Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment

* Correspondence to: Massimiliano Bonacchi, Department of Business Administration, University of Napoli ‘Parthenope’, via Medina, 40-80133 Naples, Italy. E-mail: massimiliano.bonacchi@uniparthenope.it

Business Strategy and the EnvironmentBus. Strat. Env. 16, 461–473 (2007)Published online in Wiley InterScience(www.interscience.wiley.com) DOI: 10.1002/bse.596

DartBoards and Clovers as New Tools in Sustainability Planning and Control

Massimiliano Bonacchi*1 and Leonardo Rinaldi21 Department of Business Administration, University of Napoli ‘Parthenope’, Italy

2 School of Management, Royal Holloway, University of London, UK

ABSTRACTAmong organizations that recognize that a multidimensional perspective is necessary to integrate stakeholder needs into a long term value creation process, only in a few cases are performance measurement systems able to integrate fi nancial indicators with social and environmental metrics. This paper fi rst discusses the sustainability concept for management accounting purposes. After reviewing the literature address-ing performance measurement system issues, the paper offers a view as to how implementation of management accounting for sustainability could progress. We suggest a performance measurement system based on two managerial instruments that organize a set of primary and secondary measures, connected with stakeholder satisfaction, and are able to detect and articulate both win–win and trade-off situations. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.

Received 30 January 2006; revised 13 October 2006; accepted 30 March 2007

Keywords: sustainability management; performance measurement system; stakeholder approach; sustainable development

performance

Introduction

TRADITIONAL INDUSTRIAL STANDARDS AIMED AT PROMOTING ECONOMIC GROWTH AND DEVELOPMENT

are under severe scrutiny given the negative impact that industry has on human health, on the

ecosystem and on future generations. In general, ever fewer people advocate a predatory role

for industry designed just to maximize utility; by the same token, a large and increasing number

of people agree that industry should adopt more respectful and responsible behavior that could restore

well-being to the environment and to the social communities it affects (Mokhiber and Weissman,

1999).

When challenged with specifi c details of how this can be achieved, the debate about which fundamen-

tal goals industry should aim at becomes more articulated. On the one side, there are the defenders of

a purely neoclassical economic vision, who assert that the only way for industry to effectively contribute

to well-being is to maximize profi ts (Friedman, 1962, 1970; Rappaport, 1986; Jensen, 2001; Hoffman,

462 M. Bonacchi and L. Rinaldi

Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 16, 461–473 (2007) DOI: 10.1002/bse

2002; Khanna and Anton, 2002). On the other side, there are defenders of a more socially oriented

agenda, who claim that economic initiatives and productivity can only be measured by the extent to

which they improve, in a broader sense, the quality of life (Drucker, 1984; Rubenstein, 1993; Lorraine

et al., 2004).

The latter stream of studies includes management approaches based on sustainability. Current lit-

erature about sustainable development asserts that the only way for companies to guarantee themselves

a place in the future is to adopt a business approach that equally favors profi t, the environment and the

community (Clayton and Radcliffe, 1997; Willard, 2002; Lazlo, 2003; Woerd and Brink, 2004; Bansal,

2005).

The idea that development is not sustainable if any one of the economic, social and environmental

principles is not adhered to makes traditional performance measurement systems, based only on share-

holder value, inadequate for sustainability management (Woerd and Brink, 2004).

However, translating this concept into daily operations is not easy. Management must be able to offer

strategies to those shareholders demanding sustainable development (see for instance the case of public

utilities – Miakisz, 1999; Bonacchi and Rinaldi, 2006). At the same time, it is necessary to provide

adequate planning and control systems in order to quantify sustainability, understand the factors that

contribute to it and support management in implementing sustainability strategies.

An innovative planning and control system is essential for the diffusion of the principles of sustain-

ability. To date, the majority of existing systems do not seem to have fully embraced the philosophy of

sustainable development, in which environmental, social and economic goals are achieved simultane-

ously. Traditional performance measurement systems usually do nothing to evaluate performance of a

corporation at a level beyond just the interests of the shareholders (Higgins and Currie, 2004). Some

of them are limited by measurement systems that were developed to gauge economic performance, and

are not equipped to measure social and environmental performance. Some, although integrated with

environmental and social metrics, do not consider non-shareholders stakeholders (Freeman, 1984;

Donaldson and Preston, 1995; Post et al., 2002). No one has yet succeeded in developing measures

of business sustainability that are a true integration of the three principles, thus compromising the

possibility of linking sustainable strategies to day-by-day operations.

