I

Developing Measurement Mathematical Model

in Management Change and Strategic Planning
using BSC Perspectives

Case Study" "



Prepared by
Ala'a M. Al Mtour

Supervised by
ProIessor Abdul Naser Nour


This Thesis Submitted in Partial FulIillment oI the Master's
Degree in Business Administration

Department of Business Administration
Faculty of Business
Middle East University for Graduate Studies


April 2010


II
Authorization

I, Ala'a M. Al Mtour, hereby authorize Middle East University Ior
Graduate Studies to provide copies oI this thesis to all and any university
libraries, institutions or related parties interested in scientiIic research
upon their request.

Name:
Date:
Signature:





















III
Committee Pronouncement
This thesis has been discussed under its title "Developing Measurement
Model in Management Change and Strategic Planning Using BSC
Perspectives ", and has approved on 26-5-2010
Committee Members Title Signature
ProI. Abdul Naser Nour Supervisor ---------------
ProI. Mohammad Alnuimi Member and chairman ---------------
Assis. ProI Samer Aldhayat Member ---------------


























IV
Acknowledgements
I would like grateIully to acknowledge the enthusiastic supervision
oI ProIessor Abdul Naser Nour, who provided me the inspiration to
embark and Iinalize my thesis, my deepest thanks and gratitude to him Ior
constant support and encouragement.

My thanks and appreciation to the members oI my thesis
committee Ior their reviewing and criticizing my work.

My thanks and appreciation to the University Ior it's generosity Ior
granting me the chance to embark and Iinish my thesis.

Finally, I am Iorever indebted to my Iamily, my parents, my wiIe,
and my children Ior their understanding, endless patience and
encouragement.
Researcher










V
Dedication


There is a number oI people without whom this thesis could not
have been written, and to whom I am greatly indebted.
To my parents who taught me beyond the darkness there is always
light and hope.
To my wiIe who is always there pushing me, encouraging and
loving me.
To my daughters: Besan and Noorhan who know that the best kind
oI knowledge to have, is that which is learned Ior its own sake.
To my son Mohammad who knows that with science and
knowledge we can take control oI a situation that is out oI control.
Researcher















VI

Table of Contents

Subject Page
Authorization II
Acknowledgements IV
Dedication V
Table oI Contents VI
List oI Tables VIII
List oI Figures IX
List oI Appendixes IX
Abstract in English Language X
Abstract in Arabic Language XII
Chapter One: Study Introduction 1
1-1 Introduction 2
1-2 Problem Statement 5
1-3 Research Questions 5
1-4 Research Hypotheses 6
1-5 SigniIicance oI The Study 6
1-6 Concepts & Terms 7
1-7 Study Limitations 10
Chapter Two: Theoretical Framework And Literature Review 11
2-1 Theoretical Framework 12
2-1.1 The Balanced Scorecard (BSC) 12
2-1.2 Strategic Planning 21
2-1. 3 Change Management 33
2-2 Literature Review 42
2-3 Distinguishing Features oI the Study Over The Previous
Studies
53
Chapter Three: Research Model And Methodology 55
3-1 Chapter Overview 56
3-2 Data And Research Methodology 56
3-3 Population oI the Study 56
3-4 Sample oI the Study 57
3-5 Instrument oI the Study 58
3-6 Validity oI the Instrument 58
3-7 Reliability oI the Instrument 58
3-8 Model Variables 59
3-9 Data And InIormation Instruments 60
3-10 Statistical Methods 61
3-11 Scoring Method 61


VII

Chapter Four: Hypotheses Testing And Analysis Of Statistical
Results
62
4-1 Overview 63
4-2 Means And Standard Deviation For The Areas 63
4-2.1 First Area: Financial Perspective 64
4-2.2 Second Area: Agent Perspective 66
4-2.3 Third Area: Internal Processes Perspective 68
4-2.4Fourth Area: Human Resources Innovation and
Renewal Perspective
70
4-2.5 FiIth Area: BSC Four Perspectives And The
Correspondence Relation In Between
72
4-3 Model Approach 74
Chapter Five: Conclusion And Recommendations 83
5-1 Overview 84
5-2 Areas Discussion 84
5-2.1 Discussion First Area: Financial Perspective 84
5-2.2 Second Area: Agent Perspective 85
5-2.3 Third Area: Internal Processes Perspective 85
5-2.4 Fourth Area: Human Resources Innovation And
Renewal Perspective
86
5-2.5 FiIth Area: BSC Four Perspectives And The
Correspondence Relation In Between
87
5-3 Recommendations 89
ReIerences 90
Appendixes 96
















VIII

List of Tables

Table No. Table Name Page No.
1 The Sample 58
2 The Reliability Statistics 59
3 The Means and Standard Deviations Ior Areas 64
4 The Means and Standard Deviations to the First Area:
Financial Perspective
65
5 Means, Standard Deviations and T- Value Ior The
Study Sample
66
6 The Means and Standard Deviations Ior the Second
Area: Agent Perspective
67
7 Means, Standard Deviation and T- Value Ior the
Study Sample
68
8 The Means and Standard Deviations Ior the Third
Area: Internal Processes Perspective
69
9 Means, Standard Deviations And T- Value For The
Study Sample
70
10 The Means and Standard Deviations Ior the Fourth
Area: Human Resources Innovation and Renewal
Perspective
71
11 Means, Standard Deviations and T- Value Ior the
Study Sample
72
12 The Means and Standard Deviations Ior the FiIth
Area: BSC Four Perspectives and the Correspondence
Relation in Between.
73
13 The Relation Between the Intangibles and Tangibles 74












IX

List of Figures

Figure No. Figures name

Page No.
1 The Geometric Interpretation 10
2 Balanced Scorecard Perspectives 13
3 Strategic Management Process 16
4 Strategic Planning 24
5 Strategic Planning Phases 25
6 Model Variables 59
7 Management EIIiciency 77
8 EIIiciency 78
9 Gap Treatment For Shortages in the
Management Process EIIiciency
80
10 Process Gap- Mathematical Representation 82


List of Appendixes

Appendix
No.
Appendixes name

Page No.
1 Questionnaire in English Language 96
2 Questionnaire in Arabic Language 100










X

Abstract In English Language
Developing Measurement Mathematical Model in
Management Change and Strategic Planning
Using BSC Perspectives
Case Study
Prepared by
Ala'a Al Mtour
Supervised by
Prof. Abdul Naser I. Nour
The study aimed at developing measurement mathematical model in
management change and strategic planning using BSC perspectives. Through identiIy
the relation between the Iinancial perspective, agent, internal processes and
innovation and renewal evaluations perspectives oI the BSC. In addition, to examine
the Mathematical Model to Integrate BSC in to the Change Management and Strategic
Planning in all the Iour areas.

The study instrument is a questionnaire to achieve study goals. The
questionnaire was distributed to study sample which consists oI (100) employee;
every (20) Irom the sample was selected Irom diIIerent banks, the Iirst one Irom Arab
Bank, the second one Irom Jordan- Kuwaiti Bank, the third one Irom Al-Ahli Bank,
the Iourth one Irom Housing Bank and the Iinal one Irom Jordan Bank.


XI
The results oI the study showed the Iollowing:
The results show that there is a signiIicant relationship on the level ( 0.05)
between the two means Ior the sample answer on Iinancial, agents, internal processes
and human resources innovation and renewal perspectives, and show that there is a
relationship between the Iour perspectives with low integrations. For these reasons,
the researcher proposed mathematical model measure integration between these
perspectives.

The researcher recommended many recommendations, the most important is:
The importance oI applying mathematical model that proposed by the researcher in
the Jordanian banks to Iacilitate organization to identiIy the operational Iactors that
drive Iuture success, align their strategic objectives and actions, to create long-term
competitive advantage.













XII
=---
;-- ,-;=- '-- - ~'- =--,-~( =-==-- ,----
'=- -=-~ _-,= Q- ;--- V
-'= ~
--
;=-- >-
,~
. . ;- ,~'-- ---
_' --' -- -', ,-- ,,=- =,---` =,==-' ,,-'
', '=- -=--'- ,--' ` `= - =' `' = --' ''-' '=-' ,-
'=- `-' '=- ,'=-' ','-' '=- '-' '--` ,--' ,-' ', ,-
,--' ` . -=-' _' '-`'- ,= - `= ,- ,'-'- ,--' ,--` '=-
',-' ,,- -` `'=-' _'= =,---` =,==-' ` .
-,= _'= '+,,- - --=-- -'--- ,--- - -- --' - ,-=- .,--
-' --' --,- - ) 100 ( -=,- ',-= - -=,- ,-= . ' - -,' - '--
-'-=- : =-- -' =--' -` -,,' =--' '` =-- '-` ` =-- .
--' _-'-- += -= '+- - ' _-'--' - :
,---' --= ,-'-= '` `= ,= ( 0.05) -,= -'= '=-,-- ,-
--' '=- `-' ''-' '=-' - _'= ,'=-' ','-' '=- ,--' ,-'
'-' '--` . -` '=-' ,- ,'-'- `= ,= += . -='-' - ='-'
=,-- ' ,-', ' `'=-' -- ,- .-'-' ,-, .


XIII
'+- ',-,-' - -,-' -='-' _- : ,-- ,-=- ,- '=- .-'-' -',
,--' ` ', '=- -' -='-' =- ' '-- ,-` ' ' .,+-- -=--' _'=
.-,' -,-=- ,',--' _-- -' _' .-----' '=-' -,,'- '-='-, '+-
,=,---` +-= ' '=' .,,=' --' _'= ,-'-- ,- .








1
Chapter One
Study Introduction
1-1 Introduction
1-2 Problem Statement
1-3 Research Questions
1-4 Research Hypotheses
1-5 SigniIicance oI the Study
1-6 Conceptual Frameworks
1-7 Study Limitations
1-8 DeIinition oI Terms













2
1-1 Introduction
The unprecedented speeds in inIormation and communication technologies
have been advanced as well as the globalization oI economic have accelerated in
development in today's societies. The recent changes are reIlected in all areas oI the
society, and the operating environment oI organizations working has grown to be
more complex and diIIicult to manage. ThereIore new management theories and
practices have been involved Iast over the past decades.
As society changes, the companies and establishments involved in its
development must also change. As the environment changes the conditions under
which organizations operate also change. Adjusting to the altered operating
environment constitutes challenge to the organizations as they review their
management systems. Help in meeting this challenge can be sought Irom modern
management tools.
Balanced scorecard (BSC) makes both practitioner and academic take notice
today. The reason is that BSC rethinks perIormance measurement eIIiciency system
oI organizations. Furthermore, BSC has become a strategic management system that
can Iacilitate organization to identiIy the operational Iactors which drive Iuture
success, align their strategic objectives and actions, and accumulate the resources that
can create long term competitive advantage.
The BSC integrates the corporate management with the corporate strategy and
making it explicit. A complete set oI objectives and indicators, easy to display report
and Iollow up disclose the strategic initiatives that compose it.
The easiness and clearness, in which the indicators evolution and the degree oI
achievement oI the objectives are displayed, constitute a powerIul means oI


3
communication, allowing to clearly aligning the diIIerent sectors oI the enterprise,
both Iunctional and managerial, in pursuit oI the strategic objectives.
Regarding the traditional Iixation and deployment oI Iinancial objectives by
means oI the budget, BSC adds important elements to enrich management
possibilities, as (Akkermans & Kim, 2002):
It includes, besides Iinancial result indicators (lagging indicators), non-
Iinancial process indicators (leading indicators), which describe how the
results will be obtained.
It deIines customer, innovation and learning perspectives, and internal process
perspective, and puts them in the centre oI the enterprise management and at
the same level as the Iinancial perspective.
It includes the generation oI strategic initiatives and drivers Ior Iuture
perIormance, which aligns the improvement process with the corporate
strategy.
It uses limited number oI indicators and measurements, avoiding dispersion
and waste oI eIIorts.
It invites review to the strategy in each BSC revision, according to the changes
that might have happened.
It develops, within the organization, a process oI establishment oI objectives
and strategic initiatives generating an active communication and participation,
to and Irom the upper management oI the company, avoiding any resistance
through the change management process.
The BSC measures organizational perIormance across Iour diIIerent, but
linked, perspectives which are derived Irom organizational strategy (Chow et.
Al.,1997):


4
Financial perspective (P1).
Customer perspective (P2).
Internal process perspective (P3).
Learning and growth perspective (P4).
The keen interest in designing eIIective perIormance, measurement systems
arises Irom the management dictum that "iI you cant measure it, you cant manage
it".
DiIIiculties in placing a reliable Iinancial value on intangible assets have
prevented companies Irom being recognized on a company's balance sheet, which is
(assets) critical Ior success, managers have searched to a system that would help them
measure and manage the perIormance oI their intangible, knowledge-based assets.
The balanced score card (BSC) provides a system Ior measuring and
managing all aspects oI a company's perIormance, which balances traditional
Iinancial measures oI success, such as proIits and return on capital, with non-Iinancial
measures as drivers oI Iuture Iinancial perIormance (Rousseau & Rousseau, 2000).
The management system oI an organisation has never been signiIicant enough.
The environment is changing and the systems, processes have to be improved
continuously. In developing the management systems, we need to have a continuous
inIormation Ilow on the needs and perspectives oI BSC in order to modiIy the
strategic plan. We also need to have a solid management Iramework in order to Iaster
the change and to measure whether the targets are met.
On the other hand, strategic management has become more and more
important to diIIerent kinds oI organizations. Development oI a management and
strategic planning system, moving towards the management oI processes, improving
customer intimacy, and better management oI people are among the most topical


5
management issues. Understanding that quality is an issue oI strategic management
helps an organization to manage the change needed to reach an excellent perIormance
and become a top quality institute.
The proposed mathematical model in this study can be a guideline, how an
organization can eIIectively develop its activities and continuously improve its
management process perIormance, through adapting BSC tool.
1-2 Problem Statement
This study will adopt case study method, Iocusing on the eIIiciency measuring
structures (Ieedback) oI developing scorecard. The purpose is to Iind key success
Iactors oI building and implementing a mathematical model Irom a Ieedback loops
perspectives, and simple mathematical equation.
Case study will be chosen to support the model idea, that implementing a
measurement system (evaluation) that touch the BSC perspectives successIully and
study its evaluation structure by perIorming the tables and model analysis Ior using
through a proposed equation.
By building a mathematical model oI the case where using the BSC
perspectives evaluation, we can deeply understand the dynamic complexity oI
developing BSC and the diIIiculties oI achieving dynamic strategic alignment in this
case.
We hope to Iind some dynamic principles and potential relations to implement
BSC and its Iour perspectives evaluation eIIectively.

