Management Accounting Research, 2000, 11, 65  88 doi:10.1006mare.1999.0121 Available online at http:www.idealibrary.com on The balance on the balanced scorecard— a critical analysis of some of its assumptions Hanne Nørreklit  In recent years academic scholars have given increasing attention to the importance of strategic measurement systems including both non-financial and financial measures. One of the approaches adopted is that of the balanced scorecard. It is distinct from other strategic measurement systems in that it is more than an ad hoc collection of financial and non-financial measures. It contains outcome measures and the perfor- mance drivers of outcomes, linked together in cause-and-effect relationships, and thus aims to be a feed-forward control system. Furthermore, the balanced scorecard is intended not only as a strategic measurement system but also as a strategic control system which can align departmental and personal goals to overall strategy. This paper first examines the extent to which there is a cause-and-effect relationship Ž among the four areas of measurement suggested the financial, customer, internal- . business-process and learning and growth perspectives . The paper then examines whether the balanced scorecard can link strategy to operational metrics which managers can understand and influence. Finally, it discusses and suggests some improvements to the balanced scorecard.  2000 Academic Press 1. Introduction 1.1. Background In recent years, increasing criticism has been levelled against the financial measures Ž . of accounting systems Emmanuel and Otley, 1995 . The criticism has, in part, focused on their historic nature, which ensures that they reveal a great deal about the Ž company’s past actions but nothing about its future alertness Merchant, 1985; Chakravarthy, 1986; Schoenfeld, 1986; Dearden, 1987; AICPA, 1994; Kaplan and . Norton, 1996 . Accounting figures do not emphasize the elements which will lead to good or poor future financial results. One of the problems with accounting figures is that the financial consequences of the uncompleted chains of action extend beyond the time of measurement. For instance, the performance measures of accounting systems ignore the financial value of a company’s intangible assets such as research in  Department of International Business, Aarhus School of Business, Fuglesangs Alle 4, 8210 Aarhus V, ´ Ž . Denmark e-mail: hann@abc.dk Received 17 July 1999; accepted 1 December 1999. 1044500500010065 24 $35.000 2000 Academic Press