Description of field site and its Balanced Scorecard20
Financial perspective objectives21
2.4The Components and Modes of Religiosity22
2.5Various Measures on Religiosity Instrument23
2.6Religiosity and Values26
2.6.1Values and its definition26
2.7Strategy - Its Origin and Definition28
2.8Strategy Making Pyramid in a Company28
2.8.1Corporate Strategy29
2.8.2Business Level Strateg29
2.8.3Functional Level30
2.9Strategy in Small and Medium Firm32
2.9.1Functional Level Strategies in Small and Medium Firms33
2.9.1.1Strategic Planning33
2.9.1.2Marketing Strategy35
2.10Strategy as a Pattern in Functional Activities35
2.11Strategic Orientation36
2.12Strategic Orientation in Small and Medium Firm38
2.14Business Performance and its Measurement43
2.15Linking Owner/Managers Values, Strategic Orientation and Business Performance46
The Case for Bow and Arrow and knowledge management as an Innovation in the Construction Industry50
Benefits for the Construction Industry51
References54
Bow & Arrow
2.1Introduction
Successful business development demand shrewd and careful management, innovative approaches to strategic thinking and decision making, substantial personal risk and a great deal of hard work (Beaver and Jennings, 2000). According to Bluementrintt and Danis (2006) one key to successful strategic management is the ability to achieve fit or coherence among a set of competitive factors, both internal and external to the organization, in a manner that facilitates high performance. Thus strategy entails managerial choices among alternatives and signals organizational commitment to specific markets, competitive approaches and ways of operating (Thompson and Strickland, 1999). In SMEs, any managerial choices in business activities are made by the owner/managers which are influence by their values system. England (1967, pg. 116) deduced that “…the actual goals of business may be related more closely to personal characteristics of its managers than to broad characteristics of the business”. Guth and Taguiri (1965) found that managers' values influence the objectives and strategies chosen, as well as the daily decisions managers make. Various researchers postulated that in SMEs, the values system of owner/managers heavily influence the firm's objective, strategic behavior and business performance (Kotey and Meredith, 1997 and Blackman, 2003).
2.1.1 History of the Bow and Arrow
All over the planet we have evidence of ancient archery, even recovered from regions whereupon formerly it has been accepted that the bow and arrow was never made use of, such as Australia.
It is thought that archery in all probability leads back to roughly 20,000 BC which was in the middle of the Stone Age; still the early Egyptians are recognized as representing the earliest known people to have used the bow and arrow. Archery was encompassed by the ancient Egyptians at least 5000 years past for the purpose of both hunting and war.
Approximately 1200 BC the Hittites, an ancient race who inhabited what today is known as Turkey and northern Syria, utilised the bow and arrow from speedy, light chariots that allowed them to grow to be revered opponents in Middle Eastern battles.
Their neighbours known as the Assyrians, who originated in Turkey, Iraq, Iran and Syria likewise utilized archery extensively. They remodelled the bow to a recurve profile that was stumpier and considerably more effective enabling them to be employed with ease by way of an archer on a horse. They additionally applied various different forms of materials to fabricate bows like tendon, horn and wood.
Inside China archery may be traced as far back as the Shang dynasty which took place between 1766 and 1027 BC when war chariots three people the driver, lancer and bowman.
During the proceeding Zhou dynasty 1027-256 BC the Chinese aristocrats at court loved watching archery sporting competitions that were acted out along with music and a substantial measure of fanfare.
The Chinese introduced civil archery to the Japanese in around the 6th century and it bore a enduring effect on future techniques and customs. Japanese Martial Arts presently known as kyudo (way of the bow) is still taught in Japan in the unvaried traditional ways. A bow over 2 metres in length and made from wood, bamboo and coated strips is used for shooting a target assembled in a roofed bank of sand.
In the Geco-Roman age, the bow was utilized more for individual ventures or hunting than it was for warfare, Archery is often depicted on earthenware dating to that time.
The Romans are not believed to have been very good archers, more than likely because up until the 5th century the bows they used were shot by drawing the string back to the chest rather than the face which gives the arrow far more accuracy.
Enemies such as the Parthians possessed far superior skills; they were skilful horsemen who were competent at shooting backwards by rotating in the saddle often at great speed.
The domination of the archery equipment and styles implemented by the people of the Middle East prevailed for centuries. Attila the Hun and his Mongolians, employing bows comparable with those of the Parthians and Assyrians, overcame a good deal of Asia and Europe and the Crusaders were driven off by Turkish archers.
The bow was an instrument of existence in the days of English and subsequently American settlement and still is in some nations on the African continent.
The popularity of archery has also been conveyed in several songs and folklore, in all likelihood the most famed being Robin Hood, furthermore archery is likewise often referenced in Greek mythology.
The first recognised archery competition included 3000 participants and was held at Finsbury, England in 1583.
By the time of the European thirty Year War between 1618 and 1648 attributable to the establishment of guns, it had become apparent that the bow and arrow as a weapon belonged to a prior age.
Since that time, archery is has become extremely popular as a recreational sport.
2.2Decision making and Entrepreneurship
Religiosity has long been as an important determinant of economic behavior (Longenecker, McKinney and Moore 1998). Islam encourages entrepreneurship as a means of earning a halal living. Mushtaq (1995), an Islamic scholar, explained that the Quran has made an extensive use of business terminology. About 370 times the term tijarah (business) occurred in the Quran. This explained the seriousness of the Islamic religion in discussing the issue of business or tijarah. Even the Prophet Muhammad (peace be upon him) was himself involved in business for a considerable period of time (Mushtaq 1995).
Steps in Applying the Decision Making Technique
A significant part of decision making skills is in knowing and practicing good decision making techniques (Davenport, 2000). One of the most practical decision making techniques can be summarized in those simple decision making steps:
1.Identify the purpose of your decision. What is exactly the problem to be solved?
2.Gather information. What factors does the problem involve?
3.Identify the principles to judge the alternatives. What standards and judgment criteria should the solution meet?
4.Brainstorm and list different possible choices. Generate ideas for possible solutions (Mastin, Dec2004). See more on extending your options for your decisions on my brainstorming tips page.
5.Evaluate each choice in terms of its consequences. Use your standards and judgment criteria to determine the cons and pros of each alternative.
6.Determine the best alternative. This is much easier after you go through the above preparation steps.
7.Put the decision into action (Davenport, 2000). Transform your decision into specific plan of action steps (Mastin, Dec2004). Execute your plan.
8.Evaluate the outcome of your decision and action steps. What lessons can be learnt? An important step for added development of decision making skills and judgment.
In everyday life we often have to make decisions fast, without enough time to systematically go through the above action and thinking steps (Mastin, Dec2004). In such situations the most effective decision making strategy is to keep an eye on your goals and then let your intuition suggest you the right choice.
Critical Thinking for Decision Making Model
The planning using the PMI technique (1) gives managers a standard of measurement, thus allowing managers to determine if goals are being met; (2) helps managers to transform values and beliefs into specific coherent actions; and (3) allows limited resources like budgets and human resources to be committed in the most efficient manner(Mastin, Dec2004). The author points out that, in the PMI technique, the T-chart is divided into three sections: plus (good points), minus (negative points), and interesting sections (points that are neither specifically good nor bad, but applicable, interesting, or have extended implications for the decision) (Whitlatch, 2008). The paper relates that the PMI may not be especially useful when a manager has few or no prejudices regarding a specific decision and already has a broad and nonjudgmental understanding of the problem; when a manager has strong existing biases, the PMI is especially useful.
" Small and large enterprises, for earnings and non-profit associations, high expertise and constructing enterprises all need good conclusions to be viable and successful(Whitlatch, 2008). Further, in today's fast-paced and complex business environment, managers are often faced with difficult and sometimes seemingly unsolvable problems (Whitlatch, 2008). As such, managers require decision making tools and techniques that are effective across a wide variety of situations. The Plus/Minus/Interesting (PMI) decision-making technique is one of most valuable and simple tools that managers can use to make effective decisions.
