Hot or Not? - scrutnizing the balanced scorecard from a management fad & fashion perspective

Abstract

Background and problem: A well established truth in the world of business is that companies need management control systems (MCS) in order to ensure the maximization of shareholder wealth, however, it is extremely hard – perhaps impossible – to design “the optimal MCS”. Consequently, it is not surprising to see that there is a multitude of management tools out there, many of which have been criticized of being fads. Of all the management tools designed to improve performance, the Balanced Scorecard (BSC) has, by far, been the most popular. Therefore, we feel that it would be very interesting to see if the BSC could withstand the scrutiny of being investigated from a fad & fashion perspective. Purpose: The purpose of this thesis is to examine to what extent the BSC exhibits management fad or fashion related indications and to analyze what this tells us about the BSC itself. Method: A quantitative investigation of volume, authorship, and content of publications will be conducted to discern popularity patterns and attitudes toward the BSC. To support the investigation secondary data in the form of studies made by Bain & Co and Chen & Jones, mapping the usage and satisfaction of the BSC will be used. In addition, another quantitative investigation will be conducted to determine whether the BSC is new or if it is “old wine in new bottles”, meaning that it is a repackaged bundle of already existing management concepts. Results and conclusions: Our findings indicate that the BSC in fact exhibits some indications of management fads or fashion even though the evidence is inconclusive. Indicating that the BSC might be a trend is that satisfaction and attitude towards the model is waning and that the core concepts existed prior to its creation. Indications that the BSC is not a trend are that no bell‐shaped pattern was discernable and that market penetration is stable at a fairly high level. In conclusion, it is too early to firmly establish to what extent the BSC could be considered a trend. Suggestions for future research: Since we concluded that it is too early to firmly establish to what extent the BSC could be considered a trend; it would be interesting to conduct a similar investigation in a few years to see whether it, by then, is possible to discern a clear trend pattern. Other interesting areas for future research include: content vs. rhetoric analysis, studies of the ation of the BSC with Abrahamson’s interpretative viability of the BSC, and similarities of the foundfashion‐setting process.