The Implementation of Balance Scorecard and
Its Impact on Performance: Case of Universiti Utara Malaysia
Peter U. Anuforo
Tunku Puteri Intan Safinaz
School of Accountancy
College of Business
Universiti Utara Malaysia,
Malaysia
Email: [email protected]
Hazeline Ayoup
Tunku Puteri Intan Safinaz
School of Accountancy
College of Business
Universiti Utara Malaysia,
Malaysia
Email: [email protected]
Umar Aliyu Mustapha
Faculty of Economic and
Management Sciences
Department of Accounting
Universiti Sultan Zainul
Abidin (UniSZA), Malaysia
Email:[email protected]
Ahmad Haruna Abubakar
Tunku Puteri Intan Safinaz
School of Accountancy
College of Business
Universiti Utara Malaysia,
Malaysia
Email: [email protected]
The
intensity of competition among contemporary Higher Education Institution (HEIs)
has led to many of such institutions to focus more on how to provide high
quality education so as to attain a suitable position in the university world
ranking by adopting a suitable performance management. This study aims to
demonstrate how UUM implement and uses the BSC to enhance and improve its
strategic plans by addressing the issues facing its strategic management
process. This study employed a qualitative case study approach. Data were
collected using interview and reviewing the university quarterly and annual
reports, organizational structure and the university�s webpage as well as its
news bulletins. Data were analyzed
qualitatively using thematic analysis. Consistent with Kaplan and Norton BSC
model in public sector, findings indicates that the case institution implements
the BSC ideology by adapting the concept such that it reflects the unique
contextual needs of UUM. This study found that in implementing the BSC project,
the university staff�s buy-in, top management commitment, organizational
culture and communication strategy has significant effects on the case
institution�s performance. Also, findings revealed that the implementation of
BSC ideology in UUM has a significant impact on its performance in that it
helps in improving the case institution�s overall university rankings. The
implication of BSC implementation in UUM is that it helps the university management
to monitor its performance with regard to its 2016-2020 phase II strategy
plans. Future study should consider more institution that implements BSC so as to get more detail results
that may be generalized.
Keywords: Balance
Scorecard; Critical Success Factor; Performance Indicators; Performance Management; Performance Measurement; Universiti Utara
Malaysia.
1. Introduction
Globalization
forces such as competition in terms of university rankings in the educational
sector have brought to bear incessant changes and challenges that have heavily
affected the performance of both private and public institutions across the
globe. As a result, educational institutions that plan to survive these dreaded
issues and challenges have attempted to seek for suitable performance
management such as Balance Scorecard (BSC). Thus, institutions that leave an
indelible mark amidst counterpart globally, are those that effectively
implements suitable strategic performance management model (Sharma, 2009).
Moreover, studies have shown that performance management is crucial to the
success and sustainability of institution of higher learning (Horngren, Datar,
and Rajan, 2012). As such, in order to sustain and remain competitive in the
university rankings and ratings, the institution
of higher learning must ensure that its performance is up to the standards of
world class university, which can be attained by adopting suitable strategic
management tool such as the BSC. Hence, the motive of this study is to attain
such goal by exploring how Universiti Utara Malaysia (UUM) implements its
strategic plans to address its performance related issues.
Performance
management system (PMS) is a vital element in managing an institution. Various
PMS models have been developed by researchers and practitioners. Among all, the
Balance Scorecard (BSC) is one of the most popular PMS that has been used
worldwide by private as well as public institutions. This study is conducted to
understand the BSC practices in a public institution in Malaysia. Specifically,
this chapter discusses the background of the study. It consists of the
following outlines that are the background of the study (i.e. introduction to
BSC as both a performance and management tool), problem statement, research
questions and research objectives, thereafter the scope and significant of the
study and lastly chapter summary. This study aims to investigate and provide
insight into how the BSC methodology is being implemented and its impact on
performance.��
One
important criterion/yardstick for measuring and managing the success of
institution of Higher learning is Performance (Gamal, and Soemantri, 2017).
Studies have shown that the implementation of suitable performance management
is one of the main concerns in the field of strategic management study.
Performance management has been defined as the process of using performance
measures to find out whether there is improvement in firm�s performance (Zheng,
Morrison, and O'Neill, 2006). Similarly, Bititci, Carrie, and McDevitt, (1997,
p3) �defined performance management as a process that allows an organization to
handle its performance in line with strategy and objectives�. Also, according
to Neely, Gregory, and Platts, (2005), performance management system has been
regarded as a vital and indispensable organizational function. As such, a good
performance management facilitates performance improvement. Thus, in recent
years concerns for performance improvement has led to the introduction of
various forms of strategic performance management and measurement systems such
as the BSC by Kaplan and Norton (1996a), Performance Prism by Neely, Adams, and
Kennerley (2002), Performance Pyramid by Lynch and abridge Cross (1991),
Integrated Performance Measurement System by Bitichi et al. (1997), Consistent
Performance Measurement System by Douwe Flapper, Fortuin, and Stoop (1996),
Results and Determinants Matrix by Moon and Fitzgerald (1996), among others
(Lee, 2006). The inadequacies of traditional performance measurement system
have led to the development of BSC which incorporate financial and
non-financial performance measures.
