Evaluation of the success of management accounting innovations -A study of the use of the balanced scorecard

Abstract

Background and problem: The Balanced Scorecard (BSC) was developed with intentions to provide a more balanced management in organisations. Since its invention in the 1990s, this management accounting innovation (MAI) has gained a large acceptance in both research and practice and been adopted by both public and private organisations. Previous researches argue that the adoption of the BSC has to some extent become a fashion and that the choice may not consider the nature of the organisation. An adoption and implementation of the BSC does not necessary imply benefits for the organisation and the change evokes a need for assessing its effectiveness. It is therefore of importance to further investigate this matter by questioning: How and why do organisations measure the success of their use of the Balanced Scorecard? Purpose: The purpose of this thesis is to through an empirical study contribute to an expanded knowledge of the MAI evaluations conducted by organisations. By providing examples on how theoretical methods are applied in organisations, we wish to give further guidance in the practice in evaluations of MAIs and contribute to a greater appraisal of how to measure its success. Method: This thesis is based on semi-structured interviews with six organisations, which have carried out evaluation of their BSC. The interviews were conducted in person or over the telephone. Result and conclusions: Our findings suggest that the definition of success to a large extent is individual for the organisation. It is furthermore suggested that the definition often lacks a direct link to the method of evaluation and that the complexity of measuring success has lead to a frequent use of subjective measures of success. This implies that the choice of method of evaluation does not always consider the nature of success according to the MAI itself. Furthermore, developing the model is shown to be the most common purpose of evaluation.