- Email: [email protected]
Strategic control: meshing critical success factors with the balanced scorecard
Strategic Control: Meshing Critical Success Factors with the Balanced Scorecard
407
Paula van Veen-Dirks and Martin Wijn
Companies operating in fast-changing environments face a constant need to evaluate and formulate strategy. The problem many of the companies face is how to measure performance in order to be sure of following the correct path and avoid too much tension between strategy formulation and implementation. The use of non-financial indicators has come into favour as a method of providing insights into organisations. One method, the Balanced Scorecard, is a way of designing a performance measurement system that takes into account non-financial indicators. Another is the use of Critical Success Factors, which can be employed to establish a direct relationship with the market and therefore lead to a strategic control system. The authors argue that these methods are complementary and can be combined, a conclusion drawn from a six-year research project into performance evaluation in the Netherlands. They argue that the Balanced Scorecard provides opportunities for diagnostic and interactive control, but not for strategic control, and as a tool it is very inflexible. Critical Success Factors, on the other hand, can be used as a measurement system that is directly connected to the market and therefore can provide an early signal to changes in the environment. The authors argue that an integrated approach can lead to a more adequate performance management system that provides support for strategy implementation as well as for review of the chosen strategy. PII: S0024-6301(02)00065-1
Long Range Planning, vol 35
2002
347
407
Paula van Veen-Dirks and Martin Wijn
Companies operating in fast-changing environments face a constant need to evaluate and formulate strategy. The problem many of the companies face is how to measure performance in order to be sure of following the correct path and avoid too much tension between strategy formulation and implementation. The use of non-financial indicators has come into favour as a method of providing insights into organisations. One method, the Balanced Scorecard, is a way of designing a performance measurement system that takes into account non-financial indicators. Another is the use of Critical Success Factors, which can be employed to establish a direct relationship with the market and therefore lead to a strategic control system. The authors argue that these methods are complementary and can be combined, a conclusion drawn from a six-year research project into performance evaluation in the Netherlands. They argue that the Balanced Scorecard provides opportunities for diagnostic and interactive control, but not for strategic control, and as a tool it is very inflexible. Critical Success Factors, on the other hand, can be used as a measurement system that is directly connected to the market and therefore can provide an early signal to changes in the environment. The authors argue that an integrated approach can lead to a more adequate performance management system that provides support for strategy implementation as well as for review of the chosen strategy. PII: S0024-6301(02)00065-1
Long Range Planning, vol 35
2002
347