Within
the context of BSC, performance management simply refers to the process of
managing the drivers of performance (Bourne, Neely, Mills, and Platts, 2003).
Note that the concept of BSC evolved from performance measurement to
performance management which is used to strategically align financial and
non-financial measures (Kaplan and Norton 1996b; Brudan, 2010; Witcher, and
Chau, 2007; Huang, and Hu, 2007; Ayoup, Omar, and Rahman, 2016). Essentially,
the BSC focuses on how to manage the measures that drives performance. Thus,
the Cornerstone of BSC is how its balances or manages the 4 perspectives of
performance measurement. The BSC has undergone series of modification and
improvement since it was introduced.
The
objective of this study is to examine the implementation of BSC and its impact
on the performance of institutions of higher learning particularly in UUM
(Universiti Utara Malaysia).Although, there is little or no specific documented
studies addressing BSC implementation here in UUM. Hence, this study aims at
employing the BSC model in evaluating both the financial and non-financial
performance of the case institution. There are four perspectives of BSC but in
this study, more emphasis is placed on the exceptional relevance of the
non-financial performance measures within the context of the educational institution. The reason is that the university is essentially a service
provider. However, looking at the dearth of previous studies, little has been
done to emphasize on the exceptional relevance of the non-financial
perspectives particularly in educational settings in contrast to a financial perspective which is considered to be
more important (perspective among all the other perspectives of BSC) in the
commercial business entity. Moreover, the reason for the choice of this unit of
analysis in spite of other available high performing universities in Malaysia
is because of its uniqueness as a non-comprehensive university that focuses on
management related courses which have
earned its international presence and attraction even beyond Asian countries.
� How does UUM
implement the BSC?
� What are the
impacts of BSC implementation on UUM�s performance?
� What are the
critical success factors (CSF) needed to improve UUM�s non-financial
performance?
The
primary objective of this study is to explore the implementation of BSC in
UUM.� Specifically, the present study
seeks to address the following research objectives:
� To explore the
process of BSC implementation in UUM.
� To identify the
extent of the impact of BSC implementation on UUM�s performance.
� To investigate
the critical success factors that drive
UUM�s non-financial performance.
2. Background of
Universiti Utara Malaysia (UUM)
Universiti
Utara Malaysia (UUM) was the sixth Malaysian public university which was
formally established on 16th February 1984 as the only university,
that was mainly set up to solely specialize on management education. The
university has the primary objective of training and producing the requisite
pool of professionals, especially in the field of business and management for
both the international markets and the local inclusive. The university also
believes in the philosophy that institutions should be universally recognized,
and supports the view that knowledge goes beyond national boundaries.
As
another way of championing and promoting the name and the agenda of UUM in the
histories of its academic excellence, of being an Eminent Management University
as well as a research base university that focuses in Social Sciences, hence
the Vice-Chancellor of UUM, Prof. Dato� Dr. Mohamed Mustafa Ishak, in
conjunction with the laid down 2011 strategic plan launched a Transformation
Plan. Moreover, UUM Transformational Plan, which is mainly a roadmap showing
the future endeavors and pursuits of UUM, is categorized into two phases. The
2011-2015 strategic plans � Phase I, focused exclusively on placing UUM on the
local academic map in a strategic and systematic way while the Second Phase of
the university strategic plan which is a continuation of the Phase I Strategic
Plan was basically meant to run from 2016-2020.�
UUM
have not been proactively adopting BSC per say, but the ideology with the view
of addressing the quantum of issues and challenges confronting its strategic
management process. UUM is one of the Malaysian public universities that enroll
a significant number of international
students from various parts of the country. The university has attracted a
significant number of international students when compared to its counterparts,
reasons being that the university does not make its indigenous language course
compulsory for postgraduate students in contrast to its counterparts. More
recently, the university performance has enabled it to attain AASCB university
ranking accreditation which has prompted the need to adopt a suitable
performance that will help to sustain and increase its performance. In spite of
the above performance of the university and recognition beyond national to
international presence, the university is confronted with a series of issues
ranging from performance management, how to sustain and improve its performance
as well as its general rankings both within and across the country.
Consequently, it also attempts to accomplish both its short and long term
objectives as enshrined in its vision and mission.
In
sum, as mentioned earlier, the selection of appropriate performance management
nowadays is very vital to the institution
of higher learning because at the end of the day the outcome of the performance
of such institution will determine the
ranking profile of the university among its competing counterparts. For
example, recently, there was a policy that was issued by the gov�t of one of
the African countries regarding its student�s enrolment in the Malaysian
university. Five best Malaysian public universities were selected in this
policy; hence this will obviously affect
the number of student�s enrolment in any of the university that fails to meet
this criterion of �five best Malaysian public universities�.
Thus, the choice of appropriate performance management such as BSC and the
strategic implementation process is fundamental to the success and improvement
of the ranking profile of contemporary institutions of higher learning
especially among the public Malaysian universities.
This
study is replete with past studies
on BSC implementation and its impact on organization�s performance (e.g. Kaplan
and Norton 1992; Crabtree and DeBusk, 2008; Davis and Albright, 2004: Lubis,
Torong, and Muda, 2016; Martello, Watson, and Fischer, 2016; de la Mano, and
Creaser, 2016; Calderon Molina, Palacios Florencio, Hurtado Gonzalez, and Galan
Gonzalez, 2016; Hu, Leopold-Wildburger, and Strohhecker, 2017; Gamal, and
Soemantri, 2017; Singh, and Arora, 2018; Osewe, Gachunga, Senaji, and Odhiambo,
2018).
