Chapter 1
Introduction
Developmental organizations embrace performance management processes that enable employees to become their greatest asset. When managers function as performance coaches, they become trainers, confronters, mentors, and counselors, providing positive feedback and reinforcement to improve skills and competencies that ultimately enhance overall employee performance. Performance management functions as an integral part of a comprehensive development strategy, although too few organizations subscribe to this philosophy (Gilley & Maycunich 2000). . Hence, the business world overflows with mediocre, stagnant, or failing organizations that stubbornly or ignorantly overlook their employees' potential. We believe that well-designed and well-executed performance management provides an excellent vehicle for promoting continuous employee and organizational growth and development (Gilley & Maycunich 2000).
A company does not need managerial supermen to build a high performance management system; the system performs because its design enables ordinary people to deliver extraordinary results consistently. High performance does, however, require managers who understand, use and improve the system (Stankard, 2002). Most organizations already have the building blocks in the form of management approaches and capabilities; they just stop short of linking what they have into a continuous cycle, which can amplify the performance of the whole. It is this connecting the dots and getting all parts working together that permanently boosts management effectiveness and business performance (Stankard, 2002).
The role of financial performance measurement is to help keep the organization on the financial straight and narrow track. The measures are used primarily by financial specialists, and the action taken as a result of such analysis may also be exclusively financial. Nevertheless, it is also clear that evidence of financial problems may occur because of deficiencies in other areas of business operations. In this case, the ratios can provide the finance director with the information necessary to convince other managers that operating action needs to be taken in order to avoid financial distress. However, the primary role served by this type of performance measurement lies within the province of the finance function, and is concerned with the effective and efficient use of financial resources (Neely, 2002). Performance management and measurement has become a vital part of an organizations operation. It came from the need of organizations to monitor how it performs certain actions and operations that aims to reach its goals. Performance management and measurement was the prime motivator for companies to focus not only on financial measures. Businesses have seen the effects to the company of relying too much on financial measures. It leads to downfall of the company. To check the performance level of the company it needs to use various methodologies and techniques. One method is the balanced scorecard. The study will determine the effects of the balanced scorecard on modern organizations.
Problem Statement
The statement of the problem is so important in researches that it should be stressed regardless of the point value assigned to it in the reviewer’s evaluation form. That is, even when the reviewer’s evaluation form allocates only a small percentage of the total allowable points to the problem section (Miner, LE & Miner, JT, 2003). There are different factors that contribute for a business to be successful. One factor is the strategies the business use; another factor is its brand name and image, moreover a factor can be the quality of the product and lastly a factor that contribute for a business to be successful can be the relation of the company with the society. Business will not be successful if their goals will not be reached. For them to reach their goal, it has to make sure that the activities of the company are meeting its objectives in terms of vision and strategy. The company has to focus not only on its financial performance but the issues faced by their personnel. One methodology used by a company to do such observation is the balanced scorecard. In lieu of this the paper will examine the effect of the balanced scorecard on modern organizations.
Research Questions
Generally the paper intends to examine the effect of the balanced scorecard on modern organizations. Specifically, the study will try to answer the following questions.
1. How can a personnel performance be improved and sustained in an organization?
2. How important the balance scorecard is on organizations?
3. What personnel issues can be detected by the balance scorecard?
4. What can the balance scorecard do to change the performance of modern organizations?
Aims and objectives
Typical research questions concern the effects of marketing instruments and household-specific characteristics on various marketing performance measures. Recent advances in data collection and data storage techniques, which result in large data bases with a substantial amount of information, seem to have changed the nature of marketing research (Franses & Paap, 2001). While the research questions were stated, they nevertheless only referred to the information that the researcher intended to question. The objectives, however, will focus on the necessary problems and objectives that should be clarified in order to gather the intended information. The aims and objectives of the study include
Importance of the Study
The study is important to businesses since they can know how the balanced scorecard can change their business processes. The management of the businesses can see the difference of the time they were not using such technology. With the establishment of the goals given, this study may also be of importance to the goals that have been set. By fulfilling the aims and objectives of the study, this study will be helpful for other researchers who may be focusing on the way determine the effect of balanced scorecard to modern business organizations. Such data will hopefully be helpful for researchers in establishing their own means of conducting their study. The notable significance of this study is the possibility that it may be able to use the findings for the other studies that may wish to analyze the factors for the success or demise of a particular study.
