A Balanced Scorecard Strategic Initiative Planning Model with Resource Constraints
Abstract
Purpose
Empirical evidence indicates that effective management of resources to implement strategy in a balanced scorecard (BSC) system is essential. We present a mathematical model for allocating limited resources in the BSC strategy implementation process.
Methodology/approach
The proposed facilitated negotiation model provides a systematic approach to prioritizing strategic initiatives in the design and implementation of a BSC.
Findings
Our joint decision model prioritizes strategic initiatives and concurrently calculates the optimal (or approximately optimal) set of BSC targets and weights, given multiyear resource restrictions.
Practical Implications
The model assumes full, open, and truthful exchange of information between the parties; an assumption that may exclude many organizations.
Social Implications
We address an important gap in the BSC literature on how organizations can effectively link strategy to the potential constraint of resource budgets.
Originality/value
Quantitative models are being used in practice for allocating resources, but we are not aware of their use by organizations for allocating resources in a BSC application.
Keywords
Acknowledgements
Acknowledgment
We wish to thank the Editor, Professor John Y. Lee, and the reviewers for their valuable comments that helped improved the article. Dr. Hemantha S. B. Herath acknowledges research funding from the Social Sciences and Humanities Research Council (SSHRC) of Canada (Grant nos: 410-2009-1398 and 410-2004-758).
Citation
Herath, H.S.B., Bremser, W.G. and Birnberg, J.G. (2014), "A Balanced Scorecard Strategic Initiative Planning Model with Resource Constraints", Advances in Management Accounting (Advances in Management Accounting, Vol. 24), Emerald Group Publishing Limited, Leeds, pp. 1-38. https://doi.org/10.1108/S1474-787120140000024001
Publisher
:Emerald Group Publishing Limited
Copyright © 2014 Emerald Group Publishing Limited