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Vol. 17, No. 3 DOI: 10.2308/jiar-52093

Fall 2018
pp. 115–134

The Balanced Scorecard beyond Adoption

Gaurav Gupta
The University of North Carolina Wilmington

Stephen B. Salter
Middle Tennessee State University
ABSTRACT: Utilizing the theoretical underpinnings of the actor-network theory (ANT) and neo-institutional theory,
we develop and test a model of the relationship between organizational culture and the use of the balanced
scorecard (BSC). The data are collected from 1,126 top management and other employees in 48 manufacturing
companies in India. After primary data collection and using path analysis, we find that the usage of the BSC is
dependent on organizational culture. Organizations that are future and performance oriented with a high level of
power distance have higher levels of BSC usage. This usage is found to be lower in organizations that are collectivist
and uncertainty avoidant.
Keywords: balanced scorecard; organizational culture; GLOBE study; actor-network theory; neo-institutional
theory; India.


ince its introduction by Kaplan and Norton in 1992, the balanced scorecard (BSC) has fundamentally changed the view
of what management accounting and control is. As Otley (2016, 46) observes:
The dominance of accounting control was challenged in the early 1990s by the codification of what has become the
most widely adopted technique in modern organizations, the Balanced Scorecard (BSC), which combined both
financial and non- financial performance measures into a single integrated framework.
The BSC is also widely used in practice. In 2015, the Bain & Company’s biennial survey of global management practices
(Rigby and Bilodeau 2015) ranked the BSC sixth among the 25 tools used by management globally.
Much has been written about the BSC, and the next section examines questions asked about its role, volume of use, and
efficacy (with and without incentives). In addition, questions about political processes surrounding its introduction and use are
explored. Summarizing 20 years of BSC publication in top journals, Hoque (2014) reports that the BSC is a useful tool for
management control. Salterio (2012) finds that one significant theme linking incentives and rewards using the BSC is finding
and coping with ‘‘common measures bias.’’ Common measures bias leads the scorecard to be unbalanced, with managers
focusing on more common measurements, such as financial data, to rate and reward employees. This leads to the more
qualitative and nontraditional aspects of the BSC being underutilized.
On a slightly different theme, Cheng and Humphreys (2012) demonstrate that the BSC has grown from a simple diagnostic
tool (a measure of progress like a dial) to an interactive system where the users of the BSC regularly interrogate the
environment and suggest modifications, not only in company strategy but also in the BSC.
These articles assume that the BSC is both adopted and used. There is evidence of adoption and use (Rigby and Bilodeau
2015), but what influences the actual process of adoption and use? Here, there is limited theory and even less theory testing.
Both Cooper, Ezzamel, and Qu (2017) using actor-network theory (ANT), and Ax and Greve (2017) using neo-institutional

The authors would like to thank Karl Putnam (deceased) and Terry Glandon of The University of Texas at El Paso and David Sharp of the Ivey Business
School who provided guidance on the earlier versions of the paper. We would also like to thank the discussant, Helen Kang, for providing excellent
feedback as the discussant of the paper at plenary session of the 2016 joint international conference of the Journal of International Accounting Research
(JIAR) and Accounting, Organizations & Society (AOS) in Augsburg, Germany. Finally, we greatly appreciate the extensive feedback received from the
two anonymous reviewers and the editors of JIAR.
Editor’s note: Accepted by Wolfgang Schultze, under the Senior Editorship of Ervin L. Black.
Submitted: December 2015
Accepted: February 2018
Published Online: March 2018
116 Gupta and Salter

theory, describe how and why the BSC is adopted. Both represent a process where an external inventor, an external testing
process, and a marketing process lead to adoption. The critical difference between the two theories is as follows. In neo-
institutional theory, the organization itself makes its own decision. That decision is conditional on an agreement between
organizational culture and the cultural change the innovation will bring or the purpose it will serve. In ANT, the consultant is so
influential that the use of mimetic isomorphism quickly transitions to coercive isomorphism and the firm is merely a bystander.
But adoption does not equate to usage. It can be argued that adoption can be the beginning of an extended period of
significant usage or an extended period of little or no usage. The former occurs when the innovation adopted is concomitant
with the organizational culture and can be re-embedded. The latter route, of little or no usage, occurs when senior management
is convinced or guilted into adopting new tools by the consultant or another agent of the BSC, but makes little effort to enforce
the use of the BSC or only enforces the use of less than the full set of dimensions. Thus, post-adoption, the organizational
culture matters. As Detert, Schroeder, and Mauriel (2000) propose, the compatibility of an innovation with an organization’s
culture is the primary driver of the usage.
While there are many uses of institutional and ANT theory (see Appendix A), this study focuses on the literature related to
these theories as they apply to the BSC. Empirically, it examines the relationship between organizational culture and usage of
the BSC. It builds on Ax and Greve (2017) by moving beyond the adoption decision. We link widely accepted measures of
organizational culture (House, Hanges, Javidan, Dorfman, and Gupta 2004) to Ax and Greve’s (2017) definitions of the
preconditions/values inherent in a BSC. We hypothesize and test whether these cultural values are significantly related to levels
of usage of the BSC. As discussed in the ‘‘Research Methodology’’ section, to measure usage we survey utilization of the extent
to which companies monitor their performance on the following four perspectives: financial, efficiency, customer, and
innovation. The independent variables are the individual dimensions of organizational culture, which are linked to the
underlying culture of the BSC.
This study finds that five of the eight organizational culture variables affect the utilization of the BSC. Organizations that
have a culture of individualism, future orientation, performance orientation, and respect for authority are statistically more
likely to use a BSC. Firms that are uncertainty avoidant or face an uncertain business environment are less likely to use the
The following sections provide a review of the literature on organizational culture and the BSC, develop hypotheses,
describe the research methodology, results, and, finally, conclude the paper with a discussion of the implications of findings,
limitations, and opportunities for future research.


The Balanced Scorecard: History and Usage

Kaplan and Norton (1992) introduced the balanced scorecard (BSC) as an attempt to provide a more balanced view of
what was required for firms to be successful in the long run. Kaplan (2010, 3) notes that Norton and his interest in developing a
BSC are based on the belief of a notable British scientist, Lord Kelvin, who said the following during a lecture delivered at the
Institution of Civil Engineers in London on May 3, 1883:
I often say that when you can measure what you are speaking about, and express it in numbers, you know something
about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and
unsatisfactory kind. If you cannot measure it, you cannot improve it.
Kaplan and Norton (1996) describe the BSC initially as like the control system of a jet aircraft. The pilot of the aircraft
would need multiple dials and a variety of other data to avoid flying blind and crashing the aircraft. Similarly, a manager trying
to run an enterprise needs multiple measures indicating how critical aspects of the business are performing. The system of
measures that constituted the BSC had, by 2010, morphed to include much more than just the BSC. ‘‘It embeds the original
Balanced Scorecard framework as a component within a comprehensive management system that integrates strategy and
operations’’ (Kaplan 2010, 28).
The BSC has fundamentally changed academics’ vision of what constitutes management accounting and control. This
revised landscape includes measurements with multiple attributes both monetary and nonmonetary. The BSC now permits the
practitioner to have a tool through which, conjoined with a strategy map, allows multiyear and multilevel defining of what
needs to be done, the paths to get there, and a series of key performance indicators to measure progress.
The BSC is widely used in practice. Lawson, Desroches, and Hatch (2008), for example, argue that 62 percent of large
organizations worldwide use BSC-style practices. In 2015, the biennial Bain & Company survey of global management
practice (Rigby and Bilodeau 2015) ranked the BSC coequal in value with the top technique used, but marginally less popular
among management globally.

