Business Performance Index For Private Higher Education Commerce Essay

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Education is a growing industry and Malaysia is gaining acceptance as a reputable study destination in the region. The Government of Malaysia is firm in its resolution to ensure the re-emergence and continuance of excellence in higher education in the country, so that institutions of higher learning are capable of producing Malaysians of quality human capital who are fully competent to make outstanding contributions to the development of the nation. In order to get a sustainable competitive advantage, PHEIs should alert of their performance.

The education sector offers a variety of higher educational programs as well as professional and specialised skill courses that are comparatively priced and of excellent quality. Underlying this is the current trend of reputable universities from the UK and Australia setting up branch campuses here, whilst other universities from USA, Canada, Australia, France, Germany and New Zealand offer twinning, franchised and external degree programs in partnership with Malaysian institutions.

It is observed more public and private higher education institutions (PHEIs) are built to meet the demand for professional qualifications and a trained workforce. New programmes and courses are continuously being introduced. In view of today's development in the world economy, and globalization, Malaysia recognises that 'knowledge' is the passport to prosperity and social stability. With a market economy, Malaysia has a good communication infrastructure for education in terms of printing, radio and television broadcasts, telephone, postal services and telecommunication. The Multimedia Super Corridor (MSC), which is the brainchild of the former Prime Minister, could play a major role for the future development of distance education in Malaysia (Saleh, 1998: 46).

The definition of PHEIs in the Malaysian Private Higher Educational Institutions Act (1996) is "These are a private higher educational institution without the status of a University or University College or a branch campus; or a private higher educational institution with the status of a University or University College or a branch campus". Such institutions emerged tremendously in the 1990s (Ibrahim 2000), and could provide more and adequate education opportunities, in terms of more places for students to obtain knowledge after their secondary schools and varieties of courses and programmes offered to students, which could not be fully provided by public HEIs since there are restrictions such as in regulations, quota, spaces, facilities and budget.

Malaysia is a fast developing nation. The country is transforming itself and moving aggressively towards building an effective and successful 'K' Economy. Our society according to Tan (2000: p.59) "… is information and knowledge hungry. We need greater speed, more efficiency and effectiveness in all our endeavours. For this, we need all the knowledge and information that we can get from all sources, and from around the world."

The purpose of the study to develop a business performance index (BFI) for the PHEIs in Malaysia based on the previous research findings (Abdul Rahim, Fariza, Filzah, Hartini, Hisham and Salleh 2009). This research will dominantly use the inductive approach in order to get in-depth of the real situation (Yin 1993).


The complexity of rapidly changing environment makes it challenging to management the businesses. Therefore, there is a need to analyze several areas of performance simultaneously (Kaplan & Norton, 1992; 1996). Given the uniqueness of the PHEIs in Malaysia based on (Abdul Rahim et al., 2009) the performance index should be based the factors found crucial in the PHEIs.

The scenario faced by the Malaysian PHEIs has led to serious implications. Initially, the failures of these institutions could jeopardize Malaysia's intention of becoming an education hub in this region. This in turn lowered the public confidence of sending their children to PHEIs apart from dampening the government strategic planning of achieving certain percentage of the Malaysian population of having a degree.

Clarke (1997) argued that if HEIs are to compete more aggressively, they need to determine the areas of comparative competence on which to base successful resource-led strategies. Although many institutions have a vision, it is important for HEI administrators to have a realistic grip on the institution's strongest position (Higher Education Review, 2004). Work on core competencies by Snyder and Eberling (1995) suggests that an institution should look at its system of activities and assess the value that they add not only to the present revenue but to the future potential of the organisation. King et al. (2001) argued that although managers and scholars often claim organisational competencies is the most critical sources of competitive advantage, many firms are often vaguely aware of the value of their competencies or important competencies that they lack. Therefore, an understanding and awareness of a firm's competencies are needed for the development of those competencies. In addition, identification of competency can point to areas where investment is required to protect or enhance the firm's competitive position.

Therefore, it is beneficial to measure the index of business performance of the PHEIs in order to ensure the sustainable competitive advantage as stressed by Abdul Rahim et al. (2009).


