THE STUDY OF
PERFORMANCE MEASUREMENT: VALIDITY OF THE BALANCE SOCRECARD IN MALAYSIAN
BUSINESS ENVIRONMENT
By
Performance measurements have been perceived as a vital part of business management. Many researches have been conducted in order to improve measurement so as to utilize it in a most effective way. The latest study on performance measurement resulted a new management philosophy known as the Balance Scorecard (co-authored by Robert S. Kaplan and David P. Norton). All these triggered an urge to further understand the performance measurement tools and the validity of the balance scorecard in a Malaysia business environment. This research is started with an inept study of secondary information on various types of performance measurement. Many references from books, journals, magazines as well as the Internet were made. It was found that performance measurement is indeed a major concern both in the education industry and business industry. The current emphasis by many researcher is that non-financial performances have not been getting adequate attention from business managers. This research thus, goes about explaining the importance of non-financial issues and also criticism for lying solely on financial performance measurement. It is concluded that both financial and non-financial performance measurements should be integrated to enable managers to utilize the full effect of performance measurements. Hence, the balance scorecard is recommended. This research would test the validity of the balance scorecard by first analyzing how Malaysian managers measure their business performance. Thus a sample of 50 companies was selected randomly and each company was scored according to its preferences for measurement tool. It was found that managers in Malaysia to emphasis more on financial performance which means that they tend to weigh lightly on non-financial factors. Further evaluation was made on the result from comparing the balance scorecard measurement with other performance measurements. Having done this, it is concluded that adequate evidence was obtain on the validity of balance scorecard as a performance measurement in Malaysia. Lastly, various recommendations are suggested base on the evaluation of data and result obtain. It is believed that these suggestions would be able to help improve performance measurement systems currently implemented in Malaysian business.
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Bachelor of Arts (Hons) In Accounting
April 2000
Number 17