A Critique of the Balanced Scorecard as a Performance Measurement Tool

Abstract

Given the dynamic nature of business markets, organizations have witnessed a rapid change in their performance measurement systems in the last three decades with most of the performance measurement tools being more sophisticated. One of the most widespread tools is the Balanced Scorecard (BSC). Within a decade since its emergence, a majority of the Fortune 1000 companies was implementing the BSC. Despite the widespread adoption, a growing body of scholarship finds limitations in the BSC, particularly in its concept, application, and practice. The same body of scholarship contends these limitations could either undermine the effectiveness of the BSC or cause firms to abandon the BSC altogether for better performance measurement alternatives. Hence, the main aim of this paper is to provide a review or rather a critique of the BSC as a performance measurement tool and debating whether the BSC is in fact a universal solution for corporate performance measurement.