Balanced scorecard: a rising trend in strategic performance measurement

The long‐term survival of a business is dependent upon meeting market needs through a long‐term value creation process. Traditional performance measurement systems have been criticized as being too narrowly focused on financial figures and functional level performance such that they often fail to capture organizational long‐term business success. In contrast, the balanced scorecard calls on managers to first make a commitment to introduce an array of measures or scorecards that will guide their decisions away from the narrowly focused financial measures. These scorecards, in turn, serve as dials on a dashboard and guide businesses into greater profitability as managers position themselves to better serve their employees, customers, and shareholders at large. Using information collected from 83 electronics companies located within the USA, results from the study provide support for the balanced scorecard. Specifically, findings show that manufacturing plants that have strategically linked their corporate goals or objectives to their performance measurement systems, via the scorecard, performed better than those that do not.