Causality analysis and human resources management policy determinant in balanced scorecard: A system dynamics approach
The most widely adopted Performance Measurement Systems (PMS) is the BSC which is a framework for translating organisation strategy into a set of achievable performance indicators. The uniqueness of BSC that differentiates it from other PMS is the strategy map that has a unidirectional causality whi...
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| Format: | Thesis |
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2014
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| Summary: | The most widely adopted Performance Measurement Systems (PMS) is the BSC which is a framework for translating organisation strategy into a set of achievable performance indicators. The uniqueness of BSC that differentiates it from other PMS is the strategy map that has a unidirectional causality which follows the bottom- up approach. However, BSC contains certain shortfall despite its apparent popularity. The criticisms on the causality in BSC have been widely discussed as to whether they are based on statistical testing, logic or assumptions. Well-developed causal models are valuable for improving business performance, predicting and decision- making to foresee how action affects future performance. Therefore, the relationships between measures should have notion of causality. In seeking empirical evidence of causality linkages in BSC, a theoretical framework which consist of 10 propositions based on the Service Profit Chain (SPC) theory were developed and tested using the statistical causality analysis; the Granger causality tests on the 45 time series data point extracted from the Business Performance Review report. Results of the study show insufficiency of well-established causality models as only 40% of the causal linkages were supported by the data. |
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