Abstracts

ARTICLES

Evidence of institutionalizing elements in the Balanced Scorecard in the book Strategy in action: a view based on institutional theory

Paschoal Tadeu Russo^I; Claudio Parisi^II; Evandir Megliorini^III; Claudiane Barbosa de Almeida^IV

^IPh.D. Candidate, Graduate Program in Accountancy and Controllership, Department of Accountancy and Actuarial Sciences, University of São Paulo School of Economics, Business Administration and Accountancy, Brazil - E-mail: ptrusso@terra.com.br

^IIPh.D. in Accountancy and Controllership, University of São Paulo, Brazil - Faculty and researcher at Fundação Escola de Comércio Álvares Penteado, Brazil - E-mail: claudio.parisi@fecap.br

^IIIPh.D. in Accountancy and Controllership, University of São Paulo, Brazil - Adjunct Professor, Universidade Federal do ABC, Brazil - E-mail: evandir.megliorini@ufabc.edu.br

^IVUndergraduate student, Accountancy Program, Fundação Escola de Comércio Álvares Penteado, Brazil - Auxiliary Professor, Fundação Escola de Comércio Álvares Penteado, Brazil - E-mail: claubalmeida@gmail.com

ABSTRACT

The Balanced Scorecard (BSC) is a methodology that allows managers to define and implement a set of financial or nonfinancial indicators in a balanced way to assess an organization's performance from four viewpoints. Many companies are unsuccessful in their implementation of the BSC. This lack of success may be attributed to different factors, such as strategic problems, planning failures, and poorly defined targets and goals. However, the failed implementation may be attributed in part to the failure to institutionalize habits and routines. In this regard, this objective of this paper is to use institutional theory to determine whether the book Strategy in Action: Balanced Scorecard contains evidence that the BSC model proposed by the authors (Kaplan & Norton) includes elements that favor the model's institutionalization. For this purpose, a qualitative bibliographic survey was prepared. The survey revealed 404 clues that were rated according to Tolbert and Zucker's description of the processes inherent to institutionalization and to Scott's proposed framework of legitimation/legitimizing. These findings suggest that the book primarily legitimizes the BSC by examining organizations and describes it as an acknowledged management instrument. The aspects supporting the semi-institutional stage (26% of the findings) and the total institutionalization stage (10% of findings) suggest that the authors intended to propose a tool without focusing on the institutionalization process, which may partly explain the great difficulty faced by companies attempting to implement this methodology.

Keywords: BSC; institutional theory; management; strategy.

1 INTRODUCTION

Scholars have studied the effective use of the Balanced Scorecard (BSC) as a tool to support the performance management process. Atkinson (2006, p. 1442) cited studies that have documented the use of the BSC since the late 1990s by most large companies in the world. He also summarized studies conducted by other researchers that demonstrate the need for adjustments to the BSC and for the joint use of other performance management tools by organizations.

In contrast, Speckbacher, Bischof, and Pfeiffer (2003) researched the implementation and use of the BSC in companies in German-speaking countries and found that only 9% of 174 surveyed companies had implemented the BSC throughout the organization and that only 17% had implemented the BSC in business units.

Researchers such as Lewy and du Mee (1998) have noted that flaws in the implementation of the instrument are accompanied by high rates of failure. Kong (2010) stated that the BSC is conceptually inappropriate for some organizations, particularly nonprofit organizations.

In Brazil, the subject of the BSC has aroused great interest in the area of management accounting, and several studies have been conducted regarding its implementation and use. For example, Giuntini (2003) conducted a study on the use of the BSC in Alcoa; Silva, Santos, and Prochnik (2008) studied the implementation of the BSC in Petrobras; Dietschi and Nascimento (2008) investigated publicly traded and private companies' adherence to the BSC; and Russo (2011) examined the institutionalization of the BSC in Sabesp.

The deployment and use of the BSC as a management tool should be viewed as a sea change in management accounting systems. The relevance of this issue and the consequent changes in management accounting systems have been so significant that in 2001, the academic journal Management Accounting Research devoted an entire issue to articles addressing the subject (Guerreiro et al., 2005).

