A Balanced Scorecard Strategic Initiative Planning Model with Resource Constraints

Empirical evidence indicates that effective management of resources to implement strategy in a balanced scorecard (BSC) system is essential. We present a mathematical model for allocating limited resources in the BSC strategy implementation process.

The proposed facilitated negotiation model provides a systematic approach to prioritizing strategic initiatives in the design and implementation of a BSC.

Our joint decision model prioritizes strategic initiatives and concurrently calculates the optimal (or approximately optimal) set of BSC targets and weights, given multiyear resource restrictions.

The model assumes full, open, and truthful exchange of information between the parties; an assumption that may exclude many organizations.

We address an important gap in the BSC literature on how organizations can effectively link strategy to the potential constraint of resource budgets.

Quantitative models are being used in practice for allocating resources, but we are not aware of their use by organizations for allocating resources in a BSC application.