UTILIZATION OF UNIQUE MEASURES IN THE BALANCED SCORECARD: EFFECTS OF AWARENESS AND EXPERIENCE

Michael L. Roberts
The University of Alabama

Thomas L. Albright
The University of Alabama

Aleecia R. Hibbets
The University of Alabama

Abstract: Lipe and Salterio (2000) found superiors disregarded half the information in a Balanced Scorecard when evaluating the performance of two divisional managers. Only common measures affected superiors’ holistic evaluations, defeating the purpose of the Balanced Scorecard. Lipe and Salterio attributed their finding to superiors’ need to adopt a cognitive simplifying strategy. Our study examines whether an explicit reminder that all the Balanced Scorecard measures are important to corporate mission and strategy provides sufficient motivation to exert the necessary cognitive effort to utilize unique measures. We find Executive MBAs who are currently employed and who possess an average of ten years of experience utilize unique measures to a significant degree, but regular MBAs similar to participants in Lipe and Salterio (2000) did not. These findings indicate Lipe and Salterio’s (2000) results may not generalize to corporate settings.

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