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BIJ
25,3 The adoption of balanced
scorecard: an exploration of its
antecedents and consequences
874 Reetesh K. Singh and Simple Sethi Arora
Department of Commerce, Delhi School of Economics,
Received 7 June 2017
Revised 19 October 2017 University of Delhi, New Delhi, India
Accepted 2 November 2017

Abstract
Purpose – The purpose of this paper is to study the adoption of balanced scorecard (ABSC) as performance
management system (PMS). It also proposes a framework for empirically validating the antecedents and
consequences of the ABSC as PMS.
Design/methodology/approach – Through the extensive review of BSC literature, the antecedents and
consequences factors of BSC adoption as PMS are explored. A conceptual model is derived which
hypothesises the relationship between the antecedents and consequences of the ABSC. The data collected by
surveying perception of 128 bank employees is empirically tested. Confirmatory factor analysis is used to test
the validity of the proposed measurement model, and hypothesised relationships are tested using structural
equation modelling.
Findings – The findings confirmed the hypothesised conceptual model. They indicate that top management
involvement and interdepartmental communication are the two prime antecedent factors which significantly lead
to ABSC as PMS. In addition to this, the findings validate a strong causal relationship between ABSC and three
consequence factors, namely, employees’ behaviour, organisational capabilities and perceived performance.
Research limitations/implications – The current study broadens the understanding of the notion of BSC
as PMS in a considerable manner. It overcomes the inadequacy of the previous studies which failed to explore
the antecedents and consequences of ABSC in a comprehensive way. The studies’ key limitation is that it is
based on the perception of employees which can be overcome by using multiple methods to collect data in
future studies.
Originality/value – The current study makes a significant contribution to the BSC literature. It is a first of
its kind study to provide empirical validation to the conceptual model of antecedents and consequences of the
ABSC as PMS. The research finding offers key implications for both researchers and practitioners.
Keywords SEM, CFA, Adoption, Antecedents, Consequences, Balanced scorecard (BSC),
Performance management system (PMS)
Paper type Research paper

1. Introduction
In today’s dynamic environment the competition is making business organisations to thrive
for enhancement of performance effectiveness (Punniyamoorthy and Murali, 2008).
This makes imperative for the organisations to have sustainable performance management
systems (PMS) which in addition to define its purpose, and ongoing plans, gives
comprehensive coverage to performance assessment. Conventionally, performance
measurement used to hinge on financial goals, off late sustainability became the driving
force for performance management. Presley and Meade (2010) found sustainability to be an
integral component of business’ benchmarking plans.
To take the idea of benchmarking forward, the present study has taken balanced scorecard
(BSC) as benchmarking tool as introduced by Kaplan and Norton (1992). BSC is visualised as a
multiple perspective measure that provides a framework for monitoring current performance
and adopting sustainable procedures essential for future performance (Kaplan and Norton,
Benchmarking: An International
Journal 1996). It has replaced the passive performance measurement reporting system with more
Vol. 25 No. 3, 2018
pp. 874-892
proactive result driven performance management practices. The acceptability of BSC is
© Emerald Publishing Limited
1463-5771
evident in its considerable essentials and content development and evolution (Ax and
DOI 10.1108/BIJ-06-2017-0130 Bjornenak, 2005; Braam and Nijssen, 2004; Bible et al., 2006; Crabtree and DeBusk, 2008;
Cooper et al., 2012) since inception. The research and review rigour has made BSC an Adoption of
appropriate topic for deep exploration (Aparisi Caudeli et al., 2009; Madsen and Stenheim, balanced
2015). Contrarily, despite numerous studies, the validity of the adoption of balanced scorecard scorecard
(ABSC) as PMS and its antecedents and consequences remain interrogative (Lucianetti, 2013).
Though BSC researchers, namely, Malmi (2001), Braam and Nijssen (2004) and Johanson et al.
(2006) have attempted to identify antecedents factors like top management support,
management fashion, centralisation, formalization, etc. that encourage organisations to adopt 875
BSC as PMS, these studies are limited in scope only to identify these factors. To further the
work, Lucianetti (2013) stresses the need to explore the validity of antecedents responsible for
BSC adoption. Similarly, as BSC antecedents are factors expected to predict its adoption, the
other factors i.e. consequences result out of adoption of BSC. BSC research literature has traces
of different manners of investigating the consequences of BSC adoption. On the one hand, the
studies focus explicitly on the BSC’s effect of adoption on organisational performance
(DeGeuser et al., 2009), on the other hand, the studies focus on implicit outcomes of BSC
adoption like the behavioural aspects (Braam and Nijssen, 2004). Despite this, there are little
evidence about actual consequences of BSC adoption as PMS. In addition to this, no two
studies appear to be aptly comparable as they differ in many aspects like samples,
methodologies and timeframe of data collection. Furthermore to our knowledge no integrated
study has been conducted to better understand the interplay of antecedents and consequences
of BSC adoption as PMS.
Hence given this background, the current study aims to empirically explore the
antecedents and consequences of ABSC as PMS. It is believed that research findings will be
highly significant to managers and scholars interested in comprehending the BSC as PMS.
The present paper is organised in sections for better readability. The current section
contains introduction; Section 2 presents the review of BSC literature that motivated our
research objectives; in Section 3, the conceptual model and hypotheses of the study are
detailed; Section 4 presents the research method used. In Section 5, the analysis and
interpretations is presented followed by discussion and conclusion in Section 6. In the next
section managerial and theoretical implications are listed. In the last section current study’s
limitations and future research directions are given.

