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Balanced scorecard for performance evaluation of R&D organization: A conceptual model
Abstract and Figures
Research and Development has been recognized as most important for future competitiveness to survive in this competitive and highly turbulent environment. A huge amount of money and other resources are being deployed in R&D by government as well as private organizations. A major consideration is required on performance improvement that needs to continuously evaluate the performance of R&D in line with vision and strategy of the organization. This paper deals with evaluating the performance of R&D organizations from four perspectives (financial, customers', innovative and learning, and internal business processes) using the balanced scorecard technique.
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... It may be worth mentioning here that the focus of the original 'Internal Processes' perspective in the BSC framework [16][17][18] is limited to those processes that affect either the customer value proposition or efficiency improvement, both of which lead to financial benefits. Thus, most of the previous works based entirely on the BSC framework do not adequately fulfil this second guiding principle, despite there being instances of performance measurement for R&D and new product development discussed in [21][22][23][24][25][26][27][28][29][30], which advocate an R&D process or lifecycle-based innovation performance measurement. ...
... Jyot and Deshmukh [27] To present a conceptual model for evaluating the performance of R&D organisations from four BSC perspectives: 'Financial', 'Customers', 'Internal Business Processes' and 'Innovation and Learning'. ...
... Use of internal and external knowledge and information sources [14,15,26,49] I424 Transfer rate of new knowledge and technology into product development (goods or services) [26,27,49] I425 Number of newly created innovative opportunities with customers, suppliers or partners [15] I426 Number of ideas generated with customers, suppliers or partners [15] I427 Number of projects funded by external organisations per year [15,26,27] ...
In the last decades, several multidimensional models for measuring and evaluating the innovation capacity and performance of organisations have been designed by researchers and consulting firms and adopted by established innovative organisations worldwide. However, the topic of measurement and evaluation models that are designed for sustainability-oriented innovation management has remained underexplored by researchers and practitioners. From this perspective, this work proposes a conceptual model for measuring and evaluating the sustainability-oriented innovation capacity (SOIC) and performance (SOIP) of established organisations, guided by the following principles: a multidimensional structure, stakeholder goal orientation, interdependence and feedback loop analyses, innovation process orientation and ease of implementation and use. In line with these principles, the proposed model combines the balanced scorecard (BSC) framework with a hybrid multicriteria methodological approach. Furthermore, it considers the interdependencies between the key innovation indicators (KIIs), which are classified according to four perspectives of an adapted BSC framework. The proposed conceptual model, and the empirical results that demonstrate its applicability in an organisational context, may contribute to improving the current practices for measuring and evaluating the SOIC and SOIP, which could help organisations to adjust their strategies to create sustainable value for the new era of business.
... Organizations generally use financial indicators for performance measurement. Such indicators may be deprived of forecasting and predicting function, might not emphasize on the processes but only the operative outcomes, and never explain the cause and effect of operative outcomes (Jyoti et al., 2006). The performance measurement of nonprofit organizations is studied extensively but the findings are generally inconclusive (Forbes, 1998). ...
... Anra & Yamin (2017) also argued that organization culture directly affects the performance of university lecturers and thus the performance of HEIs. Kaplan (2001) proposed Balance Scorecard (BSC) for non-profit organizations, which was later revised by Jyoti et al., (2006) and Iselin et al., (2009). Theme of the proposed Balance Scorecard is that accomplishment for not-for-profit organization cannot solely be measured using financial measures. ...
Culture and climate of an organization is valued to gain competitive advantage in today’s modern organizations. This study aimed to analyze the relative importance of Artifacts, Espoused Beliefs & Values and Basic Underlying Assumptions—the constituents of organization culture in relation to organization performance in Higher Education Institutes (HEIs) of district Peshawar. Cross-sectional data was collected from 250 employees of public and private sector universities working in drade-17 or above as teaching faculty or administrative staff using multi-stage cluster sampling technique. Findings indicated strong impact of constituents of organization cultural on organization performance and that the artifacts component has greater impact on organization performance than the other two components. Espoused beliefs and values have smaller impact than artifacts but greater impact than basic underlying assumptions and basic underlying assumptions have smallest impact. Thus leadership and management of HEIs should pay more and more attention to their tangible artifacts and making then more and more visible and ensuring their proper usage as this will lead to improvement in organization performance.
