Saudi Telecom Company Balance Scorecard | Free Essay Example

Saudi Telecom Company Balance Scorecard

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Topic: Business & Economics
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Introduction

The main purpose of the proposed study is to undertake a critical evaluation of the implementation of the balanced scorecard (BSC) within the Saudi Telecom Company (STC), with the view to exploring what managers and employees recognize to be the fundamental challenges associated with BSC implementation.

A tangential purpose is to evaluate how BSC implementation issues affect BSC use and awareness rates in STC. The proposed study is research-based and will employ a case study research design with a qualitative approach. The subsequent sections included in this proposal are as follows: research background; aims and objectives of the study; methodological framework; and study plan, ethical considerations, and critical analysis.

Research Background

Background

Strategic Performance Measurement Systems (SPMS) have found wide usage in contemporary organisations owing to their capacity to enable these entities “to plan, measure and control their performance, so that decisions, resources and activities can be better aligned with better strategies to achieve desired results and create shareholder value” (Bento, Bento, & White 2014, p. 25).

These systems are designed to present managers with a set of financial and nonfinancial measures covering diverse angles which, in combination, provide them with an avenue of translating the organisation’s strategy into a consistent set of performance measures in an effort to report on past performance while influencing future performance (Choi, Hecht, & Taylor, 2013).

The most widely used form of SPMS is the balanced scorecard (BSC), first proposed by Robert Kaplan and David Norton in a 1992 edition of the Harvard Business Review and subsequently revised by the two authors in other seminal papers (Machado & Joao 2013; Perkins, Grey & Remmers 2014).

The literature on the BSC is intense and elaborate. A strand of existing literature (e.g., Kaplan 2012; Perkins et al 2014) demonstrates that, since the BSC was first introduced by Kaplan and Norton in 1992, many other authors have provided their scholarly input to the notion, giving rise to the development of the BSC concept from a performance measurement tool to a performance management system predicated upon the use of both financial and non-financial indicators.

Drawing from the work of Mooraj, Oyon, and Hostettler (1999), Iqbal (2014) and Chavan (2009), it is evident that the overbearing emphasis of BSC throughout its development phase has been on making sure that managers of an organization are fully engaged in the process of implementation, consequently making certain that the BSC puts organizational strategy and vision, rather than control, at the very core of performance management system.

The utilization of the BSC is increasing with varying degrees of adaptation (Atkinson 2006), with empirical studies already carried out showing high usage rates for BSC in the United States and Europe (Machado & Joao 2013).

A research study by Silk (1998) cited in Perkins et al (2014) acknowledges that approximately 60 percent of the Fortune 1000 companies in the United States have experimented with the BSC concept, while Rigby (2011) also cited in Perkins et al (2014) finds that around 54 percent of the 1,230 global organizations sampled have reported the use of a BSC.

Success stories of the BSC concept have been well documented in the literature. Janes (2014, p. 205) reports that “the biggest advantage of the BSC, as compared to other approaches or models, is its ability to integrate the capabilities of the various perspectives of the company: financial and non-financial, as well as internal and external.”

In their empirical study of 76 business units, Geuser et al (2009) comprehensively cited in Perkins et al (2014) finds that BSC implementation does have a positive impact on the performance of organizations not only in terms of improving the translation of strategy into operational terms but also in ensuring a greater alignment between the processes, services, competencies, and units of sampled organizations.

In their case study on an international manufacturing organization, Malina and Selto (2001) cited in Modell (2012) report that BSC implementation provides the needed impetus for the organization to control corporate strategy.

Available literature demonstrates that “whilst the BSC has, on occasion, proven successful in assisting companies with their strategic and PMSs, it has also attracted a certain degree of criticism” (Perkins et al 2014, p. 152).

For instance, Cobbold and Lawrie (2004) decry the lack of a solid theoretical underpinning to the BSC approach which is reflected in the weaknesses of the causal linkages and proposed relationships between the four perspectives (financial, clients, internal processes, learning, and growth).

This criticism is reinforced by Machado & Joao (2013), who cite several empirical studies to demonstrate how difficult it is to implement cause-effect relations between BSC performance indicators.

Assiri, Zairi, and Eid (2006) criticise the BSC approach for its lack of focus on change management and implementation, while Lipe and Salterio (2000), cited in Perkins et al (2014), show how unique measures in a business unit level BSC can be underweighted by managers designing them, thus leading to problems during BSC implementation.