1-3 Research Questions
Is there any relation between the Iinancial, agent, internal processes and
innovation and renewal evaluations perspectives oI the BSC?


6
Is there any gap in practicing oI Iinancial, agent, internal processes and
innovation and renewal evaluations perspectives oI the BSC?
Dose the Mathematical Model integrate BSC in the Change Management and
Strategic Planning in all oI the Iour areas?

1-4 Research Hypotheses
Ho1: there is no relation between the Iinancial, agent, internal processes and
innovation and renewal evaluations perspectives oI the BSC.
Ho2: there is no gap in practicing oI Iinancial, agent, internal processes and
innovation and renewal evaluations perspectives oI the BSC.
Ho3: Mathematical Model does not integrate BSC in the Change Management
and Strategic Planning in all the Iour areas.

1-5 Significance of the Study
The signiIicance oI the study lies in the Iollowing:
Providing a perIormance measurement system, using BSC to allow an agency
to align its strategic activities to the strategic plan.
Forming a measurement oI process eIIiciency, to provide a rational basis Ior
selecting what business process improvements should be taken Iirst (process
compensation-improvement).
Reducing risk through the visibility that will be provided by the model using
BSC measurement system, which in turn will support better and Iaster budget
decisions and control oI the process eIIiciency in the organization.
Reducing the Resistance Ior management process change, since it will be
always a major challenge in deploying the BSC system, because it must touch


7
every signiIicant activity in the organization. Since the BSC process aIIects
everyone in the organization, it has to conIront the organization's culture.
Maximizing perIormance and maintaining results, by using the process
improvement (compensation) concept, to reIill process evaluation shortages
(Management Gap).
Introducing a Iramework Ior building and implementing a BSC perIormance
system, through continuous eIIiciency measuring.

1-6 Concepts & Terms:
- Balanced Scorecard: a concept Ior measuring whether the activities oI a company
are meeting its objectives in terms oI vision and strategy. By Iocusing not only on
Iinancial outcomes but also on the human issues, the balanced scorecard helps to
provide a more comprehensive view oI a business which in turn helps organizations to
act in their best long-term interests (Amaratunga, et. Al., 2001)
And Ior the purpose oI the study, Balanced Scorecard deIines as a concept Ior
measuring whether the activities oI bank meeting its objectives in terms oI vision and
strategy.
- Strategic Planning: an essential process in preparing to carry out your
organizations mission. An eIIective strategic planning process provides a Iramework
to make decisions on how to allocate organizational resources, address challenges and
take advantage oI opportunities that arise along the way (Bryson, 1997).
And Ior the purpose oI the study, Strategic Planning deIines as an essential
process preparing to carry out bank mission.
- Change Management: is a structured approach to transitioning individuals, teams,
and organizations Irom a current state to a desired Iuture state. Change management


8
(or change control) is the process during which the changes oI a system are
implemented in a controlled manner by Iollowing a pre-deIined Iramework/model
with, to some extent, reasonable modiIications (Lorenzi, Riley, 2000).
And Ior the purpose oI the study, Change Management deIines as a structured
approach to transitioning individuals, teams, and banks Irom a current state to a
desired Iuture state.
- Financial Perspective: The Iinancial perspective addresses how shareholders view
the Iirm and which Iinancial goals are desired Irom the shareholder's perspective. The
speciIic goals depend on the company's stage in the business liIe cycle (Kaplan and
Norton, 2004).
And Ior the purpose oI the study, Iinancial Perspective addresses how
shareholders view the bank and which Iinancial goals are desired Irom the
shareholder's perspective.
- Customer Perspective: The customer perspective addresses how the Iirm is viewed
by its customers and how well the Iirm is serving its targeted customers in order to
meet the Iinancial objectives (Kaplan and Norton, 2004).
And Ior the purpose oI the study, customer Perspective addresses how its
customers view the bank and how well the bank is serving its targeted customers in
order to meet the Iinancial objectives.
- Internal Business Processes: Internal business process objectives address the
processes are most critical Ior satisIying customers and shareholders (Kaplan and
Norton, 2004).
And Ior the purpose oI the study, internal Business Processes addresses the
processes are most critical Ior satisIying bank customers and shareholders.


9
- Learning and Growth: Learning and growth metrics address how the Iirm must
learn, improve, and innovate in order to meet its objectives. Growth metrics address
the question oI how the Iirm must learn, improve, and innovate in order to meet its
objectives(Kaplan and Norton, 2004).
And Ior the purpose oI the study, learning and Growth addresses how the bank
must learn, improve, and innovate in order to meet its objectives.
- Algebra: reIers to any mathematical system which uses the concepts oI equality,
addition, subtraction, multiplication and division. For example, the algebra oI real
numbers is what we normally call "arithmetic"; but algebraically concepts can be
applied to other mathematical system oI which the system oI complex numbers is one.
In meeting a new mathematical system Ior the Iirst time, the concepts oI equality,
addition, subtraction, multiplication and division need to be properly deIined, and that
is the purpose oI the present section. In some cases, the deIinitions are Iairly obvious,
but need to be made without contradicting ideas already established in the system oI
real numbers which complex numbers include (CroIt & Davison, 2010).
- Complex Numbers: is a number oI the Iorm abi where a and b are real numbers. II
z a bi then a is known as the real part oI z and b as the imaginary part, we write a
Re z and b Im z. Note that real numbers are complex a real number is simply a
complex number with zero imaginary part (ArIken, Weber & Harris, 2000).
- The Argand Diagram: The complex numbers, having two components, their real
and imaginary parts, can be represented as a plane; indeed, C is sometimes reIerred to
as the complex plane, but more commonly, when we represent C that the x-axis
contains all the real numbers, and so is termed the real axis, and the y-axis contains all
those complex numbers which are purely imaginary (i.e. have no real part), and so is
reIerred to as the imaginary axis (ArIken, Weber & Harris, 2000).


10
Figure (1) The Geometric Interpretation

In this interpretation we call the x-axis the real axis and the y-axis the
imaginary axis. We oIten call the xy-plane in this interpretation the complex plane.
A Complex number Z in complex plane can be represented by Cartesian co-
ordinates, its real and imaginary parts, but equally useIul is the representation oI z by
polar co-ordinates. II we let r be the origin to z makes with the positive real axis, then
we can write
zx iy r cos ir sin
The relations between z's Cartesian and polar co-ordinates are simple we see that
xr cos and y r sin
r x y and tan y/x
1-7 Study Limitations
The study will be limited to the Iollowing:
The procedures and duration oI the study.
The results are not bound Ior generalization to other resource evaluation.
The Iindings oI the study will be limited by the instruments that will be used
in the evaluation with its validity and reliability.
The study will be limited to local banks in Jordan.


11
Chapter Two
Theoretical Framework and Literature Review
2-1 Theoretical Framework
2-1.1 The Balanced Scorecard (BSC)
2-1.2 Strategic Planning
2-1. 3 Change Management
2-2 Literature Review
2-3 Distinguishing Features oI the Study over the Previous Studies


















12
2-1 Theoretical Framework
2-1.1 The Balanced Scorecard (BSC)
The Balanced Scorecard (BSC) is a technique developed by Kaplan and Norton
(1992) that helps organizational decision makers to navigate the organization towards
success. The technique enables organizations to translate their mission and strategy
into a comprehensive set oI perIormance measures that provide the Iramework Ior a
strategic measurement and management system. Organizations have used the
Balanced Scorecard to; (1) clariIy and translate vision and strategy, (2) communicate
and link strategic objectives and measures, (3) plan, set targets and align strategic
initiatives and (4) enhance strategic Ieedback and learning, and succeed in realizing
both tangible and intangible beneIits oI their investments (Kaplan and Norton, 1992,
1996, 2000).

The Balanced Scorecard measures organizational perIormance, with emphasis
on Iinancial objectives. But, it also includes the perIormance drivers oI these Iinancial
objectives, and measures organizational perIormance across Iour balanced
perspectives; (1) Iinancial, (2) customer, (3) internal business processes and (4)
learning and growth, see Figure (2):









13

Figure (2) Balanced Scorecard Perspectives

Robert, Kaplan & Norton, 1996
1. Learning and Growth Perspective
The BSC is a popular perIormance measurement system that uses multiple measures.
The BSC measures across Iour hierarchical perspectives and describes a series oI
causal relations between Iour perspectives that culminate in the achievement oI
Iinancial objective. The lowest level in the hierarchy is the learning and growth
perspective because actions taken there. Outcome measures oI the learning and
growth perspective become indicators oI the outcomes oI each oI the three
perspectives above it in the hierarchy. Employees with higher skills and knowledge
are compensated with higher salaries and employee beneIits (Milkovich and Newman,
2002). The employee skills could increase internal business process perspective
(Bryant et al., 2004). Common outcome measures include employee satisIaction,


14
employee retention, employee productivity and turnover (Niven, 2002; Kaplan and
Norton, 2004).
2. Internal Business Process Perspective
The second level in the BSC hierarchy is the internal business process perspective. It
encompasses the entire internal value, which includes innovation, customer
management, operational, and regulatory (Kaplan and Norton, 2001). Other outcome
measures are operating process quality, cycle time and inventory turnover (Niven,
2002; Wang, 2006).

3. Customer Perspective
The third level in the BSC is the customer perspective, which Iocuses organizations
on the external environment and allows Iirms emphasize customer needs, which
includes customer satisIaction and market share. Other outcome measures oI the
customer perspective are market share and sales growth (Batt, 2002).

4. Financial Perspective
The Iinancial perspective is considered the highest-level perspective. Companies
improve shareholder value through a revenue strategy and a productivity strategy. The
outcome measurements are return oI investment and proIit.

Creators oI the Balanced Scorecard argue that, traditional Iinancial measures Tell the
story oI the past (Kaplan and Norton, 1992). They try to address this inadequacy by
complementing past perIormance measures (Iinancial measures) with the drivers oI
Iuture perIormance indicators (customers, suppliers, employees, processes,
technologies and innovation. The Iundamental concept oI the Balanced Scorecard is


15
to derive the objectives and measures Irom the overall corporate vision and strategy
and to use the Iour perspectives as a balanced Iramework to monitor and achieve
these objectives. A properly developed Balanced Scorecard should:
(1) Represent Iinancial and non-Iinancial measures Irom all levels oI the organization
(Iront line to executives)
(2) Maintain equilibrium between:
2 External measures (developed Ior the stakeholders and customers) and internal
measures (developed Ior the bushiness processes, innovation, learning and growth).
3 Outcome measures (results Irom the past) and measures that are Ior Future
perIormance.
4 Objective (easily quantiIiable outcome measures) and Subjective (judgmental
perIormance drivers) outcome measures.
(3) Include only measures that are elements in a chain oI cause-and-eIIect
relationships that communicate the meaning oI the organization's (or business units)
strategy.

Using the Balanced Scorecard to Support the Strategic Management Process
The Balanced Scorecard, which was initially proposed as a general measurement
system, has rapidly evolved into a strategic management system Ior implementing a
companys strategic vision (Kaplan 1994). The Scorecard has developed into a system
that supports the strategic management process (see Iigure3).
Using the Scorecard as the central, organizing Iramework Ior the strategic
management process implies the use oI Iour successive management steps:




16
Figure (3) Strategic Management Process

Thomas, 2007
ClariIying and translating vision and strategies the process starts with senior
management working together on the vision and how it is to be implemented. This
linking oI the competitive position oI the organization to the operational oI its
processes is necessary to translate strategy into action (Booth 1996).
In the Academic InIormation Service, a business consultant assisted a group oI senior
staII in the Iormulation oI a corporate vision and strategies according to the Iour
perspectives oI the Balanced Scorecard. The emphasis, here, was on the process and
principles oI cooperation and speciIically co-creation unless the whole team was
Iully engaged in the process, a successIul outcome was unlikely and consensus oI
shared vision and strategies throughout the organization not attainable.


17
Communicating and linking serves to signal to all employees the critical objectives
that must be achieved iI an organization's strategy is to succeed. The Balanced
Scorecard is thus used as a vehicle Ior communication by cascading it down through
the organization and by deIining measures that relate to more and more detailed
activities. It then becomes possible to use the Scorecard as a basis Ior setting personal
goals and linking these goals to personal rewards (Booth, 1996).
With the aim oI ensuring multidirectional open communication channels allowing Iree
circulation oI organizational inIormation, the director oI the Academic InIormation
Service communicated the vision and strategies to the rector oI the organization, as
well as having a series oI open inIormation sessions with the staII oI the Academic
InIormation Service on a regular basis. Translation oI the vision and strategies
resulted in one oI the most inIluential vehicles Ior the transIormation process namely
the establishment oI a PerIormance Management System based on competencies and
outcomes.
As a direct result oI continuous communication with the organization top-
management, a similar system is now in the process oI being implemented Ior the
university as a whole.
Planning and target setting can be used as a basis Ior business planning. Through
quantiIying long-term outcomes to be achieved, establishing short-term goals, and
identiIying mechanisms Ior achieving these outcomes, an organization provides Ior
the alignment oI organizational plans with Iinancial and other resources.
SpeciIic targets Ior renewal plans Ior the Academic InIormation Service were set Ior
one, two and three year periods and strategic coordinators Ior the various established
perspectives were appointed. This renewal team is annually reconsidered and adapted


18
to changing circumstances. Leaders oI service units are responsible Ior the translation
oI strategic objectives into Ieasible action plans on the operational level.
Feedback and learning permits a Ieedback loop to be established (Booth, 1996) and is
regarded by Kaplan and Norton (1996) as being the most innovative and most
important aspect oI the entire Scorecard management process. By setting targets
during planning sessions and making mid-course corrections (Birchard, 1995) strategy
can consistently be evaluated as to its appropriateness within the developing
organizational environment.
In the Academic InIormation Service, this process serves as a way oI ensuring that it
becomes a real learning organization. Quarterly Ieedback sessions are held by the
strategic coordinators and the service unit leaders, monitoring the progress made with
the three-year plan. Open Ieedback sessions with the rest oI the staII are also held
regularly. InIormation that is Ied back through these processes results in modiIications
to strategies where necessary. In June 2000, a strategic discourse was held by the
leader-corps in the light oI the renewal objectives. A panel discussion Iormat was
used. Three topics received attention:
i) The Iormulation oI an Internet strategy;
ii) The implications oI knowledge management on the Iunctioning oI the Academic
InIormation Service;
iii) The possible convergence with the CSIR InIormation Service.
Balanced scorecard and strategic planning always come together because this is a tool
that is oIten used Ior decision making. Most oI the time, it is being called as a
decision making application. This is because it has been a proven method Ior anyone
who wants to make sure that the decision that they have in mind are appropriate Ior
the conditions oI their concerns.


