barriers of implementing the balanced scorecard in egyptian banks
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Research proposal Barriers of implementing the Balanced Scorecard in Egyptian banksTRANSCRIPT
Research proposal:
Barriers of implementing the Balanced Scorecard in Egyptian banks
(Case study on a local private bank)
Prepared by:
Walid SaafanDBA - September 2014
Supervisor:
Prof. Dr. Alaa Abdel Bary
Barriers of implementing the Balanced Scorecard in Egyptian banks2
FORMULATION
3 Barriers of implementing the Balanced Scorecard in Egyptian banks
EXECUTION
Contents
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1. Abstract
2. Introduction
3. AIM of the research
4. Research objectives
5. Research problem
6. Literature review
7. The research design
8. Research significance
9. Limitations
10. Consent
11. Dissertation outline
12. Timeline
13. References
Abstract
Barriers of implementing the Balanced Scorecard in Egyptian banks5
o This research aims to identify the barriers of using the Balanced Scorecard as a strategy management tool in the Egyptian private commercial banks.
o The research finding and recommendation will support the Egyptian banks’ management to adopt the Balanced Scorecard framework for strategy management in their banks.
Abstract, cont.
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The research will cover the following areas:
o Identify the current strategy execution practices adopted by the senior management of the bank (under study),
o Identify the barriers of implementing the Balanced Scorecard framework.
Introduction
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CBE Governance guidelines
o According to the governance guidelines of the Central Bank of Egypt (CBE) approved on 5th Jul., 2011, the board of directors is responsible of the approval of the bank strategy and strategic objectives, overseen the strategy execution, and make sure that it is communicated to all the employees.
Introduction, cont.
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What is Strategy?
According to Michael Porter (HBR 4134, 1996), Operational effectiveness and strategy are both essential to superior performance, which, after all, is the primary goal of any enterprise. But they work in very different ways.
1. Strategy is the creation of unique and valuable position, involving a different set of activities.
2. Strategy requires you to make a trade-offs in competing to choose what not to do.
3. Strategy involves creating “fit” among a company’s activities.
DOING DIFFERENT THINGS, ORDO THE SAME THING DIFFERENTLY
9 Introduction
Introduction, cont.
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Importance of Strategy
o According to Robers S. Kaplan and David P. Norton (2008), The Monitor Group asked senior executives, in a 2006 global survey about their priorities. Number 1, by a clear margin, was strategy execution.
o The Conference Board in its 2007 survey reported that executives’ number 1 priority was “excellence in execution.” After the number 2 priority, “sustained and steady top-line growth,” strategy execution again appeared as priority number 3, “consistent execution of strategy by top management.”
11 Barriers of implementing the Balanced Scorecard in Egyptian banks
Introduction, cont.
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The Balanced Scorecard
o Developed by Harvard professor Robert Kaplan and consultant David Norton, the balanced scorecard does not focus solely on financial objectives of the firm. Rather the scorecard shifts the focus from financial objectives to include the intangible assets.
o Translates the strategy into operational terms.
o The ONLY strategy managenet framework
o LEAD measures
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Internal capabilities
Customer benefits
Financial results
VISION
Introduction, cont.
AIM of the research
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1. Investigate the barriers of implementing the Balanced Scorecard as a framework for strategy management in local banks.
2. Provide recommendations to the bank’s management to adopt the Balanced Scorecard (BSC) in their banks.
Research objectives
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1. Identify the current strategy management’s practices in local banks.
2. Identify the important barriers of strategy execution.
Research problems
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1. The Balanced Scorecard framework is not adopted by local banks that led to unsatisfactory strategy management practices.
2. Most of the Egyptian banks’ executive and senior management focus on operational effectiveness activities of the bank.
3. Executives and senior management’s focus on operational effectiveness and tactics has a negative impact on performance of the whole bank
Research questions
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1. What’s the current strategy management framework used in the bank?