In Brazil, several studies have addressed change processes in management accounting based on institutional theory in recent years (Guerreiro et al., 2005; Guerreiro, Frezatti, & Casado, 2006; Reis & Pereira, 2007; Frezatti, Aguiar, & Rezende, 2007; Reis, 2008; Rezende, 2009; Guerreiro, Pereira, & Frezatti, 2008; Takahashi, Almeida, & Almeida, 2004; Kuniyoshi, 2008; Boff, Beuren, & Guerreiro, 2008).

Despite the importance attributed by the literature to the BSC and the numerous companies that have internalized BSC concepts, researchers have noted difficulties and critical issues in the implementation and the use of the BSC (Silva, Santos, & Prochnik, 2008; Beber, Ribeiro, & Kliemann Neto, 2006; Pietro et al., 2006; Frezatti, Relvas, & Junqueira, 2010).

This finding corroborates Kaplan and Norton's claim (2001, p. 371) that many companies, "despite considerable effort, and in some cases, vast resources, have failed to deploy" the BSC. Henri (2004) showed that different studies on the BSC have produced conflicting results.

In their reflections on companies' low levels of adherence to the adoption of new management practices, Guerreiro, Frezatti, and Casado (2006, p. 9-10) raised questions about the real reasons that hinder the deployment of such practices in organizations. The rationality of the economic agent seeking to take actions aimed at profit and market efficiency is an important assumption in neoclassical economic theory but does not seem to explain these issues.

According to Burns and Scapens (2000, p. 4), institutional theory has produced several approaches to organizational studies. Institutionalists argue that organizations seek legitimacy for their actions (even if those actions do not confer efficiency gains) and thus seek tools (devices) that confer the legitimacy they seek (Tolbert & Zucker, 1999; Meyer & Rowan, 1991). This phenomenon is also mentioned in Norreklit's (2003, p. 614) analysis of Kaplan and Norton's work Strategy in Action: Balanced Scorecard.

Against this backdrop, this article aims to analyze Kaplan and Norton's abovementioned book because it is a benchmark for the legitimation of the BSC as a management practice in organizations (Scott, 2001; Norreklit, 2003). This paper moves beyond the role of the BSC's institutionalization to investigate evidence that the authors included other elements that facilitate the institutionalization of the BSC in companies adopting this methodology. These institutionalization processes were identified from the theoretical elements contained in New Institutional Sociology (NIS) and the elements cited by Scott (1987) in his third and fourth lines of thought on institutional theory.

We analyzed the evidence with content analysis techniques (Bardin, 2004), which allow categories, investigative questions, variables, and measurement indicators to be identified based on the critical causal forces of the institutionalization processes proposed by Tolbert and Zucker (1999, p. 207) and Scott (2001).

In this context, we seek to answer the following question: how has the work Strategy in Action: Balanced Scorecard contributed to the corporate institutionalization of the model proposed by the authors Kaplan and Norton?

Accordingly, this study aims to use institutional theory to verify whether there is evidence in Strategy in Action: Balanced Scorecard that the BSC model proposed by Kaplan and Norton contains elements that promote its institutionalization. The specific objectives are to perform a literature analysis of the BSC based on institutional theory and to identify criticisms of the BSC model.

The theoretical framework adopted for the study was based primarily on NIS concepts and Scott's (1987) third and fourth lines of thought. The paper does not address the differences between NIS and other streams of institutional theory and whether there are points of divergence between them.

The main contribution of this study is to clarify the usefulness of Strategy in Action: Balanced Scorecard for the corporate institutionalization of the BSC. Clarifying the book's contribution will allow BSC users and readers to understand the book's limits as a conceptual reference for the implementation of the BSC. We will determine the utility of the book by identifying the book's institutional elements and by encouraging interested parties to seek other academic references and technical professionals who address the elements that are not discussed in detail in the book but that influence the implementation of the BSC.

