Available via license: CC BY-NC 4.0
Content may be subject to copyright.
Balanced Scorecard for the Execution of Strategies in
Australian Economy
Hong Zhong
Zhaoqing University
*Corresponding author. Email: Chunghung222@126.com
ABSTRACT
As potential international trade risks increase, such as political risk, financial risk, and the risk of Covid-19. The study
presented in this article examined the balanced scorecard (BSC) as a component of a management control system for
the purpose of executing plans in a big mixed economy business. Over the past decades, the Balanced Scorecard (BSC)
model has aided companies in establishing activities that are linked with a value-creating strategy. Typically, BSC was
originally described as an achievement assessment framework critical to strategy implementation (SI), before
developing into a strategic management program. Additionally, BSC works to fulfill the anticipations of shareholders,
employees, customers, and to enhance service, internal procedures, training, and innovation. The firm's ownership
structure balances the interests of conventional shareholders with those of the administration. The study is innovative
in that it analyzes BSC usage and contributions in order to convert a corporate's strategy into set targets linked with the
four BSC viewpoints: financial, learning and development, process improvement, and customer.
Keywords: Organizational Planning, Corporate Strategic Planning, Balanced Scorecard, Mixed Economy
Company, Management Control System.
1. INTRODUCTION
BSC facilitates the handling of such information by
standardizing it into four distinct viewpoints [6]. further
emphasize that the BSC's idea of performance
assessment and control aims to connect the conventional
financial viewpoint with three others focused on
customer happiness, process improvement, and staff
learning and development. Nevertheless, a study has
shown the value of BSC in public and private enterprises,
as well as nonprofit groups. Meanwhile, critical
examinations of the literature have shown incoherent
empirical findings, resulting in the formation of criticism
or the lack of theory. Apart from the shortcomings noted
in the research, there are study shortages on the usage of
such models as a section of the management control
system (MCS) and the impact of BSC on SI in MEC,
particularly in emerging countries. Therefore, the aim of
this study is to examine the impact of using BSC as part
of a management control system on strategic
implementation at a major Australian mixed economy.
Notably, for the article to attain its objectives, this study
will focus on the following research questions;
How is MCS used in companies where strategic
interests from the Government and other investors must
be aggregated?
How to utilize systems that enable SI and promote
objective congruence in such companies (being a
significant management issue)?
2. LITERATURE REVIEW
Johnson and Kaplan (1987) asserted in the mid-
eighties that traditional accounting performance metrics,
which focused exclusively on physical and financial
predictors, were insufficiently reasonable to possible
direction felt in an increasingly dynamic, adaptable, and
strenuous corporate world involving communications
and information computation. BSC was created to assist
organizations in establishing practices that provide value
to shareholders, meet the expectations of other
stakeholders, execute plans, and enhance management
services, internal processes, training, and innovation. The
MCS is a tool for facilitating the execution of a business's
strategy hence it is a critical component of the
management activities, as it serves as the foundation for
strategy execution and, as a result, for meeting both
business and stakeholder goals. Dias Jordão and Casas
Advances in Economics, Business and Management Research, volume 654
Proceedings of the 2022 International Conference on Urban Planning and Regional Economy (UPRE 2022)
Copyright © 2022 The Authors. Published by Atlantis Press International B.V.
This is an open access article distributed under the CC BY-NC 4.0 license -http://creativecommons.org/licenses/by-nc/4.0/. 231
Novas [4] believe that strategy implementation is the link
between defining desired goals and successfully
achieving them. According to Andrews [2], strategy
formulation is a process through which senior
management evaluates the firm's strengths and
limitations in light of its core competencies,
environmental possibilities, and cooperative threat.
Besides, Porter [12] emphasizes that core competencies
are those that often have a broad, beneficial, and desired
impact and are built on intellectual assets that
differentiate a business from its competitors and propel it
to a higher degree of competition. Typically, strategy
refers to the overarching direction that the institution
establishes explicitly at the corporate, company, as well
as segment levels in order to accomplish its goals [4].
Nevertheless, Dias Jordão and Casas Novas argue that
Concerns at the organizational level include defining the
types of companies that the firm might grow and
allocating resources along with them. At the company
rank, strategic problems concern the efficacy of the firm
in a particular activity, with the goal of encouraging
diversity within the business or diversification into
various business segments.
