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CONTENTSCONTENTSCONTENTSCONTENTS
Sr.
No. TITLE & NAME OF THE AUTHOR (S) Page No.
1. MARKET INTELLIGENCE - AN EMPIRICAL STUDY OF MARKET BEHAVIOR OF AGRICULTURAL COMMODITY
S. P. BHARDWAJ, ASHOK KUMAR & K. N. SINGH
1
2. CONSTRUCTING A MULTI-CRITERIA CO-BRANDING STRATEGY MODEL FOR FAUCET INDUSTRY
DR. CHAO-CHAN WU, MENG-CHEN CHANG & DR. HAO WANG
7
3. IMPACT OF ORGANIZATIONAL CLIMATE ON ORGANIZATIONAL LEARNING
HAMID REZA QASEMI & SAEED BONYADI
16
4. BPO INDUSTRY IN INDIA: B2B MARKET TRANSFORMATION
DR. VIJU MATHEW
22
5. DETERMINANT FACTORS THAT ATTRACT INTERNATIONAL TOURISTS TO VISIT ETHIOPIA
DR. GETIE ANDUALEM IMIRU
27
6. NON FINANCIAL FACTOR OF MEASURING ORGANIZATIONAL PERFORMANCE BRINGS LONG TERM FINANCIAL CAPABILITY: AN EXPERIENCE
FROM BANGLADESH
MD. MONIRUZZAMAN SARKER, MD.SAHABUDDIN & NAFISA KASEM
39
7. PREDICTORS OF WILLINGNESS TO ADOPT CUSTOMER RELATIONSHIP MANAGEMENT IN NIGERIAN ORGANIZATIONS: A FRAMEWORK
APPROACH
EKAKITIE-EMONENA, SUNNY.