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Regionally, there is considerable variation in usage. The BSC’s most substantial usage is in the Europe/Middle East/Africa
(EMEA) region, where 44 percent of respondents used the product, making it the third most popular management tool. The
usage of the BSC is least widespread in the Asia-Pacific area, where 28 percent of respondents use it, ranking it eighth.

General Topics in the BSC Literature

The BSC literature has primarily attempted to answer the following questions:
1. Is it successful? (Efficacy)
2. How do we link incentive and reward with the BSC?
3. Is it a diagnostic or interactive tool?
4. Is the BSC a coercive tool or an enabling mechanism?
5. Why is the BSC adopted?
6. How do we explain levels of usage of the BSC?
This paper focuses on influences of organizational culture on levels of utilization, post-adoption. It also provides a
reasonably modest literature review on Topics 1–4 above. We point the reader to Hoque (2014) or Salterio (2012) for much
more extensive discussion.

Efficacy of the Balanced Scorecard

Most studies on the BSC focus on the impact of adoption/implementation on organizational performance. The results of
these studies are mixed. Hoque and James (2000) reported a positive relationship between the use of the BSC and
organizational performance, although the relationship depended on other factors such as the market position or size of an
organization. Davis and Albright (2004) compare the financial performance of bank branches that implemented the BSC with
branches that did not, and they find that the implementing branches showed better financial performance than the non-
implementing branches. However, Ittner, Larcker, and Meyer (2003) find no impact of the BSC implementation on
organizational performance.

Linking Incentive and Reward with the BSC

Reviewing the extant literature, Salterio (2012) finds that the dominant stream on incentives is that the evidence shows a
‘‘common measures bias.’’ This bias results in managers focusing on more familiar measurements, such as financial data, in
rating and rewarding employees using the BSC. Examples of common measures bias articles include:
1. Ittner et al. (2003), who find that the subjectivity in the BSC plan creates an unbalanced rewards system by placing most
of the weight on financial measures.
2. Roberts, Albright, and Hibbets (2004), who find that disaggregating the BSC results in evaluations more consistent with
the intent of the BSC approach.
3. Libby, Salterio, and Webb (2004), who find that requiring justification to a superior, or auditing of performance
appraisals, reduces common measures bias.
4. Ding and Beaulieu (2011), who find that financial incentives can motivate decision makers to correct mood congruency
5. Humphreys and Trotman (2011), who find that common measures bias can be eliminated if strategy information is
provided and all measures are strategically linked.
6. Cheng and Humphreys (2012), who find that strategic uncertainty affects the number of BSC information points that are

Diagnostic or Interactive? What Is the Role of the BSC?

Kaplan (2010) points out that the initial BSC was intended as a diagnostic tool to monitor an organization’s performance
and then, separately, to decide how to improve any perceived weaknesses. Kaplan and Norton (1992) originally envisioned the
BSC as an enhanced performance diagnostic system. However, as the BSC went through the process of experimentation and
reconfiguration, Kaplan and Norton learned from their network that the BSC had the ability to become an interactive strategy
management system.
Other studies provide more evidence of the BSC’s interactive value. Cheng and Humphreys (2012) find that managers’
understanding of causal linkages between strategic objectives in the strategy map (a part of the BSC system) increases the
quality of their strategic judgments. Bakkali, Maurice, and Naro (2016) describe an intervention at five business incubators

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where they find that a BSC originally introduced for diagnostic control can progressively be transformed into an interactive
control tool. The flexibility of the BSC facilitates this process.
In summary, the extant literature concludes that the BSC is an effective, iterative, and learning management system. It also
concludes that there are biases that affect the usefulness of the BSC as a tool. However, for any innovation to have success, it
must be used. The primary purpose of this paper is to study the organizational culture factors that affect the usage of the BSC.
The next section reviews the literature in this area.

Literature on Adoption and Use of the BSC

The primary purpose of this paper is to examine the linkage between organizational culture and use of the BSC. In a
literature review of articles on BSC implementation, Lueg and Vu (2015, 317) identify organizational culture as one critical
blind spot in the extant literature as follows: ‘‘Studies rarely address culture as it is difficult to measure and difficult to relate to
the BSC.’’ Similarly, Gupta (2016) also emphasizes that understanding organizational culture can help unfold reasons behind
the adoption of management accounting tools such as the BSC. A predecessor condition to usage is the adoption of the BSC.
The stated reason for adoption is usually to improve decision making in the company.
In a review spanning 20 years, Hoque (2014, 44) summarizes the literature in this area thusly, ‘‘According to Kaplan and
Norton (1996), the purpose of implementing the balanced scorecard is to expand the set of measures managers use in decision-
making.’’ Other reasons suggested in Hoque (2014) for adopting the BSC include improving strategic communication, aligning
goals and strategies, and perceived legitimacy with external stakeholders. Hoque (2014) also warns that much of the work on
usage of the BSC is descriptive, with very little theory building on adoption and usage. For example, using semi-structured
interviews at a small sample of Finnish companies, Kasurinen (2002) concludes that there is no apparent reason why companies
use a BSC. Kasurinen (2002) adds that side comments during the interviews suggest that the primary drivers for adoption and
usage of a BSC are the actions of consultants and the dissemination of the BSC information through seminars and books
leading to a management fashion. Similar views are expressed by Nørreklit (2003), and Madsen and Slåtten (2015). None of the
studies above formally proposes a grand or even intermediate theory for BSC adoption. However, they provide a sound basis
for Cooper et al.’s (2017) substantive theory building using actor-network theory (ANT).
Building on the work of Busco and Quattrone (2015) and Qu and Cooper (2011), Cooper et al. (2017) describe the process
of developing and marketing the BSC through the lens of actor-network theory (Callon 1986, 1999; Latour 1987, 2005). ANT
is based on two fundamental principles: (1) putting all the factors involved in a social situation on the same level, and (2) doing
away with the concept of social forces. While ANT has a structure and nomenclature to describe what is observed (e.g., the role
of actors and obligatory passage points), the final ANT model only appears after careful analysis of the process being studied.
Cooper et al. (2017) describe a network in which Kaplan and Norton are the primary actors. Through their Balanced Scorecard
Collaborative (BSCol) and the Nolan-Norton Institute, Kaplan and Norton not only develop the original BSC, but also select a
network for testing the BSC tool. They then coopt their network into a process of experimentation and modification and create a
veneer of scientific evidence that the BSC is successful and should be adopted.
Based on network feedback, Kaplan and Norton also modify the BSC to create a stable and marketable product. After
training by Kaplan and Norton, independent consultants have been the primary actors in the BSC traveling through time
and space.1 As obligatory passage points, the Balanced Scorecard Collaborative (BSCol) and Nolan-Norton Institute
control the training of the consultants who will market it, ensuring it is acknowledged and named as the Kaplan and
Norton BSC.
Consultants are crucial actors in the ANT process because they have the depth of practical understanding of a practitioner
but the time to focus on one product. Consultants place clients in the position to be heroes by adopting an already successful
tool (essentially mimetic isomorphism). Alternatively, consultants convince managers to accept the BSC by describing an
alternate scenario where the client (usually the managers of a firm) faces the opprobrium of other stakeholders if the firms fails
to adopt the BSC and subsequently performs at a sub-par level. Client perception of risk transforms the mimetic isomorphism
of copying the successful into the coercive isomorphism as they face the perceived consequences for the firm and themselves of
not adopting a successful technique.2 As discussed above, ANT is a non-socially driven theory based on observations in each
case of the world as it is. Cooper et al. (2017), for example, do not consider the culture of the receiving institution in modeling
the adoption of a BSC. Instead, they present a political argument based on observed political processes. Further, they present no
theory of what might happen after adoption, leaving that to other analysts.
An alternate theoretical route to account for BSC adoption is in modified neo-institutional theory. Neo-institutionalism
(DiMaggio and Powell 1991) rejects the rational-actor models of classical economics. Instead, it seeks cognitive and cultural

As discussed above, this conclusion is similar to non-theoretical findings by Malmi (2001), Nørreklit (2003), and Madsen and Slåtten (2015).
Given the less than universal use of the BSC, the likelihood of coercive isomorphism seems relatively modest.

