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[ 363 ]Management Decision36/6 [1998] 363–369© MCB University Press [ISSN 0025-1747]Management by objectives and the Balanced Scorecard: will Rome fall again?David DineshArthur Andersen, Auckland, New ZealandElaine PalmerMSIS Department, School of Business and Economics, University of Auckland,New ZealandDrucker introduced manage-ment by objectives (MBO) inthe late 1950s. Kaplan andNorton introduced the Bal-anced Scorecard in the early1990s. MBO and the Bal-anced Scorecard are manage-ment systems that aligntangible objectives with anorganisation’s vision. Thisarticle compares and con-trasts the two managementsystems. The examinationconcludes that the philosoph-ical intents and practicalapplication of MBO and theBalanced Scorecard stemfrom similar precepts. Theexamination of patterns ofMBO implementation alsoilluminates possible problemsin the application of theBalanced Scorecard. Imple-mentation of MBO suffersfrom two main problems.Partial implementation:taking a portion of a prescrip-tion does not provide thecure. Second, a patent disre-gard for MBO’s core philoso-phy that calls for goal congru-ence through collaboration.Our forecast is that partialimplementation will remain asa problem for the BalancedScorecard. An increasing rateof change in business encour-ages this (because develop-ment of organisation-widescorecards takes too long).However, we think that cur-rent management will usemore collaboration than wasthe case with MBO, becauseof the influence of total qual-ity management (TQM, whichencourages collaboration). IntroductionThe adage that “there is no such thing as anew idea” seems to be true with respect tomanagement concepts. Management by objec-tives (MBO), which Drucker (1955) introducedmore than four decades ago, is a system ofmanagement based on goal congruence as ameans of improving performance. The Bal-anced Scorecard, which Kaplan and Norton(1992) introduced almost 40 years later, is alsoa management system based on goal congru-ence as a means of improving performance.This article takes the view that the BalancedScorecard is essentially similar to MBO, andthat differences can be explained by businesschanges during the years separating theirinception. The main purpose of this article isto extend knowledge about the BalancedScorecard, by examining problems that haveoccurred as part of the earlier goal congru-ence system (MBO).The paper starts by describing MBO’sphilosophical intent as well as its implemen-tation guidelines. This is repeated for theBalanced Scorecard. A section describing thepractical application of MBO (which has beenlargely unsuccessful) follows, and concludeswith an examination of reasons for its failure.This is followed by a discussion about theapplication of the Balanced Scorecard, focus-ing on the likely recurrence of MBO-evidenced problems. The paper finishes witha summary of the key points and conclusions,and extends the findings to a larger ongoingdebate about the value of performance mea-surement systems in business. Management by objectives MBO was first introduced to businesses in the1950s as a system called “management byobjectives and self-control” (Drucker, 1955).Drucker (1955) states that the basis for thissystem is that an organisation will be moresuccessful if:…their efforts … all pull in the same direc-tion, and their contributions … fit togetherto produce a whole, without gaps, withoutfriction, without unnecessary duplication ofeffort…This focus on goal alignment as a way toimprove organisational performance was, atthe time, thought to provide the best path toincreased profitability (D’Aveni, 1995).Drucker’s initial ideas about organisationalgoal congruence were extended and put intopractice as a managerial performance systemused at General Mills, known as “manage-ment by objectives” (McGregor, 1960). McGre-gor’s practical use of this goal congruencesystem was tied to his own development of amanagerial assumption about human behav-iour which he called Theory Y. McGregor (1960) argued that the traditionalmanagerial assumption, which he calledTheory X, assumes that:…the average human being has an inherentdislike of work and will avoid it if he can…Therefore employees must be controlled,intimidated, or coerced to produce. Theory Y, on the other hand, assumes theopposite about the nature of people:…the average person finds work as naturalas play or rest…Based on this theory, McGregor argued thatan employee, if directly involved in the goalsetting process, can be relied upon for