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Export Barriers in a High-Tech Sector in a Less Developed Country: The Case of ICT SMEs in Malaysia Christopher J. R. Richardson A Framework of Performance Measurement System for Manufacturing Company Dermawan Wibisono Individual Differences in Participations of a Brand Community: A Validation of the Goal-Directed Behavior Model Badri Munir Sukoco Organizational Characteristics and Employee Satisfaction: A Comparison of State-Owned and Non State-Owned Enterprises in Vietnam Lam D. Nguyen The Role of HRM Practices in Predicting Faculty Turnover Intention: Empirical Evidence from Private Universities in Bangladesh Mohd H R Joarder and Dr. Mohmad Yazam Sharif

SEAM

Vol. 5

Issue 2

Pages 91 - 180

Depok October 2011

ISSN 1978-1989

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Editor in Chief Sari Wahyuni, Universitas Indonesia Vice Editor Rokoh Rokhim, Universitas Indonesia and Bisnis Indonesia Intelligence Unit Managing Editor Imam Salehudin Layout and Typesetting Shafruddin Nusantara Administration Angtyasti Jiwasiddi REVIEWER Preet S. Auklah, York University Adith Cheosangkul, Chulalongkorn University Luchien Karsten, University of Groningen Felix Mavondo, Monash University Cornelius B. Pratt, Temple University Vivien T. Supangco, University of the Philippines Ma. Gloria V. Talavera, University of the Philippines Albert Wijaya, Universitas Indonesia Gunawan Alif, Universitas Indonesia Anees Janee Ali Hamid, Universiti Sains Malaysia Yanki Harijasti, Universitas Indonesia Aryana Satrya, Universitas Indonesia Hanny Nasution, Monash University, Australia Handri Santiago, Universitas Indonesia Lily Sudhartio, Universitas Indonesia Anton Wachidin Widjaja, Bhayangkara Jakarta Raya University Djamaludin Ancok, Gadjah Mada University Kazuhiro Asakawa, Keio Business School Arnoud De Meyer, University of Cambridge G.M Duijsters, Technische Universiteit Eindhoven Riani Rachmawati, Universitas Indonesia Budi W. Soetjipto, Universitas Indonesia Hani Handoko, Gadjah Mada University

The South East Asian Journal of Management (ISSN 1978-1989) aims to present the latest thinking and research that test, extends, or builds management theory and contributes to management practice. All empirical methods -- including, but not limited to, qualitative, quantitative, eld, laboratory, and combination methods -- are welcome. Published twice a year (April and October) by: Department of Management, Faculty of Economics, Universitas Indonesia, Depok 16424 Indonesia. Phone: +62-21 7272425 ext 503 Fax : +62-21 7863556 The views expressed in SEAM are not necessarily those of the editorial staff nor the publisher. All articles in this journal, unless otherwise noted, have undergone a blind review process. Copyright 2011 Management Research Center, Faculty of Economics, Universitas Indonesia. All rights reserved.

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Contents
Export Barriers in a High-Tech Sector in a Less Developed Country: The Case of ICT SMEs in Malaysia Christopher J. R. Richardson A Framework of Performance Measurement System for Manufacturing Company Dermawan Wibisono Individual Differences in Participations of a Brand Community: A Validation of the Goal-Directed Behavior Model Badri Munir Sukoco Organizational Characteristics and Employee Satisfaction: A Comparison of State-Owned and Non State-Owned Enterprises in Vietnam Lam D. Nguyen The Role of HRM Practices in Predicting Faculty Turnover Intention: Empirical Evidence from Private Universities in Bangladesh Mohd H R Joarder and Dr. Mohmad Yazam Sharif 91

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A Framework of Performance Measurement System for Manufacturing Company

School of Business and Management, Bandung Institute of Technology In the current dynamic environment, measuring a companys performance becomes exceedingly complex since Performance Measurements Systems (PMS) not only measure a companys performance but also reect their organizational culture and philosophy. Designing and implementing PMS is an integral part of management control systems. However, traditional PMS are criticized for being obsolete, irrelevant to managerial decision making, unrelated to strategic objectives and detrimental to organizational improvements. Given the shortcomings of traditional PMS, there is need for a new framework that can lead to the design of a PMS that balances short-term and long-term measures, internal and external measures, and nancial and operational measures. This paper presents issues associated with the needs of a dynamic PMS, observe past research achievements in PMS and review past PMS frameworks that have been introduced. The paper then proposes an improved methodology for the design of a realistic PMS and its effective implementation in a manufacturing environment with case for Indonesias company. Keywords: Performance measurement system, benchmarking, Indonesian manufacturing company

Dermawan Wibisono*

Introduction
In the current dynamic competition, companies realize the intense need of Performance Measurement Systems for managing their performance compared to their competitors. Since Skinner (1969) published his research related to that matter, there are no solid ndings and conclusion for which performance measurement should be implemented as changing of nancial performance measurement method, such as balanced sheet and income statement. Skinner (1969) argues the importance

of aligning corporate strategy with the capabilities of the manufacturing function. Generally companies state their strategy in their mission statement. Many companies have a powerful mission statement but frequently do not know whether that mission is deployed throughout the organization. Management spends a lot of time developing mission statements, but often gets diverted from the details of developing a set of performance measures. Performance measures should drive the strategy throughout the organization so that everyone in the organization understands