42
8. COMPARISON OF VALUE-RELEVANCE OF CASH FLOW AND OPERATING PROFIT IN EXPLANATION OF COMPANIES STOCK RETURN WITH
CONSIDERING INFORMATION ASYMMETRY: EVIDENCE FROM TEHRAN STOCK EXCHANGE
ROYA DARABI, B.ZANGANE & SHAHIN SAHRAEI
47
9. CUSTOMER SATISFACTION SURVEY OF TRAINING AND DEVELOPMENT PROGRAMS FOR HUMAN RESOURCE DEVELOPMENT DEPARTMENT
OF MANUFACTURING ORGANIZATIONS
MANOJ MEHTA & GEETA DAWAR
52
10. ACCESSING THE INTERNATIONAL CAPITAL MARKETS WITH DEPOSITARY RECEIPTS
DR. M. L. GUPTA & DR. SIMMI KHURANA
61
11. A STUDY ON THE MARKETING PRACTICES OF THE KOVILPATTI CO-OPERATIVE MILK SUPPLY SOCIETY LTD.
M. SEKAR & M. SHUNMUGA SUNDARAM
63
12. IMPACT OF ORGANIZATION CULTURE ON EMPLOYEE MOTIVATION AND JOB PERFORMANCE
NIDHI MAITHEL, DR. D. S. CHAUBEY & DEEPAK GUPTA
68
13. VALIDITY OF EFFICIENT MARKET HYPOTHESIS IN THE INDIAN STOCK MARKET
DR. RASHMI SONI
74
14. ANALYSIS OF PERCEPTIONS OF INVESTORS TOWARDS MUTUAL FUNDS: AN EMPIRICAL INVESTIGATION
DR. S. O. JUNARE & FRENA PATEL 81
15. CUSTOMERS’ EXPERIENCE WITH SMALL SCALE RETAIL STORES – AN EMPIRICAL STUDY
DR. K. RAMA MOHANA RAO & DR. K. RATNA MANIKYAM
86
16. INDIAN SPICES EXPORTS: THEIR GROWTH AND INSTABILITY
DR. D. SRINIVASA RAO
90
17. STOCK PRICE RESPONSES TO THE ANNOUNCEMENT OF BUYBACK OF SHARES IN INDIA
DR. ISHWAR P & DR. I. B. CIRAPPA
95
18. INVESTOR BEHAVIOR TOWARDS MUTUAL FUND SCHEMES: AN EMPIRICAL STUDY
SHAFQAT AJAZ & DR. SAMEER GUPTA
103
19. MULTICHANNEL STRATEGY – A COMPETITIVE ADVANTAGE TOOL OF ORGANISED RETAILERS
P. SATHISH CHANDRA & DR. G. SUNITHA
109
20. STUDY OF SAVING PATTERN AND INVESTMENT PREFERENCES OF INDIVIDUAL HOUSEHOLD IN INDIA
MEENAKSHI CHATURVEDI & SHRUTI KHARE
115
21. DEVELOPING INFRASTRUCTURE FOR PROMOTION OF RURAL TOURISM IN THE STATE OF WEST BENGAL: A STUDY ON KAMARPUKUR
DR. DILLIP KUMAR DAS & NILANJAN RAY
121
22. PROFITABILITY AND LIQUIDITY MANAGEMENT OF FMCG COMPANIES IN INDIA: A COMPARATIVE STUDY BETWEEN HINDUSTAN UNILEVER
LIMITED (HUL) AND ITC LIMITED
DR. BHASKAR BAGCHI & DR. BASANTA KHAMRUI
128
23. A COMPARATIVE STUDY ON BUYING BEHAVIOR OF RURAL AND URBAN CUSTOMERS IN SELECTED DISTRICT OF GUJARAT
ARATI. TRIVEDI & PARIMAL. CHAVDA
131
24. RETAILING STRATEGIES FOR CUSTOMER SATISFACTION: COMPARATIVE STUDY OF MORE AND FOOD WORLD
A. SANDHYA RANI 135
25. DIRECT MARKETING OF AGRICULTURAL PRODUCTS - A STUDY OF RYTHU BAZAARS (FARMERS’ MARKET) IN ANDHRA PRADESH
DR. K. RAJI REDDY & DR. H. SATEESH
137
26. NEED FOR A PARADIGM SHIFT IN MANAGEMENT TEACHING THROUGH PROFESSIONAL DEVELOPMENT OF FACULTY
AFREEN NISHAT A. NASABI 142
27. CUSTOMERS’ SATISFACTION ON CORE BANKING: A STUDY WITH SPECIAL REFERENCE TO A NATIONALIZED BANK IN THIRUNELVELI
BIJU K, D. DEVANDHIRAN & SREEHARI R 146
28. A STUDY ON CUSTOMER SATSIFACTION OF GOODKNIGHT PRODUCTS IN ERODE, TAMILNADU
N.S.SUGANYA, P. SENTHILKUMAR & K.VISNUPRIYA 153
29. ASSOCIATION BETWEEN DIVIDEND DECISION AND FINANCIAL PERFORMANCE: AN EMPIRICAL ANALYSIS
SANJEEV LALHOTRA 157
30. AN EMPIRICAL INVESTIGATION OF CAPITAL BUDGETING PRACTICES IN INDIA
PREETI ARORA 166
REQUEST FOR FEEDBACK 170
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CHIEF PATRONCHIEF PATRONCHIEF PATRONCHIEF PATRON PROF. K. K. AGGARWAL
Chancellor, Lingaya’s University, Delhi
Founder Vice-Chancellor, GuruGobindSinghIndraprasthaUniversity, Delhi
