Napier University Edinburgh UK Eh105lw
Abstract
Because of the weakness of the traditional performance measurements, the Balanced Scorecard (BSC) has become one of the most known and most studied models. This thesis introduced the studies on BSC from foreign scholars, about its signification, criticisms and so on. Keywords: BSC, performance measurements, criticisms
1. weakness of the traditional performance measurements,
Traditional management accounting control systems have been used to monitor and maintain organizational control during many decades [1] . However, with the global environment changing during the 1980s, it is clear to appear the weaknesses of traditional performance measurements. Traditional accounting profit always base on measures such as ROI, ROCE and so on. These measures are mainly criticized because they are mostly based on financial measures, what induce a short term view resulting in a lack of strategic focus; and which are historically focused, while managers require indicators that will predict the future. Moreover, managers’ decisions will be exclusively focused on cost reduction, ignoring customer needs and competitors performance [2] . Due to above weakness of the traditional performance measurements, the new performance measurements linking non-financial measures were developed during the 1980s and 1990s. The new performance measurements as followed [3] : The Balanced Scorecard from Kaplan and Norton in 1992; The Performance Pyramid from Lynch and Cross in 1990; The Results and Determinants Matrix from Fritzerald in 1991; The Framework for Integrated Dynamic PM from Ghalayiniin 1997; The Integrated PM System Methodology from Bititcy in 1997; The Cambridge PM Process from Neely in 1996; The
Review on Studies of BSC
Yang Liang
Department of Humanities and Economic Management China University of Geosciences Beijing, PRC 100083 Liangyang22@163.com
Yan Wang
Department of accounting and finance Napier University Edinburgh UK Eh105lw
Abstract
Because of the weakness of the traditional performance measurements, the Balanced Scorecard (BSC) has become one of the most known and most studied models. This thesis introduced the studies on BSC from foreign scholars, about its signification, criticisms and so on. Keywords: BSC, performance measurements, criticisms
1. weakness of the traditional performance measurements,
Traditional management accounting control systems have been used to monitor and maintain organizational control during many decades [1] . However, with the global environment changing during the 1980s, it is clear to appear the weaknesses of traditional performance measurements. Traditional accounting profit always base on measures such as ROI, ROCE and so on. These measures are mainly criticized because they are mostly based on financial measures, what induce a short term view resulting in a lack of strategic focus; and which are historically focused, while managers require indicators that will predict the future. Moreover, managers’ decisions will be exclusively focused on cost reduction, ignoring customer needs and competitors performance [2] . Due to above weakness of the traditional performance measurements, the new performance measurements linking non-financial measures were developed during the 1980s and 1990s. The new performance measurements as followed [3] : The Balanced Scorecard from Kaplan and Norton in 1992; The Performance Pyramid from Lynch and Cross in 1990; The Results and Determinants Matrix from Fritzerald in 1991; The Framework for Integrated Dynamic PM from Ghalayiniin 1997; The Integrated PM System Methodology from Bititcy in 1997; The Cambridge PM Process from Neely in 1996; The