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explanations of social and organizational phenomena by considering the properties of units of analysis at the firm level. Love
and Cebon (2008) modify the neo-institutional two-stage model (DiMaggio and Powell 1983; Tolbert and Zucker 1983) so that
developing and implementing an innovation such as the BSC occurs in two stages:
1. In the first stage, member institutions of a field that an organization is part of develop an innovation, test it, document it,
and make said innovation available in a standardized form (template) for the consumption of the market. The template
is written up to encompass the extant values of the field. This process is referred to as disembedding (Czarniawska and
Joerges 1996).
2. In the second stage, the innovation is marketed by the member institutions of the field, or by knowledge entrepreneurs,
to organizations that are not aware of the innovation’s existence. Once members of organizations become aware of the
innovation, they have the choice to select or not select.
Love and Cebon (2008) and Ax and Greve (2017) both argue that this choice to adopt an innovation is primarily driven by
the fit between the innovation and the organizational culture of the receiving organization. Once the new organization has
acquired the innovation, the neo-institutional theory argues that the organization will then re-embed the innovation through a
process of translating and editing the innovation in a manner appropriate to the values of the organization (Sahlin-Andersson
1996). Thus, organizational culture theoretically affects both the adoption decision and the subsequent use of the innovation. In
fact, adoption can be seen as a waypoint in the organization’s reaction to available innovations.
Adoption is not the end. Indeed, Love and Cebon (2008, 243) present adoption as a particular case of the earlier model of
usage, pointing out that ‘‘Detert et al. (2000, 850) focuses on the use rather than the adoption of technique. However, their
arguments transfer readily to the adoption decision.’’ Adoption can be the beginning of an extended period of significant
utilization or an extended period of little or no utilization. The latter occurs where senior management adopts a BSC or any
other innovation based on their own perception of organizational culture, but the underlying culture does not mirror that of
senior management. We can equally contemplate an organization where the initial adoption is supply driven, such as proposed
in ANT models. In this situation, senior management is convinced or guilted into adopting new tools by the consultant or
another agent of the BSC but makes little effort to enforce the use of the BSC or uses less than the full set of dimensions.
An in-depth review of Detert et al.’s (2000) model of the usage of innovations confirms that the compatibility of an
innovation with an organization’s culture is the primary driver of the usage of said innovation. Managers in organizations with
cultural elements that are compatible with the innovation will use that culture as a guideline for the depth and breadth of usage
of an innovation. Describing another innovation, re-engineering, Detert et al. (2000, 850) propose the following scenario:
A company’s prevailing cultural characteristics can inhibit or defeat a re-engineering effort before it begins. For
instance, if a company operates by consensus, its people will find the top-down nature of re-engineering an affront to
their sensibilities. Companies whose short-term orientations keep them exclusively focused on quarterly results may
find it difficult to extend their vision to re-engineering’s longer horizons. Organizations with a bias against conflict
may be uncomfortable challenging long-established rules. It is executive management’s responsibility to anticipate
and overcome such barriers.
Ax and Greve (2017) extend Detert et al.’s (2000) more general model by analyzing the BSC literature to come up with a
list of five cultural descriptors and preconditions that underlie the BSC. The current study builds on Ax and Greve (2017) by
moving beyond the adoption decision. We link widely accepted measures of organizational culture (House et al. 2004) to Ax
and Greve’s (2017) definitions of the preconditions/values inherent in a BSC. We hypothesize and test whether these cultural
values are significantly related to levels of usage of the BSC.

Mapping Organizational Culture to the Culture of the BSC

We begin with Detert et al.’s (2000) premise that compatibility between organizational culture and the nature of an
innovation drives the usage of said innovation. Rather than devise our own measure of culture, we use House et al. (2004) to
define possible dimensions of organizational culture (see Table 1). The Global Leadership and Organizational Behavior
Effectiveness (GLOBE) Study (House et al. 2004) is based on data collected from around 17,000 managers in 951 companies
in 62 countries during the three-year period from 1994 to 1997. House et al.’s (2004) cultural values instrument was designed
to measure culture at both the organizational and societal levels.
We then use Ax and Greve’s (2017) underlying values of the BSC (see Table 2) and match them to organizational culture
values in House et al. (2004). A summary of matching sets of variables is contained in Table 3. Ax and Greve (2017, 72)
extracted ‘‘definitions of the values and beliefs that underlie the BSC’’ from Kaplan and Norton (1992, 1996). Ax and Greve
(2017) describe their extensive process thusly:

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House et al. (2004) Organizational Culture Dimensions
Dimension Definition
Power Distance refers to ‘‘the degree to which members of an organization or society expect and agree that power should be
shared unequally’’ (House et al. 2004, 30).
Institutional Collectivism refers to ‘‘the degree to which organizational and societal institutional practices encourage and reward
collective distribution of resources and collective action’’ (House et al. 2004, 30).
In-Group Collectivism describes ‘‘the degree to which individual’s express pride, loyalty, and cohesiveness in their organizations and
families’’ (House et al. 2004, 30).
Future Orientation refers to ‘‘the extent to which members of a society or organization believe that their current actions will
influence their future, focus on investment in their future, believe that they will have a future that matters,
believe in planning for developing their future, and look far into the future for assessing the effects of their
current actions’’ (House et al. 2004, 285).
Uncertainty Avoidance refers to ‘‘the extent to which a society, organization, or group relies on social norms, rules, and procedures to
alleviate the unpredictability of future events’’ (House et al. 2004, 30).
Performance Orientation refers to ‘‘the extent to which a community encourages and rewards innovation, high standards, and
performance improvement’’ (House et al. 2004, 239).
Humane Orientation refers to ‘‘the degree to which a collective encourages and rewards individuals for being fair, altruistic,
generous, kind, and caring to others’’ (House et al. 2004, 30).
Gender Egalitarianism refers to ‘‘the degree to which a collective minimizes gender inequality’’ (House et al. 2004, 30).
Assertiveness refers to ‘‘the degree to which individuals in organizations or societies are assertive, tough, dominant, and
aggressive in social relationships’’ (House et al. 2004, 395).

The Balanced Scorecard Values and Its Cultural Antecedents
Summary of BSC
Value Original Source from Kaplan and Norton (1996)
The basis of truth and The scorecard should incorporate the complex set of cause-and-effect relationships among the critical
rationality in the variables, including leads, lags, and feedback loops that describe the trajectory—the flight plan—of the
organization should strategy.
be logic.
The nature of time and It was the translation of the business unit’s strategy into a linked set of measures that defined both the long-
time horizon. A long- term strategic objectives, as well as the mechanisms for achieving them.
term perspective was
Motivation. The card What you measure is what you get. Senior executives understand that their organization’s measurement system
itself should motivate strongly affects the behavior of managers and employees.
Stability versus change/ Traditional approaches attempt to monitor and improve existing business processes, yet still focus on
innovation/personal improving existing processes. The balanced scorecard approach, however, will usually identify entirely new
growth. Change is processes at which the organization must excel to meet customer and financial objectives.
Control, coordination, The objectives and the measures for the balanced scorecard are more than just a somewhat ad hoc collection
and responsibility. of financial and nonfinancial measures; they are derived from a top-down process driven by the mission and
strategy of the business unit. The balanced scorecard should translate a business unit’s mission and strategy
into tangible objectives and measures.
Adapted from: Ax and Greve (2017).