Control and management control systems (MCS)
research focuses on one critical phase in the managing
process as it serves as the foundation for delivering on
strategies and meeting managerial and customer goals
[4]. A control tactic that is coherent with the goal of
increasing employee involvement in the management
activities is an opportunity to attain a comparative edge
from a strategic standpoint and a manner to direct the
entire group towards the administration's purpose from
an organizational standpoint. Srimai, Radford and Wright
[14] provide a complete strategy to manage based on a
study of the research on MCS from which entails a
systematic approach to the business with the goal of
meeting the expectations of various stakeholders within
the firm to the greatest extent feasible. Besides, Srimai et
al note that an MCS is intended to promote a company's
success by including a large number of people in the
management process with the goal of achieving both
individual and corporate goals. Since the eighties,
developments in the corporate climate have pushed
businesses into a more open, multinational, and dynamic
setting [4]. As a consequence, their MCS are required to
include additional indices in addition to the usual
economic, monetary, as well as performance metrics.
Among these new indicators, there are those relating to
organizational ethos, surrounding variables,
competitiveness, management partners' needs, and, in
specific, customer experience with goods, services, and
practices. Typically, the new methods advocated for
corporate productivity assessment techniques and the
integration of overt and covert control methods in order
to maximize the potential of policy-making procedures.
Additionally, recent MCS have included informal
methods to urge employees to act in line with
management expectations [10]. In this way, the paradigm
presented by BSC may be seen as a component of the
MCS owing to its integration of formal and informal
control views, as well as its critical role in the process of
strategy implementation.
Numerous studies have concentrated on specific
facets of BSC, its organizational and managerial
consequences [16]. However, empirical research on BSC
is limited, and many of the model's premises have
received little support from the scientific community.
According to Johanson [5], the BSC model's
systematized connections are logical - and not causal –
connections. Other writers, on the other hand, noted that
the arrangement of predictors inside the four viewpoints
and such connections may contribute to the managerial
process's advantages [4]. Following the criticism, it is
noted that the researcher community supports the
importance of BSC in SI. Kaplan and Norton [6] think
that BSC may be used to convert an organization's
purpose and strategy into a set of metrics that can be used
to evaluate and manage performance and the
organization. Nevertheless, BSC assumes that
effectiveness in SI is contingent upon individual
dedication and the development of productivity metrics
that are consistent with the organization's and all
stakeholders' anticipations. According to Niven [11], the
BSC assists companies in disseminating their strategic
plans across all levels, guiding people's activities toward
current and future performance improvement through
four distinct viewpoints. Allison and Kaye [1] argue that
performance assessment serves as a crucial connection
between planning, which includes defining objectives
and creating methods for achieving them, and control,
which guarantees that the institution’s members continue
to work toward achieving those objectives. They say that
BSC is a behavior assessment method that may assist
individuals in selecting main and secondary performance
measurements, as well as in comprehending their goals
and development throughout the process.
The BSC's perception as a model implies that, if
implemented, it allows companies that adopt it to make
continual improvements throughout time. Kaplan and
Norton [6] purported that companies may develop their
BSC to achieve more coherence and simplicity in
carrying out their responsibilities, focused on the
encounters of other enterprises that have previously used
this approach. The emphasis on the productivity
measuring procedure places the organization's strategy at
the center. This goal demonstrates that the BSC's
measurements may result in worldwide advances in
strategic management. Yet; the effective implementation
of such a model requires the participation of all
stakeholders in accordance with the strategic planning
objectives and priorities. One of the primary advantages
of using this approach is that it would concentrate on
strategies (which would form the foundation of the
company) that may result in better performance and
Advances in Economics, Business and Management Research, volume 654
232
innovation, while also connecting these strategies to
senior management objectives.
In research conducted in a petrochemical sector
organization that adopted the BSC, da Silva Carvalho and
Tostes [3] emphasized the need of defining the
company's positioning in relation to its purpose, vision,
and strategy. According to Nuintin, before implementing
the BSC, the organization must identify its reasons for
being,' its objectives, and the means by which it will
achieve them. According to the author, this model
enables managers to determine the causes and
consequences of transactions and choices made in order
to accomplish the desired outcomes. Nuintin found that,
even in the highly specialized world of agriculture, it is
feasible to implement the BSC model effectively.
