Balanced scorecard and controllability at the level of middle managers – the case of unintended breaches

Abstract

Purpose – This paper aims to analyse how the inherent design of the Balanced Scorecard (BSC) violates the controllability principle. The management control literature provides convincing examples of actors who breach controllability without intention. This discussion was extended by the example of the BSC. This paper focusses on the breaches that occur when actors lack the awareness or the skills to re-enforce controllability. Design/methodology/approach – Taking a pragmatic-constructivist position, analytical and empirical evidence was included on controllability to analyse the normative literature on the BSC. Findings – It was found that the BSC causes several unintended breaches of the controllability principle at the level of middle managers, both ex ante (control rationale) and ex post (fairness rationale). These breaches are not only situational or induced by how managers in the field design a BSC. They appear to be inherent in the BSC due to the way Kaplan and Norton have conceptualised it. Practical implications – Practitioners are alerted that the intuitive appeal of popular management fashions such as the BSC covers their conceptual flaws. It was also proposed that failed implementations and dysfunctional applications can be due to the inherent characteristics of the concepts themselves. Originality/value – This paper contributes by uncovering the unintended violations of the controllability principle by the inherent characteristics. The authors suggest using our conceptual contribution to conduct empirical research on the issues of controllability and management control systems in general. Thereby, the theory-based discussion on the BSC is advanced (Nørreklit, 2000, 2003; Nørreklit et al., 2012a).

Middle Managers and the Translation of New Ideas in Organizations: A Review of Micro‐practices and Contingencies

“…Middle managers calibrate their position according to their attitude toward the idea (Balogun and Johnson ; Behrens et al . ; Conway and Monks ; Fenton‐O'Creevy ; Huy ; Ren and Guo ; Sillince and Mueller ) and develop judgments about its controllability and fit with personal values and interests (Ciuk and James ; Jakobsen and Lueg ; Raaijmaker et al . ).…”

“…Indeed, MMs are expected to adapt ideas for organizational consumption, and even to reinvent their core contents and purposes (Fitzgerald et al . ; Floyd and Lane ; Jakobsen and Lueg ; McCabe ; Morris and Lancaster ). In particular, Ciuk and James (, p. 7) report how apparently innocuous interlingual translations could become a ‘cultural and political process which opened up spaces for reflexivity and dialogue among those involved’ and MM‐led coalitions embedded local interests and values in the ‘source text’.…”

“…knowledge, practices, strategies, roles and technologies that are ‘new’ to the context of translation, and that are translated because they carry the potential for significant changes in established routines, practices and products/services. Examples in our review are the ‘translation’ of balanced scorecards in performance management tools (Jakobsen and Lueg ), top‐down plans to restructure a unit (Rouleau and Balogun ), and bottom‐up gender‐equality plans (Dutton and Ashford ).…”

The role of the controller in strategic capital investment projects: bridging the gap of multiple topoi

“…Facts referring to ontologically subjective phenomena can for example be institutional or individual matters. Subjective facts can also be assumptions, language or management accounting knowledge (Jakobsen and Lueg 2014;Nørreklit et al 2016). Accounting facts such as revenue estimates and profit predictions are human creations and socially constructed (Nørreklit et al 2010).…”

The Actor’s Role in the Survival of non-financial Management and Reporting Practices: the case of IC reporting in Denmark and Italy

“…Tight guidelines or requirements, i.e., with limited possibilities (cf. Jakobsen and Lueg, 2014), instead reduce the space for co-creation and thereby limit people's engagement and consequently the survival of practices.…”