Ex. Pro Vice-Chancellor, GuruJambheshwarUniversity, Hisar
PATRONPATRONPATRONPATRON SH. RAM BHAJAN AGGARWAL
Ex.State Minister for Home & Tourism, Government of Haryana
Vice-President, Dadri Education Society, Charkhi Dadri
President, Chinar Syntex Ltd. (Textile Mills), Bhiwani
COCOCOCO----ORDINATORORDINATORORDINATORORDINATOR DR. SAMBHAV GARG
Faculty, M. M. Institute of Management, MaharishiMarkandeshwarUniversity, Mullana, Ambala, Haryana
ADVISORSADVISORSADVISORSADVISORS DR. PRIYA RANJAN TRIVEDI
Chancellor, The Global Open University, Nagaland
PROF. M. S. SENAM RAJU Director A. C. D., School of Management Studies, I.G.N.O.U., New Delhi
PROF. M. N. SHARMA Chairman, M.B.A., HaryanaCollege of Technology & Management, Kaithal
PROF. S. L. MAHANDRU Principal (Retd.), MaharajaAgrasenCollege, Jagadhri
EDITOREDITOREDITOREDITOR PROF. R. K. SHARMA
Professor, Bharti Vidyapeeth University Institute of Management & Research, New Delhi
COCOCOCO----EDITOREDITOREDITOREDITOR DR. BHAVET
Faculty, M. M. Institute of Management, MaharishiMarkandeshwarUniversity, Mullana, Ambala, Haryana
EDITORIAL ADVISORY BOARDEDITORIAL ADVISORY BOARDEDITORIAL ADVISORY BOARDEDITORIAL ADVISORY BOARD DR. RAJESH MODI
Faculty, YanbuIndustrialCollege, Kingdom of Saudi Arabia
PROF. SANJIV MITTAL UniversitySchool of Management Studies, GuruGobindSinghI. P. University, Delhi
PROF. ANIL K. SAINI Chairperson (CRC), GuruGobindSinghI. P. University, Delhi
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DR. SAMBHAVNA Faculty, I.I.T.M., Delhi
DR. MOHENDER KUMAR GUPTA Associate Professor, P.J.L.N.GovernmentCollege, Faridabad
DR. SHIVAKUMAR DEENE Asst. Professor, Dept. of Commerce, School of Business Studies, Central University of Karnataka, Gulbarga
MOHITA Faculty, Yamuna Institute of Engineering & Technology, Village Gadholi, P. O. Gadhola, Yamunanagar
ASSOCIATE ASSOCIATE ASSOCIATE ASSOCIATE EDITORSEDITORSEDITORSEDITORS PROF. NAWAB ALI KHAN
Department of Commerce, Aligarh Muslim University, Aligarh, U.P.
PROF. ABHAY BANSAL Head, Department of Information Technology, Amity School of Engineering & Technology, Amity
University, Noida
PROF. V. SELVAM SSL, VIT University, Vellore
DR. N. SUNDARAM Professor, VITUniversity, Vellore
DR. PARDEEP AHLAWAT Reader, Institute of Management Studies & Research, MaharshiDayanandUniversity, Rohtak
S. TABASSUM SULTANA Associate Professor, Department of Business Management, Matrusri Institute of P.G. Studies, Hyderabad
TECHNICAL ADVISORTECHNICAL ADVISORTECHNICAL ADVISORTECHNICAL ADVISOR AMITA
Faculty, Government M. S., Mohali
MOHITA Faculty, Yamuna Institute of Engineering & Technology, Village Gadholi, P. O. Gadhola, Yamunanagar
FINANCIAL ADVISORSFINANCIAL ADVISORSFINANCIAL ADVISORSFINANCIAL ADVISORS DICKIN GOYAL
Advocate & Tax Adviser, Panchkula
NEENA Investment Consultant, Chambaghat, Solan, Himachal Pradesh
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Advocate, Punjab & Haryana High Court, Chandigarh U.T.
CHANDER BHUSHAN SHARMA Advocate & Consultant, District Courts, Yamunanagar at Jagadhri
SUPERINTENDENTSUPERINTENDENTSUPERINTENDENTSUPERINTENDENT SURENDER KUMAR POONIA
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• Bowersox, Donald J., Closs, David J., (1996), "Logistical Management." Tata McGraw, Hill, New Delhi.
