The balanced scorecard in a not-for-profit environment: a theoretical discussion

The Balanced Scorecard (BSC) is promoted as a management tool that will clarify strategy; align goals; identify and align strategic initiatives; and provide feedback that will encourage learning. In their examination of the implementation and benefits of the BSC Kaplan and Norton emphasize commercial organisations and devote one chapter to discuss the possible usefulness of the BSC in public sector and not- for-profit organisations. However, there are important differences between the three sectors and the assumptions underpinning the BSC in a business may not be relevant to the BSC in a not-for-profit organisation. In this paper the implications of inappropriate assumptions are considered in the context of the implementation and design of the BSC in a not- for-profit environment. The paper concludes that the BSC would require significant changes if it were to be successfully introduced into a Not-For- Profit organization.