This study proposes the business performance index for the PHEIs. Specifically, the research objectives of this study are as follows:

to validate the proposed business model to the private higher education institutions.

to identify the index of business performance for each key factors i.e reputation, accreditation, admission and financial.

To establish the index of the business performance for the PHEIs


Based from the problem statements derived for this study, the objectives are:

Does the business model can be worked in the PHEIs? How?

What is the level of business performance index in the PHEIs?


The Terms of Reference as for this study are proposed as below:

Validate the business model proposed based on the previous findings

Plan an appropriate research strategy to answer the research questions

Provide index measurement and recommendation to the ministry for continuous improvements


The scope of the study encompasses all private institutions under the jurisdiction of the Minister of Higher Education namely:

Private Institutions of Higher Education (University Level)

Private Institutions of Higher Education (College University Level)

Branch Campus

Non University


The study attempts to contribute to the development of the business performance index to alert the PHEIs about their achievement. The previous studies of the critical success factors in PHEIs which is done comprehensively by Abdul Rahim et al. (2009) provide a foundation for the current researcher to develop the business performance index more systematically. Other than that, utilising the proposed index is hope to send a signal to the top management about the current performance of the organization. Furthermore, the study is help to demonstrate the organizational strategic value by employing the comprehensive view of the organisation. The long-range strategic plan should be reviewed accordingly on a periodic basis to analyse progress and to update objectives and measures. The PHEIs can plan their resources based on the index identified for the organization.



The RBV highlights the firm as a unique collection of resources (Barney, 1986, , 1991; Wernerfelt, 1984), but the theory emphasizes that not all these resources possess the potential to provide the firm with a sustained competitive advantage (Clulow, 2007). Previous literature on RBV frequently focused on resources as a stable concept that can be identified at a point in time and will endure over time (Dunford, Snell, & Wright, 2003). When referring to the RBV, most researchers focuses in strategic context, presenting resources and capabilities as essential to gaining a sustained competitive advantage and superior performance (Ferreira & Azevedo, 2007). The present study will represent the function of entrepreneurship in RBV by highlighting the importance of EO as human resource capabilities. As Casson (2004) points out, RBV is focusing on the importance of human resources, as reflected in competencies and capabilities to the performance of the firm (Teece, Pisano, & Shuen, 1997).

Superior performance usually base on developing a competitively distinct set of resources and deploying them in a well conceived strategy (Collis & Montgomery, 1994). Indeed, strategists who embrace the RBV also point out that competitive advantage comes from aligning skills, motives and etc. with organizational systems, structures, and processes that achieve capabilities at the organizational level (Teece, Pisano, & Shuen, 1997). On the other hand, firms with bundle of resources that are valuable, rare, inimitable and non-substitutable can implement value creating strategies not easily duplicated by other firms (Barney, 1991). However, it is quite difficult to find a resource which satisfies the Barney's entire VRIN criterion.

Concerning few theories contributes to the RBV development, the following table highlighted the historical view of the underpinning theory and it contribution to RBV:

Table 1: Historical View of the Resourced-Based View


Contribution to RBV

(Barney, 1991; Rumelt, 1987; Wernerfelt, 1984)

Suggests that to be sources of competitive advantage, resources must be valuable, rare, inimitable and non-substitutable.

Individual resources as unit of analysis.

Focuses on state (equilibrium) where firms earned sustained competitive advantage.

A strategic resource to one firm is also a strategic resource to another firm. Usually no distinction between resources and their services.

(Nelson & Winter, 1982; Schumpeter, 1934, , 1942)

Technological innovation and "creative destruction" basis of competitive advantage.

Managerial action and entrepreneurialism influence firm success rather than market power or industry structure.

Firm view as bundle of resources and hierarchies of activities governed by routines and rules.

(Penrose, 1959)

Firm as bundle of resources

Firm's growth is based on the effective use of resources and limited by managerial resources.

Entrepreneurship exercised by team, emphasizes alertness as well as judgment.

Services rather than resources are stressed.