According
to Zolfani and Ghadikolaei (2013) the theory of Balanced Scorecard
(BSC) was propounded by �David Norton, the CEO of Nolan Norton Institute, and
Robert Kaplan, a professor at Harvard University�� (Kaplan, Norton 1992). The BSC is presently
one of the most valued contemporary performance management that is widely
adopted as a performance management system which improves financial and
non-financial performance (Norreklit, 2003; Wong-On-Wing, Guo, Li, and Yang, 2007; Witcher and
Chau, 2007; Modell, 2012; Ayoup, Omar, and Rahman, 2015a). The BSC has been
widely adopted and rated by both academics and practitioners as the most
popularly used and suitable performance management model. Zin, Sulaiman, Ramli,
and Nawawi, (2012), stressed that the BSC has been generally claimed as the
most popular tool of performance management, used by the academicians and the
practitioners as a result of its comprehensive and holistic approach towards
enabling institutions to identify its core vision, mission, strategic
objectives, and targets respectively. For example, studies have shown that the
BSC is an advance model for organization�s strategic orientation adopted by
over 54% of the total 1230 global firms (Rigby, and Bilodeau, 2011; Elola, Tejedor, Pastor Tejedor, 2016;
Gamal, and Soemantri, 2017). However, the inception of the BSC since 1992 as an
influential strategic management tool till date, have constituted a subject of
debates both among the academia and the practitioners (Ayoup, et al., 2015a).
Thus, the BSC has suffered a lot of criticism and setback from both academia
and practitioner, especially in terms of its implementation process. For
example, in spite of its popularity, studies have indicated that about 70% of
BSC project have failed in organizations, due to half hazard implementation and
lack of understanding how to implement and execute the framework and other
related issues such as employees buy-in, managers� acceptance, misalignment of
organizations strategies inadequate support and buy-in from top management (and/or)
at all levels of management etc. (Neely and Bourne, 2000; Tarigan 2005; Kaplan
and Norton 1992, 1996a, 2001, 2004 and 2006a; Modell, 2012; Ayoup, Omar, and
Rahman, 2012; Ayoup, Omar, and Rahman, 2016; Ayoup, et al., 2015a). Danesh
Asgari, Haeri, and Jafari, (2017,p1), also stressed that �the momentous issue,
in BSC implementation, is essentially based on the proper selection of measures�.
Despite
the aforementioned limitations and challenges of BSC project, studies have
revealed that, to some certain extent, the BSC have benefitted organizations
that have implemented it especially in the private sector, although most of the
success stories are not being properly
documented or shared openly to outsiders. Examples, of such successful
companies include; Tata Motors, IBM, HSBC Rail, Ricoh, Thorton Oil, DuPont,
Tokyo, Mitshubishi HQA and Bank of Tokyo, Infosys Technologies, AT and T Canada
etc. Similar examples are also found in the educational sector particularly in
institutions of higher learning. Thus, BSC practice in the institution of higher learning across the
world, particularly in the UK, USA, Canada and Australia have successfully
implemented BSC with a view of building strong international brands and
ultimately maintaining a top global ranking consistently. Similarly, Vermaak, and Cronje, (2001),
perceived the BSC as a strategic management tool for strategic planning and
also as a performance improvement used in South African and Australian
universities. Additional success story found in institution of higher learning
includes; �the University of Edinburgh, Ohio State University, University of
Southern California, University of Akron, University of California, and so on
(Walker and Ainsworth 2007; Balanced Scorecard Institute 1998�2008; Karathanos and
Karathanos 2005; Umashankar and Dutta 2007)�. Also, for any institution of
higher learning to successfully achieve a well-recognized high ranking profile
in the university world rankings, it becomes essentially necessary for such
institution to adopt a suitable performance management tool such as the BSC.
One
of the main contributions of successful
BSC implementation as outlined by many studies is its ability to develop
critical success factors that align and
promote strategic performance management geared towards attaining the
institution�s vision, mission and strategies (Kaplan and Norton, 1996, 2000,
2004, 2006b; Ayoup, 2009). Although, despite the benefits arising from BSC
implementation, up until now, there is little or lack of published studies on BSC
implementation process in institutions of higher learning, especially in Asian
countries such as Malaysia (Othman,
Domil, Senik, Abdullah, and Hamzah, 2006; Othman, 2008; Jusoh, and
Parnell, 2008, Sandhu, Baxter, and Emsley, 2008; Ayoup, 2009). Moreover, the
available studies are mostly undertaken in the western institution, which
obviously has its own peculiar cultural related settings issues when compared
to Malaysia (Davis, 1996; Maiga and Jacobs 2003; Davis and Albright 2004;
Hendricks, Menor, Wiedman, and Richardson, 2004; Braam and Nijssen 2004; Ax and
Bjornenak 2005; Decoene and Bruggeman 2006; Nielsen and Nielsen 2008; Ayoup,
2009). Thus, these, among other reasons are the motivations behind the current
study which seeks to examine BSC implementation specifically in UUM.
