BALANCED SCORECARD AND RISK MANAGEMENT: A REVIEW OF ALTERNATIVE APPROACHES FOR INTEGRATION

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To ensure that shareholder value is preserved and enhanced, businesses control value creation process with a balanced scorecard (BSC), while they ensure value loss prevention with risk management. By various scholars, there have been made many critical recommendations about the need for integration of both managerial processes in a formal way to ensure that both of them are more effective tools by eliminating the deficiencies of each other, and thus various conceptual methods have been developed. However, it is necessary to examine in more detail which of these proposed methods will be more suitable for the enterprises, and to make suggestions to illuminate researchers for new conceptual methods to be developed in the future. In this study, therefore, in order to contribute to the elimination of the lack of research in the related literature, alternative approaches that integrate risk management into BSC have been examined, and discussions have been made on the pros and cons of these approaches. After reviewing the related literature, it is considered that the best alternative method of integration may be achieved by developing an aggregated risk factor linked to strategic objectives for each perspective and also by adding a risk management strategy as a third strategy theme into the financial perspective included in the strategy map.

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Balanced Scorecard , Strategy Map , Risk Management , Corporate Risk Management , Risk Perspective

Abant Sosyal Bilimler Dergisi

169

Abant Sosyal Bilimler Dergisi