The methods that this study will take must also be credible and help researchers in knowing how to look for particular information and know how to analyze them. It is through this that researchers will then be able to find out how they will be able to focus on their particular investigation and also know the possible methods that they may choose in the possible time that they may choose to already conduct their study. Thus, another significance of this study is to serve as a guide for researches that focus on the analysis of the success of certain corporations as they venture into internationalization, and especially focus on the possible factors that may have affected these companies’ success or downfall.
Methodology
Type of research
The research process onion of Saunders, Lewis & Thornhill (2003) will guide the study in order to come up with the most suitable research approaches and strategies for this study. The research process onion will be used as a basis to show the conceptualization of the most applicable research approaches and strategies that will lead to the gathering of the necessary data needed to answer the research questions stated, as well as to arrive to the fulfillment of this research undertaking’s objectives. Any approach that attempts to describe data might be referred to as a descriptive method. There is a range of sophistication possible in any description whether quantitative or qualitative. The simplest quantitative description reports the data in raw form. As the description gets more sophisticated, the researcher groups the data and presents it in tables and figures.
The use of descriptive statistics is merely a convenient way of description. Data are reported in tables organized to give a suitable overall picture at a glance. These simplify the description and lend meaning to data which in raw form is hard to interpret (Anderson, 1998). The research will use the descriptive method to determine effect of balanced scorecard on modern business. Descriptive research tries to explore the cause of a particular event or situation. In addition, such method tries to describe present conditions, events or systems based on the impressions or reactions of the participants of the research (Brewer & Ware, 2002). Furthermore descriptive research utilizes observations and surveys. For this reason, the study calls for the use of this approach because it is a goal of the study to gather first hand information that will determine the effect of balanced scorecard on modern business.
Primary and secondary source of data
The primary source of data will come from an interview that will be conducted. The primary data frequently gives the detailed definitions of terms and statistical units used in the survey. These are usually broken down into finer classifications. The primary source of data will give actual responses from various people who encounter different kinds of things. The primary source of data will provide answers not found in written documents or other written source of information. This kind of data will give a further understanding of the situation. After gathering the primary data, the information will be reviewed to see if the data is appropriate for the study. Afterwards the strength and weakness of the data will be evaluated. The secondary source of data will come from researches done by the organization, previous studies and surveys. Acquiring secondary data are more convenient to use because they are already condensed and organized. This kind of data can be found anywhere. The researchers work for same organization and because of this they would have access to the needed data at any time needed. It saves more time and effort. The secondary source of data will come from various written sources such as books, magazines, journal and other printed sources.
Methods for Data analysis
Data analysts have turned to data mining techniques when the size of their data has become too large for manual or visual analysis. What makes the analysis of these data sets challenging is not just the size, but the complexity of the data. Data sets provide a very rich environment for the application of data mining (Ye, 2003). Data gathered will be analyzed through frequency distributions. This procedure of analyzing the data will give way to reviewing the data categories and the number of referrals in each category. With relation to data analysis, the indicators that will be used in evaluating the study include the age of the respondent; the gender of the respondent, the social status of the respondent; the educational attainment of the respondents; the position of the respondents in the company and the number of years the respondent served as an employee of the company.
Time frame
A timeframe distinguishes a studies' long-term strategy from its short-term strategy. In doing so, this helps reveal the frequent reality that there is no long-term strategy The discipline of specifying a timeframe counteracts the researcher's tendency to think in idealized superlatives (Lanning 1998). The first thing to be done is to collect necessary data and information. This includes colleting data from primary and secondary sources. Within this time frame the questionnaire has been formulated and ready for use.
After gathering such data the next thing to be done is analyzing it to use it in the study. This will be done for a month. The next activity is formulating the first two chapters. Within the said activity the data is integrated with the research, and the related literature is included. This will be done in 2 weeks. The next activity is formulating the last few chapters of the study wherein the data gathered from the survey is integrated and the analysis of the data is included in the research. This will be done for at least 3 weeks to ensure that the study is done well. The last activity is finalizing the paper and preparation to present the results of the study.
Validating the accuracy of findings
The accuracy of the findings will be validated through the combination of various techniques and accessories that will assist in determining whether the recorded and non recorded information is valid and whether such information can assist the study, the recorded information will be compared with the different literatures used in the study, This is to check whether the sources of data agree on the effects and consequences of mergers and acquisition.
