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An Empirical Investigation on the links within a sustainability balanced scorecard (SBSC) framework and their Impact on Financial Performance
Journal article   Open access   Peer reviewed

An Empirical Investigation on the links within a sustainability balanced scorecard (SBSC) framework and their Impact on Financial Performance

John Sands, Kirsten Rae and David Gadenne
Accounting Research Journal, Vol.29(2), pp.154-178
2016
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PDF - Author's Accepted Version652.98 kBDownloadView
Accepted VersionPDF - Author Accepted Version Open Access
url
https://doi.org/10.1108/ARJ-04-2015-0065View
Published Version

Abstract

sustainability balanced scorecard environmental management accounting balanced scorecard human capital environmental process social process innovation-orientated process value creating internal processes customer value financial performance structural equation model non-financial measures
Purpose: This study investigates the feasibility of integrating the social, environmental, and innovation processes within the four SBSC perspective 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 valuecreating process into the Internal Process of the four SBSC perspective model. The results also provide evidence about the extent direct or indirect associations exist between the four SBSC perspectives: first, human capital (Learning and Growth perspective) direct association with value-creating processes (Internal Processes perspective); second, the value-creating (Internal Processes perspective) direct association with customer value (Customer Perspective); and third, value-creating (Internal Processes perspective) direct and indirect associations with financial performance (Financial perspective). Research limitations: Several limitations are acknowledged related to cross-sectional data, senior and middle managers' perceptions, and assumptions underpinning structural equation modelling (SEM). 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 orientatedenvironmental budgets and ongoing employee training that lead to customer value and financial performance. Practical implications: The implications for practice from this study concern how organisational management should relate to their stakeholders while providing value in their financial performance. Originality/value: This is an initial in-depth study of a four SBSC perspective model that provides an effective means of integrating social, environmental and innovation processes within the traditional four BSC perspectives.

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Business, Finance

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#9 Industry, Innovation and Infrastructure

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