2. What are the barriers to implement the Balanced Scorecard?
Literature review
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o Michael E. Porter explained the differences between Operational Effectiveness (OE) and Strategy (1996).
o Robers S. Kaplan and David P. Norton (HBR 2008) explained the importance strategy execution and management using the Balanced Scorecard
o The topic of using the Balanced Scorecard in commercial banks was covered in some researches in India (Sagar R. Dave, 2012), but discussing the barriers of using the Balanced Scorecard in Egyptian commercial banks was not discussed in other researches.
Literature review, cont.
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o Ahmed et al. (2011) conducted a study in which they surveyed a sample of 27 banks in Pakistan to identify the measures that are used by the sample banks to evaluate their performance according to the four perspectives of the Balanced Scorecard (BSC).
Literature review, cont.
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o Sabah M. Al-Najjar (2012) conducted a study to contribute to the understanding of how Balanced Scorecard (BSC) is developed and applied in evaluating the performance of a Large Local Bank (LLB) in Iraq. Using the concepts of Kaplan and Norton.
The research design
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o The purpose of the research is to discover the barriers of using the Balanced Scorecard (BSC) as strategy management tool in a local private banks, and to provide some recommendations for the management to successfully implement the Balanced Scorecard (BSC).
o The research type is exploratory, descriptive and, qualitative. The research will be done using in-depth interviews (IDI) with the executive committee (EC) members of the Egyptian private bank (under study).
The research design, cont.
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The proposed data collection will be as follows:
o An official request will be sent to the chairman of the bank about the research purpose for approval.
o A confidentiality agreement will be signed with the concerned person in the bank.
o The detailed questionnaire will be developed to support the research objectives.
o Interviews with the executive committee members will be scheduled.
o The interview will be conducted by the researcher.
o Data will be collected and analyzed using a statistical software.
o Research findings and recommendation report will be discussed with the executive committee.
Research significance
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Research significance, cont.
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Our research results will support the bank’s executive committee members to apply the Balanced Scorecard framework for their strategy management and hence will outperform their competitors in the marketplace.
Limitations and delimitations
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o This research will be conducted on a private bank and the findings can’t be generalized to all the governmental and international banks due to the different management practices.
o The quality of the findings and recommendation depends on the understanding and cooperation of the executive members of the bank.
Consent, access and participants' protection
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The researcher will sign a confidentiality agreement with the bank under study and the detailed results and findings will be treated accordingly.
Dissertation outline
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Chapter 1 - Introduction
Chapter 2 - Literature Review
Chapter 3 - Research Methodology
Chapters 4 - Findings and Results
Chapter 5 - Discussion and Conclusion
Timeline
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Time Topic
1 month Chapter 1: Introduction
4 months Chapter 2: Literature Review
5 monthsChapter 3: Research Methodology and Research
Design
1 month Chapter 4: Findings
1 month Chapter 5: Discussion and Conclusions
1 month References and appendices
References
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Books
o Robert S. Kaplan & David P. Norton (2008), The Execution Premium. Harvard business school Publishing Corporation, 3-5.
References, cont.
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Articleso Michael E. Porter (1996). What is strategy, Harvard Business
Review, 4-10.o Sabah M. Al-Najjar (2012). Designing a Balanced Scorecard to
Measure a Bank's Performance: A Case Study, International Journal of Business Administration, Vol. 3, No. 4.
o Ahmed, Z., Bowra, Z., Ahmad, I., Nawaz, M., & Khan, M. (2011). Performance Measures Used by the Commercial Banks in Pakistan within the Four Perspectives of Balanced Scorecard. Journal of Money, Investment and Banking, (21), 12-20.
o Sagar R. Dave, (2012). Applying Balanced Scorecard in Indian Banking Sector: An Empirical Study of the State Bank on India. Pacific Business Review International Volume 5 Issue 6.
o Charan, R., & Colvin, G. (1999). Why CEOs Fail? Fortune.
Questions
31 Barriers of implementing the Balanced Scorecard in Egyptian banks