According to Mustaq (19945), the Quran classified business endeavor into a gainful business and a losing business. He discussed thoroughly the issue on business activities as stated in the Quran as below (in Mustaq 1995, pg. 31-34):
A gainful business consists of three elements: 1) knowing the best investment, 2) making the sound judgment, and 3) following the right conduct. In the following pages these elements shall be examined in the light of the Quran.
Best Investment
In the Quran, the objective of all human activity is to seek the pleasure of Allah. Any business activity are conducted to fulfill the pleasure of Allah is considered a best investment. The best investment is therefore to expend in good causes.
2.Sound Judgment
The Quran repeatedly proclaims that the well-being of the Hereafter is much more preferable to all the riches and treasures of this world. It is the purification of one's heart from all filth that will make one successful in the Hereafter (Quran 103:1-3). Preference of that which is good and lawful over against that which is bad and unlawful is considered to be a proof of a sound judgment.
3.The Right Conduct
Right conduct consisting of good deed is regarded as the real gainful investment insofar as it ensures a peaceful life in this world as well as success and great recompense in the Hereafter (Khalaff p. 168-170). It is the conduct of the Prophet (peace be upon him) that sets the standard for the believers.
Mustaq (1995, pg. 35-36) explained the concept of a losing business in the following section. It consists of three elements. They are 1) the worst investment, 2) Unsound Judgment, and 3) the evil conduct.
1.The Worst Investment
There are some transactions due to which man plunges himself into a complete loss. These are: to buy this world in return f or the Hereafter (Torrey p.3); to tamper with Allah's Book for small worldly gains (ibid p. 2); to sell oneself for magic and Unbelief (Quran 2:198); to purchase error in exchange for guidance , and torment [of the Hereafter] for forgiveness (Quran 83:1-9) and unbelief for faith (Quran 42:17; 57:25; 55 7-9); to restrict the objective of one's good deeds merely for worldly gains with utter disregard to the rewards of the Hereafter (Quran 24:37; cf. 62:9; 9:24); to render one utmost submission to anybody other than Allah (Torrey op. ct, 2); and finally, to waste the most invaluable capital, life by not investing it properly (Quran 106:1-4).
2.Unsound Judgment
The Quran unequivocally maintains that unsound judgment regarding the crucial issues of life do result in tremendous losses. The example of such unsound judgments are: to prefer the life of this world to that of the Hereafter; to prefer khabith or unclean because of its abundance and availability (i.e., opting for quantity regardless of quality); to be wavering and unstable in faith; to rely on wealth and power rather than on Truth and Justice; to aspire for worldly pomp and show devoid of true guidance; to depend on the support of false protectors instead of on that of Allah; to prefer trade and amusement over the higher prosperity in terms of mind and spirit; to become too involved in wealth and children to remindful of Allah and forgetful of the Hereafter. Last, but not least, a major element constituting the losing business is the evil conduct which will be examine below.
3.The Evil Conduct
Involvement in any activity that is prohibited by Allah is bound to result in loss. The Quran has mentioned such activities along with their harmful consequences. These are, for example, to disbelief and to reject the Gidance revealed in the Book; to be stingy and parsimonious; to practice usury; to spend without having faith; to be an unbeliever, to be dishonest, to betray the trust to disregard all moral restrictions prescribed for fair dealings, to violate pacts and promises, to be ungrateful to avoid the payment of zakat by manipulation, and etc.
In the western world, Protestantism influence capitalism. In the writing of Max Weber (1958) ascribed the rise of capitalism to:
a new conception of religion, which taught them [entrepreneurs] to regard the pursuit of rewards as, not merely of an advantage, but a duty
Labor is not merely an economic means: it is a spiritual end.
According to Drakopoulu and Seaman (1998) religion and enterprise enjoy a complex and interdependent relationship. They explained that investigating the relationship between the individual religion and enterprise shows that religion affects believers' entrepreneurial activity, influencing the decision to become an entrepreneur, enterprise management, and the entrepreneurs' contact network (pg. 71). Their study examined the interaction between entrepreneurs and religion on societal, individual and theoretical levels. Their finding, however, did not find any relationship between British entrepreneurs' religious and non-religious group on business performance, suggesting that religion may not be a significant environmental factor for UK entrepreneurship. Drakopolou and Seaman (1998) did not examine on owner/managers values and religiosity which values is postulated by Rokeach (1973) and England (1975) as one of the important factors that influence economic behavior. Thus, this study wishes to fill the gap between the relationship among owner/managers religiosity and personal values, and to examine the differences on owner/managers religiosity with that of values considered as entrepreneurial by Rokeach (1973) and England (1975).
Another study by Bellu and Fiume (2004), also focus on religiosity. They question can religiosity mediate entrepreneurial success and importantly, neutralize the deleterious effects of material rewards. They concluded in their study, religiosity is contributed to entrepreneurial success, and that entrepreneurs' pursuit of material wealth, in the presence of personal religiosity, does not lead to dysfunctional outcomes, but rather to greater degrees of life satisfaction. Figure 1 summarized the theoretical underpinnings of the Bellu and Fiume (2004) study.
Figure 2.1: Mediating effect of Religiosity and Entrepreneurial Action (from Bellu (2003)
Since religiosity do affect individual entrepreneurial actions, therefore this issue will be discussed next together with the definition in religion, religiosity and spirituality.
2.2.1 Bow & Arrow framework
It is to accelerate the development and implementation of the next benchmark of the end to end processes utilizing the methodologies within the frame work of Bow & Arrow to support the organization to drive business performance. It is to drive discipline, eliminate waste and support the business excellence development.
The Bow & Arrow framework requires different type of competences and the taste for initiative with the ability to create a climate of innovation and to think outside the box. This implies the right to make a mistake but also the readiness to correct it and to learn from it. Therefore this frame work provides a systematic and structured 2 phases that support the management in:-
?Setting goals / targets and take decision.
?Preparing the tools and analysing the fact that helps to solve problems and achieve target.
Phase 1 - Target & Decision
A target is an observable, attainable and measurable end result having different objectives to be achieved within a time frame . The right decision is the main element that helps management to achieve target.
Phase 2 - Tool and Road Map
The tool is used to perform a specific work to achieve a target. This tool should facilitate the work and help the user to perform better .
Bow & Arrow is the methodology of demonstrating the tool and the elements that affect this tool. It will describe the role of human to leverage and best practicing the available tool.
The Bow & Arrow presents and reflect the 80/20 rule for any process.
In the process, the tool is 20% supporting the manager to achieve the target and take decision. The remaining 80% are related to the person and the other factors.
20%
It is the bow that we need to use to trigger the Arrow and how much we are trained and practiced on the Bow.
80%
This is about all the elements that affect the player or the user who is leading the process and using the bow to trigger the Arrow.
Bow & Arrow will describe in details the importance of each element and how can this element impact the decision maker and the team in the organization.
?Elasticity in taking a decision. How flexible the decision maker? What is the importance of brainstorming and collecting data before taking decision?
?The force that required triggering the Arrow. Team work and individual performance.
?Readiness of the user. How much the training and practicing will help to eliminate the barriers and problems.
?One player. This is to differentiate between responsibility and accountability. Only one person is responsible to trigger the Arrow but there are many other users accountable for the same and they can support by providing analysis, support being part of the team. Each target must have a leader.
2.3Religion, Religiosity and Spirituality
Religion is one of the most studied and least understood constructs affecting human behavior because it has so much to say about life and morality either directly or by implication (Hood et al. 1996). Rokeach (1969) claimed that religion teaches man a distinctive system of moral values that he might not otherwise have and such moral values guide man's everyday relations to his fellowman toward higher, nobler, or more humane levels than might otherwise be the case. To Rokeach (1969) both of these assumptions are empirically testable.
To make the issue on the study of religion even complicated besides its definition alone, is the terminology of religiosity and spirituality which some scholar think that these two words are the same in meaning. Therefore it is important at this juncture to define the meaning of religion and to distinguish the difference between religiosity and spirituality.
