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BALACED SCORECARD: REVIEW OF LITERATURE The Balanced Scorecard has been proposed in the literature and has been widely used in management practice as a useful tool to support the effective implementation of the strategy of an organization tool. In the academic literature, it has been discussed about the limitations of financial indicators as a basis for decision making (Dearden, 1969). He argues that the financial measures of business performance are not fully reflecting the importance of current decisions on future financial performance. In this context, the relationship between specific non - financial measures and financial performance of the company has been the subject of many studies in both the U.S. and Europe, finding empirical evidence supporting the hypothesis of a positive relationship between both types of measures. Moreover, there is abundant literature on the advantages, methodology, and steps to follow for a Strategic Planning within a company (see e.g. Bradford and Duncan, 2000). It is important to highlight the series of articles published by the drivers of Balanced Scorecard (BSC), Kaplan and Norton (1992, 1993, 1996), as well as several other articles published by magazines such as Harvard Business Review, Strategic HR Review, Measuring Business Excellence, etc. A quick review of these items leaves the reader with the impression that the BSC is the most comprehensive tool for measuring organizational performance and its alignment with strategy execution. 1. CONCEPTUAL REVIEW OF LITERATURE In Kaplan and Norton (1992), in which is proposed for the first time the use of the BSC, this tool is defined as: "a set of measures that gives top managers a fast but comprehensive view of the business". From this first article, Kaplan and Norton have developed this tool with a series of eight articles published mostly in the Harvard Business Review, plus four additional books. This first version of the BSC could be compared with the Tableau de Bord, used in France during the last decades of the twentieth century according to Kaplan and Norton (1996a). In Kaplan and Norton (1996c), the BSC is proposed as a new strategic management system incorporating four processes: clarifying and translating the vision and strategy, communication, training and strategic feedback, and planning and goal setting. In Kaplan and Norton (1996a), it is established the three principles that allow the BSC of a company to be linked to its strategy set: cause-effect relationships, performance inductor, and finances linkers. "Ultimately, causal paths of all BSC indicators should be

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BALACED SCORECARD: REVIEW OF LITERATURE

The Balanced Scorecard has been proposed in the literature and has been widely used in management practice as a useful tool to support the effective implementation of the strategy of an organization tool.In the academic literature, it has been discussed about the limitations of financial indicators as a basis for decision making (Dearden, 1969). He argues that the financial measures of business performance are not fully reflecting the importance of current decisions on future financial performance. In this context, the relationship between specific non - financial measures and financial performance of the company has been the subject of many studies in both the U.S. and Europe, finding empirical evidence supporting the hypothesis of a positive relationship between both types of measures. Moreover, there is abundant literature on the advantages, methodology, and steps to follow for a Strategic Planning within a company (see e.g. Bradford and Duncan, 2000). It is important to highlight the series of articles published by the drivers of Balanced Scorecard (BSC), Kaplan and Norton (1992, 1993, 1996), as well as several other articles published by magazines such as Harvard Business Review, Strategic HR Review, Measuring Business Excellence, etc. A quick review of these items leaves the reader with the impression that the BSC is the most comprehensive tool for measuring organizational performance and its alignment with strategy execution.

1. CONCEPTUAL REVIEW OF LITERATUREIn Kaplan and Norton (1992), in which is proposed for the first time the use of the BSC, this tool is defined as: "a set of measures that gives top managers a fast but comprehensive view of the business". From this first article, Kaplan and Norton have developed this tool with a series of eight articles published mostly in the Harvard Business Review, plus four additional books.This first version of the BSC could be compared with the Tableau de Bord, used in France during the last decades of the twentieth century according to Kaplan and Norton (1996a).In Kaplan and Norton (1996c), the BSC is proposed as a new strategic management system incorporating four processes: clarifying and translating the vision and strategy, communication, training and strategic feedback, and planning and goal setting.In Kaplan and Norton (1996a), it is established the three principles that allow the BSC of a company to be linked to its strategy set: cause-effect relationships, performance inductor, and finances linkers. "Ultimately, causal paths of all BSC indicators should be linked to the financial goals" (Kaplan and Norton, 1996b: 67). This evolution of the BSC as a new model of leadership and strategic management that relates the four perspectives of BSC' with the strategic objectives, was formalized by Kaplan and Norton (2000a) in Strategy Maps.

1.1 ALTERNATIVE MODELS TO BSCIt is also important to consider that other researchers have raised parallel models AND similar to BSC with some interesting variations. First, McNair et al. (1990) developed a program focused on a model in three different levels: business units, operational area and activity centers or departments. Second, another model is proposed by Adams and Roberts (1993), which focuses on the analysis of the evolution of the indicators. Finally, the model Maisel (1992) is the most similar to that developed by Kaplan and Norton, matching the four perspectives which focus on the objectives of the strategy and overview of the company and develop indicators for each of these perspectives. Meanwhile, Edvinsson (1997) proposed the Skandia Navigator, a system that tries to measure intellectual capital in organizations, which has also become popular, but not at the level of the BSC.

