Abstract:
Over the past two decades various management accounting innovations, such
as the balanced scorecard, activity-based costing, activity-based management
and target costing have been diffused to organizations across the world.
Although the merits of these tools and their application in various countries
have been well researched, currently there is only limited understanding of
how and why such tools get diffused in different organizational contexts. The
purpose of this paper is to examine how and why the balanced scorecard has
been diffused in a leading private sector financial institution in Sri Lanka.
We adopt the qualitative methodology and the case study approach, and the
data has been collected through in-depth interviews conducted with various
managers and through documentary sources. The evidence gathered show that
demand-side as well as supply-side forces have been significant in the diffusion
of the balanced scorecard. This study makes an important contribution to the
literature by offering a dynamic perspective on the diffusion of management
accounting innovations, through a theoretical framework which brings together
the supply-side as well as the demand-side forces into a single innovation
diffusion model. The study also provides valuable insights for managers into
the implementation and diffusion of management accounting tools such as the
balanced scorecard.