* Jl. Ganesha 10 Bandung Indonesia, Phone. +62 22 253 1923, Fax. +62 22 250 4249, Email: dwibisono@sbm-itb. ac.id 107

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what the strategy is and how their work and their performance are linked to that overall strategy. The absence of this linkage is that stated by Skinner (1969) as the missing link in manufacturing strategy and his arguments did not get response from academician as well as practitioners for long time until 1980. In the late 1980s, Skinners view provided the trigger for quite a lot of research into manufacturing strategy. This is because of several reasons including the loss of Western companies market shares to global competition, declining prots, recession and the ascendancy of the Japanese and other Pacic Rim competitors. All these symptoms provided the motivation for seeking new ideas and approaches to managing industry. In Indonesia, the need of such performance measurement is more intense because the difference environment they meet compare to the companies in the world that can not be fullled satisfactorily by previous research ndings. Some previous framework such as the Balance Scorecard (Kaplan and Norton, 1996), the Performance Prism (Neely et al., 2002), and other approaches still need to adapt and adjust with the Indonesians environment. Therefore, this research is vital to ll the gap because it can contribute in providing framework and method in the literature and theoretical foundations and also enrich methods available for practical implementation to increase competitiveness of Indonesian companies. In the current dynamic era of competition, managing and measuring a companys performance becomes exceedingly complex as PMS not only relates to measuring companys performance but also reects its organizational culture and philosophy and describes how well the company performs in terms of nancial and non-nancial indicators. PMS is viewed as one of those management philosophers that would give signicant benets, including:

a. Satisfying customers By having PMS that focuses on customer satisfaction, companies keep their long life business and competitiveness. Without a continual drive towards customer satisfaction, the company will not know the product characteristics or service elements necessary to remain competitive. b. Monitoring progress The right performance measures make process improvement not just possible but continuous. A company that can make a better product (that is one more suited to customers needs and wants), in less time for less cost, is bound to succeed. c. Benchmarking processes and activities Performance measures make possible management by facts. They should provide the information needed to focus on the best processes and allow comparisons between companies. By having a PMS, a company will know its position relative to its competitors. d. Driving Change The right performance measures help organizations change successfully because they break down barriers and in many cases prevent barriers. This is because performance measures facilitate communication within a process and throughout the whole organization. The achievement of those benets needs appropriate designing and implementing of a PMS. To be effective, performance measures need to reect the changes in competitiveness, but traditional PMS that are mostly depend on the nancial performance and reports are criticized for being obsolete, irrelevant to managerial decision making, unrelated to strategic objectives, too late, too aggregated, and detrimental to organizational improvements (Medori, 1998; Kaplan and Norton, 1996). Given the shortcomings of traditional PMS, it is clear that a new PMS framework is

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required, which balances short-term and long-term measures, internal and external measures, and nancial and operational measures. The challenging research questions would then be: (1) Is there any framework appropriate for certain companies in managing their competitiveness? (2) Can the framework be appropriate specically to certain types of companies or even for certain countries? (3) Can the previous research achievements be implemented to the Indonesian environment?

Literature Review
A core research issue in the area of manufacturing strategy has concerned the establishment of PMS (Dixon et al., 1990; Kim and Arnold, 1996). Hronec (1993) denes PMS as the vital signs of an organization that tell the people in an organization what and how they are doing and whether they are functioning as part of the whole. However, Ljungberg (1994) introduces another denition of PMS that more concise and practical as a set of related measures-described by rules and procedures for capture, compilation, presentation and communication of datathat in combination reect key performances and characteristic of a selected process effectively enough to allow intelligent analysis leading to action if needed. The main theme of previous research was the inability of accounting based measurement to accommodate the current needs of production systems. Medori (1998) and Cooper et al. (1992) for example, describe the disadvantages of traditional nancial PMS. Non-nancial performance measures are becoming of greater importance because of increased interest being shown in them at the higher management levels (Stoop, 1996). At the operational management and shop oor levels, non-nancial performance