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Garg, Bhavet (2011): Towards a New Natural Gas Policy, Political Weekly, Viewed on January 01, 2012 http://epw.in/user/viewabstract.jsp
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39
NON FINANCIAL FACTOR OF MEASURING ORGANIZATIONAL PERFORMANCE BRINGS LONG TERM
FINANCIAL CAPABILITY: AN EXPERIENCE FROM BANGLADESH
MD. MONIRUZZAMAN SARKER
SR. LECTURER
SCHOOL OF BUISNESS & ECONOMICS
UNITED INTERNATIONAL UNIVERSITY
DHAKA, BANGLADESH
MD.SAHABUDDIN
RESEARCH OFFICER
THE FEDERATION OF BANGLADESH CHAMBERS OF COMMERCE AND INDUSTRY (FBCCI)
DHAKA, BANGLADESH
NAFISA KASEM
LECTURER
FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF DEVELOPMENT ALTERNATIVE
DHAKA, BANGLADESH
ABSTRACT This paper deals with the measurement of organizational performance (MOP) and tries to highlight that Non-Financial factor of measuring organizational
performance brings long term financial capability. An endeavor has been made to present the problems associated with the financial indicators of performance
and how Non-Financial Indicators (NFI) help in decision making. Both importance of NFIs in Bangladeshi context and consequences of ignorance NFIs have been
discussed to find out the evidence of Non-Financial factors impact. Finally, this paper suggests that using the NFIs which linked to factors such as corporate
strategy, value drivers, organizational objectives and the competitive environment.
KEYWORDS Measurement of Organizational Performance (MOP); Non Financial Indicators (NFIs); Organizational Performance (OP).
INTRODUCTION easuring of organizational performance is an important factor for the organization itself and the stakeholders of the organization. It is not always an
easy job to do. Measurement of OP is always linked with organizational missions, goals and objectives. Choosing performance measure is a challenge.
Performance measurement systems play a key role in developing strategy, evaluating the achievement of organizational objectives and compensating
managers. Yet many managers feel traditional financially oriented systems no longer work adequately.
From A recent survey of U.S. financial services, companies found that most of the companies were not satisfied with their measurement systems that have been
used right now. They believed that there were too much emphasis on financial measures such as earnings and accounting returns and little emphasis given on
drivers of value such as customer and employee satisfaction, innovation and quality.
In response to that, companies are now implementing new performance measurement systems. For example, A third of the financial services companies, made
a major change in their performance measurement system during the past two years and 39% of the companies, plan a major change within two years.
As a result of the Inadequacies in financial performance measures, innovations ranging from non-financial indicators of "intangible assets" and "intellectual
capital" to "balanced scorecards" of integrated financial and non-financial measures had made. This article discusses the advantages of non-financial
performance measures and offers suggestions for implementation.
OBJECTIVES AND METHODOLOGY OF THE STUDY As the competition among the competitors has been increased, this Competition forces every organization to increase their performance and profit but
somehow it is not possible to achieve both of these objectives due to the misconception of organizational performance. In most of the cases, organization
emphasizes on financial record as an indicator of performance, As financial record is the final outcome of any performance which cannot be modified within
current year so new indicator must be needed. So, here we have tried to emphasis on Non-Financial indicator to measure organizational performance so that
organization can learn lessons and take act in the current year to achieve financial success. To establish this concept, we have collected secondary information
from the various different kinds of published journals, articles, and books related with the analysis. This study is exploratory in nature and based on secondary
information. For the reliability of this study, we have given emphasis on the practical knowledge and expert opinions about the organizational performance.
PROBLEMS ASSOCIATED WITH THE FINANCIAL INDICATORS OF PERFORMANCE By tradition, firm often uses financial indicators of performance to measure the success of the organization. Researcher Kaplan (1983) has identified three main
probable consequences for the high-tech diversified manufacturing industries that are still practicing traditional cost based reporting system. These are:
USE-TYPE: Traditional cost reports use of arbitrary cost allocation schemes and there is no link between products, different processes or indirect cost that they
create. Therefore, without reliable picture of what different processes really cost, management is unable to see the connection between decisions and their
effects on the cost.
