An Analytic Approach to Developing Strategic Performance Measures in Small Organizations: A Comparative Study of the Development Process in a Small Government Agency Versus a Small Private Company

• Main Author: Al-Hedaithy, Suleiman Abdullah
• Format: Dissertation
• Language: English
• Published: ProQuest Dissertations & Theses 01-01-2000
• Subjects: Balanced Scorecard; Comparative studies; Government agencies; Industrial engineering; Management; Operations research; Performance evaluation; Public administration; Small business; Software; Strategic planning; Total quality
• ISBN: 9780599585096; 0599585099

The objective of this research study was to compare the development process of strategic performance measures between a small government agency and a small private company using a new analytic approach. The analytic approach was based on integrating Kaplan and Norton's Balanced Scorecard (BSC) concept with Saaty's Analytic Hierarchy Process (AHP) and its software implementation Team Expert Choice (TeamEC). In this context, the BSC furnished a framework for the development process and TeamEC provided collective team-based decision support. Two small organizations participated in the study: the U.S. Small Business Administration/South Florida District Office and NIDA Corporation—an electronic training systems manufacturer located in Melbourne, Fla. In addition, a survey questionnaire was sent to a random sample of small public- and private-sector organizations in Florida. Using the analytic approach, both teams were able to develop a balanced scorecard for their respective organization. Each balanced scorecard included the organization's strategic objectives and performance measures which were grouped into four perspectives: Financial, Customer, internal Business Process and Learning-and-Growth. The findings show that the analytic approach is an effective tool for the development of strategic performance measures in small organizations. The balanced scorecard concept helped broaden the customary focus of the senior management teams in both organizations. TeamEC helped the teams to collectively participate in the decision making process. In developing their performance measures, NIDA focused more on the financial perspective, while the SBA/SFDO focused on the internal business process perspective. However, neither organization believed that their customers should be directly involved in developing their strategic objectives or performance measures. The survey found that 59 percent of government organizations compared to 31 percent of private companies operate with both strategic plans and performance measures. Only 7 percent of government respondents—compared with a surprising 39 percent of small companies' respondents—indicated that their organizations operate with neither strategic plans nor performance measures. In addition, the survey confirms that most small government agencies generally focus on measuring their work volume rather than program results. The survey also confirms that most small private companies tend to focus on maximizing profits and controlling costs.