On the basis of these convictions to quantify sustainability, and to understand the factors that con-

tribute to it, we suggest in this paper a multidimensional and multilevel framework based on a set of

primary and secondary measures organized using two managerial instruments, showing the horizontal

and vertical relationships among them.

The paper is organized as follows. The following section outlines the theoretical background behind

the concept of sustainability, critically analyzing the possible short-circuits involved in using a traditional

management and control system for measuring sustainability; the next section proposes a framework

for planning and control of sustainability. This section explores both the logical issues that lie behind

the framework, and presents the managerial instruments whereby the framework becomes operational.

Finally, the fourth section offers some concluding remarks.

Theoretical Background

The concept of sustainable development originated from the realization that pre-existing growth para-

digms were incapable of meeting the constantly changing needs of modern culture. An important phase

of its evolution came towards the end of the 1980s, when the idea emerged that economic growth could

not be considered in isolation from the macro-system, without also taking into consideration the well-

being of the individuals who operate within the system.

DartBoards and Clovers as New Tools in Sustainability Planning and Control 463

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In more recent years many defi nitions have been given for sustainable development, in order to satisfy

the need for a more scientifi c structure to the concept. All of them offered a clearly political and social

commentary on reality, with suggestions on how to confront it. In 1987, the World Commission on

Environment and Development (WCED) offered the defi nition for sustainable development that would

become the most widely accepted: ‘development that meets the needs of current generations without

compromising the ability of future generations to meet their needs and aspirations’ (WCED, 1987,

p. 8).

Even though there were numerous attempts to formalize the concept of sustainability, the

main problem was their focus on macroeconomic issues. No defi nition was given offering guidance

to a company willing to translate the concept of sustainable development into daily business

practice.

The United Nations Conference on Trade and Development (UNCTAD, 1996), the World Business

Council on Sustainable Development (WBCSD, 2001) and the Dow Jones Sustainability Group Index

all made useful contributions to understanding the pillars of sustainable development in terms of indus-

try economics. They identifi ed the three principal components: environmental integrity, social equality

and economic prosperity (Elkington, 1997). Each of these three parts represents a necessary prerequisite

for sustainable development, which can only be achieved when all three conditions are met simultane-

ously (Smith, 2003; Bansal, 2005).

Despite the numerous academic publications on the subject of sustainability measurement (Bennett

et al., 1999; De Haas and Kleingeld, 1999; Atkinson, 2000; Bebbington and Gray, 2001; Bieker et al., 2001; Epstein and Roy, 2001; Epstein and Wisner, 2001b, 2001a; Figge et al., 2002; Bell and Morse,

2003; Bennett et al., 2003; Epstein and Roy, 2003), and although sustainability reporting has become a

high-profi le issue, there has been less progress with regards to the planning and control of sustainabil-

ity in general, and in particular to developing practical measures that are a true integration of social,

environmental and economic performance.

As UNEP and SustainAbility argue, before companies begin to report externally on environmental

performance initial efforts need to be focused upon developing appropriate environmental accounting

methods for measuring performance, and then installing full management structures and systems for

auditing these – only then should a company’s environmental report be produced. Instead, companies

have tended to kick off with auditing, followed by reporting – and only now are they starting to think

about environmental accounting techniques (UNEP and SustainAbility, 1996). Faced with a growing

demand for sustainability, an increasing number of companies are currently communicating sustain-

ability performance, but only very few of them are taking steps towards managing it.

From this evidence we formulate our research question: How should a performance measurement

system be designed for the planning and control of sustainability?

The principal goals of a modern planning and control system are twofold: linking strategy to actions

(to ensure strategy implementation) and performance measurement (the process of quantifying effi -

ciency and effectiveness of action – Neely et al., 1995). The Balanced Scorecard (Kaplan and Norton,

1992, 1993, 1996) has emerged as one of the most popular managerial tools that link performance

measurement to strategy, using a multidimensional set of fi nancial and non-fi nancial performance

metrics.

However the traditional Balanced Scorecard, like other scorecards such as ‘Tableaux de Bord’ (Epstein

and Manzoni, 1998), the ‘Performance Pyramid’ (Lynch and Cross, 1991) and ‘Performance Measure-

ment in Service Businesses’ (Fitzgerald et al., 1991), was developed to translate strategies that were aimed

at maximizing shareholder value by gauging economic performance only. No consideration was given

to either the social or environmental dimensions. As Higgins and Currie state, ‘corporate scorecards are

badly in need of rebalancing’ (Higgins and Currie, 2004, p. 304).