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Comparisons of BSC Values from Ax and Greve (2017) and Organizational Culture Dimensions from House et al.
BSC Culture GLOBE Organizational Culture
(Ax and Greve 2017) (House et al. 2004)
The basis of truth. Collectivism
Decisions are based on facts. Information providing decision The degree to which organizational and societal institutional
support explains/describes causality between important/relevant practices encourage and reward (and should encourage and
factors/parameters. reward) collective distribution of resources and collective
action, achievement, and rewards.
(Note: this relationship is inverse)
The nature of time and time horizon. Future Orientation
We adopt a long-term perspective. By deciding on establishing The extent to which individuals engage (and should engage)
long-term (consistent over time) objectives/targets and in future-oriented behaviors such as delaying gratification,
formulating/developing a long-term (consistent over time) planning, and investing in the future.
strategy, success can be achieved/attained.
Motivation. The card itself should motivate employees. Performance Orientation
Individuals are motivated when clear targets/goals are The degree to which a collective encourages and rewards (and
presented/communicated, and their performance is measured should encourage and reward) group members for performance
and given/brought to the attention of others. improvement and excellence.
Stability versus change. Change is good. Uncertainty Avoidance
Change and development are important/highly valued. It is The extent to which a society, organization, or group relies
important/vital to produce/achieve progress and innovations. (and should rely) on social norms, rules, and procedures to
alleviate unpredictability of future events.
(Note: this relationship is inverse)
Control, coordination, and responsibility. Power Distance
Management is demanding and controls organizational units The degree to which members of an organization or society
by deciding on and following up on measurable targets/goals. expect and agree that power should be shared unequally.

Two researchers were involved in searching the literature for values and beliefs that underlie the BSC, for developing
the pairs of statements that represent the opposite positions along the cultural dimensions, and for establishing links
between the values and beliefs that underlie the BSC and the cultural dimensions. These activities required
considerable time and effort and continued until a consensus was reached on the values and beliefs, statements, and
links. A group of five senior management accounting researchers/teachers, of who two also work as BSC consultants,
were interviewed about the relevance of the chosen statements and links. The interviewees were consistent in their
affirmative view of the chosen statements and links.
We then develop hypotheses of the relationship between the House et al. (2004) organizational culture dimensions and
usage of the BSC. The extant literature leads us to believe that organizational cultural values that are compatible with the BSC’s
values will result in more significant usage of the BSC. The five organizational culture dimensions from House et al. (2004)
that match the Ax and Greve (2017) definitions of the values and beliefs that underlie the BSC are collectivism, future
orientation, uncertainty avoidance, performance orientation, and power distance.

The overall research question is whether organizational culture influences the overall level of use of the BSC. Within this
research, we hypothesize the following relationships between different dimensions of organizational culture singly and
conjoined on the relationship between organizational culture and use of the BSC.

House et al. (2004) split collectivism into two components: (1) institutional collectivism, and (2) in-group collectivism.
These are defined by House et al. (2004, 30) as follows:

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 Institutional collectivism refers to ‘‘the degree to which organizational and societal institutional practices encourage and
reward collective distribution of resources and collective action.’’
 In-group collectivism describes ‘‘the degree to which individuals express pride, loyalty, and cohesiveness in their
organizations and families.’’
Overall, collectivism reflects shared beliefs, values, and assumptions of the members of a group (Schein 1992).3 As Table 3
shows, collectivism is inversely related to the principles of the BSC. The BSC requires that the basis of truth and rationality in the
organization should be logic. It appears to us that the very core of the collection and analysis of data and creating logical steps is
the individual effort to understand where they fit and how they act. As Gilbert (2014) points out in a recent working paper, the
critical values of a Western approach are individualism, inquiry, and logic. Therefore, it seems logical that use of a BSC would be
tied to an individualist rather than collectivist approach. Thus, we develop the following hypothesis in the alternate form:
H1: Collectivism is negatively associated with the use of the BSC.

Future Orientation
House et al. (2004, 285) define future orientation as ‘‘the extent to which members of a society or organization believe that
their current actions will influence their future, focus on investment in their future, believe that they will have a future that matters,
believe in planning for developing their future, and look far into the future for assessing the effects of their current actions.’’ Some
organizations focus more on their future than others. Laverty (1996) calls this a problem of intertemporal choice—a choice that
managers make about decisions such as technology investments, employee learning and development, and entry into new markets.
House et al. (2004) maintain that highly future-oriented organizations are flexible and have long-term strategic focus. Ax and
Greve (2017) emphasize that the BSC requires a long-term perspective. In fact, more than merely setting out a way forward, the
BSC has morphed into a long-term strategic management system (Kaplan and Norton 1996). As such, we hypothesize that:
H2: Future orientation is positively associated with the use of the BSC.

Performance Orientation
Ax and Greve (2017, 72) observe that one of the critical uses of the BSC is motivation, i.e., the BSC itself should motivate
employees.Thisidea is contained in their questionnaire asa responseto the statement that‘‘Individuals are motivated when clear targets/
goals are presented/communicated, and their performance is measured and are given/brought to the attention of others.’’ This statement
is almost identical to the Javidan, Dorman, De Luque, and House’s (2006, 69) summary of House et al.’s (2004) organizational
dimension of performance orientation. Performance orientation is defined as ‘‘the degree to which a collective encourages and rewards
(and should encourage and reward) group members for performance improvement and excellence’’ (House et al. 2004, 239)
Top management in these high-performance-oriented organizations will promote innovative culture to remain competitive
by continually improving their products and processes. Top performance needs reliable and multisource data. Thus, we
hypothesize the following:
H3: Performance orientation is positively associated with the use of the BSC.

Uncertainty Avoidance
Uncertainty avoidance refers to ‘‘the extent to which a society, organization, or group relies on social norms, rules, and
procedures to alleviate the unpredictability of future events’’ (House et al. 2004, 30). House et al. (2004) list the characteristics
of a high uncertainty avoidance culture as less tolerance for breaking the rules, stronger resistance to change, a tendency toward
formalizing interactions, and greater reliance on formalized policies and procedures. Ax and Greve (2017, 72) describe the BSC
culture thusly: ‘‘Change and development are important/highly valued. It is important/vital to produce/achieve progress and
innovations.’’ Thus, it appears that the use of the BSC is not compatible with the culture of uncertainty avoidant companies.
Given the BSC’s focus on change and willingness to accept uncertainty, we hypothesize:
H4: Uncertainty avoidance is negatively associated with the use of the BSC.

In the current study, collectivism is envisaged as a single construct because of the lack of relevant research on each subdimension of collectivism. The
validity of using the combined construct was tested by assessing the scale’s reliability using Cronbach’s alpha (Cronbach 1951). The scale was reliable,
with a Cronbach’s alpha of 0.82, which is above the minimum threshold of 0.70 (Hair, Black, Babin, and Anderson 2010).