To that end, we developed an analytical approach that can be applied not only to the research subject in the present article but also to other studies on the BSC and other institutional elements for theoretical substantiation.

2 THEORETICAL FOUNDATION

2.1 Institutional theory

Institutional theory is known to offer a different approach to management accounting studies and can be classified into three different areas: New Institutional Economics (NIE), Old Institutional Economics (OIE), and New Institutional Sociology (NIS) (Burns & Scapens, 2000).

NIE is used to analyze macroinstitutions and the relations between organizations and the environments in which they operate (Guerreiro et al., 2005; Steen, 2005). OIE focuses on institutions, microinstitutions, and the relationships among individuals within organizations. OIE has been used to identify how the process of institutional change occurs. NIS is used to study macroinstitutions and the relationships between organizations and the environments in which they operate. Additionally, NIS is used to analyze the behavior of institutional actors and to research their decisions to increase their legitimacy, which may explain the emergence of practices such as budgeting, activity-based costing (ABC), and the BSC (Guerreiro et al., 2005; Steen, 2005).

Unlike Burns and Scapens (2000), Scott (1987) classified institutional thinking into four streams:

The first stream focuses on the awareness of a distinction between "organization" and "institution" and the importance of the institutionalization process to the introduction of values (Selznick, 1996; Rezende, 2009; DiMaggio & Powell, 1983; Meyer & Rowan, 1991). The second stream identifies the formation of objectifications resulting from the crystallization of institutions formed between two individuals (individual actors) and of institutionalization as the post-sedimentation process of transmitting this object to new generations (Rezende, 2009).

The third stream focuses on the formal structures of institutionalization in organizations created from rational myths or a system of shared beliefs (i.e., prescriptions that are impersonal and rationalized, that serve specific purposes (e.g., rules), and that serve the entire organization regardless of the individual participants' judgments) (Rezende, 2009; Meyer & Rowan, 1991).

The fourth and final perspective is concerned with institutions and describes the institutionalization process by emphasizing the existence in all societies of standards, different cognitive systems, and standardized human activities, which are initiated and tend to persist (Scott, 1987; Friedland & Alford, 1991; DiMaggio & Powell, 1983; Meyer, Scott, & Strang, 1987; Tolbert & Zucker, 1983).

Institutional elements such as structures, actions, and roles are transmitted to newcomers in organizations and maintained for long periods of time. These elements arise from within the organization or through the imitation of similar organizations (Zucker, 1987).

New management accounting methodologies such as ABC and the BSC can be regarded as institutional elements (Chenhall, 2003; Ittner, Larger, & Meyer, 2003; Wickramasinghe & Alawattage, 2007). Past studies have shown new methodologies in management accounting, including ABC, activity-based management, revenue accounting, product lifecycle costing, the BSC, economic value added (EVA), and economic management. These studies also indicate that these methods may have poor adherence or implementation difficulties (Coad, 1999; Kaplan & Norton, 2001, 2004).

2.1.1 The institutionalization process

According to Zucker (1987), the meaning of institutionalization is associated with two ideas. The first idea concerns rules, such as the social standards of organized actions. The second idea concerns the perception of something that is embedded in formal structures and not tied to particular actors or situations. For Tolbert and Zucker (1983), institutionalization also refers to the process by which the components of a formal structure are widely accepted as appropriate and necessary. This process serves to legitimize the organization.

For Scott (2001), legitimacy is achieved in institutions if it is possible to act in a rational and efficient way or to build mental models that communicate standards of efficiency according to the values envisioned by the social actors involved. The legitimacy of a structure and its consequent institutionalization are achieved by actors who share meanings and significances. Legitimacy can also be obtained from concepts that are widely accepted by society, especially if the company adopts solutions regarded as panaceas (Tolbert & Zucker, 1999; DiMaggio & Powell, 1983).

Meyer and Rowan (1991) proposed two classifications of environments in which organizations, actors, and artifacts coexist: the technical environment, which addresses the products and services provided by the organization through its economic relationship with society, and the institutional environment, in which systems (cultural, social, and legal) that exert pressure on the actions of organizations are produced and disseminated. If these environments meet the expectations of institutional actors, they provide legitimacy to the institutions.