Sources: Foss (2006); (Galbreath, 2004)

SME Competitive Rating For Enhancement Tool (SCORES)

The organisational competencies for this study are built around the SCORE dimensions developed by SMIDEC with several emphasis and modifications appropriate for the services industry mainly PHEIs. SCORES was developed to have a sense of the performance of SMEs at firms' level. Studies show that it is important to have the performance indicators in order to measure the PHEIs performance (Owlia and Aspinwall,1996). The measurement should be comprehensive and integrate all the important components. To this extent, SCORE has received much interest especially from its performance measurement capability (SMIDEC, 2007). The SCORE rated against 6 dimensions of capabilities, Management, Technical, Financial, Production, Innovation, Quality and Business Performance.


Institutional Image

Corporate reputation is sometimes seen as synonymous with corporate or institutional image (Dowling, 1993); as representing outside members' perception of corporate image (Dutton et al., 1994); and as only one dimension of corporate image (Barich and Kotler, 1991; Mason, 1993). Weigelt and Camerer (1988) provide a rather acquiescent definition contending that corporate reputation is a set of economic and non-economic attributes ascribed to a firm, inferred from the firm's past actions. This latter aspect is also stressed by Yoon et al. (1993) who hold that "a company's reputation reflects the history of its past actions." Earlier, Levitt (1965) also defined company reputation in terms of a number of attributes which he sought to identify, maintaining that a company's reputation from a buyer's perception consists of the extent to which the firm is well-known, good or bad, reliable, trustworthy, reputable and believable. Brown (1995) makes use of these attributes to operationalise the construct.

The reputation held about a firm by each public is formed on the basis of direct and indirect experiences and information received (Fombrun and Shanley, 1990; Sullivan, 1990; Yoon et al., 1993). Certain product categories, including service offerings, cannot be assessed prior to consumption hence they are classified as "experience" as against "search" products (Nelson, 1974). In reality, experience is itself a source of information. Reputations can be formed even when the experience by a public is not direct as long as this is passed on either directly through word-of-mouth, or indirectly via the media or other publics. Restaurants rely heavily for their trade on their reputation as transmitted by word-of-mouth. Firms have varying degrees of control over the informational cues that they transmit.

Financial Strength

Financial resources or factors are considered as one of an internal aspect of the company's competitiveness as mentioned by Bamberger (1989) and Man, Lau, & Chan (2002). Internal resources and capabilities also include know how and various kind of knowledge, personnel, capital, production equipment, building and others (Harmsen, Grunert, & Bove, 2000). However, for the purpose of this study, one of the internal factors to be investigated is financial capability.

Thus, the importance of financial capability is undeniable especially to ensure continuous business operations. Todd and Taylor (1993) reported rapidly growing companies tended to be niche player. They also identified that one of the factors such as access to finance most likely to influence company success. According to the definition of National Foundation for Educational research, financial capability is the ability to make informed judgment and take effective decisions regarding the use and management of the money (Atkinson, A, McKay, S., Collard, S. & Kempson, E., 2007). Mason and Wilson (2000) further argued that the process could lead to desired outcomes.

Strategic Alliances

The rapid growth of international alliances has been encouraged by several factors, some of which are: the internationalisation of markets; the speed, complexity, interrelation and uncertainty of technological development; increase in costs of Research & Development (R&D); and the necessity for large companies to monitor a spectrum of technologies (Contractor & Lorange, 1988). Hagedoorn (1993) claims that firms engage in alliances not only to increase complexity of new technologies and technological synergies, and to access to new market and opportunities; but also to involve in concrete innovation process, which includes capturing partners' knowledge of technology and shortening product life cycle by reducing the period between invention and market introduction. Hence, alliances aid firms to harness the capabilities and the dynamism of firms to do things that would be otherwise hard to do alone. Firms often find it too costly and cumbersome to develop on their own, all the knowledge and capabilities they need or want to have available.