2. Literature review
2.1 ABSC as PMS
The conventional performance measurement methods were extensively criticised for being
dominated by temporary, inside looking, backward oriented and feebly related to
organisational tactic (Cross and Lynch, 1991; Kaplan and Norton, 1992; Epstein and
Manzoni, 1997). This called for a paradigm shift from the conventional performance evaluation
system to modern approach of assimilating both financial as well as non-financial measures
(Atkinson and Brander Brown, 2001; Malina and Selto, 2001; Hoque and James, 2000).
In response to this requirement, the BSC was conceptualised “as a framework for
measuring performance from both financial as well as non-financial perspectives”. The chief
reason for its development was to provide a benchmarking tool that can offer “a fast but
comprehensive view of the business” (Kaplan and Norton, 1992). Early writings on the BSC
stressed upon “balance” aspect of scorecard by appreciating the ability of its multiple
measures to present the balanced view of organisation’s performance (Hoque and James,
2000; Malina and Selto, 2001; Atkinson and Brander Brown, 2001). In past, researchers like
Atkinson and Brander Brown (2001) and Davis and Albright (2004) have investigated how
the managers use the four BSC perspectives (financial, customer, internal business process
and learning, and growth) to achieve wholesome measurement of performance. But now the
focus has got shifted in recent studies from measurement to management and from balance
to strategy (Kaplan and Norton, 2006; Aparisi Caudeli et al., 2009). Literature reveals that
BIJ BSC is now projected as a strategic PMS advocating translation of strategy to operational
25,3 terms. Though there have been traces of a gradual evolution of BSC from conventional
performance measurement system to contemporary PMSs, the validation of its adoption as
PMS remains to be established and authenticated (Braam and Nijssen, 2004). According to
Rogers (2003), adoption refers to “the process through which a decision making unit passes
for gaining initial knowledge of an innovation, to forming an attitude towards it, making a
876 decision to adopt or reject, to implementation of new idea and to confirmation of this new
decision”. Building on the model proposed by Roger’s framework, Braam and Nijssen (2004)
in their study recognise BSC adoption as a complex process by differentiating between
experimentation and implementation stages of adoption. In their study Rigby and Bilodeau
(2007) found that in a worldwide survey, 66 per cent of the respondent companies claimed to
have effectively adopted the BSC. Despite impressive BSC adoption rate, past studies
advocated ABSC needs to be well conceptualised to facilitate its further exploration
(Davis and Albright, 2004; Braam and Nijssen, 2004; DeGeuser et al., 2009). Moreover, there
is a dearth of published research on the ABSC as PMS, in the context of India. Though
research in the past have studied BSC from various perspectives like Indian companies
experience with BSC (Anderson and Lanen, 1999; Joshi, 2001), it is implementation
(Anand et al., 2005), usage (Pandey, 2005; Dave and Bhatt, 2012), extent of adoption (Anand
et al., 2005; Pathak, 2014), challenges associated with BSC (Pandey, 2005; Dave and Bhatt,
2012) yet there seems to be lack of clarity over terms “adoption” and “implementation” as
they have been used interchanagebly inspite of different meanings (Rogers, 2003).
Hence, there is a need for the appropriate conceptualisation of the construct of ABSC.
Therefore, in the current study on the basis of Kaplan and Norton (1996) “Using balanced
scorecard as strategic performance management system”, items chosen to be reflecting the
BSC adoption attributes are tested and validated.
Further, the BSC literature indicates that ABSC is widely researched across the countries
but researchers have suggested that it would be interesting to explore what are the factors that
facilitate ABSC as PMS (Braam and Nijssen, 2004; Neely et al., 2004). Hence in current paper to
better comprehend the construct of ABSC we have attempted to explore the factors under two
separate heads as antecedents and as consequences of BSC which are presented below.

2.2 Drivers (antecedents) of BSC

The drivers also commonly referred to as forerunner or antecedents connotes to those
construct, conditions or factors which have paved the way for the ABSC. They are the
determinants that explicate why organisations should go for adopting the BSC besides
substituting it for their existing performance measurement systems. There is number of
studies where researchers have attempted to explore the drivers, i.e. antecedents that
encourage organisations to adopt BSC either because it presents valuable information or
because it leads to better execution of organisational strategies (Aparisi Caudeli et al., 2009;
DeGeuser et al., 2009). It is found by Farneti and Guthrie (2008) that in Italy as well as
Germany, the BSC is primarily used as internal management control activity and only a little
for external public reporting. While exploring the motivating drivers for BSC adoption, Malmi
(2001) by interviewing the key managerial personnel of Finnish organisations known to have
adopted BSC asserted that BSC is perceived as simply another management fad. Further, he
states that primarily BSC’s promoters are responsible for its popularity. However, he raised
the concerns regarding who are BSC’s main promoters or disseminators? With the intention to
found answers to these questions, Braam and Nijssen (2004) have explored whether
consultants, after top management, are main BSC disseminators. On the basis of content
analysis of Dutch language management publication, it is concluded that consultants indeed
play a significant role in BSC dissemination as around 50 per cent consultants are found to be
the authors in professional media. In their study, Speckbacher et al. (2003) have found BSC to
be the wholesome system offering an all-inclusive control mechanism and effective means to Adoption of
cost control. Further, the efficacy of the BSC model with factors like transparency in an balanced
organisational setting and strategic decision-making facilitates ABSC as a strategic scorecard
management system (Carmona and Grönlund, 2003). In addition to this, Braam and Nijssen
(2004) found the positive and significant impact of interdepartmental communication (IDC) on
BSC adoption. To substantiate this, Assiri et al. (2006) discovered that information sharing
among departments is a key driver to BSC adoption. Further, Shutibhinyo (2013) established 877
that higher degree of participation; formalisation, interconnectedness and information sharing
positively impact the organisation’s decision to adopt BSC. DeGeuser et al. (2009) empirically
substantiate that positive enhancement to the organisational culture is leading motivation to
employ BSC. In a comprehensive study, Lucianetti (2013), while exploring diverse antecedents,
concludes that initiating the process of internal change and common BSC adoption practices
are the prime drivers for ABSC.
In the context of India, Kumar (2013), while exploring the antecedents of BSC adoption,
found that product market dynamics, centralisation and formalisation are the key
determinants, whereas Aravamudhan and Kamalanabhan (2009) discovered that
contingency factor (firm size, product life cycle stage and strong market position) and
behavioural factors (involvement and experience of top management) both tend to support
BSC adoption in Indian firms. However, in addition to top management’s commitment, the
determination of critical success factors and an effective organisational communication
system are also found to be prerequisite for the successful implementation of the BSC
(Farooq and Hussain, 2011; Pandey, 2005).
Against this background, it is established that past researchers have recognised various
antecedents. These are constructs perceived to be causing the ABSC as PMS. These are
prime determinants to adopt BSC. The present study takes first objective to validate these
antecedents of ABSC as PMS. On the basis of Braam and Nijssen’s (2004) study, the present
study empirically explored two antecedents of ABSC, namely, top management involvement
(TMI) and Interdepartmental Communication (IDC).

