Balanced Scorecard Essay Sample

Balanced Scorecard


It is becoming increasingly difficult to ignore the fact that contemporary businesses need to consider multiple factors.  Recent trends in business and economy suggest that organisations should not only take into account financial perspective, but should adopt generic approach to managing their performance. In other words, an integrated business model serves as a universal way to run a successful business. One of such universal business models is balanced scorecard. This technique presupposes consideration of material and non-material factors of business performance such as workforce commitment, productivity, liquidity of finances, market share, etc. However, a general concept of balanced scorecard is rather vague, and, therefore, various practitioners differently recognize BSC. Consequently, a large volume of literature has been published on the subject of balanced scorecard’s applicability. Balanced scorecard has evident advantages and drawbacks, which can become explicit under different circumstances. The following paper conducts a comparative analysis of the related literature on BSC.

Overview of The Main Themes

Zeng and Luo

The first article under analysis discusses balanced scorecard as a Western technique of measuring performance and strategic control. The article depicts the main limitations companies have faced within recent years in appliance of balanced scorecard. The most significant finding suggests that the overall concept of balanced scorecard is rather ambiguous, thus it cannot be applied in business environment (Zeng & Luo 2013). Moreover, BSC is more suitable for top-down organisational control, which is why it is ineffective in the contemporary Western-based strategic control. Similarly, this article mentions that contemporary metrics of balanced scorecard are also biased. The authors emphasise that it is impossible to combine material and non-material data for measuring a company’s performance (Zeng & Luo 2013). What is more, a static nature of BSC is also mentioned in the article. Balanced scorecard has applied measurements and controls, which cannot be changed without redesigning the entire model. That is why a drastic decline in use of BSC can be observed in Western businesses; meanwhile Chinese practitioners tend to avoid such vague method.


The article by this author touches upon the absence of credibility in balanced scorecard. First, the article argues that cause-effect model does not mean a logical and linear decision-making process. In other words, the author admits that business should be measured from the perspective of logical mathematical calculations rather than through the combination of data and intangible factors (Norreklit 2000). In the same vein, the author scrutinises a system of measurements. Cause-and-effect model is not multi-sided, thus it does not involve mutual relations of metrics. The author, however, argues that business measurements have to be mutually related. Besides, the article also pays attention to the fact that balanced scorecard is hardly applicable to strategic control (Norreklit 2000). BSC has a pre-existing form of top-down governance; therefore, average frontline workers are not able to act within its terms.


The article by this researcher discusses the purposes of balanced scorecard. In such a way, the article reveals that most organisations prefer to use balanced scorecard for strategic management and improvement of performance. The article reports that organisations deploy balanced scorecard with metrics related to measuring completion of tasks, which comprise a certain strategic objective (Wiersma 2000). Consequently, the article gives an account of key driving forces of balanced scorecard in a corporate environment. The majority of companies use BSC for evaluation of their current performance and for establishment of alternative strategic controls (Wiersma 2000). Eventually, the article argues that balanced scorecard can have multiple uses in business environment, since several organisations have reported to apply balanced scorecard for various purposes, such as workforce’s efficiency evaluation, measuring of competitive capacity, and marketing attractiveness of an organisation.


When talking about the key themes of this article, first it is important to pay attention to the ideological discourse between the United States and France in regards to balanced scorecard. The article contextualises the research problem through the description of American and French economic doctrines and cultural insights related to business (Bourguignon, Malleret & Norreklit 2004). The author places emphasis on the evidence that balanced scorecard is a quite vague concept, which is why it cannot be interpreted with a single point of view. It is worth saying, however, that the author does not criticise the ambiguity, but presents balanced scorecard as universal tool (Bourguignon, Malleret & Norreklit 2004). As for ideological discourse, the article suggests that American vision of organisational culture, strategic governance, and business performance is already embedded in balanced scorecard, which is why this business model is more applicable in the United States.