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Power Distance
The last of Ax and Greve’s (2017) BSC values arises from the BSC’s role as a top-down control tool. Ax and Greve (2017,
72) define this value as one where, ‘‘Management is demanding and controls organizational units by deciding on and following
up measurable targets/goals.’’ This is very close to the organizational culture value of power distance. Power distance is defined
as ‘‘the degree to which members of an organization or society expect and agree that power should be shared unequally’’
(House et al. 2004, 30). Employees in high power distance organizations are given limited decision-making powers and
compensated primarily through financial compensation (House et al. 2004). High levels of direct management control require
monitoring and acceptance of BSC goals. As Kaplan and Norton (1996, 8) note, the BSC was a ‘‘top down reflection of the
company’s mission and strategy.’’ Therefore, we hypothesize:
H5: Power distance is positively associated with the use of the BSC.

Unmapped Dimensions of Organizational Culture: Gender Egalitarianism, Humane Orientation, and Assertiveness
Beyond the previous dimensions of organization culture, it is difficult to determine how the remaining House et al. (2004)
variables of gender egalitarianism, humane orientation, and assertiveness affect the use of the BSC. However, we believe it is
worth exploring.
Gender egalitarianism refers to ‘‘the degree to which a collective minimizes gender inequality’’ (House et al. 2004, 30).
Prior research (Carless 1998; Stelter 2002) has provided evidence that female and male leaders adopt different management
styles. Carless (1998, 888) finds that female managers are more transformational than male managers, and transformational
leaders are defined as those who ‘‘articulate a vision, use lateral or nontraditional thinking, encourage individual development,
use participative decision-making, and promote a cooperative and trusting work environment.’’ Furthermore, Oakley (2000)
argues that gender equity in top management means that organizations develop business policies that are likely to include the
viewpoints of all the members of an organization. While gender equality may be a company goal (Galizzi 2010), there is no
suggestion that it is a tool for forming a consensus. Therefore, we do not hypothesize a direct relationship between gender
egalitarianism and the use of the BSC.
Humane orientation is defined as ‘‘the degree to which a collective encourages and rewards individuals for being fair,
altruistic, generous, kind, caring to others’’ (House et al. 2004, 30). House et al. (2004) were the first to conceptualize humane
orientation as a dimension of organizational culture. House et al. (2004, 586) list the following characteristics of high humane
orientation: informal relationships, paternalistic approach to handling employee problems, and organizational members’
preference to work with others to ‘‘get the job done.’’ As with gender equality, a company may include a humane orientation in
its mission and goals and the goals of a BSC. Therefore, no direct relationship is hypothesized between humane orientation and
the use of the BSC.
Assertiveness refers to ‘‘the degree to which individuals in organizations or societies are assertive, tough, dominant, and
aggressive in social relationships’’ (House et al. 2004, 395). At the organizational level, assertiveness means whether
organizations encourage tough (versus tender), dominant (versus nondominant), and assertive (versus nonassertive) behavior
among their employees. Naor, Linderman, and Schroeder (2010, 196) find that low assertiveness can help companies
‘‘implement high performance manufacturing practices (e.g., Total Quality Management)’’ because it ‘‘promotes employee
involvement and encourages a willingness to share resources and information.’’ As with gender egalitarianism, a company may
include an assertive approach to measurement in its mission and goals, and the goals of a BSC. Therefore, no direct relationship
is hypothesized between assertiveness and the use of the BSC.


Data Collection
This study uses a survey-based methodology to collect data from 1,126 top management and other employees in 48
manufacturing companies in the National Capital Region of India.4 In business terms, the region has local offices of more than
250 Fortune 500 companies. Both of the surveys were conducted in English.5 Most of the organizations in the sample belonged
to the auto industry (71 percent), whereas some organizations were from textiles (19 percent), and food, machinery, medical
equipment, and other industries (10 percent).

The study was approved for data collection by the Institutional Review Board at the University of Texas at El Paso.
English is the language of the business in India. See https://www.nytimes.com/2011/02/17/world/asia/17iht-letter17.html

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The process of sample selection began with finding the names of suitable senior managers through a Google search of
companies in the area. This search was supplemented by suggestions from a retired professor of the local university. Managers
with whom one of the authors was familiar and who worked in the local community also suggested companies to contact.
Finally, several senior managers who had been contacted and agreed to be surveyed also suggested additional companies and
managers that could be approached for data.
Individuals who expressed interest in their firm participating in the study were also visited by one of the authors, who explained
the purpose, but not the expected outcome, of the project. C-suite, general managers, and senior managers of the companies were
approached for permission to meet with their company’s managers and employees in group meetings. Participants, in turn,
completed the survey(s) in these group meetings. In some cases, the senior manager asked for time and freedom to distribute the
questionnaire. In this case, the author or his retired colleague returned to collect the questionnaires after completion.
There were several reasons for choosing Indian organizations as the center of data collection. One, the growing role of the
Indian economy has motivated us to concentrate our research efforts on India. In 2015–2016, Prime Minister Narendera Modi
launched an initiative ‘‘Make in India’’ to invite foreign companies to invest in the Indian manufacturing sector. Since then, several
multinational companies, including The Boeing Company and DHL International GmbH, have shown interest in the Indian
manufacturing sector. While the Indian companies are making a mark in the global economy, it is well documented that the Indian
and Western management styles and organizational cultures are significantly different, and these differences are relevant when
companies form strategic alliances with international partners. In one study, Pothukuchi, Damanpour, Choi, Chen, and Park (2002)
found that the organizational culture is more dominant than the national culture in explaining the success of international joint
ventures. In another study, Chenhall (2003, 152) notes that multinationals ‘‘face the issue of whether to transfer their domestic MCS
overseas or redesign their systems to fit the cultural characteristics of the offshore entities.’’ The author further states that the ‘‘culture
will increase in relevance as firms continue to develop multi-national operations’’ (Chenhall 2003, 154–155). Thus, we believe that
the findings of our research can provide valuable information to companies as they plan to expand their operations in India.

Independent Variables
The independent variables are the individual dimensions of organizational culture from House et al. (2004). Organizational
culture practices were collected using the original instrument from House et al. (2004). The version used to collect data on the
culture of the organization focuses on the ‘‘as is’’ scenario at the organization level. Thus, the survey instructions are, ‘‘The
authors are interested in your beliefs about what the norms, values, and practices are in the organization in which you work. In
other words, we are interested in the way your organization is—not the way you think it should be.’’
The House et al. (2004) instrument is the preferred method of measuring culture for several reasons:6
1. Discussing the GLOBE research program, Dickson, Aditya, and Chhokar (2000) note that the study was designed to
capture culture at both at the organizational and societal level. The original questions were designed as quartets.
Quartets have isomorphic structures across two units of analysis (societal and organizational) and across two
manifestations of culture (As is and Should be). Moreover, the GLOBE Study (House et al. 2004) added newer
dimensions, such as performance orientation, thereby expanding the universe of organizational culture.
2. Further, there is evidence that the survey measures organizational culture as separate from the societal culture. Dickson et al.
(2000) find that societal values have a minimal direct effect on organizational culture, accounting for as little as 5 percent of
the organizational variance. This tells us that organizational culture can be measured independently of national cultures.
3. The validation sample in the original study was both large and diverse. The GLOBE Study (House et al. 2004) is based
on data collected from around 17,000 managers in 951 companies and 62 countries during the three-year period from
1994 to 1997. Other studies (e.g., Hofstede, Neuijen, Ohayv, and Sanders’s [1990] organizational culture model) are
based on the data collected from a small sample.
The data on each organization’s culture was provided by 18–28 employees in each company working at different levels in
departments such as sales, purchasing, accounting and finance, human resources, quality control, security, and information
An organizational culture dimension score was computed for each respondent per the methodology provided by House et
al. (2004). The organizational culture dimension score for each company is a simple mean of the scores by the dimension of all
the responding participants from that company.