measures are more relevant than nancial measures. Although nancial measures capture the monetary consequences of operational performance, they are too broad to help managers cope with such daily decisions as resource allocation and job scheduling. Even though many authors agree on the need to use more non-nancial measures of performance, there appears to be little agreement on precisely which measures to use. This lack of consensus can be explained, in part, by the following reasons. First, the obvious need for each company to use measures that are relevant to its own situation. Second, there is a lack of clear operational manufacturing strategy, together with some measure of their degree of focus. Third, there is shortage of survey-based empirical works that show the linkage between performance measurements at different levels (Ahmed et al., 1996). The problem in selecting nonnancial measures, to some extent, can be overcome by utilizing a performance measurement framework. There have been a number of frameworks that have been promulgated over the last periode, for example, The Malcolm Baldrige National Quality Award (MBNQA) by United States government (Wibisono, 2006), SMART (Cross and Lynch, 1989); Performance Measurement Questionnaire (PMQ) by Dixon et al., (1990); Performance for World Class Manufacturing (PWCM) by Maskell (1991); Quantum Performance Measurement Model (QPMM) by Hronec, (1993); Key Performance Indicators (KPI) by AusIndustry (1995); The Balanced Scorecard (BSC) by Kaplan and Norton (1996); and The Performance Prism (Neely, 1999). All the above frameworks have their relative benets and limitations. The mapping of previous PMS frameworks and comparison amongst them with the present model is illustrated in Appendix

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1. It can be seen that there are fourteen different research aspects that have been compared amongst previous frameworks. The most common limitations of the previous frameworks are: First, there is little or no consideration given for existing measurement systems that companies may have in place (Medori, 1998; Neely et al., 1994). Second, all the provided frameworks have not been supported by a Knowledge-based/Expert System approach, therefore giving difculties in consistent implementation. Third, even though the benchmarking process has been stated as the one of the most important procedures on managing performance, the mechanism on how to conduct that process and the standard for each performance variables have not been provided. Fourth, the improvement recommendations for each poor performance have not been formulated explicitly. There are several approaches practiced in the world, including Indonesian companies, such as the Balanced Scorecard, The Performance Prism, The Baldrige Approach, The Six Sigma and others. However there is still a lag especially in practicing and contextual of that approach to the Indonesian environment. Some companies, like PT. Telkom and PT. Pertamina, are even confusing because there are so many performance approaches they knew and implemented in running their business and then they abandoned it because it did not give valuable value added or at least in practicing this approach then tend to corrupt to the certain level of management interest.

Research Method
The methodology used in conducting this research is combining theoretical study with model validation from Indonesian manufacturing industries. The theoretical study showed, there are nine important

aspects that should be considered in designing PMS for a manufacturing environment: (1) determining a PMS framework, (2) identify company environment, (3) formulating companys statements, (4) analyzing current implemented PMS, (5) determining performance variables, (6) determining cause-effect amongst variables, (7) determining performance standards, (8) determining improvement priority, and (9) formulating recommendations and model evaluation. All nine aspects could be conducted more accurately, consistently and concisely if supported by a Knowledgebased/Expert System approach. The model then tested its validity through interviews and eld survey in the manufacturing industries in Indonesia. We conduct Focus Group Discussions (FGD) with 10 big manufacturing companies in Indonesia. Each company consists of several experts (10-15 people in each company) to validate the knowledge-based practice in their company, appropriateness of key performance indicators they have implemented as well as the suitability of that indicators, the benchmarking of each indicators and the linkage that are exist amongst indicators. Since the data needed to that validation is for whole company performance, so key persons needed to be included are board of director and managers in the related areas such as department of nance, production, marketing, engineering, and human resources. After validation of the framework and related data needed is completed, then the second FGD is conducted to improve the software composing and nally, the third FGD is conducted to nalize and validate the proposed model includes trial for their current data.

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Result and Discussion

Determining PMS framework The rst important step in designing a PMS is determining which PMS framework should be implemented in the company. It is deemed prudent and right to use previously good practices for the design of the present PMS. For example, the Balanced Scorecard (BSC) of Kaplan and Norton (1996) is the most popular PMS framework implemented around the world and is taken in classifying performance perspectives. In manufacturing, for example, rather than using the four perspectives of the BSC, in this research, ve level performances are used: nancial perspectives, customer perspectives, manufacturing competitive priorities, internal process and resource availability. In determining which performance variables should be used in each level and the reasons for choosing those variables, one could refer to the Performance Prism (Neely, 1999) as an important resource even in this resource, the most appropriate variables should be chosen since there are around 280 variables that are provided and not all suitable for the certain manufacturing company. For analyzing whether the current PMS implemented is aligned with the company vision and mission, one can apply the analysis provided by Dixon at all (1990) in their Performance Measurement Questionnaire approach. Identifying company environment The different companys product, market, competitors, employee size, and business life cycle stage need varying improvement strategies and therefore different PMS. Analyzing the type of industry where the manufacturing is operating, the number of employee that is currently working and the business prospects of that manufacturing are becoming

foundations for determining performance variables and performance standards in PMS. Formulating company statements Most of corporate strategists agree that PMS should be derived from the company vision, mission and objectives. Therefore in the proposed model, the existing company statements are analyzed through a systematic procedure. The company mission should be derived and aligned with the company vision. The mission then becomes the foundation in developing company objectives, from which the performance variables are determined. Analyzing current PMS implemented The PMS are becoming standard for most manufacturing companies. However, the problems encountered by most practitioners are how can they analyze the existing implemented PMS rather than designing from scratch. It is therefore, important that the existing PMS procedures are analyzed and use as feed back to the design of the new PMS. Determining performance variables Determining performance variables is the most crucial step in designing a PMS. There are potentially a very huge number of performance variables that could be used. The choice of the variables provided should be based on the optimization between the degree of importance and practical aspects as it is not possible to use all the performance variables because it would be costly, time consumed and need a big effort.