19
First oI all, the company should be able to provide a record oI their perIormance
regarding the sales, customers and other aspects in order Ior them to use the BSC.
These records will be used as an input Ior the balanced scorecard. Now, the tool will
evaluate the company's progress through the data that have been given. What the
company will do now is to observe the important elements that have an eIIect on their
development. Later, they can make the right decisions that will promote the
organization's growth.
It may sound simple, but the balanced scorecard only helps in the decision making
process. At the end, it is up to the person running the company to make the Iinal
choice. It is important to remember that each oI the selections he makes will create a
diIIerence in the company but it does not mean that it will always yield good results.
With this, there has to be and analysis in the strategies and the objectives oI the Iirm.
In this tool, an individual particularly the manager oI the company will have to take
into consideration the important Iactors that are considered the backbone oI every
organization. These are the customers, the money, the development and the internal
processes. Each oI these elements has their own aspects that are being covered
individually.
In the customer Iactor, it is important that you measure the improvements based on
the loyalty, the satisIaction and the contentment oI the customers to your products or
services. In the Iinancial terms, this includes the sales, the proIitability, the growth in
production and the ROI. On the other hand, development Iocuses on the rewards, the
trainings and the other activities that can improve the processes. Lastly, the internal
processes are those that include delivery cycle, value added services and others. Now,
you have the power to draw strategy map because oI the BSC strategies.



20
Balanced Scorecard as a Strategic Planning Model
In the early 1990s, researchers Robert Kaplan and David Norton oI the Harvard
Business School determined that 90 oI their private sector clients were unable to
implement their own strategic objectives into daily operations (Niven, 2002).
According to Kaplan and Norton (1992), the reasons why those organizations Iailed to
realize ongoing, sustainable results are the same reasons why, over 20 years later,
strategic planning eIIorts in many oI todays public and nonproIit organizations
continue to Iail: conIlicting and competing work priorities, declining revenues or
sources oI Iunding, more work done with less staII, increased costs, and lack oI an
eIIective approach to plan and execute strategy. While the success oI private sector
Iirms is measured by return on investment and proIit margins, success in public and
nonproIit organizations is primarily realized through constituent satisIaction and cost
containment. Even though organizational structures, methods oI operations, and
values may diIIer among private, public, and nonproIit organizations, the challenge oI
perIorming and implementing strategic planning is common to all oI them. Whether
an organization is proIit or people-driven, Kaplan and Nortons Balanced Scorecard
provides a practical model Ior managers to deIine strategic themes and objectives, to
implement strategy through all levels oI the organization, and to measure
perIormance. Simply stated, the Balanced Scorecard is a tool managers can employ to
measure an organizations operational success through direct cause-and-eIIect
linkages back into daily operations (Huselid, Becker, & Beatty, 2005).






21
2-1.2 Strategic Planning
There are numerous deIinitions oI strategic planning, and there are many diIIerent
approaches that can be used to undertake strategic planning. Most deIinitions Iocus on
aligning the organization with its environment in the Iuture and are based on ideal
constructs that yield planning methods that are primary rational, sequential, and
comprehensive.
Bryson (1995), drawing on Olsen ve Eadie (1982) deIines strategic planning as a
disciplined eIIort to produce Iundamental decisions and actins that shape and guide
what an Organization is, what it does and why it does it. According to Bryson (1995:
p. 9) clearly, strategic planning is no panacea. As noted, strategic planning is simply a
set oI concepts, procedures and tools designed to help leaders, managers and planners
think and act strategically. Used in wise and skillIul ways by a coalition oI the
willing, strategic planning can help organizations Iocus on producing eIIective
decisions and actions that Iurther the organizations mission meets its mandates and
satisIy key stakeholders. Nevertheless, strategic planning is not a substitute Ior
strategic thinking and acting. Furthermore, strategic planning is not a substitute Ior
leadership.
Typically, strategic planning includes the Iollowing components: setting a vision Ior
the organization; scanning the external environment; assessing internal capabilities;
and establishing goals, perIormance measures, and implementation plans.
Implementation addresses speciIics about how the organizations Iinancial resources,
human resources, inIormation, and reward systems, along with structure and culture,
will be changed in the near term to achieve long-term, strategic goals (Galbraith &
Kazanjian, 1986).


22
Strategic planning is the process by which the guiding members oI an organization
envision its Iuture and develop the necessary procedures and operations to achieve
that Iuture, (Goodstein, Nolan, & PIeiIIer, 1992). It is an iterative process, with no
clear beginning or ending point. It can be viewed much like a merry-go-round. What
an organization does Iirst depends upon where it gets on.

The purpose oI strategic planning is to transIorm the organization. Strategic planning
helps leaders to:
Create their own organizations Iuture
Provide a Iramework and a Iocus Ior improvement eIIorts
Optimize organizational systems
Provide guidance Ior day-to-day decisions
Provide a learning opportunity Ior top leaders
Build a critical mass
Provide a means Ior assessing progress

Strategic Planning Process
Keller notes that any organization with competitors, with aspirations oI greatness, or
with threats oI decline has come to Ieel the need Ior a strategy, a plan to overcome
(1983, p. 75). This brieI observation captures the core oI the strategic planning:
planning, at all levels, is a dynamic continuous process, operating in and impacted by
an environment with both internal and external Iactors (Figure 4). Understanding and
implementing this process is the key to success.
In 2001, research was conducted to deIine and model the strategic planning process oI
strategic planning Ior distance learning in higher education (Pisel, 2001). The research


23
employed a panel oI experts in the Iield to develop, reIine, and validate the model.
The product oI the research was a 10-phase model with over 200 hyperlinked issues
and questions that should be considered in developing and implementing a strategic
plan Ior distance learning. The model is Ilexible and the lines between phases may
become blurred as individual steps collapse together. The importance oI each phase
will also vary with the experience oI the planner and the situation. The 10 phases oI
the model are listed below. A more-detailed depiction oI the model is shown in Iigure
5.
I. Planning Initiation
II. Planning Guidance and Scheduling
III. Analyses
IV. Mission ReIinement
V. Assumptions
VI. Strategy Development and Courses oI Action
VII. Functional Analyses
VIII. Implementation
IX. Assessment
X. Periodic Review










24
Figure 4 . Strategic planning


Pisel & Ritz, 2005











25
Figure 5. Strategic planning phases
Pisel, 2001


26
Phase I Planning Initiation
Three things occur in this phase that set the planning process in motion: a decision to
start, identiIication oI assets available Ior planning, and the assignment oI a team to
conduct the planning. The decision to start begins with an idea. This idea can be either
internal or external to the institution. At a public institution, it is very possible that the
idea is driven Irom state legislature or other directive body and Iorces the institution
to embark in planning. At a private institution, it may be an internal decision.
Regardless oI the source, an individual or group within the institution that has the
authority to approve the plan, allocate resources, and create policies Ior
implementation and accountability must assume the lead; otherwise, the process will
be stillborn.
There are myriad assets that can be addressed in this phase. The primary assets oI the
higher education institution include Iaculty, support services, technology
inIrastructure and support, and Iunding, but planners must also consider intangible
assets such as expertise and experience. When considering Iunding, the planners must
know the types oI budgets or Iiscal allocations to be assigned. It is essential to
understand whether there will be a Iixed budget, one-time Iunding, or ongoing
Iunding. Each approach to Iunding poses diIIerent challenges and opportunities.

Phase II Planning Guidance and Scheduling
Two Iunctions should occur in this phase: leadership intent is articulated and a
planning schedule is established. Leadership intent is a guiding statement that clearly
states the purpose oI the planning eIIort. It gives the opportunity Ior all involved to
understand the need Ior and overall goals oI the planning eIIort. It is also a clear
statement oI ownership oI the planning process by the organizations leadership. Such


27
guidance should include the intended direction oI the planning process and any
predetermined constraints. II the planning task is externally driven, it is essential that
there be a clear understanding oI all guidance and stipulations that accompanied it.
Since public institutions are more likely to be engaged in distance learning, the
likelihood oI external guidance may be greater, but both public and private
institutions are subject to inIluence Irom policy groups, coalitions, and Iunding grants
(Allen & Seaman, 2007 & Fain, 2007).
The planning schedule keeps the process moving Iorward at a deIined pace. It
establishes realistic parameters Ior the planning process based on leadership intent.
Periodic milestones and/or phases can be used to reduce the process into more-
manageable elements that give the ability to gauge the progress oI planning. Not all
milestones are oI equal importance and the schedule should note where the objectives
are rigidly set and where there is Ilexibility.

Phase III Analyses
The Analyses phase contains two critical and distinct elementsthe environmental
analysis and the needs/gap analysis. These two individual analyses bracket the
Mission phase that Iollows, eIIectively causing the two phases to run concurrently.
Mintzberg describes strategy as a pattern that reIlects the dynamics oI the
environment (1994). It is this phase that enables the planning process to assess the
environment.
The environmental analysis precedes the Mission phase and gives it shape, aligning
services and activities with changed and changing environmental conditions. At the
core oI the environmental scan is the SWOT analysis (SWOT is an acronym Ior
Strengths, Weaknesses, Opportunities, and Threats).


28
Phase IV Mission Refinement
The Mission phase describes how distance learning is important to and aligned with
the core mission and Iuture vision oI the institution. It is, perhaps, the most
challenging phase because participants can spend so much time arguing about where
they need to go that they run out oI steam when it comes to actually going there. It is
critical that the mission and vision deIine an achievable objective, but planners must
guard against it becoming more oI an intellectual than a practical exercise. II planners
are not cautious, it may lead to seeing the plan as the end rather than the means to
achieve it.
At the core oI the Mission phase is the organizational vision. Unlike the mission, the
vision is Ior internal consumption, designed to provide direction and inspiration Ior
the organization (Aaker, 1992; Hoyle, 1995). The vision statement deIines success,
describing what it looks like and clearly establishing the institutions long-term core
intentions. Two important elements oI the vision are timing and organizational buy-in.
It is critical that the ideal vision be developed Iirst, beIore restricting the groups
imagination with real-world data (KauIman & Herman, 1991). It is equally critical
that the leadership sell the vision internally. A vision not shared by the organization is
a recipe Ior Iailure (Bothel, 2001).
While the vision is inspirational, the mission is to be stated in measurable terms that
provide a clear and concise picture oI what is to be accomplished and why (KauIman,
2005; JFSC, 2002). It will serve as the basis Ior all phases to Iollow. This statement
tells everyone what is to be accomplished, by whom (person or organization), when,
where (target audience), and why. Normally, the how or the means by which the
mission will be accomplished is leIt to the course oI action (COA) development
phase, but it may be known iI the process is commenced with predetermined external


29
direction. The Iocus oI the mission is on the endsnot the means to achieve them.
KauIman stresses the importance oI understanding the diIIerence between ends and
means. Ends are the desired results, accomplishments, and outcomes; means are the
way to achieve those ends (1995). Means include such things as the resources and
methods employed in a plan.
Strategy, because it is an organizational process, is inseparable Irom the structure,
behavior, and culture oI the organization in which it occurs (Andrews, 1987).
Structurally, there is an organizational hierarchy that must be considered in
developing the vision and mission. II, Ior example, a subordinate school is developing
a strategic plan, it must align its mission and vision with the higher university plan
(KauIman, 2006b). Planners must also consider organizational culture and values
items identiIied in the internal analysis. The design, structure, and leadership oI an
organization are unique Iunctions oI its culture and values (Hardy, 1991; Murgatroyd
& Woudstra, 1989). Ultimately, whatever strategy is developed will have to survive
and be implemented through that same Iilter oI culture and values (Vestal, Fralicx, &
Spreier, 1997).

Phase V Assumptions
Assumptions are one oI the least understood aspects oI planning. They are used to Iill
a gap in knowledge so planning can continue. While they are absolutely critical to the
process, they cannot be treated as items oI convenience. A planning assumption is a
hypothesis on the current situation or on the Iuture course oI events that is assumed to
be true in the absence oI positive prooI and normally cover issues over which the
planning team has no control. Only those items necessary to enable planners to
complete an estimate oI the situation and make decisions can become assumptions. A


30
valid assumption has three characteristics: it is logical, realistic, and essential Ior the
planning to continue. Because oI their inIluence on planning, the Iewest possible
number oI assumptions should be included. As planning proceeds, additional
assumptions may be needed, some early assumptions may prove to be Iaulty, and still
others may be replaced with Iacts or new inIormation gained during the planning
process. All planning assumptions should be documented to ensure that everyone
involvedparticularly those who join the process laterhas a common Irame oI
reIerence.

Phase VI Strategy Development
Here, the analysis oI the earlier phases is craIted into a strategic direction. Armed with
the results oI the gap analysis, the planning group should be able to move Iorward
with strategic options Ior consideration and assessment.
This step takes the process beyond identiIying who, what, when, where, and why by
speciIying how the institution intends to achieve its mission and vision. An essential
element oI this step is to ensure that there is broad staII involvement and all
stakeholders are inIormed.

Phase VII Functional Analyses
With strategy developed, the next phase will be to review and compare them against a
number oI criteria. This analysis assesses whether each strategy does the Iollowing:
complies with any relevant policies; is Ieasible within the resources available or
projected to be available; adequately achieves the stated mission; has acceptable
costs; completely answers the questions oI who, what, when, where, and why; and is
suIIiciently diIIerent so as to create a range oI alternatives.