This article is mainly based on fundamental findings of Kaplan and Norton (2006). It describes reasons of balanced scorecard’s deployment from the perspective of its basic theories (Malmi 2001). In addition, use of balanced scorecard as a regulative control of employees’ performance is also included. Likewise, the article describes central driving forces of balanced scorecard. In particular, the article highlights such strategic needs as targeting and performance measurement as a supplementary source of business data. The author admits that these purposes are quite widespread among organisations, which practice balanced scorecard (Malmi 2001). Surprisingly, the article does not present balanced scorecard as vague or hardly applicable to a contemporary business environment concept. Instead, the author depicts balanced scorecard as generally useful tool for the majority of organisations, owing to the fact that many firms managed to optimise their performance with the help of BSC.

Kraus and Lind

The article by Kraus and Lind (2010) argues that balanced scorecard is a biased tool for corporate governance and strategic control because of its top-down nature and unclear system of measuring the performance. A free interpretation of balanced scorecard implies that such concept does not exist because of absence of any framework and implementation methodology. In the same vein, the article discusses appliance of balanced scorecard to different business purposes. The authors admit that balanced scorecard is biased, which is why practice to rely on BSC is usually associated with failures. However, the strongest argument of this article is focused on the statement that balanced scorecard renders low business impacts, since it is excessively plain and hardly applicable to business environments (Kraus & Lind 2010). Besides, growing pressure of capital markets makes organisations avoid usage of balanced scorecard as its primary business model.

Comparative Analysis


In regards to similarities among the presented articles, it is necessary to highlight an argument that balanced scorecard is a biased and limited concept. In other words, all articles suggest that limits and methodology for implementation of balanced scorecard are not outlined, which is why every single company interprets balanced scorecard in their own way. That makes this business model extremely ambiguous, since it can be inappropriately recognised and applied without pursuing any real business purpose (Bischoff 2013). It is certainly true in a contemporary business environment, which requires organisations to measure their performance with rational tools.

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In a similar way, a strong criticism of balanced scorecard as a mean of strategic control should be admitted. All articles consider balanced scorecard as a biased tool for such purpose, especially in terms of liberal approaches to organisational behaviour and organisational layout. Most of the articles promote a view that balanced scorecard is a distinctly top-down method of corporate governance, which is why it is hard to implement it in a modern organisational culture. It can be used as a supplementary tool to collect data on personnel’s performance, but not as a primary measuring instrument. In addition to a general vagueness of balanced scorecard, the articles also mention unclear system of measurements. Besides the fact that metrics vary from organisation to organisation, the essence of these metrics is also irrelevant (Yilmaz 2013). Cause-and-effect is obviously an empirical approach but it does not necessarily offer logical decision-making process (Niven 2010). Business operates using financial and other countable parameters, thus a combination of empirical factors and mathematical calculations is nearly impossible, especially under circumstances of ambiguous methodology of balanced scorecard. In such a way, a common vision of BSC’s vagueness is shared among the presented articles.

The articles also have an agreement on the description of key driving forces of balanced scorecard. This aspect is relevant, since this agreement should be present for analysing balanced scorecard as a concept. The researches presented in the articles their surveys and revealed that majority of organisations consider similar forces to be driving. Establishment of strategic objectives and a need for evaluation of employees’ performance are the main driving forces of balanced scorecard according to the surveyed organisations. The articles, however, mainly recognise a limitation to balanced scorecard rather than its distinct scope in business sense. In consequence, reasons for applying BSC are also a common theme discussed in the articles. Such tendency could be explained with the fact that driving forces and purposes of use of balanced scorecard were combined when analysed (Smith 2007). Hence, the articles outline such reasons for implementation of balanced scorecard as management and control of meeting objectives, enhancement of employee performance, and supplementary source of business intelligence. Again, the same organisations have been surveyed to indicate the most frequent reasons for using balanced scorecard. Beyond a doubt, the results witness a direct relationship between usage of BSC and its driving forces. The credibility of the articles’ findings is ensured.

