Managing Value-Based Organizations
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Managing Value-Based Organizations

It’s Not What You Think

Bruce Hoag and Cary L. Cooper

Managing Value-Based Organizations argues that those who fail to understand management history are destined to repeat it. Research has shown that despite the prodigious output of management books, managers still have little idea why there is so much change in the world of work or what they can do about it. Most, it seems, are still waiting for the dust to settle, expecting instead that in the near future they will be able to go back to doing things the way they have always done them.
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Chapter 7: The Myth of the Balanced Scorecard

Bruce Hoag and Cary L. Cooper


A pervasive theme in business today is that there is no management without measurement. The degree to which change has occurred, whether it is the number of inches a teenager grows in one year or the increase in profits made by a corporation in the same 12 months, cannot be determined without comparing numerical values at the starting point with the ending point. In view of the amount of measuring that managers do, however, it seems that there is an underlying belief that more measurement yields better management, and that the more parts of an organization that are measured and the more frequently they are measured, the more likely an organization will be able to implement its strategies.1 These convictions have led to the creation of various management tools and techniques that have enabled managers to measure everything and everyone. The myth of the balanced scorecard pertains to this obsession. At an organizational level, it is observable in the activities contained within the use of the balanced scorecard, benchmarking and best practice and at an individual level in the use of management by objectives, individual scorecards and performance appraisals. THE BALANCED SCORECARD The horizontal revolution rendered many traditional organizational systems obsolete, and managers soon recognized that measuring the success of their firms solely in financial terms was also inconsistent with these changes.2 It was in this context that the balanced scorecard3 was designed as a means to give managers a more complete picture of the organization’s performance. The scorecard...

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