Background: The competitive and dynamic health care sector has spurred hospitals into delivering greater flexibility and quality of services while cutting the hospital cost at the same time. However, hospitals differ in the extent to which they achieve these strategic goals.
Purposes: This article explores the use of a new management tool-the balanced scorecard-which facilitates managers to meet multiple strategic goals. It also analyzes how nurse managers use the balanced scorecard in an interactive or diagnostic way and its subsequent effect on strategic goal achievement (cost reduction and flexibility). It also examines how "balanced" is the balanced scorecard in terms of financial versus nonfinancial measures.
Methodology: Data were collected from a mail survey sent to 218 nurse managers in Spanish public hospitals. A satisfactory response rate was achieved, with 114 (52.29%) useful answered questionnaires.
Findings: The results show that younger, more tenured, and clinically trained nurse managers would be more likely to use the balanced scorecard in an interactive way. Conversely, older, less tenured, and administratively trained managers would use it diagnostically. The results also indicate that the balanced scorecard facilitates the cost reduction and flexibility in hospitals only when it is used interactively.
Practice Implications: This article provides evidence that not only the technical design of the balanced scorecard matters, but also an appropriate use of the balanced scorecard is paramount for achievement of multiple strategic goals. An effective use of the balanced scorecard requires managers to actively stimulate dialogue and agreement among hospital's staff about desirable financial and nonfinancial performance measures in alignment with multiple strategic goals.