The GLOBE Study is not without its critics (Maseland and Van Hoorn 2009; Hofstede 2006; Javidan et al. 2006; Warner-Søderhold 2012). However,
these critics discuss its use cross-nationally rather than organizationally.

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Dependent Variable: The Use of the BSC

The dependent variable was the overall use of the BSC. Data were collected using Hoque and James’ (2000)7 survey
instrument consisting of 20 Likert-type scale items that measure the use of a number of items common to the BSC. Each item
was measured on a five-point scale where 1 indicates that an item was used ‘‘not at all’’ to monitor firm performance, while 5
indicates usage to ‘‘a great extent.’’ The data on BSC and its four perspectives were collected from one–three senior-level
managers in finance departments in each organization. A simple mean of the 20 items indicates the overall use of the BSC by
each respondent. A simple mean of all the respondents’ scores per company indicates the use of the BSC in that company.

Control Variables
The control variables used in the existing literature were also used in this study. Data were also collected on industry
categories, external environment, and strategies of firms. The firms were concentrated in the auto industry, although later
evaluation showed that industry membership had no impact.
Given that the BSC was part of strategic management, two strategic variables were collected as control variables:
environmental uncertainty and strategy type. Defined in Govindarajan (1984, 127), environmental uncertainty refers to ‘‘the
unpredictability in the actions of customers, suppliers, competitors, and regulatory groups that comprise the external
environment of the business unit.’’ This is entirely different from the organizational culture value of uncertainty avoidance,
which describes the attitude to uncertainty rather than the existence of same.
Using scale items from Govindarajan (1984), data on the extent of unpredictability were collected from one–three senior
managers on each of the following eight items: manufacturing technology, competitors’ actions, market demand, product
attributes/design, raw material availability, raw material price, government regulation, and labor union actions. A simple mean
of eight items provides the perceived environmental uncertainty score for each respondent. A simple mean of all the
respondents’ scores per company indicates the environmental uncertainty in that company.
Strategy was a categorical variable with four categories: defender, prospector, analyzer, and reactor (Miles and Snow
1978). Snow and Hrebiniak’s (1980) instrument was utilized to understand the strategies used in the sample organizations. As
the strategy scale was completed by one–three senior managers in each company, we found that in some cases there were
disagreements among the respondents about the strategy implemented in their organization. To account for this, a fifth category
of strategy named ‘‘multiple’’ was created. ‘‘Multiple’’ indicates that the sample companies are using a combination of several
strategies. Interestingly, no company selected the ‘‘Reactor’’ strategy type.


Descriptive Statistics
Table 4 provides a list of variables, their means, and standard deviations, as well as the sources of items for each variable.
The average use of the BSC of the 48 companies was 3.65 on a five-point scale. The closest descriptor was ‘‘to a considerable
Of the eight organizational culture variables, future orientation has the highest average score of 5.25 on a seven-point scale.
This is followed by performance orientation (5.18), uncertainty avoidance (5.10), humane orientation (5.07), and collectivism
(4.90). Thus, the sample companies are future and performance oriented, uncertainty avoidant, humane oriented, and
collectivist. However, the sample companies have a mean score of 2.70 on gender egalitarianism, indicating that they are
primarily male-dominated.

Path Analysis
We conduct a path analysis using Mplus software (L. Muthén and B. Muthén 2010) to analyze the data. As an extension of
a multiple regression, path analysis tests the structural model that comprises theoretically established relationships between
constructs of interest (Kelloway 2015). In our study, we develop and test a path model that describes the relationship between
organizational culture and use of the BSC. In a path analysis, variables are connected to other variables using one-sided arrows
in the path diagram. These path arrows represent the causal linkages between the connected variables (Meyers, Gamst, and
Guarino 2013).
Before conducting a path analysis, we evaluate the possibility of multicollinearity in our data by computing variance
inflation factors (VIF). Multicollinearity occurs when two or more independent variables are highly correlated. Although some

The authors thank Professor Hoque for providing the survey.

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126 Gupta and Salter

Variables and Descriptive Statistics
Construct Variable Type Mean SD Min. Max. Source of Items
Use of the BSC Continuous; Dependent Variable 3.65 0.53 2.58 4.73 Hoque and James (2000)
Humane Orientation Continuous; Independent Variable 5.07 0.51 3.88 6.18 House et al. (2004)
Gender Egalitarianism Continuous; Independent Variable 2.70 0.47 1.49 3.95 House et al. (2004)
Power Distance Continuous; Independent Variable 3.82 0.53 2.77 5.71 House et al. (2004)
Collectivism Continuous; Independent Variable 4.90 0.43 3.83 5.90 House et al. (2004)
Performance Orientation Continuous; Independent Variable 5.18 0.47 4.01 5.95 House et al. (2004)
Future Orientation Continuous; Independent Variable 5.25 0.71 3.56 6.57 House et al. (2004)
Uncertainty Avoidance Continuous; Independent Variable 5.10 0.60 3.62 6.64 House et al. (2004)
Assertiveness Continuous; Independent Variable 4.60 0.43 3.64 5.55 House et al. (2004)
Environmental Uncertainty Continuous; Control Variable 3.07 0.80 1.13 4.83 Govindarajan (1984)
n ¼ 48.
Strategy types selected by the sample companies are Multiple Strategies (13 companies), Defender (5 companies), Prospector (15 companies), Analyzer
(15 companies), and Reactor (0 companies). The data on strategy types are collected from one–three top management employees in each company utilizing
Snow and Hrebiniak’s (1980) questionnaire.

correlation was expected among the independent variables, multicollinearity was mainly caused by one organizational culture
dimension—humane orientation. At a VIF of 9.61, the humane orientation dimension of organizational culture has by far the
highest VIF among all the independent variables. Further, in the correlation analysis, humane orientation was found to be
significantly correlated with other organizational culture variables. Field (2009) suggests that high multicollinearity in the data
makes the coefficients of variables unreliable and causes problems in identifying the importance of each variable. Further, Hair
et al. (2010) suggest that the presence of multicollinearity in data causes shared variance among variables, causing a decline in
the total variance explained (R2). As such, we remove humane orientation from our analysis.

Results from the Path Analysis—Overall Utilization of the BSC

The results of the path analysis are shown in Tables 5 and 6. Table 5 reports the different goodness-of-fit statistics reported
by the Mplus program. Table 6 presents information on path coefficients, standard errors, and significance levels. The results
indicate that the overall model fit well, with an R2 of 0.42 (p-value ¼ 0.000, two-tailed). Extending Ax and Greve (2017), we
hypothesize relationships between five dimensions of organizational culture and the use of the BSC. We find support for all five
hypotheses. Specifically, we find that future orientation, performance orientation, and power distance are positively associated
with the use of the BSC. Also, collectivism and uncertainty avoidance are found to be negatively associated with the use of
BSC. As predicted, our results indicate that organizational culture is significant in explaining the use of the BSC in companies.
In our model, we also test the non-hypothesized relationships between gender egalitarianism and assertiveness and the use
of the BSC. Our results indicate that both gender egalitarianism and assertiveness are not significant organizational culture
Additionally, one control variable, environmental uncertainty, was found to be negatively related to the use of the BSC.
Summarizing, individualist, future-oriented, and performance-oriented organizations are the heaviest users of the BSC. These
can be constrained by the extent to which the organization values certainty over success or faces an uncertain environment. No
significant relationship was found between strategy types and the use of the BSC.

