INTRODUCTION Summary of Article The article entitled ” Linking Balanced Scorecard Measures to Size and Market Factors
INTRODUCTION
Summary of Article
The article entitled ” Linking Balanced Scorecard Measures to Size and Market Factors: Impact on Organizational Performance” that was made by Zahirul Hoque and Wendy James examines the relationship between the use of a balanced scorecard on the size of the organization, the product life cycle stage, and market position strength, and its impact on organizational performance.
This study was conducted by giving questionnaires to the main financial controller of 188 manufacturing companies in Australia in July 1997. However, not all questionnaires responded well by respondents, only about 35.1% of companies responded well to the questionnaire.
The results of the study using the questionnaire showed that there is a significant relationship between company size and the use of BSC. Companies that have larger sizes tend to require a larger BSC in decision making. For the product life cycle stage, it is only related to the perspective of BSC innovation only, and the results also indicate a positive influence between the product life cycle stage and the use of BSC. However, the negative result is shown by the test with the analysis of the BSC segregation with the market position. The test results show that there is no influence of market position on BSC usage in a company. Furthermore, for testing between the use of BSC on company performance, the test results show that the use of BSC and corporate characteristic not so influential on organizational performance.
Teoritical Concepts
This research has given theoretical concepts that are in line with the title of the article. Each of these variables has been described in terms of exposure based on the exposure of the book or the exposure of other figures in different articles which serve as a reference in the making of this article. In addition to containing the meaning of each variable, this article also provides additional explanation of some things related to the variables to be tested, for example in the balance scorecard, described also the exposure of four main perspective in the balance scorecard is useful to provide a more detailed picture on the reader about BSC. In writing, researchers have also provided footnotes for additional information to the reader, as well as using the rules of good quotation in the article.
Research Methodology
This research uses primary data type because the data in this research is obtained from the questionnaire distribution. A questionnaire with a cover letter and a postage-paid, self-addressed envelope was mailed to the chief financial controllers of 188 Australian manufacturing firms in July 1997. The company will be randomly selected from the Business Who’s Who of Australia (Dun ; Bradstreet 1997). The companies used as the sample of this study are independent business units, not home office.
In the first delivery, there are twenty-three dari188 questionnaires were returned. The second delivery resulted in 27 questionnaires were returned. Four of the 70 respondents failed to complete the questionnaire for some inconsistent reasons, such as violating company policies and staffing limitations. So the adjustable response rate was 35.1 percent. To test for the possibility of bias, t-tests on two independent samples were performed by testing returns on first and second deliveries.
Variables used in this research are the balanced scorecard, organization size, product life cycle stage, strength of market position, and organizational performance. In this study also has been equipped with a chart that explains the relationship between variables.
Research Findings
After testing the variables using multicollinearity test through tolerance level and variance inflation factor (VIF), nonlinear test, heteroscedasticity test, regression test, ANOVA test, etc, can be obtained that larger companies, more use of BSC. In addition, firms that have a higher proportion of new products associated with new products. The BSC’s BSC is still unknown. In this study also shows that BSC is associated with improved performance, but does not depend on organizational size, product life cycle, or market position.
DISCUSSION
Review of Theoritical Concept
Theoretical concepts written by the researchers in this article have been quite complete. Cause, researchers have been able to develop logical thinking researchers to further combined with variables are at the core of research trials that led to the relationship between the existing theory of the factors which will affect a problem.
In this article, the authors noted the study of each variable, namely: the balanced scorecard, , organization size, product life cycle stage, strength of market position, organizational performance and explain in detail the relationship of each of these variables with the existing theory. Researchers logical thinking plays a very important role in developing the theory in this section. In addition, Sekaran (2014: 219) has also expressed some important points in the preparation of theoretical concepts, among others:
1. The variables considered relevant for the study should be identified and named clearly in the discussion.
This article has identified each of the variables and named it clearly. As listed in Table 4, there is a description that X1 = the size of the organization, X2 = product life cycle stage, and X3 = market position.
2. The discussion should mention why two or more variables are related to each other.
In this case, the researchers have already mentioned how a variable can affect other variables.
3. If the nature or direction of the relationship can be theorized in previous studies, there should be an indication of whether there is a positive or negative relationship in it.
On this third point, researchers have explained on previous research related to the study conducted by researchers when inu and results, positive or negative.
4. There must be explicit argument why researchers estimated this relationship applies.
In this article, researchers have explained how the relationship may apply for each variable.
5. There is a schematic diagram theorists framework to facilitate the reader to see and easily understand the relationship theorized.
To this last point, the researchers have done with show the theorists framework in figure 1 to facilitate the reader in understanding the relationship theorized.
Furthermore, after developing a theoretical framework, researchers built a hypothesis to support his research. Researchers constructed hypotheses exist 4, starting H1-H4. The overall hypothesis is directional hypothesis. Because, the whole hypothesis is built investigators about the relationship two or more variables using the term positive, negative, and other similar terms.
