The Impact of Contingency Factors on the Balanced Scorecard Adoption: Evidence from Algeria

Abstract

This article aims to analyse the existence of significant relationships between some contingency factors and the degree of adoption of the balanced scorecard. A quantitative study, based on a survey, is conducted among 186 individuals, belonging to different Algerian enterprises, from different sectors. Only 57 responses were obtained, that 43 were complete and usable. Otherwise, we obtained a response rate of 23.12%. The results indicate that only three contingency factors (age, differentiation strategy and competition intensity) are found to be significantly associated with the degree of use of the balanced scorecard indicators. Thus, we conclude that the adoption of the balanced scorecard increases with the rivalry of firms in the markets, with the degree of diversity of their products/services and that older and more mature firm are more likely to use this tool. Despite this study’s limitations, the main findings have potential implications for future research, particularly for researchers wishing to test the diversity in the use of the balanced scorecard across different industries and to explore its advantages and disadvantages. Our model is limited by its exclusion of the effects of other important contingency factors, such as organisational culture, corporate social responsibility, industry, computerisation and others. However, limiting ourselves to a one country allows us to control for the effects of local management practices. We provide evidence of associations rather than drawing conclusions about causality. Another limitation is due to the low representativeness of the sample which may generate a risk of bias.