An empirical investigation on the links within a sustainability balanced scorecard (SBSC) framework and their impact on financial performance

John Stephen Sands, Kirsten Nicole Rae and David Gadenne

Accounting Research Journal, 2016, vol. 29, issue 2, 154-178

Abstract: Purpose - This study aims to investigate the feasibility of integrating the social, environmental and innovation processes within the four-perspective sustainability balanced scorecard (SBSC) model by determining the extent of linkages between and within the four SBSC perspectives. Design/methodology/approach - A survey collected responses from senior management and middle management of large Australian companies. Findings - The findings support several positive significant associations. Direct associations are found between value-creating processes within the internal process perspective. These results support the feasibility of integrating environmental, social and innovation-orientated value-creating process into the internal process of the four-perspective SBSC model. The results also provide evidence about the extent to which direct or indirect associations exist between the four SBSC perspectives: first, direct association of human capital (learning and growth perspective) with value-creating processes (internal processes perspective); second, direct association of value-creating (internal processes perspective) with customer value (customer perspective); and third, direct and indirect associations of value-creating (internal processes perspective) with financial performance (FP; financial perspective). Research limitations/implications - Several limitations are acknowledged related to cross-sectional data, senior and middle managers’ perceptions and assumptions underpinning structural equation modelling. Practical implications - The implications for practice from this study concern how organisational management should relate to their stakeholders while providing value in their FP. Social implications - These associations reflect the influence of stakeholders’ recognised needs on process and product innovation. These needs highlight the benefits of focusing on future-orientated environmental budgets and ongoing employee training that lead to customer value and FP. Originality/value - This is an initial in-depth study of a four-perspective SBSC model that provides an effective means of integrating social, environmental and innovation processes within the traditional four SBSC perspectives.

Keywords: Human capital; Corporate social responsibility; Environmental process; Innovation-orientated process; Social process; Sustainability balanced scorecard (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:v:29:y:2016:i:2:p:154-178

DOI: 10.1108/ARJ-04-2015-0065

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