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2 REVIEW OF EMPIRICAL LITERATURE2.1 PERFORMANCE

ARTICLES IN FAVOR OF THE BSCBraam and Nijssen (2004) suggest that the use of the BSC to complement corporate strategy has a positive impact on firm performance. Tsang et al. (1999) argue that performance measures provide useful information to guide management decisions and examine different approaches to measure maintenance performance. Griffith and Alexander (2002) claim that the BSC is an opportunity to make a more successful organization. Libby et al. (2004) suggest that the requirement for an assessment to justify an evaluation to a superior or the provision of a report on the BSC increases with the use of single measures and also examine the perceived quality of the BSC. Kristensen and Westlund (2004) show that the values of employee and customer satisfaction show the effect of intangible and also have tried to formalize a system of measurement for the modern enterprise. Bremser and Barsky (2004) provide specific examples of how firms can implement and integrate a system of measures of R&D. Berler et al. (2005) concluded that the use of the BSC has activating the conceptual framework towards a strategy of Knowledge Management for a health center. Moller and Schaltegger (2005) state that the eco-efficiency not only provides a source of data for sustainability but also serves as a link between the BSC and the accounting environment at the corporate level. Wu and Chen (2006) indicate a positive impact on strategic performance measures and these were significantly correlated with operational activities. Janssen et al. (2006) present a set of five alternative indicators to improve the results of the implementation of the strategy and describe how the BSC served as a model to support a case of market penetration. Smith and Goddard (2002) argue that the performance should address four broad functions: strategy formulation, development instrument of measures, interpretation of results, and encouraging responses to information.

CRITICAL ARTICLES OF BSC Lohman et al. (2004) have attempted to show the limitations of performance measurement systems and concluded that the empirical results differ somewhat from the literature and develop a Program Measurment Systems (PMS). Lipe and Salterio (2000) show that only the common measures for all the Strategic Business Units (SBU's) and the unique measures of each SBU affect evaluations of companies. Norkelik (2000 and 2003) makes harsh criticism to the BCS, especially regarding to the causes of performance.

2.2 FORMULATION OF STRATEGYButler et al. (1997) propose a strategic model using part of the BSC. They show a European case of determination, development, and implementation of the BSC for the use by top management. Rigby (2001) states in his work that each company uses an average of 11 strategic tools per year. Strategic plans, mission and vision, benchmarking, and customer satisfaction measures are popular. It concludes that the relationship between tool use and financial performance is ambiguous. The BSC has a ratio of 43.9 % usage. In addition, he studied what tools business management companies use, if the companies are satisfied using them, and if the companies that use them are better than other companies. Lee and Lo (2003) notes that agility is needed, therefore adaptation processes in the world of business today. Lowe and Jones (2004) present the experience of a holding company in New Zealand. Managerial experience within the organization, in the process of identifying what things impact on the markets is counted. These factors are measured by Key Performance Indicators (KPI 's). Greasley (2004) demonstrates the need to choose and, in some cases, develop tools and instruments based on the context of process improvement effort. He studies the use of BSC as a technique that allows the reconciliation of the multiple objectives of the stakeholders.

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2.3 IMPLEMENTATION In terms of implementation, it is fundamental to highlight the contributions of Wachtel et al. (1999) that link the SBU’s with the perspective of customers. They build a BSC for a health center. Kanji and Sa (2002) propose a model that incorporates the factors of success in the BSC based on the philosophy of Total Quality Management (TQM). Papalexandris et al. (2004) show the experience and obstacles for the implementation of a BSC with a software in Greece while Chand et al. (2005) explain the strategic contribution of an Enterprise Resource Planning (ERP) when it is adapted to a BSC.

2.4 STRATEGIC MAPS From the selected articles, two authors analyze the importance of strategy maps. Kaplan and Norton (2000a and 2000b) describe its use both in companies and corporations and nonprofit organizations or public sector companies. For Irwin (2002) strategic maps are a useful tool for strategic development.

2.5 ALIGNMENT Under this category, the found articles are trying to explain how the implementation of the BSC affects in organizations and how certain areas can influence the process. Fleisher and Mahaffy (1997) discuss how the Public Relations (PR) are complemented by the BSC and propose a valuation model. According to Morgan and Rao (2002) the change of the process of strategic alignment and its implementation has been supported by the use of performance measures, particularly in dynamic environments where considerable effort is required.

3. CONCLUSION According to the literature review, there is more evidence in favor for the use of this tool of strategic direction, so it is concluded that favors business performance.

4. REFERENCES

Berler A., Pavlopoulos S. y Koutsouris D. (2005), "Using key performance indicators as knowledge-management tools at a regional health-care authority level", IEEE Transactions on Information Technology in Biomedicine, 9 (2): 184-192.

Dearden, J. (1969), “The case against ROI control”, Harvard Business Review, 47(3): 124-135.

BRADFORD R., DUNCAN P., 2000. Simplified strategic planning. Worcester, MA.: ChandlerHouse Press

Adams C. y Roberts P. (1993), “Your are what you measure”, Manufacturing Europe, Sterling Publication Ltd., 504-517.