BSC
implementation issues basically stem from the causal linkage of organization
vision and strategy that is embedded in the four perspectives of the BSC and
how the strategies in each perspective are integrated. The BSC suffers from
several implementation issues despite the claim that it is the most regarded
contemporary strategic management accounting tools that helps in improving
organization performance (Kaplan and Norton 1992, 1996a, 2001, 2004 and 2006a;
Modell, 2012; Ayoup, et al., 2016). The key issues underlining BSC
implementation includes;
� Strategy
misalignment
� Strategy
communication issues
� The challenges
of manager�s acceptance/employees buy-in
� The issue of
clarity of vision, mission, strategy, and outcome
� Strategy map
implementation issues
Papenhausen
and Einstein (2006) studies on BSC implementation in a college of business
found that the implementation of a strategy requires the buy-in of everyone in
the institution to participate actively especially in the daily operations of
the business. Thus, communication and staff education as well as commitment play a vital role in actualizing institution�s
initiatives. According to Farid,
Nejati, and Mirfakhredini (2008) in order to create a causal
relationship, all staff needs to work together. Thus, Ahmad and Soon (2015)
stress that communication plays a significant role in the effective BSC
implementation because it is regarded as one of the main critical success factors of the BSC implementation project.
Thus, effective communication helps to minimize the issue of resistance to
change by employees and promotes good momentum during the phase of the implementation process.
Furthermore,
Ayoup et al. (2012), using
the case study approach highlighted that their studies support other research,
as such communication may constitute one of the factors
that impede manager�s understanding of
the BSC as a performance management system employed in the organization in
addition to understanding the strategy alignment between BSC measures, the
company�s goals, and targets, KPIs and the institution�s reward system.
Moreover, the study also concludes by stating that communication plays a vital
role in the implementation process of BSC, as supported similar studies (Kaplan
and Norton, 2001; Hendricks, Menor, Wiedman, and Richardson, 2004; and Pandey,
2005).
According
to Chen, Yang, and Shiau, (2006), the implementation of BSC in an institution
of higher learning requires faculty staff to exercise team spirit in their
work. And this usually starts with senior staffs that are responsible for
implementing policies in a hierarchy of top-to-bottom.
In
sum, significant studies have identified the critical success factors (CSF) of
BSC to include top management support, communication, information technology,
organizational culture and employee�s buy-in (Singh, and Arora, 2018; Ferreira,
2017 and Zin, et al., 2012; Kaplan and Norton 2004; Dimitropoulos, Kosmas, and
Douvis, 2017; Slavica, Ljubica, and Jelena, 2017; Ayoup, et al., 2016; Othman,
et al., 2008). Moreover, the strength of BSC lies in its ability to develop a
system of evaluation that generates suitable performance indicators in
educational institutions. Additionally, according to Kaplan, and Haenlein
(2010) BSC can only be used properly when its performance measures are aligned
with the overall strategy of an organization
The
dearth of published research on BSC shows that, the BSC concept has not been
widely embraced by the educational institution unlike the business sector where
there is extensive evidence of BSC adoption (Karathanos and Karathanos, 2005).
The prior purpose of developing the BSC was initially meant for the profit
oriented outfit with the aim of enhancing financial success, however it was
later adopted by, and adapted in public sector outfit as an arrangement geared
towards providing and communicating effective service to the public. Kaplan and
Norton (1999) stressed that the BSC is not just applicable to the public sector
organization, but also very suitable. However, it is important to reiterate
here that the BSC provides better prospects and potentials of enhancing
management performance in not-for profit organization and tend to be more
promising in yielding better results (Kaplan and Norton 1999: 1). Hence, the
framework of the BSC application in the public sector needs to be adjusted in
order to reflect its peculiarity and the uniqueness of its mission driven
nature since it focuses more on promoting accountability and results in
satisfying user expectations for public services.
Essentially,
the institution of higher learning (HEI)
is known to be solely a service provider. Thus, the university performance
system is a multifaceted social system which requires a holistic approach.
Al-Zwyalif (2012), argued that the educational institution focus on
organizational performance is influenced by the rapid
change of global environment and technology. Thus, this assertion was further
supported by Binden, Mziu, and Suhaimi, (2014) in which they found that the
implementation of performance management system has become a trend in
educational institutions. However, in order to measure institutions performance,
Al-Zwyalif (2012), stressed that educational institution should implement the
BSC in such a way that it will enable it to evaluate and manage the overall
performance. Although, (Gmelch, and Wolverton, 2002) highlighted that the
university world today, is confronted with complex and tasking competitive
reality. Similarly, Barlas, and Diker, (2000) indicate that modern-day
universities worldwide are confronted with management difficulties such as
uneven growth in the number of students population in the universities,
inadequate infrastructures that may not cater for the increase in students
enrolment, increased number of student to faculty ratios, concern about quality
of teaching, pronounced competition for insufficient funding for research, and
aggressive competition by private universities for more student demand.
Moreover, these issues are interrelated and interact closely and
simultaneously, hence contributing more complexity in the dynamic set up of the
universities performance system. More so, according to Taylor and Baines (2012) Universities are now facing intense competition in
terms of student enrolment thereby, prompting further consideration of the
entire student experience. Moreover, international student enrolment is
especially more pronounced; hence, the institution
of higher learning is increasingly looking for new forms of internal
management.
