Department of Economics and Business Economics

Erland Hejn Nielsen

Management Accounting and Business Analytics: An example of System Dynamics Modelling's use in the design of a Balanced Scorecard

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

  • Erland Hejn Nielsen
  • Steen Nielsen
  • Anders Jacobsen, Commercial Analyst, Project Triton at Siemens Wind Power Denmark , Denmark
  • Lars Bjoern Pedersen, Pindstrup Mosebrug A/S Pindstrup, Ryomgaard, , Denmark
This paper focuses on how System Dynamics Modeling (SDM) can contribute to an increased understanding of business in an ‘analytics’ setup. Such improved understanding is necessary to identify the variables that most effectively support a company’s strategy in a Balanced Scorecard (BSC). By combining the idea of a BSC as a causal loop system with systems thinking, the current paper aims to address not only the conceptual domain concept of ‘comprehensiveness’ related to BSC, i.e. the ‘scope’ (learning) and ‘differentiation’ (system dynamics causality and feedback), but also the methodological domain concept of ‘precision’ (solution by differential equations). We show that a company can improve its understanding of its business at a very early stage in the BSC design phase by using SDM such as causal loop diagrams.
Original languageEnglish
JournalDanish Journal of Management & Business
Issue3 & 4
Pages (from-to)31-44
Number of pages14
Publication statusPublished - 2014

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