Corporate Strategy, Employees’ Attitudes Toward the Balanced Scorecard, and Corporate Performance: A Contingency Approach

Behavioral aspects and positive attitudes toward the balanced scorecard (BSC) could be a determinant factor in the success of BSC implementation. In the study we use the contingency theory framework to examine whether adopting a planned strategy improves employees’ buying into the BSC and helps to maximize the benefits of BSC implementation by enhancing corporate performance. We hypothesize that employees’ attitudes and perceptions toward the implementation of the BSC are contingent upon the type of strategy the firm is employing and the suitability of deploying the BSC with this strategy in place. We use a path model that draws an association between the firm's strategy and employee attitudes toward BSC implementation and employs OLS regression to test the association between the variables. We also examine whether employees’ positive attitudes help to improve a firm's performance as proxied by the customer, internal processes, learning and innovation, and financial perspectives of the BSC. We sent a mail survey to Canadian and US firms to collect the necessary data in order to conduct this study. Conforming to our expectations, we find that firms that carefully plan their strategic objectives are more likely to have a positive impact on their employees’ perception of the BSC. A deliberate strategy – or planned strategy – as defined by Mintzberg (1978) is associated with higher levels of BSC awareness, perceptions of BSC ease of use, perceptions of BSC usefulness, and intentions to use the BSC. We also find that higher perceptions of BSC ease of use are positively associated with aspects of a firm's performance, such as from the customer, internal processes, and learning and innovation perspectives. Hence, we conclude that firms implementing the BSC need to take into consideration that the successful implementation of the BSC requires careful planning to ensure that the firm's strategic objectives are well formulated, in agreement with BSC measures, and effectively communicated to BSC users.