Madsen and Stenheim (2014) cite several studies in BSC implementation to identify different BSC implementation challenges, including lack of time and resources, resistance due to the BSC capacity to upend existing measurement practices in an organisation, trade-offs between the measures in the BSC, organisational culture, power games between different professional groups in the organisation, lack of commitment from senior management, complexity of organisations, and challenges in the causal relationships between financial and non-financial measures.

Taken together, this succinct assessment of background literature demonstrates that, although there are many successful accomplishments related to the BSC concept, its actual implementation has always being a complex affair whereby organizations have increasingly encountered a multiplicity of challenges, often leading to failure.

A successful BSC implementation, like the implementation of any other performance measurement system, should enhance “the measurable performance of a firm by improving its ability to manage its assets, whilst at the same time allowing costs to be reduced through an increased understanding of the business environment in which it is operating” (Perkins et al 2014, p. 150).

Owing to the fact that this has not always been the case for many organizations attempting to implement the BSC, it is important to undertake a study aimed at identifying BSC implementation problems and exploring how these problems affect BSC use and awareness rates.

Problem Discussion

Madsen and Stenheim (2014, p. 121) acknowledge that “although many BSC success stories have been cited in the practitioner-oriented literature and in the business media, researchers have shown that the implementation of BSC can be a complicated process.”

As demonstrated in the analysis on BSC challenges, there are many drawbacks associated with the implementation and use of the BSC in spite of the fact that little empirical research has been conducted on BSC implementation issues (Madsen & Stenheim 2014; Perkins et al 2014).

Considering the huge amount of scholarly literature covering this area, it is surprising that there is relatively little evidence in the literature showing possible implementation challenges and how these problems affect BSC use and awareness rates within organizations.

It is also surprising that the empirical studies already conducted reporting BSC use and awareness rates are yet to put much focus on establishing how BSC implementation problems may affect BSC use and awareness rates (Molina, Gonzalez, Florencio, & Gonzalez 2014).

Proper understanding of implementation problems and how they affect BSC use and awareness rates at the organizational level is indispensable for successful BSC implementation aimed at driving organizational strategy and vision. It is these gaps in knowledge that the proposed study seeks to fill.

Significance of Study

The proposed study adds to the emerging literature on BSC implementation challenges particularly in large organizations located in developing countries (e.g., Kaufmann & Becker 2005; Sharma & Gadenne 2011; Madsen & Stenheim 2014).

In particular, the proposed study advances the literature on BSC implementation problems and how such problems influence BSC use and awareness rates at the organizational level. Such knowledge is beneficial to academics, consultants and practitioners looking to harness the benefits of aligning performance management systems with organizational strategy through effective adoption and implementation of the BSC approach.

The proposed study also avails practical implications for managers struggling with BSC implementation in their respective organizations by providing an advanced understanding of the various factors affecting the implementation process and how such factors crystallize to affect or influence BSC use and awareness rates.

This significance is consistent with the views of Sharma and Gadenne (2011) recommending further research to be carried out in this area to provide managers with a practical frame of reference on BSC implementation difficulties and how they could be avoided for effective implementation.

Aim and Objectives of the Study

The aim of the proposed study is to increase knowledge regarding implementation problems of the BSC by evaluating the implementation of the BSC in Saudi Telecom Company (STC), with the view to exploring what BSC users perceive to be the underlying challenges associated with the concept’s implementation and how these challenges affect BMC use and adoption rates.

Although available literature demonstrates that successful BSC implementation is a complex undertaking and many organizations still encounter a multiplicity of problems in their attempts on BSC implementation, it is evident that implementation issues related to BSC remain a relatively under-researched area (Assiri et al. 2006; Madsen & Steinheim 2014). The objectives of the proposed study include:

To develop a knowledge base on BSC implementation issues facing organizations in developing countries like Saudi Arabia. The few studies published on BSC implementation issues (e.g., Assiri et al. 2006; Madsen & Steinheim 2014) focus on American or European organizations, hence the need to develop a knowledge base on BMC implementation issues facing organizations in the developing world.

These studies report that organizations perceive a broad assortment of issues associated with BSC implementation, spanning from conceptual/technical to social/political challenges; however, for scholarly discourse, it would be interesting to evaluate if the same implementation issues can be identified in organizations operating in an emerging economy.

To explore how BSC implementation issues affect BSC use and awareness levels in organizations. Available literature demonstrates that some contingency variables affect BSC use and awareness levels within organizations (Kaufmann & Becker 2005; Chaven 2009; Molina et al. 2014); hence the need to explore how BSC implementation issues may impact use and awareness levels in an organizational setting.