2.3 BSC consequences

As BSC drivers are expected to envisage its adoption, the consequences pertain to the
outcomes arising out of this adoption. Scholars have attempted to measure the consequences
of BSC adoption as performance management tool. However, consequences of adoption vary
from no effect to slight indirect effect and of course to clearly evident effect. As few
researchers like DeGeuser et al. (2009) have indicated that BSC is capable to enhance
organisational performance by practicing execution of organisation’s strategic plans, then
others have stated that it seems tricky to evidently proclaim a direct association between
organisational performance and BSC adoption (Davis and Albright, 2004; Braam and Nijssen,
2004). In addition to this, it has been found that the BSC’s consequences largely depend on
how its notion is inferred, comprehended, and implemented by the organisations as the ones
implementing it like a PMS tend to achieve different outcomes than the others who adopt it as
a strategic management tool (Davis and Albright, 2004). Also, performance outcomes of the
BSC are not dependent on subject contingent factors, whereas unique measures are
comparatively less influential in performance evaluation than common measures (Becker and
Gerhart, 1996; Hoque and James, 2000; Lipe and Salterio, 2000). Moreover, researchers have
explored certain explicit outcomes of BSC usage too, for instance, the organisation’s strategic
goals can be visualised better by making use of strategy maps ( Jarzabkowski and Spee, 2009;
Whittington, 2003). While studying the effectiveness of the BSC model, Malina and Selto
(2001) discovered BSC effective to control corporate strategy and communication of the firms.
However, Lucianetti (2013) found the interest of fewer firms in employing BSC for strategy
communication process at an employee level.
BIJ Researchers in India like Pandey (2005) found that BSC has been adopted and practised
25,3 by many big Indian firms to improve organisational performance and concludes that BSC is
widely accepted as a tool for driving organisational change by firms. Some other Indian
studies are worth mentioning in this regard. Yemeshvary et al. (2013) found BSC adoption
enhances employee engagement and improves strategy implementation process resulting in
the creation of performance-oriented work culture. In a more recent study by Gohel (2007) it
878 is established that post BSC, the strategic and operational effectiveness improves
considerably. Likewise, Makkar and Kumar (2011) substantiated the overall optimistic
impact of BSC on employees leading to increased organisational effectiveness. Similarly, it’s
also found that the Indian companies involving employees in the development of BSC to
obtain active participation in the tactical process of planning leading to enhanced
organisational performance. In an interesting study, Valmohammadi and Servati (2011)
revealed that growth and learning perspective of BSC improves knowledge management of
the firm leading to positive impact on organisational performance. However, exploring the
consequences of BSC adoption, Kumar (2013) opines positive consequences of BSC adoption
but fails to find significant outcomes of BSC adoption. He further states that consequences
should be explored beyond financial yardstick encompassing multiple perspectives. Singing
on the same tunes, Malmi (2001) submitted that the manner in which BSC is applied makes
its consequences vary, paving the way for appraising the consequences of BSC.
Therefore in the current study, on the basis of the classification of the consequences of
PMS given by Franco-Santos et al. (2012), the consequences of the ABSC as PMS are explored.
According to Franco-Santos et al. (2012) there are three consequences of PMS, namely,
employees’ behaviour (EB), organisational capabilities (OC) and perceived performance (PP)
which are tested and validated as consequences of ABSC as PMS. Hence, the next objective is
to study the relationship between ABSC and its three consequences.

3. Conceptual model and research hypotheses

On the basis of the literature review, a model is hypothesised showing precedence of
relationship as shown in Figure 1. This model explains interrelationship between

ANTECEDENTS OF ABSC CONSEQUENCES OF ABSC

TOP MANAGEMENT EMPLOYEES’

INVOLVEMENT (TMI) BEHAVIOUR (EB)

H1
H3

H4 ORGANISATIONAL
ADOPTION OF BSC CAPABILITIES (OC)
(ABSC)

H5

H2
PERCEIVED
PERFORMANCE (PP)
INTER DEPARTMENTAL
Figure 1. COMMUNICATION (IDC)
Conceptual model of
antecedents and
consequences of
adoption of BSC
antecedents’ factors TMI and IDC, their impact on ABSC and the causal linkage between Adoption of
ABSC and its three consequence factors, namely, EB, OC and PP. balanced
Based on the conceptual model the following alternate hypotheses are derived for scorecard
empirical investigation:
H1. TMI is positively related to ABSC.
H2. IDC is positively related to ABSC.
879
H3. ABSC will have causal effect on EB.
H4. ABSC will have causal effect on OC.
H5. ABSC will have causal effect on PP.
These hypotheses are tested empirically based on the data collected from the employees
working in banks in India, where BSC is adopted as PMS.