According to, Kaplan and Norton [6], the BSC approach
is focused on the firm's strategy and how it is translated
into objectives, activities, and measurements. These
scholars further argue that, the application of BSC aids in
the management of critical resources necessary for future
performance. Implementing performance measurements
from a BSC viewpoint entails four steps: the translation
of the corporate vision; communication and goal
alignment; business planning; and evaluation and
learning. As a result, this approach enables the firm's
operational procedures and management to be aligned
with a long-term global and comprehensive plan. This
enables the short-term, through control actions, to be
evaluated, as well as the efficacy of decision-making in
relation to the BSC's four perspectives. This model, when
considered as a section of an MCS, helps to the firm's
vision and goals be defined consistently. Additionally,
this approach may enable strategy execution and required
changes aimed at increasing the company's
competitiveness by integrating all sectors.
Initially intended for private businesses, the BSC
details the methods necessary to "balance" their
productivity. However, there are instances in the
literature of how such a framework has been modified for
the public sector by prioritizing client, employee, and
customer satisfaction up the pyramid to represent the
organization's goal of delivering services. The objective
was to encourage responsible accountability, outcome
assessment, and decision-making that was transparent,
effective, and of high quality [4]. It is worth noting that
the public sector may have difficulty articulating its
strategic approach for a variety of reasons, including poor
customer engagement, a dearth of urgency for change,
and incapacity to prioritize initiatives. Furthermore,
external forces such as political or economic pressures
often result in financial limitations without regard for the
effect on the company's purpose and vision. Additionally,
such demands may cause a shift in emphasis away from
long-term strategic vision and toward immediate
concerns. In MEC, this issue is exacerbated by the private
sector's emphasis on financial outcomes, coupled with
the public sector's emphasis on service quality, openness,
and legitimacy. Therefore, a successful assessment
system designed for MEC must bring together technical
and political considerations with the goal of generating
value for all stakeholders [7]. Lastly, the effectiveness of
BSC implementation in MEC is contingent upon striking
an appropriate balance between short and long-term
goals, monetary and non-monetary metrics, pattern and
incidence predictors, and, eventually, company
performance views.
3. DISCUSSION
The triangulation of information with the necessary
documentation demonstrates that implementing the BSC
in the company will significantly aid in the execution of
the strategy stated in organizational planning. The
examination of all levels of statements will demonstrate
that the BSC enables constant surveillance of non-
financial variables which contribute to the organization's
plan, such as predictors of human resources. Typically, it
is critical that information about the BSC covers all areas
and functions inside the firm's structure since corporate
strategy goals unfold via participation panels that
approach the operational level. It is critical to explain the
BSC model to operational employees in order for them to
comprehend the connection between their job and
corporate strategy. The BSC is responsible for translating
strategy into goals, measurements, targets, and
initiatives, as well as for the development of corporate
indicators at the supervisory, management, and
operational levels [4].
The BSC allows administrators to highlight the
triggers and consequences of transactions and choices
made to accomplish the desired outcomes. Strategy
maps, which are used to translate strategy components,
provide critical information to top management in order
to monitor strategy implementation. In business maps,
such as the one for DBU, the corporate map is
fragmented. This map contains a number of strategic
objectives that help to the accomplishment of business
goals. There are objectives from every angle, ranging
from decreasing accidents and improving service quality
to enhancing the company's image and increasing
shareholder value. As is the case with all business maps,
financial metrics such as EBITDA and EVA are at the top
of Stewart's [15] map and must be met to fulfill the
fundamental views' goals. Additionally, the
superintendent of strategic planning will explain the
XYZ discussions that will be conducted to address
business operation and sustainability. Additionally,
workers will be urged to consider how they might offer
support to the organization's strategy implementation.
The data supplied by strategic activities as well as BSC’s
support will be sufficient to aid the management body in
policy-making since it will connect management
performance to the performance needed for the company,
as defined by the organization's strategy. Thus, the BSC
Advances in Economics, Business and Management Research, volume 654
233
will aid managers in comprehending and adhering to the
company's senior management plans [9].