According to Tolbert and Zucker (1999, p. 203), creating a new structure requires considerable human effort. Figure 1 presents a diagram with a summarized overview of the causal critical forces in the institutionalization process.

To better understand this diagram, we applied another concept also proposed by Tolbert and Zucker (1999) to the stages of institutionalization to observe the institutionalization process across different stages or levels. For those authors, the institutionalization process occurs in three distinct stages (or phases): the pre-institutional, semi-institutional, and total institutionalization stages.

As shown in Figure 1, in the pre-institutional stage, causal forces external to the organization arise from changes in technology, legislation, and market forces, which may lead to the introduction of innovations in organizations. These forces may also lead to the creation of new habits.

DiMaggio and Powell (1983) identified stimuli that do not originate exclusively from external forces. According to these authors, organizations also compete for political power and institutional legitimacy for both the social and economic good.

In this initial phase of the change processes, which is called habitualization, different actors within organizations perceive stimuli. Each actor responds to these stimuli individually and proposes solutions. Consequently, there are many adopters of new solutions in this stage but few equivalent solutions (i.e., few organizational actors adopt the same type of solution).

As a result, the level of theorizing about proposed new structures in the initial stage of the institutionalization processes (habitualization) in organizations is low. The methods by which solutions are found vary greatly because of the diversity of the approaches adopted by individual agents. The end result is that the failure rate of the institutionalization processes in this stage is high.

The semi-institutionalization stage is characterized by the objectification of the new institutional element (i.e., the element becomes more dispersed and permanent within the organization) (Tolbert & Zucker, 1999). This objectification occurs because organizations in this phase are already using information about the results of the implementation in other organizations. An organization can obtain this information by monitoring competing organizations and by working to increase its competence relative to its competitors. Objectification also occurs by internally monitoring the results of the new structures.

In the semi-institutionalization stage, the adopters of new innovations in organizations are often driven by the desire to improve performance and to add value to the organization (Selznick, 1996). However, seemingly rational strategies for individual organizations may not be rational if they are adopted by numerous organizations (DiMaggio & Powell, 1983).

According to DiMaggio and Powell (1983), this phenomenon means that organizations become increasingly similar. The authors were surprised to find that vastly different companies (in origin, purpose, and history) become so similar over time. The researchers noted that if companies are in their early life stages, they are considerably different. However, as a particular market segment becomes well established, there is an inexorable trend towards homogenization. At that time, powerful forces (bureaucracy) emerge and cause the companies to become similar but not necessarily more efficient.

DiMaggio and Powell (1983) identified three mechanisms through which institutional isomorphic change occurs: 1) coercive isomorphism, which spreads from political influence and the problem of legitimacy (laws, government, and pressure from stakeholders); 2) mimetic isomorphism, which results from responses to patterns of uncertainty (with the resolutions to problems identified through solutions found by other organizations); and 3) normative isomorphism, which is associated with professionalization (which may happen if professionals (i.e., consultants) define the choice of institutional elements, especially if this choice concerns champions (i.e., panaceas)). The greater potential a market has for innovation, the more likely it is that panaceas will emerge (Tolbert & Zucker, 1999). In these circumstances, these panaceas are taken for granted, and it is advantageous for organizations to conform to them at least symbolically (Strang & Meyer, 1993).

Thus, as more companies adopt the same solutions, decision makers are more likely to perceive the favorability of accepting a given solution and to believe that this decision will improve the relative balance between the costs and benefits of deploying the solution.

Structures that undergo the objectification process become fairly well distributed. The new element being institutionalized in the organization in this stage (semi-institutional) is primarily distributed through normatization, with a reduction in imitation processes. This normatization allows many new adopters to access the new element (irrespective of their initial beliefs). As a result, the group of adopters becomes heterogeneous.

