Sustainability Balanced Scorecard Architecture and Environmental Investment Decision-Making
This study is centered around a set of research questions that aim to explain how sustainability balanced scorecard architectures with sustainability parameters either embedded or treated as a separate perspective relate to environmental investment decision-making. The research also examines the mediating role of sustainability balanced scorecard knowledge and moderating role of strategic risk information. This article presents the results and answers to the research questions via conducting an experimental study approach using a two-factor factorial design. This is possibly the first study that determines, through an experimental procedure conducted with managers working in large manufacturing companies, whether any significant difference exists in environmental investment decision outcomes when decision-makers are presented with either an architecture where sustainability is embedded with the traditional four perspectives of balanced scorecards versus when it is presented as a separate fifth perspective. Furthermore, the development of an integrated model is possibly a significant contribution to the extant literature. (original abstract)
- Alewine, H.C. and Miller, T.C., 2016. How Balanced Scorecard Format and Reputation Related to Environmental Objectives Influence Performance Evaluations. Advances in Management Accounting, 27, pp.123-165.
- Banker, R.D., Chang, H. and Pizzini, M., 2011. The Judgmental Effects of Strategy Maps in Balanced Scorecard Performance Evaluations. International Journal of Accounting Information Systems, 12(4), pp.259-279.
- Beresford, B. and Sloper, P., 2008. Understanding the Dynamics of Decision-Making and Choice: A Scoping Study of Key Psychological Theories to Inform the Design and Analysis of the Panel Study. York: Social Policy Research Unit, University of York.
- Berrone, P., Cruz, C., Gomez-Mejia, L.R. and Larraza-Kintana, M., 2010. Socioemotional Wealth and Corporate responses to Institutional Pressures: Do family-controlled Firms Pollute Less? Administrative science quarterly, 55(1), pp.82-113.
- Bostian, M., Färe, R., Grosskopf, S. and Lundgren, T., 2016. Environmental Investment and Firm Performance: A Network Approach. Energy Economics, 57, pp.243-255.
- Cagno, E., Micheli, G.J. and Trucco, P., 2012. Eco-efficiency for Sustainable Manufacturing: An Extended Environmental Costing Method. Production Planning & Control, 23(2-3), pp.134-144.
- Cheng, M.M., Humphreys, K.A. and Zhang, Y.Y., 2018. The Interplay between Strategic Risk Profiles and Presentation Format on Managers' Strategic Judgments Using the Balanced scorecard. Accounting, Organizations and Society, 70, pp.92-105.
- Davis-Peccoud, J., Stone, P. and Tovey, C., 2016. Achieving Breakthrough Results in Sustainability. Bain and Company, pp1-8. [online] Available at: http://www.bain.com/publications/articles/achieving-breakthrough-results-insustainability.aspx. [Accessed 1 July 2018].
- Epstein, M.J. and Buhovac, A.R., 2018. Making Sustainability Work: Best Practices in Managing and Measuring Corporate Social, Environmental, and Economic Impacts. Berrett-Koehler Publishers.
- Fayers, C., 1999. Environment and Investment: The Role of Personal Investment Choice in Creating Sustainability. Sustainable Development, 7(2), pp.64-76.
- Ferreira, J.J., Raposo, M.L. and Fernandes, C.I., 2013. Does Innovativeness of Knowledge-Intensive Business Services Differ from Other Industries? The Service Industries Journal, 33(7-8), pp.734-748.
- Figge, F., Hahn, T., Schaltegger, S. and Wagner, M., 2002. The Sustainability Balanced Scorecard-linking Sustainability Management to Business Strategy. Business strategy and the Environment, 11(5), pp.269-284.
- Gandhi, K., Schmidt, B. and Ng, A.H., 2018. Towards Data Mining-based Decision Support in Manufacturing Maintenance. Procedia Cirp, 72, pp.261-265.
- Hansen, E.G. and Schaltegger, S., 2016. The Sustainability Balanced Scorecard: A Systematic Review of Architectures. Journal of Business Ethics, 133(2), pp.193-221.
- Hayes, A.F., 2015. An Index and Test of Linear Moderated Mediation. Multivariate Behavioral Research, 50(1), pp.1-22.
- Hayes, A.F., 2017. Introduction to Mediation, Moderation, and Conditional Process Analysis: A Regression-based Approach. Guilford publications.
- Hourneaux Jr, F., da Silva Gabriel, M.L. and Gallardo-Vázquez, D.A., 2018. Triple Bottom Line and Sustainable Performance Measurement in Industrial Companies. Revista de Gestão, 25(4), pp.413-429.
- Hristov, I., Chirico, A. and Appolloni, A., 2019. Sustainability Value Creation, Survival, and Growth of the Company: A Critical Perspective in the Sustainability Balanced Scorecard (SBSC). Sustainability, 11(7), pp.1-19.
- Ignatius, A., 2018. The New World of Risk. Harvard Business Review, pp.124-130,[online] Available at: https://hbr.org/2018/05/the-new-world-of-risk. [Accessed 13 September 2018].
- Jano-Ito, M.A. and Crawford-Brown, D., 2017. Investment Decisions Considering Economic, Environmental and Social Factors: An Actors' Perspective for the Electricity Sector of Mexico. Energy, 121, pp.92-106.