4. Research method
4.1 Sample
In order to investigate the ABSC as PMS, the Indian banking sector has been chosen to collect
the data. This sector being an indispensable component of the Indian Economy and having
emerged as one of the largest contributor to nation’s growth makes the study robust. The past
studies have only explored BSC’s implementation experience in Indian banks pressing the need
for further investigation (Pandey, 2005; Dave and Bhatt, 2012). This builds the strong ground for
collecting the data from the banking sector in India. A stratified random sampling method is
used in the study. The strata are created of public and private sector banks. Further stratification
is achieved by giving representation to the employees belonging to the top level (MD/CEO/CFO/
president/VP), middle level (senior gen. manager/gen. manager) and low level (executive/senior
officer/officer) in ratio of 1:3:5. A survey research design is adopted by administering the
questionnaire to the bank employees. The questionnaires are distributed to a total of 160
banking employees through personal visit as well as through e-mails. A total of 135 responses
are received out of which seven are found to be unusable. So with an effective response rate of
80 per cent, a final sample of 128 is obtained for the subsequent analysis. The response rate is
evidently impressive and representative of the population studied, as Sekaran (2003) found at
least 30 per cent response rate good enough for generalisation of results obtained.
Table I presents the sample description of the respondents. Out of 128 respondents
approximately 64.1 per cent are male, and 35.9 per cent are female. Majority of the
respondents (52.34 per cent) are at low level (executive/senior officer/officer) in the hierarchy,
followed by 36.7 per cent at middle level (senior gen. manager/gen. manager) and 10.9 per cent

Classification Number (%)

Nature of bank
Public sector banks 66 (51.6)
Private sector banks 62 (48.4)
Gender
Male 82 (64.1)
Female 46 (35.9)
Designation/Level
Top level (MD/CEO/CFO/President/VP) 14 (10.9)
Middle level (Senior Gen. Manager/Gen. Manager) 47 (36.7) Table I.
Low level (Executive/Senior Officer/Officer) 67 (52.34) Sample description
BIJ at top level (MD/CEO/CFO/president/VP). This is consistent with stratification of sample
25,3 between top, middle and low level. It adds value to the study that nearly all (99.2 per cent) of
the respondents are aware about ABSC as PMS in their respective banks.

4.2 The instrument

The research instrument used for the study is divided into two sections: Section 1, general,
880 captures the respondents’ demographic information like age, gender, experience, designation
etc. Section 2, BSC as PMS, comprises items belonging to antecedents, consequences and
attributes of BSC adoption. All three constructs, i.e., antecedents, consequences and adoption
are measured using multiple items to be rated on five-point Likert scale ranging from 1 to 5
(strongly disagree to strongly agree).
For antecedents, the standardised instrument based on the study of Braam and Nijssen
(2004) is used. The identified two antecedents of ABSC, namely, TMI and IDC with each
having three items are validated. The construct reliability as measured through Cronbach’s α
is found to be 0.839 for TMI and 0.876 for IDC, respectively, indicating high degree of
internal consistency.
The classification of the consequences of PMS given by Franco-Santos et al. (2012) is
adapted in the study for measuring “Consequences”. The three constructs of consequences
are EB, OC, and PP. The exploratory factor analysis (EFA) is used to find the structural
validity of constructs as suggested by Fabrigar et al. (1999) for already established
measures. For 15 items in the questionnaire, EFA is done using principal component
analysis with varimax rotation. In conformance with the previous studies three constructs
are found having eigenvalues greater than 1.0 and small factors suppressed at 0.50.
However, few items with cross loading are dropped (Fabrigar et al., 1999). With a KMO
value of 0.924 and Bartlett’s test of Sphericity (Bartlett, 1954) having p o0.05, total 13 items
are retained. The identified three factors have found eigenvalues greater than 1,
communalities greater than 0.4, together explained variance of 79.19 per cent (Hair et al.,
2010). Consistent with the classification given by Franco-Santos et al. (2012), EB (α ¼ 0.927),
OC (α ¼ 0.934), and PP (α ¼ 0.863) are further cross validated through CFA for model
development and hypothesis testing.
Lastly, the construct ABSC is operationalized. Based on the work of Kaplan and Norton
(1996) “Using balanced scorecard as strategic performance management system”, seven items
are chosen to be reflecting the BSC adoption attributes. The principal component analysis
using varimax rotation is used to eliminate unjustified variables, and identify prime drivers
(Pallant, 2005). All seven items are found loading in a single factor having eigenvalue greater
than 1.0 and small factors suppressed at 0.50. However, two items having very low factor
loadings are eventually dropped (Fabrigar et al., 1999), and factor analysis is done again to find
KMO value of 0.885, being more than 0.6 (Tabachnick and Fidell, 2001), and Bartlett’s test of
Sphericity (Bartlett, 1954) having po0.05 and explained variance of 71.86 per cent. For ABSC
Cronbach’s α is found to be 0.901 indicating acceptable internal reliability (Fabrigar et al., 1999).