31
The purpose oI this step is to have each staII element identiIy the strengths and
weaknesses oI each strategy Irom their Iunctional perspective. Functional analysis
allows details to surIace Irom Iunctional experts that may not otherwise be visible to a
planning team. This process is particularly important Ior a plan developed by a
campus-wide team or administrators where members are two or three steps removed
Irom actual implementation. When the planning is done by those directly involved in,
or only one step removed Irom, implementation, most oI these issues are addressed in
the act oI planning and thus unnecessary as a separate step; however, the process still
can play a key role in gaining stakeholder acceptance.

Phase VIII Implementation
Implementation is the phase where the lead shiIts away Irom the planning team to
those who will actually execute the plan. The institutional leadership must clearly
deIine who has the authority and responsibility Ior implementation and Iormally task
all elements oI the organization that are responsible Ior support. Resources are
allocated and any assumptions made about Iunding, personnel, or other assets are
reconciled. Detailed operational or tactical plans, that identiIy near-term objectives
that must be achieved as part oI the strategic plan, are developed and implemented.

Phase IX Assessment
A common point oI Iailure Ior strategic planning is the post-implementation period.
Too oIten, the plan is developed and, once implementation begins, the process stops.
Assessment represents the continuation oI the process. It provides the data to allow
continual minor or major course adjustments that bring the plan in line with (or reIine)


32
the mission and vision in response to whatever internal or external Iorces are aIIecting
it.
Since strategic planning is a continuous process, the argument can be made that there
is no summative assessment. However, in the context oI this model, summative
assessment reIers to the evaluation oI individual objectives and milestones as they are
completed.

Phase X Periodic Review
The Review phase enables the institution to adapt to short-term volatility while
maintaining its long-term strategic vision. Review is a critical element oI strategic
planning. It recognizes that planning is a continuous systematic process and that the
plan is a living document existing within a dynamic environment (Watkins, 2004).
Periodic review is required to identiIy and assess the impact in changes to internal
strengths and weaknesses, external opportunities and threats, assumptions, and the
original mission and goals. The institution must establish some periodicity Ior the
review process.

Implementing the Strategic Plan via Balanced Scorecard
The real beneIit comes Irom making the scorecard the cornerstone oI the way you run
the business. Imagine an organization in which everyone understands the strategy and
his or her role in executing it. A high perIormance workIorce prepared and motivated
to achieve the results. An organization so agile that strategy can be tested and adapted
in a continual process oI Ieedback, learning, and innovation, Where all resources are
aligned toward a uniIied strategy view. This new management model is called the
Strategy-Focused Organization (SFO). (Kaplan & Norton 2004)


33
Kaplan and Norton present a SFO Iramework that describes the Iive principles that
organizations use to achieve breakthrough perIormance. The principles transIorm the
Balance Scorecard Irom a measurement to a leadership and management system. Each
SFO principles actively support the roles oI leadership and management.
Translate the strategy to operational terms
Align the organization to the strategy
Make strategy everyones job
Make strategy a continual process
Mobilize change through executive leadership
The strategic planning necessary to implementing change involves, in part, with
ensuring that employees and stakeholders are on side and committed to the process.
But it is inevitable that there is resistance Irom all quarters. As a result even the best
plans are doomed to Iailure unless this resistance is met and deIeated.

2-1.3 Change Management
Change management is always going to be a major challenge in deploying the
balanced scorecard system, because it must touch every signiIicant activity in the
organization. John Kotter in Leading Change provides a description oI the conditions
that should prevail in order to ensure success. The most important oI these conditions
is a sense oI urgency by the senior management members oI the organization. Does
your agency's management have a sense oI urgency, or complacency? How can you
instill greater urgency in them? This eIIort should not be underestimated, because
success depends on their consistent support and understanding oI the deployment.
Key PerIormance Indicators (KPI's)


34
A set oI quantiIiable measures that a company or industry uses to gauge or compare
perIormance in terms oI meeting their strategic and operational goals. KPIs vary
among companies and industries, depending on their priorities or perIormance
criteria, also reIerred to as "key success indicators (KSI)".
A company must establish its strategic and operational goals and then choose the
KPIs which best reIlect those goals. For example, iI a soItware company's goal is to
have the Iastest growth in its industry, its main perIormance indicator may be the
measure oI revenue growth year-by-year. A company's KPIs will be stated in its
annual report. Also, KPIs will oIten be industry-wide standards, like "similar store
sales", in the retail sector.
Key PerIormance Indicators (KPIs) provide vital inIormation to the organization Ior
tracking and predicting business perIormance against strategic objectives in a way
that compliments Iinancial measures. KPIs can be part oI a corporate-wide Balance
Scorecard implementation or can be used to monitor each individual business
Iunction. By measuring and monitoring operational eIIiciency, employee perIormance
and innovation, customer satisIaction, as well as Iinancial perIormance, long term
strategies can be linked to short term actions. (From Wikipedia, Online Iree
encyclopedia)
"The Iirst and Ioremost obvious deIinition oI change management reIers to the
making oI changes in a planned and managed or systematic Iashion"(Nickols, 2002, p.1)
Change Management is the art or science oI making changes to a certain method or
system in an orderly, systematic Iashion, to make sense out oI the organizational
chaos that is permeating the company, its employees, its suppliers and vendors and
most importantly its customers. The "change" that will take place to the organization


35
is internal. This means that the change will take place within the conIines oI the
company and not outside the "walls" oI the organization.
The reason Ior the change, however, might be completely externally oriented.
For example, many companies might have to adjust their pricing or changes in their
products, react to a large cut in Iunding, the need to attract new customers and
business, the changing oI their current customer base due to external conditions, (i.e.
economy, aging, etc.), the increased need Ior productivity and the hiring or laying oII
oI large quantities oI employees and managers. Some changes take place when the
new "Boss" or ChieI Executive OIIicer takes over the company and their personal
interaction or philosophies slowly but surely change the culture oI the company or
organization. (Ledez, Robert E, 2008, change management: getting a tuned up
organization)

The change management oI organization changes the implications Ior
organizations that are attempting to develop collaborative relationships with their
suppliers, Iocusing on Iour dimensions oI the collaborative relations including joint
buyer-supplier cost reduction, supplier involvement in new product development,
delivery and logistics management, and core business strategy. An organization can
adopt a strategy that leds to extensive outsourcing and adoption oI more collaborative
relations with its key suppliers.
The pursuit oI this strategy has acted as a stimulus Ior change within the
organization, including the adoption oI an integrated approach to the management oI
strategic change, the pivotal role oI senior managers as Iacilitators oI this change, and
the involvement oI those most aIIected by the movement toward more collaborative
buyer-supplier relationships. (From journal oI supply chain management)


36
Over the past Iew decades large-scale organization change has become a way oI liIe
in American business. TQM, cycle-time reduction, process re-engineering, theory oI
constraints, and general Ilattening oI the organization have, at various times, led the
parade oI Iavored approaches to organization change. But many organization change
initiatives, in these or other Iorms, have Iailed to deliver promises oI increased
productivity and morale, decreased costs, decreased waste, and increased customer
satisIaction. McKinsey has reported that more than two-thirds oI quality initiatives
over the past Iew decades have Iailed to realize the beneIits stakeholders expected.

OIten among the Iailures, a common theme has been the lack oI collaborative cultural
inquiry and re-designs. New work structures, such as autonomous teams, are
established and people simply are expected to become empowered by these new ways
in which they are working. Yet, largely due to a lack oI understanding oI the power oI
the collective human system to obstruct the progress oI initiatives, many merely
structural change programs have Ioundered. A sad result oI these Iailures has been to
reinIorce Iear, deIensiveness, and cynicism among people at work toward
organization change eIIorts.

In cases oI successIul, durable change, what are the characteristics oI these programs
that we can point to as important Iactors in the successes to date? II there are common
Iactors in successes, what are they, and how can we learn whether these and/or other
Iactors may be helpIul Ior particular change agendas? And even iI we can point to
Iortunate success stories, the question arises: what is missing in these initiatives that
could help them to be even more successIul? As the 21st Century dawns, we
increasingly see a move toward the integration oI methods and techniques Irom


37
widespread disciplines into meta-methodologies Ior organization change. As diverse
as Iamily therapy, martial arts, systems science, and organizational behavior are
working together in teams to design new, more sophisticated approaches to change.
This monograph sketches one particular, integrative approach to organization change.
This integrative approach seeks to help organizations continually reinvent themselves
by helping the people in them develop and reIine new sets oI interlinked skills and
capabilities, ones that will help them become powerIul players in the dynamics oI
change, minimizing the likelihood that they or their organizations will be leIt in the
dust. The general, or contextual, model oI organization change is one Ieaturing at least
three streams oI coordinated inquiry and design.
These streams correspond with the Iollowing categories oI group activity:
Structural: in which work structures, processes, and procedures are
examined, diagnosed, re-engineered, implemented, and evaluated.
Group tools and skill building: individuals in groups develop enhanced skill
in managing group processes. This includes meeting Iacilitation, the use oI group
problem-solving and continuous improvement skills, and development oI skills Ior
establishing dialogue as a model oI exploratory group communication.
Cultural: in which all the stakeholders examine the culture and values they
currently have, reinventing them, iI necessary, to help the people work together
eIIectively in new and more eIIective ways. In addition, practices Irom Iields such as
Iamily therapy, mindIulness meditation, and the martial art oI Aikido are oIIered Ior
enhancing individual leadership through increasing inner mastery.
Many individuals in successIul organizations have developed skills in reIining both
structural stream activities, and group process and meeting management. Fewer
individuals appear to have developed skill in speaking and listening in order to lead


38
non-coercive cultural inquiry and design. On the other hand, individuals Iewer still
appear to have established practices oI mindIulness, grounded presence, and
connectedness with others which can lead to increase leadership through inner
mastery.
Inner Mastery: The innermost circle denotes that set oI practices and skills by
which individuals are able to maintain a grounded, Iocused, and authentic presence in
the midst oI mounting chaos and stress. Individuals with developed skill in Inner
Mastery tend to appear to others as leaders worthy oI trust. Leaders with Inner
Mastery skills can sense and maintain a connection with others because they are more
completely in touch with themselves. In contrast, most oI us are not at all at home in
our bodies. We are not in touch with the physical sensations that may accompany our
being eIIective or ineIIective. We do not have a sense oI where our physical center is,
and our reactive thoughts and Iears seem to drag us in every direction, especially in
stressIul situations. (By JeII Dooley, 1998)

EIIective change management is crucial to any organizations ability to adapt and
react. The objective oI any change management is to maximize beneIits, while
minimizing the risk oI Iailure during the change implementation. Globalization,
localization, privatization, outsourcing, mergers and acquisitions are just some oI the
revolutionary changes encompassing organizations today, in addition to the rapid
change in technology and higher levels oI competition. The volatile environments in
which corporations operate make it easy Ior senior management to ignore what is
oIten called the soIt side oI doing business. A recent Harvard Business study
conducted in 255 companies showed that shorter, more Irequently evaluated projects


39
are more likely to succeed than longer ones, which are evaluated more than two
months apart.
Senior managements Iear oI employee reaction oIten keeps them Irom successIully
implementing change. Industry analysts believe that the human aspect becomes the
most important issue once change management initiatives are rolled out in any
organization.
The Iollowing are the key aspects oI any change management initiative that the
executives should bear in mind as change sweeps their company:

Create Ownership
Whenever any Iorm oI change hits a company, people seek and need answers to all
their queries. II leIt unanswered, such questions give way to dissent and mistrust
about the change. The credibility oI the management executing the change also comes
under scrutiny. Teams with nominated or appointed leaders should be created to
dissipate such a scenario, which can dampen the objectives oI change in any Iirm, big
or small. Appointed leaders operating in small teams have been observed to be more
eIIectual than the manager you last saw at the annual conIerence.

Communicate the Change
Good communication is, more oIten than not, the biggest carrier oI any proposed
change. Senior leadership oIten assumes the communication process to be eIIective,
when it is not. The Iocus on the Iormal communications network should be
interspersed with the way in which the inIormal networks are used: an impromptu
meeting with the CEO or an extempore at the quarterly meeting could sometimes be
more emphatic than a Iormal memo. Research has exhibited that the various


40
communication channels companies' use has diIIerent levels oI eIIectiveness: a Iace-
to-Iace conversation always work better than an email, which could at best serve to
reinIorce.

Create Layers and Address Each Group
As mentioned previously, the groups created with the objective oI implementing
change successIully should be small. An average employee Ieels lost in a maze oI
people and keeps his questions and objections, iI any, to himselI. As the change
cascades throughout the organization, each group should Ieel involved and
empowered; each individual should Ieel that he has contributed towards the successIul
implementation oI the eIIorts. He should Ieel aligned with the companys vision, and
understand the need Ior change, in the context oI their markets, competition and other
related aspects. Lou Tice, the Iounder oI The Pacific Institute, once said All
meaningIul and lasting change begins on the inside and works its way out.

Address the Human Aspect Reach Out to Every Individual in the Value Chain
Any change eIIort requires people to reconcile and adjust to the new situation they
Iind themselves in. As job Iunctions are moved around, responsibilities reassigned,
and in some cases restructuring oI the company (read: Iirings), people are led by their
personal agendas to protect themselves. II not given the credence oI being an
important part oI the organization, employees are vulnerable and susceptible to the
water-cooler conversations that oIten act as rumor mills, impeding the change
process. As Steven Covey Iamously said, "People can't live with change iI there's not
a changeless core inside them. The key to the ability to change is a changeless sense
oI who you are, what you are about and what you value."


41

Create Checkpoints and Feedback Loop
However, drawn-out the change eIIort, a Ieedback loop helps to take stock oI the
current company culture and the voice oI the employees. This helps in making
modiIications to the change management rollout plan, which can be an eIIective way
to concurrently make amends, rather than making iterations only at the end oI the
engagement. This ties-in with the Harvard Business recommendation that constant
evaluations should Iorm part oI the change eIIort. Creation oI a Ieedback loop also
tells the employees that they are being heard, and their suggestions are valued this
single Iact can do wonders Ior the organization. (Shanker, From business perIormance
consulting, www.CGN.Net).
