Firms engage in different forms of strategic alliances for various reasons, the major reasons being economic and technological change. The perceived benefits of alliances can be categorised into two parts. The first is concerned with building new businesses or with introducing new products and the second is concerned with improvement of the current business (Beeby & Booth, 2000). Primary reasons for engaging in strategic alliances include gaining economies of scale and of learning, accessing the benefits of other firms' assets, reducing risk by sharing the capital requirements of new product development, reaching new markets, enjoying first mover advantage by exploiting speed to market, and achieving synergies, systems improvement and other benefits of learning. The major concern about engaging in alliances is its effect on the firm's competitiveness. Despite enhancing firms' competitiveness, alliances also pose some drawbacks.

Quality of Academic Staffs

Minimum qualification requirements for incumbencies of teaching and research staff, procedures of organising competitions to fill these vacancies and performance evaluation of the teaching and research staff are established by the Government. While evaluating teacher performance results, due regard must be paid to assessment given by students. Other requirements for incumbencies of teachers and research fellows are set by higher education institutions. Those requirements may not be less demanding than the minimum qualification requirements for incumbencies of the teaching and research staff established by the Government.

A certified lecturer must continuously improve his/her academic qualifications and teaching skills by participating in in-service training workshops and seminars provided by institutions for enhancing the professional qualifications of teachers. He/she is supposed to spend a certain number of days in a year, share his/her teaching experience and meet the requirements of the qualification category acquired.

Entrepreneurial Firm Culture

Entrepreneurship has received attention from several researchers. Davidsson et al. (2002) propose that in entrepreneurship studies "entrepreneurship" has to be defined appropriately. There are various definitions and conceptualizations of entrepreneurship. The mostly accepted definition belongs to Schumpeter (1934 cited in Morris and Sexton, 1996). He defines entrepreneurship as introduction of new goods or new quality of goods, introduction of new methods of production, opening of a new market, utilisation of new sources of supply and carrying out new organisational forms (1934 cited in Morris and Sexton, 1996). This definition considers entrepreneurship as "the creation of new economic activity". In this approach, any activity that makes changes in the market is "entrepreneurship". The "new activity" varies from starting a new firm to internal activities that are new to the firm (Davidsson, 2003). According to this definition firm growth is also regarded as entrepreneurship because growth brings some changes to the external environment as well as to the internal environment.

In firm-level entrepreneurship literature, entrepreneurial firm culture is one of the most common concepts. Organisational culture comprises the fundamental values, assumptions, and beliefs held in common by members of an organisation (Ostroff et al., 2003). It is stable, socially constructed, and subconscious. Employees impart the organisational culture to new members, and culture influences in large measure how employees relate to one another and their work environment. Theorists propose that organisational culture is among the most critical barriers to leveraging new knowledge and implementing technical innovation (Ostroff et al., 2003). All cultures are hypothesized to permeate most facets of the organisation, from the comportment of its managers, to the values that bind employees to one another, to the priorities the organisation pursues. Therefore, one expects the dominant culture to manifest itself in the views of employees at all levels of the organisation (Denison and Spreitzer, 1991).


A review of the literature on entrepreneurial characteristics disclosed a number of factors that are attributable to the success of an entrepreneur. Among those factors are innovativeness, creativity, ability to take risks, ability to identify business opportunities, self efficacy, need for achievement, business management skills, marketing skills, manufacturing know how, locus of control, ability to cooperate, total commitment, determination and perseverance; opportunity and goal orientation; taking initiative and personal responsibility, seeking and using; integrity and reliability; low need for status and power; persistent problem solving and realism and sense of humor (Littunen, 2000; Louw, et al., 2003).

In a study on a Malaysian contextual setting, Ndubisi (2003) has mentioned several common traits of entrepreneurs like innovation, risk taking propensity, perseverance or persistence and flexibility, and these traits are consistently reported in many earlier empirical studies. However, different authors will select different combination of traits or characteristics that suit the nature of the nature of their study and contextual setting. Thus, to perform effectively and subsequently achieve total organisational success, an entrepreneur has to continue identifying opportunities in the market, assuming various types of risks, planning, organising and operating business venture, embracing creativity and innovation, with the view of being rewarded with a satisfactory profit margin.