To social scientists and religionists, to give a solid definition for religion is difficult. Even George Coe (in Hood et al. 1996 p. 4), a noted psychologist of religion, once stated out of frustration to define religion by saying:
Balanced Scorecard
The Balanced Scorecard (BSC) BSC has gained increasing popularity as an effective management tool that aligns employee actions and goals with corporate strategy since first being introduced in 1992. We present an empirical analysis that investigates the impact of BSC on a banking institution's financial performance.
Beginning in the early 1980s, management accounting researchers described the increasing irrelevance of traditional control and performance measurement practices. Weaknesses included failure to link performance measurement to strategic initiatives of organizations, an emphasis on accounting for external reporting rather than on accounting reports useful for internal decision making, and a failure to account for advances in technology that change how manufacturing firms operate (Palmer, 1992 and Spicer, 1992). The growing importance of service industries and increased global competition has further intensified the need for alternative control and performance measures.
BSC emerged from the need to improve planning, monitoring and measuring the performance of the functions of management accounting. Due to the popularity of BSC, and the benefits attributed to its use, Atkinson et al. (1997) state BSC is a significant step in the development of management accounting, which deserves the attention of the study. They propose to use multiple research methods, including case studies, behavioral experiments, and archival approaches. Although much has been written extolling the benefits of BSC, there are few studies that directly assess the financial performance benefits associated with the BSC or BSC is superior to other requirements of performance measurement. This study seeks to determine whether the improvement in financial indicators occurred after the introduction of the BSC and whether changes in financial performance is significantly higher than the performance observed in similar circumstances, when the traditional system of measuring performance by using only financial measures work.
To achieve and sustain improved financial performance among the proposed benefits of identified supporters of the BSC, but no study has established a strong causal link between BSC usage and improved financial performance. Using quasi-experimental field methods based on the research according to Yin (1994) and Cook and Campbell (1979), we get a sense of the BSC by comparing the performance of BSC BSC singers to perform without implementers.1 data set is unique because we have developed Experiment setup (experimental and control groups with pre-and post-test data) in the field of research. Our study contributes to current literature directly study the actual program BSC and its ability to improve financial performance in the organization.
The primary principle of BSC is that success must be achieved on the key non-financial measures (NFMS) up to the success of key financial indicators. Using the method of BSC on AIDS in the identification of key KFMs, are associated with success on certain financial ratios. Previous studies seek to establish a link between specific NFMS and improving operational and financial performance have produced mixed results. This study differs from these preliminary studies in four main ways. First, although earlier studies examined the relationship between NFMS and performance, few have sought to establish a connection between the implementation of performance measurement systems BSC, that more attention is paid to the group NFMS and improved financial performance. Secondly, many studies have relied on research and archival research methods to get information about performance measurement practices and organizational performance. This study uses a quasi-experimental approach to study the effects that programs aimed at NFMS has on organizational performance. Third, many studies relied on self-assessment of the organization, which asked respondents to evaluate the effectiveness of the company, as above or below the average industry. Other studies have used a company-wide financial performance, rather than self-assessment measure. This study benefits from the use of actual financial performance data for individual business units (BU) within the organization as a means to measure changes in financial performance, goals, specific indicators of designers as the dependent variable. Finally, most studies have used cross-section analysis to compare the performance and NFMS at a time. This study uses a longitudinal approach to determining if changes in financial performance achieved in the implementation of the program BSC.
Financial performance is operationalized as a branch's rating on a composite measure of nine key financial performance measures. Because this composite measure is used for bonus calculations, both groups of branches at the field site (experimental and control) seek to improve their performance on this measure. We compare performance levels for a period before implementing the BSC with a period two years after implementing the program. The Wilcoxon rank test reports a significant increase in performance occurred during the observation period (P-value=0.034) for the experimental branches. A similar performance comparison for control branches revealed an insignificant change in performance during the observation period.
We also compare the change in financial performance for the experimental division and the control division over the same time period. Results indicate the experimental division realized greater improvement in financial performance than the control division (P-value<0.02). Thus, we provide evidence supporting the proposition that the implementation of the BSC program resulted in superior financial performance compared to what would have been achieved if the BSC program had not been implemented.
The BSC translates the often-nebulous goals found in corporate mission statements into a strategic roadmap to be followed by employees. By detailing specific actions and outlining cause-and-effect relationships between those actions and key financial objectives, a BSC serves not only as a performance measurement system, but also as a means for communicating long-term strategic initiatives to business-units and achieving long-term financial success. It combines important practices and concepts from various disciplines and theories into a single performance measurement system for the purpose of improving financial performance.
Improved financial performance after the implementation of the BSC relies on the identification of key leading indicators of desired financial performance. These leading indicators, typically non-financial in nature, are logically derived from establishing causal links between improved performance on NFMs and improved performance on selected financial measures. Employing the BSC method aids managers in the selection of these key indicators through viewing the organization from four different perspectives: financial, customer, internal processes, and learning and growth (Kaplan and Norton, 1996). If the causal linkages between NFMs and financial measures are sound, focusing on improving leading indicator measures should lead to improved performance on the selected financial measures.
Review of current literature reveals few attempts to link the improved financial performance with improved performance on NFMS with mixed results., 3 mixed results may arise due to lack of a coherent strategy and plan of focusing on certain NFMS and not others. To the extent that the program BSC provides an appropriate framework and process integration NFMS in the measurement system performance, an organization of well-designed and BSC should experience better financial performance than organizations that do not use such programs.
Recent literature includes three attempts to link the use of BSC and improve organizational performance. Hoque and James (2000) surveyed Australian manufacturers to use non-financial measures commonly found in the discussion of BSC. Were indicators of self-esteem measures in relation to their peers in the same industry. Their results show a significant positive relationship between the use of generic measures BSC and excellent performance. The authors noted, however, that while their study included the use of NFMS performance, their study was not able to capture the actual dependence of the BSC or the power of causal relationships that are so important for the implementation of BSC.
In an extensive study of large-scale organization of production, raspberry and Selto (2001) examine the effectiveness of BSC to communicate strategic objectives and serving as a control device controls. They find evidence of indirect relationships between the leadership of BSC in management functions and improve performance on measures BSC. In addition, leaders in their research is perceived to improve the performance of BSC would lead to greater efficiency and profitability.
Ittner et al. (2003) offer conflicting testimony in two previous studies show, finding a negative relationship between BSC practices and financial performance (ROA) in the broad study of financial services. They also found that while 20% of respondents reported using the BSC, more than 75% of those companies said they had not relying on business models that causally link performance driver performance results.
Finally, one study examined the direct relationship between improved financial performance and implementation of performance measurement, which includes NFMS. Banker et al. (2000) analyze the relationship between improved financial performance and NFMS in the business chain, where a new incentive program includes a focus on customer satisfaction performance measures. They found evidence of a link between customer satisfaction NFMS and future financial performance, indicating that a new program of incentives positively influenced trust NFMS and ultimately, improved financial performance for businesss on the new incentives.
In the same vein, the current study seeks to document whether the improved financial performance was observed after the implementation of the BSC in a banking institution. BSC is a management initiative, which is developing performance measures based on specific strategies for each business unit. Relations between NFMS chosen for performance measurement and improvement of financial indicators are defined and communicated so that employees have an understanding of how their performance on various measures impact on organizational financial performance. Field site chosen for this study in the BSC only a portion of its branches. Branch managers implement industries systematically identify NFMS, which were logically and causally related to improve a specific financial figures, so we expect that the "BSC branch to test the superior performance on the financial targets as compared with" non-BSC branches. "
Description of field site and its Balanced Scorecard
The field research site is a banking organization located in the southeastern United States. The bank has a total of 30 geographical locations grouped into 14 reporting units, or branches. Branches are located in communities of varying sizes, ranging from small rural areas to cities. The bank employs approximately 375 persons, with approximately 250 working in branch operations and approximately 125 working at a central administrative location. Branches are divided into two geographical regions: the northern division (ND) and the southern division (SD). Each division consists of seven branches. The typical branch employs a branch president, a branch vice-president/chief loan officer, customer service representatives (CSRs), loan representatives, mortgage loan originators, head tellers, tellers, and administrative assistants.