Beard
(2009) found out that identifying and adopting vital performance measures that
are consistent with the university�s core values and mission and ensuring
continuous improvement provides opportunities of creating educational value in
the institution of higher education. She
added that, the process of developing and implementing the BSC offers the
opportunity of identifying stakeholders and customer�s value, the mission and
vision, as well as the objective of the institution. According to
Zangoueinezhad and Moshabaki (2011), the model of BSC is regarded as one of the
most suitable and appropriate strategic performance management used in managing
the higher education institutions compared to other strategic performance
management tools. Thus, the BSC can be applied in the educational institutions
to strengthen the significance of managing instead of only monitoring
performance (Cullen, et al., 2003). Furthermore, Nambi and Werner (2013) conducted a study on
�determining the challenges influencing the implementation of performance
measurement in Uganda public universities� in which they found out that, the
absence of a formal performance management setting constituted the major issues
confronting the universities which hinders effective performance measure
implementation.
One
of the difficulty of implementing the BSC model is the need to modify the
concept to reflect the peculiarity of the organization in question especially
in terms of the institution�s mission, vision, strategy, technology and
culture; otherwise the intended result or benefit may not be achieved (Kim,
Suh, and Hwang, 2003; Khomba, Vermaak, and Hanif, 2012; Chimtengo, Mkandawire,
and Hanif, 2017). Although, some scholars suggested that the BSC may likely not
be appropriate for the educational institution and may only be suitable for
profit-oriented organizations. On the contrary, the scorecard can be
modified to address the specific needs of the academic
organization. For example, �the Rossier School of Education at the University of Southern California adopted the
BSC to measure the effectiveness of its academic program (Sutherland 2000 cited
by Umashankar and Dutta 2007)�. Additionally, the examples of other
universities across the globe, that have implemented the BSC with obvious
significant performance improvement includes; �the University of Southern
California, University of Edinburgh, Ohio State University, University of
Akron, University of California,� and so
on (Balanced Scorecard Institute 1998�2008; Karathanos and Karathanos 2005;
Walker and Ainsworth 2007; Umashankar and Dutta 2007)�.
Beard
(2009) argued that despite the fact that lack of awareness and understanding of
how the BSC may be implemented in educational institutions being an aspect of strategic management,
especially in terms of instructional functions, does not suggest that it may
not be applicable. However, she highlighted the results of BSC implementation
successes at the �at the University of Wisconsin�Stout, being the first
university to receive the award in 2001 and Kenneth Monfort College of Business
at Northern Colorado, a 2004 Malcolm Baldrige National Quality Award recipient.
Although their respective individual measures vary significantly in various
areas, by reflecting the differences in their individual vision, missions, and core
values. For example, �Sutherland 2000 cited by Umashankar and Dutta 2007,
presented that the Rossier School of Education at the University of Southern
California implemented the BSC project aimed at to evaluating the program and planning process of its academic.
Binde
et al. (2014), in their studies having reviewed a significant number of
articles on BSC implementation particularly as regards to measuring the
performance of institution of higher learning found that a good number of
educational institutions world-wide have recorded successes in BSC
implementation process especially in terms of linking the four perspectives
with the institution�s missions, goals and policies.
This
study employed a qualitative case study approach because it is considered
well-suited in answering the research questions appropriately and adequately,
as well as its flexibility when compared to the design used in quantitative
research design. The strength of the case study method lies in its ability to allow
an in-depth examination of the phenomenon by using various kinds of evidence
obtained from interviews with those involved, and analysis of documents and
artefacts (Yin, 2003). Also, the case study was used because the focus of the
study is more of description and explanation rather than prediction, and the
variable studied is not easily unidentifiable or embedded in the phenomenon to
be extracted for study (Merriam, 1988). Additionally, the case study allows for
empirical inquiry of phenomenon in its real-life context; particularly when the
boundaries between context and phenomenon are not evidently clear (Yin, 2003).
More so, according to Creswell (2007) case study enables researchers to examine
phenomena holistically within the context of real life situation. Adams, Hoque, and Mcnicholas (2006),
corroborated this view by stressing that the case study approach entails
eliciting information from practitioners� experiences and perception about the
case institution as well as its management process. Moreover, the present study
attempts to demonstrate how UUM Adapts the BSC to tackle the issues underlining
its strategic implementation process tagged as �phase I and phase II strategy
plan�. UUM has been selected as the case institution since it has been adopting
the ideology of BSC to implement its strategic plans, tagged as �strategy plans
phase I (2011-2015) and phase II (2016-2020)� respectively.
Data
was collected from both primary and secondary sources. Primary data collection
sources involved using a semi-structured interview question via tape-recorder,
and the key informants were mainly the Head of Department of the case
institution. While secondary data was collected (through documentation) by
reviewing the university quarterly and annual reports, organizational structure
and the university�s webpage and news bulletins. According to Creswell, (2007)
and Yin, (1998), these approaches can lessen the possibility of the element
human biases in providing information in contrast to just the interview and
questionnaire survey.
