A System Dynamics-Based Simulation Experiment for Testing Mental Model and Performance Effects of Using the Balanced Scorecard

This study develops a theoretical model that explains the effectiveness of the balanced scorecard approach by means of a system dynamics and feedback learning perspective. Presumably, the balanced scorecard leads to a better understanding of context, allowing managers to externalize and improve their mental models. We present a set of hypotheses about the influence of the balanced scorecard approach on mental models and performance. A test based on a simulation experiment that uses a system dynamics model is performed. The experiment included three types of parameters: financial indicators; balanced scorecard indicators; and balanced scorecard indicators with the aid of a strategy map review. Two out of the three hypotheses were confirmed. It was concluded that a strategy map review positively influences mental model similarity, and mental model similarity positively influences performance.

A system dynamics-based simulation

This study develops a theoretical model that explains the effectiveness of the balanced scorecard approach by means of a system dynamics and feedback learning perspective. Presumably, the balanced scorecard leads to a better understanding of context, allowing managers to externalize and improve their mental models. We present a set of hypotheses about the influence of the balanced scorecard approach on mental models and performance. A test based on a simulation experiment that uses a system dynamics model is performed. The experiment included three types of parameters: financial indicators; balanced scorecard indicators; and balanced scorecard indicators with the aid of a strategy map review. Two out of the three hypotheses were confirmed. It was concluded that a strategy map review positively influences mental model similarity, and mental model similarity positively influences performance.

Historical Inevitability

What interests me more here is the so-called Historical Inevitability. It is a concept intimately linked with Human Choice and Freedom. There is a long history of debate around it among the western thinkers. The protestant thinkers, and particularly its Calvinist brand laid much emphasis upon predestination. The modern thinkers, freed from the theological trappings, questioned the Church imposed limitations to the capacity of human reasoning. The progress of science and technologies supported by it through the Industrial Revolution and thereafter seemed to endorse this new self-confidence. However, the miseries brought upon mankind by regional and world wars fuelled by the same technologies have made mankind wary of its faith upon scientific progress. The promises of modernization have left the greater part of mankind without its benefits, and even the rest of mankind is unsure of living in a safe and uncontaminated environment.