Access was gained to the field site through an acquaintance of the researchers who is employed at the field site. The acquaintance was not involved in the development or implementation of the BSC program at the bank. The researchers were introduced to the individual responsible for implementing the BSC at the bank and directed all correspondences through this individual. The activities of one of the researchers can be categorized as a “participant-observation” (Yin, 1994) inasmuch as he served as an active participant in what Kaplan, 1993 and Kaplan, 1998 calls “action research”. This researcher's role was limited to assisting in the development of individual scorecards for employees (NFM identification and causal link identification).
The strategic direction of the bank is reviewed annually at a meeting of top bank officials and outside consultants. The purpose of the meeting is to outline the vision and mission of the bank and to ensure all top managers understand and agree on the direction of the organization. It is at this annual meeting that goals for individual branches are established. In setting individual branch goals, bank managers consider past performance, strategic emphasis, and local factors that may affect a branch's ability to perform. Branch goals are then communicated with branch presidents and revisited if necessary.
The need for better communication of bank goals was evident after the SD president conducted a series of interviews with front-line employees and discovered a lack of knowledge of the bank's mission and goals and a lack of understanding about how specific jobs contributed to the success of the bank. These interviews, coupled with the need to establish and sustain a positive trend in performance, prompted the SD president to seek and receive approval for implementing the BSC in the SD. The SD president was prompted to try the BSC after studying about the program in a graduate management course. To begin the educational process with his branch presidents, the SD president purchased copies of Kaplan and Norton's (1996) book outlining the BSC and had each branch president read the book in early 1998. Bank management followed the model set forth by Kaplan and Norton (1996) as closely as possible in developing the BSC in the southern division. An overview of the SDs BSC program is discussed in the following section.
Financial perspective objectives
Financial perspective objectives for the SD branches were determined using the bank's existing bonus payout program. In 1995, the bank identified nine key financial measures (KFMs) that were deemed to be important indicators of success for bank branches. Performance on these nine measures (shown in Fig. 1) determines a specific branch's bonus level for the year. Bank management places various weights on the measures for each branch, given a particular branch's strategic focus and competitive setting. Branch performance on these nine KFMs is combined into a composite key financial measure (CKFM) to determine an overall branch's financial performance level.
2.4The Components and Modes of Religiosity
The three components of religiosity are the cognitive, the affective, and the behavioral component. In the cognitive component is the religious belief or orthodoxy component (Cornwall et al. 1986). In Islam, for example, the cognitive component consists of six Islamic principles: 1) the belief in Allah, 2) the belief in the Prophet, 3) the belief in the Angel, 4) the belief in the Holy Book ( the Quran), 5) the belief in Qada and Qadar, and 6) the belief in the end of the world (the day of Qiamat).
The affective component is the feeling dimension and encompasses feelings toward religious being, objects or institutions (Cornwall et al. 1986). The item of religiosity measures on affective components are basically in terms of one spiritual commitment and church commitment. Some spiritual commitment items are, for example, “My relationship with the Lord is an important part of my life”, “I love God with all my heart”, “I am willing to do whatever the Lord wants me to do” and etc. And church commitment items will be like acceptance of church doctrines, church programs and activities as part of ones life and ones care about church.
The behavioral component consists of two dimensions; they are the religious behavior and religious participation. Religious behavior is defined as those behavior which are by nature religious, but do not require membership or participation in a religious group or community. Whereby, religious participation has generally been operationalized as frequency of church attendance or attendance at worship services. A much private participation behavior is also included as religious participation. Such items, for example, are frequency of family prayer, frequency of family religious discussion, frequency of reading of the Holy book and frequency of family discussion on what is right and wrong.
Religiosity also consists of two modes of religious involvement: the personal mode and the institutional mode. The personal mode comprised of religious belief, feelings, and behaviors that find their source in personal and individualized religion. The institutional mode includes acceptance of religious beliefs which are unique to a sect or denomination, personal feelings and attachments to a particular church or congregation, and participation in religious ritual and worship services (Cornwall 1986 p.228). And there exists a sequential interaction among the three components within each mode. As Cornwall et al. (1986) postulate that in order to be committed to God, one must believe in Him, and commitment to God influence religious behavior. On the other hand, in order to feel committed to a church or organization, one must believe it to be good and viable organization, and commitment to the organization influences participation and acceptance of the behavioral norms and expectations of the organization.
After understanding the three interrelated components and modes in religiosity, it is crucial to discuss various measures on religiosity instrument before adopting any religiosity measure for this study.
2.5Various Measures on Religiosity Instrument
There are five unique theoretical and empirical instruments on religiosity. They are the Religious orientation scale (ROS) by Allport (1950), the Quest scale by Batson and Ventis (1982), the Hoge's (1972) Intrinsic religious motivation scale and the Duke religious index (Koegnig et al. 1997a), and the Religious values scale by Sandage (1999). Four of the instruments, that are the Quest scale, the Intrinsic religious motivational scale and the Duke religious index and the Religious values scale will only be summarized by the researcher as this study will adopt Allport's ROS measurement which will be modified by the researcher to include Gorsuch and Venable (1983) and Hoge (1972) intrinsic and extrinsic religiosity measures and Cornwall et al. (1986) other multi-dimensional measures on Religiosity.
The first religiosity measure is by Gordon Allport (1950). His conceptualization of intrinsic (I) and extrinsic (E) religion is the dominant influence on the measurement of religion in psychology (Meadow and Kahoe 1984; Kirkpatrick and Hood 1990). Allport (1966 p.454) saw individuals who demonstrated intrinsic religiosity as those who “regard faith as a supreme value in its own right, religious sentiment [that] floods the whole life with motivation and meaning”. In contrast, Allport viewed extrinsically oriented practice as the use of religion as a means to an end. Allport's paradigm of intrinsic-extrinsic religious orientation scale (ROS) has been the philosophical underpinning of much contemporary research in religiosity (Kirkpatrick and Hood 1990; Genia 1993; Genia 1996; Hoge 1972). Meadow and Kahoe (1984) even concluded that no other measurement approach has had a greater impact on the empirical study of the psychology of religion than the Allport's Religious Orientation Scale (ROS).
Nonetheless, the ROS items are not free from criticism. Almost since its inception to the present there have been calls to move beyond its simplicity to approaches that are more sophisticated conceptually and psychometrically (Dittes 1971; Hunt and King 1971). Kirkpatrick and Hood (1990) criticized on Allport's ROS measurement by questioning whether Allport is measuring for motivation, personality, cognitive style or something else. Hunt and King (1971) and Hoge (1972) claimed that Allport's measurement on I and E represent motives for religious belief and practice. Allport (1959) saw religious behaviors as determined by religious orientation. Hunt and King (1971) maintained that intrinsic and extrinsic religiosity cover a wide spectrum of cognitive, motivational (affective) and social behavior patterns.
The question of whether I and E are opposite poles on a single continuum or independent dimensions has never been settled. The I and E were originally theorized by Allport (1950) as bipolar opposites. Nonetheless, a two-factor theory has dominated empirical work (Kirkpatrick and Hood 1990) including Allport's I and E construct ( Allport and Ross 1967). Kirkpatrick and Hood (1990) suggest that given the richness of Allport's original bipolar theory, it may have been abandoned too easily and that it perceived empirical shortcomings may be attributable to weakness in the original item pool, not the theory itself (King and Crowther, 2004). Kirkpatrick and Hood (1990) support further attempts to construct a better unidimensional scale such as Hoge's (1972) over the wide acceptance of orthogonal I and E dimensions (in King and Crowther, 2004 p.87).