However, to properly distribute the concepts underpinning the new element being institutionalized, organizations must undertake two tasks of theorizing: a) a generic organizational problem and the organizational actors characterized by the problem must be defined; and b) a formal structural arrangement must be justified with rationales. In the first activity, a problem requiring resolution is publicly recognized, and in the second activity, theories that diagnose the sources of dissatisfaction/failures and that provide a unique solution or treatment must be developed (Tolbert & Zucker, 1999; Strang & Meyer, 1993).

Finally, the total institutionalization stage is associated with the sedimentation process, as shown in Figure 1. For Tolbert and Zucker (1999, p. 209), total institutionalization occurs through the continued use, maintenance, and survival of the structure across successive generations of organizational members. Sedimentation is characterized by the virtually complete propagation of structures across the group, either in perpetuity or over a long period of time.

Tolbert and Zucker (1999, p. 209) stated, "Identification of factors that affect the extent of diffusion and long-term retention of this structure are therefore key to understanding the process of sedimentation." The authors noted that one factor indicated in many studies is the opposition role that many actors attempt to play and mobilize against the new devices.

The authors also argued that in some instances, there is no direct opposition but a lack of demonstrable results associated with new structures (i.e., a weak relationship between the structure and the desired results may be sufficient to affect diffusion, either by reducing the efforts of the structure's supporters or by reducing theorizing and promotion efforts). In many situations, there are great difficulties in associating benefits with new structures. Therefore, total institutionalization likely depends on combinations of various types of effects.

2.2 The Balanced Scorecard (BSC)

Kaplan and Norton (2004, p. vii-xii) noted that the BSC began in 1990 as a research project involving several companies with the objective of developing new ways to measure organizational performance. The authors believed that conventional means of financial accounting were unable to measure accurately intangible assets, such as employees, databases, and customer relations. The authors also believed that managers would be drawn to systems that offer measurements appropriate to their needs. On this basis, the concept of a balanced system of measurement emerged: the Balanced Scorecard.

The executives who implemented this new measurement system in their organizations intuitively realized that "a measurement system based on strategy could solve the problem of how to communicate and implement the strategy" (Kaplan & Norton, 2004, p. viii-ix). Thus, as the system was implemented in companies, the authors realized that they were creating a new strategic management model.

This realization led them to publish the book Strategy in Action: Balanced Scorecard, in which the fundamentals of the BSC were formulated as a measurement and management strategy system (Kaplan & Norton, 1997). Through this methodology, five management principles were identified to create a "strategy-oriented organization" (which is also the title of the authors' second book (released in 2001)):

• Translate the strategy into operational terms.

• Align the organization with the strategy.

• Transform the strategy into everyone's jobs.

• Convert the strategy into a continual process.

• Mobilize change through executive leadership (Kaplan & Norton, 2004, p. IX).

As more was learned about the use of the BSC, companies realized that they needed to focus on goals and that these goals were linked in cause-and-effect relationships. Developing this insight, the book Strategic Maps asserts that the success of a strategy depends on three components: description of the strategy, measurement of the strategy, and management of the strategy (Kaplan & Norton, 2004).

Despite this apparent conceptual density, researchers have found difficulties in deploying and using the BSC. Additionally, evidence of the instrument's impact on performance improvements is lacking. Some of the criticisms appear to be related to functional aspects of the BSC, but others are related to the behavior of people, the leadership, and the organizational culture.

To better understand the criticisms and their relationship with the BSC, we propose a classification of criticisms by type: functionality aspects, which are criticisms that are directly related to the development of the BSC model, the quality of information, and the use of the functional BSC model by organizations; and people and leadership aspects, which are related to the behavior of the BSC users, who, in turn, are probably influenced by the organizational culture.

Table 1 summarizes the main criticisms encountered by the author(s). The studies were selected for their relevance to the issues addressed in the book under review.

Some criticisms highlight the organizations' difficulties in addressing issues related to functionality aspects. In terms of institutional theory, these same criticisms can be understood as a consequence of inadequate allowances in the methodology implementation process for failures in the diffusion and theorizing processes.