4. CONCLUSION
The study reported in this paper examined BSC usage
in a major Australian MEC as part of an MCS on SI.
Through the use of case studies, it was determined that
BSC is a critical model because it enables the monitoring
of the monetary and non-monetary variables that support
the attainment of corporate strategic goals. This follow-
up is the section of a concept for plan management
centered on a planned flow of discussions that enables
better coherence and concentration, thereby converting
the planning and control procedure into a continual one.
As previously stated BSC in XYZ works as a component
of an MCS because it enables organized strategic
planning and prompts changes via a mechanism of
strategic notifications that may be triggered in the event
of need or opportunities. In XYZ, top management is the
focal point and primary user of the paradigm, and via
BSC, it manages any part of the business in accordance
with its objectives. One significant drawback of this
report was the difficulty of generalizing the findings
indiscriminately, as well as the potential for bias in both
participant statistics and the articles' assessment,
irrespective of the methodological potential and the
scholars' efforts to conduct an unbiased account.
Conversely, it was observed that there is a structure
amongst performance measures, with financial metrics at
the highest end and the company needing to achieve the
grassroots views' goals in order to attain them. However,
hierarchies were not the primary target of this review, and
further studies are suggested to further explore such
problems and get a deeper knowledge of the topic.
REFERENCES
[1] Allison, M., & Kaye, J. (2011). Strategic planning
for nonprofit organizations: A practical guide and
workbook. John Wiley & Sons.
[2] Andrews, K. R. (1971). Concept of corporate
strategy.
[3] da Silva Carvalho, G., & Tostes, F. P. (2007). A
implantação do Balanced Scorecard em uma
empresa brasileira do setor petroquímico: um estudo
de caso. In Anais do Congresso Brasileiro de
Custos-ABC.
[4] Dias Jordão, R. V., & Casas Novas, J. L. (2013). A
study on the use of the balanced scorecard for
strategy implementation in a large Brazilian mixed
economy company. Journal of technology
management & innovation, 8(3), 98-107.
[5] Johanson, U., Skoog, M., Backlund, A., &
Almqvist, R. (2006). Balancing dilemmas of the
balanced scorecard. Accounting, Auditing &
Accountability Journal.
[6] Kaplan, R. S., & Norton, D. P. (1996). Using the
balanced scorecard as a strategic management
system.
[7] Lubberink, R., Blok, V., Van Ophem, J., & Omta,
O. (2017). Lessons for responsible innovation in the
business context: A systematic literature review of
responsible, social and sustainable innovation
practices. Sustainability, 9(5), 721.
[8] Meneses, F. J. N., MARTÍ, F. P., &
HERMOSILLA, J. C. (2016). Complexity-based
view of the firm: theoretical perspectives,
methodological framework and empirical evidence
(Doctoral dissertation, Universidad de Alcalá).
[9] Mooraj, S., Oyon, D., & Hostettler, D. (1999). The
balanced scorecard: a necessary good or an
unnecessary evil?. European Management Journal,
17(5), 481-491.
[10] Mundy, J. (2010). Creating dynamic tensions
through a balanced use of management control
systems. Accounting, Organizations and society,
35(5), 499-523.
[11] Niven, P. R. (2002). Balanced scorecard step-by-
step: Maximizing performance and maintaining
results. John Wiley & Sons.
[12] Porter, M. E. (2008). Competitive advantage:
Creating and sustaining superior performance.
simon and schuster.
[13] Schneier, C. E., Shaw, D. G., & Beatty, R. W.
(1991). Performance measurement and
management: A tool for strategy execution. Human
resource management, 30(3), 279-301.
[14] Srimai, S., Radford, J., & Wright, C. (2011).
Evolutionary paths of performance measurement: an
overview of its recent development. International
Journal of Productivity and Performance
Management.
[15] Stewart, B. (2013). Best-practice EVA: the
definitive guide to measuring and maximizing
shareholder value. John Wiley & Sons.
[16] Tikkanen, H., Lamberg, J. A., Parvinen, P., &
Kallunki, J. P. (2005). Managerial cognition, action
and the business model of the firm. Management
decision.
Advances in Economics, Business and Management Research, volume 654
234