Review of Research Methodology
In this study has clearly explained what techniques are used in data retrieval, who will be the research sample, and what variables are used to test this study. Judging from the explanation in this article the sample used is the independent business unit and the questionnaire distributed directly to the chief financial controller, so the results of the questionnaire can be guaranteed accuracy because the sample of this study is an expert in the field associated with this research.
Nevertheless, this study also has many weaknesses such as: the focus of the sample from this company is only on the manufacturing company, so the application in other sector companies needs some adjustment. In addition, the sample size is too small, ie only 66 manufacturing companies in Australia, causing less significant research results with real circumstances. For the variables used may be enough because it has presented the purpose of this study although not complete, but if you want to add another variable is also better so that it can get more detailed results. Associated with the problem of data retrieval techniques, can be done with several other alternatives such as case studies or interviews, as seen from this study, the number of return questionnaires from two times the delivery is only slightly.
Then, the variables will be tested for significance level by conducting multicollinearity test through tolerance level and variance inflation factor (VIF), nonlinear test, and heteroscedasticity test. In addition, the researchers also conducted a regression test and ANOVA test. In this test the researcher has presented the results of the research clearly so that can be known how the level of correlation and significance between variables. The researcher also listed the tables of test results to facilitate the reader in concluding the research results. This test is done using SPSS software. In our opinion, this research uses a less precise methodology, because the methodology used in this study still can not present the Balance Scorecard in real and detail.
Review of Research Findings
In reviewing the research findings, we will compare the findings of the main article entitled “Linking Balanced Scorecard Measures to Size and Market Factors: Impact on Organizational Performance” with a supporting article entitled “Balanced Scorecard as a Tool to Influence Organizational Performance: Evidences From Indian Companies “. Both of these articles will discuss about Balance Scorecard.
The research on the first article entitled “Linking Balanced Scorecard Measures to Size and Market Factors: Impact on Organizational Performance” aims to explore the relationship between the use of BSC and (1) organizational size, (2) the product life cycle stage, and (3) strength market position. It also seeks a contingent relationship between organizational performance (yield variables) and the compatibility between the use of BSC and the three contextual variables described above. While research on the second article entitled “Balanced Scorecard as a Tool to Influence Organizational Performance: Evidences From Indian Companies” aims to explain how the relationship between balance scorecard in manufacturing industry and public and private sector vis-à-vis services in india so as to improve organizational performance.
The theoretical concepts of both articles have been well described by researchers and have qualified the theory of good concepts. Researchers from both articles have also explained the concetual framework of balance scorecard clearly. Each variable has been well expressed by the researcher and balanced by the related theories and logical thinking of the researcher. In addition, researchers also provide a conceptual chart that makes it easier to understand the relationships between variables.
For research methods, both articles are equally using questionnaires in the data collection. In the first article, the answer of the questionnaire is guaranteed validity, because the questionnaire is directly sent and addressed to the chief financial controller in the company. While in the second article, it is possible not completely answers from a valid questionnaire because it is not aimed at a specific division. For the return of questionnaires, the research on the second article is more and more efficient because of the 150 questionnaires, 76 respondents returned valid questionnaires. While in the first article, only 43 questionnaires returned from 188 first deliveries and 27 on the second delivery, and only 66 valid reponses from 70 respondents who returned the questionnaire. For testing, the first article is more complex because it performs several tests such as multicollinearity test through tolerance level and variance inflation factor (VIF), nonlinear test, heteroscedasticity test, regression test, ANOVA test, etc. While in the second article just do the test sample t-test with the help of Likert scale.
Research on the first article, found that the larger companies, more use of BSC. In addition, firms that have a higher proportion of new products associated with new products. The BSC’s BSC is still unknown. The paper also shows that the use of the BSC is associated with an improved performance, but does not depend on organizational size, product life cycle, or market position. While the findings of the second study are significant differences in average scores of balanced scorecards and organizational performance with respect to industry, manufacturing and service characteristics have different BSC perspectives, firms in the service sector mainly use the BSC rather than the manufacturing sector, the public sector and private enterprises have different BSC perspectives, private sector organizations use them more than manufacturing organizations, and BSC positively affects the company’s performance.
When asked about the validity of the findings, the findings of the second article more closely resemble the real-life picture, since the samples used are sufficient and the research also includes the manufacturing and service sectors as well as the public and private sectors. While in the first article research still requires the addition of several instruments to improve the research. The results of this study can be used as a reference and evaluation for managers in applying BSC in companies in Indonesia so that managers are not wrong steps in making decisions and can encourage the development of companies in Indonesia. BSC implementation can be done by conducting customer satisfaction surveys, conducting training for workers, monitoring the ups and downs of profits, etc.
CONCLUSION
The research of this article has been done as well as possible and has been in accordance with existing theories. However, there are still many shortcomings that still need to be fixed.
In testing BSC related to the effect on the performance of our company not only focus on the financial aspect but also non-financial aspects. Thus, to test the BSC we must also take into account the diversity of actions, so that we can produce tests that are appropriate to the real circumstances. In addition, a reference is needed from previous research in order for us to have a preliminary overview of the test.