RELEVANCE-TYPE: The system fails to develop quality control that ensures customer satisfaction and factor productivity measure or fails to highlight opportunity
costs. Further it also fails to provide answers to the manager for some basic questions like- what takes up the time of production planning staff, the right amount
of resources is in the place etc.
CONTROL-TYPE: The traditional cost report also fails to consider the Non-Financial factors that need to measure the efficiency of customer’s service. Therefore,
this system subsidize low-volume, customized product, at the cost of high volume standard products in manufacturing industry (O’Guin 1991). So, the system
under-cost is the complex products and consequently creates a control- type problem for the firm. Many researchers have found that there is an impact of Non-
Financial Indicators (NFIs) on the decision making process in achieving the organizational target (Smith, 1994; Green-Singleton 1993).
M
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NON-FINANCIAL INDICATORS IN DECISION MAKINGNowadays In the area of operation management, Non
manufacturing firms. In the strategy of new control measure, NFIs can help a firm to maintain consistency with goals and obje
internal and external factors that are required to achieve the firm’s target (Ber
three types of failures such as, Use-types, relevance-type, and control
decision of value, facilitated evaluation and control measure of a firm (Smith 1994).Most significant reasons for the use of NFIs are that i
innovation, Quality, satisfying customer and production efficiency (Singleton,G.B,19993).
Now-a-days, it is not just an issue of financial justification for the firm
efficiency and growth in comparing with competitors. Therefore, the firm should be willing to invest capital
on the operational efficiency of the firm. Chalos (1992) identifies various NFIs to measure the operation control, which is s
FIGURE 1: NON
Source: Chalos I (1992), Managing cost in manufacturing. Prentice Hall, New York.
The above point understands a company's value drives, the factors that create stakeholder value. Once known, these factors de
contribution to long-term success and so how to translate corporate objectives into measures that guide managers' actions
one of the Important Factors largely influences the success of the organization and the following costs such
PREVENTION COSTS: The costs of all activities specifically designed to prevent poor quality from products or services. Examples are the costs o
review, quality planning, supplier capability surveys, process capability evaluations, quality
education and training.
APPRAISAL COSTS: Appraisal costs are the costs associated with measuring, evaluating or auditing products or services to assure conformance to
standards and performance requirements. These include the costs of incoming and source inspection/test of purchased material, in
inspection/test, product, process or service audits, and calibration of measuring and test equipment, associated supplies a
FAILURE COSTS: The costs resulting from products or services are not conforming to requirements or customer/user needs. Failure costs are di
internal and external failure categories. Internal Failure Costs:
to the customer. Examples are the costs of scrap, rework, re
after delivery or shipment of the product — and during or after the furnishing of a service
complaints, customer returns, warranty claims, product recalls.
The above all costs can be controlled and managed during the operational year of any firm and firm can build a strong interna
financial gain at the end.
IMPORTANCE OF NFIS IN BANGLADESHI CONTEXTIf we try to solve the following questions, all answers will emphasis on NFIs.
a) Why do the government firms turn into private firm?
b) Why do the government firms face huge financial loss every year?
c) Why are the performances of government firm becoming weaker day by day?
d) Why are the private firms gaining huge financial benefits?
The main reasons behind the poor performance of government are that they don’t emphasis the Non
Satisfaction, Time Management, Inventory, and Product De
2. Studies show that here in Bangladesh, most of the firms particularly in manufacturing want to gain financial benefit immed
force them to emphasis financial measurement. Because of too much emphasis on financial measure, it forces the organizations
which lead them to accept loss at the end of the competitive market. Noapara (Jessore, Bangladesh)
around 15 cement factories established a decade ago in a full swing but after a few years only 5 of them are survived. Most o
to make immediate profits force them to increase their production without considering standard quality and the ultimate effect is very logical that they are
bound to shut down all factory due to lack of market confidence.
