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Monday, May 10, 2010

DESIGNING THE BALANCED SCORECARD WEIGHT ON SYARIAH BANK BRANCHES THROUGH PERFORMANCE MEASUREMENT


SIMPOSIUM NASIONAL AKUNTANSI 9 PADANG

DESIGNING THE BALANCED SCORECARD WEIGHT ON SYARIAH BANK BRANCHES
THROUGH PERFORMANCE MEASUREMENT
(AN EMPIRICAL STUDY ON BANK SYARIAH MANDIRI)

UNGGUL PURWOHEDI
State University of Jakarta, Indonesia

IMAM GHOZALI
Diponegoro University, Indonesia

ABSTRACT

The objective of the study is to design the appropriate weight for each balanced scorecard perspectives (financial, customer, internal-business process, and learning and growth). To achieve that objective, this study is trying to analyze the relationships between Balanced Scorecard perspectives with organizational and managerial performance. Therefore, this study has two hypotheses, first the BSC usage is positively associated with organizational performance. Secondly, the BSC usage is positively associated with managerial performance.

In order to test the hypotheses, this study used the Structural Equation Model by AMOS 4.0. This study analyze managers in Bank Syariah Mandiri as the respondents. Fifty one respondents through out Indonesia were used in this study which are consists of branch mangers, operational managers and marketing managers. The questionnaires were sent by email.

Using Structural Equation Modeling (SEM), the results of the study indicated that each perspective has different relationship to organizational and managerial performance, either positive or negative. Internal business perspective supported the first hypothesis, meanwhile, financial and internal business perspective supported second hypothesis. This study is also gives a recommendation related with weight design for each BSC perspectives.

Key words : Balanced Scorecard Weight, Organizational Performance, Managerial Performance



I. INTRODUCTION
1.1. Research Background

The development of syariah banking has shown its great contribution to community. Syariah banking is an intermediary and trustee of other people’s money with the difference that it shares profit and loss with its depositors. Syariah banking introduces an element of mutuality between depositors and bank. Both of them have the same right in distributing the return. However, in practice, most syariah banks have an organizational set-up similar to their conventional counterparts.

One of the most beneficial function in an organization is related to control system. Syariah banking control systems may be divided into internal and external. The former includes managerial remuneration and constitution of Board of Directors. The markets for corporate control and managerial labor, product market competition, juridical constraints, and exit and voice strategies are examples of external control (Dar & Presley, 2000).

One of the control mechanism in organization is performance measurement. It contains the method of re-numeration packages for management. Including, incentives strategy includes salary incentives, share options, executive presentations and discussions, and active employment market for senior executives whose salary may be determined by past performance (Dar & Presley, 2000).

The main focus on performance measurement issues is how to seek the best underlying measures in evaluating process. In the early of performance measurement, people tend to rely on financial measures especially accounting performance (Otley & Fakiolas, 2000). This began with Hopwood’s pioneering work on the role of accounting data in performance evaluation. Hopwood’s (1972) work identified three distinct evaluative styles used by senior managers in holding subordinates accountable for their performance.

*SIMPOSIUM NASIONAL AKUNTANSI 9 PADANG
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