The aforementioned critics often cited problems with people and leadership aspects. These criticisms lead us to question whether there may be conflicts between the culture of user organizations and the BSC proposal. This finding then becomes a question of whether the BSC should be adapted to fit the organization better, which would change Kaplan and Norton's original proposal, or whether the BSC should be consolidated with difficulty as a performance management tool for these organizations. These criticisms highlight the role played by support and resistance groups in the process that enables the BSC to transition from the objectification phase to the sedimentation phase.

Additionally, the criticisms analyze the evidence for the institutionalization of the model in Kaplan and Norton's work by focusing on the functionality aspects, which are the main focus of the literature on the BSC. Especially relevant are Otley's (1999) criticisms about the lack of detail in the literature on the BSC and about how goals, means, and ends must be related analytically. Norreklit (2003, p. 610) also criticized the BSC by arguing that the "analogies and metaphors employed in the BSC, together with the overload of adjectives and metonymy are excellent for persuading, but they are not convincing."

Regarding the structure of the management accounting attributes, Frezatti, Relvas, and Junqueira (2010) showed that the companies that adopted the BSC had two management accounting attributes that distinguished them from the other surveyed companies: the availability of financial information for evaluating performance and information on future predictions.

According to the authors, these attributes allow the BSC to be understood as a maturation of the use of planning and are prerequisites for well-structured organization planning processes. It is inferred that organizations without such attributes tend not to achieve the benefits of using the BSC and thus incur the criticisms leveled by the authors listed in Table 1.

Concomitantly, as argued by Norreklit (2003) in his analysis of Kaplan and Norton's work, the motivations of companies lacking the management accounting attributes required to implement the BSC successfully may be related to mimetic and normative isomorphism.

3 METHODOLOGY

This research is descriptive and qualitative. First, as proposed by Cervo and Bervian (2002, p. 65), a literature search was developed to explain a problem based on published theoretical references. We applied content analysis techniques in accordance with Bardin's (2004) methodological propositions, which are appropriate for analyzing mass media such as newspapers and books (e.g., Strategy in Action: Balanced Scorecard). According to the same author, the stages of content analysis should include preanalysis, codification, categorization, and inference.

In the preanalysis phase, we performed a preliminary reading, formulated questions for the investigation and variables of interest, and linked the BSC with institutional theory from a theoretical basis to guide the codification phase.

In the codification phase, we defined the rules for clipping text in a methodological manner. We used these rules to determine whether the text was considered evidence of a contribution to the institutionalization of the BSC in the organizations that adopted this device. The rules were as follows: a) the phrase "Balanced Scorecard" and/or the word "scorecard" was found in the text, and an allusion was made to this phrase or word even if neither was actually quoted in the text; and b) the phrases, sentences, and paragraphs that could define a specific sense and that could be related to one of the issues and variables listed in Table 2 were identified.

According to the script suggested by Bardin (2004, p.101) and the codification process described in the previous paragraph, listing rules were defined based on the frequency of each category's occurrence.

As shown in Table 2, the categorization process entailed classifying each piece of evidence identified in the work according to critical causal forces (i.e., the forces that contribute to the establishment of the institutionalization stages).

To properly understand each piece of evidence and its ranking in these categories, we present the questions that shifted attention away from the reading process of the preanalysis phase toward the search for evidence, which can contribute to the BSC's institutionalization process in organizations.

Table 2 also shows the variables that indicate what was sought in the literature and the theoretical basis of the data required to identify the elements of institutional theory that clarify how the text was understood and classified into one of the stages. The table is shown below:

Table 3 illustrates the text excerpted from the book for each classification to show the type of information provided in the work from an institutional theory perspective.

Finally, the aim in the inference phase was to define frequency measures by linking the data collected and the inferred variables of interest to the theoretical basis.