Need for Achievement

Need for achievement has been defined as the desire to perform something better, solve problems or master complex tasks (Chapman, Fromholtz, & Marrison, 2001). McClelland (1961) was the first researcher who established the construct of need for achievement in the entrepreneurship literature. McClelland (1961) theory of the need for achievement suggests that individuals who have a strong need to achieve are among those who want to solve problem themselves, set targets, and strive for the targets through their own efforts. Therefore, entrepreneurs are seen as self-starters who appear to be internally driven by a strong desire to compete, succeed, pursue and attain challenging goals. Hence, individuals with strong needs to achieve often find their way to entrepreneurship and tend to succeed better than others as entrepreneurs. In other words, there is a relationship between development of achievement motivation and the desire to take entrepreneurial activity. Ever since, the need for achievement theory of McClelland (1961) has become the most applied theories on entrepreneurship because, following the first study by McClelland (1961) more scholar and researchers have given greater attention on need for achievement by exploring its role in generating the entrepreneurial ventures (Casson, 1982).

Locus of control

Locus of control refers to where people place their beliefs about causes of the outcomes of their behaviours. McShane and Von Glinow (2005) define locus of control as a generalized belief about the amount of control people have over their own lives. In Rotter's (1966) theory, the individual's locus of control varies along the internal/external divide. Internal locus of control is when a person believes that the outcomes stem from internal factors such as their own efforts, ability, decision an opinion. He further stated an entrepreneur is an individual with a high internal locus of control. Thus, having a higher internal locus of control implies that an entrepreneur is responsible for his/her own action and can face whatever failures confronting them. He/she is bold enough to make important decisions and ready to face any consequences that might take place later on. Parallel to this view, another study also suggested that locus of control could distinguish entrepreneurs who are successful from those who are not (Brockhaus & Horwitz, 1986). In other words, internal locus of control can be regarded as the degree to which people believe they are masters of their own fate (Robbins, 2003).


Innovativeness was once regarded as an exclusively inherited trait. Innovation characteristics is important for organisational to sustain their business and considered as the engine for growth. Creating an innovative product or service is the heart of new venture formation. Innovation theorists often describe the innovation process as being composed of two main phases: initiation and implementation (Axtel et al., 2000). The division between the two phases is believed to be the point at which the decision to implement the innovation is made. The first stage ends with the production of an idea, while the second stage ends as soon as the idea is implemented (King & Anderson, 2003). innovation is a key factor in sustaining business. There where two major causes influencing the business success of a business are innovativeness and R&D content (Drucker 2004). Mc Clelland (1961) agreed that entrepreneurs can perform better if they are creative and innovative while operating a business venture. For example, during the introduction of a new product, entering a new market or processing material for production (Jaafar et al., 2005). Thus, innovation and creativity have to be part of an organisational culture because a leader who is innovative and creative tends to be more susceptible to market needs and environmental change that may bring strong impact to the overall performance of the organisation.

Risk Taking

Risk is referred to as the uncertainty outcomes of an organisation's resource commitment (Ndubisi, 2003) or the probability of incurring a certain amount of loss. From the perspective of decision making behaviour analysis, risks can be divided into three important aspects: risk perception, risk propensity and preparedness to take risk (Brindley, 2005). Thus, risk taking can be referred to as a individual's behaviour that can be influenced by trait, task, cognitive and situational factors (Sitkin & Pablo, 1992).


The growing intensity of competition and the larger role that the market is playing provide a new chance for significant gains in how well higher education actually serves society. Competition won't automatically lead to better colleges and universities. These forces must be strong enough to encourage change. At the same time, they must be channelled or restrained in ways that prevent damage. The ability of an organisation to adapt to changing environmental circumstances is the key to organisational survival (Lawrence, 1981; Yasai-Ardekani and Nystrom, 1996) and the effectiveness of the adaptive response is dependent on aligning the response to the environmental circumstances faced by the organisation (Hambrick, 1983, Lee and Miller, 1986; Miles and Snow, 1978). The firm's response to the environment could be hypothesised from a contingency theory (Donaldson, 2001) or strategic choice perspective (Child, 1972).

