Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 31103
Balanced Scorecard (BSC) Usage and Financial Performance of Branches in Jordanian Banking Industry

Authors: Hamzah Hussein Al-mawali, Yuserrie Zainuddin, Noor Nasir Kader Ali


The purpose of this paper is to contribute to the body of knowledge in the area of management accounting, particularly performance measurement systems within the BSC framework, by investigating empirically the extent of multiple performance measures usage and their effects on the financial performance of Jordanian banks in the branches level. Nevertheless, the result of this study shows that the non-financial measures usages, particularly, customer oriented indicators and product/ service oriented indicators, appears to be important as it enhances firm performance. Remarkably, the findings reveal that there is positive relationship between the usages of multiple performance measures via overall BSC measures and financial performance in the branches level.

Keywords: jordan, Balancedscorecard, Performance measurements systems

Digital Object Identifier (DOI):

Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 4465


[1] D'Souza, D. E. & Williams, F. P. 2000. Appropriateness of the stakeholder approach to measuring manufacturing performance. Journal of Managerial Issues, 7(2): 227-246.
[2] Ittner, C., Larcker, D., & Rajan, M. 1997a. The choice of performance measures in annual bonus contracts. The Accounting Review, April: 231-255.
[3] Kaplan, H., K. Hill, A.M. Hurtado, J. Lancaster, and R. Robson(2001a) The strategy focused organization: How the Balanced Scorecard companies thrive in the new business environment. Boston, Massachusetts: Harvard Business School Press
[4] Euske, K. J., Lebas, M. J., & McNair, C. J. 1993. Performance management in an international setting. Management Accounting Research(4): 275-299.
[5] Kaplan, R. S. & Atkinson, A. A. 1989. Advanced Management Accounting: Prentice Hall.
[6] Kaplan, R.S. and Norton, D.P. (1992), "The Balanced Scorecard: measures that drive performance", Harvard Business Review, Vol. 70 No. 1, pp. 71-9.
[7] Kaplan, R.S. and Norton, D.P. (1996a), "Using the Balanced Scorecard as a strategic management system", Harvard Business Review, Vol. 74 No. 1January-February, pp. 75-85.
[8] Kaplan, R.S. and Norton, D.P. (1996b), Translating Strategy into Actions: The Balanced Scorecard, Harvard Business School Press, Boston, MA.
[9] Beechey, J. & Garlick, D. 1999. Using the Balanced Scorecard in banking. The Australian Banker(133): 28-30.
[10] Birch, C. 1998. Balanced Scorecard points to win for small firms. Australian CPA, 68(6): 43-45.
[11] Chow, C. W., Ganulin, D., Haddad, K., & Williamson, J. 1998. The Balanced Scorecard: A Potent Tool for Energizing and Focusing Healthcare Organization Management. Journal of Healthcare Management, 43(3): 263-279.
[12] Ittner, C.D. and Larcker, D.F. (1998a), "Innovations in performance measurement: trends and research implications", Journal of Management Accounting Research, Vol. 10, pp. 205-38.
[13] Ittner, C.D. and Larcker, D.F. (2001), "Assessing empirical research in managerial accounting: a value based management perspective", Journal of Accounting and Economics, Vol. 32 No 1-3, pp. 349-410
[14] Maisel, L. S. 1992. Performance measurement: The Balanced Scorecard approach. Journal of Cost Management, 6(2): 47-52.
[15] Newing, R. (1995), "Wake up to the Balanced Scorecard", Management Accounting, Vol. 73 No. 3, pp. 22-5.
[16] Hogan, J., Gressle, M., & Neyland, R. 1999. Creating shareholder value. Washington: Electric Perspective.
[17] Huselid, M. 1995. The impact of human resource management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal, 38(3): 635-672.
[18] Ittner, C.D. and Larcker, D.F. (1998b), "Are non-financial measures leading indicators of financial performance? An analysis of customer satisfaction", Journal of Accounting Research, Vol. 36, pp. 1-35.
[19] Johnson, S. T. 1998b. Plan your organization's reward strategy through pay-for performance dynamics. Compensation Benefits Review, 30(3): 67.
[20] Lockamy, A. & Cox, J. F. 1994. Reengineering Performance Measurement: How to Align Systems to Improve Processes, Products, and Profit. New York: Richard D. IRWIN, INC.
[21] Tang, T. L. P. & Fuller, R. M. 1995. Corporate downsizing: What managers can do to lessen the negative effects of layoffs? Sam Advanced Management Journal, 60(4): 1231.
[22] Becker, B. & Gerhart. 1996. The impact of human resource management on organisational performance: Progress and prospects. Academy of Management Journal, 39(4): 779-801.
