An empirical investigation on the links within a sustainability balanced scorecard (SBSC) framework and their impact on financial performance

Article


Sands, John Stephen, Rae, Kirsten Nicole and Gadenne, David. 2016. "An empirical investigation on the links within a sustainability balanced scorecard (SBSC) framework and their impact on financial performance." Accounting Research Journal. 29 (2), pp. 154-178. https://doi.org/10.1108/ARJ-04-2015-0065
Article Title

An empirical investigation on the links within a sustainability balanced scorecard (SBSC) framework and their impact on financial performance

ERA Journal ID19067
Article CategoryArticle
AuthorsSands, John Stephen (Author), Rae, Kirsten Nicole (Author) and Gadenne, David (Author)
Journal TitleAccounting Research Journal
Journal Citation29 (2), pp. 154-178
Number of Pages25
Year2016
Place of PublicationUnited Kingdom
ISSN1030-9616
Digital Object Identifier (DOI)https://doi.org/10.1108/ARJ-04-2015-0065
Web Address (URL)HTPM://www.emeraldgrouppublishing.com/licensing/reprints.htm
Abstract

Purpose – This study aims to investigate the feasibility of integrating the social, environmental and innovation processes within the four-perspective sustainability balanced scorecard (SBSC) model by determining the extent of linkages between and within the four SBSC perspectives. Design/methodology/approach – A survey collected responses from senior management and middle management of large Australian companies. Findings – The findings support several positive significant associations. Direct associations are found between value-creating processes within the internal process perspective. These results support the feasibility of integrating environmental, social and innovation-orientated value-creating process into the internal process of the four-perspective SBSC model. The results also provide evidence about the extent to which direct or indirect associations exist between the four SBSC perspectives: first, direct association of human capital (learning and growth perspective) with value-creating processes (internal processes perspective); second, direct association of value-creating (internal processes perspective) with customer value (customer perspective); and third, direct and indirect associations of value-creating (internal processes perspective) with financial performance (FP; financial perspective). Research limitations/implications – Several limitations are acknowledged related to cross-sectional data, senior and middle managers’ perceptions and assumptions underpinning structural equation modelling. Practical implications – The implications for practice from this study concern how organisational management should relate to their stakeholders while providing value in their FP. Social implications – These associations reflect the influence of stakeholders’ recognised needs on process and product innovation. These needs highlight the benefits of focusing on future-orientated environmental budgets and ongoing employee training that lead to customer value and FP. Originality/value – This is an initial in-depth study of a four-perspective SBSC model that provides an effective means of integrating social, environmental and innovation processes within the traditional four SBSC perspectives.

Keywordshuman capital, corporate social responsibility, environmental process, Innovation-orientated process, Social process, Sustainability balanced scorecard
ANZSRC Field of Research 2020350105. Management accounting
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Byline AffiliationsSchool of Commerce
University of the Sunshine Coast
Institution of OriginUniversity of Southern Queensland
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