Leonard-Barton (1992) contends that core capabilities can become core rigidities in the face of the changing technological environments. The contingency theory postulates that the effectiveness of the organisation depends on the congruence between elements of the organisation subsystem and the demands of the environment, while the strategic choice perspective suggests that through choices made, key decision-makers have considerable influence over an organisation's future direction.

Environmental Hostility

Environmental hostility represents the perceived frequency of change and turnover in the marketing forces of the external/task environment (Aldrich, 1979). In addition to rapid continuous change, sudden discontinuous changes are also prevalent (Sutton et al., 1986). Changes in technology, customer preferences and competitive action are some examples of environmental hostility. Uncontrollable changes in the market evolution, technological evolution, or changes in the value-added system can bring about dynamic, turbulent environmental conditions (Bourgeois and Eisenhardt, 1988). Miller and Friesen (1983) defined environmental hostility as an unfavourable business climate, featuring intense competition for limited resources or market opportunities. This environment intensifies challenges to the firm and often complicates firm challenges (Miller and Friesen, 1983). This construct has also been referred to as environmental dynamism, variability or volatility (Child, 1972), and is considered a dimension of environmental uncertainty (Scott, 1992).

Environmental Uncertainty

It is possible to equate uncertainty with unpredictability, which is the inability to foretell future events. Whatever occurs in the environment is likely to affect the degree of uncertainty experienced by its members. Uncertainty is regarded as the "cutting edge" of organisational analysis and, thus, coping with uncertainty is the essence of the administrative process (Thompson, 1967). Environmental uncertainty is characterised by the rate of change of innovation in the industry as well as the uncertainty or unpredictability of the actions of competitors and customers (Burns and Stalker, 1961; Lawrence and Lorsch, 1967; Miller and Friesen, 1983). More specifically, it is the "amount and unpredictability of change in customer tastes, production or service technologies, and the modes of competition in the firm's principal industries" (Miller and Friesen, 1978).


Porter (1985) asserts there are basic businesses strategies - differentiation, cost leadership, and focus - and a company performs best by choosing one strategy on which to concentrate. However, many researchers feel a combination of these strategies may offer a company the best chance to achieve a competitive advantage (Cross, 1999; Johnson and Scholes, 1993), which should be aligned to the business obejectives.

Differentiation Strategy

Differentiation strategy focuses its efforts on providing a unique product or service (Hyatt, 2001; Cross, 1999). Product differentiation fulfils a customer need and involves tailoring the product or service to the customer. This allows organisations to charge a premium price to capture market share. The differentiation strategy is effectively implemented when the business provides unique or superior value to the customer through product quality, features, or after-sale support. Firms following a differentiation strategy can charge a higher price for their products based on the product characteristics, the delivery system, the quality of service, or the distribution channels. The quality may be real or perceived based on fashion, brand name, or image. The differentiation strategy appeals to a sophisticated or knowledgeable consumer interested in a unique or quality product and willing to pay a higher price.

Cost Leadership Strategy

This strategy focuses on gaining competitive advantage by having the lowest cost in the industry (Porter, 1979, 1987, 1996; Hyatt, 2001). In order to achieve a low-cost advantage, an organisation must have a low-cost leadership strategy, low-cost manufacturing, and a workforce committed to the low-cost strategy (Malburg, 2000). The organisation must be willing to discontinue any activities in which they do not have a cost advantage and should consider outsourcing activities to other organisations with a cost advantage (Malburg, 2000). For an effective cost leadership strategy, a firm must have a large market share (Hyatt, 2001).

Focus Strategy

In the focus strategy, a firm targets a specific segment of the market (Davidson, 2001; Porter, 1979, 1987, 1996; Hyatt, 2001). The firm can choose to focus on a select customer group, product range, geographical area, or service line (Hyatt, 2001; McCracken, 2002). For example, some European firms focus solely on the European market (Stone, 1995). Focus also is based on adopting a narrow competitive scope within an industry. Focus aims at growing market share through operating in a niche market or in markets either not attractive to, or overlooked by, larger competitors.