Data
were analyzed qualitatively using
thematic analysis. The findings from the interview were itemized in a thematic
report and narrative format in such a way that it will reflect the objective of
the study in answering the research questions (Yin, 2003). Thus, all interviews
were transcribed and transmitted into Microsoft Word 2010 files. To make sense
of the transcribed data, it was analyzed into several themes based on the
objectives of the study (Miles and Huberman 1994).
The
objective of this study is to explore and provide insight into how BSC is
implemented and its impact on UUM�s performance. The findings of this study are
presented based on the objectives of this paper. Thus, this section discusses
the findings with regards to BSC project and relevant extant literature as it relates to the case institution in this
study. However, it is quite difficult to relate the results of this study to
prior literature because the case institution actually adapted the ideology of
the conventional BSC implementation process rather than adopting the model of
BSC as originated by Kaplan and Norton.
According to
Informant A, the BSC is a measurement tool. And the Key Performance Indicator
(KPI) is the items that are used to translate how to manage performance within
the context of BSC.
Consequent
upon the usefulness of the BSC, UUM adapted this management tool, and modified
it suitably within the context of the university. The university kind of BSC
implementation is the implementation of KPIs which is a resemblance of the BSC
and comprise of all the strategies and perspectives of the conventional BSC as
originated by Kaplan and Norton. These KPIs is what the university refers to as
the Strategic Plan (or Transformational Plan). Specifically, UUM BSC
implementation process is otherwise known as Strategic Plans implementation
which involves the implementation of the university�s 4 thrust, 6 Key result
areas, 12 Strategies, 7 Objectives, and 16 KPIs as well as other performance
indicators (PIs) which are peculiar to other functions of the university (see
appendix A for details). For example, there are 26 PIs that are related to the
academic Staff.
UUM
has managed to successfully attain 60 percent of the KPI listed in Phase 1 of
the strategic plan. The Phase II Strategic Plan comprises of 4 thrust of the
strategic plan unlike phase I that have 5 thrust of strategic plans.
Essentially, Phase II of the Strategic Plan focuses mainly on UUM�s
international agenda, which encompasses QS (Quacquarelli Symonds) Ranking, QS
Rating, US News Ranking, UI Green Metric, Webometrics, and Times Higher
Education (THE).�
The
Institute of Quality Management (IPQ) is a department that is responsible for
planning, strategizing, implementing and monitoring of all quality related
activities including continual Quality Improvement (CQI). It is tagged as � IPQ
drives UUM endless potentials� and the IPQ department also focuses on driving
the development of the university 3E governance system (centered on being
Efficient, Effective, and Excellent) as well as striving for the realization of
the university�s strategic plan, especially with regard to its rankings and rating agenda.
Interview
findings revealed that, in 2012, during the course of the implementation of the
Strategic Plan, the university introduced a performance evaluation system
called Strategic Planning Information System which was meant to support its
Strategic Plan agenda. The system is essentially being used to monitor every
single KPI performance. The system enabled the university to generate reports
easily and accordingly. Moreover, this Strategic Planning Information System is
actually similar to the conventional BSC especially in terms of monitoring the
performance of the institution. Additionally, findings from interview indicate
that, starting from 2013 onward, the performance reports were exclusively based
on the various schools in the university. Thus, the reported achievements of
the university were based on individual respective school performances.
The
objectives of UUM Strategic Plan Phase II: 2016-2020 includes
� To provide
cutting edge research, consultation and publication
� To establish
effective teaching and learning
� To produce
highly capable talent and human capital
� To develop
reputable academic programs
� To provide state
of the art infrastructure
� To produce
holistic, entrepreneurial and balance student development
� And to establish
effective and efficient financial management
Analysis
of the objectives of UUM Strategic Plan for both Phase I and II shows that UUM
incorporates all the themes that are involved in all the 4 perspectives of BSC,
except that it is within the context of the university. Moreover, phase II of
the Strategic Plan focuses mainly on �UUM�s international agenda, which
encompasses QS (Quacquarelli Symonds) Ranking, QS Rating, US News Ranking, UI
GreenMetric, Webometrics, and Times Higher Education (THE)�. This is in
addition to the national agenda, which involves RU, National Higher Educational
Blueprint (NHEBP), SETARA and the university�s specific agenda.
The
results of the impact of the implemented Strategic Plan of Phase I (2011-2015)
and Phase II (2016-2020) in UUM includes among others the following;
One
of the informants, expressed an optimistic view regarding the concept of BSC
and its associated positive impacts, according to him, the BSC is one of the
best modern performance management tools that we have today, even though
organizations have to adapt this BSC with some modification so as to reflect
the institution�s context. Similarly, articles on BSC have corroborated this view
by stating that the BSC is one of the most influential contemporary performance
management and measurement concept that ties and aligns both short-term
strategic actions and long-term strategic goals of institutions even though the
difficulty encountered is how to modify the BSC model to reflect the
institution�s mission, vision, strategy, technology and culture (Marr and
Schiuma, 2003; Kim, et al., 2003; Khomba, et al., 2012; Chimtengo, et al.,
2017; Anjomshoae, Hassan, Kunz, Wong, and de Leeuw, 2017).