Raw Material
Scrap
Cost
Quality
Inventory
INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENTBlind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories
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FINANCIAL INDICATORS IN DECISION MAKING Nowadays In the area of operation management, Non-Financial indicators (NFIs) are receiving recognition among the practitioners
manufacturing firms. In the strategy of new control measure, NFIs can help a firm to maintain consistency with goals and obje
internal and external factors that are required to achieve the firm’s target (Berlin and Brimson, 1988). It was found that the negative consequences of the above
type, and control-type could be overcome by the use of NFIs.Thus it has been argued that NFIs improve the
ue, facilitated evaluation and control measure of a firm (Smith 1994).Most significant reasons for the use of NFIs are that i
innovation, Quality, satisfying customer and production efficiency (Singleton,G.B,19993).
s not just an issue of financial justification for the firm-owners. It is also an issue of increasing firm’s image, market share, customer loyalty,
efficiency and growth in comparing with competitors. Therefore, the firm should be willing to invest capital to meet customer’s expectations that largely depend
on the operational efficiency of the firm. Chalos (1992) identifies various NFIs to measure the operation control, which is s
FIGURE 1: NON-FINANCIAL PERFORMANCE MEASUREMENT
Source: Chalos I (1992), Managing cost in manufacturing. Prentice Hall, New York.
The above point understands a company's value drives, the factors that create stakeholder value. Once known, these factors de
term success and so how to translate corporate objectives into measures that guide managers' actions
one of the Important Factors largely influences the success of the organization and the following costs such as:
The costs of all activities specifically designed to prevent poor quality from products or services. Examples are the costs o
review, quality planning, supplier capability surveys, process capability evaluations, quality improvement, team meetings, quality improvement projects, quality
Appraisal costs are the costs associated with measuring, evaluating or auditing products or services to assure conformance to
performance requirements. These include the costs of incoming and source inspection/test of purchased material, in
inspection/test, product, process or service audits, and calibration of measuring and test equipment, associated supplies a
The costs resulting from products or services are not conforming to requirements or customer/user needs. Failure costs are di
Internal Failure Costs: Failure costs occurring prior to delivery or shipment of the product, or the furnishing of a service,
to the customer. Examples are the costs of scrap, rework, re-inspection, re-testing, material review, downgrading, External Failure Costs:
and during or after the furnishing of a service — to the customer. Examples are the costs of processing, customer
complaints, customer returns, warranty claims, product recalls.
The above all costs can be controlled and managed during the operational year of any firm and firm can build a strong interna
IMPORTANCE OF NFIS IN BANGLADESHI CONTEXT following questions, all answers will emphasis on NFIs.
Why do the government firms turn into private firm?
Why do the government firms face huge financial loss every year?
Why are the performances of government firm becoming weaker day by day?
private firms gaining huge financial benefits?
The main reasons behind the poor performance of government are that they don’t emphasis the Non-Financial factor like
Satisfaction, Time Management, Inventory, and Product Development. Here a model of ultimate effects of ignorance of NFIs are tried to show below in figure
2. Studies show that here in Bangladesh, most of the firms particularly in manufacturing want to gain financial benefit immed
force them to emphasis financial measurement. Because of too much emphasis on financial measure, it forces the organizations
which lead them to accept loss at the end of the competitive market. Noapara (Jessore, Bangladesh) Industrial area can be one of the best examples where
around 15 cement factories established a decade ago in a full swing but after a few years only 5 of them are survived. Most o
increase their production without considering standard quality and the ultimate effect is very logical that they are
bound to shut down all factory due to lack of market confidence.