self-control. Therefore productivity can best beimproved by clarifying strategically alignedgoals (coupled with related rewards forachievement). In other words, a system suchas MBO (which is based on goal congruency)should improve employee productivity if usedcollaboratively. McGregor’s work on Theory Y, togetherwith the development of the MBO system,codified a shift in managerial thinking thattook place during the 1950s (Bartol and Mar-tin, 1991). Before this time, traditional west-ern management practices were mostly cen-tered on, and driven by, the rational goalmodel (also known as the economic model)(Quinn et al., 1996). Grant et al. (1994) suggest that the rationalgoal model places a strong emphasis on com-mand and control, and utilises scientificmanagement concepts together with Tay-lorism principles (Freedman, 1992) which arebased on one best way to do things. Thus therational goal model parallels McGregor’s[ 364 ]David Dinesh and Elaine PalmerManagement by objectivesand the Balanced Scorecard:will Rome fall again?Management Decision36/6 [1998] 363–369Theory X, in terms of its implicit assump-tions about human behaviour. The shift in managerial thinking repre-sented by MBO is related to a movement awayfrom assumptions about human behaviourbased on scientific management principles(Freedman, 1992). MBO principles differmarkedly from the command and controlmodel of scientific management related togoal setting, instead illustrating a movetowards a paradigm known as the “humanrelations” model. The human relations modelreflects employee empowerment and collabo-ration (Guillen, 1994), and supports McGre-gor’s Theory Y assumptions that work is anatural state. In summary, while MBO is still based on therational goal model in terms of its emphasison goal and measurement setting, employeeinvolvement and collaborative efforts are alsointegral to its philosophy. As such MBO couldbe viewed as a first attempt to merge twocontrasting paradigms (the rational goalmodel and the human relations model), andrepresents what Quinn et al. (1996) describeas a major shift in managerial thinking to thehuman relations model. Further support forthis shift in thinking is evidenced by one ofthe best selling books of the 1950s: How to WinFriends and Influence People (Carnegie, 1981). Following the successful application ofMBO to General Mills, MBO systems becameincreasingly common in organisations dur-ing the 1960s and 1970s. The commonly agreedelements of an MBO system (Reddin, 1971;Reddin and Kehoe, 1974) are:• objectives established for all jobs in thefirm;• use of joint objective setting;• linking of objectives to strategy;• emphasis on measurement and control;• establishment of a review and recycle system.As business acceptance of MBO principlesbecame widespread, a set of MBO implemen-tation steps were developed to allow the con-sistent application of MBO across organisa-tions. These steps are:1 Identification of organisational strategy.All organisations should start by identify-ing their long-term strategic goals(Drucker, 1955; Odiorne, 1979).2 Collaborative goal setting.Goals should be set in collaboration withsuperiors and subordinates. These goalsshould be consistent throughout all levelsof the organisation (Drucker, 1955; Reddinand Kehoe, 1974).3 Rewards linked to goals.Attempts should be made to link rewardsto the individual goals developed by theMBO system. Research on linking rewardsto measurement (Dewey, 1995; Shaw andSchneier, 1995) shows that collaborativegoal and reward setting is successful as amotivational tool.4 Development of action plans.An action plan helps identify problemareas and assists in resource allocation.Action plans encourage innovation andempower subordinates, and should againbe developed by subordinates in collabora-tion with their supervisors (Bartol andMartin, 1991; Neale, 1991).5 Cumulative periodic review of subordinateresults against targets.Management need to be kept informedabout progress and unexpected problems,so that they can provide a coaching andsupporting role if subordinates are havingdifficulties. For this reason, an MBO sys-tem includes periodic performancereviews. The focus of the review should beon gaps between the set goals and actualperformance. The review should includepraise and recognition for areas where thesubordinate has performed well, as well asdiscussion of areas in which the subordi-nate could improve (Reddin and Kehoe,1974).6 Review of organisational performance. The final step of MBO implementation is aregular review of the entire system, whichfeeds back into