Sustainability Balanced Scorecard and Business Ethics - Developing a Balanced Scorecard for Integrity Management

The Balanced Scorecard (BSC) is being discussed as a possible appropriate conceptual framework for Corporate Social Responsibility (e.g. see Bieker et al., Figge et al., Orssatto et al., 2001). As research activities underlying this paper show, the predominance of the financial perspective of the concept prevents companies from integrating sustainability-related issues in an equal way into this concept. Coming up from an integrative ethical point of view, this paper tries to illustrate, the structural modifications needed to overcome the conceptual shortcomings of the BSC on the way to a pluralistic-oriented stakeholder management system. The concept of the Balanced Score-card (BSC) tries to integrate intangible assets in the management system in a more efficient way. It has been developed in the early 1990s by Kaplan and Norton to help companies better manage such intangible assets as "intellectual and organisational capital" as the value drivers for future success. Most management tools, they argued, focus primarily on financial results, which are inherently lagging indicators. How-ever, for business to successfully manage its future performance, a system is needed based on leading indicators of business success. The BSC accordingly analyses the expected future contribution to financial performance of such intangible assets (e.g. a firm´s knowledge base, its ability to enthuse customers, or excellent control of process quality). Recent research activities at the IWOe-HSG have shown that the instrument of the BSC is suitable to integrate qualitative, e.g. environmental and social, aspects into the core management system of companies (see Bieker, Dyllick, Gminder, Hockerts, 2001). However, the BSC, being a functionalist tool that aims at linking any activity of a company to its predominant financial objectives, is likely to fall short on the way to Corporate Social Responsibility. Besides, the BSC is a tool that allows top-management to implement strategies and measures in a regardless way without encouraging internal and external stakeholders to engage in the debate. Finally, the predominance of quantitative key performance indicators in companies´ practice neglecting qualitative, long-term oriented strategic success-factors, presumably prevents them from focusing a more long-term-oriented sustainable business. Coming up from an integrative ethical approach facing a pluralistic value-based management of stakeholder demands in order to prove as a "good corporate citizen" (see Ulrich, 2001), this paper will analyse how the concept of the Balanced Score-card should be modified to better integrate corporate sustain-abi-lity stra-te-gies into the core manage-ment systems.