Edvinsson L. (1997), “Developing intellectual capital at Skandia”, Long Range Planning, 30 (3):366-373.

McNair C., Lynch R. y Cross K. (1990), “Do financial and nonfinancial performance measures have to agree?”, Management Accounting, 72 (5): 28-36.

Maisel L. (1992), “Performance Measurement. The balanced scorecard approach”, Journal of Cost Management, 6 (2): 47-52.

Griffith J. y Alexander J. (2002), "Measuring comparative hospital performance", Journal of Healthcare Management, 47 (1): 41-57.

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Braam G., Nijssen E. (2004), "Performance effects of using the Balanced Scorecard: a note on the Dutch experience", Long Range Planning, 37 (4): 335-349.

Lipe M. y Salterio S. (2000), "The balanced scorecard: Judgmental effects of common and unique performance measures", Accounting Review, 75 (3): 283-298.

Lohman C., Fortuin L. y Wouters M. (2004), "Designing a performance measurement system: A case study", European Journal of Operational Research, 156 (2): 267-286.

Kristensen K. y Westlund A. (2004), "Performance measurement and business results", Total Quality Management & Business Excellence, 15 (5-6): 719-733.

Wu I. y Chen J. (2006), "A hybrid performance measure system for e-business investments in high-tech manufacturing: An empirical study", Information & Management, 43 (3): 344-357.

Janssen A., Lienin S., Gassmann F. y Wokaun A. (2006), "Model aided policy development for the market penetration of natural gas vehicles in Switzerland", Transportation Research Part A-Policy and Practice, 40 (4): 316-333.

Tsang A., Jardine A., Kolodny H. (1999), "Measuring maintenance performance: a holistic approach", International Journal of Operations & Production Management, 19 (7): 691-715.

Smith P., Goddard M. (2002), "Performance management and Operational Research: a marriage made in heaven?", Journal of The Operational Research Society, 53 (3): 247-255.

Moller A. y Schaltegger S. (2005), "The sustainability balanced scorecard as a framework for eco-efficiency analysis", Journal Of Industrial Ecology, 9 (4): 73-83.

Bremser W. y Barsky N. (2004), "Utilizing the balanced scorecard for R&D performance measurement", R&D Management, 34 (3): 229-238.

Libby T., Salterio S. y Webb A. (2004), "The balanced scorecard: The effects of assurance and process accountability on managerial judgment ", Accounting Review, 79 (4): 1075-1094.

Butler A., Letza S. y Neale B. (1997), "Linking the balanced scorecard to strategy", Long Range Planning, 30 (2): 242-253.

Greasley A. (2004), "Process improvement within a HR division at a UK police force", International Journal of Operations & Production Management, 24 (3-4): 230-240.

Lee S. y Lo K. (2003), "e-Enterprise and management course development using strategy formulation framework for vocational education", Journal of Materials Processing Technology, 139 (1-3): 604-612.

Lowe A., y Jones A. (2004), "Emergent strategy and the measurement of performance: The formulation of performance indicators at the microlevel", Organization Studies, 25 (8): 1313-1337.

Rigby D. (2001), "Management tools and techniques: A survey", California Management Review, 43 (2): 139.

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Chand D., Hachey G., Hunton J., Owhoso V. y Vasudevan S. (2005), "A balanced scorecard based framework for assessing the strategic impacts of ERP systems", Computers in Industry, 56 (6): 558-572.

Kanji G., Sa P. (2002), "Kanji's business scorecard", Total Quality Management, 13 (1): 13-27.

Papalexandris A., Ioannou G. y Prastacos G. (2004), "Implementing the balanced scorecard in greece: A software firm's experience", Long Range Planning, 37 (4): 351-366.

Wachtel T., Hartford C. y Hughes J. (1999), "Building a Balanced Scorecard for a Burn Center", Burns, 25 (5): 431-437.

Irwin D. (2002), "Strategy mapping in the public sector", Long Range Planning, 35 (6): 637-647.

Fleisher C. y Mahaffy D. (1997), "A balanced scorecard approach to public relations management assessment", Public Relations Review, 23 (2): 117-142.

Morgan I., Rao J. (2002), "Aligning service strategy through Super-Measure management ", Academy of Management Executive, 16 (4): 121-131.

Kaplan R. y Norton D. (1992), "The balanced scorecard: Measures that drive performance", Harvard Business Review 70 (1): 71-79.

Kaplan R. y Norton D. (1993), "Putting the Balanced Scorecard to Work", Harvard Business Review, 71 (5): 134-142.

Kaplan R. y Norton D. (1996a), "Linking the balanced scorecard to strategy", California Management Review, 39 (1): 53.

Kaplan R. y Norton D. (1996b), The Balanced Scorecard: Translating Strategy Into Action. Boston: Harvard Business School Press.

Kaplan R. y Norton D. (1996c), "Using the balanced scorecard as a strategic management system", Harvard Business Review, 74 (1): 75.

Kaplan R. y Norton D. (2000a), "Having trouble with your strategy? Then map it", Harvard Business Review, 78 (5): 167.

Kaplan R. y Norton D. (2000b), The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Boston: Harvard Business School Press.