the first step. The overallreview provides an opportunity to ensurethat organisational plans are being imple-mented as expected and that strategicgoals remain as the focus (Bartol and Mar-tin, 1991; Odiorne, 1987; Reddin and Kehoe,1974). The Balanced ScorecardThis section details the development of theBalanced Scorecard, and defines the charac-teristics of its use as a management system. The Balanced Scorecard measurementsystem (Kaplan and Norton, 1992, 1993a) wasfirst introduced to address what its authorsperceive as the shortcomings of traditionalperformance systems, which they link to areliance on financial measures. In order toovercome this “singular” focus, Kaplan andNorton (1992) introduce three additionalmeasurement categories that highlight non-financial aspects. These are: customer satis-faction, internal processes, and learning/innovation.Kaplan and Norton think of these threeadditional categories as the drivers of futureperformance, whereas the category of finan-cial measures emphasises past performance.[ 365 ]David Dinesh and Elaine PalmerManagement by objectivesand the Balanced Scorecard:will Rome fall again?Management Decision36/6 [1998] 363–369By using all four categories, the BalancedScorecard draws together a wide variety ofdisparate yet important competitive strategicpriorities (Newing, 1994). A central tenet of the Balanced Scorecardsystem is its focus on goal congruence (Hof-fecker and Goldenberg, 1994; Newing, 1995).The objectives and measures for each of thefour Balanced Scorecard categories (finan-cials, customers, internal processes, learn-ing/innovation) are directly derived from theorganisation’s vision and strategy. Hence theresultant measures are aligned with thestrategic direction of the firm. This consis-tency with strategic goals is expected to applyacross all functional areas within the organi-sation (Hoffecker and Goldenberg, 1994), aswell as through existing hierarchical levels(Beischel and Smith, 1991). Kaplan and Norton (1996a) describe theirsystem as “…more than a tactical or an opera-tional measurement system…” Rather, theauthors show that the Balanced Scorecardhas evolved into a strategic managementsystem, with organisations using it to man-age their strategy over the long term. This isdone by using the measurement focus of theScorecard for the following critical manage-ment processes (Kaplan and Norton, 1996b): • clarify and translate vision and strategy;• communicate and link strategic objectivesand measures;• plan, set targets, and align strategic initia-tives;• enhance strategic feedback and learning;• link measures with rewards.Similarities and differencesbetween MBO and the BalancedScorecardThe management processes described for theBalanced Scorecard are very similar to theMBO system elements and six implementa-tion steps. In essence, both systems are basedon goal congruence throughout an organisa-tion, and each details an iterative processbased on collaboration between and withinall levels of an organisation. In terms of managerial paradigms, theBalanced Scorecard, like MBO, seems to haveat its core the rational goal model (clear mea-sures and goals) extended to include thehuman relations model (requiring collabora-tion). A further similarity between the twosystems is that the Balanced Scorecard mea-sures have been tied to rewards and incen-tives as a useful motivational tool (Kaplanand Norton, 1996b). This parallels Dewey’s(1995) and Shaw and Schneier’s (1995)research on MBO.One notable difference between the twosystems is their degree of explicitness. MBOis an open-ended management system basedon the collaborative determination of goalsand measures (without detailing what thosegoals and measures should be). The BalancedScorecard is also based on the collaborativedetermination of goals and measures, but ismore focused than MBO as it prescribes thefour categories of customer satisfaction,internal processes, innovation and learning,and financial measures. The creators of the Balanced Scorecardclaim that such explicitness is neededbecause using open-ended systems hasresulted in too much focus on easily quantifi-able financials (Kaplan and Norton, 1992).The creators argue that the specific targetingof non-financials reminds management ofother equally important concerns. In summary, it appears that MBO and theBalanced Scorecard are essentially similar.They are both based on the development ofstrategic measurements (although the Bal-anced Scorecard is more explicit about whatthose strategic measurements are). They bothfocus on goal congruence (the