42
2-2 Literature Review
1. Pienaar and Penzhorn, (2000), conducted a study titled "Using the Balanced
Scorecard to Facilitate Strategic Management at an Academic Information
Service". The study reports on the implementation oI the balanced scorecard model
Ior Iacilitating strategic management at the Academic InIormation Service (academic
library) oI the University oI Pretoria, South AIrica. Robert Kaplan and David Norton
developed the concept oI the Balanced Scorecard in the early 1990s Ior motivating
and measuring business perIormance. This management methodology is seen as an
excellent vehicle Ior implementing organizational transIormation measures in the
Academic InIormation Service. The article starts by giving a short theoretical
introduction to the concept oI the Balanced Scorecard, Iollowed by an outline oI the
implementation oI the Scorecard on both the strategic and operational levels. It
concludes by examining the ways in which the Balanced Scorecard is currently being
used to Iacilitate the strategic management process at the Academic InIormation
Service.

2. Saad, (2001), conducted a study titled Strategic performance evaluation:
descriptive and prescriptive analysis. The study addresses the question oI how to
assure eIIective perIormance evaluation oI a public service strategic unit. Both
descriptive and prescriptive approaches are discussed. Based on this analysis a
practical model Ior perIormance evaluation is developed. The model comprises key
drivers oI perIormance, including internal and external Iactors, as well as both
quantitative and qualitative Iactors, simultaneously.
The model has been designed using the Analytical Hierarchy Process (AHP) and
tested by using the Expert Choice SoItware. The testing results show that the


43
evaluation outcomes diIIer as a Iunction oI the criteria used, the weight assigned, and
the meaning given to each criterion, by using the same criteria with a diIIerent
weighting scheme results in diIIerent outcomes Ior the same perIormance. This
counter-intuitive Iinding has important implications Ior management practice.
In this part the researcher highlights extracts Irom the related studies by taking into
account some international and regional studies, which are mainly Iocuses on the
balanced score card concept and its Iormulation and implementation in the private and
public sectors.

3. Arora, (2002), conducted a study titled Implementing Knowledge Management
a balanced score card approach. The study states that in todays Iast changing
and non-linear business environment the only way to gain competitive advantage is by
managing intellectual capital, which is more commonly known as knowledge
management (KM). There are basically three broad objectives oI KM: leveraging the
organizations knowledge; creating new knowledge or promoting innovation; and
increasing collaboration and hence enhancing the skill level oI employees.
The most common KM programmer involves development oI a knowledge repository,
and Iorming and nurturing oI the communities oI practice. These two, jointly, address
all the three objectives oI KM. Many organizations are embracing KM, but Iew oI
them are able to implement it successIully to see the beneIits.
Implementation oI KM is a strategic process that needs careIul target setting and
review. Organizations, which use balanced scorecard Ior strategy deployment, can
eIIectively implement KM in their organization by developing and deploying a KM
index.



44
4. Sedera, Gable and Rosemann, (2002), conducted a study titled "A Balanced
Scorecard Approach to Enterprise Systems Performance Measurement". The
study aim was to propose the Balanced Scorecard as an appropriate approach Ior
measuring the perIormance oI ES employed in the public sector. It Iirst introduced the
design and objectives oI the research, detailing results Irom past ES success and
Iailure studies, and justiIying the need Ior a balanced ES perIormance measurement.
The Balanced Scorecard approach was then introduced, proposing its appropriateness
Ior ES perIormance evaluation in both private and public sectors. Finally, the
Queensland Government Balance scorecard approach was discussed describing the
overall goals and techniques oI applying a balanced scorecard in the public sector. A
high-level case study oI the overall QGBRN and an example oI DPIs Balanced
Scorecard with a comprehensive literature review has been completed to date. Further
tasks planned include: a number oI case studies oI ES beneIits realizations projects in
Queensland Government agencies to evaluate the eIIectiveness oI the Balanced
Scorecard approach to measure Enterprise Systems perIormance. A pilot case study oI
the Queensland Police Iollowed by a multiple case study oI other agencies practicing
the QGBRN guidelines will be conducted, and the proposed Balanced Scorecard
measurement instrument will be developed and justiIied using pattern analysis
techniques.

5. Wongrassamee and Simmons (2003), conducted a study titled Performance
Measurement Tools: the Balanced Scorecard and the European Foundation of
The Quality Management (EFQM) Excellence Model. The study states that
perIormance improvement is high on the agenda oI many companies around the world
and with the growing number oI improvement models now available care has to be


45
taken to adopt an approach that will yield the most attractive return on investment.
This paper compares and contrasts two widely known and well-publicized
improvement models: Kaplan and Nortons Balanced Scorecard and the EFQM
Excellence Model. Each consists oI a non-prescriptive template oIIering managers; a
relatively small number oI categories oI key perIormance metrics to Iocus on.
Here the models were examined Irom a critical perspective with regard to Iive central
issues represented by Iive questions relating to objectives, strategies and plans, target
setting, reward structures and inIormation Ieedback loops. The conducted analysis
revealed that despite having some signiIicant diIIerences, both approaches seem to be
developed Irom similar concepts.
The study concludes that it is diIIicult to Iind a perIect match between a company and
a perIormance measurement Iramework and that Iurther research should concentrate
on how to implement strategic perIormance Irameworks eIIectively in speciIic types
oI organization.

6. El-Anati, (2004), conducted a study titled Deriving a Model for Performance
Evaluation by Using Balanced Scorecard (BSC) for 1ordanian Construction
Companies. The study is about deriving a model Ior perIormance evaluation by
using Balanced Scorecard as a modern and essential perIormance measurement tool,
and at the same time, this study was applied on Jordan construction sector which
represents one oI the most basic and important Jordanian economic sectors in
socioeconomic development.
The results oI the study were:
1. There is a positive relationship between the ability oI using modern
managerial accounting systems (BSC, ABC, ABM) and the class oI the company (r


46
0.68); nevertheless, systems are not appropriate Ior construction companies
classiIication.
2. The derived model Ior perIormance evaluation that can be used by the
construction companies is as Iollows
P 0.48F 0.17C 0.14E0.10S 0.09W0.02R
Where
P: PerIormance measurement
C: Customer measurement
E: Internal process
S: SaIety measurements
W: Employees Innovation and learning
R: Social Responsibility

7. Al-1aberi, (2005), conducted a study titled Building a Performance
Measurement Model for 1ordanian Telecommunication Sector in the Light of
Global Experience: 1apan, Europe, and U.S.A". The objective oI this study is to
build a perIormance measurement model through analyzing the criteria, diIIerences
and similarities oI three adopted international models. These are Total Integrated
Management (TIM), Business Excellence Model (BEM), and Balanced Scorecard
(BSC). Then a Iramework Ior evaluating perIormance measurement systems are
applied in Jordanian Telecommunication sector to test the extent oI the above
international models to achieve the relevance, timelines, aid the decision making
process, and selI-reIlection.




47
The study reveals the Iollowing results and implication:
1. Using international perIormance measurement models in Jordanian
Telecommunication sector companies' dose not achieve the relevance oI perIormance
measurement.
2. Using international perIormance measurement models in Jordanian
Telecommunication sector companies that achieve the timeliness, did the decision
making process and selI- reIlex ion.
3. The derived model Ior perIormance measurement that may be used by Jordanian
Telecommunication sector companies as Iollows:
P 0.367F0.191C0.135L0.124I 0.119R 0.063S
Where
P: PerIormance measurement
C: Customers and agencies
L: Learning and growth
R: Government regulations.
F: Financial perIormance
I: Internal business process
S: Suppliers

8. Green and Ryan, (2005), conducted a study titled A Framework of Intangible
Valuation Areas (FIVA): Aligning Business Strategy and Intangible Assets. The
study investigates the adequacy oI existing intangible asset models and deIines and
codiIies common principal valuation drivers oI intangible assets Ior use in enterprise
balanced scorecard valuation practices oI inIormation technology (IT) Iirms. IT Iirms
that use a standard and consistent taxonomy oI intangible assets could increase their


48
ability to identiIy and account Ior more intangible assets Ior measurement and
valuation.
FIVA provides a Iramework to have command oI and access to eIIective utilization oI
business resources and knowledge, to develop, sustain and enhance its mission
eIIectiveness and/or competitive advantage.

9. Zwelef & Nour, (2005), conducted a study titled The Importance and Scope of
Using Balanced Scorecard in Performance Evaluation: Applied Study in
1ordanian Banks. The study aimed at highlighting the principles and applications
oI BSC and illustrating contribution in transIerring the organization strategy to a
common language that could be used by all employees. This is done through making
perIormance measures according to the BSC perspectives, and knowing the potential
use oI the BSC in evaluating the strategic perIormance oI the Jordanian bank sector.
To demonstrate that, three hypotheses were Iound and a questionnaire was prepared to
veriIy the hypotheses depending on SPSS packages.
The study was concluded with a number oI recommendations such as: it is very
necessary to apply the system oI BSC as a package in the Jordanian banks; these
banks apply the concepts oI BSC while evaluating their perIormance, without
applying the whole package oI BSC as all, since the banks do not know how to apply
it.

10. Ronchetti, (2006), conducted a study titled "An Integrated Balanced Scorecard
Strategic Planning Model for Nonprofit Organizations". The study discussed what
the Balanced Scorecard is, describes implementation guidelines, and proposes
practical scenarios oI how to implement the Balanced Scorecard Ior a new outreach


49
ministry within a nonproIit religious organization. Also, due to the widespread
popularity oI Rick Warrens (1995) Purpose-Driven Church model, a scenario is
presented combining the Balanced Scorecard with the Purpose-Driven Church model
to demonstrate the power and Ilexibility oI the Balanced Scorecard as a strategic
planning and perIormance measurement tool.
The study showed that the Balanced Scorecard model provides an innovative and
alternative approach Ior many nonproIit organizations that do not Iind private sector
strategic planning models applicable to their unique planning needs. The use oI the
Balanced Scorecard model or an alternative integrated solution where the Balanced
Scored model supplements another strategic planning model already in use is an
option Ior those nonproIits seeking to plan with the precision oI a private sector Iirm,
and committed to meeting the unique needs oI their community-Iocused
organizations.

11. Thakkar, et al (2007), conducted a study titled Development of a Balanced
Scorecard: An Integrated Approach of Interpretive Structural Modeling (ISM)
and Analytic Network Process (ANP). The purpose oI this study is to propose an
integrated qualitative and quantitative approach to the development oI a balanced
scorecard (BSC) Ior a real liIe case company KVIC (Khadi and Village Industries
Commission, organic Iood sector, India).
This study illustrates how the use oI a mix approach oI cause and eIIect diagram,
Interpretive Structural Modeling (ISM) and Analytic Network Process (ANP) can
address some oI the shortcomings related to the development oI BSC in the light oI a
real liIe case company KVIC (Khadi Village and Industry Commission, organic Iood
sector India). The paper delivers a complete Iramework oI BSC Ior the case company.


50
The study shows that present work demonstrates the use oI an innovative approach to
the development oI perIormance measurement system at one end while to deliver a
workable Iramework oI balanced scorecard Ior a real liIe case company is the
objective oI the other end. The present work encapsulates the philosophy oI strategy
maps using a mix oI quantitative and qualitative approach Ior a real liIe case.

12. Umashankar & Dutta, (2007), conducted a study titled Balanced Scorecards
In Managing Higher Education Institutions: an Indian Perspective. The study
aims to look at the balanced scorecard (BSC) concept and discuss in what way should
be applied to higher education programs/institutions in the Indian context.
The BSC approach oIIers the institution an opportunity to Iormulate a cascade oI
measures to translate the mission oI knowledge creation, sharing and utilization into a
comprehensive, coherent, communicable and mobilizing Iramework Ior external
stakeholders and Ior one another.
In the absence oI evidence oI the application oI BSC to the educational institutional
domain in India, the current paper may be a starting-point Ior a debate and possible
strategies to implement BSC methodology in this area.
The study shows that The BSC approach oIIers the institution an opportunity to
Iormulate a cascade oI measures to translate the mission oI knowledge creation,
sharing and utilization into a comprehensive, coherent, communicable and mobilizing
Iramework Ior external stakeholders and Ior one another.

13. Manville, (2007), conducted a study titled "Implementing A Balanced
Scorecard Framework in A Not For Profit Small And Medium Enterprise
(SME). The purpose oI this study is to explore the implementation oI a perIormance


51
management system using the balanced scorecard (BSC) within a not Ior proIit small
and medium sized enterprise (SME).
The Iindings oI this research are that balanced scorecards can be implemented within
a SME context. However, the motivations Ior the adoption oI the scorecard were both
internal and external due to the heavily regulated nature oI the organization.

14. Chang, (2007), conducted a study titled in The National Health Services
(NHS) Performance Assessment Framework As A Balanced Scorecard
Approach: Limitations And Implications. The study stated that the use oI the
balanced scorecard has been subjected to increasing scrutiny and criticism in
academic literature. The purpose oI this study is to explore the limitations oI, and
implications Ior, the PerIormance Assessment Framework (PAF) as a balanced
scorecard approach in the NHS. Although Kaplan and Norton suggested that the
balanced scorecard can be adapted Ior strategic perIormance management purposes in
the public sector, this study aims to argue that such claims Iail to give suIIicient
weight to the political context in which a public sector organization operates.
This study agrees with institutional theorists' argument that the use oI perIormance
measurement systems should take into account politics and power Iaced by an
organization. In the NHS, perIormance measurement might be used by local NHS
organizations primarily as a ceremonial means oI demonstrating their symbolic
commitment Ior legitimacy seeking purposes.

15. Chen and Chen, (2007), conducted a study titled Data Envelopment Analysis
(DEA) Performance Evaluation Based on BSC Indicators Incorporated: The
Case Of Semiconductor Industry. The study attempted to evaluate the


52
perIormance oI the semiconductor industry in Taiwan, which is the main economic
liIe-line in Taiwan. Operational perIormance is normally deemed as a key Iactor in
industry. The importance oI this issue can be measured through perIormance indices
to observe the operational perIormance oI Taiwan's semiconductor industry.
This study Iinds that the eIIiciency oI every domestic semiconductor manuIacturer is
generally good, and concerning the Iour perspectives oI the balanced scorecard, the
most important Ior the domestic Iirm is the Iinancial perspective, second is the
internal process perspective, third the learning and innovation perspective, and least
importantly is customer perspective.
When implementing Data Envelopment Analysis (DEA), traditional Iinancial indices
cannot obtain an in-depth understanding oI an enterprise; hence, this study considers
the Iour major constructs oI the balanced scorecard in index selection, and employed
these Iour major contracts to expand the indices that can be available Ior selection and
gain a deeper understanding not only oI the Iinancial aspects, but also oI customers,
the internal process, learning, and innovation. It should be noted that the balanced
scorecard can develop the perIormance goal Irom the perspective oI job IulIillment,
and uses this view to assess management perIormance. These indicators can reIlect
diIIerent Iocuses regarding job IulIillment, and produce pluralism in the perIormance
indices.

