Supporting Causal-Oriented Performance Management by a Dynamized Balanced Scorecard

The claim of performance management systems is to enhance managers’ knowledge about the events, circumstances and processes, which constitute organisational performance. Performance management systems serve as instruments to reconstruct the complexity of the value creation process. Thereby, modern companies, especially service companies, are confronted with a highly dynamic environment. Against this background, a performance management system is conceptualized as continuous process of redesigning performance management systems. Against this background, the suitability of the Balanced Scorecard for causal-oriented performance management is discussed. On this basis, the benefits of integrating a time dimension into BSC-methodology are evaluated from a design-theoretical point of view. Based on the developed design-framework and deficiencies of the standard Balanced Scorecard-methodology, a dynamic BSC is modelled. The aim of this model is to support managers understanding of the complex causal system, which constitutes the value creation process. Concerning the needs of causal performance management, the opportunities and limitations of dynamic models are discussed.