464 M. Bonacchi and L. Rinaldi

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The need to rebalance the Balanced Scorecard was recognized a few years after its introduction.

Researchers began to point out that it needed to address the social and environmental aspects of orga-

nizational activity (Johnson, 1998; Epstein and Wisner, 2001b; Dias-Sardinha et al., 2002; Figge et al., 2002; Woerd and Brink, 2004). Kaplan and Norton also recognized the necessity to integrate the Bal-

anced Scorecard, but they did it by adding to the internal perspective only two aspects related to sustain-

ability (Regulatory and Social Processes), maintaining, in this way, the preference for profi ts over social

and environmental aspects (Kaplan and Norton, 2004).

However, even if adapted, the Balanced Scorecard still does not include all strategic stakeholders

(Norreklit, 2000). For this reason, it seems inadequate for managing strategies aimed at satisfying a

diverse group of stakeholders, and also for supervising strategies related to each specifi c principle of

sustainability.

In order to summarize existing approaches to social and environmental performance measurement

systems, Table 1 indicates some of their limitations despite the many improvements suggested.

In order to internalize the concept of sustainability, an evolution to existing managerial instruments

is needed, given the necessity to adapt to a more complex business management style, as a result of the

multidimensionality of the concept.

The main issues to consider are the following:

(a) inclusion of all stakeholders;

(b) linkage of stakeholders’ needs with day-to-day management activities;

(c) integration of the three principles of sustainability into a framework capable of assessing multidi-

mensional performance.

A Multidimensional and Multilevel Framework for Planning and Control of Sustainability

To internalize the concept of sustainability, we recognized that the relationships between the three

dimensions (environment, economic, social) cannot be imposed in a hierarchical manner, but we argue

that they should be developed following the Rawlsian concept of justice (Rawls, 1971). That is to say, the

loss of utility suffered by one stakeholder cannot be justifi ed by a gain of utility achieved by another

stakeholder. In this light, development will be sustainable only if improvement in any one dimension

does not lead to diminished performance in either of the other two.

On the basis of these convictions, we suggest a planning and control system that allows us to measure

a variety of dimensions of sustainability. We do not intend for this model to replace existing managerial

instruments. Instead, it could represent an evolution in current practice. In fact, performance measure-

ment systems have to be modifi ed as circumstances change (Dixon et al., 1990; Kennerley and Neelly,

2002).

The framework we propose is constructed in three phases (Figure 1):

(1) input identifi cation, in which the fundamental aims of the organization are defi ned, the paths that lead

to their fulfi lment are identifi ed and specifi c actions to obtain tangible results are determined;

(2) identifi cation of objects to be measured, in which the levels to measure performance are defi ned

coherently with the corresponding input;

(3) output identifi cation, in which the instruments are predisposed to measure each identifi ed object, to

appreciate effectiveness and effi ciency reached.

A planning and control framework built in this way can facilitate the work of management in the pursuit

of sustainability, offering support in the critical moments of feedforward, current and feedback control.

In particular:

DartBoards and Clovers as New Tools in Sustainability Planning and Control 465

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(1) in feedforward control, the system must be capable of providing a preliminary assessment of the

extent to which the intended strategic options will contribute to sustainability,

(2) in current control, the model has to verify that the actions necessary to reach sustainability have

been taken, and

(3) in feedback control, the system must verify that the hypotheses put forth in the relationship between

actions and strategies are plausible.

Input Identifi cation

The starting point of the process consists in the formalization of a clear business identity (GRI, 2002;

Kaplan and Norton, 2004) that can be defi ned as a combination of the following:

Authors and publications Improvements suggested Limitations

Azzone et al. (1996), Introduce and organize The framework focuses only on ‘Defi ning environmental environmental performance environmental performance. performance indicators: metrics There is no multidimensional an integrated framework’ performance evaluationJohnson (1998), Integrate the Balanced Scorecard It includes only environmental ‘Identifi cation and selection of with environmental performance metrics, and also priority is given environmental performance indicators to maximizing shareholder value indicators: application of the Balanced Scorecard approach’Epstein and Wisner (2001b), Add new social and Even with the inclusion of ‘Using a Balanced Scorecard to environmental metrics to the environmental and social implement sustainability’ Balanced Scorecard metrics, priority is still given to maximizing shareholder valueEpstein and Roy (2001), Integrate social and Environmental and social aspects ‘Sustainability in action: environmental aspects of are considered only as drivers of identifying and measuring the performance into a new fi nancial performance key performance drivers’ framework (not the Balanced Scorecard)Dias-Sardinha et al. (2002), Raise the concept of There is no integration of ‘From environmental sustainability as a strategic goal measures in order to get a true performance evaluation to of an organization combination of social eco-effi ciency and sustainability environmental and economic Balanced Scorecards. A study of performance fi rms in Portugal’Figge et al. (2002), Recognize that lack of Strategy is not directly linked to ‘The sustainability Balanced integration between economic, stakeholders because they still Scorecard – linking sustainability social and environmental use the Balanced Scorecard management to business performances is the major framework. In addition the strategy’ obstacle for the attainment of model maintains all the other sustainability. The importance of limitations of the Balanced the stakeholder is highlighted ScorecardNeely et al. (2002), It provides a multidimensional It is not possible to fully evaluate ‘Performance Prism’ performance evaluation win–win and trade-off situations framework that links strategy to stakeholder

Table 1. Literature on social and environmental performance measurement systems

466 M. Bonacchi and L. Rinaldi

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(1) a mission that identifi es the role of the business and the reason for which it exists;

(2) values that are the ideals and goals of the company, shared by its employees and partners;

(3) a vision that has to put forth the goals that the company would like to reach and the position in the

competitive environment in a medium–long period;

(4) a code of business conduct that has to translate the value system into operational guidelines (Paine,

1994; Trevino and Nelson, 2003).

Although the defi nition of business identity could be inspired by the principles of sustainability, it is

not suffi cient in itself to move companies towards sustainability. For this reason, a clear strategy must

be formulated and management needs to combine a right mix of internal and external resources. Sus-

tainability, in fact, requires the translation of strategy into managerial actions by defi ning the steps that

must be taken to reach strategic objectives (Figure 1, left-hand side).

Identifi cation of Objects to be Measured

In order to effectively evaluate business performance, each decision-making input must be linked to a

measurable object; in particular:

(1) at the corporate identity level, it is necessary to monitor the simultaneous evolution of the economic,

environmental and social dimensions,

(2) at the strategy level, it is necessary to assess the degree of satisfaction of the stakeholders in all three

dimensions, since strategies are implemented in an effort to increase their satisfaction, and

(3) at the action level, the focus must be on the internal processes aimed toward translating actions into

operating activities.

At this stage it is worth emphasizing that the objects to be measured are logically connected each with

the other. In fact, each dimension is an aspect of performance, which can be appreciated only through

the assessment of stakeholder expectations and needs, whose satisfaction depends on effectiveness and

effi ciency of processes. Among these stages, the crucial aspect is represented by the assessment of the

social, environmental and economic expectations of stakeholders. The output of such analysis, in fact,

will indicate both what behavior the stakeholders require and consider acceptable from the organization,

and the information needed from the organization to judge its own performance in relation to these

expectations (Unerman, 2006).

Figure 1. Planning and control framework for sustainability

DartBoards and Clovers as New Tools in Sustainability Planning and Control 467

Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 16, 461–473 (2007) DOI: 10.1002/bse

Output Identifi cation

After identifi cation of both the input and the objects to be measured, to complete the breakdown of the

framework we need to develop a system of measurement that will be able to guide managers in their

short, medium and long term decisions. This system must be able to summarize the level of sustain-

ability, and to highlight its drivers. For this reason, it is necessary that the control system be articulated

on a multilevel basis. In particular, there are three levels to consider: sustainability dimensions; stake-

holder satisfaction; process development (Figure 2).

The fi rst level of the measurement system constitutes what we consider to be a sustainability score,

which is not a single number measure of performance but a visualization of a combination of measures

that shows the results achieved (or achievable) in all three dimensions at the same time (Munier, 2005).

In other words, to obtain the sustainability score one needs to empirically observe differences between

the achieved values in the period surveyed and the minimum and planned/past values. The idea is to

appreciate overall sustainability by observing what we term the DartBoard (discussed below) in its com-

plexity, moving through each dimension as a whole and then taking under consideration each primary

measure affecting each stakeholder. In fact, a mathematical-statistics algorithm that would start from

each single indicator, and would return a single score, both for general sustainability, and for every

dimension and/or stakeholder, would compromise the full understanding of the degree of sustainability

achieved.