The identification of such a linkage, it is believed, will go a long way in providing managers and practitioners with an avenue to successfully implement the BSC concept in their respective organizations and at the same time ensure high BSC usage and awareness levels.

Kauffman and Becker (2005) raise an important issue by acknowledging that, although the BSC concept has been adopted and implemented by many organizations from its inception by Kaplan and Norton in 1992, its usage and awareness levels in most of these organizations remain low.

To develop recommendations on the best practices in BSC implementation at the organizational level. Several studies (e.g., Assiri et al. 2006; da Costa Marques 2012) have developed what they consider to be roadmaps to successful BSC implementation; however, none is yet to use BSC implementation issues, usage, and awareness levels to develop a roadmap for successful BSC implementation.

The proposed study purposes to use the identified BSC implementation issues to develop a framework for successful BSC implementation.

Methodological Framework

Research Philosophy

The proposed study aims to employ an interpretive research philosophy in its attempt to explore what BSC users in Saudi Telecom Company (STC) perceive to be the underlying challenges associated with BSC implementation and how such issues affect BSC use and adoption.

The basic premise of this philosophy is that the social world is far too complex to lend itself to theorizing by definite ‘laws’ in the same manner as the physical sciences, hence the need for the researcher to view the world as constructed, interpreted, and experienced by individuals in their interactions with each other and wider social systems (Maxwell, 2006; Lincoln, Lynham, & Guba 2011).

To have a first-hand understanding of BSC implementation issues, it is important to adopt an interpretive philosophy which assumes that meaning is not only embedded in the participants’ experiences but also mediated through the researcher’s own perceptions of the issues of interest (Lincoln et al 2011).

Research Approach

The proposed study adopts a qualitative approach, which is usually associated with the interpretive research philosophy as well as the social constructivist paradigm (Maxwell 2006). Available literature demonstrates that qualitative research is an approach for “exploring and understanding the meaning individuals or groups ascribe to a social or human problem” (Creswell 2009, p. 214).

This approach is justified for use as it will assist the researcher to uncover the deeper meaning and significance of the identified BSC implementation issues and how these issues affect human behavior and experience through use and awareness rates.

Consequently, qualitative research will assist the researcher to gain a rich and complex understanding on BSC implementation issues affecting organizations in developing countries and how such issues influence or affect BSC use and awareness levels (Creswell 2009).

It is important to note that the proposed study adopts a case study research design, as it is interested in evaluating the implementation of BSC in STC. According to Yin (2003, p. 3), “the case study method allows investigators to retain the holistic and meaningful characteristics of real-life events – such as individual life cycles, organizational and managerial processes, neighborhood change, international relations, and the maturation of industries.”

Owing to the fact that case studies can be explanatory, exploratory, or descriptive (Tellis 2005), the proposed study adopts an exploratory orientation to provide insight and understanding of BSC implementation issues and how these affect BSC use and adoption levels.

A case study research design not only provides a rich methodology that assists researchers to become deeply involved in the identification of BSC implementation issues in STC and gain a deep understanding of the phenomena of interest, but also helps them to avoid any misinterpretation when dealing with the various issues of interest to the study, hence the justification (Tellis 2005; Saunders, Lewis, & Thornhill 2009).

Time Horizon

It is expected that the proposed study will take three months to complete. According to the detailed research plan (see Appendix 1), the tentative date for research commencement is 19th January 2015, with completion of the study set on 19th April 2015.

Data Collection Tools

The proposed study will draw on qualitative data gathered by means of semi-structured interviews with managers involved in BSC implementation in STC and sampled employees working in diverse departments within the organization. Interviews are described in the literature as “discussions, usually one-on-one between an interviewer and an individual, meant to gather information on a specific set of topics” (Harrell & Bradley 2009, p. 6).

Two sets of semi-structured interviews will be developed for the purpose of data collection – one set will be administered to managers while the other set will be administered to employees.

The advantages of semi-structured interviews, according to Olsen (2012), include

  1. capacity to allow for complex issues to be addressed as the interviewer is present,
  2. provision of scope to ask open-ended questions and seek in-depth clarifications,
  3. capacity to pick non-verbal clues that indicate what is relevant to the interviewees.

Sampling

The samples for the proposed study consist of

  1. departmental managers charged with the responsibility of BSC implementation in STC,
  2. employees working in STC.

Specifically, the proposed study will use purposive sampling technique to come up with a sample of 15 managers for the purpose of responding to the first interview guide. 15 Employees will be selected using convenience sampling technique to respond to the second interview guide.

