The Impact of Transformational Leadership on the Effectiveness of Balanced Scorecard Implementation in Vietnamese Businesses: A Case Study of Enterprises in Hanoi and Neighboring Provinces

Abstract

In the context of increasing competition and rapid digital transformation, organizations require effective strategic management tools to align organizational activities with long-term objectives. The Balanced Scorecard (BSC) has emerged as one of the most widely adopted strategic performance management systems globally. However, the success of BSC implementation often depends on leadership capabilities and organizational context. This study investigates the impact of transformational leadership on the effectiveness of Balanced Scorecard implementation in Vietnamese enterprises. Using survey data collected from 420 managers and employees from businesses in Hanoi and neighboring provinces (Bac Ninh, Hung Yen, Phu Thọ, and Ninh Binh), the study employs Partial Least Squares Structural Equation Modeling (PLS-SEM) using SmartPLS 4 to examine the relationships among transformational leadership dimensions and BSC implementation effectiveness. Transformational leadership is measured through four dimensions: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. BSC implementation effectiveness is evaluated across four perspectives: financial performance, customer perspective, internal process efficiency, and learning and growth. The empirical results indicate that transformational leadership significantly enhances BSC implementation effectiveness through improved strategic alignment, organizational learning, and employee engagement. Among the leadership dimensions, inspirational motivation and intellectual stimulation demonstrate the strongest influence on BSC outcomes. The findings contribute to leadership and strategic management literature by integrating leadership theory with strategic performance management frameworks in emerging economies. Practical implications suggest that Vietnamese enterprises should strengthen transformational leadership capabilities to maximize the strategic benefits of BSC implementation. The study also provides policy and managerial recommendations for improving leadership development and strategic performance systems in Vietnamese firms.