Strategic Investment Proposals and the Balanced Scorecard: How to Ensure Consistency Between Investments and Long Term Strategy.

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Ralph W. Adler Paul Theivananthampillai

Abstract

This paper examines how a balanced scorecard can be used to guide strategic investment decisions. As noted in the literature, an advantage of the balanced scorecard over the common financial metrics that are often used (e.g., net present value) is that a broader set of benefits and limitations can be recognised. Furthermore, unlike other non-financial and hybrid financial and non-financial approaches, the balanced scorecard provides relatively clear guidance. This clarity comes from its ability to make tradeoffs between the balanced scorecard measures by assigning weightings to each measure. Unfortunately, the balanced scorecard literature is silent on how these weightings are best determined. In addressing this oversight, this paper argues for and suggests that managers should use a balanced scorecard approach that relies on a multi-attribute decision model. A detailed explanation of this approach is provided and further illustration of the approach is presented through the use of a hypothetical example.Keywords: Strategic investment decisions, capital investments, balanced scorecard

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How to Cite
W. ADLER, Ralph; THEIVANANTHAMPILLAI, Paul. Strategic Investment Proposals and the Balanced Scorecard: How to Ensure Consistency Between Investments and Long Term Strategy.. Asia-Pacific Management Accounting Journal, [S.l.], v. 1, n. 1, p. 113-125, dec. 2006. ISSN 2550-1631. Available at: <http://arionline.uitm.edu.my/ojs/index.php/APMAJ/article/view/359>. Date accessed: 23 june 2018.
Section
Management Accounting