Most studies on organisational performance use a variety of financial and non-financial success measures. Researchers employ financial measures such as profit (Saunders and Wong, 1985; Hooley and Lynch, 1985), turnover (Frazier and Howell, 1983), return on investment (Hooley and Lynch, 1985), return on capital employed (Baker et al., 1988), and inventory turnover (Frazier and Howell, 1983). Nonfinancial measures include innovativeness (Goldsmith and Clutterbuck, 1984) and market standing (Saunders and Wong, 1985; Hooley and Lynch, 1985). When performance is measured at a variety of levels (e.g. national, industry, company, and product), comparison of results is difficult (Baker and Hart, 1989; Buckley et al., 1988).

Measures of firm performance generally include such bottom-line, financial indicators as sales, profits, cash flow, return on equity, and growth. It is important to determine how a firm compares with its industry competitors when assessing firm performance (Dess and Robinson, 1984). With the multitude of competitive environments faced by firms in differing industries, knowing only absolute financial numbers such as sales, profits, or cash flow is not very illuminating unless viewed in the context of how well the firm is doing compared to their competition. Therefore, it is important to use an industry comparison approach when making firm performance assessments for organisations sampled from a wide variety of industries.

Lusch and Laczniak (1989) define business performance as the total economic results of the activities undertaken by an organisation. Walker and Ruekert (1987) found primary dimensions of business performance could be grouped into the three categories of effectiveness, efficiency, and adaptability. But there is little agreement as to which measure is best. Thus, any comparison of business performance with only these three dimensions involve substantial trade-offs: good performance on one dimension often means sacrificing performance on another (Donaldson, 1984).

In many research situations it is impractical or impossible to access objective measures of organisational performance. Even if such measures were available it does not guarantee the accuracy of the performance measurement. For example, when a sample contains a variety of industries, performance measurement and comparisons can be particularly problematic. What is considered excellent performance in one industry may be considered poor or middling performance in another industry. If researchers limit themselves to a single industry, the performance measures may be more meaningful, but the generalisability of the findings to other industries is problematic.


The schematic diagram in Figure 1 illustrates the theoretical framework of the proposed relationship in this study. The firm competencies, entrepreneurial traits and the institutions competitive environment are the main constructs influencing the institution's choice of strategies. Based from the constellation of firm's competencies and its adopted business strategy, this would lead to firm's business performance (Abdul Rahim et al. 2009).

Business Performance (Index)

CSFs (Index)

Figure 2: Theoretical Framework

Organisational Competencies

PHEIs performance

Strategic positioning

Organisational Attributes

Entrepreneurial Traits

Business Environment



The present study will rely upon a triangulation approach to gathering data. The data will be gathered through a structured questionnaires and interviews after the initial index developed. The basis of triangulation is based on the foundation that - no single method ever adequately solves the problem (Denzin, 1978) and by using of only one method is more exposed to error linked to that particular method and reduce the possibility of personal bias by not depending on only one method of approach (Mambula, 2002; Patton, 1990). Another reason why researcher will use triangulation is to increase the validity and credibility of the research conclusion, to be more confident about the findings, to increase the ability of generalization, to answer the research questions and to meet the research objectives effectively.

The answered questionnaires will be used to develop the initial index of each critical success factors of the PHEIs. The index for each factor will be calculated using the equation below:

BFI is multiplied by its corresponding weighting factor to produce weighting scores, and

Overall BFI index for the organisation will be the average of every PHEI's individual index

(1) Level of importance of each factor using an evaluation scale from 1 to 5 where; '1' = least important to '5' =most important.

(2) Level of actual implementation, using the same scale: '1' = strongly disagree to '5'=strongly agree.

