Designing a Dynamic Model of Balanced Scorecard for Evaluating the Performance of Bank Branches

Document Type : Original Article


1 M.A., Ferdowsi University of Mashhad.

2 Associate professor, Ferdowsi University of Mashhad.

3 Assistant Professor, Ferdowsi University of Mashhad.


In today's rapidly changing environment, organizations require performance evaluation system to survive. In order to evaluate the performance of the organizations several tools and models have been proposed in the literature, each has advantages and disadvantages. Among them, the popularity of the Balanced Scorecard is increasing because of considering the financial and non-financial indicators. But this approach has limitations, for example thisapproach Considers to be one-way interaction, the time lag between cause and effect does not consider, there is no way to validate the indicators and select them. In this study we try to combine Balanced Scorecard with system dynamic in a bank branch case, to overcome the Balanced Scorecard limitation and review the impact of policies on the performance of the bank branch so we study unit after checking the conditions, simulated system performance evaluation with vensim software and four policies has been defined. Using dominance, the best policy is developed and then according to the results obtained suggestions to improve the performance evaluation criteria presented in the case study.


1. Abofaied, A. (2017). Evaluation of Bank's Performance by using Balanced Score card: practical study in Libyan Environment. International Journal of Business and Management, 4(1), 1-14.
2. Adeli, A. (2012). The evaluation of i.r. of iran’s police performance in restoring law, order and security in the city of bam: with reference to the approach of crisis management. Quarterly police management studies quarterly (pmsq). 7(2), 253-281 (In Persian).
3. Afshar kazemi, M. A., & Panahi, F. (2014). Evaluating the Balanced Scorecard Model Using System Dynamics Methodology (Case Study: Saman Bank).Quarterly management accounting, 7(22), 1-19 (In Persian).
4. Akkermans, H. A., & Van Oorschot, K. E. (2005). Relevance assumed: a case study of balanced scorecard development using system dynamics. Operational Research Society, 56, 10.
5. Amirkhani, T., & Alikhani, F. (2015). Key indicators of organization performance and productivity improvement: Balanced Scorecard Approach. Industrial Management Perspective. 5(4), 101-118 (In Persian).
6. Barlas, Y., & Yasarcan, H. (2006). Goal setting, evaluation, learning and revision: A dynamic modeling approach. Evaluation and program planning, 8.
7. Bianchi, C., & Montemaggiore, G. B. (2008). Enhancing strategy design and planning in public utilities through “dynamic” balanced scorecards: insights from a project in a city water company. System Dynamics Review, 24, 38.
8. Dincer, H., Hacıoğlu, U., & Yüksel, S. (2016). Balanced Scorecard-based PerformanceAssessment of Turkish Banking Sectorwith Analytic Network Process.Journal of Decision Sciences Applications, 1(1), 01-21.
9. Fernandes, K., Raja, V., & Whalley, A. (2005). Lessons from implementing the balanced scorecard in a small and medium size manufacturing organization. Technovation, 26(s 5–6), 623-634.
10. Hamidiyan, M., Khosravi Pour, N., & Abdi, M. (2017). Evaluation the Strategic Plan Indicators with Balanced Scorecard Approach and Hierarchical AHP (Case study of Iranian Tax Administration (INTA)). tax research, 25 (34), 171-209 (In Persian).
11. Jafari Eskandari, M. Keshvari, M. (2015). The application of fusion model of dynamic balanced scored card and data development analysis in order to evaluate the performance of broadcasting centers. journal management system, 3(4), 61-73 (In Persian).
12. Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard – Translating Strategy into Action.Harvard Business School Press.
13. Karimi, M. (2010). Designing a Balanced Scorecard Performance Evaluation Model with System Dynamics Approach, M.Sc. thesis, Tarbiat Modarres University (In Persian).
