Balanced scorecards are having a major impact on executives’ strategic decision making by encouraging their use of future‐oriented, non‐monetary success indicators. This article explains how to create a balanced scorecard with a reasonable number of indicators, set appropriate benchmarks for them, and evaluate overall management performance against those benchmarks. In doing so, it relies heavily on a controlling tool that is new to the business sector: data envelopment analysis. After discussing the theoretical foundations of this nonparametric optimization procedure and defining several key terms, the article presents a practical example. The example assesses management's performance from several perspectives, paying particular attention to implications of the analytic results for a firm's strategic and operational controlling. The article also offers an overview of various models for data envelopment analysis, describes limits to its use, and concludes with a summary of key findings.

PurposeTo report how an SME developed strategic and operational balanced scorecards (BSCs) as well as benchmarks for use in e‐commerce.Design/methodology/approachThe report begins with the initial management meeting, in which participants set goals for the firm, specified causal linkages among those goals, and identified appropriate strategies for attaining them. It then explains the perspectives chosen to structure the BSCs. Next, it summarizes results from analyzing proposed operational goals, concrete action plans, and key performance indicators to ensure inclusion of all potentials for growth. The report gives concrete examples of how management bundled proposed goals and actions into projects, budgeted them, and committed responsible actors. In addition, it describes how the firm used BSC development to institute a continuous learning process, while providing feedback to various stakeholders both within the firm and across its parent holding company.FindingsFor many small‐ and medium‐sized enterprises, the development, introduction, and use of BSCs and benchmarks certainly seem feasible. Although relatively few have done so thus far, the managers of these firms likely would find it worthwhile to analyze their businesses on the basis of BSC‐perspectives.Originality/valueThis report covers step by step the successful implementation of BSC and benchmarking methodologies in an e‐commerce firm, while overcoming many of the handicaps associated with doing so in SMEs.

Do city governments generally behave in keeping with the assumptions underlying the incremental model when they allocate their resources among competing activities? That is to say, do they try to maintain everyone's historical “fair share” of the budget in order to minimize disputes among rival participants in the decision process? Earlier studies have lacked sufficient data to address this question. However, with data from 105 West German cities, the present study is able to provide an answer. The resource allocation behavior of many of those cities seems to conform with the incremental model's assumptions. Yet for other cities, major changes in expenditure patterns from one year to the next are common. The differences in the variability of expenditure patterns across the cities studied are far from random. They are systematically associated with certain characteristics of the municipal environment. These associations, in turn, offer plausible hints about the process that leads to change in cities' spending patterns.