- Jassem, S., Azmi, A. and Zakaria, Z., 2018. Impact of Sustainability Balanced Scorecard Types on Environmental Investment Decision-Making. Sustainability, 10(2), pp.1-18.
- Jayalath, K.P., Ng, H.K.T., Manage, A.B. and Riggs, K.E., 2017. Improved Tests for Homogeneity of Variances. Communications in Statistics-Simulation and Computation, 46(9), pp.7423-7446.
- Jiangtao, L. and Pin, Z., 2010, April. Analysis of Sustainability Balanced Scorecard Influences on Decision Processes and Investment Decisions. In 2010 2nd IEEE International Conference on Information Management and Engineering, IEEE, pp.111-116.
- Kahneman, D. and Tversky, A., 1979. Prospect Theory: An Analysis of Decision under Risk. Econometrical, 47(2), pp.263-292.
- Kalender, Z.T. and Vayvay, Ö., 2016. The Fifth Pillar of the Balanced Scorecard: Sustainability. Procedia-Social and Behavioral Sciences, 235, pp.76-83.
- Kang, G.G. and Fredin, A., 2012. The Balanced Scorecard: the Effects of Feedback on Performance Evaluation. Management Research Review, 35(7), pp.637-661.
- Kaplan, R.S., 2009. Risk Management and the Strategy Execution System. Balanced Scorecard Report, 11(6), pp.1-6.
- Kaplan, R.S. and Mikes, A., 2012. Managing Risks: a New Framework. Harvard Business Review, 90(6), pp.48-60.
- Kaplan, R.S. and Norton, D.P., 2001. Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part I. Accounting Horizons, 15(1), pp.87-104.
- Kaplan, S.E. and Wisner, P.S., 2009. The Judgmental Effects of Management Communications and a Fifth Balanced Scorecard Category on Performance Evaluation. Behavioral Research in Accounting, 21(2), pp.37-56.
- Kettinger, W.J. and Li, Y., 2010. The Infological Equation Extended: Towards Conceptual Clarity in the Relationship Between Data, Information and Knowledge. European Journal of Information Systems, 19(4), pp.409-421.
- Kotze, P.N., Vermaak, F.N. and Kirsten, E., 2015. Including Risk in the Balanced Scorecard: Adoption Rate and Implementation Methods of Johannesburg Stock Exchange Listed Organisations. Southern African Business Review, 19(2), pp.99-107.
- Lee, S. and Lee, D.K., 2018. What is the Proper Way to Apply the Multiple Comparison test? Korean Journal of Anaesthesiology, 71(5), pp.353-360.
- Myung, J.K., An, H.T. and Lee, S.Y., 2019. Corporate Competitiveness Index of Climate Change: A Balanced Scorecard Approach. Sustainability, 11(5), pp.1-16.
- Nazari-Shirkouhi, S., Mousakhani, S., Tavakoli, M., Dalvand, M.R., Šaparauskas, J. and Antuchevičienė, J., 2020. Importance-performance Analysis Based Balanced Scorecard for Performance Evaluation in Higher Education Institutions: an Integrated Fuzzy Approach. Journal of Business Economics and Management, 21(3), pp.647-678.
- Olson, D.L. and Wu, D., 2020. Balanced Scorecards to Measure Enterprise Risk Performance. In Enterprise Risk Management Models (pp.137-148). Springer, Berlin, Heidelberg.
- Payne, J.W., Payne, J.W., Bettman, J.R. and Johnson, E.J., 1993. The Adaptive Decision Maker. Cambridge University Press.
- Pekovic, S., Grolleau, G. and Mzoughi, N., 2018. Environmental Investments: Too Much of a Good Thing? International Journal of Production Economics, 197, pp.297-302.
- Rana, R. and Singhal, R., 2015. Chi-square Test and its Application in Hypothesis Testing. Journal of the Practice of Cardiovascular Sciences, 1(1), pp.69-71.
- Rikhardsson, P. and Holm, C., 2008. The Effect of Environmental Information on Investment Allocation Decisions - an Experimental Study. Business Strategy and the Environment, 17(6), pp.382-397.
- Sarker, T.K. and Burritt, R.L., 2008. An Empirical Examination of the Role of Environmental Accounting Information in Environmental Investment Decision-making. In Environmental Management Accounting for Cleaner Production (pp. 457-475). Springer, Dordrecht.
- Schaltegger, S. and Wagner, M. eds., 2017. Managing the Business Case for Sustainability: The Integration of Social, Environmental and Economic Performance. Routledge.
- Schaltegger, S. and Wagner, M., 2011. Sustainable Entrepreneurship and Sustainability Innovation: Categories and Interactions. Business Strategy and The Environment, 20(4), pp.222-237.
- Simons, R., 2000. Performance Measurement & Control Systems for Implementing Strategy. Prentice-Hall, New Jersey
- Wisutteewong, G. and Rompho, N., 2015. Linking Balanced Scorecard and COSO ERM in Thai Companies. Journal of Management Policy and Practice, 16(2), pp.127-134.
- Wu, D.D. and Olson, D.L., 2009. Enterprise Risk Management: Small Business Scorecard Analysis. Production Planning and Control, 20(4), pp.362-369.