Discussing Feedback System Thinking in Relation to a Balanced Scorecard, Inspired by an Actual Case

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    Abstract

    Since the emergence of the Balanced Scorecard at the beginning of the 1990s, only few articles have proposed a framework of translating BSC into an analytical numerical model. This paper addresses two research themes : (1) a discussion of the cause-and-effect modeling within the BSC and (2), how may the feedback systems thinking and causal loop reasoning be conducted within BSC. In contrast to previous literature on BSC this paper focuses on a System Dynamics Modeling approach to transform a static BSC into a dynamic and analytical closed loop management model by incorporating both time-lags and cause-and-effect schemes. Our main result shows that SDM is a relevant and possible approach for building a BSC. The SDM model adds additional benefit to the BSC by (1) providing a translation of the strategy into operational terms and (2) offering possibilities for the decision maker to simulate scenarios for planning, learning and feedback. In addition the model shows how both structural and direct action settings impact significantly on the solution paths.
    Original languageEnglish
    Publication date2010
    Publication statusPublished - 2010
    EventAmerican Accounting Association: Event 2010 Management Accounting Section - Seattle, United States
    Duration: 6 Jan 20109 Jan 2010

    Conference

    ConferenceAmerican Accounting Association: Event 2010 Management Accounting Section
    Country/TerritoryUnited States
    CitySeattle
    Period06/01/201009/01/2010

    Keywords

    • Balanced Scorecard
    • Feedback Systems Thinking
    • Time-delays
    • Cause-and-effect
    • System Dynamics
    • Simulation

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