Balanced scorecard as a tool to transform sustainability strategy into practice

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School of Business | Bachelor's thesis
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Date

2024

Major/Subject

Mcode

Degree programme

Laskentatoimi

Language

en

Pages

24 + 7

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Abstract

Corporate sustainability and sustainable development are in ever increasing role in companies’ decision making. Increasing regulation and external pressures underline the importance of including sustainability related issues into the corporate strategy. On the other hand, successful sustainability strategy might help finding new sustainable businesses and supporting competitiveness. In the thesis, it will be reviewed how balanced scorecard can be used to promote sustainability in companies. The object of the thesis is to increase the understanding of how the balanced scorecard can be used to transform sustainability objects into practice. The subject of the thesis is divided into three sub problems. The first goal is to review which options exist for integrating sustainability into balanced scorecards. Second goal is to review the latest research on sustainability balanced scorecards. The third goal is to critically evaluate the sustainability balanced scorecard. Various motivations exist for promoting sustainability in companies. Corporate sustainability can be addressed through at least three distinct theories. Stakeholder theory suggests that managers need to address both external stakeholder and shareholders in their decision making. According to institutional theory, sustainability is practiced due to internal and external pressures. Different institutional forces, such as regulation, norms, and social pressure affect decision making. Normative theory suggests that companies manage their sustainability strategies according to the industry standards, which is driven by for example increased role of sustainability education in universities. The results of this thesis emphasize the relevancy of the balanced scorecard as a management control tool, and because of its versatility, it can be beneficial when implementing sustainability strategy.

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Thesis advisor

Taussi, Thomas

Keywords

corporate sustainability, corporate social responsibility, CSR, sustainable development, SD, balanced scorecard

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