Testing Strategy with Multiple Performance Measures: Evidence from a Balanced Scorecard at Store24

Dennis  Campbell; Srikant M. Datar; Susan L. Kulp; V.G.   Narayanan

Article | Journal of Management Accounting Research | 2015

Testing Strategy with Multiple Performance Measures: Evidence from a Balanced Scorecard at Store24

by Dennis Campbell, Srikant M. Datar, Susan L. Kulp and V.G. Narayanan

Abstract

We analyze balanced scorecard data from a convenience store chain, Store24, during the implementation of an innovative, but ultimately unsuccessful, strategy. Quarterly strategic reviews, based in part on the firm's balanced scorecard, led executives at Store24 to identify problems with, and eventually abandon, this strategy over a two-year period. We find that formal statistical tests of the hypotheses underlying the firm's balanced scorecard and strategy map reveal problems with the strategy on a timelier basis. We also test alternative hypotheses to those underlying the firm's formal strategy map and scorecard that are consistent with concerns expressed by some of Store24's top executives during the initial stages of implementing the new strategy. Our analysis demonstrates that this firm's balanced scorecard contained useful and timely information for distinguishing between these alternatives. These results provide some of the first field-based evidence on the potential for a firm's balanced scorecard to provide useful information for detecting problems in its strategy.

Keywords: Balanced Scorecard; Business Strategy; Retail Industry;

Format: Print

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Citation:

Campbell, Dennis, Srikant M. Datar, Susan L. Kulp, and V.G. Narayanan. "Testing Strategy with Multiple Performance Measures: Evidence from a Balanced Scorecard at Store24." Journal of Management Accounting Research 27, no. 2 (2015): 39–65.

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Testing Strategy with Multiple Performance Measures: Evidence from a Balanced Scorecard at Store24

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