Sustainability of private higher education institution in Malaysia Essay Example

students, and the effectiveness of service, is not influenced by individual factors but rather the result of a well-planned and managed performance-oriented management practice. Therefore, the balanced scorecard (BSC) is the most suitable performance management tool to enhance an establishment through a balanced perspective. Moreover, Firgio and Krumwiede (1999), as cited in Kettunen (2006), have proven that BSC is more effective compared to other performance management systems.

Hence, organizations can opt for the Balanced Scorecard (BSC) as their public presentation direction framework to enhance their competitive advantage. In the past, businesses typically relied solely on financial measures to evaluate their performance. However, depending solely on financial measures or lag indicators can jeopardize the organization's profitability as it encourages short-term planning (Chavan, 2009; Papenhausen and Einstein, 2006). Additionally, Karathanos and Karathanos (2005) argued that concentrating solely on financial measures hampers the identification of drivers or activities that contribute to success.

On the other hand, the Balanced Scorecard (BSC) focuses on both financial and non-financial measures, including financial position, customer position, internal process position, and learning and growth position (Pineno, 2008). BSC is widely used by profit organizations to achieve significant success. The Ministry of Higher Education in Malaysia states that most private higher education institutions (PHEIs) are profit-driven, making BSC a suitable tool for measuring their performance. However, even non-profit organizations like educational institutions can also implement BSC due to its flexibility (Papenhausen and Einstein, 2006; Dorweiler and Yakhou, 2005). This performance management system assists PHEIs in improving quality, meeting customer needs (Chen et al., 2009), and ultimately achieving sustainability.

2.0 Research Aims

To examine the usefulness of Balanced Scorecard in assisting a private higher education institution in gaining a

competitive advantage over other competitors.

The purpose of this text is to discuss the benefits of using Balanced Scorecard in achieving sustainability and competitive advantage for an establishment. The research questions focus on the usefulness and assistance of Balanced Scorecard in sustainability and competitive strength, as well as the benefits that can be obtained from implementing a balanced scorecard approach. The hypotheses suggest that through the use of Balanced Scorecard, a private higher education establishment can achieve sustainability and desirable competitive advantage. The management processes involved in Balanced Scorecard, such as translating, communicating, business planning, and feedback and learning, contribute to operational efficiency, high quality of service, improved teamwork, and better understanding.

5.0 Theoretical model

6.0 Literature Review

6.1 Institutions' Strategy and BSC

PHEIs in Malaysia face numerous challenges. In order to survive in the market, deans of PHEIs need to clarify their strategy, strategic positioning, and alignment with the competitive environment (Thomas, 2007). The balanced scorecard is a tool that helps organizations formulate their strategy (Laitinen, 2006; Dorweiler and Yakhou, 2005). Each organization may implement a different strategy. According to Kettunen (2005), early-stage organizations should focus on rapid growth as their strategy, while organizations in the middle of their life cycle should prioritize profitable growth. Mature organizations typically define profitability as their strategy. Additionally, Kettunen states that maintaining a balance between costs and revenue is sufficient for an organization to stay competitive in the market.

According to Kettunen (2005), strategy is the movement from the present position (mission) to the future position (vision).

The mission is typically the goal that an organization aims to achieve (Punniyamoorthy and Murali, 2008). An example of a mission is "the promotion of excellence in the creation, sharing, and application of knowledge, typically described in terms of education, scholarship/research, and public service/outreach" (Cardoso et al., 2005, pg.1). The vision of an organization could emphasize regional development.

According to Chen et Al. (2006), having a valued mission and vision is important for an establishment as it enhances educational quality and sustains its position in the industry. After setting strategy, mission, and vision, managers/deans often struggle to translate strategy into understandable goals and performance measures across different aspects of the establishment (Davis, 1996). As a result, employees may not effectively contribute to the organization, putting it at a disadvantage and potentially falling behind in competition.

BSC, also known as the Balanced Scorecard, offers a framework for supporting an institution in achieving significant sustainability by backing up scheme version and realization (Achterbergh et al., 2003; Punniyamoorthy and Murali, 2008). This framework, introduced by Kaplan and Norton, consists of four management processes: translating the vision, communicating and linking, business planning, and feedback and learning. These processes involve formulating, testing, adapting, and adjusting the strategy (Achterbergh et al., 2003).