rational goalmodel), as well as collaboration throughoutall levels of the firm (the human relationsmodel). Likewise, they both imply Theory Yas they assume that employees will be moti-vated by rewards and incentives associatedwith goals that they have helped determine.MBO failure in practiceThis section examines problems with theimplementation of MBO. Given the similari-ties between MBO and the Balanced Score-card, identifying these problems may provideuseful information about the current system.Despite MBO’s objectives of improvingorganisational performance through goalcongruency, and its initial success in suchorganisations as General Mills, successfulimplementation overall has been disappoint-ing. Growth in the introduction of MBO pro-grammes was especially rapid during the1960s and 1970s (Odiorne, 1979). Ironically, thesame organisations that adopted MBO as aperformance management system laterclaimed that MBO proved to be more of ahindrance rather than a help (Van Tassel,1995).Analysing the results of an empirical studycarried out on 48 organisations that intro-duced MBO in the 1960s and 1970s (Reddinand Kehoe, 1974) gives some initial insightsabout possible reasons for its failure. Table Iillustrates the reasons that top management[ 366 ]David Dinesh and Elaine PalmerManagement by objectivesand the Balanced Scorecard:will Rome fall again?Management Decision36/6 [1998] 363–369in this study gave for introducing an MBOsystem.Table I shows that the most frequent reasonfor introducing MBO (more than 35 per centof the organisations surveyed) was its use asan appraisal scheme. And yet individualappraisal is only one of the six MBO imple-mentation steps described earlier.Next, the Table I figures show that only 16.6per cent of the organisations surveyed statedgoal alignment (6. Link company objectivesto department objectives) as a reason forintroducing MBO. Further, this stated aspectof goal alignment does not include the needfor alignment throughout all levels of theorganisational hierarchy. This is in contrastto the overall stated purpose of MBO, which(as stated by its initiators) is to avoid goalmisalignment (Drucker, 1955; McGregor,1960). In summary, these findings suggest thatMBO’s failure may be due to a lack of under-standing by management of one of MBO’score philosophies (organisational goal con-gruence), while at the same time implement-ing MBO for performance appraisal purposesalone (hence focusing on only one step in theMBO system). A recent survey carried out among publicorganisations in the USA supports the wide-spread use of MBO as an individual appraisalsystem (Poister and Streib, 1995). Only 28 percent of the respondents in this study usedMBO on a company-wide basis, while theremaining 72 per cent used MBO as anappraisal system in selected areas within theorganisation. In most cases the use wasrestricted to individual appraisal of seniorlevel managers. Congruent goal settingthroughout the organisation was rare, withonly 10 per cent implementing systems thatextend down to the operating (shopfloor)level.Other authors support the MBO implemen-tation patterns observed in the Reddin andKehoe (1974) and Poister and Streib (1995)studies. For instance, Bechtell (1996) arguesthat MBO has not worked because of a lack ofcollaborative communication, coupled with afailure to link objectives when required.Bechtell’s work supports the Reddin andKehoe view (1974) that the failure of MBOmay well be because two core premises ofMBO, goal congruence and a focus on thehuman elements, have simply been ignored inpractice. Further literature supports this view. Forinstance, Landau and Stout (1979) suggestthat MBO centralises the organisationthrough rigid controls at the expense of theneed for flexible response and coalition build-ing. Odiorne (1979) argues that a main reasonfor MBO’s lack of success is that it requires amajor change in the way things are done, andalso in the way of thinking. In particular,Odiorne suggests that MBO requires a shiftfrom viewing employees as “labour” to “peo-ple” and also requires a shift from an auto-cratic power base to one more widely shared.This fits with McGregor’s (1960) emphasis onthe need to move from Theory X to Theory Yassumptions.The absence of the human relations modelin MBO implementation is supported bysome authors who consider MBO to beagainst total quality management (TQM)principles (Poister and Streib, 1995; Van Tas-sel, 1995). TQM is a philosophy based on thehuman relations model (Bowen and Lawler,1992; Guillen, 1994) in its focus on collabora-tion, empowerment, and