The underlying premise of the balanced scorecard is that firms jeopardize their future performance possibilities when strategic controls are emphasized at the expense of financial controls.

Question

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The statement is incorrect. The underlying premise of the balanced scorecard is that firms need to balance their focus on financial metrics with non-financial metrics (such as customer satisfaction, internal processes, and employee learning and growth) in order to achieve long-term success. The balanced scorecard does not suggest that financial controls should be neglected; rather, it emphasizes the importance of a more comprehensive, balanced approach to performance measurement and management.

The Underlying Premise of the Balanced Scorecard Is That Firms