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Erland Hejn Nielsen

Discussing Feedback System Thinking in Relation to Scenario Evaluation in a Balanced Scorecard Setup

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Since the emergence of the Balanced Scorecard (BSC) at the beginning of the 1990s, literature has intensively discussed the problems of the cause and effect relationships, the time-delay elements between measures and perspectives and the concepts of feedback loops. This paper focuses on the use of the System Dynamics Modeling approach to deal with these three problems, an approach first suggested by Forrester back in 1958. The wide scope of application of BSC as a decision-supporting instrument continues to spur the interest in BSC. We have used an actual case as inspiration on which our model construction and our simulation scenarios are based. Our findings suggest that the idea of linking BSC and System Dynamics together based on properties of the systems dynamic nature seem to be both a natural and a relevant development. Furthermore, our simulations demonstrate the ability to: (1) provide a scheme for the translation of the strategy into operational terms and at the same time (2) offer possibilities for the decision maker to be able to evaluate the plan-do-review results based on the feedbacks, specifically in a risk evaluating context.
Original languageEnglish
JournalProduction Planning & Control
Pages (from-to)436-451
Number of pages16
Publication statusPublished - 2012

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