Using a balanced scorecard to manage corporate social responsibility

• Author: Kaveh Asiaei,Nick Bontis
• DOI: http://doi.org/10.1002/kpm.1616
• Date: 01 October 2019
• Published date: 01 October 2019

RESEARCH ARTICLE

Using a balanced scorecard to manage corporate social

responsibility

Kaveh Asiaei

1,2

| Nick Bontis

3

1

Department of Accounting, Faculty of

Business & Accountancy, University of Malaya,

Kuala Lumpur, Malaysia

2

Department of Accounting, Mashhad Branch,

Islamic Azad University, Mashhad, Iran

3

DeGroote School of Business, McMaster

University, Hamilton, Canada

Correspondence

Nick Bontis, DeGroote School of Business,

McMaster University, Hamilton, Canada.

Email: nbontis@mcmaster.ca

Abstract

This conceptual paper aims to tie together the insights from the body of research on

corporate social responsibility (CSR) and management accounting and control sys-

tems to investigate a model in which performance measurement systems (PMSs) can

play a role in translating socially responsible initiatives into enhanced performance.

The underlying assumption of the “fit-as-mediation”approach signifies that company

practices can play a role in the determination of the structure and implementation of

particular managerial processes, and this, in turn, may support information processing

and lead to desirable results within organizations. Synthesizing theory from perfor-

mance measurement and CSR, the paper's analysis and discussions elucidate how the

implementation of an overarching PMS, that is, sustainability balanced scorecard

(BSC), could translate the knowledge-related factor, that is, CSR, into enhanced per-

formance. The proposed model may inspire a new research agenda to show how

socially responsible or sustainability initiatives are managed and measured in organi-

zations and how they are properly aligned with specific managerial processes to

deliver real value. Although the importance of CSR and its wide implications has long

been appreciated in the literature, there still remains a paucity of information con-

cerning the importance of particular managerial processes, for example, PMS,

whereby organizations can translate their CSR into enhanced performance. This

paper, therefore, seeks to bridge this gap by proposing a conceptual model in which

an integrated PMS, that is, sustainability BSC, comes to play a role in the association

between CSR and corporate performance.

1|INTRODUCTION

In today's hypercompetitive world, corporate social responsibility

(CSR) has gained considerable momentum as an integral part of busi-

ness practice and strategy (Skouloudis, Evangelinos, & Malesios,

2015; Yepes-Baldó, Boria-Reverter, Romeo, & Torres, 2017). CSR is a

concept whereby companies integrate social and environmental con-

cerns in their business operations and in their interaction with their

stakeholders on a voluntary basis (European Commission, 2001). CSR

primarily plays a vital role in organizations through dynamically

supporting sustainable economic, social, and environmental develop-

ment, which in turn could yield enormous benefits to society overall

(Huang, Liu, & Qi, 2016; Torugsa, O'Donohue, & Hecker, 2013;

Vizuete Luciano, Gil-Lafuente, García González, & Boria-Reverter,

2013). Whereas the economic aspect is concerned with the company's

practices and activities that can potentially influence the surrounding

community and the organization's stakeholders (Reverte, Gómez-Melero,

& Cegarra-Navarro, 2016), the social facet of CSR centers on the impact

of the organization on the social systems in which it operates (Global

Reporting Initiative, 2013). Also, the environmental aspect considers

organization's impact on living and nonliving natural systems, including

ecosystems, land, air, and water (Jamali, 2006).

Despite extensive research endeavors over the past two decades

on the topic, the relationship between CSR and performance has

Received: 27 June 2019 Accepted: 30 August 2019

DOI: 10.1002/kpm.1616

Knowl Process Manag. 2019;26:371–37379. wileyonlinelibrary.com/journal/kpm © 2019 John Wiley & Sons, Lt d.

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