Conceptualisation of the Balanced Scorecard (BSC) model: A critical review on its validity in Africa

Abstract

Purpose

This paper aims to review and analyze the validity and relevance of the conceptualization of the Balanced Scorecard (BSC) model, especially within an African context. The BSC model was developed to address the problems and limitations of relying solely on traditional financial measures. This paper carries out a critical review and detailed analysis on perspectives surrounding the BSC model.

Design/methodology/approach

The paper critically reviews relevant literature on the BSC model by focusing on the pertinent issues surrounding the applicability of the BSC model in modern business environment. A critical review of conceptualization issues regarding the BSC model especially with a focus toward its application within an African framework was also done.

Findings

It is established that the BSC model plays a pivotal role in assisting business executives in making holistic long-term management decisions. However, the model puts undue emphasis on shareholders’ wealth maximization at the sacrifice of other equally important stakeholders. The model puts less emphasis or completely ignores such stakeholders as competitors, suppliers, lenders, government, the local community and the natural environment. The model is fraught with many conceptualization assumptions that are not realistic in the modern environment.

Practical implications

It is envisaged that the study should add to the literature on corporate performance measures and the BSC model. The revelations gained through this paper will enable researchers to have an open mind on the way the BSC model is supposed to be modified and applied for various business environments.

Originality/value

The revelations of the paper point out application limitations of the BSC model, there is an imperative need to upgrade and redesign the BSC model to reflect realities of modern business activities, especially within an African context.

Citation

Khomba, J.K. (2015), "Conceptualisation of the Balanced Scorecard (BSC) model: A critical review on its validity in Africa", International Journal of Commerce and Management, Vol. 25 No. 4, pp. 424-441. https://doi.org/10.1108/IJCoMA-12-2012-0077