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Determining cause-effect The linkage amongst performance variables in the different performance levels is crucial in determining performance improvement. The linkage amongst the performance variables can be formulated through analyzing of companys previous performance as well as management judgement. These mechanisms can be determined through implementation of the Analytic Hierarchy Approach/AHP (Saaty, 1980) if there is not enough data provided by companies or it can be using factorial analysis and analysis of correlation based on the companies real data. Determining performance standards Benchmarking is another important aspect that should be considered and implemented within a PMS. There are two types of benchmarking processes that should be accommodated in the PMS: internal and external benchmarking. The benchmarking exercise is mainly for diagnosing whether the performance is leading or lagging against the standards. The benchmarking process in the proposed model is based on the GAP (Gauging Absence of Prerequisite) analysis approach proposed by Kochhar et al (1991), which not only determines the GAP between the ideal and the present, but also indicates what needs to be done to bridge the GAP. The standards of performance for each variable also have to be analyzed compare to the internal standard and external benchmarking appropriately to each performance indicator. Formulating recommendation Measuring performance without any follow up or improvement action is not benecial (in fact it may lead to the opposite result) in increasing manufacturing competitiveness. Therefore, it is important

to provide recommendations for each lagging performance against standards. The recommendation should be based on the input of experts and experiences of that company in running their productions. Model evaluation PMS is a dynamic process that has to be reviewed regularly, based on the latest information and any environmental changes. It is therefore necessary to regularly review the companys operating environment, both internal and external. The model evaluation can be varied based on the level of performance. Evaluations at the shop oor level could be more frequent compared to the strategic level so that the company response is not delayed. Figure 1 shown below illustrates the performance variables chosen for managing this review process. From Figure 1, it can be seen that there are ve levels proposed for managing the performance of a manufacturing company. Level 1 is Financial Perspective that consists of four main performance variables namely Leverage, Liquidity, Protability, and Return on Investment (ROI). With the exception of ROI, each main performance variable includes several sub-variables that basically represent nancial ratio such as Debt Ratio, Cash ratio and Net Prot Margin. Level 2 is about Customer Perspective and consists of three main variables namely Customer Satisfaction, Customer Loyalty and Customer Acquisition. The most appropriate method to manage these variables is through conducting customer survey activities. Hence, in the proposed model the mechanism for checking Customer Perspective is through analyzing commitment, planning, implementation and evaluation of the companys concern. Level 3 is about Manufacturing Competitive Priorities that impact on

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managing manufacturing performance in terms of quality, exibility and delivery. This level contains ve variables to determine the priorities: customer claims, product returns, lost sales, back order and on time delivery. Level 4 is about managing Internal Processes which consists of four main categories: Innovation, Manufacturing Process, Marketing and Post Sales Service. Each category consists of several performance variables such as new product development and R & D spending for Innovation category; reject and rework rate for Manufacturing Process; promotion, advertising and distribution for Marketing category; and quality of service for Post Sales Service category. In total, there are about 20 variables that are included in the Internal Process.

Figure 1. Proposed Variables for Managing Manufacturing Company Performance

Financial Perspective
Leverage Liquidity Profitability Return on Investment (ROI)

Customer Perspective

Manufacturing Competitive Priorities

Innovation Manufacturing Marketing Post sales service

People Machine Method Suppliers Material

Resource Availability

LEVEL 5

LEVEL 4

Internal Processes

LEVEL 3

Quality Flexibility Delivery

LEVEL 2

Customer Satisfaction Customer Loyalty Customer Acquisition

Level 5 is about Resource Availability which is divided into ve main categories namely People, Machine, Method, Material and Supplier, in which each category consist of several performances variables. There are more than 25 variables included in the Resource Availability as a whole. It can be seen from Figure 1, that even though it seems that there is a hierarchical and procedural method from the level 1 (Financial Perspective) to level 5 (Resource Availability) in composing the linkage amongst performance variables, in practice the actual measurement can be done simultaneously. However, differences exist in the response time needed between levels. While the measurement and analysis of the performance result for level 5 can happen more frequently such as weekly or monthly, the measurement and analysis of the performance result for level 1 usually happens annually or at least quarterly. The gure 1 shows the result of input from the Indonesian companies on how the industries can manage themselves and compete globally. It is modied from the Balanced Score Card method that consists of four perspectives, with emphasis on the manufacturing competitive priorities that are quality, exibility and delivery. The choosing of performance variables and how to implement it to the certain environment is of crucial important in the PMS. This is can be based on the statistical data of companies by conducting factorial analysis and analysis of correlation. By doing these two statistical data it can be drawn which variables of companies in the each perspective that most inuence of the performance and appropriate to be implemented. However, not many Indonesian companies have such kind of data, to do so, it can be using AHP to choose the suitable variables based on assumption that these information are discussed to the expert ones in that companies. Table 1 illustrates the example summary of

LEVEL 1

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analytical performance variables that are proposed in the PMS model.