teamwork. The mis-match of MBO with TQM is explained as toomuch focus on individual performance(therefore de-emphasising teamwork) and toomuch focus on quantitative goals rather thanthe goal of continuous improvement. In summary, it appears that MBO’s wide-spread failure to work in practice may bepartly explained by two key factors, whichare: 1 Partial implementation of the system (asan individual performance appraisal sys-tem rather than an overall goal congru-ence system).2 A lack of paradigm shift from scientificmanagement principles to the humanrelations model (which is endorsed by thecreators of MBO as key to the system). Thus it appears that MBO in practice hasfailed because neither the prescribed processsteps nor the original philosophical intenthave been followed.Table IPhilosophy and rationale for MBORationalen(48) Per cent1 To link evaluation to performance 17 35.42 Aid manager in planning 12 25.03 Motivate managers 11 22.94 To increase boss/subordinate interaction and feedback 11 22.95 Development of management potential 8 16.66 Link company objectives to department objectives 8 16.67 Managers know what their job is 8 12.58 Give management information about what is going on at lower levels 4 8.39 Management club to pressure performance 3 6.2510 No mention 7 14.5Source: Reddin and Kehoe, 1974[ 367 ]David Dinesh and Elaine PalmerManagement by objectivesand the Balanced Scorecard:will Rome fall again?Management Decision36/6 [1998] 363–369Balanced Scorecard implementation The Balanced Scorecard is currently beingadopted as the management system of choiceby many organisations, which include FHCCorporation, Rockwater Engineering, AppleComputer Company, Advanced MicroDevices, DHC Chemical Division, NatWestBank, and Mobil’s US Marketing and RefiningDivision (Corrigan, 1996; Kaplan and Norton,1993b; Newing, 1994; Vitale et al., 1994).Despite the Balanced Scorecard’s well-publicised success to date in improving goalcongruence (Kaplan and Norton, 1993a), therehave also been a number of weaknesses notedin its implementation. Newing (1994) suggeststhat one of the main weaknesses is the com-plexity and time involved in its development.The development of many Scorecards fordifferent levels (and in some cases, for allindividuals) is needed if the Balanced Score-card is to be carried out as intended. Thisprocess is very complex and time-consuming,and Newing (1994) argues that the costs ofsuch a procedure may well outweigh improve-ments in organisational performance. This complexity might encourage organisa-tions to attempt partial application of thesystem, for instance to develop senior levelmeasures only. If this is the case, the BalancedScorecard may become subject to some of thesame problems as MBO. That is, it may not beused as the overall goal congruency systemfor which it was intended. Partial implementation is likely to be anattractive option for businesses operating incurrent conditions. The competitive environ-ment in the 1990s is far more turbulent thanthe stable business environment that existedduring the 1950s (Hamel and Prahalad, 1994).The competition faced by organisations todaymoves faster and is more aggressive. D’Aveni(1995) has termed this new competitive envi-ronment “hyper competition”. If the environ-ment that a company operates in is changingfaster than its ability to develop organisation-wide measures, partial implementation maywell be encouraged.A second main cause of MBO’s failure hasbeen detailed as the failure of management toshift their thinking to the human relationsmodel. It is worthwhile considering the impli-cations of this with respect to the BalancedScorecard. It is likely that the business envi-ronment of the 1990s is more conducive to theuse of the human relations model than wasthe case with MBO implementation. This isassociated with the widespread adoption ofTQM principles in the 1980s (which in turnare based on the human relations model(Bowen and Lawler, 1992; Guillen, 1994)). Because of this general business accep-tance of the human relations model, it isplausible that the problems associated withthe “command and control” aspect of MBOimplementation (Bechtell, 1996; Odiorne,1979) should be reduced for the BalancedScorecard. In other words, Balanced Score-card implementation should benefit from 40years of experience with the human relationsmodel, in contrast to MBO (which is relatedto the initial introduction of the model). ConclusionThe discussions of MBO and the BalancedScorecard have described many similaritiesbetween the two management