The researcher’s role
The researcher is the one that will gather the data that will be analyzed and analyzed for the study. The researcher is the one that will make sure that the data gathered will be appropriate for the study and can help the study achieve its goals. The researcher will make sure that respondents will be informed on why the data is important. The respondents will be informed that the data will be treated with confidentiality and respondents will be given notice when the researcher wants to publicize the results.
Structure of dissertation
There are different chapters for this project. Each chapter has a different focus for a specific course of action that will benefit the study. Each chapter will bring the study closer to gathering information about the goal of the study. The different chapters will contribute to the success of the study and it can be used as a starting point for further studies. The first chapter was the introduction part wherein general ideas and goals of the study were discussed. The second chapter will be the literature review part. The second chapter used various resources to gather necessary data.
This data have a relation to the goal of the paper which is to determine the effect of balanced scorecard on international business. The literatures presented will come from books and other sources that are deemed to be helpful in the advancement of awareness concerning the subject. The third chapter will focus on the presentation of data, the ideas of the respondents, and analysis of data. The third chapter will demonstrate how the results from the surveys and Interviews link to the literature review results. The last chapter will focus on discussing the Summary of the data acquired, Conclusions and Recommendations.
Chapter 2
Review of related literature
This section of the study primarily focuses on the different researches and other literatures that focused on several aspects that will help with the progression of this study. With the topic mainly concerning on the effects of the balanced scorecard on modern organizations.the paper’s main aim is to determine appropriate information that can help in the study of the effects of the balanced scorecard on modern organizations.The literatures presented will come from books, journals, and reports that are deemed to be helpful in the advancement of awareness concerning the subject.
Business Success
There is no magic formula for business success. While, over time, some companies achieve spectacular success, others fall by the wayside or suffer setbacks and have difficult years; they are not impervious to changes in the market. Setting customer value as the strategic imperative not only makes sense, but brings with it real economic value (Schuster 2000). The message, therefore, is in order for hard pressed Chief Executives to maintain and grow shareholder value; they must focus their business on the customers first. In order to ensure long-term business success and the continuance of the company, the retention rate of existing customers will rise and new customers will be acquired by positive word-of-mouth communication with the help of Total quality management (TQM). The business success of a company, which results from TQM, is consistent with the creation of shareholder value, if the return expected by the shareholders is consulted as a success criterion. Within the scope of TQM the pursued customer orientation, staff orientation and societal orientation have to be fulfilled sufficiently in the sense of a collateral condition (Schuster, 2000). Business success cannot be easily attained. Companies have to undergo various changes and they have to face various problems to attain the true meaning of success. Business will not be successful if they will not provide the best product and deliver the best service. Businesses cannot provide the best kind of products and services on their own they need help from employees who perform well because they were properly motivated and they achieved job satisfaction.
Businesses have to make use of strategies to maintain or upgrade the level of success it has. Each strategies concentrate on various aspects of the company, some aspects concentrate on financial aspects. Others focus on supply management .While some focus on the relationship between the company and its employees. The relationship between the company and its employees is important for the business to attain its goals. The employees are the backbone of the company and once they refuse to work the company will not be able to create products and service and the company will not reach its goal. For employees and the business to perform well, employees should be motivated so that there would be no barriers for the company to achieve its goals. Employees needed to be pampered with the appropriate treatment for them to be productive. Because of this employee motivation and business success has a great connection; both factors are important aspects for the company’s growth and development.
Employee Motivation and its role in business success
Managers who want their employees to participate in performance growth and development plans need to recognize that employees have reasons for everything they do. Managers should realize that employees choose to perform the way they do because of some internal or external motivation. Employees participate when the goal they have chosen to pursue is attainable. To ensure greater participation, managers must understand this simple motivational principle. Employee motivation can be greatly enhanced when managers understand the seven assumptions that underlie change behavior (Boughton, Gilley & Maycunich, 1999). First, employees are motivated to change their behavior when given clear, sharply focused objectives. Employees are not encouraged to participate in change activities when they are written in ambiguous, immeasurable terms. Managers who help identify skill gaps and work closely with their employees in the construction of performance objectives that are clear and precise have a much better opportunity to enhance employee growth and development (Boughton, Gilley & Maycunich, 1999).