Then, in order to understand the drivers of the three dimensions, it is necessary to move the analysis

to the second level, in which the parameters for stakeholder satisfaction are identifi ed. To obtain this

result, we have to build a set of primary measures having a fi nancial or non-fi nancial nature, and able to

give feedback information about the effectiveness and the effi ciency by which strategies have been real-

ized. These measures are characterized as being connected through a logical relationship to stakeholder

satisfaction (Norreklit, 2000).

To complete the breakdown of sustainability performance drivers, it is now necessary to analyze the

third level. In particular, it is necessary to work out a system of secondary measures focusing on those

processes that are being carried out and should lead to stakeholder satisfaction. They are characterized

as being feedforward measures, able to explain why primary measures are achieved or not (Newman,

1975). These indicators are directly linked to processes and, for this reason, tend to be company specifi c,

refl ecting the uniqueness of business strategy (Figure 2, right-hand panel). The secondary measures

Figure 2. Relationship between objects to be measured and connected output

468 M. Bonacchi and L. Rinaldi

Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 16, 461–473 (2007) DOI: 10.1002/bse

differ from the primary ones in the kind of relationship they have with stakeholder satisfaction. On the

one hand, there are logical relationships between stakeholder satisfaction and primary measures. On

the other hand, there are usually etiological relationships between primary measures and secondary

measures, based on assumptions that have to be tested by the performance measurement system

(Epstein and Roy, 2001).

At the top management level, the primary measures help to evaluate the degree of stakeholder satis-

faction; at the middle management level, the secondary measures show the results of the processes,

evaluating whether they are operating as intended (Atkinson et al., 1997).

Horizontal and Vertical Development

To quantify sustainability, and to understand the factors that contribute to it, we suggest a performance

measurement system that includes two managerial instruments:

• Sustainability DartBoard;

• Sustainability Clover.

DartBoard (Figure 3) offers a detailed measurement of sustainability. It lets us appreciate the horizontal

relations between the three dimensions of performance, allowing managers to weigh win–win and trade-

off situations related to each strategic option. Without integration of the dimensions, a complete

appraisal of the mutual infl uences that tie the various perspectives together is impossible. Such a situ-

ation could easily induce management to choose non-sustainable strategies.

Technically, DartBoard is a geometrical space divided into three areas, dedicated to the economic,

environmental and social dimensions, respectively. In order to appreciate the company’s capacity to

perform in every dimension, DartBoard splits each area into spokes, every one of which shows an indi-

cator corresponding to a particular stakeholder. This representation is convenient for our purposes, since

on each spoke it is possible to mark the level of the corresponding indicator according to three different

criteria, namely the following.

1. The minimum value, which refl ects the minimum results as defi ned by the corporate identity and

obligations placed on the company by law. It represents the ‘boundary system’ (Simons, 1994). All

minimum values, taken together, return a minimum sustainability score.

2. The planned value, which represents the results to be expected, based on specifi c strategies taken. All

planned values, taken together, lead to a planned sustainability score.

3. The achieved value which refl ects the actual results achieved in the period surveyed. All achieved

values, taken together, indicate an overall achieved sustainability score.

Building a graphical representation of the three levels by connecting all values corresponding to each

criterion allows for a direct appreciation of the areas in need of careful attention and identifi cation of

successful performances.

As already mentioned, the sustainability score is a combination of metrics derived from indicators of

different typologies, origin and units of measure. It can be drawn through different processes that

depend both on the level of demand for information, and on the degree of sophistication of the instru-

ments with which the information is provided. Using this system of scoring, DartBoard allows manag-

ers to evaluate sustainability through comparison between the following.

a. The planned and achieved sustainability scores. Through comparison of the achieved sustainability score

to the other sustainability scores (minimum and planned), some extreme situations, requiring par-

ticular attention from management during strategic formulation, can be identifi ed in the following

combinations:

DartBoards and Clovers as New Tools in Sustainability Planning and Control 469

Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 16, 461–473 (2007) DOI: 10.1002/bse

(1) full strategy success, in which the achieved sustainability score reaches or exceeds the planned

sustainability score;

(2) attainment of minimum sustainability, while still higher than the minimum, the achieved sustain-

ability score does not reach the planned sustainability score;

(3) full failure of sustainability, in which the achieved sustainability score is below the minimum.

b. Results of past and present periods surveyed. Particular attention has to be paid to the comparison

between results referring to time series data. For instance, two typical situations are the following:

• partial loss, in which we observe a decline in at least one dimension while the others remain the

same (a dimension declines when at least one of its primary measure values decreases);

• value shift, in which the results show improvements in some dimensions, and a decline in others.

