Empirical investigation of balanced scorecard’s theoretical underpinnings

Purpose – The purpose of this study is to investigate empirically the balanced scorecard (BSC)’s theoretical underpinnings. Design/methodology/approach – This study undertakes a cross-sectional, self-administered e-mail survey to examine the convergent and discriminant validity of the performance indicators of the BSC’s four perspectives using principal components analysis and confirmatory factor analysis. Findings – The results suggest that the performance indicators of each BSC’s perspective converge with the same perspective’s performance indicators and discriminate from other perspectives’ performance indicators. Research limitations/implications – Future researchers are invited to conduct conceptual-level tests of the BSC framework using the newly constructed subjective scales of the performance indicators of the BSC’s perspectives. Furthermore, scholars conducting empirical research on the field are encouraged to further investigate the BSC’s theoretical underpinnings using various research designs, multiple research methods and a combination of existing and new BSC’s performance indicators. Originality/value – This study contributes to the academic stream of management accounting and strategic management field by: empirically validating the BSC’s theoretical underpinnings that is a prerequisite for the BSC to advance from a framework to a theory and providing subjective scales for measuring the generic performance indicators of the BSC’s four perspectives that can be used in future research of the BSC framework’s hypotheses. In addition, the literature is enhanced with a newly developed perceptual measure of firm performance with attributes of the BSC’s four perspectives.