16. Durgham & Abufaddah (2009) conducted a study titled Effect of
Implementing Balanced Scorecard (BSC) in Enhancing Strategic Financial
Performance of National Palestinian Banks that are Actively Working in Gaza
Strip". This study aimed to know the eIIect oI applying Balanced Scorecard (BSC)
measures, (which are speciIied in its Iour perspectives: Iinancial, customer, internal


53
processes, and learning and growth), on enhancing the strategic Iinancial perIormance
oI national Palestinian banks that are actively working in Gaza Strip.
The most important results oI this study ensure that the national Palestinian banks
actively working in Gaza Strip are: (1) possessing a good perception that their success
needs promptly and seriously work to enhance their strategic Iinancial perIormance,
(2) owning a clear imagination concerning the basic dimensions oI strategic Iinancial
perIormance, which enables them to realize a distinct strategic Iinancial perIormance,
(3) having the ability to use perIormance Balanced Scorecard (BSC) perspectives
collectively and separately to enhance the strategic Iinancial perIormance oI banks.
The main recommendations oI this study to national Palestinian banks, which are
actively working in Gaza Strip, are: (1) the necessity to adopt (BSC) model through
reshaping the institutional culture, and preparing the needed conditions to activate its
implementation processes. (2) the necessity to use (BSC) model as a means to
rationalize managers' decisions, to direct their behavior and to evaluate the
perIormance.

2-3 Distinguishing Features of the Study over the Previous Studies
AIter reading and through examining previous studies that related to the subject oI
this study, which can be achieved by the researcher, the researcher Iound that the most
important characteristics which distinguish this study Irom the other pervious studies
can be stated as Iollows:
The other pervious studies were concentrating on how to use and implement
BSC in diIIerent regions and establishments, and it is suggested methods on that.
However, this study is discussing the BSC perspectives and how it can be used more


54
eIIectively and eIIiciently by suggesting a mathematical model studying the potential
relation between the perspectives oI BSC.
This study (suggested mathematical model), discussing the measuring oI the
intangibles and tangibles by using BSC measurement check lists, and calculate the
eIIiciency oI the management process and it's gap (iI consists) between intangibles
and tangibles.
Implementing the proposed mathematical model by using BSC evaluations
and tabulating sheets, and calculating management process eIIiciency and the gap
(shortages in the intangibles perspectives), we can integrate BSC into change
management and strategic planning.














55
Chapter Three
Research Model and Methodology
3-1 Chapter Overview
3-2 Data and Research Methodology
3-3 Population oI the Study
3-4 Sample oI the Study
3-5 Instrument oI the Study
3-6 Validity oI the Instrument
3-7 Reliability oI the Instrument
3-8 Model Variables
3-9 Data and InIormation Instruments
3-10 Statistical Methods
3-11 Scoring Method













56
3-1 Chapter Overview
The purpose oI this study is to address the developing oI the mathematical
model to integrate BSC into the change management and strategic planning. In this
chapter, research methodology is addressed. Similarly to existing research studies, the
methodology oI this research based on a multiple quantitative method research by
using a questionnaire. The research methodology adopted Ior this study consists oI
research instruments in which a questionnaire survey, research tasks, and analyzing
data were implemented.

To enhance the reliability oI the primary collected data and addressing this
research study, relevant secondary data is available and considered undertaken.
Consideration oI the advantage oI secondary data to be incorporated with primary
collected data helped to Iacilitate the validity oI data.

3-2 Data and Research Methodology
This section describes the population and the sample oI the study, a
description oI the research variables and the related model, and statistical analysis.

3-3 Population of the Study
The researcher selected available-purposive sample, including Iive local banks
in the Jordanian Society which are (Arab Bank, Jordan- Kuwait Bank, Al-Ahli Bank,
Housing Bank and Jordan Bank), by using its evaluation systems and measurements
data Ior the intangible and tangible variables (sources) in organization.




57
3-4 Sample of the Study
The Sample represented by its measurements and evaluation reports related to
the research and the proposed model Ior studying, implementing and testing the
model.
In each sample, measurements and evaluation's scores tabulated and weighted in
a manner suitable to serve the implementation oI the model.
The sample oI the study was chosen aIter a careIul study oI Iinancial statements
Ior the Iive banks (Arab Bank, Jordan- Kuwaiti Bank, Al-Ahli Bank, Housing Bank
and Jordan Bank), Ior the Iollowing reasons:
1. The Iive banks have the largest budget in contrast with other commercial
banks.
2. The Iive banks have high reputation in contrast with other commercial
banks.
The sample study consists oI (100) employee, every (20) Irom the sample was
selected Irom diIIerent bank, the Iirst one Irom Arab Bank, the second one Irom
Jordan- Kuwaiti Bank, the third one Irom Al-Ahli Bank, the Iourth one Irom Housing
Bank and the Iinal one Irom Jordan Bank.
The researcher distributed 110 questionnaires, 100 oI them returned to the
researcher and were valid to start data analysis, while the others did not.








58
Table (1)
The Sample
Frequency Percentage
Gender Male 82 82.0
Female 18 18.0
Specialist Management 19 19.0
Economic 7 7.0
Accounting 33 33.0
Other 41 41.0
Experience 3 years and less 5 5.0
4-6 years 10 10.0
more than 6 years 85 85.0
QualiIications Bachelor 51 51.0
higher diploma 1 1.0
Master 42 42.0
PhD 6 6.0

3-5 Instrument of the Study
The researcher built questionnaire consists oI Iive areas and each one consists oI
(5-6) items. The questionnaire aimed to measure the integration oI the BSC Iour
perspectives in between, and mainly the relation between tangibles and intangibles.

3-6 Validity of the Instrument
To establish the validity oI the questionnaire, the researcher asked academics
to judge the accuracy, the content, and appropriateness oI the Iour levels oI questions.
Their comments and recommendations were taken into consideration.

3-7 Reliability of the Instrument
As Ior the questionnaire, the researcher calculated Cronbach's Alpha Ior all the
areas to test the reliability Ior each area, Cronbach's Alpha values ranged between
(0.699- 0.815).


59
Table (2)
The Reliability Statistics
No. Area Cronbach's
Alpha
1 Financial Perspective 0.815
2 Agent 0.601
3 Internal Processes 0.699
4 Human Resources Innovation and Renewal 0.724
5
BSC Iour perspectives and the correspondence relation in between
0.714

3-8 Model Variables
Figure 6. Model Variables

There are several variables that will be used Ior studying and Iormulating the
model, and these will be required to the concepts oI input and output.
- Input variables will reIer to the resources which are consumed or expended
in taking a course oI action. (source is any thing oI value), these resources will


INDEPENDENT
VARIABLES


BSC Perspectives
Evaluations

CONFOUNDING
VARIABLE


Management
Process
Efficiency

DEPENDENT
VARIABLES



Change Management
&
Strategic Planning
Customer
perspective
Internal
Process
Learning &
Growth
Financial
Perspective



60
be used in a very general sense which is not restricted to monetary
considerations.
- Output variables will be measured in terms oI either the resources or the
psychological or sociological characteristics oI the resulting state. Thus,
output reIers to the "return" or "pay-oII" resulting Irom a course oI action.
- Outcomes- and hence objectives (i.e., desired outcomes) will be deIined in
terms oI either inputs or outputs, or both.
The Researcher proposed a model which is depending on the BSC Iour
perspectives and the correspondence relation in between. He treated as it
independent variables. Dependent variables will be the change management
and strategic planning.
Tangible measurements, intangible evaluations treated as inputs to the model.
- Efficiency and the relation between tangible and intangible measurements will
be the output oI the model, and considered dependent variable.

3-9 Data and Information Instruments
The researcher used the Iollowing instruments Ior gathering the data:
1. Books, Journals, related studies and other literary materials.
2. Distributed Questionnaire.
3. Financial statements oI the related sample.
4. Internal evaluation sheets oI the related sample.






61
3-10 Statistical Methods
The researcher applied (SPSS) program Ior analyzing data and testing
hypothesis by using
1. One- sample test Ior hypothesis.
2. Arithmetic means and standard deviations.
3. T- Test.
4. Regression and correlation analysis.

3-11 Scoring Method
Each item in the questionnaire was divided into 5-points according to Likert-type
scale, and was determined in Iive levels as the Iollowing: strongly agree given (5)
degrees, agree given (4) degrees, neutral given (3) degrees, disagree given (2)
degrees, and strongly disagree given ( 1) one degree. In addition, to use judge scale
Ior the responses, which divided to (high, medium, low), depending on questionnaire
Iour classes (1-1.99), (2-2.99), (3-3.99) and (4-5). By dividing judge scale classes on
the Iive alternatives (strongly agree, agree, neutral, disagree, strongly disagree) like
the Iollowing calculation method:
5-1 3 1.33
And the three levels consist oI the low degree (1-2.33), the medium degree (2.34-
3.66) and the high degree (3.67-5). As the Iollowing:
The low degree less than 2.33
The medium degree 2.34-3.66
The high degree more than 3.67




62
Chapter Four
Hypotheses Testing and Analysis of
Statistical Results
4-1 Overview
4-2 Means and Standard Deviation Ior the Areas
4-2.1 First Area: Financial Perspective
4-2.2 Second Area: Agent
4-2.3 Third area: Internal Processes
4-2.4 Fourth Area: Human Resources Innovation and Renewal
4-2.5 FiIth Area: BSC Four Perspectives and the Correspondence Relation In
Between.
4-4 Model Approach














63
4-1 Overview:
This chapter shows and discusses the analysis oI statistical methods, and tests
the studied hypothesis, by calculating means and standard deviations Ior each item oI
the areas oI BSC.
It also discusses T- Value results Ior the sample, which shows signiIicant
relationship on the level ( 0.05) between the two means Ior the sample answer.
ThereIore, depending on the results that the researcher achieved it by using the T-
Value, the regression analysis also applied to the sample to ensure the relationship and
the results.
In this chapter, the researcher is discussing the results Ior every area through
tables and comments, and Iinally shows the model approach.

4-2 Means and Standard Deviations for the Areas
The researcher calculated the means and standard deviation oI the Iive areas.
Table (3) shows that, agent perspective and internal process perspective have
the highest mean (3.77), Iollowed by Financial Perspective with means up to (3.58),
and then Human Resources Innovation and Renewal Perspective with means up to
(3.42). Moreover, at the end BSC Iour perspectives and the correspondence relation in
between Perspective in the lowest mean (2.95).








64
Table (3)
The means and standard deviations for areas
Area mean Standard
deviation.
Financial Perspective 3.58 0.38
Agent Perspective 3.77 0.31
Internal Processes Perspective 3.77 0.38
Human Resources Innovation and Renewal Perspective 3.42 0.48
BSC Four Perspectives and the Correspondence Relation
in Between Perspective
2.59 0.56

4-2.1 First Area: Financial Perspective
Means and standard deviation were calculated Ior each item oI the Iirst area,
the mean Ior the Iirst area is (3.58) with a standard deviation (0.38).
In the Iirst area, all the agreement degrees were high. The item, "The bank has
relative growth in lending to customers", comes in the Iirst rank in a mean (3.87) and
in a standard deviation (0.42), while the item "there is increase in cash and bank
balances with central banks" comes in the second rank in a mean (3.78) and in a
standard deviation (0.70). Moreover, the item "there is a clear decrease in operational
cost comparing with the proIits that the bank achieved" comes in the last rank in a
mean (3.23) and in a standard deviation (0.66).










65
Table (4)
The means and standard deviation to the First Area: Financial Perspective
agreement
degree
rank Std.
Deviation Mean
Area No.
high 1 0.42 3.87
The bank has relative
growth in lending to
customers
2
high 2 0.70 3.78
There is increase in cash
and bank balances with
central banks
6
high 3 0.69 3.71
The Bank uses
measurement tools to
detect the development oI
the Iinancial perIormance
1
high 3 0.69 3.71
The Bank uses
measurement tools to
detect the development oI
the Iinancial perIormance
10
high 5 0.72 3.69
There are Iinancial cash
Ilow indicate to the bank
growth
4
high 6 0.70 3.67
The bank achieves a
noticeable growth in
proIits
5
high 7 0.54 3.56
There is increase in bank
deposit in the banks and
banking institutions
7
high 8 0.73 3.5
The bank has an extra
share in Jordan banks
marketing
5
high 9 0.51 3.41
There is a noticeable
increase in user net cash
Ilow in investment
operations
8
high 9 0.49 3.41
There is increase in user
net cash Ilow in Iinancial
operations
9
medium 11 0.66 3.23
There is a clear decrease in
operational cost comparing
with the proIits that the
bank achieved
3
high 0.38 3.58 Total Mean

The means, standard deviations, T- value were calculated, also we used T-
value Ior one sample T-Test and the next table shows that.


66
The results show that there is a signiIicant relationship on the level ( 0.05)
between the two means Ior the sample answer, because signiIicant level was less than
) 0.05 ( which is statically signiIicant. This disagrees with the hypotheses (Ho1:
there is no relation between the Iinancial perspective evaluations and the evaluations
oI the rest three perspectives oI the BSC).

Table (5)
Means, standard deviation and T- value for the study sample
area means S.D T- value SigniIicant
Financial
Perspective
3.58 0.38 25.632

0.000
2.6 -

4-2.2 Second Area: Agent Perspective
Means and standard deviations were calculated Ior each item oI the second
area, the mean Ior the second area (3.77) in standard deviation (0.31). In the second
area all the agreement degrees were high. The item "The Bank uses measurement
tools to detect the evolution in customer service" comes in the Iirst rank in mean
(4.01) and in standard deviation (0.69). While " The bank has continuous newly
agents" comes in the second rank in mean (3.99) and standard deviation (0.59), while
the item " There is increase in bank deposits and banking institutions " comes in the
last rank in a mean(3.42) and in standard deviation (0.54).