Among the analyzed extreme cases, numerous intermediate combinations can also be observed. Judg-

ment on these possible outcomes can be expressed only by managers, who will have to consider the

internal and external factors in which results have been achieved.

Although these comparisons are essential in the control process, they represent only a starting point

for deeper analysis. As such, the model we propose is able to analyze the sustainability drivers through

a two-step process. The fi rst step, using DartBoard, highlights the dimensions with increasing or decreas-

ing performance due to a gain or a loss in stakeholder satisfaction. The second step, through Clover,

allows managers to identify the direct and indirect causes of stakeholder satisfaction or dissatisfaction.

The second building block of our model, Clover (Figure 4), allows for the understanding of connec-

tions between processes, stakeholder satisfaction and each single dimension that encompasses them,

through a vertical and diagonal development between primary and secondary measures. Vertical develop-

ment involves both the identifi cation of a logical relationship between stakeholder satisfaction and

primary measures, and the evaluation of the cause-and-effect relationships between primary measures

Figure 3. Sustainability DartBoard

470 M. Bonacchi and L. Rinaldi

Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 16, 461–473 (2007) DOI: 10.1002/bse

and secondary measures. Diagonal development, instead, involves the secondary measures that, while

connected by a vertical relationship to a given stakeholder satisfaction, could also affect the satisfaction

of other stakeholders. In addition, it is necessary to notice that some primary measures logically con-

nected with a given stakeholder can, at the same time, be linked by a cause-and-effect relationship with

the satisfaction of other stakeholders, becoming a sort of secondary measure. In this case, Clover will

show a diagonal relationship between two primary measures.

Conclusions

Demands for sustainability are continually growing in number and force. Stakeholders have put great

pressure on companies, forcing them to be more transparent in the market, and have succeeded in

convincing many of them that the traditional system of reporting no longer suffi ces. The attention to

sustainability, however, cannot be limited to external reporting. If sustainable development is the only

option that guarantees survival in the long term, all business decisions must be made in accordance

Figure 4. Sustainability Clover

DartBoards and Clovers as New Tools in Sustainability Planning and Control 471

Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 16, 461–473 (2007) DOI: 10.1002/bse

with it. For this reason management needs a control system that supports the sustainability decision-

making process through the following:

• evaluating business performance in its economic, environmental and social dimensions, in order to

analyze their horizontal relationships;

• monitoring the evolution of stakeholders’ needs;

• identifying the performance drivers, by formalizing the system of vertical and diagonal relationships

(that link the actions taken to the realization of strategic objectives).

With the intention of broadening the functionality of existing models, we have suggested two comple-

mentary instruments of planning and control that seem to have some advantages compared to existing

performance measurement systems for sustainability, in particular the following:

(1) the three sustainability dimensions (economic, environmental, social) have an explicit, clearly defi ned

place in the framework;

(2) there is an equilibrium between the three sustainability dimensions;

(3) stakeholders have an explicit, univocal place in the framework.

Nevertheless, the adoption of the framework does not imply the automatic achievement of sustainability

by solving the divergence among goals. Confl icts have occurred and will continue to occur. Where

meeting environmental goals would compromise economic goals (for example), controllers should make

this explicit, giving managers and/or stakeholders the opportunity to decide among trade-offs.

It is clear that many fi rms today still function on the basis of the traditional shareholder value maxi-

mization model. Nevertheless, we observe a growing interest in the new paradigm of performance

inspired by sustainability, for which an adequate measurement system has not yet been found. We hope

that our work sparks more interest in this area and also will facilitate those managers who want to plan

and to act in a more sustainable manner.

Acknowledgements

The authors would like to acknowledge the useful comments of the two anonymous reviewers. Although the paper is the result of a team effort, Massimiliano Bonacchi can be considered the author of the fi rst two sections and the fi rst two subsections of the third and Leonardo Rinaldi the author of the last two subsections of the third and the fourth.

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