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Eventually, a negative orientation of all articles is apparent. Even though some articles consider balanced scorecard to be an effective business model, they describe its limitations or suggest that currently it is impossible to apply BSC in a modern business environment. The majority of articles rely on survey data as well as fundamental works of previous researchers. This is a credible way to indicate new insights on balanced scorecard, which is why findings on BSC’s essence and applicability to a contemporary business are objective. Still, presence of multiple similarities among the presented articles does not deny distinct differences in views on other aspects of balanced scorecard.  


The article by Zeng and Luo (2013) describes a Chinese perspective on balanced scorecard. This practice is not widespread in Chinese business, since China has overcome a wave of globalization in its national business. In addition, the article argues that balanced scorecard experiences a decline among Western businesses, as well. Authors argue that balanced scorecard faces much more limitations in China rather than in Western countries, even though Chinese organisations still prefer to use top-down approach in corporate governance and strategic control. Overall, the article immersed balanced scorecard in Asian context of business.

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On the contrary, Norreklit (2000) describes balanced scorecard from a position of logical relevance. The author claims that cause-and-effect model is not logical, since empirical evidence and mathematical data are not combinable. The article does not attach the research to real cases of balanced scorecard’s appliance but criticises the tool in theoretical terms. The article also argues that a system of measurements suggested by balanced scorecard is also irrelevant, since all metrics should be mutually related. Otherwise, measurements do not address their primary purpose and use of balanced scorecard becomes irrelevant. The article refers to basic business and economic concepts, which is why the main argument is credible and strong.

Wiersma’s (2009) article suggests that multiple appliance of balanced scorecard is possible. The article claims that balanced scorecard can be used not only for basic purposes of targeting and evaluation but also for measuring various aspects of business, such as competitive capacity, overall liquidity of finance, etc. The research described in the article also used survey to collect the data, but the results of this article witnessed an evidence of multi-purpose usage of balanced scorecard. Such interpretation of BSC’s is rather unique, which is why the research needs additional support.

As for Bourguignon’s (2004) article, it presents entirely different dimension of research on balanced scorecard. The article revolves around discussion of ideological discourse between American and French views on balanced scorecard. The article conducts a comparative analysis and involves historic and cultural perspectives, which are related to balanced scorecard. The article promotes a view that American culture and entrepreneurial orientation is more suitable for balanced scorecard. In such a way, the article does not criticise the business model. Thus, relevance of this article is unidentified, since it investigates cultural and historic insights on balanced scorecard without attaching it to a global context.

What is more, Malmi (2001) admits that balanced scorecard has a positive effect on many organisations. A trend to criticise balanced scorecard, however, can be traced in the articles under analysis. Instead, this article argues that balanced scorecard can be universally applied, which is why it can be effective for reaching any organisational goal. A general vagueness and absence of distinct methodology are explained as a flexible approach, so that any organisation can use balanced scorecard to achieve its strategic objectives. The article does not support the view that a concept without a distinct framework is not credible.

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Finally, Kraus and Lind (2010) argue that balanced scorecard has a low impact on business performance of any organisation, since it does not comply with trends of market competition. It is certainly true, but the article does not assume that balanced scorecard is vaguely formulated. That is why Kraus and Lind suggest that balanced scorecard is excessively plain and outdated business model meanwhile its methodology is justified and effective. At any rate, a number of differences between the presented articles do not refute their main findings. It is becoming increasingly difficult to ignore the fact that similarities are stronger than differences.


It is appropriate to make a general comment on the fact that balanced scorecard is mainly criticised by modern researchers. Such evidence can be explained by the fact that modern business environment does not stand for static and hardly deployable business models. What is more, the majority of articles have admitted a negative influence on organisational behaviour. More specifically, BSC is strictly a top-down approach, which is why it cannot be combined with contemporary liberal forms of organisational layout. Absence of distinct metrics has been also mentioned within the articles. The most prominent argument is based on the fact that cause-and-effect vision is not logical even though it is related to empirical environment of business. In other words, business should be controlled with precise data, since cause-and-effect model is a qualitative representation of business performance. Finally, the definition of balanced scorecard is unclear, and thus it has received such a strong criticism from the researchers.

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