6.2.1 Translating the vision

As every institution has its own strategy, vision, and mission, BSC serves as a means to translate the strategy into a clear and understandable objective.

Tohidia et al. (2010) consider the Balanced Scorecard (BSC) as a method of strategic planning that is utilized to achieve goals and vision. Compared to traditional performance measures, the BSC offers a comprehensive approach to assessing performance. The BSC breaks down the strategy into four

perspectives, including leading indicators and lagging indicators, in order to provide a holistic evaluation of an organization's performance. These four perspectives reflect cause-and-effect relationships, with financial objectives aligned with internal process objectives, and learning and growth objectives driving customer perspective. Consequently, management can effectively oversee operations and facilitate the achievement of strategic goals.

Kaplan and Norton classify the Balanced Scorecard (BSC) as a performance measurement system. According to Chen et al. (2006) and Chen et al. (2009), an effective BSC must have appropriate Key Performance Indicators (KPI) to measure the level of achievement and help in achieving the organization's goals. Kaplan and Norton, the founders of BSC, stated that "if you can't measure it, you can't manage it" (cited in Kettunen, 2005).

To effectively manage the performance of an organization, it is important for management to establish a comprehensive set of indicators and determine which aspects to benchmark and measure. Key Performance Indicators (KPIs) are specifically developed to assess the achievement of organizational goals and offer insights into the feasibility of the overall strategy (Wu et al., 2010; Thomas, 2007). Additionally, Cardoso et al.

(2005) states that BSC (Balanced Scorecard) is a management information system that allows organizations to measure performance, assess goal achievement, and adjust strategies if necessary. This system can promote competition within an establishment and enable it to surpass competitors, ultimately achieving sustainability.

6.2.2 Communicating and associating

Once the strategy has been translated into strategic themes, objectives, and actions, it is crucial to communicate and connect with staff members within the establishment. Communication and linking play a vital role in the BSC management process. Even if the strategy is feasible, it will not be achieved if staff

members do not comprehend the objectives and their roles.

In this procedure, the dean of an establishment is responsible for discussing and communicating their strategy throughout the establishment and linking the strategy to departmental and individual objectives (Thomas, 2007). When the dean discusses the strategy and objectives with the staff, it provides an opportunity for staff to negotiate about the strategy. The staff then enhance their understanding of the strategy and objectives. Therefore, the Balanced Scorecard (BSC) provides a framework for communication and implementation of strategy, and it is viewed as a communication tool (Kettunen, 2005, 2007, 2008).

According to Punniyamoorthy and Murali (2008), BSC serves as a performance management system that aligns the vision and mission with all functional requirements and daily operations. Through top-down alignment of the vision, it gives guidance to staff on how they should effectively contribute to the establishment's goals (Chen et al.).

According to various sources (2006; 2009; Chavan, 2009), it is stated that the Balanced Scorecard (BSC) is most effective when it inspires innovation and helps businesses to sustain their goals. Kettunen (2005) adds that when employees successfully achieve their objectives, management can then link their contributions to rewards, resulting in the efficient allocation of resources (Dorweiler and Yakhou, 2005). Furthermore, aside from facilitating resource allocation, rewards serve as motivation for employees to perform their duties effectively and efficiently. The BSC also encourages the creation of coordinated scorecards at all levels of an organization (Atkinson, 2006).

Every dimension and staff is involved in achieving the scheme. In an establishment, for example, direction and lectors work together to achieve a common goal, such as improving student quality. Therefore, BSC is an approach that

promotes better teamwork at the top level and improves communication at all levels (Kettunen, 2006b). The strategy map is a communication tool of the BSC, not only for internal staff but also for external stakeholders. The strategy map is a visual representation that includes the objectives of each perspective and illustrates the cause-and-effect relationships among the four perspectives (Chen et al.)

, 2006; Kettunen, 2005, 2006a, 2006b, 2007). Words alone may not effectively transmit information or intention to individuals. Conversely, a visual representation allows for easy comprehension. A strategy map serves as a visual representation, demonstrating the attainment of objectives. Through this diagram, staff can comprehend departmental targets and individual objectives, as well as their impact on various dimensions within the organization. Ultimately, it reveals whether the ultimate goal will be achieved.