Operation Control
Inventory
Turns
Space
Quality
Quality
Defects
Rework
Product
Diversity
Volume
Overhead
Time
Switch over
Cycle
Downtime
Scheduling
Utilization
ISSN 0976-2183
INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT Included in the International Serial Directories
40
Financial indicators (NFIs) are receiving recognition among the practitioners of the diversified
manufacturing firms. In the strategy of new control measure, NFIs can help a firm to maintain consistency with goals and objectives and measurement of both
lin and Brimson, 1988). It was found that the negative consequences of the above
type could be overcome by the use of NFIs.Thus it has been argued that NFIs improve the
ue, facilitated evaluation and control measure of a firm (Smith 1994).Most significant reasons for the use of NFIs are that it deals with causes like
owners. It is also an issue of increasing firm’s image, market share, customer loyalty,
to meet customer’s expectations that largely depend
on the operational efficiency of the firm. Chalos (1992) identifies various NFIs to measure the operation control, which is shown below figure:
The above point understands a company's value drives, the factors that create stakeholder value. Once known, these factors determine which measures
term success and so how to translate corporate objectives into measures that guide managers' actions. As a matter of fact, Quality cost is
The costs of all activities specifically designed to prevent poor quality from products or services. Examples are the costs of new product
improvement, team meetings, quality improvement projects, quality
Appraisal costs are the costs associated with measuring, evaluating or auditing products or services to assure conformance to quality
performance requirements. These include the costs of incoming and source inspection/test of purchased material, in-process and final
inspection/test, product, process or service audits, and calibration of measuring and test equipment, associated supplies and materials
The costs resulting from products or services are not conforming to requirements or customer/user needs. Failure costs are divided into
ior to delivery or shipment of the product, or the furnishing of a service,
External Failure Costs: Failure costs occurring
to the customer. Examples are the costs of processing, customer
The above all costs can be controlled and managed during the operational year of any firm and firm can build a strong internal position which will lead them to
Financial factor like Total Quality Management Customer
. Here a model of ultimate effects of ignorance of NFIs are tried to show below in figure -
2. Studies show that here in Bangladesh, most of the firms particularly in manufacturing want to gain financial benefit immediately after investments which
force them to emphasis financial measurement. Because of too much emphasis on financial measure, it forces the organizations to ignore Non-Financial factors
Industrial area can be one of the best examples where
around 15 cement factories established a decade ago in a full swing but after a few years only 5 of them are survived. Most of the firms take loan from bank and
increase their production without considering standard quality and the ultimate effect is very logical that they are
Time
Switch over
Cycle
Downtime
Scheduling
Utilization
VOLUME NO. 3 (2012), ISSUE NO. 5 (MAY)
INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENTA Monthly Double-Blind Peer Reviewed Refereed Open Access International e
CONSEQUENCE OF IGNORANCE OF NFIs
Because of this in Bangladesh most of the government firms except some firms are facing huge financial loss and in recent tim
government firm turn into private firm and when they emphasis NFIs, it becomes profitable. For example
acceptable to modern organization as their performance measurement tool.
ADVANTAGES OF NFIs After the analysis we can say that, Non-financial measures offer some clear advantages over measurement systems based on financial data.
have closer link to long-term organizational strategies. Financial evaluation systems generally focus
yardsticks. They do not deal with growth relative to customer requirements or competitors, or other non
profitability, competitive strength and longer-term strategic goals. For example, new product development or expanding organizational capabilities may be
important strategic goals, but may hinder short-term accounting performance. With supplementing accounting measures with non
performance and implementation of strategic plans, companies can communicate objectives and provide incentives for managers t
Second, critics of traditional measures argue that drivers of success in many industrie
rather than "hard assets" allowed to balance sheets. Although it is difficult to quantify intangible assets in financial term
indirect, quantitative indicators of a firm's intangible assets.
CONCLUSION Although non-financial measures are increasingly important in decision
by others. The choice of measurements must be linked to factors such as corporate strategy, value drivers, organizational objectives and the competitive
environment. In addition, companies should remember that performance measurement choice is a dynamic process
the system needs to be continually reassessed as strategies and competitive environments evolve.
REFERENCES 1. Cascio, W, (1996), “Managing Human Resources”, McGraw Hill, INC, New York, 1996.
2. Chalos, I, (1992), “Managing cost in manufacturing
3. Christopher, Ittner and David, Larcker, (Oct. 16, 2000),
4. Griffin, R.W. (1996), “Management”, McGraw-Hill, New York, 1996.
5. Kaplan, RS, (1984). “The evolution of management accounting”
6. Maola, S.G (October, 2001), “Measurement of organizational performance of national and int
business studies, Vol 1, No 1, pp 97-111.
