An investigation in to the interrelation between balanced score card factors: a case study in the automotive industry

Since 1990s, when Kaplan and Norton introduced balanced scorecard (BSC) model, this model has been considerably popular amongst managers all over the world. Although BSC is known as a successful performance measurement tool amongst managers, there have been criticisms of that including: How financial and non-financial measures are linked together? Are relationships in a direct way or there is bi-directional casualty? To overcome the limitations to current BSC theory, this paper aims to describe main factors of each balanced scorecard BSC perspectives and investigate interrelation between them with consideration to automotive parts sector in Iran. For this aim, we analyze the relationship between various perspectives in structure of balanced scorecard and measure causal relationships between various perspectives and their role in improving financial perspective. This research was conducted through a set of monthly reports of Balances scorecard factors in Tosnco - company of auto industry - during a three-year period. Case study evidence verified the underlying theoretical hypothesis of BSC. It is verified that perspectives are positively correlated with each other and new interrelation between internal process perspectives factor and financial perspective evidence was also found. The innovative dimension of this research is that we actually applied BSC in Iran and investigated factors related to auto industry and interrelation between factors with each other.

Performance, process, customer, finance, factors.