One
of the significant achievement of UUM�s list of Phase I KPIs is that 65% of the
170 KPIs� was attained, thereby surpassing the intended target. Also, recently,
UUM was found to be the only non-comprehensive and non-research university that
was in the 2.7 per cent of universities list in the Quacquarelli Symonds, World
University Ranking (QSWUR) 2018 out of 26,000 universities in the world.
Additionally, the university had recorded a successful AACSB (Association of
Advanced Collegiate School of Business) accreditation.
More
so, a recent report by QSWUR, which is an annual ranking list of the best
universities in the world, also revealed that "without having the fields
of science, medicine, engineering and technology - and is only based on the
social sciences and management, UUM succeeded in improving its ranking to 729
in QSWUR 2018, which is a jump of 10 spots compared to the previous year at
739, and is now ranked in the 701-750 bracket,". Also a total of nine
Malaysian universities were listed in the most recent QS ranking issued on June
8 2017 in which UUM emerged 6th and was also ranked among the 1,000
best universities in the world.
In
terms of individual school achievements, one of the informants reported that
the school of accountancy emerged as the best in Asia and the reasons was
because of the significant number of its academy staff as PhD holder and other
related vital advantages. In sum, the implementation of this Strategic Plans
has ultimately increased and improved the overall performance of UUM based on
the aforementioned outcomes of the impact of KPI implementation in the
university.
(Appendix B,
depicts UUM� recent ranking profile).
The
university Critical Success Factors (CSFs) is the various yardsticks or
Performance Indicators (PIs) put in place to monitor and measure the
performance of the various schools, colleges, departments and so on, in order
to checkmate their performance for a particular period of time.
Informant A
reported that the most critical success factor is getting the �buy-in� from the
various colleges, schools, deans, lecturers, academic staff, and the support
staff.
Moreover,
the critical success factors (CSF) that contribute
to the successful implementation of BSC in the case institution was found to be
similar with case evidence in Geomotion (Zin, et al. 2012). The evidence
revealed that four critical success factors were necessary for BSC
implementation to succeed. These factors include;
top management commitment, communication, information technology, and
organizational culture. Additionally, Singh, and Arora, (2018) supported this
view by highlighting that top management support, interdepartmental
communication and a good corporate culture serves an antecedent to BSC adoption
which plays a significant role in ensuring that BSC implementation succeeds.
They concluded by stating that the perception of management cannot be
achievable without an adequate support from the top management, in addition to
having a hitch free medium of communication in the organization.
The
dearth of various studies and the data collected from participants interviewed
in this study has revealed that one of the major CSF of implementing a
successful BSC (or Strategic Plans as in this case study), is getting the
buy-in of the employees or the management involvement via the efficient and effective communication
system (Kaplan and Norton 2004; Dimitropoulos, et al., 2017; Slavica et al.,
2017; Ayoup, et al., 2016).Similarly, management commitment has also shown to
be of paramount importance in implementing a successful BSC. For example, as
part of UUM�s commitment to CQI (Continual Quality Improvement), all relevant
policies and procedures are reviewed at least once a year at the University
Quality Council (UQC) meeting, and improved upon where necessary.
And
at the same time there is what the university call developing the Strategic
Plan Information System. This system of technology is what the university used
to monitor and communicate its strategic plans, which are much better than the
one that was used manually before.
Interview
result also shows that the case institution�s organizational culture is quite a
very complex concept. Similarly, the university is very much interested in a
high performance culture, unlike before which is business as usual; the
strategic plan to a certain extent shapes the university culture to become a
high performance culture.
The
research paper aimed at exploring and providing insight into how BSC is
implemented and its impact on UUM�s performance. This study employed a
qualitative case study approach. Data were collected using interview and
reviewing the university quarterly and annual reports, organizational structure
and the university�s webpage as well as its news bulletins. Data were analyzed qualitatively using thematic
analysis. This study has revealed some tacit fascinating findings that boarder
on the impact of UUM�s BSC implementation methodology on its performance.
Firstly, consistent with Kaplan and Norton BSC model, findings indicate that the case institution implements
the BSC ideology and not the holistic and comprehensive BSC project, by
adapting the concept such that it will reflect the unique contextual needs of
UUM. Secondly, the study has shown that
the implementation of BSC ideology in UUM has a significant impact on its
performance in that it helps in improving the case institution�s overall
university ranking both national and international arena. Also, findings of
this study show that the university staff�s buy-in or involvement and
commitment, as well as communication strategy has significant effects on the
case institution�s performance. Furthermore, this study was consistent with the
findings of Zin, et al. (2012) that identified four critical success factors
(top management commitment, communication, information technology, and
organizational culture) which they consider as pivotal (i.e. CSF) to successful
BSC implementation. Likewise, Singh, and Arora, (2018) findings supported the
present study� findings in that they highlighted that top management support,
interdepartmental communication and a good corporate culture plays a
significant role in ensuring that BSC implementation succeeds.
With
regards to the impact of BSC implementation on the
performance of the case institution, it enables the management of the
university to ascertain both its present and future performance so as to know how
to monitor, improve and sustain its position in the university world ranking.
Overall,
the finding of this study is particularly of great interest to both management
scholars and practitioners such as university management, academia, non-profit
outfit and governmental organizations (NPGOs), and so on.