5. Analysis and interpretations

The present study being explorative in nature followed a systematic logical procedure of
data analysis. SPSS 21 and Analysis of Moment structure, version 20.1 are used. After EFA
to abridge the study composition and eliminate unjustified variables, CFA and Structural
equation Modelling (SEM) are used. The SEM analyzes the interrelationships between the
all six constructs of the hypothesised model. The use of SEM is justified as it being a
multivariate technique provides a robust combination of multiple regressions with CFA for
simultaneous estimation of series of inter and causal relationships between the constructs
(Chinda and Mohamed, 2008; Hair et al., 2010).
 Though SEM is recommended to be applied on a large sample size, MacCallum and Austin Adoption of
(2000) found its appropriate usage for samples below 100 as well. Further, Muthen and Muthen balanced
(2002) have justified the compariatevely low sample size and power effect through Monte carlo scorecard
study. It is established that models with high factor loading (0.65-0.80) work well even with a
sample size of 60-90 (Wolf et al., 2013). In the current study, as evident in Table II, all constructs
are having factor loading ranging between 0.69 and 0.94. To take it forward Pathak (2014)
has explored the causal relation between various constructs of BSC using SEM with the sample 881
of 73. These stand justification forth use of SEM with 128 samples in the present study.

Average Marginal
Std. Composite variance shared
factor Cronbach’s reliability extracted variance
Construct Item Description loading α CR AVE MSV

TMI TMI1 Adopted on top management’s 0.86 0.839 0.734 0.734 0.091
persuasion
TMI2 Adopted as top management 0.79
supports every attempt to
improve company’s PMS
TMI3 Allows Top management to 0.75
initiate performance monitoring
IDC IDC1 allows intensive 0.91 0.876 0.882 0.715 0.082
Interdepartmental
communication
TDC2 Felicitates intense formal 0.87
information sharing
TDC3 Allows easy access to important 0.74
financial and management
information
EB C1 Promotes strategic focus 0.78 0.932 0.925 0.754 0.682
C2 Improves coordination 0.92
C3 Enhances employee motivation 0.90
C4 Increases role clarity 0.85
C5 Enhances job satisfaction 0.83
OC C7 Strengthens the internal 0.85 0.935 0.938 0.792 0.682
communication system
C8 Promotes quick decision making 0.94
C9 Improves corporate control 0.83
C11 Enhances operational efficiency 0.93
PP C10 Strengthens organisational 0.72 0.878 0.883 0.657 0.629
learning
C13 Reduces internal conflicts 0.91
C14 Enhances overall organisational 0.69
performance
C15 Providing holistic business view 0.90
ABSC BSA1 vision of the company is 0.87 0.901 0.903 0.652 0.101
translated well into strategy
through BSC
BSA2 BSC ensure effective allocation of 0.85
resources among departments
BSA3 BSC enhances the effectiveness 0.81
of overall business
BSA4 BSC outcomes are easily 0.69
quantifiable, measurable and
communicable Table II.
BSA5 BSC can be partially 0.80 Reliability and item
implemented on a trial basis loadings
BIJ 5.1 Assessing measurement model
25,3 The purpose of measurement model assessment is to statistically determine the extent to which
a priori theory can be accepted or rejected. There are six steps for CFA, recommended by Hair
et al. (2010) which are duly taken care of in the study starting with identification and defining of
individual constructs through EFA. For the second step as a part of the regimen only
constructs with three items or more are retained. As the third step requires generating
882 empirical results, researchers specified the indicators associated with each construct, as well as,
correlation between constructs by setting the values of exogenous and endogenous constructs.
The fourth phase is to assess the validity and reliability of the measurement model. This
requires checking for path estimate, size of path estimates and statistical significance. For this
purpose the analysis was done through statistical tools package (Gaskin, 2012). All the
constructs are found to have strong and significant path estimates. Next is to establish the
construct validity, convergent validity, discriminant validity (DV ) and reliability (see Table II).
For determining reliability Cronbach’s α is calculated. A value above 0.7 is considered
good measure of reliability (Sekaran, 2003). The study found that high statistical reliability
of the constructs as Cronbach’s α of all constructs is found to be more than 0.7 (α for TMI
0.836, IDC 0.876, EB 0.927, OC 0.934, PP 0.863, ABSC 0.925). There is found reliability,
consistency of all constructs thereby establishing their stability and equivalence (Hair et al.,
2010) as composite reliability (CR) are found to be ranging between 0.83 and 0.92, higher
than conventional cut off value of 0.70 (Fornell and Larker, 1981). Hence all constructs were
found to be reliable as CR is well established.
Figure 2 presents a full measurement model of antecedents and consequences of the ABSC.
Next is the assessment of convergent validity. It denotes the extent to which indicators of
a specific construct have high proportion of variance in common (Hair et al., 2010). It is
measured using standardized factor loadings signifying that indicator variables are
significant and representative of their latent variable. As shown in Table II, all constructs
are having factor loading ranging between 0.69 and 0.94, being well above the threshold
value of 0.5. This establishes the convergent validity.
Lastly, DV is established by adopting two different methods as recommended by the past
researchers. DV denotes the extent to which a construct is entirely distinct from the other
construct (Fornell and Larker, 1981). First, it is assessed by calculating average variance
extracted (AVE), marginal shared variance (MSV ) and average shared variance (ASV) of each
individual construct. According to Hair et al. (2010), caveats of DV are MSVoAVE and
ASVoAVE. As evident in Table II, the MSV and ASV of all constructs are lesser than their
respective AVE. Hence it can be concluded that for all constructs, the DV appears to be
satisfactory at the construct level. Second, the correlation between measures of supposedly
different constructs is calculated. It should be as low as possible. The low correlation denotes
that in the measurement model, all the constructs are independent. This required that the
square root of AVE must be greater than inter construct correlation. As evident in Table III,
the square roots of AVEs (diagonal items) are greater than correlation (off-diagonal items)
between the given constructs. This indicates that constructs are more strongly correlated with
their respective indicators than with other constructs of the measurement model. Hence, for all
constructs, the DV is further established.
The fifth phase requires estimating model fit. In CFA several tests are employed to test the
model fit. The “Good Model Fit” indicates that the model is conceivable. Further, Hair et al.
(2010) proposed reporting χ2 test and root mean square error approximation (RMSEA).
The measurement models assessment is done by means of CFA using maximum likelihood
estimation which resulted in achievement of good Model Fit Indices (see Table IV).
As evident from the above indices presented in Table IV, with χ2 ¼ 394.926 and degrees
of freedom ¼ 237, the CFA establishes that a given measurement model is achieved.
The construct validity gets strengthened too, besides expert opinions and internal consistency
 0.74 Adoption of
e3 TMI1
0.62
0.86
balanced
e2 TMI2 0.79
TMI
scorecard
0.56
0.75
e1 TMI3
0.83
e6 IDC1
0.91 883
0.76
0.07
e5 IDC2 0.87
IDC
0.55
0.74
e4 IDC3
0.14
0.60
e11 C1
0.84 0.18
0.78
e10 C2 0.92
0.82 0.13
e9 C3 0.90
EB
0.73 0.17
0.85
e8 C4
0.83 0.23
0.70
e7 C5
0.83 0.18
0.72
e24 C7
0.85
0.89 0.30
e23 C8 0.94
0.74
0.70
0.83 OC 0.29
e22 C9
0.86 0.93
e21 C11