14. Lyell, D., & McDonnell, G. (2007). A Dynamic Balanced Scorecard for Managing Health Systems Performance. Paper presented at the 25th International Conference of the System Dynamics Society, Boston, USA.
15. Mirfakhraddini, S. H., Mirghfouri, S. H., & SayadiToranloo, H. (2011). Prioritizing Improvement Projects in the EFQM Model with Balanced Scorecard Approach (Case Study: Yazd Regional Electric Company). Industrial Management Perspective. 2(20), 91-106 (In Persian).
16. Mottaghi, H. (2004). Production Management and Operations Management.
17. Musaphir, H. (1997). A system dynamics approach to studying manufacturing strategy. (Phd thesis), manitoba.  
18. Nielsen, S., & Nielsen, E. H. (2008). System dynamics modelling for a balanced scorecard Computing the influence of skills, customers, and work in process on the return on capital employed. Management Research News, 31, 19.
19. Nielsen, S., & Nielsen, H. (2015). The Balanced Scorecard and the Strategic Learning Process: A System Dynamics Modeling Approach.Advances in Decision Sciences, Volume 2015, 20 pages.
20. Rezvan Qahfarokhi, T., Rasti Barzaki, M., & Arbab Shirani, B. (2006). Balanced Scorecard Modeling Simulation for Managing Different Scenarios. Fourth International Management Conference (In Persian).
21. Rojuee, M., Ramezani, M., Hesari, M. R., & Bor Bor Jafari, M. (2017). Designing Performance Evaluation Indicators by Using AHP and BSC Approaches (Case of Study: Social Security Organization of Mashhad). Social Welfare. 17 (64), 133-160 (In Persian).
22. Soleimani Damaneh, R., Momeni, M., Mostafaei, A., & Rostami Mal Khalife, M. (2017). Development of a Dynamic Network Data Envelopment Analysis Model for Assessing the Performance of Banks. Industrial Management Perspective, 7(1), 67-89 (In Persian).
23. Sterman, J. D. (2009). Business Dynamics, Translation (K. Barapour, P. Mousavi, B., Behzad, M., Emami, L., Rezaie, H., Faghani, semat, Center for the Study and Development of the Humanities.
24. Sterman, J. D. (2000). Business Dynamics. System Thinking and Modelling for a Complex World McGraw-Hill Higher Education, Boston, MA.
25. Sterman, J. D. (2002). All Models Are Wrong: Reflections on Becoming a Systems Scientis. System Dynamics Review, 18, 30.
26. Sushil. (1993). Systems Dynamics: A Practical Approach for Managerial Problems. Wiley eastern limited.
27. Shaverdi, M., Akbari, M., & Fallah, S. (2011). Combining Fuzzy MCDM with BSC Approach in Performance Evaluation of Iranian Private Banking Sector. Advances in Fuzzy Systems, 12.
28. Tavakoli Golpayegani, M., Alam Tabriz, A., Amiri, M., & Motameni, A. (2015). Presenting a Developed Model by Integrating DEA, Factor Analysis and Common Set of Weights (Case: Insurance Industry). Industrial Management Perspective. 5(1), 44-76 (In Persian).
29. Tsalis, A. T., Nikolaou, E. I., Grigoroudis, E., & Tsagarakis, P. K. (2015). A dynamic sustainability Balanced Scorecard methodology as a navigator for exploring the dynamics and complexity of corporate sustainability strategy. Civil Engineering and Environmental Systems, 32, 281-300.
30. Yee, Rachel W.Y., Yeung, Andy C. L., & Cheng, T. C. Edwin. (2008). The impact of employee satisfaction on quality and profitability in high-contact service industries. Journal of Operations Management, 26, 17.
31. Yi Wu, H. (2012). Constructing a strategy map for banking institutions with key performance indicators of the balanced scorecard. Evaluation and program planning, 35, 18.
32. Yi Wu, H., Tzeng, G., & Chen, Y. (2009). A fuzzy MCDM approach for evaluating banking performance based on Balanced Scorecard. Expert Systems with Applications, 36, 13.
33. Zarei Mahmoodabadi, M. Nahavandi, N., & Taghavi, A. (2016). Designing Dynamic Balanced Scorecard with Balanced Scorecard with combined approach of Balanced Scorecard (BSC) and Modeling System Dynamics (SDM). International Journal of Industrial Engineering & Production Management. 27(2), 201-214 (In Persian).