Conclusion
This paper has described the importance of having dynamic PMS to improve manufacturing competitiveness, observe research achievement in the past PMS, and analyze previous PMS frameworks. It has also discussed the important issues in designing appropriate PMS for manufacturing company. Basically, there are nine important factors that should be included in designing PMS for a manufacturing: determining PMS framework, identify company environment, formulating company statement, analyzing current PMS implemented, determining

performance variables, determining causeeffect amongst variables, determining performance standards, determining improvement priority, formulating recommendations, and model evaluation. By implementing the approach suggested in this paper, one could combine any benets from several frameworks and design a tailor made PMS for a company. The new aspects of the proposed PMS model as compared to the previous framework are: First, the proposed model is supported by Knowledge-based/Expert System approach. Second, the benchmarking process and performance standards are provided explicitly for each performance variable based on the GAP analysis. Third, the model is pro-active by providing a list of recommendation for improvement. Fourth,

Table 1. Example Summary of Analytical Performance Variables for a Manufacturing Company

Perspective Financial Indicator Leverage Liquidity Term Debt Ratio Cash Ratio Net Prot Margin Others Customer Manufacturing Competitive priorities Customer needs Quality Flexibility Delivery Internal process Innovation Manufacturing Marketing ROI Customer satisfaction Customer loyalty Customer acquisition Customer claims Lost sales On time delivery New product development Reject rate Advertising vs. Sales turnover Promotion vs. Sales turnover Quality of service Formulation Long-term debt + value of leases . Long-term debt +value of leases + equity Cash + Short-term securities Current liabilities (EBIT Tax) x 100 Sales Net Prot x 100 Total Capital Employed Customer satisfaction survey % of orders/ sales turnover which are from existing customer Number of New Customer Number of product complaints Total products Number of order could not be fullled x 100% Total order Number of product delivery on time x 100% Total product % number product of obsolescence Parts per million defective Expenditure for Advertising Sales turnover Expenditure for promotion Sales turnover % of faults/ complaints that are satisfactorily resolved rst time

Post sale service Resource availability Man Machine Method Material Supplier

Employee qualication Age of technology PMS implementation Inventory Capabilities Quality

Average number of employees with the appropriate professional/ trade qualication Average age of technologies False alarms and Gaps Inventory turnover Number of product accepted x 100% Total product supplied

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the software provided in the model makes the mechanism of implementation much easier, more accurate, and more consistent and provides a recommended list of actions to improve the performance. The contribution of the paper is to provide PMS that most appropriate to Indonesian manufacturing companies where by using previous frameworks such as the BSC, The Performance Prism and others, companies still need to make further improvisation start from dening variables, establishing standard, dening linkage among performance variables and to follow up of the recommendations. Based on the Knowledge-Based system, Factorial and Correlation Analysis, GAP mechanism, the practitioners can improve their companies

competitiveness real time and based on the data. It has been known for almost fteens years that the previous approaches such as the Balanced Scorecard, the Performance Prism, the Baldrige Approach, are most popular method in managing companies performance management. However, in practice, many companies in Indonesia is having difculties to implement them because the methods still requires further adjustments. It could be that for some extent the imported PMS designs are not contextual to their needs. Therefore, this paper gives an alternative to the more practical and systematic approach for Indonesian manufacturing companies to increase their competitiveness.

References
Ahmed, N. U., Montagno, R. V., and Firenze, R. J. (1996) Operations Strategy and Organizational Performance: an empirical study, International Journal of Operations & Production Management, Vol. 16 No. 5, pp. 41-53. AusIndustry (1995), Key Performance Indicators Manual: A Practical Guide for the Best Practice Development, Implementation and Use of KPIs, Pitman Publishing, Melbourne. Basu, R and Wright, N. J. (1997), Total Manufacturing Solutions, Butterworth Heinemann, UK. Cooper, W.K., Kingshuk K.S., and Robert, S.S. (1992) Measuring Complexity in HighTechnology Manufacturing: Indexes for Evaluation, Interfaces No. 22, pp. 38-38. Cross, K. F. and Lynch, R. L. (1988/1989) The SMART way to dene and sustain Success, National Productivity Review, Winter, pp.23-33. Dixon, J.R., Nanni, A.J. and Vollman, T.E. (1990), The New Performance Challenge Measuring Operation for World-Class Competition, lrwin, Homewood, IL. Kaplan, R.S., and Norton, D.P. (1996) The Balanced Scorecard: Translating Strategy into Action, Harvard Business School Press. Kim, J.S. and Arnold, P. (1996) Operationalizing Manufacturing Strategy an Exploratory Study of Constructs and Linkage, International Journal of Operations & Production Management Vol. 16 No. 12, pp. 45-73. Kochhar, A.K., Suri, A.K. and Hather, R. (1991) Design and implementation of a general purpose knowledge-based gap analysis system with particular reference to the implementation of effective MRP systems, C429/051 ImechE, pp. 129-133. Ljungberg, A. (1994) A Measurement of Service and Quality in the Order Process, Thesis for the degree Licentiate in Engineering, Department of Engineering Logistics, Lund University, Belgium.