... This is very relevant to RTOs, as they also need to perform successfully to sustain themselves and continue to develop their mission. Contrary to the commercial firms, in which innovative success is measured by metrics like innovations or financial benefits, the success of RTOs is measured by different performance metrics [16,17]. Thus, RTOs need to perform successfully in a number of areas to ensure their sustainability: (1) knowledge generation, to ensure they generate new relevant knowledge and to remain at the forefront of technology research [18]; (2) knowledge and technology transfer, to provide companies with knowledge and technology as their main mission [19], and (3) economic results, that supports their operation and long term sustainability [20]. ...
... Due to the singular nature of RTOs, their underlying business model relies on achieving results in a set of different dimensions [16,17,19,62] that contribute to their overall performance and to achieve their long-term sustainability. Thus, RTOs are expected to provide results in three dimensions: on the knowledge generation dimension, their research activities need to contribute to the knowledge advance maintaining them at the forefront of technology research and increasing their knowledge stocks for future technology transfers [18]. ...
Research and development organisations (RTOs) are at the heart of innovation systems. They help to connect innovation system actors to foster industrial innovation. Due to this intermediary role, they act as paradigmatic open innovation (OI) actors. In this context, RTOs need to balance their knowledge stocks and flows, while assuring their own innovation capabilities and positively impacting the innovation system they influence. Thus, RTOs need to develop collaboration approaches that support their own performance while increasing their capabilities and not threatening their competitive advantages derived from their knowledge stock. In this study we extend the OI research to research organisations analysing their OI approach and the impact on its own performance, developing a new framework for OI study in RTOs using a partial least squares structural equation modelling (PLS-SEM) approach. The research, based on a sample of Spanish RTOs, arises two substantive conclusions. First, an increased number of collaboration partners (collaboration breadth) and the use of a variety of OI practices have a strong impact on RTOs’ overall performance (scientific, transference, and economic results). Second, RTOs need to foster their aperture and promote an active management to benefit from collaborating partners, whereas managers should pay special attention to questions related to the protection and management of intellectual property when promoting the use of different OI practices. Both results also emphasise the importance of managing firms’ knowledge flows in the implementation of OI in RTOs.
... Not only the corporate identities with profit motive are adopting this technique, it is seen that non profit organisations have also transformed this methodology to suit their own particular set of objectives. Jyoti et. al (2006) developed a model of BSC for Research and Development organisation. In this model the emphasis was placed on Innovation and Learning perspective, It had three core outcomes which were to measured through seventeen performance indicators. In comparison Financial perspective had three core outcomes with five performance indicators. Ronche ...
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... O BSC direciona os gestores por meio de quatro perspectivas diferentes, acrescentando aos indicadores financeiros tradicionais, outras perspectivas, como a de desempenho para os clientes, de processos internos e inovação e de atividade de melhoria (Kaplan & Norton, 2005). Além disso o BSC dá suporte à tomada de decisões com base em resultados confiáveis, deixando de arriscar e apostar em suposições para fazer escolhas mais condizentes com a realidade da empresa (Banwet & Deshmukh, 2006). ...
As organizações têm buscado ferramentas que auxiliem no processo de gestão, dando um direcionamento em meio ao mercado turbulento na qual se encontram. A busca por conhecer os benefícios das ferramentas utilizadas leva as organizações a conhecerem diferentes ferramentas que contribuam no alcance dos seus objetivos estratégicos. O Balanced Scorecard (BSC) surge com uma ferramenta de gestão de desempenhoO objetivo deste estudo foi apresentar fatores que indicam a aplicabilidade do Balanced Scorecard (BSC) numa organização. Para tanto, utilizou-se de pesquisa-ação realizada numa organização de pequeno porte, onde os dados foram coletados por meio de entrevistas semiestruturadas. Os gestores da organização foram questionados acerca de 145 indicadores apontados como os mais abordados na literatura nacional. Assim, os indicadores identificados como utilizados na organização estudada foram distribuídos em uma tabela conforme relação com cada uma das perspectivas do BSC. Identificou-se que a maior parte dos indicadores utilizados concentram-se na perspectiva financeira, não apresentando o equilíbrio entre as perspectivas proposto por Kaplan e Norton, criadores do BSC. Os resultados deste estudo convergem com os resultados de pesquisas similares, apontando a preferência das organizações por métricas financeiras em relação às métricas não financeiras
... Organizations generally use financial indicators for performance measurement. According to Jyoti et al., (2006 ...