4 DATA PRESENTATION AND DISCUSSION OF RESULTS

We analyzed the terms and expressions of Strategy in Action: Balanced Scorecard to identify evidence that might contribute to the institutionalization of the BSC by the companies adopting the device. Table 4 presents the location (by page) of each finding, which is classified by type:

The reading of the book and the classification of the findings are compiled in Table 5. A quantitative summary presents the frequency with which evidence of the institutional elements is identified in the book and the institutionalization stages of these elements.

As shown in Table 5, 3% of the evidence relates to the pre-institutional stage (i.e., the motivations for beginning the process of implementing the BSC). An additional 26% of the evidence relates specifically to the semi-institutional stage, and 10% relates to the stage of total institutionalization. Finally, 60% relates to the forces of legitimacy and legitimation, which may be associated with any of the institutionalization stages.

In accordance with Norreklit's analysis of the same work (2003), the majority of the findings are related to the efforts of legitimacy and legitimation. We can establish a relationship between the appreciation of legitimacy found in the book and the institutional environment approach proposed by Meyer and Rowan (1991) by interpreting the book as a part of a dissemination strategy to present the BSC as a successful practice and to exert pressure on organizations to accept it.

According to DiMaggio and Powell (1983), to complement the legitimacy issue, the book operates based on the elements of mimetic and normative isomorphism. Mimetic isomorphism occurs when the work raises elements that cause the BSC to be "copied" by other companies. Normative isomorphism most notably occurs when the book acts on a particular professional profile (e.g., senior executives, vice presidents, presidents, and renowned educational and research institutions) and thereby causes the professions and universities to behave as an element that induces isomorphism.

Finally, this effort to legitimize the work seeks to convey the notion that the BSC is a widely accepted approach. In this respect, Kaplan and Norton presented the device as a panacea (Tolbert & Zucker, 1999, DiMaggio & Powell, 1983). In the view of Norreklit (2003), the book presents no new theory, but readers may be influenced by its rhetoric and by the isomorphic approach of its arguments.

The second highest frequency is related to the semi-institutional phase. This phase focuses on the processes of implementation and the use of the BSC (i.e., the processes related to objectification). From the concepts of theorization proposed by Strang and Meyer (1993) and Tolbert and Zucker (1999), two tasks of theorizing can be identified in the work: given that companies had difficulties in implementing their strategies and that all that is not measured is not managed, Kaplan and Norton found an organizational problem that primarily related to the use of performance indicators for managing strategies; and the book lays the logical foundations of the BSC, especially in its first part entitled "measuring strategy," but this part focuses on aspects of the measurement system rather than the management strategy process. Thus, concerns with theorizing and with functional aspects of the BSC are prevalent in the book.

The third major group refers to the total institutionalization stage and the actions related to the sedimentation of the BSC, whose frequency percentages are three times lower than those of the actions that address the processes that lead to objectification.

Based on the analysis of this information, the authors' primary intentions may have been to write a book whose approach focused mainly on the legitimacy of the BSC. The authors' second objective appeared to be to present an approach focused on methodology. They did not seem concerned with providing elements aimed at all stages of the institutionalization process. Additionally, because it was the first book on the subject, the authors presented and reported five experiences on the full use of the BSC. The fact that only five experiences were presented implies that there were no other experiences or that the other experiences were not authorized by the adopting organizations. This lack of information limits the book's discussion on the aspects of the model's sedimentation.

The fourth group, which has the lowest frequency, relates to the pre-institutionalization stage. In the book, the BSC is presented as an established instrument and the result of empirical research on organizations. The book provides a theoretical basis for the use of the BSC as an instrument for measuring and managing strategy. The method is not presented as something incipient or concerned with the motivations that would lead to its use. Much of the discourse on this aspect is presented in two introductory chapters.

According to the findings, the book Strategy in Action: Balanced Scorecard contains evidence of elements that favor the institutionalization of the BSC framework. The analysis of the book revealed that it was designed to enable the legitimacy of the BSC by influencing and supporting organizations' decisions to adopt this approach. Adopting the BSC will lead to the formation of habits. If these habits are absorbed by the groups involved in the implementation of the BSC, the habits may be transformed into objects that become the basis for the institutionalization of the BSC (the new institutional element that will be sedimented).