Goodness-of-Fit Test Statistics
Goodness-of-Fit Statistic Our Results Minimum Value (Source)
Chi-Square Test of Model Fit Value ¼ 0; df ¼ 0; p-value ¼ 0.000 Just Identified Model
Comparative Fit Index (CFI) 1.00 0.95 (Hu and Bentler 1999)
Tucker-Lewis Index (TLI) 1.00 0.95 (Hu and Bentler 1999)
RMSEA (Root Mean Square Error of Approximation) 0.00; p-value RMSEA , 0.05 ¼ 0.000 0.05 (Steiger 1990)
SRMR (Standardized Root Mean Square Residual) 0.00 0.08 (Hu and Bentler 1999)

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Path Analysis
Use of the Balanced Scorecard
p-value Hypotheses/
Use of BSC Estimate S.E. Est./S.E. (One-Tailed) Control Variable
Collectivism 0.639 0.224 2.847 0.002** H1 (Supported)
Future Orientation 0.551 0.251 2.200 0.014** H2 (Supported)
Performance Orientation 0.678 0.249 2.720 0.0035** H3 (Supported)
Uncertainty Avoidance 0.517 0.221 2.335 0.010** H4 (Supported)
Power Distance 0.343 0.187 1.829 0.0335* H5 (Supported)
Gender Egalitarianism 0.230 0.136 1.693 0.090 (two-tailed) No Hypothesis Was Formed
Assertiveness 0.017 0.162 0.103 0.918 (two-tailed) No Hypothesis Was Formed
Environmental Uncertainty 0.290 0.120 2.408 0.016* (two-tailed) Significant
Multiple Strategy 0.029 0.212 0.138 0.890 (two-tailed) Not Significant
Analyzer Strategy 0.198 0.211 0.938 0.348 (two-tailed) Not Significant
Prospector Strategy 0.366 0.233 1.571 0.116 (two-tailed) Not Significant
Intercept 6.460 3.508 1.842 0.066 (two-tailed) Not Significant
Residual Variance
BSC 0.583 0.109 5.363 0.000
BSC 0.417 0.109 3.839 0.000 (two-tailed)
*, ** Indicate significant at 5 percent and 1 percent, respectively.

Overall, our results provide that there is usage beyond adoption, but it is heavily influenced by organizational culture. This
supports the work of institutional culture as revised by Detert et al. (2000). In essence, concurrence with organization cultural
values affects the usage of an innovation post-adoption. This can be reinterpreted in the form that once a culture has been
adopted, the strength of the re-embedding process envisaged in the neo-institutional theory (Love and Cebon 2008) is best
when the innovation’s culture matches that of the members of the firm. The culture of the innovation needs to match with the
culture of those using it. An interesting spin on this is that the highest level of usage of the BSC as an innovation occurs when
the organizations have a culture that is individualistic and future oriented. Moreover, an organization where hierarchical
authority is tolerated will also be a high user of the BSC. This implies that the BSC is a communication tool but not necessarily
a feedback tool. It also means that a hierarchical organization can, through rewards or other methods, draw on an individualistic
culture and a desire to be part of the future to enhance the use of the BSC.

Robustness Check
We also test the generalizability of our research findings by reanalyzing the data after controlling for industry membership.
As most companies in the sample belong to the auto sector, we create two groups to classify industry membership: Auto-Group
(1) and Non-Auto Group (0). The untabulated results of the path model show that while the model was significant (R2 ¼ 0.457;
p-value ¼ 0.000), industry membership was insignificant. As such, our model was robust to industry membership and provides
evidence of generalizability of research findings.


Overall, this study provides several exciting results. First, we find that several dimensions of organizational culture are
significantly related to the use of the BSC in companies. We find that performance orientation, future orientation, and power
distance are positively related to the use of the BSC. Collectivism and uncertainty avoidance are negatively related to the use of
the BSC. Thus, our results provide evidence that organizational culture is a significant driver of the use of the BSC. This
supports the work of Love and Cebon (2008), identifying organizational culture as a key institutional variable. This work also
links the probability of success of new management tools with the organizational culture dimensions. The BSC, by its essential
nature, is a strategic performance measurement system that is expected to be related to the internal forces in a company. In our
case, organizational culture is the driving process that signified the use of the BSC in companies. The more individualist, open,
performance-oriented, and forward-looking company that was inherent in Kaplan and Norton’s (1992) vision of the type of

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128 Gupta and Salter

company that would make higher use of the BSC has been validated. However, our findings also point to a slightly darker
vision that the acceptance of power disparities encourages the use of the BSC. Fundamentally, we find that the use of the BSC
is valued by those who are inspired by autocratic leadership.
Our research contributes to the accounting literature by extending our understanding of the link between organizational
culture and the use of the BSC. This is the first study that utilizes the GLOBE Study (House et al. 2004) to operationalize
organizational culture. The GLOBE Study (House et al. 2004) is unique because it does not assume equality between cultural
values and cultural practices. As such, we contribute to the accounting literature by analyzing the influence of newly developed
organizational culture dimensions on the use of the BSC.
Another contribution is that the use of a management accounting innovation, i.e., the BSC in our study, is facilitated by
organizational culture, regardless of the company strategy. This responds to the work of Detert et al. (2000) in total quality
management. Detert et al. (2000, 859) throw down the following gauntlet: ‘‘Ultimately, cumulative empirical research, based on
a solid theoretical framework, is the only way to bring valid evidence to bear on the question of how organizational culture
supports or inhibits systemic change.’’
At a practical level, managers can also benefit from the findings of this study. This research identifies organizational culture
dimensions that are positively or negatively associated with the use of the BSC. Prior research (Hoque and James 2000; Davis
and Albright 2004) has identified the positive effects of implementing the BSC on organizational performance. Moreover,
Tung (2008) argues that culture evolves over time. Therefore, managers wishing to use a BSC may utilize our findings to
develop an organizational culture that is congenial to the successful use of the BSC.
Like any study, we have limitations and regrets. Notably, we would like to have explored the role of consultants in the
choice of this innovation. At the time of this study, the strict parameters of our human subjects’ approval gave us no choice but
to make the surveys blind as to the respondent, removing the possibility of further detailed study.
A few more suggestions are provided for improving the next study. The data are collected only from manufacturing
companies, and future researchers could conduct similar research in the service sector. In using the Hoque and James (2000)
survey, we tried to use a standard instrument.
Although no differences in industry responses are found, by predefining the measures, the research assumes all companies
use the same metrics, which is unlikely. Case analysis by industry would be a good area for future study. A second suggestion
would be to examine firms’ usage of the BSC in multiple countries. Third, assuming the data can be identified, a longitudinal
study of the rates of usage for the BSC of a group of firms would tell us whether this innovation is likely to continue to be used.
It would also tell us if and why the usage changes over time. This longitudinal study should be complemented by cross-
sectional studies involving both national and organizational culture. We intend to follow up on these topics in the coming years
and would welcome participation from others.

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The Use of Institutional and Actor-Network Theories in Management Accounting
This paper alludes to two possible theories to explain the use of the balanced scorecard. These are institutional theory and
actor-network theory. Both theories have been used to explain a variety of management accounting choices. To determine the
use of these theories in the broad area of management accounting, we examine four literature reviews: Berry, Coad, Harris,
Otley, and Stringer (2009), Scapens and Bromwich (2010), Justesen and Mouritsen (2011), and Vailatti, da Silva Rosa, and
Vicente (2017). We also searched the major management accounting journals, such as Management Accounting Research,
using key words such as Latour and the names and partial names of the theories.
The dominant use of the theories seems to be improving theory or helping to explain how state or former state entities deal
with establishing a control system and allocating the power that comes with that system. A few studies have focused on
management accounting problems and products, such as activity-based costing, budgeting, benchmarking enterprise resource
planning, and building a management accounting system as part of creating an entity with sustainable practices. We summarize
our literature review in Table 7 and discuss the use of the theories in the two summary sections that follow.