Beside all the above criticisms of the ROS instrument, the preponderance of research is generally supportive of the I-E framework and measurement scales (Burris 1999). King and Crowther (2004) even suggested that the central role that the ROS has taken in the psychology of religion literature make a general acquaintance with it (issues and all) important for those who would study religion in the organizational context. Following King and Crowther suggestion, this research will adopt the ROS measurement but will modify its I-E items following Gorsuch and Valence (1983) and Hoge (1972) suggestions.
2.6Religiosity and Values
Various researchers have found strong relationships between religiosity and values priorities (Roccas and Schwartz 1997; Schwartz and Huisman 1995, Fontaine et al. 2000; and Rokeach 1969). Rokeach (1973) even claimed that different values system belongs to different religious group. Hinde (1999) stated that the specificity of religion is to unify values, moral codes, beliefs, rituals, emotions, and community into an integrative whole. Religious systems provide adherents with the meanings and the motivation necessary to go beyond the material aspects of life and strive toward a sense of higher purpose (Harris and Moran 2000). From psychologist we are told that values are influenced by society, peers, parents, education and religion. Roccas et al. (2002), values seem to be stronger predictors of religiosity than personality traits and, interestingly, values reflect personality differences to an important degree (Bilsky &Schwartz 1994; Roccas, Sagiv, Schwartz & Knafo 2002).
Values are among the very few social psychological concepts that have been successfully employed across all social disciplines (Rokeach and Ball-Rokeach, 1989; Hofstede, 1980). Schmidt and Posner (1992) ascertained that values remain at the core of our personality, influence the choice we make, the people we trust, the appeals we respond to, and the way we invest our time and energy. Before the various studies on religiosity and values are discussed further, at this point, it is best to examine several definitions of values, as elaborated below.
2.6.1Values and its definition
There are various definitions of values developed by researcher, yet no definition has attracted widespread consensus (Nonis and Swift, 2001; Rokeach, 1973; England, 1967; and Hostfede, 1980). Hostfede (1980) give a simple definition of values: values are a “broad tendency to prefer certain states of affairs over others”. Bamberger (1986) argues that values are regarded as an individual criterion that determines what is consider “good”, “desirable” or “preferred”. Schwartz (1992) defines values as desirable, trans-situational goals that vary in their importance as guiding principles in people's life. Roccas (2005) stated that values express what people believe to be good or bad, and what they think and should not be done. Feather (1988) regards values as “organized summaries of experience that capture the focal, abstracted qualities of past encounter, that have oughtness quality about them, and that function as criteria of frameworks against which present experience can be tested…they are tied to our feelings and can function as general motives” (pg. 275).
Perhaps the most widely used approach to studying values is that of Rokeach's (1973) systematic explanation which is adopted in this study. According to Rokeach (1973) values is an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct. He argues that values must be characterized as enduring and unchangeable. He further explained that total numbers of human values a person have are organized into values system. To Rokeach (1973), a values system is an enduring organization of beliefs concerning preferable modes of conduct or end-states of existence along a continuum of relative importance.
Rokeach then develops two sets of values, namely terminal values which are defined as idealized end states of existence, and instrumental values which are defined as idealized modes of behaviour used to attain the end states. According to Rokeach, the terminal values comprise two types: personal and social terminal values, respectively referring to self-centred or society-centred, intrapersonal or interpersonal, such as freedom, equality, self-respect, comfortable life, true friendship, and mature love. The instrumental values also consist of moral values which refer mainly to modes of behavior and include values such as ambition, broad-mindedness, honesty, independence, loving and self-control. A person may more or less experience all of these values. Rokeach (1973) suggests that both sets of values are best understood as a hierarchical system where some values are more important than others. The definition of value which Rokeach (1973) proposed is adopted in this study.
Next the discussion will highlight on various studies by researcher on the relationships between religiosity and values.
2.7Strategy - Its Origin and Definition
Strategy is a plan coordinated through various competitive tools and business approaches that businesses employ in running a company or an enterprise. The origin of the word strategy derived from ancient Athenian position of strategos. Strategos was a compound of stratos; which meant 'army' or more properly an encamped army spread out over ground and age in “to lead”. Initially, the concept of strategy was meant to refer to the leading role of a general in command of an army as well as for military purpose (Greenly, 1989; Mintzberg and Quin 1991). The emergence of the term paralleled increasing military decision making complexity. Warfare had evolved to a point where winning sides no longer relied on the deeds of heroic individuals, but on the coordination of many units of men each fighting in close formation (Meyer, 1994). Modern organization have mainly adopted and modified the principles of the military strategies to suit the specific business environment (Quinn 1980).
Strategy Making Pyramid in a Company
In large firms, strategy-making task, involves four distinct types or levels of strategy each of which involves different facets of the company's overall strategy. It thus follows that a company's overall strategy is really a collection of strategic initiatives and actions devised by managers and key employees up and down the whole organizational hierarchy.
2.8.1Corporate Strategy
Corporate strategies are developed at the highest level in large organizations by the board of directors and senior executives (Thompson and Strickland III and Gamble 2005). They will identify the firms' goals and formulate a strategy for the whole organization. The board of directors and senior executives will determine which businesses it will pursue and structure the overall activities needed to achieve it. They are also accountable to meet the organization's financial performance and achievement of its non-financial goals (Macmillan and Tampoe, 2000).
2.8.2Business Level Strateg
Business strategies focus on how to compete within a given business. They determine the competitive approach for firms which have single or many products and with its own group of competitors. Business level strategies describe how a particular business intends to succeed in a chosen market place against its competitors (Macmillan and Tampoe 2000). This is the level where general statements of direction developed at the corporate level are generated into concrete objectives and strategies for individual business unit (Thompson, Strickland and Gamble 2003).
2.8.3Functional Level
Functional strategies focus on the activities of the business functional areas such as operations, manufacturing, finance, marketing and human resource management, and information and communications technology. These functional strategies support the business strategies as well as span of relatively short periods of time. It aims at establishing and or strengthening specific competencies calculated to enhance the company's market position (Thompson and Strickland 2003). Some example of functional strategies are marketing strategies, financial strategies, purchasing strategies, human resource strategy and research and development strategy (Mohd Khairuddin 2000).
Figure 2.3: Company's Strategy-Making Hierarchy
(Adapted and modified from: Thompson, Strickland III and Gamble, 2005 p.35)
2.9Strategy in Small and Medium Firm
Knowing where the business is going, together with the opportunities and routes available to get there, is as important to a small firm as a large one (Beaver 2002). Business strategy adopted by small and medium firms is normally different from business strategies adopted by large firms due to factors such as economies of scale and differences in organizational structure (Jayachandran and Kraybill 1993). Strategy for small and medium firms is also different from that of large firms because all decision are depend on the owner/managers values and goals. Owner/managers values and goals highly influence strategic choice and managerial practices (Blackman, 2002). Beaver and Ross (2000) noted that for large firms managing a strategy is a predictive process but for small and medium firms it is frequently an adaptive process, principally due to positional and resource disadvantage.
A well-defined and well-communicated strategy can help the small and medium firm to succeed whatever its principal goals and ambitions happen to be (Beaver 2002). He reasoned firm that has invested in developing strategy that is both realistic and achievable and communicates it to stakeholders will gain the following:
It encourages the entrepreneur to assess and articulate their vision.
A strategy provides the starting point for the setting of objectives.
It acts as a guide to decision making.
A strategy guides the organization and design of the enterprise and relates it to the operating environment.
A strategy illuminates new possibilities for business development.
A strategy acts as a common language for stakeholders.
As cited earlier, the strategy for the SMEs focus on the functional level hierarchy, this area will be discussed next in the context of SME.
2.9.1Functional Level Strategies in Small and Medium Firms
Business strategies are implemented through the major functional strategies of marketing, finance, human resource management, production and research and development. Strategies are not explicitly divided into functional areas or departments in small and medium firms. However, activities and decisions can be grouped into functional areas for analytical purposes (Kotey and Harker 1998). They are discussed in the following manner.