systems. Itseems that the Balanced Scorecard is basedon the same philosophies as MBO. That is,there is a need for goal congruence within anorganisation in order to improveperformance, and the best way of obtainingthis is through a process of collaborative goalsetting and review. This parallels a manager-ial approach using the human relationsmodel as an extension of the rational goalmodel. MBO has proven to be largely unsuccessfulin practice, with two key failures identified aspartial implementation of the system, andnon-recognition of the need to adopt a humanrelations view.Because of the increased complexity of thebusiness environment associated with the1990s and Scorecard development, it seemsthat the Balanced Scorecard might be evenmore prone to partial implementation. Thetime and energy needed to develop company-wide business goals may be viewed as uneco-nomic when coupled with rapidly changingexternal factors (hence needing new sets ofappropriate goals). There is a more positive outlook in terms ofwhether or not Balanced Scorecard imple-mentation will also fail for philosophicalreasons. If the human relations model isindeed more widespread than has been thecase in the past, it is reasonable that the Bal-anced Scorecard may be applied in a collabo-rative fashion as intended. Wider implications and areas forfurther studyIn a wider context, this examination of twomeasurement systems illustrates some largerissues that are being debated about the role ofmeasurement systems in business. Quinn etal. (1996) state that understanding measure-[ 368 ]David Dinesh and Elaine PalmerManagement by objectivesand the Balanced Scorecard:will Rome fall again?Management Decision36/6 [1998] 363–369ment’s impact on performance is emerging asone of the most widely debated topics of the1990s.One such debate relates to the tension thatexists between flexibility and measurement(Quinn et al., 1996). Hoffecker and Goldenberg(1994) argue that in an environment of rapidchange and fierce competition, attempting tomeasure performance is anti-systemic. Thisview of flexibility and measurement being atodds with one another is shared by systems-thinking analysts such as Senge (1990) andKim (1994). The contra view (Kaplan and Norton, 1996b)is that measurement systems add more valuethan the measures themselves, because theydevelop a clearer picture of the organisation,and the process of developing measures pro-vides focus and strategic alignment even asthe measures themselves change. Renais-sance Solutions Inc. Website (1996) supportsthe view that the use of measurement sys-tems remains a critical driver of improvedperformance in the 1990s. A second debate relates to the tension thatexists between the rational goal model andthe human relations model. Despite the wide-spread adoption of the human relationsmodel through TQM principles during the1980s, some authors support the view thatmanagement is still failing to adopt collabo-rative approaches (Delavigne and Robertson1994; Guillen, 1994). Quinn et al., (1996) assertthat tension between goal setting and empow-erment of employees will always be present,and that it is a matter of determining when todirect others versus when to collaborate. Thedevelopment of guidelines for managing thistension is an area that deserves further study. In conclusion, the likely success of a mea-surement system such as the Balanced Score-card will depend on addressing the largerissues that have been described here. Only iforganisations can find ways to meet rapidexternal change while maintaining an organ-isation-wide measurement system, and man-age the human relations model in conjunc-tion with goal setting, is the Balanced Score-card likely to be applied according to itsphilosophical and practical intent. ReferencesBartol, K.M. and Martin, D.C. (1991), ManagementInternational Edition, McGraw-Hill, NewYork, NY.Bechtell, M.L. (1996), “Navigating organisationalwaters with hoshin planning”, National Pro-ductivity Review, Spring, pp. 23-42.Beischel, M.E. and Smith, K.R. (1991), “Linkingthe shopfloor to the top floor”, ManagementAccounting, October, pp. 25-9.Bowen, D.E. and Lawler, E.E. (1992), “Total qual-ity-oriented human resource management”,Organisational Dynamics, Vol. 20 No. 4, Fall,pp. 29-41.Carnegie, D. (1981), How to Win Friends and Influ-ence People, Simon & Schuster, New York, NY.Corrigan, J. (1996), “The Balanced Scorecard: thenew approach to performance measurement”,Australian Accountant, Vol. 66 No. 7, August,pp. 47-8.D’Aveni, R.A. (1995), Hyper-competitive Rivalries:Competing in Highly