Second, employees need to thoroughly understand how to perform their jobs correctly. Employees need to know not only what to do but also how to accomplish the task. Any attempt to motivate an employee to change without adhering to this basic assumption may be counterproductive. Most employees want to perform their jobs correctly. Failing to tell them exactly what to do and how to do it will serve as a de motivator. Third, employees are more likely to change their performance behaviors when they are given opportunities to participate in problem solving and decision-making activities that directly affect them (Boughton, Gilley & Maycunich, 1999). Employees need to be given the authority to make decisions about how to improve their performance. Fourth, change requires personal commitment for action, which obligates managers to secure employee buy-in prior to the creation of growth and development plans. In this way, employees own the learning acquisition and transfer process. Fifth, managers must clearly communicate positive and negative rewards that are linked directly to performance improvement. Care must be taken when identifying rewards to ensure that correct behavior is rewarded rather than punished (Boughton, Gilley & Maycunich, 1999).
Sixth, managers must demonstrate patient, persistent follow-through when providing positive feedback and reinforcement. Seventh, managers need to be realistic regarding the types of rewards offered, while acting within their discretion and authority. It is counterproductive to offer promotions, merit pay, bonuses, or other material rewards if they cannot be granted to employees. False hopes or expectations lead to distrust and the deterioration of synergistic relationships (Boughton, Gilley & Maycunich, 1999). To motivate employees, companies should first know the behaviors of employees and why it changes. By doing this companies can know how to approach certain employees and what motivational strategy can be used towards them. This will lead to better performance of the employees and a better relationship amongst the company and the subordinates. Different companies try to motivate their employees by giving feedbacks, rewards and incentives to the employees. These different kinds of motivation strategy by the company create employees that work together. It also makes the employees perform with higher standards and more energy. Employees that are motivated well behave and act properly. They have no reason to misbehave and they are well focused to perform well and do things that can help the company reach its goals and achieve success. Employees that are motivated well will be too busy to achieve their goals and performance measures, they will have no time to misbehave and they will not attempt to do things that will cause things that will affect their standing in the company. When the employee performs well the company can provide better service to clients. This leads to the company being able to reach its standards and the end result is success for the company.
Job Satisfaction and its role in business success
Judgments of job satisfaction reflect conscious attitudes toward one's job. Although job satisfaction measures are influenced by the conditions that exist in one's job, they are also influenced by one's affective disposition and overall life satisfaction. However, the moderate correlation between life satisfaction and job satisfaction does not preclude job satisfaction measures from providing unique information about an employee's attitudes toward his or her job, attitudes that may have distinct implications for productivity beyond the effects of life satisfaction or affective well-being (Barrick, Ryan & Schmitt, 2003). Positive affect, negative affect, life satisfaction, and job satisfaction are not simply attitudes about one's life and one's job. These components of happiness and well-being play a functional role in the choices that people make and the behaviors in which they engage (Barrick, Ryan & Schmitt, 2003).However, the specific impact that these differences will have on worker productivity likely depends on the nature of the worker's task. Happy workers may be more sociable, but whether this benefits productivity depends on the precise nature of their task. In addition, happy workers may be creative and efficient when performing complicated tasks, but this creativity and efficiency may come at the expense of caution and vigilance (Barrick, Ryan & Schmitt, 2003).
Job satisfaction is an attitude, not an affective state. As an attitude, it is best conceptualized as an evaluation of one's job, influenced in part by affective events that have occurred at work and, as a source of error, the mood one is in at the time of making the evaluation. In addition, most measures of job satisfaction have a large cognitive component (Barrick, Ryan & Schmitt, 2003).Psychological strain as an outcome of exposure to job stressors has many operationalizations, including job satisfaction, frustration, anxiety, depression, burnout, and physical health problems. Some of these may be considered emotional reactions, but, interestingly, even so are generally measured over a period of time (Barrick, Ryan & Schmitt, 2003). Job satisfaction covers the ability of a company to maintain a good relationship with the company and provide them the opportunity to do something they want at the same times something that will give benefits to the company. Job satisfaction can be attributed to the different emotional things encountered by an employee on the workplace. Job satisfaction entails how the employee feels about the company and how he/she acts in his/her everyday office experience. When employees are satisfied with their job they have no reason to misbehave and cause trouble in the workplace. They also have lesser time to spend since they like what they are doing and want to contribute the best product and service. Different companies make sure that their employees are satisfied with their job, they do this by using various means to determine the feelings of their employees on the job they have. The company then tries the best it can to change the employees feelings and misconceptions about the job, when they are still not satisfied the job the company then tries to change their job position and responsibilities to give them a better outlook and give them enough space. One measure to maintain the motivation and satisfaction of employees is through the balanced scorecard.
