An Approach Integrating Strategic Management and Enterprise Risk Management: The Integrated Framework for Balanced Scorecard and COSO ERM

Abstract

Since the creation of Balanced Scorecard (BSC) in 1992, BSC approach has developed several innovative models by effectively integrating some other management methodologies such as six sigma-based quality improvement programs, the value-based management using EVA, etc. This paper discusses the relationship between BSC-based strategic management and risk management, which has never been explicitly discussed in the context of such methodological innovation. In addition, the paper proposes a framework that efficiently integrates BSC and the COSO Enterprise Risk Management (ERM), which is known as the state-of-the-art risk management framework, as a means of blending strategy and risk management into a single framework.