However, criticisms of the BSC, particularly those related to functional aspects, provoke questions regarding the effectiveness of the conceptual elements proposed by Kaplan and Norton. These issues can directly influence the institutionalization process. For example, issues related to the selection, development, and implementation of indicators and measures (Paranjape, Rossiter, & Pantano, 2006; Bourne & Neely, 2002; Malina & Selto, 2001; Ittner, Larcker, & Meyer, 2003) and to problems related to organizational processes (Paranjape, Rossiter, & Pantano, 2006; Pietro et al., 2006; Malina & Selto, 2001) support Otley (1999, p. 375), who argued that the concepts of the BSC are not detailed enough to support its implementation. Similarly, regarding Kaplan and Norton's textual ambiguities, Norreklit (2003) concluded that the validity of the theory is mainly based on the reader's construction of the model's rationality.

With regard to the total institutionalization stage, the book offers little response to criticisms related to the senior management's and employees' lack of commitment (Hispagnol & Rodrigues, 2006; Pietro et al., 2006; Bourne & Neely, 2002), to the management of conflicts among managers (Ittner, Larcker, & Meyer, 2003; Hispagnol & Rodrigues, 2006; Pietro et al., 2006; Bourne & Neely, 2002), to the distortions caused by a model focused on financial performance (Ittner, Larcker, & Meyer, 2003), and to the pressure for short-term results (Hispagnol & Rodrigues, 2006). However, the book addresses the role of agents in the implementation of the instrument.

Thus, readers who seek elements that supplement the methodological approach and that might facilitate the institutionalization of the BSC should refer to other works by Kaplan and Norton and to the critics' works cited in this research, especially those concerned with the theorization and diffusion of the BSC.

5 CONCLUSIONS

With regard to the general goal of this research, the book Strategy in Action: Balanced Scorecard was found to contribute to the institutionalization of the BSC among the companies adopting this methodology.

This study analyzed the literature on the BSC with a methodical approach to read, identify, and classify the findings contained in Table 2. Specifically, we used institutional theory to analyze the contributions of the work in question. Additionally, the study identified criticisms of the BSC, as shown in Table 1. We divided the criticism into two groups: functional aspects and people and leadership aspects. This research will provide a benchmark for further evaluations of the evidence of institutionalization elements in the analyzed work.

Through the authors' references to organizations, executive functions, and educational institutions, the book under review contributes to the legitimation of the BSC among organizations. This study also arrived at the following conclusions. First, little concern was shown in the work for the aspects of the pre-institutionalization stage, and criticisms of the model did not clearly address the external factors related to its choice other than the strong appeal of the legitimacy provided by the work. Second, the most effective technical contribution of the book relates to the semi-institutional stage. However, given that most of the criticisms also refer to aspects of this phase, a deeper rationale than the one presented in the work is needed. Third, in the book, the only aspect considered from the total institutionalization stage is the role of the agents.

This study highlighted the limited collaborative appeal of the book because the authors were more concerned with proposing and seeking the legitimacy of the BSC than with examining the elements that might contribute to the effective institutionalization of the BSC in organizations. This oversight may partly explain the great difficulties encountered by many companies attempting to deploy this methodology.

This paper primarily contributes to the field of management accounting by clarifying the book's usefulness for the institutionalization of the BSC. This clarification allows users and readers to understand the limits of the work as a conceptual reference for implementing the BSC. With regard to the sedimentation of the BSC in organizations, readers of Strategy in Action: Balanced Scorecard should complement their studies of the BSC with other works by Kaplan and Norton and with research critical of the BSC.

As a suggestion for future research, the authors propose to replicate this analytical approach for other central works by Kaplan and Norton concerning the implementation and use of the BSC. By doing so, we may formulate a final conclusion on Kaplan and Norton's contributions to the institutionalization of this device.

Received on: 9.23.2010

Accepted on: 11.24. 2010 - 4^th version on: 11.24.2011

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