By doing so, it is capable of increasing employees' understanding of the company's strategy and their role in contributing to its implementation. Additionally, it also enhances the comprehension of external stakeholders. This includes investors and shareholders who may enhance their confidence in the company as they acknowledge the attainability of strategic objectives. Consequently, they will be inclined to invest more capital into the company.

The invested capital can be utilized for the development of the establishment, thereby enhancing their competitiveness. The followers provide an illustration of the establishment's strategic roadmap.

6.2.3 Business Planning

This strategic process also plays a crucial role in achieving sustainability. Management devises a series of plans to fulfill the objectives of each role. It is evident that learning and growth are the most influential factors in extension education (Wu et al.).

According to Wu et al. (2010), the Balanced Scorecard (BSC)

has a causal relationship and therefore affects other positions such as the client position and fiscal position. To ensure the sustainability of an establishment, it is important to prioritize learning and growing positions. Wu et al. (2010) emphasize that establishments need to rely on continual innovation and growth in order to maintain sustainable operation and development.

In other words, establishments should not only focus on internal operational procedures but also on the innovation process, as it is a means for adding value to customers in both the short and long term (Bose and Thomas, 2007). A comparison between public universities in Malaysia shows that the government provides grants and financial assistance to support research in these institutions (Arokiasamy et al., 2009).

According to Arokiasamy et Al. (2009), in order to gain competitive advantage, PHEIs need to upgrade their academic qualifications and establish a culture of teaching, research, and services among faculty members. Similarly, Chen et Al. (2006) argue that employees should be encouraged to be innovative and participate in quality improvement programs to enhance organizational management and improve staff quality. This perception of learning and growth serves as the foundation for the Balanced Scorecard (BSC). Chen et Al. (2006) also emphasize that fostering a sense of quality consciousness among staff will enhance internal processes and administrative efficiency within the institution.

Additionally, organizations should emphasize investing in human capital to improve the competence of their teachers and decision makers. This will result in the provision of higher quality services to clients (Kettunen, 2007). According to Kettunen (2006a), the objectives in the learning and growth perspective must be achieved through objectives in the internal process perspective in order to attain

desired outcomes from the client's standpoint. The internal process perspective influences stakeholder satisfaction and the organization's financial outcomes (Papenhausen and Einstein, 2006). As a result, Wu et al. (2010) conclude that the internal process perspective is the most important perspective among the four perspectives. Cardoso et al.

According to (2005), it is recommended that establishments should prioritize areas such as education, research, and public service to enhance overall effectiveness. Thus, the establishment should deliver top-notch service processes, ensure excellent quality of education, and provide the best educational facilities (Chen et al., 2006). To achieve these goals, the establishment should focus on job specifications, integrate ICT, and continuously improve work processes (Lee, 2006). It is important for job specifications to be based on work sharing and eliminate overlapping tasks (Kettunen, 2007).

The adoption of advanced technology in ICT will enhance the efficiency of operations. This will result in adding value to clients by delivering high-quality services and promoting cost efficiency. Additionally, Wu et al. (2010) emphasize that improving and adjusting internal operations is crucial for overall performance enhancement of an establishment.

The authors Chen et al. (2006) and Lee (2006) concur on the idea that consistently improving a company's capabilities will lead to better performance in the eyes of its customers. Chen et al. (2006) also emphasize that enhancing customer satisfaction not only increases business profit but also fosters business development. Additionally, Kettunen (2005) has demonstrated that customers are more likely to continue patronizing an establishment when they are highly satisfied with its service.

It is crucial to prioritize the satisfaction of both internal and external clients. Internal clients encompass individuals such as lecturers, decision makers, and students, while external

clients include authorities, the general public, and parents (Chen et al., 2006). As the revenues of Private Higher Education Institutions (PHEIs) in Malaysia heavily rely on tuition fees paid by students, it is essential for these institutions to prioritize meeting the needs of students. According to Umashankar and Dutta (2007), in order to meet the demands of students, institutions must provide an improved educational and learning environment.

The authors state that a good learning environment includes facilities, accommodations, physical environment, policies and procedures, and interpersonal relations and communication. Additionally, institutions should promote social responsibility to satisfy external customers. For example, they should attend public charity and community cultural events to improve the institution's image and reputation (Chen et al., 2006; Chen et al., 2009). Financial status is a representation of economic effects and reflects customer satisfaction because the successful implementation of the value proposition will result in financial outcomes (Bose and Thomas, 2007; Papenhausen and Einstein, 2006; Tohidia et al.).