2.9.1.1Strategic Planning
Majority new small and medium firms do not formally plan (Robinson and Pearce, 1984). The development of a strategic plan is crucial to the creation of a small business' competitive edge. Small businesses need a strategic planning approach that is suited to their size and particular characteristics (Scarborough 198. The planning procedure for small businesses should include: 1. a planning horizon of 2 years or less, 2. an informal, not overly structured process, and 3. the participation of outside parties
Hall (1995) suggested that formal planning might be less important for small and medium firms. Smith (1998) argued that her evidence showed that planning as defined in the business strategy literature for large organization can also be effectively applied to small firm. Small business planning behavior has been described as unstructured, irregular and incomprehensive (Steven 1982 in Sexton and Auken 1986 p.21). El-Namacki (1990) reported that in nearly all cases, the practice of strategic planning by small firm owner/managers was found to be scanty and perfunctory. Beaver and Ross (2000) confirmed conclusively in their study of small and medium firms in UK and the Midlands that strategic thinking is an essential ingredient in enterprise survival, performance and growth. Pearce et al. (1987) explained the link between planning and improved performance is equivocal. Stokes (1995) suggested that most small and medium firms did a formal planning but only to raise money. Kets de Vries, 1990; Bhide 1994; Brouthers, Andriessen and Nicolaes, 1998; Allinson, Chell and Hayes, 2000) found that small and medium firms act on instinct, intuition and impulse rather than writing a formal plan. Mintzberg (1979) summarized owner-managers as the following:
1.A written strategic plan has no explanatory power in respect of their behavior because personal strategic visions rather than a written strategic plan determine actual strategy.
2.The small entrepreneurial firm develops a strategy that is deliberate and often an extrapolation of the chief executive's personality.
3.The decision making of a small entrepreneurial firm is frequently inbred and thus its success rests on realism confirming its intuitions about the chance that exist (and that it seeks to exploit by virtue of its flexibility).
4.There is a persisting need for strategy based on personal vision and control and thus a persisting need for small entrepreneurial firms.
Mintzberg (1979) argued that the typical owner-managers of small and medium firms are governed using more personal and arbitrary forms of control. Therefore, research on small and medium firms should be on 'how things happen in 'practice' (Watson, 2002).
2.9.1.2Marketing Strategy
Small and emerging firms face marketing issues critical for survival and growth (Romano and Ratnatunga 1995). In marketing literature, marketing can be classified into three views; there are marketing as a culture, marketing as a strategy and marketing as a tactics. Marketing as a culture relates to a basic set of values and belief about the central importance of the customer that guides the organization to assess market attractiveness (by analyzing customer needs and competitive offerings in the market place) and potential competitive effectiveness (Webster 1981). Marketing as a strategy focuses on market segmentation, targeting and positioning how the firm is to compete in its chosen businesses (Webster 1981). Marketing as tactics, covers issues on the 4Ps that is of product, price, promotion and place distribution (Webster 1981). The four “Ps” (product, price, place and promotion) provide good starting point for considering the activities that comprise the marketing function (Dollinger 1995; Scarborough and Zimmerer 1991). According to Ratnatunga et al. (1993) it is essential in the context of SME that decisions associated with product, price, distribution and promotion are completely blended in all decisions to maximize resources.
2.10Strategy as a Pattern in Functional Activities
A firm's strategy represents a network of interactions among the various constituent elements (functional strategies) that ultimately make up its 'line of attack' (Galbraith and Schendel 1983; Mintzberg 1990), and must therefore support the overall business and competitive strategies (Covin 1991; Thompson and Strickland 2003). Hofer and Schendel (1978) flagged that identifiable strategies, are limited in number and each involves a pattern of competitive position, competitive advantages and objectives. This pattern spells out a firm's competitive position in relation to others in the industry. It is therefore possible to recognize a firm's competitive position by identifying the pattern among the various interrelated activities that comprise its strategy (Galbraith and Schendel 1983; Moore 2005). In addition, these functional area strategies are interrelated and therefore do not permit the independent study of the various constituent elements (Galbraith and Schendel 1983). Since the strategic posture of a firm may shift over-time, the interrelationships among the various functional strategies and their dynamic nature needs to be captured when discussing the construct. Consequently, strategy in this study is conceptualized as a pattern of interrelated activities (Moore 2005), by investigating activities in the functional areas. Future trend could the housing prices begin to fall in 2008? It seems unlikely. First of all, supply is still scarce. Land resources in the major cities remain limited and the real estate developers flushing with cash from the recent housing boom are continuing to buy much of the remaining land, pushing land prices higher than the actual cost of houses. (Moschidis O., 2006 Pp. 142-143)
2.11Strategic Orientation
Business strategy is concerned with how businesses achieve competitive advantage (Slater and Olson 2001, Mintzberg and Quinn 1991). The strategic orientation concept has been previously described as strategic fit, strategic disposition, strategic thrust, strategic choice and most commonly strategic orientation (Chaffee 1985). The term strategic orientation, nonetheless, are used by many scholars, therefore, in this research the term strategic orientation will be used following that of Goa (2004), Kotey and Meredith (1997), and Bohene (2006).
All firms, even in the same industry sector, do not respond to the operating environment in the same way. For example, some firms may tailor their actions primarily to the behavior of other firms that are strategically similar to them, while others may adopt a more independent stance comprising various approaches such as stronger emphasis on product quality (O'Regan and Ghobadian 2005). The strategic management field has produced a body of research that focuses on the identification and understanding of how firms respond to their environment. Grounded in Weber's 1947 structural contingency theory, this stream of research classifies firms into schemes based on their environmental adaptation pattern (Moore 2005). Thus the manner in which strategy content is manifested in a firm has been variously described as strategic fit, strategic choice, strategic thrust and strategic orientation (Galbraith and Schendel 1983; Morgan and Strong 2003; Venkatraman 1989). Strategic orientation is a primary means of understanding actions that firms take to enhance profitability, financial performance or competitive advantage (O'Regan and Ghobadian 2005). In addition, it helps to bring order to the complex set of interrelated activities by identifying recurring patterns of decisions which then provide a comprehensive orientation to the study of strategy (Slater and Olson 2000).
The strategic orientation has been examined from three main viewpoints: the narrative approach, the classificatory approach, and the comparative approach. The narrative approach is anchored to qualitative methodologies frequently employing case study analyses (Zajac et al. 2000; Morgan and Strong 1998). The emphasis here tends to be on describing verbally the holistic nature of strategy in its context (Andrew 1971; Evered 1983). The classificatory approach attempts to group strategy on either a priori conceptual grounds or derived categorizations (McKelvey 1975). Example is the Miles and Snow (1978) 'prospector', 'defender', 'analyzer' and 'reactor' typologies. According to Miles and Snow, prospectors are usually initiators of change in the industry. They maintain an aggressive competitive position and tend to be industry pioneers in the creation and development of new technologies (Morgan and Strong 1998). Research by Gibcus and Kemp (2003) and Teach and Schwartz (2000), shown that prospectors' firm stress on innovation and flexibility in order to be able to respond quickly to changing market conditions. They do this by constantly scanning the environment for new opportunities (Bohene 2006). These types of firms tend to invest heavily in research and development as well as marketing and promotion (Shortell and Zajac 1990).
The Analyzers is a combination of the defender and prospector type in that it simultaneously defends its niche while scanning for new opportunities (Ibrahim 1993; Shortell and Zajac 1990; Teach and Schwartz 2000). Analyzers are interested in developing new ideas, locating, exploiting new product and market opportunities (Bohene 2006). Finally, reactors usually lack a consistent strategy (Teach and Schwartz 2000). Their strategies have characteristics of each of the other types of strategy at different times and are therefore difficult to clearly categorize (Shortell and Zajac 1990; Teach and Schwartz 2000). Firms which adopt this strategy avoid taking risks, for example in developing new products or services, unless threatened by competition (Teach and Schwartz 2000). Gibcus and Kemp (2003) argued that reactors respond inappropriately to changes in their environment, perform poorly and are reluctant to commit to a specific strategy.