67
Table (6)
The means and standard deviations for the Second Area: Agent Perspective
agreement
degree
rank Std.
Deviation Mean
Area No.
High 1 0.69 4.01
The Bank uses measurement tools
to detect the evolution in customer
service.
1
High 2 0.59 3.99
The bank has continuous newly
agents
3
High 3 0.53 3.91
The bank provides suitable
Iinancial services to the agents
4
High 4 0.45 3.76
The agents satisIy with doing
diIIerent transactions
2
High 5 0.54 3.74
There is increase in agents'
deposits
6
High 6 0.66 3.55
The bank provides Iinancial
services with lower interest rate to
the agents comparing with other
banks
5
High 7 0.54 3.42
There is increase in bank deposits
and banking institutions
7
High 0.31 3.77 Total Mean

The means, standard deviation, T- value were calculated Ior the sample
answer, also we used T- value Ior one sample T-Test as shown in the next table (table
7).
The results show that there is a signiIicant relationship on the level( 0.05)
between the two means Ior the sample answer, because signiIicant level was less than
) 0.05 ( which is statically signiIicant. This disagrees with the hypotheses (Ho2:
there is no relation between the agent evaluations and the evaluations oI the rest three
perspectives oI the BSC).






68
Table (7)
Means, standard deviations and T- value for the study sample
area means S.D T- value SigniIicant
Agent 3.77 0.31 37.322

0.000
2.6 -

4-2.3 Third area: Internal Processes Perspective
Means and standard deviations were calculated Ior each item, the mean is (3.77)
with a standard deviation (0.38)

In the third area all the agreement degrees were high. The item " The bank
provides a developing unit oI credit relationship that can activate and develop the
bank credit relationship." comes in the Iirst rank in mean (3.86) and in standard
deviation (0.38), while " The Bank uses modern methods, which are in line with the
policy change to keep pace with global developments in the various internal
processes", and " "The internal processes under continuous auditing in the bank"
comes in the second rank in mean (3.84), while the item " The Bank uses
measurement tools to detect the development oI the internal processes (internal
procedures)" comes in the last rank in a mean(3.48) and in standard deviation (0.66).








69
Table (8)
The means and standard deviations for the Third area: Internal Processes
Perspective
agreement
degree
rank Std.
Deviation Mean
Area No.
High 1 0.38 3.86
The bank provides a
developing unit oI credit
relationship that can
activate and develop the
bank credit relationship.
5
High 2 0.61 3.84
The Bank uses modern
methods, which are in line
with the policy change to
keep pace with global
developments in the
various internal processes.
3
High 2 0.76 3.84
The internal processes
under continuous auditing
in the bank
6
High 4 0.56 3.81
The bank Iollows speciIic
procedures Ior the
promoting oI bank's
capital demands
4
High 5 0.58 3.77
Bank system has the
ability to sort and
determine the agents'
renewable needs.
2
High 6 0.66 3.48
The Bank uses
measurement tools to
detect the development oI
the internal processes
(internal procedures).
1
High 0.38 3.77 Total Mean

The means, standard deviation, T- values were calculated Ior the sample
answer, also we used T- value Ior one sample T-Test and the next table shows that.
The results show that there is a signiIicant relationship on the level( 0.05)
between the two means Ior the sample answer, because signiIicant level was less than
) 0.05 ( which is statically signiIicant. This disagrees with the hypotheses (Ho3:


70
there is no relation between the internal processes evaluations and the evaluations oI
the rest three perspectives oI the BSC).
Table (9)
Means, standard deviations and T- value for the study sample
area means S.D T- value SigniIicant
internal
processes
3.77 0.38 30.543

0.000
2.6 -

4-2. 4 Fourth Area: Human Resources Innovation and Renewal Perspective
Means and standard deviation were calculated Ior each item oI the Iourth area, the
mean Ior the third area (3.42 ) in standard deviation (0.48).

In the Iourth area, all the agreement degrees were high. The item "The bank
conducts training courses that help in increasing the eIIiciency oI workers" comes in
the Iirst rank in mean (3.74) and in standard deviation (0.66). While "The employee
gets a satisIying salary" comes in the second rank in mean (3.44) and standard
deviation (0.73), while the item " In The bank provides innovative culture and
renewable among workers" comes in the last rank in a mean (3.22) and in standard
deviation (0.75).










71
Table (10)
The means and standard deviations for the Fourth Area: Human Resources
Innovation and Renewal Perspective
agreement
degree
rank Std.
Deviation Mean
Area No.
High 1 0.66 3.74
The bank conducts
training courses that help
in increasing the eIIiciency
oI workers
3
High 2 0.73 3.44
The employee gets a
satisIying salary
2
High 3 0.59 3.40
The Bank uses
measurement tools to
detect the development
resulting Irom the training
oI staII.
1
High 3 0.78 3.40
The bank administration
explain the appropriate
practices as a tool oI
promoting the operational
experience Ior the workers
4
Medium

5 0.93 3.31
The bank administration
Iollows the Recent
developments in the work
oI international banks
6
Medium

6 0.75 3.22
The bank provides
innovative culture and
renewable among workers
5
High 0.48 3.42 Total Mean

The means, standard deviation, T- value were calculated Ior the sample answer, also
we used T- value Ior one sample T-Test and the next table shows that.
The results show that there is signiIicant relationship on the level( 0.05) between
the two means Ior the sample answer, because signiIicant level was less than ) 0.05 (
which is statically signiIicant. This disagrees with the hypotheses (Ho4: there is no
relation between the human resources innovation and renewal evaluations and the
evaluations oI the rest three perspectives oI the BSC).



72
Table (11)
Means, standard deviations and T- value for the study sample
Area means S.D T- value SigniIicant
Human Resources Innovation and
Renewal
3.42 .48 16.927

0.000

2.6 -

4-2.5 Fifth Area: BSC Four Perspectives and the Correspondence Relation
in Between Perspective
Means and standard deviation were calculated Ior each item oI the IiIth area, the mean
Ior the third area (2.59) in standard deviation (0.56)

In the IiIth area all the agreement degrees were high. The item "In developing the
strategic plan oI the bank is taken into account the perIormance indicators at various
levels" comes in the Iirst rank in mean (2.92) and in standard deviation (0.80). While
"Indicates the development oI the perIormance oI employees in the bank to improve
the level oI customer satisIaction" comes in the second rank in mean (2.65) and
standard deviation (0.81), while the item "Financial perIormance developing indicator
oI the development oI workers, the growth oI renewal and training" comes in the last
rank in a mean (2.42) and in standard deviation (0.74).









73
Table (12)
The Means and Standard Deviations for the Fifth Area: BSC Four Perspectives
and the Correspondence Relation in between
agreement
degree
rank Std.
Deviation Mean
Area No.
Medium 1 0.80 2.92
In developing the strategic
plan oI the bank is taken
into account the
perIormance indicators at
various levels.
5
Medium 2 0.81 2.65
Indicates the development
oI the perIormance oI
employees in the bank to
improve the level oI
customer satisIaction.
4
Low 3 0.86 2.49
ReIlected the development
oI skills oI workers to
carry out various measures
in the bank less time and
cost.
3
Low 4 0.91 2.46
There is a
complementarily in the
development oI the Bank's
perIormance at the
Iinancial, customer
service, internal processes,
and processes oI renewal
and innovation.
1
Low 5 0.74 2.42
Financial perIormance
developing indicator oI the
development oI workers,
the growth oI renewal and
training.
2
Low 0.56 2.59 Total Mean

The next table shows the relation between the tangibles (Iinancial perspective)
and intangibles (rest oI perspectives) Iactors by using regression. The results show
that there is a signiIicant on the level ( 0.05) between the two means Ior the
sample answer. This disagrees with the hypotheses (Ho5: Mathematical Model does


74
not Integrate BSC in the Change Management and Strategic Planning in all the Iour
areas).
Table (13)
The Relation between the Intangibles and Tangibles
Sig

df F

R
2


R

.000 1 .966 218.129 .621 .788 The relation between
the intangibles and
tangibles
133
143

Because there is a signiIicant on the level ( 0.05), the researcher proposed
the Iollowing model:

4-3 Model Approach
As we have seen in the pervious pages oI this chapter, there is a relation
between the tangibles (Iinancial perspective oI BSC) and intangibles (the rest three
perspectives oI BSC), this relation should be studied and Iigured, and there should be
a Irame that we can study this relation through it in order to be able to control it.
This Irame will be shown and discussed through the proposed model in this
section. The model idea is associated with mathematical method which is a derivation
Irom the algebra oI complex numbers and their geometry.
The eIIiciency oI the management process and how to calculate it by using
BSC perspectives ( tangibles and intangibles)
The management process gap (shortages in the intangibles), and how we
can achieve it, compensate (retuning) the process in order to increase the
eIIiciency oI the process itselI.



75
The researcher Iollows and adopts six phases in discussing research problem
(proposed model).
1. Formulating the problem.
2. Constructing the model.
3. Testing the model.
4. Deriving a solution Irom the model.
5. Testing and controlling the solution.
6. Implementing the solution.
The type oI measure oI the required eIIiciency depends on whether the
amounts oI input and/or output are speciIied in the deIinition oI the relevant outcome,
or not.

The Four Possibilities are as Follows:
(1) SpeciIied (or irrelevant) outputs and inputs, where the measure oI eIIiciency
is simply the probability that the outcome will occur.
(2) SpeciIied outputs and variable inputs, where alternative courses oI action are
evaluated with respect to the inputs required to obtain a speciIied output.
(3) Variable outputs and speciIied inputs are evaluated relative to the amount oI
output they yield.
(4) Variable inputs and outputs, where neither input nor output is speciIied, and
their diIIerences or ratio is used as a measure oI eIIiciency.
The course oI action which yields the greatest diIIerence between output and
input can be considered to be the most eIIicient.



76
As already indicated, proIit is measured by such a diIIerence. Return on
investment, on the other hand, is a ratio oI output to input. Model oI problem
situations will take the Iollowing special mathematical Iorm:
The model has two essential characteristics. First, at least one oI the "input"
variables is subject to the control by the person conIronted by the problem. Second,
the "output" variable must be a measure or index oI the value oI the alternative
choices to the decision maker.

4-3 -1 Efficiency Measurement
The researcher constructs and implements a model using the mathematical
equation (b) (c), to measure the eIIiciency oI the management process. Supposing that
"Ior every management process there is an apparent power", this process can be
measured and evaluated by this power.

The apparent power will be considered as the perIormance oI the management
process, and evaluating and calculating oI this power will lead to the process
eIIiciency itselI. Apparent power consists oI two parts which they will be considered
as inputs to the equation; Iirst the active power (tangible/ real part oI the equation),
and the reactive power (intangible / imaginary part oI the equation), represented by
the Iollowing.
Management process management process + management process -------- (a)
Apparent power real power idle power


Consequently, the relation between the active power (tangibles) and the
reactive power (intangibles), can be represented as eIIiciency and perIormance
measurement oI the management process, as shown in Iigure 7


77
Figure (7) Management Efficiency
















Figure by researcher
By using BSC approach and its Iour perspectives evaluation, we can measure
the eIIiciency oI the management process itselI by evaluating and tabulating the
tangibles (p1), and the intangibles (p2,p3,p4) then Ieedback the results to BSC
evaluating sheets to retune the evolutions according to the standards selected by
decision makers. Concentrating on and communicating the readings with the strategic
plane will make it easy to make the change management required, as shown in Iigure
7.
Efficiency of
Management
Process

Intangibles

Tangible/Financial

P4
P4 P3 P2
BSC
Approach

Change Management

Strategic Planning



78
ThereIore, eIIiciency can be represented mathematically as shown in Iigure 8
Figure (8) Efficiency

Where
F (Xi, Yj) S Management Process ----------------------------------- (b)

Supposing that the management process has apparent power and Irom (b), the next
equations represent the complex apparent oI the system.
S P + jQ ---------------------------------------------------------------------- (c)
Where:
S: is the complex apparent power oI the management process
P: is the real power oI the management process (tangible)
Q: is the reactive power (idle component) oI the management process (intangible)
j: is the complex operator
S [ Real [ cos [ + [ imaginary [ sin ---------------------------------- (d)

S P
2
+ Q
2
------------------------------------------- (e)



79
The magnitude oI the complex power S, is oIten reIerred to as apparent power
magnitude.
Where

P
2
Q
2
is the total magnitude oI the process
is the angle between the real and imaginary axes.
And which will be considered later as the gap oI the process.
Efficiency tan real power / apparent power
Consequently; 100 eIIiciency (pI1), which means excellent management process
means that:
Tangible part oI the process (Iinancial perspective) should equal in magnitude
the intangible part (the rest three perspectives oI BSC), and having the same direction,
(with zero angle, 0)

4-3 -2 Gap Measurement
As a managerial request, the angle () will be considered the gap between the
tangible and the intangible measurements oI the company. This gap will be treated as
a mirror Ior the process that will be controlled and evaluated by decision makers
inside the company.
Knowing and measuring the gap oI the process, will lead us to know the
shortages and mistakes through the process. This is sustaining the decision makers to
take an action that is supporting and compensating the process, as shown in Iigure 9





80
Figure (9) Gap treatment for shortages in the management process efficiency
Management Process before Gap Treatment

Management Process after Gap Treatment
Figure by researcher

P
Q
S
M Metering financial evaluations
M
Metering BSC evaluations
S
Total Management Process
P
Q
S
M Metering financial evaluations
M
Metering BSC evaluations
S
Capacitor Bank
For
Compensation
Actions by decision makers


81
The gap treatment and compensation through a math equation as Iollows:
Qc Q1-Q2
Where,
Qc P (tan
1
tan
2
)

Where,
Qc: compensation (shortage) magnitude to be added to the process by decision
makers.

1
: the angle to be always corrected.