Available methodology literature demonstrates that participants in a purposive sample are selected based on their understanding of the topic under investigation, while a convenient sample consists of participants in the research framework by virtue of being in the right position or environment at the right time (Sekaran 2006).

Purposive sampling, also referred to as judgemental sampling, is the most appropriate in the proposed study, especially in terms of assisting the researcher to gain an in-depth and holistic understanding of the phenomenon under investigation since participants in a purposive sample are selected or “handpicked” based on their expansive knowledge of the issues that interest the researcher (Mason 2002; Sekaran 2006).

Similarly, convenience sampling is easier to administer and helps the researcher to collect useful data and information that would not have been possible using probability sampling approaches.

Data Analysis

Qualitative data arising from the semi-structured interviews with STC managers and employees will be analyzed using content analysis procedure, whereby data will be reduced, presented, and finally, conclusion drawing and verification made (Sekaran 2006).

Extant literature shows that content analysis involves “the systematic description of behavior asking who, what, where, why, and how questions within formulated systematic rules to limit the effects of analyst bias…It is the preferred technique for analyzing semi-structured interviews” (Stevens 2003, p. 143).

It is important to note that qualitative data analysis will proceed simultaneously with data collection, and will include

  1. initial exploration of the data by reading through the field transcripts and writing memos
  2. coding the information by fragmenting and cataloging the text,
  3. employing codes to generate themes by combining comparable codes together,
  4. uniting and interconnecting themes that could be used to identify BSC implementation issues and how these issues affect BSC use and awareness levels (Creswell, 2009).

Plan, Ethical Considerations, & Critical Analysis

Plan

It is projected that the proposed study will take three months to complete, commencing on 19th January 2015 and terminating on 19th April 2015.

It is expected that background research and review of related literature will take the first three weeks as the researcher will have to go to great detail to come up with relevant literature that would assist in gaining a deeper understanding of what is already known concerning BSC implementation, what questions remain unanswered, and why the research topic merits further exploration.

The designing and piloting of the interview guides will be done immediately after the review of related literature, and it is expected that these tasks will take two weeks to complete. Data collection and data analysis will run concurrently and will take approximately four weeks to complete.

Project writing is expected to take two weeks to complete, with the last week being left for the submission of the project and addressing any other issues that may arise. The Gantt chart scheduling all these activities is contained in Appendix 1.

Ethical Considerations

Ethical issues arise in that the researcher will be expected to “ensure that no harm occurs to [the] voluntary participants and that all participants have made the decision to assist after receiving full information as to what is required and what, if any, potential consequences may arise from such participation” (Polonsky & Waller 2010, p. 69). Consequently, the researcher will

  1. seek for written permission from the entity in which the research study will be conducted,
  2. ensure any participation in the research process will be voluntary, implying that participants will participate in the research process without any form of coercion or deception whatsoever,
  3. ensure participants fully understand what they are being asked to do and that they are informed of any potential adverse consequences of such participation,
  4. guarantee individual confidentiality and anonymity of participants (Gregory 2003; Polonsky & Waller 2010).

Challenges and Limitations

The proposed study collects primary data from a small sample size, giving rise to the challenge of generalisability of findings. The researcher expects to deal with this limitation by ensuring the representativeness of the sample and employing techniques to reduce interviewer bias during data collection. Time constraints may also serve as a limitation, particularly due to the length of time the interviews may take to complete.

However, the researcher will pilot the interview guides to know exactly the length of time each interview guide will take to complete. Lastly, the researcher will ensure the purpose of the study is discussed comprehensively with potential participants before data collection to effectively deal with the challenge of low response rates.

Reference List

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Chaven, M 2009, ‘The balanced scorecard: A new challenge’, Journal of Management Development, vol. 28 no. 5, pp. 393-406.

Choi, J, Hecht, GW & Taylor, WB 2013, ‘Strategy selection, surrogation, and strategic performance measurement systems’, Journal of Accounting Research, vol. 51 no. 1, pp. 105-133.

Cobbold, I, Lawrie, G & Issa, K 2004, ‘Designing a strategic management system using the third-generation balanced scorecard: A case study’, International Journal of Productivity and Performance Management, vol. 53 no. 7, pp. 624-633

Creswell, J 2009, Research design: Qualitative, quantitative, and mixed methods approaches, Sage Publications Ltd, Thousand Oaks, CA.

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Yin, RK 2003, Case study research: Design and methods, 3rd edn, Sage Publications Ltd, Thousand Oaks, CA.

Appendix: Gantt chart

Gantt chart