2.12Strategic Orientation in Small and Medium Firm
As explained earlier, strategy content primarily focuses on the outcome of strategic decisions. Researchers have developed various strategic choices for small and medium firms based on observable patterns in the various functional areas activities (Gibcus and Kemp 2003). A summary of some of these studies is presented in Table 2. Based on the evidence from the literature from Table 2, one can deduce that two main strategic types are distinctive in small and medium firms: proactive and reactive. Small and medium firms can be placed on a proactive - reactive continuum according to the degree to which their activities reflect these two main strategic orientations (Blackman 2003; Kotey 1994). Details of these strategy types are presented in the next section.
Table 2.2: Summary of Studies on Strategic Orientation Types in Small and medium firms
Author
Summary of studies
Miller and Friesen (1982)
Adopted a contingency approach focused on firms in different industries by classifying them into entrepreneurial and conservative firms. Firms with an entrepreneurial orientation were more proactive, adopting competitive advantages aimed at innovation, while conservative firms were more reactive.
Covin and Slevin (1989)
Researched the strategic management of small and medium firms in a hostile and benign environment, and identified two types of orientation that influence a small firm's strategic posture: entrepreneurial and conservative. Proposed that entrepreneurial firms favour innovation and change in order to obtain competitive advantage, while firms with a conservative orientation have a mechanistic structure that is more traditional, hierarchical and tightly controlled. Reactive firms are also risk-averse and non innovative.
Kotey and Meredith (1997)
Studied small and medium firms in the furniture manufacturing industry of NSW, Australia, and categorised them along a continuum of proactive - reactive strategy types.
Luo (1999)
Examined the environment-performance relationship in Chinese SME's with a focus on township and village enterprises. Identified two different types of strategies that are associated with small and medium firms: innovativeness, and risk taking.
Blackman (2003)
Studied owner-managers characteristics and entrepreneurial management practices in predicting small firm performance in Queensland, Australia and identified two different types of strategies employed by small and medium firms: proactive and reactive strategies.
2.13Proactive and Reactive Strategies
Research has shown that small and medium businesses have fewer strategic options, and that this contributes to their weaker positions, particularly when they have to compete with large firms (Gibcus and Kemp 2003). According to Verheul, Risseuw and Bartelse (2002), strategies adopted by small and medium businesses vary according to degree of assertiveness, that is, defensive (reactive) or aggressive (proactive) strategies.
Miller and Friesen (1983) defined proactivity in terms of innovation and risk taking. Studies have shown that proactive strategies are associated with emphasis on product quality, new operating technologies, product and service innovation, and the discovery of new markets (Robinson and Pearce 1983). Proactive firms continually search the market for new products, services and technologies (Covin, Green, and Slevin 2006; Morgan and Strong 2003). In addition, firms pursuing this strategy usually define the target market and also try to improve existing products (Lumpkin and Dess 1997). They emphasize customer service, brand-name development and effective promotion strategies. These firms are usually concerned with involving employees in decision-making, motivating and retaining staff, providing training and development opportunities and appraising employees' performance (Gibcus and Kemp 2003; Gundry and Welsh 2001; Koch and Kok 1999). As noted by Gundry and Welsh (2001) and Moore (2005), proactive strategies also involve the adoption of new and efficient methods of production, attention to location, storage, wastage, transportation costs, production and inventory levels, and the selection of reliable suppliers. Furthermore, firms pursuing this strategy seek a cost-effective way of funding their activities, and planning and monitoring their cash flow (LeCornu et al. 1996). Small and medium firms with proactive strategic orientation tend to use information and communications technology to support accounting, budgeting, inventory control, word processing and spreadsheet analysis in order to maintain their competitiveness (Hussin, King, and Cragg 2002).
Reactive strategies on the other hand, emphasize survival and stability (Carter, Williams, and Reynolds 1997; Olson and Currie 1992). Firms implementing these strategies tend to follow others in the industry and events in their environment. They emphasize risk avoidance and undertake little or no innovation (Lumpkin and Dess 1997; Morgan and Strong 2003). This type of strategy often serves a niche market and emphasizes production of quality tailor made goods (Miller and Friesen 1983). Firms using this strategy do not exhibit consistent behavior in dealing with changing situations and as a result, do not have a long term focus (Upton, Teal, and Felan 2001). They are often confined to the lower price segments of the market, with little or no advertising (Covin 1991). Employee creativity and innovation are discouraged. Reactive firms usually adopt mechanistic structures with emphasis on rules, policies, procedures and other means of promoting internal efficiency (Morgan, Strong, and McGuinness 2003). Furthermore, there is a lack of or minimal use of financial strategies in decision-making.
These are the two main dimensions of strategic orientation identified in the literature for small and medium firms. However, Kotey and Meredith (1997) explained that firms cannot be purely proactive or purely reactive in their strategic orientation but rather pursue different combination of the two strategy types. They stated that firms can be located at a given point on a reactive - proactive continuum depending on the degree to which their functional area activities reflect proactive as opposed to reactive strategies and vice versa. Kotey and Meredith (1997) went on further to argue that in reality, these two strategies (proactive and reactive) may not be clearly distinguishable. Firms pursuing proactive strategies may sometimes conform to industry norms and adopt standardized strategies. Firms may do this not out of tradition, as with low performing reactive strategies, but because that is the best strategy at that time in their industry sector. Thus, a firm is said to be more or less proactive in strategic orientation or more or less reactive.
As noted earlier, business performance is very important to every entrepreneur. This issue will be discussed next.
2.14Business Performance and its Measurement
Ford and Schellenberg (1982), Lachman and Wolfe (1997) and Rodsutti and Swierczek (2002) conceptualized performance by examining three major perspectives that pervade the organizational performance literature. One perspective, the systems resource perspective defines performance in terms of the key internal and external factors that the organization depends on for survival plus its ability to enhance its resource base with scarce and valued resources. This perspective not only emphasizes the specific achievements of organizations, but also the means of achievement (Lachman and Wolfe 1997; Rodsutti and Swierczek 2002). Ford and Schellenberg (1982), Lachman and Wolfe (1997) and Rodsutti and Swierczek (2002) observed that, although this perspective provides some insight into the nature of the performance construct, relevant systems are difficult to delineate, define and assess. Furthermore, this perspective does not explain specific linkages between systems and the organization's ultimate goals of effective functioning and survival.
The second perspective, the constituency approach, views the organization as existing in order to benefit numerous constituents, both internal and external to the organization. Organizations are therefore seen as open systems which involve many parties or stakeholders, including shareholders, employees and society. Thus, performance is evaluated as the ability of the organization to account successfully for its outputs and operations to its various internal and external constituencies (Ford and Schellenberg 1982; Lachman and Wolfe 1997; Rodsutti and Swierczek 2002). In other words, performance is conceptualized as the extent to which constituencies' expectations are met. On the negative side, this perspective increases the complexity of the organizational performance construct as each constituent has its own objectives (Ford and Schellenberg 1982). Whilst it is generally agreed that performance should be viewed in relation to one or more goals (Etzioni 1964) the issues that remain unresolved are which goals, and from whose perspective.
The goal perspective, which is the third of the three perspectives, will be used to define performance in this study. This approach assumes that organizations pursue ultimate and identifiable goals. Thus in order to define performance, the goals of the organization itself must be identified. It is only after these goals have been determined that performance can be defined (Cron, Bruton, and Slocum Jr. 2006; Ford and Schellenberg 1982; Watson, Newby, and Woodliff 2000). That is, the goal approach defines performance in terms of the extent to which organizational goals are realized. Etzioni (1964) criticized this approach on the grounds that goals are ideal states and therefore do not offer the possibility of a realistic assessment. Furthermore, goals as cultural entities arise outside the organization and therefore cannot be arbitrarily attributed to the organization itself. In contrast, Yuchtman and Seashore (1967) observed that, despite these criticisms, it is still useful to identify some goals as organizational property. This is more so in small businesses where ownership and management are closely linked, and where the owner-manager's goals are inseparable from business goals.
