Pursuing Sustainability with the Balanced Scorecard: Between Shareholder Value and Multiple Goal Optimisation

Abstract

III ABSTRACT 1A rising awareness about the limitations of measuring organisational success merely with financial metrics has motivated researchers and practitioners to call for more holistic performance management and measurement systems. The balanced scorecard (BSC) as proposed by Kaplan and Norton is maybe the most popular framework which aims at a balance between multiple performance dimensions and objectives. Moreover, the increasing strategic importance of environmental and social aspects have led to the suggestion of a so called sustainability balanced scorecard (SBSC), which promises the consideration of even further performance dimensions. More specific, the SBSC aims at balancing financial objectives with environmental and social objectives. However, the SBSC approaches proposed strongly differ in the way they deal with managing multiple objectives. Against this background, we conduct a systematic review of the research field dealing with the SBSC in order to advance the knowledge on managing multiple corporate objectives. As part of our results, we first give a brief description of the research field using bibliographical analysis. Second, we derive a typology of generic SBSC architectures showing that the architecture is contingent on the value system the organisation chooses to operate in (profit driven, care driven, systemic driven) and the corporate sustainability strategy opted for (defence, accommodation, proaction). We further show that the architectures can generally be applied by various types of organisations (public listed, large private, and small and medium-sized companies), but that some combinations are more likely than others. Implications for management and research are also derived.

How to Apply the Sustainability Balanced Scorecard Concept

“…Therefore, once defined strategy has to be periodically modified or even radically redefined in order to provide the expected growth/development of an enterprise and its sustainable development goal realization (Krstić et al, 2008, Lambert et al, 2012, Hansen, Schaltegger, 2012. This is particularly important in situations when strategic importance of environmental and social aspects is not properly assessed.…”

Environmental Management Systems and Balanced Scorecard: An Integrated Analysis of the Marine Transport

“…Actually, scientists developed an extended architecture of BSC under the name of SBSC and they did it for two reasons [37]:…”

Impact of Sustainability Balanced Scorecard Types on Environmental Investment Decision-Making

“…Scholars have developed extended scorecard architectures under the name of SBSC [23], possibly for two reasons: (1) to allow management to address goals in all three dimensions of sustainability by integrating economic, environmental, and social aspects; and (2) the SBSC integrates these three dimensions in a single integrated management system instead of a parallel system. Based on these considerations, the SBSC differs from the balanced scorecard (BSC) explicitly by recognizing sustainability-related objectives and performance measures and it is an appropriate tool for integrating strategically relevant environmental, social, and ethical goals [24].…”