, 2010). According to Sivalingam's research (n.d.), the average fee for Private Higher Education Institutions (PHEIs) in Malaysia ranges from RM7,500 to RM13,000 per annum, which is significantly higher than the fee for public universities in Malaysia (RM1,400). Therefore, institutions should effectively manage their resources and seek their own financial aid (Arokiasamy et al.).

, 2009). According to Chen et Al. (2006), effective resource management involves utilizing schoolroom, library, and other instruction facilities. Additionally, implementing a computerized system can reduce the workforce and ensure that employees receive proper training, resulting in improved competitiveness. Conversely, Arokiasamy et Al. offers an alternative perspective.

According to the 2009 remark, PHEIs in Malaysia are required to generate their own revenue. Kettunen (2007) suggests

that establishments should find efficient ways to produce high-quality output despite limited financial resources. They provide an example of increasing the financial resources to improve service or emphasize the economic production of services. In other words, the fiscal position is concerned with how the establishment plans or manages the limited financial resources to maximize benefits (Lee, 2006).

6.2.4 Feedback and Learning

According to Self (2004), the intelligibility of BSC provides a clear image of its performance in the form of a pie chart.

BSC (Balanced Scorecard) not only helps supervise performance but also assists with performance management (Umashankar and Dutta, 2007; Karathanos and Karathanos, 2005). As a performance evaluation tool, BSC provides feedback on the strategy implementation process, identifying issues preventing an establishment from achieving its strategy objectives (Thomas, 2007). By evaluating performance, institutions can use BSC to make necessary changes in their operations. McDevitt et al. (2008) and Kettunen (2005) suggest that BSC is not just a tool for aligning mission and strategy, but also a learning model that supports continuous improvement and adaptability to the environment.

BSC can assist in redefining the organization's strategy and mission in response to the changing environment, as it provides feedback and promotes continuous improvement (Chen et al., 2006; Bose and Thomas, 2007; Kettunen, 2005).

7.0 Research Method

7.1 Sampling Method

The sample population of PHEIs in Malaysia is 516. For my study, I will select 400 establishments as my sample frame using chance sampling as the sampling technique.

The probability sample in this research proposal involves selecting instances from a population where the chance of selection is known and equal for all instances (Saunders et al., 2006, pg. 207). Among chance trying techniques, stratified random

sampling is the most suitable because it is easy to access and less costly. Stratified random trying involves dividing the sample population into relevant strata, allowing for more accurate results as different establishments may yield different outcomes.

I categorize PHEIs into different groups, including universities, university colleges, colleges, subdivision campuses abroad, and others. I will then use a systematic random sample to analyze the results. These results will be proportional to the size of each group, making it easy to measure and explain the overall outcome of the research.

7.2 Measurements

As the cause and effect are already known, I am conducting a research study to examine the effects of BSC on institutions. Therefore, this research proposal aims to explain and investigate the BSC theory and its impact on the sustainability of PHEIs.

Hence, my research focuses on measuring deductive epistemology. Deductive reasoning is utilized to demonstrate the theory and clarify the causal connection between variables (Saunders et al., 2006). Epistemology refers to "what is considered acceptable knowledge in a specific field of study" (Saunders et al., 2006, pg.).

102). This survey is developed using both quantitative and qualitative approaches, with pragmatism as the research orientation. Realism suggests that what our senses show us is the truth and that objects exist independently of human perception (Saunders et al., 2006, pg. 104).

7.3 Data-Collection Methods

As stated earlier, I am employing a deductive approach for data collection.

To support the hypotheses in this research proposal, I propose using a survey as the data collection method. A survey is an efficient way to gather a large amount of information from a wide population (Saunders et al., 2006). I have

chosen to use a survey as the data collection method because it will allow me to compare the results from various types of PHEIs, including universities, university colleges, colleges, and other types of PHEIs.

In addition, by comparing the consequences of different features of PHEIs, I will gain a better understanding of the effectiveness of BSC in various types of establishments. Moreover, I intend to employ a diverse range of data collection techniques, blending qualitative and quantitative methods. This mix of methodologies is particularly suitable for this research proposal as the outcomes of BSC encompass both qualitative and quantitative information. Qualitative information includes factors like customer satisfaction, establishment reputation, operational efficiency, process effectiveness, staff commitment, and ultimately the sustainability of the establishment. On the other hand, quantitative information pertains to financial results such as ROI and ROA. Consequently, utilizing a mixed method approach will offer deeper insights into the significant impacts of BSC on establishments.