2
: the measured angle Irom equation (1)
A speciIied calculated magnitude oI Qc means additional power oI ,x, to be supplied
and transIerred via the existing process. See figure 10















82
Figure (10) Process Gap-Mathematical Representation

Where
S1: Is the apparent power oI existed and calculated management process
S2: Is the reIorested power aIter compensating and remodeling the power perspectives
evaluations.
As a conclusion Ior this section, we can see the importance oI the proposed
model lies in the Iollowing:
Every management process has a power, which we called it the apparent
power, and using the model which can calculate this power.
Calculating the management process power leads to know the real power
(tangibles) magnitude and idle power (intangibles) magnitude, and
consequently the eIIiciency oI our management process.
Knowing the eIIiciency oI our management process leads us to know the gap
or weaknesses in our process which we called the gap oI the process.
Q1
Q2
S1
S2
X
Y
P

1
2


83
Chapter Five
Conclusion and Recommendations
5-1 Overview
5-2 Areas Discussion
5-2.1 Discussion First Area: Financial Perspective
5-2.2 Second Area: Agent
5-2.3 Third Area: Internal Processes
5-2.4 Fourth Area: Human Resources Innovation and Renewal
5-2.5 FiIth Area: BSC Four Perspectives and the Correspondence Relation in
Between
5-3 Recommendations















84
5-1 Overview
The results show that the area oI Financial Perspective has the highest mean,
which reIers to the Iinancial objectives oI the entire organization. As such, the
Iinancial objectives serve as the Iocus Ior the decision makers' objectives and
measures oI the other three perspectives. While the area oI BSC Iour perspectives and
the correspondence relation in between have, the lowest mean, the Jordanian banks
have to apply BSC checklist, and then apply the proposed model to achieve
integration in the Iour perspectives oI BSC with change management and strategic
planning.
5-2 Areas Discussion
5-2.1 Discussion First Area: Financial Perspective
The results showed that the item " The bank has relative growth in lending to
customers" with mean up to (3.87) has the highest mean because oI the Jordanian
banks used lending strategies to help the customers to have more options and to help
the bank to rise its reputation. The next higher item was Ior "There is an increase in
cash and bank balances with central banks" with mean up to (3.78) because oI the
direct relations between Jordanian banks and the central bank.
While the item "There is an increase in net cash Ilow that used in Iinancial
operations" and the item "There is a noticeable increase in user net cash Ilow in that
used investment operations" with mean up to (3.41) came in the ninth rank because
there is slow movement in making strategies that concern in Iacilitating the
procedures oI taking cash Ilow Irom banks to make investments and Iinancial
operations.
Finally the item "There is a clear decrease in operational cost comparing with
the proIits that the bank achieved" with mean up to (3.23) came in the Iinal rank


85
because oI the lack oI bank understanding Ior the necessary strategies that concerned
in reducing the gap between the operational cost comparing and with the proIits that
the bank achieved.
5-2.2 Second Area: Agent Perspective
The results showed that the item "The Bank uses measurement tools to detect
the evolution in customer service" with mean up to (4.01) has the highest mean. This
reIers to the most important advantage Ior the banks, which is to introduce a good
services to the customers continuously, and in this way some banks are less popularity
than other banks. The next higher item was Ior " The bank has continuous newly
agents " with mean up to (3.99) because oI the bank strategies that concerned in
satisIying the customer that they already have to present a clear evidence Ior the other
people Ior the successIul oI this bank to encourage them to be one oI its new
customers.
While the item "The bank provides Iinancial services with lower interest rate
to the agents comparing with other banks" with mean up to (3.55) came in the sixth
rank. This may relate to the Jordanian banks plans which still eIIective Ior taking
lower interest Irom its agent, which considered as deIault, and is still suIIering Irom
Jordanian banks.
Finally the item "There is an increase in bank deposits and banking
institutions" with mean up to (3.42) came in the Iinal rank. This may return that
Jordan is a poor country and its population doesn't have much to deposit it in banks
because oI the cost which become more and more expensive.
5-2.3 Third Area: Internal Processes Perspective
The results showed that the item "The bank provides a developing unit oI
credit relationship that can activate and develop the bank credit relationship" with


86
mean up to (3.86) has the highest mean because oI the importance oI bank credit in
economic progress because it tries to disable the Iunds or Irozen it. The next higher
item was Ior "The Bank uses modern methods, which are in line with the policy
change to keep pace with global developments in the various internal processes" with
mean up to (3.84) because oI the importance oI applying modern method at banking
and identiIying Jordanian banks in the rules that help in developing banking industry
and help them to prove their qualitative perIormance.
While the item "Bank system has the ability to sort and determine the agents'
renewable needs" with mean up to (3.58) came in the IiIth rank. This may relate to the
Jordanian banks policy that still has a deIault in making plans to sort the customers
according to their needs and requires. Finally, the item "The Bank uses measurement
tools to detect the development oI the internal processes (internal procedures)" with
mean up to (3.48) came in the Iinal rank because oI Jordanian bank lack in developing
the process that it has to evaluate and audit its procedures.

5-2.4 Fourth Area: Human Resources Innovation and Renewal Perspective
The results showed that the item "The bank conducts training courses that help
in increasing the eIIiciency oI workers" with mean up to (3.74) has the highest mean.
This may relate to Jordanian bank concerns to introduce the best service to its
customers to keep them satisIied, and increase the bank reputation between the other
banks. The next higher item was Ior "The employee gets a satisIying salary" with
mean up to (3.44) because iI the employees are satisIied with their salaries, they will
complete their work in a good way and prove their skills.



87
While the item "The bank administration Iollows the recent developments in
the work oI international banks" with mean up to (3.31) came in the IiIth rank because
the Jordanian banks dont Iollow the recent developments that always concerns, and
not all the development can be applied in the Jordanian banks. Finally, the item "The
bank provides innovative culture and renewable among workers" with mean up to
(3.42) came in the Iinal rank because oI the problems that the Jordanian banks have in
providing the appropriate innovate culture to the employees.

5-2.5 Fifth Area: BSC Four Perspectives and the Correspondence Relation in
Between Perspective
This area is the only area that the agreement degrees ranged by medium and
low degree. This may be related to Jordanian banks which do not activate its
practicing to the balanced scorecard model. The results showed that the item "In
developing the strategic plan oI the bank is taken into account the perIormance
indicators, at various levels" with mean up to (2.92) has the highest mean because the
perIormance indicators such as Iinancial level, customer services, internal process and
training process, are so important Ior developing bank perIormance gradually to
ensure the success oI these strategies.
The next higher item was Ior "Indicates the development oI the perIormance
oI employees in the bank to improve the level oI customer satisIaction" with mean up
to (2.65). It may reIer to the close and direct relationship between employees'
perIormance and customer satisIaction. While the item "There is a complementarily in
the development oI the Bank's perIormance at the Iinancial, customer service, internal
processes, and processes oI renewal and innovation" with mean up to (2.46) came in


88
the IiIth rank because Jordanian banks do not coordinate between all the levels, it
concerned in each one alone.
Finally the item "Financial perIormance developing indicator oI the
development oI workers, the growth oI renewal and training" with mean up to (2.59)
came in the Iinal rank because there is no noticeable development in bank procedures.






















89
5-3 Recommendations
1. The Jordanian banks have to Iocus on improving their balanced scorecard
practices, which will lead to enhance their Iirms value.
2. The importance oI balanced scorecard integrates the corporate management
with the corporate strategy and makes it explicit.
3. Conducting Iurther studies and taking into consideration other sectors and
variables haven't been taken by this study.
4. The importance oI applying the mathematical model in the Jordanian banks
can be summarized as the Iollowing: Iacilitating organization, identiIying the
operational Iactors that drive Iuture success, aligning their strategic objectives
and actions, accumulating the resources that can create a long-term
competitive advantage and returning the intangibles continuously to be
integrated with the tangibles.
5. The importance oI taking into consideration the policy oI the Jordanian banks
in the light oI the balanced scorecard.












90
References:
Aaker, D. A. (1992). Developing Business Strategies, Berkley, CA: University oI
CaliIornia.
Al-Jaberi, K. (2005). Building a PerIormance Measurement Model Ior Jordanian
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96
Appendixes
Appendix 1
Questionnaire in English Language
The Bank..
Dear reader,
Best greeting,
The Researcher is conducting a study on "DEVELOPING
MEASUREMENT MATHEMATICAL MODEL IN MANAGEMENT
CHANGE AND STRATEGIC PLANNING USING BSC PERSPECTIVES", in
order to have an M.A degree in science and Iinancial administration. Please answer all
the attached paragraph oI the questionnaire by putting () beside the answer which
might be appropriate Ior you, and please Iill out the general inIormation mentioned
below, Note that the study Ior research purposes only.
Researcher
Ala'a Al Mtour

1. Gender
Female Male
2. Specialist
Management Economic Accounting Other,
3. Experience
3 years 4-6 years more than 6 years

4. Qualifications
Bachelor higher diploma master PhD



97
Strongly
disagree
Disagree Not sure agree
Strongly
agree
Paragraphs No.
First Area: Financial Perspective

The Bank uses measurement tools to
detect the development oI the Iinancial
perIormance
1

The bank has relative growth in
lending to customers
2

the bank achieves a noticeable growth
in proIits
3

There is a clear decrease in operational
cost comparing with the proIits that the
bank achieved
4

There are Iinancial cash Ilow indicate to
the bank growth
5

The bank has an extra share in Jordan
banks marketing
6

There is an increase in cash and bank
balances with central banks
7

There is an increase in bank deposit in
the banks and banking institutions
8

There is a noticeable increase in net
cash Ilow that used in investment
operations

9

There is increase in net cash Ilow that
used in Iinancial operations
10
Second Area: Agent

The Bank uses measurement tools to
detect the evolution in customer service.
1
The bank has continuous newly agents 2

The agents are satisIied with doing
diIIerent transactions
3

The bank provides suitable Iinancial
services to the agents
4


98
Strongly
disagree
Disagree Not sure agree
Strongly
agree
Paragraphs No.

The bank provides Iinancial services
with lower interest rate to the agents
comparing with other banks
5
There is an increase in agents' deposits 6

There is an increase in bank deposits
and banking institutions
7
Third area: internal processes

The Bank uses measurement tools to
detect the development oI the internal
processes (internal procedures).
1

Bank system has the ability to sort and
determine the agents' renewable needs.
2

The Bank uses modern methods, which
are in line with the policy change to
keep pace with global developments in
the various internal processes.
3

The bank Iollows speciIic procedures
Ior the promotion oI bank's capital
demands
4

The bank provides a developing unit oI
credit relationship that can activate and
develop the bank credit relationship.
5

The internal processes under continuous
auditing in the bank
6
Fourth Area: Human Resources Innovation and Renewal

The Bank uses measurement tools to
detect the development resulting Irom
the training oI staII.
1
The employee gets a satisIying salary 2

The bank conducts training courses that
help in increasing the eIIiciency oI
workers

3


99
Strongly
disagree
Disagree Not sure agree
Strongly
agree
Paragraphs No.

The bank administration explains the
appropriate practices as a tool oI
promoting the operational experience
Ior the workers
4

The bank provides innovative culture
and renewable among workers
5

The bank administration Iollows the
Recent developments in the work oI
international banks
6
Fifth Area: BSC four perspectives and the correspondence relation in between

There is a complementarily in the
development oI the Bank's perIormance
at the Iinancial, customer service,
internal processes, and processes oI
renewal and innovation.
1

Financial perIormance developing
indicator oI the development oI
workers, the growth oI renewal and
training.
2

ReIlected the development oI skills oI
workers to carry out various measures
in the bank less time and cost.
3

Indicates the development oI the
perIormance oI employees in the bank
to improve the level oI customer
satisIaction.
4

In developing the strategic plan oI the
bank is taken into account the
perIormance indicators at various
levels.
5




100
Appendix 2
Questionnaire in Arabic Language

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101
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1
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''-' ` .
2
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`-'' .
3 ' -=, -- ,-- =,='- ' '-`
4
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7
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8
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,-
9
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-- '--,- , .
10
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'-`--` ','-= .
11
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.,,--' ','-=
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1
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3
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-'-=-' .
4 `-' '=',-= --'--- '--= --,-' --- .
5
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' '-- =` .
6 `-' _- ', -=,- .


102
;-,-
,---
=--
_-;-
-~-
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,--
_-;-
;- ,-- _-
-~-
7
=,- ' _- ', - '-- ,--' '--,-'
=` .
~-'-- '=-- : --=-- '----
1
' -=--, -- ,=-' = --'' ',
,'=-' ','-' ) ,'=-' =` .(
2
' ='--, -- '=',-= -,-=- _'= --'
-=--' `-' .
3
' -=--, -- _- _-'--- -' `,-=' -,''-`
','-' ,-''' -=---' -,-' ,,-' -',-
-'-=-' ,'=-' .

4
' _--, -- '-'=--- '--`' -=- =
' ----' '-' -- .
5
' ,, -- --+- ,-'---` `' ,,=- -= '+
' '---` ,,=- .,-- -- .
6
' ,'=-' ','-' _-=- -- =-''
----' .
-,- '=-- : ;--- '---V -,~-- ;--
1
' -=--, -- ,=-' = --'' ',
,-=,-' -,-- = _-'-' .
2
-=--- _'= -=,-' .-=, -, '=- ,''- '
'-''- .
3
' --, -- '- ,,=- '-- ,-,--
,'-'' .
4
' _-,- -- ',-, --`-' '-'--'
,'-''' ,'-' -=' ,,=-' .
5 ' --, -- ,'-'' -' -=-' --` '-` .
6
' _-'-- - - '=-' `,-=' -=---'
--' .





103
;-,-
,---
=--
_-;-
-~-
_-;- ,--
-'--
,--
_-;-
;- ,-- _-
-~-
Q-'=- '=-- : V '--- ;--- ;--V '=- Q-- ---'--- ->-
1
' ,=- .-'- '- -- ',,---' _'= :
,''-' ','-= ,'=-' ','-' `-' --=
-,--' -=-' .

2
' .-, ,'-'' ,=-' -,- ''-' ` ,=-
-,--' -=-' ','-= ,-- .
3
=`'- ',-' _'= ,'-'' '+- ,=- -,
' -'-=-' -- -'' -,' _'= .
4
' ,'-'' ,=- ,-, -- -=- _'
- ,--- _ `-' .
5
'' ,=,---` ==' _- --= -- ,- -=,,
',,---' ` -,- '--=` : ,''-' --=
-=-' ','-= ,'=-' ','-' `-'
-,--' .