Dynamic Environments,Free Press, New York, NY.Delavigne, K. and Robertson, J. (1994), Deming’sProfound Changes: When Will the SleepingGiant Wake?, Prentice-Hall, Englewood CliffsNJ, pp. 12-47.Dewey, B. (1995), “Aligning work and rewards”,Management Review, Vol. 84 No. 2, February,pp. 19-23. Drucker, P.F. (1955), Practice of Management,William Heinemann Ltd, London.Freedman, D. (1992),“ Is management still a sci-ence?”, Harvard Business Review, Novem-ber/December, pp. 26-34.Grant, R.M., Shani, R. and Krishnan, R. (1994),“TQM’s challenge to management theory andpractice”, Sloan Management Review, Winter,pp. 25-35.Guillen, M. (1994), “The age of eclecticism: cur-rent organisational trends and the evolutionof managerial models”, Sloan ManagementReview, Fall, pp. 75-86.Hamel, G. and Prahalad, C.K. (1994), “Strategy asa field of study: why search for a new para-digm?”, Strategic Management Journal, Vol.15, pp. 5-16.Hoffecker, J. and Goldenberg, C. (1994), “Using theBalanced Scorecard to develop companywideperformance measures”, Cost Management,Fall, pp. 5-17. Kaplan, R.S. and Norton, D.P. (1992), “The Bal-anced Scorecard – measures that drive perfor-mance”, Harvard Business Review, Vol. 70 No.1, January/February, pp. 71-9.Kaplan, R.S. and Norton, D.P. (1993a), “Putting theBalanced Scorecard to work”, Harvard Busi-ness Review, Vol. 71 No. 5, September/October,pp. 134-42.Kaplan, R.S. and Norton, D.P. (1993b), “Implement-ing the Balanced Scorecard at FMC Corpora-tion: an interview with Larry D. Brady”,Harvard Business Review, Vol. 71 No. 5, Sep-tember/October, pp. 143-7.Kaplan, R.S. and Norton, D.P. (1996a), “Using theBalanced Scorecard as a strategic manage-ment system”, Harvard Business Review, Vol.74 No. 1, January/February, pp. 75-85.Kaplan, R.S. and Norton, D.P. (1996b), The Bal-anced Scorecard: Translating Strategy intoAction, Harvard Business School Press,Boston, MA.Kim, D. (1994), Systems Thinking Tools: A User’sReference Guide, Pegasus CommunicationsInc., pp. 1-20.[ 369 ]David Dinesh and Elaine PalmerManagement by objectivesand the Balanced Scorecard:will Rome fall again?Management Decision36/6 [1998] 363–369Landau, M. and Stout, R. (1979), “To manage is notto control: or the folly of type II errors”, PublicAdministration Review, Vol. 33, pp. 148-56.McGregor, D. (1960), The Human Side ofEnterprise, McGraw-Hill, New York, NY.Neale, F. (1991), The Handbook of PerformanceManagement, Institute of Personnel Manage-ment, London.Newing, R. (1994), “Benefits of a Balanced Score-card”, Accountancy, November, pp. 52-3.Newing, R. (1995), “Wake up to the BalancedScorecard!”, Management Accounting,London, Vol. 73 No. 3, March, pp. 22-3.Odiorne, G.S. (1979), MBO II, Fearon PitmanPublishers Inc., CA.Odiorne, G.S. (1987), The Human Side of Manage-ment: Management by Integration and Self-Control, Lexington Books, Lexington, MA.Poister, T.H. and Streib, G. (1995), “MBO in munic-ipal government: variation on a traditionalmanagement tool”, Public AdministrationReview, Vol. 55 No. 1, January/February, pp. 48-56.Quinn, R.E., Faerman, S.R., Thompson, M.P. andMcGrath, M.R. (1996), Becoming a MasterManager: A Competency Framework, JohnWiley & Sons, New York, NY.Reddin, W.J. (1971), Effective Management byObjectives: The 3-D Method of MBO, McGraw-Hill, New York, NY.Reddin, W.J. and Kehoe, P.T. (1974), Effective MBOfor Irish Managers, Mount Salus Press,Dublin.Renaissance Solutions Inc. Website (1996),http://www.rens.com /wp-pov.htm, 24 Sep-tember.Senge, P.M. (1990), The Fifth Discipline: The Artand Practice of the Learning Organisation,Currency-Doubleday, New York, NY.Shaw, D. and Schneier, C. (1995), “Team measure-ment and rewards: how some companies aregetting it right”, Human Resource Planning,Vol. 18 No. 3, pp. 34-49.Van Tassel, J.D. (1995), “Death to MBO”, Training& Development, Vol. 49 No. 3, March, pp. 2-5.Vitale, M., Mavrinac, S.C. and Hauser, M. (1994),“DHC: the chemical division’s BalancedScorecard”, Planning Review, Vol. 22 No. 4,July/August, pp. 17-45.Application questions1 What are the ways your organization usesto measure and manage performance?Evaluate their effectiveness?2 What is wrong with MBO as a manage-ment technique (if anything)? . Dinesh and Elaine Palmer Management by objectives and the Balanced Scorecard: will Rome fall again? Management Decision36/6 [1998] 363–369Landau, M. and. reasons that top management [ 366 ]David Dinesh and Elaine Palmer Management by objectives and the Balanced Scorecard: will Rome fall again? Management Decision36/6
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