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Maskell, B.H. (1991), Performance Measurement for World Class Manufacturing, Productivity Press, Cambridge MA. Medori, D., Steeple, D., Pye, T. and Wood. R. (1995), Performance measures: the way forward, Proceedings of the Eleventh National Conference on Manufacturing Research, De Montfort University, Leicester, Taylor and Francis, Basingstoke, UK, pp. 589-93. Medori. D. (1998). The development and implementation of an integrated performance measurement framework, Proceedings of Performance Measurement - Theory and Practice: International Conference, University of Cambridge, Cambridge, pp. 639-46. Neely, A., Mills, J., Platts, K., Gregory, M. and Richards, H. (1994), Mapping measures and activities: a practical tool for assessing measurement systems, Proceedings of the First International Conference of the European Operations Management Association, University of Cambridge, Manufacturing Engineering Group, Cambridge, pp. 313-8. Neely, A. (1999) The Measure Catalogue, http://www.craneld.ac.uk/som/cbp. Saaty, T. L. (1980) The Analytic Hierarchy Process, planning, priority setting, resource allocation, McGrow-Hill, Inc. Skinner, W. (1969) Manufacturing: missing link in corporate strategy, Harvard Business Review, May-June, pp. 136-45. Stoop, P.P.M. (1996) Performance Management in Manufacturing A method for short-term performance evaluation and diagnosis, PhD theses, Technische Universiteit Eindhoven. Wibisono, D. (2003), A Knowledge Based Approach in the Design of Performance Measurement Systems in the Manufacturing Environment, unpublished PhD Thesis,

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Appendix 1. Mapping of Previous PMS Frameworks and Proposed Model

PWCM General overview No 3 perspectives Some in general terms, the others in detail No All type of industry Grouped in 4 big perspectives, each perspective could consist of several variables depending on company managed All type of industry More than 200 individual performance variables No Detailed formulation on each variable 5 perspektives Detaoled formulation on each variables QPMM Stated explicitly One distinct model BSC Stated explicitly Explicit examples from empirical companies data 4 perspectives Prism General overview Framework and distinct model 5 perspectives Proposed Model Explained Explicitly Framework and distinct moel

Research aspect SMART PMQ Procedure to design PMS General overview Stated Explicitly Design of PMS (e.g. framework, One distinct model Framework example, suggestion) Levels/ perspectives 4 levels 2 perspectives General term Not described explicitly General term

Formulation of suggested performance variables

General term

Consideration of current PMS implemented by company Purpose to be implemented in Manufacturing Around 65 individual performance variables Around 15 general variables Manufacturing

No

Yes

No

General term supported by detailed formulation on variables implemented by certain company No

Yes

Number of performance variables suggested

Manufacturing and service company 10 General variables

Manufacturing Industry in Indonesia Grouped in 5 perspectives, each perspectives consist of related several variables

Reasons on choosing variables No No Not discussed explicitly No No Not discussed explicitly

General overview

General overview

General overview

Knowledge-based approach Supported by software Benchmarking process

No No Not discussed explicitly

All types of industry Grouped in 26 categories, each category consists of several exible number of variables Stated explicitly on perspectives frame No No Some performance standards are overviewed in general

Stated explicitly for each variable No No Benchmarking procedures are not discussed explicitly, some performance standards provided

Stated explicitly for eacg variables in kowledge based Yes Yes Performance standard are overviewed and stated explicitly

Linkage amongst variables of different management levels Method to judgement linkage and improvement priorities Improvement recommendations Not provided Not provided Not provided Not provided

Established distinctly Not provided

No

No

Established distinctly Not provided Stated implicitly in discussing model

Stated explicitly on each perspective frame No No The procedures of benchmarking are discussed conceptually, but the standards are not provided for each performance variable Established in the frame of perspectives provided Not provided

Established distinctly Not provided Stated implicitly in each Stated explicitly in the examples provided (empirical variables suggested to be measured data)

Established distinctly Using Factorial Analysis & Correlation method Stated explicitly

Not provided

Wibisono

*Note: SMART = Strategic Measurement Analysis and Reporting Technique; PMQ = Performance Measurement Questionnaire; PWCM = Performance for World Class Manufacturing QPMM = Quantum Performance Measurement Model; BSC = The Balanced Scorecard