[23] Kaplan, R. S. 1998c. Innovation action research: Creating new management theory and practice. Journal of Management Accounting Research, 10: 89-118.
[24] Lust, J. A. 1986. The Impact of Benefits Availability on Employee Benefit Satisfaction. Academic Journal, 31: 686-690.
[25] McCarthy, E., Alan, R. N., Compton, & Terence, E. 1993. Strategic human resource management. Journal of Business Financial and Accounting, 59(23): 56-74.
[26] Lipe, M. G. & Salterio, S. E. 2000. The Balanced Scorecard: Judgmental Effects of Common and Unique Performance Measure. The Accounting Review, 75: 283-298.
[27] Light, D. A. 1998. Performance measurement: Investors' Balanced Scorecard. Harvard Business Review, 76(6): 17-20.
[28] Kaplan, R. S. & Norton, D. P. 2001c. Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part 2. Accounting Horizons, June: 147-160.
[29] Kaplan, R. S. & Norton, D. P. 2001b. Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part 1. Accounting Horizons, 15(1): 87-104.
[30] Pineno, C. J. 2002. The Balanced Scorecard: An incremental approach model to health care management. Journal of Health Care Finance, 28(4): 69.
[31] Heskett, J., Jones, T., Loveman, G., Sasser, E., & Schlesinger, L. 1994. Putting the service profit chain to work. Harvard Business Review, March-April: 164-174.
[32] Hoque, Z. and James, W. (2000), "Linking balanced scorecard measures to size and market factors: impact on organizational performance", Journal of Management Accounting, Research, Vol. 12, pp. 1-17.
[33] Sim, K.L. and Koh, H.C. (2001), "Balanced Scorecard: a rising trend in strategic performance measurement", Measuring Business Excellence, Vol. 5 No. 2, pp. 18-26.
[34] Maiga, A.S. and Jacobs, F.A. (2003), "Balanced scorecard, activitybased costing and company performance: an empirical analysis", Journal of Managerial Issues, Vol. 15 No. 3, pp. 283-301.
[35] Davis, S. and Albright, T. (2004), "An investigation of the effect of balanced scorecard implementation on financial performance", Management Accounting Research, Vol. 15 No. 2, pp. 135-53.
[36] Banker, R.D., Potter, G. and Srinivasan, D. (2000), "An empirical investigation of an incentive plan that includes non-financial performance measures", The Accounting Review, Vol. 75 No. 1, pp. 65- 92
[37] Droge, C., Jayaram, J. and Vickery, S. (2000), "The ability to minimize the timing of new product development and introduction: an examination of antecedent factors in the North American automobile supplier industry", Journal of Production Innovation Management, Vol. 17, pp. 24-40.
[38] Said, A.A., HassabElnaby, H.R. and Wier, B. (2003), "An empirical investigation of the performance consequences of non-financial measures", Journal of Management Accounting Research, Vol. 15, pp. 193-223.
[39] Bryant, L., Jones, D.A. and Widener, S.K. (2004), "Managing value creation within the firm: an examination of multiple performance measures", Journal of Management Accounting Research, Vol. 16, pp. 107-31.
[40] Rozita Jusoh, R., Ibrahim, D. N., & Zainuddin, Y. (2008). The performance consequence of multiple performance measures usage Evidence from the Malaysian manufacturers Multiple performance measures57 (2), 119-136.
[41] Anderson, E.W., Fornell, C. and Lehmann, D.R. (1994), "Customer satisfaction, market share, and profitability: findings from Sweden", Journal of Marketing, Vol. 58 No. 3, pp. 53-66.Ashton, 1998;
[42] Abernethy, M. and Lilis, A.M. (1995), "The impact of manufacturing flexibility on management control system design", Accounting, Organization and Society, Vol. 20 No. 4, pp. 241-58.
[43] Perera, S., Harrison, G. and Poole, M. (1997), "Customer-focused manufacturing strategy and the use of operations-based non-financial performance measures: a research note", Accounting, Organizations and Society, Vol. 22 No. 6, pp. 557-72.
[44] Young, S.M. and Selto, F.H. (1993), "Explaining cross-sectional workgroup performance differences in a JIT facility: a critical appraisal of a field-based study", Journal of Management Accounting Research, Vol. 5, pp. 300-302.
[45] Govindarajan, V. (1988), "A contingency approach to strategy implementation at the business-unit level: integrating administrative mechanisms with strategy", Academy of Management Journal, Vol. 31 No. 4, pp. 828-53.
[46] Xenikou, A., & Simosi, M. (2006). Organizational culture and transformational leadership as predictors of business unit performance Journal of Managerial Psychology 21(6), 566-579
[47] Nunnally, J.C. (1978), Psychometric Theory, McGraw-Hill, New York, NY.
[48] Hair, J.F., Anderson, R.E., Tatham, R.L. and Black, W.C. (1998), Multivariate Data Analysis,Prentice-Hall, Englewood Cliffs, NJ