Balanced scorecard
The requirements of ideal performance measurement are very stringent, far more stringent than the requirements of the balanced scorecard (BSC). The balanced scorecard imposes only the two requirements on measures, parsimony and predictive ability: in principle, scorecard measures are more parsimonious than the potpourri of measures tracked by most large firms, and non-financial scorecard measures predict financial results. The scorecard does not address pervasiveness other than acknowledging that scorecards and scorecard measures are likely to vary across different parts of the organization. Nor does the scorecard address the stability of measures. The running down of performance measures forces changes in some measures and leaves the remainder largely uncorrelated with the new measures, creating some ambiguity as to how performance should be measured Meyer, 2002). BSC is a performance measurement system focused on results. It is flexible and possible to apply differently in different organizations. In general, there are no directives on which performance is to be measured. BSC only provides guidance. The application of BSC should be unique to each organization and to levels in the organization. People should of course be careful when using different models at different levels of management to avoid confusion in the interpretation of the results. Nevertheless, the BSC, as presented by Kaplan and Norton, is not without limitations (Kanji, 2002). The causality links suggested among the four perspectives are particularly problematic and ambiguous. Additionally, it fails to explicitly recognize the contributions of important stakeholders, such as employees and suppliers. The BSC includes financial measures that tell the results of actions already taken. And it complements the financial measures with operational measures on customer satisfaction, internal processes, and the organization's innovation and improvement activities operational measures that are the drivers of future financial performance (Kanji, 2002).
Therefore, it enables companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth. The main benefit of the BSC is its ability to translate an organization's vision and strategy into tangible objectives and measures. The BSC uses indicators to communicate a strategy and to measure the success of its implementation. To translate the corporate goals into operational terms, the company's balanced scorecard should be deployed to each business unit (Kanji, 2002). The balanced scorecard is not a template that can be applied to a business in general or even industry wide. Different market situations, product strategies and competitive environments require different scorecards. Business units devise customized scorecards to fit their mission, strategy and culture'. Therefore, the specific content of the four boxes of the BSC must be adapted to the circumstances of each organization (Kanji, 2002).
An important part of a business transaction is the satisfaction of the needs and wants of clients. Satisfaction of clients cannot come easily and may take some time before finally realized by the clients. To satisfy clients is to provide them with an appropriate service and usable products. This can be done when a company and the employees work well together. The use of BSC helps the company maintain a communication with its personnel. The use of BSC also helps the company know the action it has to do to motivate an employee. BSC concentrates on the firm and different issues surrounding it. It takes a look at the internal and external problems faced by firms and what can be done by a firm to change the threats of the problems and realign it with the overall goal of the organization.
Modern business operations and BSC
Typical inputs to an operations system would include capital, raw materials, labor, and money. Increasingly, information is also being thought of as a resource. Outputs would include the organization’s products and services. Of course, organizations produce many less obvious and sometimes undesirable outputs, such as pollution and traffic congestion. Generally, though, the operations manager is striving to maximize the system’s outputs relative to its inputs. In other words, the goal is to produce the most products and services for the least cost, to the extent that this goal doesn’t interfere with the other goals of the organization (Summer, 1998) The operations system can be seen as a system which converts inputs from outside the system, such as raw materials, money, people, and information, into outputs, such as goods and services. The operations system, though, is but a subsystem of the overall organization, along with other subsystems such as marketing, finance, personnel, and accounting (Summer, 1998).The operations system of a company can be improved by finding out new processes and using it for the benefit of the company. The operations system of a company can be improved by maintaining quality as the main concern of the company. Through BSC operations can be improved through having fewer problems on personnel issues. BSC assists the operations run smoothly without concern for additional problems from the outside forces; BSC guides the company in making the best decisions with regards to internal and external activities. Once the best decisions are made the company is directed into a better path of achieving the company’s goal.
0 comments:
Post a Comment