0.52 0.79 0.30

e14 C13 0.72

0.83
e13 C14 0.91
PP
0.48
0.69
e12 C15 0.32
0.81 0.90

e25 C10

0.75 0.28
e19 BSA1
0.72 0.87

e18 BSA2 0.85

0.66 0.81
e17 ABSC
BSA3
0.69
0.48
e16 BSA4 0.80
0.64 Figure 2.
e20 BSA5 Measurement model

analyses (Bollen, 1989). The covariance between factors is found less than 0.8 convergent and
DV are established. Though output of CFA provides many fit indices, but prime focus is on
the goodness of fit (GOF) values which provide the assessment of the fit. With GFI value
coming out to be 0.811, NFI value 0.853 and CFI value 0.934, our model achieves a reasonably
BIJ good fit as CMIN/df (1.666), and RMSEA (0.072) could meet the criteria of standard. Hence, the
25,3 CFA results, in Table IV, clearly show that the hypothesised model posited a reasonably good
fit with the collected data, and is suitable for hypothesis testing using SEM.

5.2 Testing hypothesis using SEM

Finally in last phase, the structural model is evaluated in order to test the extent to which the
884 causal relationships specified by the proposed model are consistent with the available data.
All the essential caveats for carrying out SEM analysis are methodically met. First, it is
decided to have ABSC as prime construct as it is the construct whose antecedents and
consequences are aimed to be studied. Second, in SEM analysis, all the drivers which were
identified through CFA analysis are to be tested again. As per Bollen (1989) model’s second
caveat is to have the consequences too in the model. So for this purpose the three factors
identified as consequences of the ABSC, namely, EB, OC and PP are also considered in the
model. The third caveat of calls for checking the significance and strength of the respective
factors in predicting the model (MacKenzie et al., 2005). Further for hypotheses testing, we
have followed the bootstrapping procedure recommended by Chin (1998).
Table V depicts the model fit summary and Figure 3 illustrates the corresponding SEM
model. GOF is found to be marginally adequate. The value of χ2 comes out to be 582.070
with degree of freedom as 244 and p-value significant. Further CMIN/df, CFI, GFI, NFI,
RMSEA values were 2.836, 0.860, 0.751, 0.883 and 0.104, respectively. Although GFI ¼ 0.751
and NFI ¼ 0.883 could not meet the threshold of 0.90 but these values are very close to the
threshold limit. Therefore it is concluded that the structural model is acceptable as

Constructs TMI IDC EB OC PP ABSC

TMI 0.856
IDC 0.069 0.845
EB 0.140 0.183 0.858
OC 0.134 0.169 0.826 0.889
PP 0.230 0.181 0.739 0.793 0.810
ABSC 0.302 0.287 0.305 0.318 0.275 0.807
Table III. Notes: Square root of average variance extracted (AVEs) are represented by diagonal items in the italics and
Correlation matrix correlation between constructs is represented by off-diagonal items

1 Indices CMIN/DF GFI NFI CFI RMSEA

Table IV. 2 Standards o3 W0.90 W0.90 W0.90 o 0.05o0.10

Model fit indices 3 Result (measurement model) 1.666 0.811 0.853 0.934 0.072
(measurement model) Source: Standard results: Iacobucci (2010)

1 Indices CMIN/DF GFI NFI CFI RMSEA

Table V. 2 Standards o3 W0.90 W0.90 W 0.90 o 0.05o0.10

Model fit indices 3 Result (full SEM model) 2.386 0.751 0.783 0.860 0.104
(structural model) Source: Standard results: Iacobucci (2010)
 e26 0.56
Adoption of
0.75 C1 e10
balanced
0.13
0.94
0.88 scorecard
C2 e11
EB
0.90 0.82 0.26

0.77 C3 e12
0.83

e3 TMI1 0.88 0.83

0.69 885
0.61 C4 e21
0.78
0.69
e2 TMI2 TMI
0.54 0.73 0.36 C5 e22
e27
e1 TMI3 e25 0.69