7. Singleton.G.B. (May, 1993), “If it maters, measure it” Journal of accountancy,
8. Smith, M, (1993) “The rise and rise of the NFI, ed, Ratnatu
9. Werther, W.B, (1992) “Human Resource Management”
Less emphasis on NFIs
INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENTBlind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories
www.ijrcm.org.in
FIGURE-2: CONSEQUENCE OF IGNORING NFIS
Because of this in Bangladesh most of the government firms except some firms are facing huge financial loss and in recent tim
government firm turn into private firm and when they emphasis NFIs, it becomes profitable. For example: BTCL, DESCO etc. So, the importances of NFIs are
acceptable to modern organization as their performance measurement tool.
financial measures offer some clear advantages over measurement systems based on financial data.
term organizational strategies. Financial evaluation systems generally focus on annual or short
yardsticks. They do not deal with growth relative to customer requirements or competitors, or other non-financial objectives that may be important in achieving
term strategic goals. For example, new product development or expanding organizational capabilities may be
term accounting performance. With supplementing accounting measures with non
performance and implementation of strategic plans, companies can communicate objectives and provide incentives for managers t
, critics of traditional measures argue that drivers of success in many industries are "intangible assets" such as intellectual capital and customer loyalty,
rather than "hard assets" allowed to balance sheets. Although it is difficult to quantify intangible assets in financial term
ve indicators of a firm's intangible assets.
financial measures are increasingly important in decision-making and performance evaluation, companies should not simply copy measures used
linked to factors such as corporate strategy, value drivers, organizational objectives and the competitive
environment. In addition, companies should remember that performance measurement choice is a dynamic process - measures may be appropriate today, but
the system needs to be continually reassessed as strategies and competitive environments evolve.
, McGraw Hill, INC, New York, 1996.
Managing cost in manufacturing”, Prentice Hall, Newyork.
, (Oct. 16, 2000), “Mastering Management series”, Financial Times.
Hill, New York, 1996.
The evolution of management accounting” The accounting review, 59,390-417.
“Measurement of organizational performance of national and international firms: objective vs. subjective measure”
If it maters, measure it” Journal of accountancy, pp 52-53.
“The rise and rise of the NFI, ed, Ratnatunga, et al”, Issues in strategy Management Accounting, BBJ Publishers
“Human Resource Management”, McGraw Hill, New York.
Decrease the efficiency of
organizational performance
Resources both Human and capital
are not utilized properly
ISSN 0976-2183
INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT Included in the International Serial Directories
41
Because of this in Bangladesh most of the government firms except some firms are facing huge financial loss and in recent time it is noticeable that some
: BTCL, DESCO etc. So, the importances of NFIs are
financial measures offer some clear advantages over measurement systems based on financial data. First, these NFIs
on annual or short-term performance against accounting
financial objectives that may be important in achieving
term strategic goals. For example, new product development or expanding organizational capabilities may be
term accounting performance. With supplementing accounting measures with non-financial data about strategic
performance and implementation of strategic plans, companies can communicate objectives and provide incentives for managers to address long-term strategy.
s are "intangible assets" such as intellectual capital and customer loyalty,
rather than "hard assets" allowed to balance sheets. Although it is difficult to quantify intangible assets in financial terms, non-financial data can provide
making and performance evaluation, companies should not simply copy measures used
linked to factors such as corporate strategy, value drivers, organizational objectives and the competitive
measures may be appropriate today, but
ernational firms: objective vs. subjective measure”, Journal of
nga, et al”, Issues in strategy Management Accounting, BBJ Publishers, Sydney.
Long term financial loss
Example: Biman Bangladesh Airlines
VOLUME NO. 3 (2012), ISSUE NO. 5 (MAY) ISSN 0976-2183
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www.ijrcm.org.in
42
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