Actor-Network Theory (ANT)

Actor-network theory (ANT) explains changes in management accounting systems and the use of innovations in
management accounting such as ABC or the BSC. Based on the work of Latour (1987, 2005), it describes a process where
change is adopted to meet the short-term and long-term goals of principal actors within and outside an organization. In their
review of management accounting literature, Berry et al. (2009) classify ANT as one of the rising theories of management
accounting change. In the introduction to the 20th anniversary issue of the Management Accounting Review, Scapens and
Bromwich (2010) also identify ANT as a growing theoretical underpinning of the study of accounting change, but not a
dominant one. They find that of the 196 articles accepted by Management Accounting Review from 2000 to 2009, ANT is the
theoretical base of 5 percent, i.e., nine of the accepted articles in that period, up from 0 percent in the preceding decade. Our
literature search post-2010, using the key words ANT and Latour, reveals 12 articles in Management Accounting Review, so
there is some evidence of growth, but it is slow.
Within these articles, ANT research covers an extensive array of topics. In a literature review, Justesen and Mouritsen
(2011) highlight the following topics:
1. Examining the role of accounting in new public management (NPM) as governments attempt to neo-privatize the
provision of healthcare and other services (Ball 2001; Tambulasi 2007);
2. Implementation of activity-based costing (Briers and Chua 2001);
3. The design of intellectual capital statements (Mouritsen and Larsen 2005);
4. The creation of benchmarks (Llewellyn and Northcott 2005);
5. The implementation of integration of management and control through enterprise resource planning (ERP) systems
(Quattrone and Hopper 2005; Dechow and Mouritsen 2005); and
6. The role of accounting in the creation of new markets such as the market for carbon credits (MacKenzie 2009).
The ANT articles in the pre-2010 period have been lauded for establishing management accounting theory but criticized as
lacking data and practical impact (Baldvinsdottir, Falconer, and Nørreklit 2010). In the period 2010–2017, several articles have
focused on empirical support of the earlier theory. Examples include Cooper et al. (2017), Becker, Jagalla, and Skærbæk
(2014), Quattrone (2016), and Kurunmäki and Miller (2011). These authors, however, still focus on a qualitative approach
using an extensive single case study of an institution. This approach provides evidentiary support of theory but depends on the
theory to support extensions outside the industry or company examined.
Our review of ANT-based publications after 2010, also finds some new management accounting problems to which ANT
theory has been applied. These topics include:

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Literature Review and Use of Theories
Problems Actor-Network Theory Institutional Theory
Examining the role of accounting in Ball (2001); Tambulasi (2007) Nor-Aziah and Scapens (2007); ter Bogt and
new public management (NPM) as van Helden (2011); Amans, Mazars-
governments attempt to neo- Chapelon, and Villesèque-Dubus (2015)
privatize the provision of healthcare
and other services. This includes
Implementation of activity-based Briers and Chua (2001) Ahrens and Ferry (2018)
The design of intellectual capital Mouritsen and Larsen (2005) No relevant literature
The creation of benchmarks. Llewellyn and Northcott (2005) Askarany and Yazdifar (2015)
The implementation of integration of Quattrone and Hopper (2005); No relevant literature
management and control through Dechow and Mouritsen (2005)
enterprise resource planning (ERP)
The role of accounting in the creation MacKenzie (2009) No relevant literature
of new markets such as the market
for carbon credits.
As a process of introducing and Bebbington and Larrinaga (2014) Moore (2013)
managing sustainable development.
Risk management practice. Jordan et al. (2013) No relevant literature
Performance-based appraisal and Barretta and Busco (2011); Cooper et al. (2017) Carlsson-Wall, Kraus, and Messner (2016)
reward systems.
Strategy and outsourcing. Nielsen et al. (2015) Modell (2012)
Management accountants as the Briers and Chua (2001); Becker et al. (2014) Goretzki, Strauss, and Weber (2013);
change agents. Youssef (2013)

1. Strategy and outsourcing (Nielsen, Mitchell, and Nørreklit 2015);

2. As a process of introducing and managing sustainable development (Bebbington and Larrinaga 2014);
3. Risk management procedures (Jordan, Jørgensen, and Mitterhofer 2013); and
4. Performance-based appraisal and reward systems (Barretta and Busco 2011).
These new topics support the proposition that ANT theory is a powerful, yet simple, way to understand the process of change in

Institutional Theory
Our second theory is the new institutional theory (NIT) developed by DiMaggio and Powell (1991). NIT postulates that
organizations compete, not only for resources and customers, but also for political power and legitimacy. Management control
systems (MCS) are diffused within organizations using one or a mix of the coercive, mimetic, and normative approaches. In
NIT, components of any management control system are chosen, not so much because of a logical choice process seeking an
economically optimum solution, but rather as a means to satisfy organizational needs for social and political legitimacy.
Our review of the use of institutional theory in accounting begins with the revised version of NIT from Burns and Scapens
(2000). Burns and Scapens (2000) postulate an evolutionary view of change through NIT. While all rules and routines can
change structures over time, there is an evolutionary progression. Burns and Scapens’s (2000) framework provides for
resistance to change and for the interplay between management accounting and other agents of change. They also anticipate
that coalitions of interest would need to be formed and/or powerful individuals identified and persuaded (Burns 2000; Granlund
and Modell 2005; Dambrin, Lambert, and Sponem 2007).
In the introduction to the 20th anniversary issue of Management Accounting Review (MAR), Scapens and Bromwich
(2010) identify institutional theory as the most significant theoretical underpinning for management accounting literature

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134 Gupta and Salter

published in MAR from 2000 to 2009. Institutional theory sits at 19 percent of the accepted articles in that period, up from 4
percent in the preceding decade. Institutional theory seems to have taken the place of declining literature streams in the applied
area. This change to a focus on building a strong theory base has its benefits, but also its costs. Baldvinsdottir, Falconer, and
Nørreklit (2010, 79) summarize the issue thusly:
In recent decades, the interest of academic researchers in the practical aspects of management accounting has waned.
Over the past few decades, we have witnessed the establishment of management accounting in academia as a social
science. This has increased the credibility of the accounting academics. However, it has also meant that academic
researchers have neglected the technical core of their discipline and its problems and issues which have direct practical
In the period since Scapens and Bromwich (2010), institutional theory has expanded outside of management accounting. In
a literature review on the use of institutional theory in accounting, Vailatti et al. (2017) find 21 articles in major accounting
journals that use institutional theory. Only eight of these articles use it to explain management accounting phenomena. The
most significant use of institutional theory during this period is in financial accounting, particularly to explain the introduction
and/or adoption of International Financial Reporting Standards in different countries.
Within the management accounting literature, Vailatti et al. (2017) find that the areas of use of institutional theory in
management accounting are diverse. These areas include a change in the accounting and control system in a Spanish utility,
accounting change in Malaysia on privatization, institutional isomorphism in U.S. accounting research, the role of consultants
in budgeting, the introduction of sustainable measurements in an accounting system, balanced scorecard adoption in Portugal,
and management accounting change to support a new B-to-B external net in an Egyptian company. Each of these is interesting
by itself, and as a whole they provide evidence that institutional theory is valuable in examining change in the management
control system or adoption of any one management accounting tool.

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