Kaplan and Norton (2001b) argue that such new financial metrics are fully compatible with the BSC and that each enhances the other. However, neither new financial metrics nor the BSC itself cater for the needs of all significant organisational stakeholders. Two notable omissions are the environment and social matters, which are currently enjoying a resurgence of public interest. In this paper our objective is to make a case for re-balancing the BSC by incorporating social and environmental aspects of organisational performance that are of widespread concern. In doing so we will question the causal chain inherent in BSC strategy maps (Kaplan & Norton, 2000, 2001a, b & c), concluding that it is flawed in such a way as to enable the inclusion of social and environmental aspects in a BSC.
In the rest of the paper we first discuss the BSC and outline the recently introduced concept of “strategy mapping” (Kaplan & Norton, 2000, 2001a, b & c). An institutional theory approach is then used to analyse the problems of balance and integration when three stakeholders are recognised in a PMS. We then consider a wider set of organisational stakeholders and identify environmental and social aspects as the principal omissions from the BSC. The linear causal chain that is claimed to link the four perspectives of the BSC is next argued to be an over-simplification of reality, that has implications for the possibility of including social and environmental aspects into a BSC. Following a brief discussion of Kaplan and Norton’s (2001c) cursory attempt to cater for such aspects, we make a proposal for amending the BSC so as to adequately cater for social and environmental aspects of organisational performance. Brief
conclusions and suggestions for further work follow.