Approaches to Measuring Organizational Effectiveness Based on Balanced Scorecard and Rational Framework: A Narrative Literature Review

Organizational effectiveness measurement has evolved significantly as organizations face increasingly complex, dynamic, and stakeholder-driven environments. Traditional reliance on financial indicators is widely recognized as insufficient for capturing the multidimensional nature of organizational performance. In response, comprehensive frameworks such as the Balanced Scorecard (BSC) and the Rational Framework have gained prominence. This narrative literature review synthesizes existing theoretical and empirical research on the application and integration of BSC and the Rational Framework in measuring organizational effectiveness. Drawing on peer-reviewed literature and seminal works, the review examines the theoretical foundations of both frameworks, their empirical applications across organizational contexts, integration patterns, success factors, and implementation challenges. The findings indicate that BSC offers systematic structure, causal logic, and strategic alignment through its multi-perspective design, while the Rational Framework contributes contextual flexibility, stakeholder inclusivity, and recognition of competing effectiveness criteria. Integration of the two approaches enables more comprehensive and context-sensitive measurement systems by combining BSC’s practical implementation strengths with the Rational Framework’s theoretical depth. However, integrated approaches also introduce challenges related to complexity, data quality, resource constraints, cultural alignment, and the risk of dysfunctional behavior. The review further identifies critical success factors including leadership commitment, strategic alignment, stakeholder engagement, organizational capabilities, balanced metric design, and continuous refinement. The study contributes to theory by clarifying complementarities and tensions between the two frameworks and highlighting the importance of context and stakeholder considerations in effectiveness measurement. Practically, it provides guidance for organizations seeking to design robust, multidimensional performance measurement systems aligned with contemporary strategic, sustainability, and governance demands. Future research directions include longitudinal studies, cross-cultural analyses, and empirical evaluation of integrated measurement frameworks’ causal impact on organizational performance.