Future
studies may explore more number of
institutions that implement BSC so as to
enrich the findings such that the results may be generalized.
This
study suffers from the limitations that are associated with the case study
methodology because data collected and the results of this study are exclusively based on the case institution,
hence results may not be generalized due to the fact that other institutions
may have their own peculiar BSC implementation processes and management
practices as well as challenges. Although, the findings still have value and
may serve as a basis of reference to institutions that wants to implement BSC
so as to improve their performance, especially institutions that share similar features like the case
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Figure 1.UUM�s 2018 rank in QS Asia
University Rankings
Figure 2. UUM�s
2018 rankings among the top 25 universities in Southeast Asia
|
S/N |
The Four thrust |
|
1 |
Enhancing
Scholarship and Internationalization� |
|
2 |
Developing
Human Capital and Talent Management |
|
3 |
Focusing
on the Holistic Development of students |
|
4 |
Generating/Creating
Wealth |
Six Key Result
Areas (KRA)
Also,
in order to facilitate the execution of this strategic plan, the university has
outlined six (6) Key Result Areas (KRA) which is shown in table 4.2
Table
4.2 Six Key Result Areas (KRA)
|
S/N |
6 Key Result Areas (KRA) |
|
1 |
Research
and high-impact innovations |
|
2 |
High
impactful teaching and learning activities |
|
3 |
High
performance students |
|
4 |
High
performance human capital and institutions |
|
5 |
Sustainable
wealth creation and Management |
|
6 |
Conducive
infrastructure and learning environment |
Table
4.3�� 7 Objectives
|
S/N |
7 OBJECTIVES |
|
1. |
To provide cutting edge research consultation and publication |
|
2. |
To establish effective teaching and learning |
|
3. |
To produce highly capable talent and human capital |
|
4. |
To develop reputable academic programs |
|
5. |
To provide state of the art infrastructure |
|
6. |
To produce holistic, entrepreneurial and balanced student development |
|
7. |
To establish effective and efficient financial management |
Table
4.4�� 12 Strategies
|
S/N |
12 STRATEGIES |
|
1. |
Enhance high impact research |
|
2. |
Enhance high impact consultation |
|
3. |
Enculturate high impact publication |
|
4. |
Strengthen flagship and executive education programmes |
|
5. |
Strengthen teaching and learning competencies |
|
6. |
Empower human capital and talent development |
|
7. |
Development of balanced students � entrepreneurship and global
employability. |
|
8. |
Modernize infrastructure |
|
9. |
Optimize infrastructure cost |
|
10. |
Enhance financial sustainability |
|
11. |
Optimize research funding |
|
12. |
Enhance sustainable cost saving |
Table
4.5��� 16 Key Performance Indicators
(KPIs)
|
S/N |
16 Key Performance Indicators
(KPIs) |
|
1 |
Research |
|
2 |
Consultation |
|
3 |
Publication |
|
4 |
Flagship program |
|
5 |
Teaching and learning competencies |
|
6 |
High performance staff |
|
7 |
Students with multi-competencies |
|
8 |
Student mobility |
|
9 |
Employability |
|
10 |
Education
center |
|
11 |
Student
accommodation facility |
|
12 |
University
infrastructure |
|
13 |
Sustainable
income � Academic |
|
14 |
Sustainable
income � Non-Academic |
|
15 |
Research
funding |
|
16 |
Cost
reduction |
The
Implementation of BSC and its Impact on Performance: Case of UUM
Time/Date:
3:35-4:10�� 21/12/16 (Wednesday) � First
interview in IPQ
Time/Date:
11:30-11:45�� 17/01/17������������������������������� ������ - Second interview in TISSA
The
objective of this research is to find out the implementation processes of BSC
and its impact on performance in UUM (and to also access how the quality of
services provided could be improved).
1.
KPI
implementation process from the 2010-till
date (i.e. the processes involved in implementing BSC in UUM)
2.
How
you developed the planning process
3.
Your
role, responsibility and experience in the implementation process
4.
The
perspectives of the BSC adopted by UUM whether is exactly the same with the one
proposed by Kaplan and Norton
5.
The
issues involved in the implementation of BSC
6.
The
impacts on performance
7.
What
is the critical success factors (CFS) i.e. what are the factors that contribute
to the successful implementation of BSC e.g.�
Case evidence in Geomotion indicates that four critical factors are
found to be the critical success factors in the successful implementation of
BSC.� These factors which consist of (1)
top management commitment, (2) communication, (3) information technology, and
(4) organizational culture.
8.
How
do you translate the university�s aims and objectives into goals and measures?
(I.e. objectives, measures, targets, initiatives).
9.
What
or how does the strategy map of the university looks like (please annotate with
strategy map diagram)�
10.
How
do you link performance measurement and the strategies you have put in place
towards achieving the mission and vision of the university (strategy map).
11.
The
BSC is a �living document� that requires regular revision of objectives,
measures, and initiative. How often do you do that?
12.
In
a business oriented organization the
financial perspective is considered more important in contrast to the educational institution where customer
perspective is regarded more. What are the measures put in place to ensure
customer/stakeholder satisfaction?
13.
Having
said all these, where do you see UUM going in the future or does the BSC
implementation indicate any positive impact on its performance towards
improving the university institutional ranking?
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