0.30 0.14 0.83

C7 e13
0.92
0.18 0.96
OC
0.37 C8 e14
0.07 0.82
ABSC 0.67

0.93 C9 e15
0.28 0.86 0.81 0.86
0.83 0.84 0.80 0.69
C11 e23
e6 IDC1 0.91 0.74 0.71 0.48 0.48 0.66 0.33
e28
0.76 BSA1 BSA2 BSA3 BSA4 BSA5
0.87 0.80
e5 IDC2 IDC 0.11 0.90
C10 e7
0.56 0.75
e20 e19 e18 e17 e16 0.67 0.45
e4 IDC3 PP
C13 e8
0.94
0.89

0.65 C14 e9 0.30

0.42 Figure 3.
C15 e24
SEM model

recommended by past studies (MacKenzie et al., 2005). Hence the model is further used for
the analysis of hypotheses in the study.
Further, Table VI summarises the hypothesised relationships which are tested using
SEM. It shows individual path coefficients ( β), standard error, critical ratio, etc. The level of
significance is set at 0.05. The estimates is the estimated value of each parameter and CR is
the critical ratio which represents the parameter estimate divided by standard error and
p is the probability (Hair et al., 2010). Additionally, R2 (squared multiple correlation) value
which evaluates the strength of the proposed model is reported too. In the current model the
R2 explains that the 18 per cent of the variation in the ABSC could be due to two exogenous
latent constructs (TMI and IDC). Also ABSC positively explains EB, OC, and PP to the
extent of 13, 14 and 11 per cent, respectively.

Unstandardised
Hypothesis Causal relation Estimate ( β) regression weight SE CR p Result

H1 ABSC ← TMI 0.296 0.353 0.117 3.003 **** Supported

H2 ABSC ← IDC 0.277 0.327 0.113 2.904 **** Supported
H3 ABSC → EB 0.361 0.296 0.080 3.716 **** Supported
H4 ABSC → OC 0.369 0.375 0.096 3.902 **** Supported Table VI.
H5 ABSC → PP 0.331 0.327 0.094 3.470 **** Supported Significance indices
Notes: β, standardized beta coefficients SE, standard error; CR, critical ratio. ***po 0.05 hypothesis testing
BIJ The hypothesised relations are found to be positive in nature. The current study, thereby,
25,3 supports and accepts all six hypotheses. We can conclude that TMI ( β ¼ 0.296, p o0.05, H1)
significantly predicts ABSC.
Similarly, there is support for H2, indicating that “IDC” is positively related to ABSC
( β ¼ 0.277, p o0.05). The results support that ABSC ( β ¼ 0.361, p o0.05, H3) is having a
significant causal effect on “EB”. Based on H4 ABSC (β ¼ 0.369, p o0.05) is found
886 impacting “OC”. Lastly, H5 get supported too, as ABSC ( β ¼ 0.331, p o0.05) is found to
have a significant causal effect on “PP”. All the estimates are found to be consistent as all
the relationships are found to be significant (po 0.05).
It can be stated that results of the current study support the hypothesised structural
model, as all the hypothesised relationships were found to be significant at p o0.05 and in
the anticipated direction. Thereby, concluding that IMI and, IDC are two antecedents’
factors which impact the ABSC as PMS. Also, there exist causal linkages between ABSC
and, its three consequences factors, namely, EB, OC and PP.

6. Result discussion and conclusion

In the current study, a conceptual model has been tested to examine the relationship
between the antecedents and consequences of the ABSC as PMS. The empirical results
provide fresh evidence in support of the conceptual model derived from the theory
(Ahn, 2001; Ittner and Larker, 2003; Crabtree and DeBusk, 2008; Dechow, 2012).
While attempting to explore the drivers which lead to ABSC, it is established that data
having good degree of variance fully support the hypothesised relationships.
The research findings indicate that the main driving factor of ABSC is TMI. This finding
supports the previous studies of Rogers (2003) and Braam and Nijssen (2004) who found
that TMI plays an important role in adoption of innovations like BSC. Based on the present
findings and the support from Lucianetti (2013) it can be concluded that Top management
positively leads to BSC adoption because of its capacity to bringing transparency in
organisational working along with the ability to develop innovative corporate culture.
In relation to TMI, our research findings have the support of other Indian study, i.e.,
Aravamudhan and Kamalanabhan (2009).
Our findings confirm the anticipated positive effect of IDC on the ABSC as PMS. On the
basis of current findings and support from Shutibhinyo (2013) it can be concluded that
IDC is positively and significantly related to ABSC. It is consistent with the past research
findings that the free flow of internal communication among departments facilitate BSC
adoption (Assiri et al., 2006; Braam and Nijssen, 2004). The results of the current study
empirically validate that TMI and IDC as expected were found to be two important
antecedents of ABSC as PMS. Based on available evidence and findings of our study it is
perceptible that the success of ABSC largely depends on the top managements’
involvement and internal communication. In other words, to ensure the success of BSC as
performance management tool buying in of the same has to be done at top level and a
transparent inclusive system may be developed for effective communication. This would
not only be facilitative rather strategically benefiting the organisation helping achieve
PMS objectives in short and long run.
Further while exploring the causal relation between ABSC and its consequences, it is
evident that ABSC has positive and significant causal relation with all three anticipated
consequences, namely EB, OC and PP. These findings are consistent with the prior studies of
Hoque and James (2000) and Lucianetti (2013). To conform the previous findings the present
study asserts that ABSC as PMS impacts the behaviour of employees leading to increased job
satisfaction, motivation, role clarity and better strategic focus (Ahn, 2001; Madsen and
Stenheim, 2015). Likewise the study results confirm the influence of ABSC on the PP, both
finacial and nonfinancial. Interestingly this PP, which is the perception of employees about
organisational performance (Franco-Santos et al., 2012), significanltly impacts the success and Adoption of
failure of the organisation. In agreement with the past reserches, the present study too found balanced
that ABSC positively affecting the firm’s performance on the basis of employees’s perception scorecard
(Hoque and James, 2000; Braam and Nijssen, 2004; DeGeuser et al., 2009). In other words, if
some change is to be injected in the organisation a positive environemnt needs to be created
where positive perception about the change could be build.
Further the study supports the hypothesis that ABSC enhances OC. The exsting 887
literature explains the OC as innovative processes, benchmarking activites and
managerial capabilities that enable the organistion to achieve competetive advantage.
Scholars like Ahn (2001), Carmona and Grönlund (2003), Ax and Bjornenak (2005) and
Crabtree and DeBusk (2008) support the findings of the present study to summarise that
not only ABSC, rather any innovation, if handled carefully has potential to improve
organisational performance in terms of corporate control, strategy implementation,
learning and holistic business view.
Gaining support from Malina and Selto (2001), Malmi (2001) and Lucianetti (2013) it is
empirically established that BSC may be adopted by firms as a very effective measure of
PMSs. To reiterate the findings, BSC as innovation has been found to be an effective tool to
manage the performance of employees in the organisation. This helps to improve
organisational performance. The risk of implementing a new idea in the organisation could
be offset if right perception about innovation and change is created in the organisation.
The management of perception is not possible without the dedicated support of top
management and free open communication within the organisation.