Since the Likert Scale used ranging from '1' to '5' therefore the index has to multiply by 2 and then be converted to the percentage. The formula as below:

BFI = {Actual Score, A x Weighting Factor, W} = {AW}

GAP = {Actual Score, A x Weighting Factor, W} - {Importance Score, I x Weighting Factor, W} = {AW} - {IW

In order to get the "level of importance of each factor"; the researcher plans to do the group interviews for several sessions using the saturated approach to identify the weightage for each score. The naturalistic and inductive nature of qualitative methods requires that operational variables and hypothesis not be determined prior to interviewing the study participants, or that the instrumentation be finalized either (Patton, 1990). Group interviews will be based on both structured and semi-structured questions in order to achieve the research objectives. The study proposes purposive to get the participants that held top management positions, academic staffs and administrative staffs at the PHEIs. Other groups will consist of the regulators of HEIs.

They will be chosen to give inputs on these:

The identification of the importance and weightage of each factor; and

The interpretation of the index and benchmark/ standard of the index; as a signal of the PHEIs performance.

Generally, the computation of the index and model fit will be based on the gap and multivariate analysis using SPSS package and NVivo.


The duration of the research project will take approximately six months to be completed. The accomplishment of the research project will depend on the cooperation from the respondents in this study. The crucial activities are on the group interviews, BPI development and validations.









Literature review

Initial Index Calculation

Group Interviews & weightage identifications

BFI development & validation

Draft report

Final report, presentation & submission of report



(Phases are to be determined by researchers and not limited to this space)

Budget Summary

(Please provide detail budget in Appendix B)

Phase I (Including Initial Interview with regulator)


JUMLAH RM17,800.00




RM180.00 X 4 person X 2 days = RM 1,440.00

Meal Allowance

RM60.00 X 5 person X 2 days = RM 600.00

Flight Ticket

(Alor Setar-K. L-Alor Setar)

RM 554.00 X 5 persons = RM 2,770.00

ii. Taxi:

UUM - Airport Kepala Batas - UUM

RM30 X 1 taxi X 2 trip X 5 person = RM 300.00

a) Structured Interview printing

RM1.50 X 300 =RM 450.00

c) Pen drivers

RM60.00 X 6 unit =RM 300.00

d) A4 Paper

RM12.00 X 6 rim =RM 72.00

e) HP Laser Jet Catridge

RM200 X 2 =RM 400.00

f) Reference Material (books, reports, magazine, etc)

=RM 400.00

g) Telephone =RM1000.00

h) Dictation Machine/MP3 Recorder

RM 500.00 x 1 unit = RM 500.00

j) Incentives for Respondents

RM20.00 x 40 units = RM 800.00

Sub-Total RM 9,032.00

Phase II (Group Interviews)



RM180.00 X 5 person X 10 days = RM 9,000.00

Meal Allowance

RM60.00 X 5 person X 10 days = RM 3,000.00

Flight Ticket

(Alor Setar-K. L-Alor Setar)

RM 554.00 X 5 persons X 2 = RM 5,540.00


UUM - Airport Kepala Batas - UUM

RM30 X 1 taxi X 2 trip X 5 person = RM 300.00


RM80.00 X 1 taxi X 2 trip X 5 person = RM 800.00

Toll = RM 200.00

Research Assistant:

Full time research assistant

RM65.00 X 1day X 5 month X 1 person = RM 6,825.00

Accommodation & transport

RM60.00 X 21 days X 1 person = RM 1,260.00

v. Transcriber / Data encode = RM 1,500.00

Sub-Total RM 28,425-00

Phase III






RM180.00 X 4 person X 4 days = RM2,880.00

Meeting Room (4 days) = RM 1,000.00

Meal Allowance

RM60.00 X 5 person X 5 days = RM 1,500.00

b) Photocopy report

RM0.06 X 150 pages X 10 copies =RM90.00

c) Binding Report

RM30.00 X 10 copies =RM300.00

d) Paper Presentation Conference = RM 4,000.00

Flight Ticket

i. (Alor Setar-K. L-Alor Setar)

RM 554.00 X 5 persons = RM 2,770.00

ii. Taxi (KLIA-Putrajaya-K.Batas) = RM 100.00


RM180.00 X 4 person X 2 days = RM 1,440.00

Meal Allowance

RM60.00 X 5 person X 2 days = RM 600.00

Sub-Total RM 14,680.00

Total RM 52, 137-00