Designing a system dynamics model for contractors’ sustainable productivity management: integrating the balanced scorecard perspectives with empirical evidence

This study develops an evidence-grounded Balanced Scorecard (BSC)-based framework for contractors’ sustainable productivity management (CCSPM) in a developing-country context and extends it to a CB-SEM-to-system dynamics (SD) scenario analysis. Using survey data from 535 practitioners in Vietnam, covariance-based structural equation modeling (CB-SEM) was applied to estimate the direct and inter-perspective relationships among four BSC dimensions: financial, customer, internal processes, and learning-growth. The estimated causal structure was then translated into an SD stock – flow model to simulate quarterly improvement trajectories over 20 quarters under explicit ceteris paribus assumptions. In this design, CB-SEM provides empirically estimated influence patterns, while SD captures accumulation, feedback, delay, and erosion effects for policy-oriented scenario exploration. A small exploratory field application with two anonymized SME contractors informed initial conditions and assessed the behavioral plausibility of the simulated trajectories. Results indicate that internal process capability is the strongest leverage point, with spillover effects on customer- and learning-related performance. Simulations show delayed and saturating responses: internal process-center strategies generate the largest long-run gains, financial-only and customer-only strategies level off earlier, and learning-oriented investment mainly sustains improvement momentum. The study contributes an empirically supported causal structure, a transparent CB-SEM-to-SD translation, and a practical tool for sequencing interventions under resource constraints.