This paper sets out to develop and illustrate a model of the relationship between strategic alignment, motivation and organizational performance in a balanced scorecard (BSC) context – a comprehensive system of strategically aligned performance measures.
The study develops theoretical arguments to show how the strategic alignment process of a BSC can help companies improve their organizational performance. The study develops a theory of the motivational mechanisms that intervene in the relationship between strategic alignment and organizational performance. The literature on operations management and management control are used to underpin the theoretical propositions. A theory illustration case study is described to provide evidence for the theoretical model.
Effective strategic alignment calls for the active involvement of manufacturing executives in the BSC design and implementation process. Effective strategic alignment empowers and motivates manufacturing executives. A combination of effective strategic alignment and a BSC‐based compensation plan has a positive effect on the extrinsic motivation of manufacturing executives.
The case study offers an interesting setting to illustrate the theoretical predictions. However, it is not possible to generalize the results to the population of manufacturing companies. Future research could formally test the relationship between strategic alignment, motivation and organizational performance by using a survey questionnaire in companies that use BSCs.
This paper studies the cascading process, a systematic approach to the creation of strategic alignment using the BSC.