I will use both a semi-structured questionnaire and a structured questionnaire as qualitative methods. The target audience for the semi-structured questionnaire includes lecturers, decision makers, and the general public, while the structured questionnaire is aimed at students. The semi-structured questionnaire allows interviewees to express their genuine feelings about the Balanced Scorecard (BSC) and its outcomes. On the other hand, the structured questionnaire provides a straightforward way for students to indicate their level of satisfaction.

Therefore, using various methods will give me a broader understanding of the results of BSC. For this study, I plan to use a longitudinal survey. According to Saunders et al. (2006), a longitudinal survey focuses on changes and development, providing researchers with valuable insights into long-term trends.

I prefer using

longitudinal surveys because they provide a deeper understanding of an organization's performance before and after implementing the Balanced Scorecard (BSC). This allows me to clearly see the benefits of BSC for the organization. To ensure the reliability of this research, I will try to minimize participant bias and errors. One way to reduce participant errors is by providing a neutral time for completing the survey, which can help ensure that participants respond to the questionnaire objectively.

In order for the participants to understand the purpose of this study and respond to the questionnaire honestly, I will explain each question and the motivation behind this research. Additionally, to minimize the potential for invalidity, I will ensure that the survey is conducted within an appropriate time frame and includes a larger sample size.

7.4 Potential outcomes

The hypotheses outlined in this research proposal suggest that implementing the Balanced Scorecard (BSC) can assist organizations in achieving sustainability and obtaining various benefits. Specifically, PHEIs in Malaysia are likely to achieve sustainability by effectively communicating their strategy and mission to employees through the management process. Moreover, BSC, as both an information management system and a performance and communication tool, has the potential to enhance operational effectiveness, employee cooperation, service quality, and educational quality.

Therefore, the obtained consequences may align with the hypotheses.

8.0 Decision

The demand for third instruction is rapidly rising in Malaysia. Private higher instruction establishment in Malaysia faces numerous challenges including public university in Malaysia, research, and support. Balanced scorecard is considered crucial for maintaining or improving an establishment's sustainability.

In this research proposal, instead of only focusing on the four perspectives that are beneficial to an administration

or establishment, I examine the management procedures of the Balanced Scorecard (BSC). The management procedures include translating, communicating and linking, business planning and feedback, and learning, which provide a broader understanding than just the emphasized four positions. During the initial phase, an establishment should prioritize strategy formulation, as it helps in setting the strategy, vision, and mission of the organization. The strategy setting should be based on the life cycle of the establishment. For example, a mature establishment may define profitability as its strategy.

The text can beand unified as follows:

It will be translated into a set of balanced steps and goals. The Balanced Scorecard (BSC) incorporates lag indicators and lead indicators because focusing solely on lag indicators will prioritize short-term actions and ignore long-term profitability. Therefore, the BSC considers the overall picture, including financial position, customer position, internal process position, and learning and growth position. After interpreting the strategy and goals, the BSC serves as a communication tool to convey the goals to employees and connect them to daily work. In the communication process, a strategy map is commonly used to communicate with internal and external stakeholders.

Hence, the staff will have improved understanding, collaboration, and effectiveness in daily operations. The following process is business planning, wherein an organization must take steps to achieve each position's goals. Within this process, management is accountable for guiding the staff in accomplishing the strategic objectives.

In conclusion, the Balanced Scorecard (BSC) offers feedback to adapt and refine strategies in response to changing circumstances. This continuous improvement approach allows organizations to gain a competitive edge. However, there are limitations to BSC. It can identify problems during the management process but does

not provide solutions. Additionally, the BSC operates on a cause-and-effect basis where failure in one area will have an impact on other aspects.

The causes (internal procedure position and acquisition and growing position) require high staff committedness. An establishment must carefully manage its staffs and provide sufficient encouragement, and then staffs will contribute efficiently and effectively to operations. It can be concluded that the balanced scorecard (BSC), as a performance measuring system, communication system, and strategic management system, provides higher benefits than costs to institutions. The overall benefits will bring significant sustainability for private higher education establishments in Malaysia.

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