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Index

Author Index
Ahmad, Noormala, 5(1): 51 Balqiah, Tengku Ezni, 5(1): 73 Husin, Norhayati Mat, 5(1): 51 Joarder, Mohd H. R., 5(2): 159 Khairani, 5(1): 73 Nguyen, Lam D., 5(2): 135 Richardson, Christopher J. R., 5(2): 91 Sapingi, Raedah, 5(1): 51 Setyowardhani, Hapsari, 5(1): 73 Sharif, Mohmad Yazam, 5(2): 159 Sobri, Riani Rachmawati, 5(1): 37 Sukoco, Badri Munir, 5(2): 119 Syaebani, Muhammad Irfan, 5(1): 37 Thang, Tran Toan, 5(1): 1 Umar. Haryono, 5(1): 19 Wibisono, Dermawan, 5(2): 107

Subject Index
Accountability, 5(1): 19-20, 23-24, 27-29, 32; 5(2): 136 Bangladesh, 5(2): 159-174 Benchmarking, 5(2): 107-115 Brand Community, 5(2): 119-131 Company Reputation, 5(1): 73-74, 77-87 Corporate Social Responsibility (CSR), 5(1): 52, 58-59, 64-65, 73-88 Corruption, 5(1): 19-22, 24-27, 31-33, 44; 5(2): 137 Developing Country, 5(1): 64; 5(2): 91-92, 99 Deviant Workplace Behavior, 5(1): 37-44, 46-48 Distributive Justice, 5(1): 37-39, 41-46 Employee Satisfaction, 5(2): 135, 142, 151152 Export Barriers, 5(2): 91-100 Faculty Turnover, 5(2): 159-173 Financial Management, 5(1): 19-21, 24-25, 27-33 Foreign Direct Investment (FDI), 5(1): 1, 3-4, 8-11, 14-15 Good Governance, 5(1): 19-20, 22, 24, 2729, 32 Human Capital, 5(1): 51, 53-55, 60 Indonesia, 5(1): 19-33, 39, 41, 48; 5(2): 107, 110-115, 119-120, 124, 131 Information Communication Technology (ICT), 5(2): 91-100 Intellectual Capital, 5(1): 51, 55 Interactional Justice, 5(1): 37-39, 41-43, 45 Loyalty, 5(1): 56, 73-74, 76-88; 5(2): 112114, 136 Malaysia, 5(1): 51-67; 5(2): 91-101 Manufacturing Company, 5(2): 107-115 Members/Non-Members, 5(2): 119-131 Model of Goal-directed Behavior (MGB), 5(2): 119-131 Organizational Characteristics, 5(2): 135152 Organizational Justice, 5(1): 37-49 Panel Data, 5(1): 11-12 Performance, 5(1): 11, 19-20, 24, 28-33, 53, 56-59, 62, 67, 76-77, 85-88; 5(2): 92, 94, 107-115, 136-137, 140, 142, 145-146, 149, 160, 162-163, 165-166, 174 Personal Aggression, 5(1): 39, 41-45 Political Deviance, 5(1): 40, 42-45 Private Universities, 5(2): 159-174 Procedural Justice, 5(1): 37-39, 41-43, 45 Production Deviance, 5(1): 40, 42-45 Productivity Spillover, 5(1): 1- 6, 8-16 Property Deviance, 5(1): 40, 42-45 Quality of Life, 5(1): 73-76, 78, 81-96 Small Medium Enterprise (SME), 5(2): 91100 State-Owned Enterprise (SOE), 5(1): 2, 10, 14; 5(2): 135-152 Stochastic Frontier Model, 5(1): 1, 7, 10, 15 Vietnam, 5(1): 1, 2, 10, 13, 15, 16, 57; 5(2): 135-152

179

THE SOUTH EAST ASIAN JOURNAL

OF

MANAGEMENT

Instructions to Contributors
Aim and Scope
The South East Asian Journal of Management (SEAM) aims to present the latest thinking and research that test, extends, or builds management theory and contributes to management practice. Contents of the Journal will be of interest to management teachers, student and researchers as well as to practicing managers and material will be analytical rather than descriptive. Whilst a major focus of the journal is on the Asian countries and management issues connected with it, increasingly, global concerns and conceptual topics will be covered. The Journal does not take a narrow view of business and management and will publish in other disciplines if they contribute signicantly to problems considered by managers and researchers. To be published in SEAM, a manuscript must make strong empirical and theoretical contributions and highlight the signicance of those contributions to the management eld. Thus, preference is given to submissions that test, extend, or build strong theoretical frameworks while empirically examining issues with high importance for management theory and practice. Soft copy of the article should be sent to: Dr. Sari Wahyuni Editor in Chief The South East Asian Journal of Management Departement of Management Faculty of Economics Universitas Indonesia Departement of Management Building, Kampus Baru UI, West Java, Indonesia Phone : +62-21-7272425 ext 503 Fax : +62-21-7863556 Email: seam@ ui.ac.id Manuscripts are reviewed by the editor, members of the SEAM Editorial Review Board, and occasional reviewers. The authors name and afliation are removed before reviewing in order to ensure objectivity. Please do not identify the author(s) in the body of the paper either directly or by citation. With the submission of a manuscript, the following three items should be included: Cover page showing title, each authors name, afliation, complete address, telephone and fax number, and the category of the article. Select one category from the following: Finance, Capital Market, Policy, Accounting, Marketing, Human Resource, Innovation, Strategic, and Organization. 1. Abstract of up to 150 words. 2. Keywords.

