A Survey Of Hotels In Northeast England Accounting Essay


The findings state that the sources relating to the more detailed implementation issues of strategy are relatively scarce. The strategy literature relating to the hospitality sector is relatively weakly developed. However, the reports are available which indicate the usefulness of a BSC approach, albeit modified to suit individual circumstances, but also point to potential pitfalls in its implementation. The primary research conducted indicates that a wide variety of measures are currently being used and that many hoteliers are using measures from all four of the category groupings identified in the BSC framework. The primary research is based on a limited survey of hotels and it is recognized that further research is necessary to establish the exact nature of the causal linkages between performance measures and strategic intent and also to gain insights into practice elsewhere. The paper considers a broad range of generic and industry-specific literature sources and concludes that, despite its limitations, such a structured approach to strategy provides a useful managerial tool for hotel managers. The researcher therefore suggested that since the paper will be useful to academics with an interest in strategic implementation and performance measurement, and also to practitioners seeking an understanding of a practical managerial tool in terms of its benefits and potential difficulties, the results of the study can be of guide for the future researchers in conducting the study regarding the use of BSC focusing in the other field of business and how it can help the first line managers to evaluate performance of the employee and how the company production be affected specifically with the purpose of increasing its financial growth.

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Another study was conducted by Khan, et al (2010) entitled "The use of multiple performance measures and the BSC n Bangladeshi firms: An empirical investigation" The study aimed to examine the status and the use of financial and non-financial measures, and the Balanced Scorecard (BSC) in Bangladeshi companies; the reasons for BSC adoption; and associated problems. Data via a questionnaire were obtained from the chief accounting and finance officers of a cross section of sixty Bangladeshi companies listed on the Dhaka Stock Exchange. A combination of descriptive statistics, bi-variate, and multi-variate techniques of statistics were used to test three research questions. The results indicate that financial measures are more widely used, but that 78.4 per cent of companies use some non-financial indicators. Furthermore, the exercise of a full BSC is limited to only 10 per cent of the sample. The results also show that companies adopt these frameworks to aid decision making, and the problems associated with the adoption of BSC include a cost-benefit perspective and a lack of management support. The findings suggest many companies are using a dashboard of financial and non-financial performance measures that could possibly be a precursor to adopting more holistic performance measurement frameworks like the BSC. There have been recent calls for more in-depth analysis of the management accounting systems of emerging countries and these findings contribute further knowledge to an under researched area. In particular, the paper demonstrates how a performance measurement framework may evolve in an emerging country context. This study further suggest a detailed study on the use of various performance evaluation methods to further identify what evaluation tool is appropriate in evaluating different level of performance of employee from different companies (Niven, 2008).

Another study by Ping (2006) about Perception and Applicability of the Balanced Scorecard in Hong Kong Organisations was conducted and results were given for utilization of the companies as guide to increase the quality level of services rendered by the employee (Norreklit, 2000). The researcher used the qualitative method of research. A questionnaire was designed to investigate the opinions on the issues such as the perceptions of the BSC in Hong Kong organisations, of its applicability, of the benefits and weaknesses arisen from its usage, and of the linkage of BSC between strategy formation and implementation. The whole questionnaire was set by listing out several statements on each issue, except the section concerning the linkage of BSC to strategy formation and implementation. Those statements were set according to the ideas developed in the literature review. The respondents were asked to express their opinions with the use of a five-point Likert scale from 1 (completely disagree) to 5 (completely agree). In addition, open questions were used to collect the comment on the linkage of BSC between strategy formation and implementation. This part of comments would be incorporated to support those statements findings. Moreover, those respondents without the application of the BSC in their firms were asked about the reasons. A sample of fifty Hong Kong companies listed on the Hong Kong Stock Exchange was randomly selected. The questionnaires were sent to the chief financial officers or financial managers or company secretaries of the 50 companies through email. Four weeks after the initial mail-out, there was no response while two companies replied with refusal. Subsequent to the poor response, follow-up phone calls were made to the selected companies except the two rejected. Consequently, there were twelve responses with completed questionnaires. Later on, questionnaires were distributed in a class of part time MBA by asking those who had acknowledged of the BSC and worked in a listed company to fill in the questionnaire. In return, 10 questionnaires were received.

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Therefore, this study is carried out based on the total 22 returned questionnaires. These companies come from a wide range of industries, including banking and financial services, logistics, engineering, outdoor advertising, mining, 9 manufacturing, property and business services, retail trade, etc. Regardless of the usage of the BSC in the respondents' companies, they are going to answer the five-point Likert scale type questions concerning the understanding of the BSC and the applicability of the BSC. Analysis is carried out by comparing the means scores among all statements in two dimensions. First one is to indicate those statements with higher means which imply that they are highly agreed by most of the respondents, constantly; those statements with extraordinary low means are also specified. The second dimension is to compare the perceptions on BSC between the BSC users and non-BSC users with the use of t-test statistics. It is to test if there is any great discrepancy in the perceptions of the two subgroups of respondents.