Culture is a vibrant component of effective & efficient administrative practices in higher education institutes (HEIs) and is linked with progress and success. This research examines the impact of organization culture on organization performance in public and private sector universities of district Peshawar and presents a comparison of the impact in both the sectors. Impact of the three levels of cultural analysis, Artifacts, Espoused Beliefs & Values and Basic Underlying Assumptions on Organization Performance is measured and discussed. Schein Model of Organization Culture (Schein, 2004) and Balance Scorecard (BSC) for non-profit organizations (Kaplan, 2001) are used to examine the relationship between organizational performance (as dependent variable) and organizational culture (as independent variable). The research establish that organization culture have a strong positive impact on organization performance and that in public sector universities Belief and impact on organization performance.
The essence of the balanced scorecard system as a means of providing information for the innovative management of the enterprise has been considered. The functions of a balanced scorecard system in the system of innovative management have been disclosed. The role of a balanced scorecard system in the formation of information support for the management of the enterpriseʼs innovative capital has been analyzed. The factors that determine the need for the development of a balanced scorecard system in the conditions of the knowledge economy have been analyzed. Four main options for the reorganization of the balanced scorecard system for the accounting support of the management of the innovative capital of the enterprise have been identified and analyzed: 1) inclusion of innovative indicators in the existing prospects of balanced scorecard system; 2) renaming the individual balanced scorecard system perspectives; 3) highlighting a new «innovative» perspective; 4) creation of an innovative scorecard system. The advantages and disadvantages of each of the proposed options for the development of a balanced scorecard system from the standpoint of building a system of accounting support for the management of innovative capital at Ukrainian enterprises have been grounded.
Purpose
The paper develops a model for enhancing R&D productivity for Indian public funded laboratories. The paper utilizes the productivity data of five Council of Scientific and Industrial Research (CSIR) laboratories for analysis and to form the constructs of the model.
Design/methodology/approach
The weighted average method was employed for analyzing the rankings of survey respondents pertaining to the significant measures enhancing R&D involvement of researchers and significant non-R&D jobs. The authors have proposed a model of productivity. Various individual, organizational and environmental constructs related to the researchers working in the CSIR laboratories have been outlined that can enhance R&D productivity of researchers in Indian R&D laboratories. Partial Least Squares-Structural Equation Modeling (PLS-SEM) was used to find the predictability of the productivity model.
Findings
The organizational factors have a crucial role in enhancing the R&D outputs of CSIR laboratories. The R&D productivity of researchers can be improved through implementing the constructs of the proposed model of productivity.
Research limitations/implications
The R&D productivity model can be adapted by the R&D laboratories to enhance researchers’ R&D involvement, increased R&D outputs and achieving self-sustenance in long run.
Practical implications
The R&D laboratories can initiate exercises to explore the most relevant factors and measures to enhance R&D productivity of their researchers. The constructs of the model can function as a guideline to introduce the most preferable research policies in the laboratory for overall mutual growth of laboratory and the researchers.
Originality/value
Hardly any studies have been found that have focused on finding the measures of enhancing R&D involvement of researchers and the influence of significant time-intensive jobs on researchers’ productivity.
The purpose of this article is to analyse South Africa’s progress on the 17 Sustainable Development Goals (SDGs) since the adoption of the goals in 2015 and to propose a way forward. The article is based on a desktop study of authoritative sources to conceptualise and contextualise the progress towards the implementation of the SDGs. Unobtrusive research techniques are applied in terms of a documentary and conceptual analysis. The findings suggest that concerning progress of SDGs, South Africa is largely off track on almost all of the 17 SGDs. Out of the 17 SDGs, based on the goal trends, only two SDGs are on track or maintaining SDG achievement, six are stagnating, seven are moderately improving and two have trend information missing. Moreover, of the 17 goals, six are still experiencing major challenges, eight have encountered significant challenges and there are two where challenges remain. The country has made progress through its commitment to realising the goals by implementing various policies, financing the goals, aligning the National Development Plan (NDP) to the SDGs and involving multiple stakeholders.