Similarly, Kotey and Meredith (1997) proposed that small business performance should be conceptualized on the basis of the extent to which the firm's goals and/or objectives have been achieved. They reasoned that, at the macro level interest in small business is associated with their contribution to economic development in terms of innovation, employment and income. This view is shared by others such as Acs and Storey (2004), Julien (1998), LeCornu et al. (1996), and Verheul, Risseeuw, and Bartelse (2002). These macro level expectations of the small business sector can only be achieved through the growth and expansion of individual firms. However, growth of small businesses depends on the owner-manager's goals and/or objectives. As noted by Du Reitz and Henrekson (2000), Storey et al. (1989), Verheul, Risseuw and Bartelse (2002) and Walker and Brown (2004), not all owner-managers will pursue growth even if it is financially worthwhile. Thus, performance of small businesses cannot be conceptualized without reference to goals at the micro level, that is, the personal goals and/or objectives of the owner-manager (LeCornu et al. 1996; Rodsutti and Swierczek 2002).
Next, discussion will be on owner/managers values and strategic orientation with that of business performance.
2.15Linking Owner/Managers Values, Strategic Orientation and Business Performance
The relationship between personal values and business strategy was examined as early as 1965 in research conducted by Guth and Taguiri (1965). They suggested that in determining an appropriate strategy, top management attempts to determine where they believe the company should be over a period of time and in this process of strategy-making, top management's personal values play a role in the judgments and choices made. A study by Kotey and Meredith (1997) empirically investigated the relationship between owner/managers personal values and the strategies they adopt in operating their businesses. Vesper (1980) proposed a continuum along which several entrepreneurial types might exist. In their study, Kotey and Meredith (1997) identified four clusters of value types along a continuum of value types from conservative to entrepreneurial. Two of the clusters (C1 and C3 in figure 6) were clearly separated by value orientation, the strategies they employed, and by business performance. They found that entrepreneurial personal values such as ambition, achievement, growth, and innovation were endorsed by owner/managers who adopted a proactive strategic orientation. The more entrepreneurial of the two groups (C3 and C4 in figure 6) choose more proactive strategies and achieved above average business performance, whilst those in the conservative cluster were strategically more reactive and experienced below average performance.
Figure 2.5: Kotey and Meredith's (1997) Cluster Positions
In light of the work of Allport (1950), Hoge (1972), Rokeach (1973), England (1975), Kotey and Meredith (1997), Gadenne (1998) and Blackman (2003), the conceptual model below, which outlines the way in which owner/managers religiosity, values, strategic orientation and business performance has provided the basis of this research. This study wishes to find the association, if any between religiosity and values. Filling the gap between religiosity and entrepreneurial values; examine values of Bumiputera owner/managers and their strategic orientation hence business performance and investigate the mediating effect of values between religiosity and strategic orientation and business performance.
Figure 2.6: Proposed relationships between entrepreneurs' religiosity, values, strategic orientation and business performance
The Case for Bow and Arrow and knowledge management as an Innovation in the Construction Industry
Murray and Langford (2003) report that construction commerce managers and authorities have conveyed, through diverse construction commerce accounts, the require for the commerce to become more innovative and supply larger worth for cash through instilling discovering in their organizations. The construction commerce should accept the dispute to change and modernise if it is to agree the presentation of commerce that develop higher earnings and can more effortlessly appeal high-calibre gifts (DETR 1998). Success of diverse KM plans in other commerce -mainly pharmaceuticals (Normann and Ramirez 1993; Powell 1998), electronics (Sieloff 1999), and constructing (Andrews 1996) -provides a form for the construction industry.
While there are boosting indications of alterations to the way that construction commerce and construction study knowledge exchange functions, these are somewhat couple of and underdeveloped. For demonstration while there are indications of the construction commerce adopting a more systemic set about to discovery through provide string of connections management in the UK (Jones and Saad 2003), and a relationship-based procurement set about in Australia (Walker and Hampson 2003a), discovery adoption still tends to be usually distinuished by incremental or modular publicity hoc adoptions other than scheme or fundamental innovations (Slaughter 1998; Slaughter 2000). (Winch 1998) contends that the project integration process is partially to accuse for this because it is convoluted utilising fragmented groups, so discovery tends to occur on projects other than as company broad plans (where courses manage not gladly move from the project boundary to the organisational flats engaged in the project). The overhead publications proposes that most construction contractors in numerous nations are profoundly fixed in customary practices with a weather of doubt of dangers engaged in seeking new goods or processes— except there are well-established demonstrations to follow.
KM permits organisations to develop means that could convey them nearer to knowledge groups developing new knowledge and making innovations. This interaction can permit a flow of knowledge between interior and external knowledge groups in order that rather than of an administration answering reactively to knowledge-push it can drag that knowledge into itself, acclimatize it and competently use it.
KM has profited vigilance in the last eight years in the construction industry. The expanded possibility of achievement of taking up KM values, and its diffusion into construction organisations, is starting to proceed as an impetus for learned investigators to evolve best perform KM for construction organisations (Walker 2005).
Benefits for the Construction Industry
Knowledge is being identified as a crucial asset and source of comparable benefit in today's dynamic and altering enterprise natural environment (Burton-Jones, 1999). Organisational and one-by-one knowledge is crucial for enterprise entrepreneurship and for organising change (Nonaka and Takeuchi 1995; Egbu 2000). Knowledge identification, creation, acquisition, move, distributing and exploitation is now usually acknowledged as crucial for effective employed in projects and for advancing organisational competitiveness.
The foregoing is furthermore factual for construction industry. Effective management of knowledge in the construction commerce is probable to make discovery, decrease project time, advance value and clientele approval (Kamara et al. 2002; Love et al. 2003). Through the process of KM, the exploitation of an organisation's intangible assets conceives worth and knowledge both internally and commerce wide. (Snowden 1999; Davenport and Prusak 2000; Liebowitz and Megbolugbe 2003). In the project natural environment, KM will aid project managers to advance communications inside teams. It will furthermore supply acquainted knowledge to the project manager and project teams. KM can double-check better distributing of best perform articles, courses wise, project management and scheme technology methodologies, and reconsider and article the rationale for strategic decision-making (Liebowitz and Megbolugbe 2003). Failure to arrest and move project knowledge directs to an expanded risk of 'reinventing the wheel', trashed undertaking, and weakened project presentation (Siemieniuch and Sinclair 1999a). These promise advantages of KM are assuring sufficient for the construction organisations to project into taking up its principles.
A thriving KM start will establish discovering and help knowledge-sharing heritage and natural environment, supply dream and productive authority to overwhelm discovering barriers. This will assist an administration to be changed into a discovering administration that is open to discover new methods and relentlessly alterations itself founded on wise knowledge. This change rises the absorptive capability of the administration, which is a function of how organisations keep and circulate knowledge internally to virtually workout KM (Cohen and Levinthal 1989; Cohen and Levinthal 1990). Furthermore, former knowledge of specific knowledge domains tends to make it simpler to realise new knowledge (Burton-Jones 1999). It endows organisations to identify the worth of new data, assimilate it and request it to financial finishes (Cohen and Levinthal 1990). Liebowitz and Megbolugbe (2003) observe that with the creation and arrest of knowledge, discovering takes location and knowledge is directed and embedded inside one-by-one and organisational processes. Organisations may discover competently from the knowledge and use them efficiently.
Summary
In this chapter the review on various studies on religiosity and how this variable influence individual values has been described. Rokeach (1973) postulated long ago that religiosity influenced the value systems adopted by individual. Several other researchers have claimed the positive association of entrepreneurial values and strategic orientation of SME. Most of the study revealed the positive relationships between personal values, strategic orientation and business performance. It is also the interest of this study to examine the mediating effect of values with religiosity, strategic orientation and business outcome. Various hypotheses were established to test the association among variables.
Next in chapter three, the methodology use for this research is described. The main topic discussed will be on sampling technique, justification on research variables as indicated in this chapter, and the analytical analysis adopted.
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