In the researchers' discussion of the results, several insights have been made. The adoption of BSC in Hong Kong organisations is not widely spread as in the United States and New Zealand. The reasons for not applying the model can be summarized into 5 points. Firstly, the respondents may think that other measurements such as amount of revenues and profits deemed to be more appropriate. Secondly, the unfamiliarity with the BSC causes difficulty in the usage of BSC. This results in the third reason that lack of resources since adequate and relevant expertise and competence are required in the implementation. The fourth reason is the lack of management awareness of the BSC model, and the last one may be the matter of company size.

Although there is a low level of usage, the variety of industries that have adopted BSC does support the assertion of Kaplan and Norton that every company can use the BSC. On the subject of the strategic management model, the mean of all statements are above the mid-point of Likert scale. It implies that all respondents agree with the function of the BSC to communicate the corporate vision and strategic objectives throughout the organisations and enable the management to link the short-term operations with the long-term strategic objectives. Under this aspect, the translation of vision, linkage of vision to daily activities and the foundation of vision in developing key measures in BSC get the high level of support from the respondents. When comparing the views of the user group and non-user group under this subject, there are four items that sharing different points of views. These are the use of vision in measures development as a foundation, framework for strategy formation and implementation, a tool to focus on long-term success, and the link between short-term operations and long-term strategic objectives. User group had a stronger Quoted from Blundell et al. (2003) the survey conducted in New Zealand gave the usage rate of 58%.19 supports to these items while non-user just held a minor degree of support. It may be due to users' experiences in the implementation and they may find that the theory can be applied in practice.

Although both groups share similar views in other items, users do not strongly support, as non-users, on the issue of agreeing the BSC is a valid strategic management tool. According to the written comments of users, even they acknowledged the concept of the BSC as a strategic management tool, it was difficult for them to link the concept to the real life situation due to various uncontrollable factors in the real world, for example, market situation, company policy, staff morale, etc. The balance of financial and non-financial perspectives concerning the balance of financial and non-financial perspectives (i.e. the four perspectives), the respondents, in an overall view, do not strongly agree with the incorporation of the financial and non-financial measures as well as the four perspectives involvement in BSC as expected. Despite of the low degree of agreement, users indeed had a more positive support to the incorporation of the financial and non-financial measures.

On the other hand, the respondents considered that the four perspectives in BSC may not be sufficient to measure the corporate performance and its structure should be modified. Similar to the previous discussion, users also strongly support the idea given by Kaplan and Norton that the four perspectives are only the framework and can be modified to meet the special needs of different users. Since non-users may not have any experience in the use of BSC, they can only make their judgment based on their abstract knowledge and thus they are not sure whether the modified four perspectives allow greater viability within the company.

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On the matter of cause-and-effect relationships in the BSC, all respondents provided a more positive support than other aspects. It implies that respondents are aware of the interdependence relationships between BSC measures and its significance. Particularly, the cause-and-effect relationship of learning and innovation and financial perspectives gets the highest support by the respondents. The findings are consistent with Haas and Kleingeld's feed-forward control system which means the non-financial measures can predict financial results. As a result, both users and non-users consider the cause-and-effect relationships as a critical assumption in the BSC.

In relation to the applicability of BSC in those responding companies, the respondents agreed that their firms can link the performance measures to strategy implementation and the necessity of establishing the measures before BSC implementation. They also agreed that their companies can use the four perspectives as measurements and to outline the strategies in details. In this regard, it seems that their companies can implement the BSC as mentioned by (Martinsons et al., 1999). However, this research provides limited support on company's ability to apply BSC. In comparing the users' and non-users' views on the applicability of BSC, although users have a relatively greater extent of agreement than non-users, users do not confirm a stronger support on their ability to use the BSC.

In accordance with the users' comments, they described the implementation as complicated since the BSC model requires all levels of management to firstly understand the strategies and then link the strategies to BSC. Even though the successful linkage of BSC and strategy implementation is very rewarding, there are some external factors which make the BSC difficult to apply. When comparing the two groups' views on the applicability of BSC, user group was asked about the appropriateness of the 12 items in the use in BSC. Generally, both groups provide more or less the same view except four items. In addition to the issue of BSC adoption, the others are the ability to link performance measures to strategy implementation, the use of the four perspectives as performance measurements, and the use of performance reporting system to track the progress of strategy implementation. Regarding application of BSC, users usually gave a more positive support to those matters while non-users assessed themselves lack of ability to link performance measures to strategy implementation and others (Sharma and Gadenne, 2011).