Executives know that a company's measurement systems strongly affect employee behaviors. But the traditional financial performance measures that worked for the industrial era are out of sync with the skills organizations are trying to master. Frustrated by these inadequacies, some managers have abandoned financial measures like return on equity and earnings per share. "Make operational improvements, and the numbers will follow,"the argument goes. But managers want a balanced presentation of measures that will allow them to view the company from several perspectives at once. In this classic article from 1992, authors Robert Kaplan and David Norton propose an innovative solution. During a yearlong research project with 12 companies at the leading edge of performance management, the authors developed a "balanced scorecard;" a new performance measurement system that gives top managers a fast but comprehensive view of their business. The balanced scorecard includes financial measures that tell the results of actions already taken. And it complements those financial measures with three sets of operational measures related to customer satisfaction, internal processes, and the organization's ability to learn and improve-the activities that drive future financial performance. The balanced scorecard helps managers look at their businesses from four essential perspectives and answer Some important questions. First, How do customers see us? Second, What must we excel at? Third, Can we continue to improve and create value? And fourth, How do we appear to shareholders? By looking at all of these parameters, managers can determine whether improvements in one area have come at the expense of another. Armed with that knowledge, the authors say, executives can glean a complete picture of where the company stands-and where it's headed.
Very few performance measurement reports used by world class manufacturers are new; the majority have been in use for many years. The difference is that now these are the primary methods used to monitor and control the business. Cost accounting reports - which were primary in the past - are still used for external reporting, but not for operational decision-making by plant or departmental managers. Performance measurement reports employed by companies with good world class manufacturing (WCM) track records fall into five broad categories: quality, delivery, production process times, flexibility and costs. Specific examples of performance measures and examples of reporting methods are presented.
Can a TQM initiative really fail? The primary aim of the article is to convey a more astute understanding of the very essence of TQM. It shows how the TQM philosophy is founded in common sense, and why the infusion of TQM in any organization should result only in a win-win situation. While stressing the value of the human resource, it sheds light on the practical application of TQM. It establishes an innovative and proactive perspective on TQM implementation. Most importantly, it challenges sceptics of TQM to re-evaluate. In helping management and other employees understand the essence of TQM, addresses some commonly held misconceptions.
The historical use of performance measures and the problems associated with productivity improvement in industry today are reviewed. A simple numerical example illustrates the problems arising when each functional area uses its own performance standard. A short case study highlights the problems of an actual company's performance measurement system, and shortcomings associated with various traditional performance measures are described.
Performance indicator is an important factor used in business goal setting and management performance assessment. Traditionally, companies tend to measure business performance in terms of financial data such as ROI, ROA, etc. However, those indicators are not enough for management to evaluate business performance as a whole. Balanced Scorecard can be used to overcome this problem by integrating all aspects of business operation such as customer aspect, organizational process aspect, business creation and learning aspect, and financial aspect. While we are proposing the Balanced Scorecard method, we have to, at the same time, evaluate the performance of the organization. Whilst business performance can be expressed in certain clear numbers or words, it can only be described in vague languages for most of the times. Thus, the Data Envelopment Analysis Method (DEA) along with the Fuzzy Theory can be implemented to generate the objective performance indicators. This paper uses the Fuzzy DEA to evaluate the performance of Balanced Scoreboard for a multi-national research and development project.
Results of a study conducted to understand how performance is evaluated in just-in-time (JIT) operations are reported in this paper. The purpose of the study was to develop a series of propositions concerning the performance criteria, standards, measurement techniques, and reporting methods that are appropriate in JIT environments. Ten propositions are provided.
Strategic controls can be considered to be non-financial performance measures and they are of particular value in a diversified company in controlling, monitoring and guiding the development of operating units. The development of a strategic control process is described and its implementation.
Without effective performance evaluation, R&D organizations will find it hard to motivate their R&D scientists and engineers: ‘How should R&D managers design the performance measurement system most suitable to their own organization?’ is a critical question. Based on a large-scale survey covering over 1200 R&D scientists and engineers in Korean R&D organizations, we put forth the following lessons. Although most of the R&D personnel prefer their compensation based on their performance, they indicate that lack of fair performance evaluation system could be the biggest obstacle towards implementing such a compensation scheme. They also suggest that a fair performance evaluation should utilize more behavioral and qualitative measures such as leadership and mentoring for younger researchers, and bottom-up (e.g., R&D researchers’ evaluation of their own bosses, say, R&D managers) as well as horizontal (e.g., peers and/or colleagues) evaluation schemes.