7. Managerial implications and theoretical implications

The current study broadens the understanding of BSC to be used as PMS in a considerable
manner. The limitation of the previous studies which failed to explore the antecedents and
consequences of ABSC in a comprehensive way has been overcome in the present study.
The research findings offer key implications for both researchers and practitioners.
First, the top management should understand that effective adoption and diffusion of any
innovative system like BSC depends largely on their commitment towards it. Second, it
indicates the success or failure of its acceptance relies on how well it is communicated to the
employees. This can be achieved by having effective IDC. Third, linking the benefits of
ABSC with its positive consequences like enhanced job satisfaction, improved motivation,
and better role clarity may go a long way in its successful acceptance.
In addition to this, the current study considerably contributes to BSC literature. Past
researchers have stressed the need for exploration of the validity of antecedents and
consequences responsible for BSC adoption (Ittner and Larker, 2003; Lucianetti, 2013).
Also, BSC research literature has traces of different manners of investigating the
consequences of BSC adoption. Therefore, the present study offers various research
implications in this regard. First, the present study provides empirical validation to the
comprehensive model of antecedents and consequences of the ABSC as PMS. Second, the
evidence in this study highlights the interplay of drivers (antecedents) that leads to ABSC as
PMS in organisations. Further, by bridging the gap, it contributes considerably to the more
inclusive understanding of the actual consequences of BSC adoption. Lastly, the proposed
model and its validation enrich the BSC literature by offering new insights that future
researchers may embark upon.

8. Limitations and future directions

The current study has succeeded in exploring the ABSC as PMS along with empirically
examining its antecedents and consequences in a wholesome framework. Moreover the
BIJ results are quite consistent with prior studies conducted in other parts of the world. Despite
25,3 impressive findings of the study, there are certain limitations that need to be dealt:
• the study is based on the perception of employees which can be overcome by using
multiple methods to collect data in future studies;
• the results are derived from comparatively small sample which may limit the
generalisability of our findings for other contextual settings;
888
• although major factors of antecedents and consequences of BSC as identified from
the literature have been explored in current study, there might be few more factors
which can be explored in further studies;
• the research design is based on a cross-sectional study which can further be validated
by carrying out a longitudinal study to examine consequences of BSC adoption in
longer run; and
• the study largely is based on the quantitative method. There is a need to engage
qualitative method as used by Singh and Hira (2017) to find newer insights in
the domain.
These limitations can be assumed as the bases for carrying out further exploration of ABSC.
The tested model can be re-evaluated in cross-industry studies on BSC. Future researchers
may expand and test the conceptual model with additional factors. To enhance the
generalisability of findings, the study can be replicated to examine BSC adoption as PMS
with larger samples and, lastly, the action research can be conducted to supplement the
current framework by exploring how identified consequences in reality impact the ABSC.

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Further reading
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About the authors

Dr Reetesh K. Singh is a well-respected academician. He received the Master’s, MPhil and PhD Degrees
from the University of Delhi. His area of Doctoral Research was “Managing Human Resource
Diversity”. He has been continuously engaged in creation and dissemination of knowledge in addition
to extension activities. He is a person with more than a quarter century of academic experience and is
also a Full Professor of Human Resource and Organizational Behaviour at the Delhi School of
Economics, University of Delhi. He has contributed academia in many ways as author of research
BIJ papers, teacher, editor of journal, and trainer to leading corporates like Vedanta, Aricent Technologies,
25,3 Punjab Police, National Hydro Power Corporation, Steel Authority of India Limited, JK Cement Ltd,
Gas Authority of India Limited, Indian Farmers and Fertilizers Cooperative, etc. Dr Reetesh K. Singh
has been awarded the “Best Business Academic Award” in 2007 by All India Commerce Association.
Simple Sethi Arora is an Assistant Professor of Commerce at the Shyam Lal College (M), Delhi
University. She has vast teaching experience and has specialisation in Marketing, Advertising and
Human Resource Management. She is currently pursuing Doctoral studies in the area of
892 Organisational Behaviour from the Department of Commerce, Delhi School of Economics, and the
University of Delhi. She has presented papers in various national and international conferences. She
has been awarded the “Best Paper Award” in 2017 by Indian Institute of Technology(IIT), Roorkee for
the paper titled “The impact of Balanced Scorecard as PMS on Organizational Effectiveness”. She has
research publications in reputed journals to her credit. Simple Sethi Arora is the corresponding author
and can be contacted at: [email protected]

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