The usefulness of BSC is discussed in two categories: benefits and weaknesses. There are five significant benefits that are highly agreed by the respondents: BSC provides criteria to measure and set standards to align initiatives; BSC improves alignment among divisional or individual goals and the organisational goals; BSC can translate vision to daily operations effectively; BSC can translate and clarify the organisational vision, strategic plans and expected performance throughout the company efficiently and effectively; and BSC encourages all employees to consider the impact of their decisions and performances on the organisational profitability (Rabbani et al., 2011). Nearly all benefits listed are agreed by the respondents. However, both users and non-users disagreed that the adoption of BSC can bring more profit to the company. It implies that the implementation of BSC may lead to a higher cost which may be 22 regarded as a weakness.

Generally, both groups shared similar views on the benefits except the benefits 1 and 2 mentioned above as well as the use of BSC can equip employees with greater accountability. Users strongly agreed with those points while non-users agreed to a minor extent. Since the users have experienced with the BSC, they are able to comment with evidence together with their knowledge which eventually provide a stronger support on the benefits of BSC (Rompho, 2011). Relating to the weaknesses, there are three significant points: i. a scorecard will fail if an organisation is unable to identify and monitor the important aspects of operation; ii. The BSC is unable to identify the supplier-related and competitor-related issues; iii. It takes a long time to develop an appropriate set of performance measures. These are consistent with the comments given by Wisniewski (2001) and Schneiderman (1999). With reference to the users of BSC, they noticed that key measures should be set and agreed and reported frequently for monitoring performance.

An appropriate set of performance measures takes a long time to develop. Although most of the weaknesses are agreed by the respondents, there are three points disagreed. The respondents opposed the minor effect of BSC on organisation performance, the pitfall of single focus on the financial indicators and the difficulty in the linkage of strategy to performance measures. Generally, both users and non-users held a similar view on all the weaknesses including the former two opposed issues. However, the two groups shared different views in two items: the complexity of the BSC and the difficulty in the linkage of strategy to performance measures (Erbasi and Parlakkaya, n.d.). Users held a stronger state of agreement with the complexity of the BSC while non-users tended to disagree with it. This contradicts with 23 the reason of the unfamiliarity with BSC given by the non-users. In addition, users had confirmed more strongly the difficulty in the linkage of strategies to performance measures but non-users disagreed. Non-users believed that it is not so difficult to link the strategies to performance measures. This conflicts with the findings in the applicability section that non-users assess themselves as low ability to link the strategies to performance measures. The existence of the two inconsistencies may be explained by lack of practical usage (Darvish et al., n.d.).

This study comes up with a conclusion that there is a low usage of BSC in Hong Kong due to its complexity and complicated implementation. Theoretically, respondents agree with all the characteristics of the BSC, i.e., strategic management model, balance of financial and non-financial measures, and cause-and-effect relationships. Practically, these characteristics do not always apply. Instead, users also encounter some problems regarding the applicability of BSC. Take strategic management model as an example, respondents believed that BSC can translate the corporate vision throughout the organisation, but they could hardly admit it as a valid management tool because some unpredictable factors may arise in reality. For instance, there may be a sudden international event that causes economic recession, the strategic objectives may not be able to achieve; or the changed market conditions cause the company to change its original strategic plan; or the senior staff do not act bona fide towards the corporate goals; or competitors develop their comparative advantages that override others.

In this summary, researcher stated that Hong Kong, as an international and commercial centre with more than 1000 listed companies, the usage of BSC in Hong Kong is an attractive topic that motivated this research to be conducted. Apart from the usage of BSC, the perceptions, applicability and its usefulness held by Hong Kong organisations are other concerns. The research shows that BSC is not widely adopted in Hong Kong, and managers in Hong Kong companies do not consider the BSC is applicable to their business. The findings reflect most respondents agree with the BSC as a strategic management model, the balance of financial and non-financial measures and cause-and-effect relationships. They believed that BSC provides a framework for vision translation and communication which brings divisional goals consistent with corporate goals. However, due to its difficulty in the linkage of BSC model and the real economic environment, experts and other resources in relation to the measures development, companies may choose other simpler measurements and management systems.

The author used also different literature of the previous study by various researchers stating that in late 1980s, more managers started to aware of the importance of turning the strategic vision for an organisation's future development into tangible and realizable results by matching measurement with its business strategy (Thomas et al., 1999). Therefore, many strategic management models and theories such as the Boston Consultancy Group portfolio planning model, game theory, Balanced Scorecard, and dynamic multi-dimensional performance model (Maltz et al., 2003) were evolved. Among those approaches, the BSC had gained worldwide acceptance.