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This study investigates the relationship between successful Balanced Scorecard (BSC) and successful COSO Enterprise Risk Management (ERM) in Thai listed companies. Data were collected from a mailed survey. Targeted respondents were corporate strategic planning managers or others who held a similar position of the Stock Exchange of Thailand (SET) listed companies, which applied both BSC and COSO ERM. Result shows a significant positive relationship between a successful BSC and an effective COSO ERM. It can be implied that the combined approach of these management tools should be taken into consideration in order to realize full benefits.
INTRODUCTION
In an era of competition, all types of business would thrive and gain competitive advantage through efficient and effective allocation of resources. A performance measurement system (PMS) is used as a management tool to help a firm determine the most advantageous resource allocation. The PMS initially consisted of solely financial measures, but it was found several decades after it was introduced that traditional financial measures were unable to evaluate the feasibility of intangible assets, for example, employee skills, technology, and customer satisfaction. This led to the addition of non-financial measures to resolve this problem. A popular PMS that captures both financial and non-financial measures is known as a Balanced Scorecard.
The Balanced Scorecard (BSC) is a management system that was initially proposed by Kaplan & Norton (1992) in order to solve the problem inherent in the traditional financial accounting model, which is the inability to value the organization's intangible assets (Kaplan & Norton, 1992, 1996, 2001). The system focuses on four perspectives: financial, customer, internal business processes, and learning and growth. According to Kaplan & Norton (1996), the Balanced Scorecard is not simply a management system, but is a strategic management system that clearly emphasizes on strategic implementation. Kaplan & Norton (2001) suggested organizations that failed to execute strategic objectives to focus and align the strategy by using the five principles of a Strategy-Focused Organization. These five principles are 1) translating the strategy to operational terms, 2) aligning the organization to the strategy, 3) making strategy everyone's everyday job, 4) making strategy a continual process, and 5) mobilizing change through executive leadership. However, risk management is rarely written into the BSC context because the conventional BSC is...