Manuscripts
Manuscripts must be double-spaced on 8 1/2 x 11. Manuscript length should be reasonable for the contribution offered.

Mathematical Notation
Notations should be clearly explained within the text. Equations should be centered on the page. If equations are numbered, type the number in parentheses ush with the right margin. Unusual symbols and Greek letters should be identied. For equations that may be too wide to t in a single column, indicate appropriate breaks.

Books: Bagozzy, R.P. (1980), Causal Models in Marketing, New York: Wiley. Journals: Singh, J. (1991), Understanding the Structure of Consumers Satisfaction Evaluations of Service Delivery, Journal of the Academy of Marketing Science, 19 (Summer), 223244. Three or More Authors: Zeithaml, V.A., Berry, L..L., and Parasuraman, A. (1993), The Nature and Determinants of Customers Experiences of Service, Journal of the Academy of Marketing Science, 21 (Winter), 1-12. Article in a Book Edited by another Author: Levitt, T. (1988), The Globalization of Markets, in Multinational Marketing Management, Robert, D.B., and Quelch, J.A. (Eds.), Reading, MA, Addison Weley, 186-205. Unpublished Dissertations: Paterson, K.S. (1985), The Effects of Bilingual Labels in Buyer Behaviour, Dissertation, University of California at Irvine. A copy of the SEAM Journal style sheet is available from the editor on request. For further information, please visit our website http://seam.pascafe.ui.ac.id

Table and Figures

Indicate table placements within text. Camera-ready tables should be typed ush with the left-hand margin and have proper labelling of sources, column headings, and other notations. Once the manuscript has been accepted for publication, complex tables and gures (diagrams, charts, graphs, etc.) should be prepared professionally for camera-ready reproduction.

References
Reference citations within the text should consist of the authors last name and date of publication, without punctuation, enclosed within parentheses, and should be inserted before punctuation and/or at a logical break in the sentence. If several citations are needed, separate them with semicolons, and list alphabetically. If two or more works by an author have the same year, distinguish them by placing a, b, etc. after the year. References should be double-spaced and attached on a separate page. Works by single author, list chronogically; two authors, alphabetically and then chronogically; three authors, the same; four or more, list chronogically. References should be in the following:

About MRC
The Management Research Center (MRC) laboratory was created in March 2006 due to the particular reason of relative weakness on management research in Indonesia. MRC is national research center dedicated to contribute the theoretical, empirical, and practical research in recent management issues. The intention is not only to stimulate research and discussion within scholarly circles, but also to enhance business community and public awareness to stimulate thinking on and exploring solutions in management issues. The MRC is placed to assist local, regional and international scholar and other researcher that provides a congenial and stimulating intellectual environment, encouraging the fullest interaction and exchange ideas. To achieve these aims, the MRC conducts a range of research programs; holds public lecturers, seminars, workshops, and conferences; publishes research journals and books, support research facilities, including data, nancial subsidy and library collections.

research organization and also with private sectors. The eld of these activities from informal discussion group to major international events. Especially for the public lecturer, MRC invites and opens the opportunity for distinguish professor, leaders and CEO of the companies to share their know ledges and their experiences.

Publications
To facilitate timely dissemination of research and commentaries on recent and current developments, MRC produce monographs under the Working Paper Series. MRC also publishes academic journals which is called The South East Asian Journal of Management (SEAM), Indonesia Capital Market Review (ICMR ) and Asean Marketing Journal (AMJ).

Library
The MRC library collaborates with the Graduate School of Management, Faculty of Economics, University of Indonesia. This library has many excellent collections of management studies in Bahasa Indonesia and English, in print and multimedia formats.

Research
Research within MRC covers the elds of interest in: Business Policy & Strategy Entrepreneurship Finance and Banking Gender and Diversity in Organizations International Management Management Education & Development Operations Management Organization Development & Change Organization & Management Theory Organizational Behavior Research Methods in Management Social Issues in Management Technology & Innovation Management

Contact us
MANAGEMENT RESEARCH CENTER (MRC) DEPARTMENT OF MANAGEMENT FACULTY OF ECONOMICS, UNIVERSITAS INDONESIA Department of Management Building 2nd oor. Kampus Baru UI Depok, West Java, Indonesia 16424 Phone : 021- 7272425 ext 503 Fax : 021- 7863556 E-mail : mrc@ ui.ac.id http://pascafe.ui.ac.id http://seam.pascafe.ui.ac.id

Activities
MRC has a program of public lecturers, seminars, workshops, and conferences, organized independently or in collaboration with other

The South East Asian Journal of Management

Faculty of Economics Universitas Indonesia Departement of Management Building, Depok Campus, West Java Phone : +62-21-7272425 ext 503 Fax : +62-21-7863556 E-mail: seam@ui.ac.id http://seam.pascafe.ui.ac.id/