Corporate Governance, the Use of Financial and Non-Financial Data to Sustainable Performance in KSA - Research Proposal Example

Student Name: Instructor’s Name: Title: Proposal The relationship of Corporate Governance, Competitive Strategy, the use of financial and non financial information to sustainable organization performance in Saudi Arabia Course: Institution: Table of Contents The relationship of Corporate Governance, Competitive Strategy, the use of financial and non financial information to sustainable organization performance in Saudi Arabia 1 Table of Contents 2 Background 3 Literature Review 4 Corporate Governance 4 Competitive Strategy 5 Financial and Non Financial Information 6 Sustainability Performance Management 6 The balanced scorecard as a framework for performance management 7 Each one of the perception constitutes a sequence of performance events, aims and objectives that replicate the company’s protracted period plans. The financial outlook captures the view point of company stakeholders and characteristically applies traditional financial procedures like operating currency surges, income on assets and transformation in the operating earnings over a period of time. The client perception tackles the merchandise and company’s demarcation approaches incorporating it with significance conception to suit organization’s client support. Hence the client perception consists of non financial actions such as market allocation, consumer fulfillment and product or service delivery that form an important aspect of future economic accomplishment (Janet, 2011). 8 The interior business viewpoint encompasses procedures of the efficiency and efficacy of the company’s processes. It includes non financial dealings of product and service worth, manufacture or performance phase moment and process quality outcome. Lastly the knowledge and expansion perspective emphasizes on the establishment of organizational significance with the use of human resources and inventive performance. Thus non financial metrics in this perspective relates to employee turnover, employee cross-training and skill levels. It is important to note that each perspective eventually is reproduced in the financial angle. A company will therefore be able to realize its financial objectives through ensuing success in fulfillment of its clients, optimizing interior processes and being continually inventive (ANZMAC 2009) 8 Research objectives and aims 8 Research Hypothesis 9 Research Methodology 10 Conclusion 11 Bibliography 13 Background The ability of a company to accomplish its goals and objectives that translates to its realized results in comparison to other companies is referred to as performance. Performance in combination with sustainability is also regarded as capacity to achieve all-inclusive outcome within a given period of time. Consequently a company’s capability to exhibit excellent results within different achievable ends constitutes comprehensive performance. The amalgamation of ESG comprises of the investigations of ecological factors, social and corporate governance together with perceived company hazards and prospects. These factors greatly influence the success and sustainability of any given company. The Balanced Score Card (BSC) structure will be used in the stipulation of a transparent client emphasized model that will allow and facilitate Saudi Arabia listed companies to uphold competition and contractual exposure necessary for sustainable performance management process (ANZMAC 2009). Hence this research will seek to determine the relationship linking corporate governance, competitive strategy, the use of both financial and non financial information with the performance and sustainability of companies in Saudi Arabia. Furthermore the research will evaluate the effects of the above factors in relation to a company’s success and sustainability. Literature Review Corporate Governance Corporate governance is the ability of companies to adequately control and stabilize the financial, social and ecological impacts of its behavior. Thus it outlines a core business procedure of any company. In recent years, the degree that a company should consider social and environmental features in the process of assessment rather than focusing entirely on capitalize on short time accounting proceeds has been a vital discussion. Studies have indicated that corporate social conscientiousness is gradually becoming an essential aspect in drawing and maintaining a well endowed and assorted labor force hence the final outcome; elevated intensity of output (Globescan Inc 2005). In addition corporate social responsibility acts as a basis to react to environmental and communal hazards and revolve them into business prospects hence increasing and maintaining a company’s performance. Generally companies function in a market of attitude. Thus it also presents a means through which companies can deal with and influence the outlooks and opinions of their stakeholders while structuring their faith and constructing an affirmative associations that will bring about business benefits. Furthermore it tenders a supplementary valuable management of jeopardy whilst aiding companies in diminution of unnecessary losses, discover fresh budding concerns and exploit positions of management as a way to achieve competitive improvement. Corporate social responsibility presents prospects of dropping both current and upcoming expenses to the company and in the process enhance operational competence and advance prosperity (CAMAC, 2006). Competitive Strategy Globalization has resulted to the world to be regarded as a global village and inter-reliant. Due to the adverse effects of globalization process rivalry between different companies has been elevated particularly in the recessionary era. As a result of experiencing this pressure companies engage in competition and retain their business through enhancing their competitive advantage. Studies have indicated considerable connection involving competitive approach and company’s performance or success (Kocmanova & Docekalova 2012).The choice of a suitable competitive plan that is appreciated by the company and the organization structure is vital for the reason that firms employ it to achieve the competitive advantage. Furthermore it affects the competitive power and company’s performance. The management system is vested with the major role of mounting a premeditated plan and appraising the achievement of the company’s goals and objectives for their eventual success. Strategy choice of a company is considered to be important in clarifying on their profitability. Hence competitive strategy comprise of cost leadership and differentiation. The former is incorporated set of procedures employed in the production goods or services with exceptional characteristics that are suitable to customers at an affordable cost as compared to the opponent so as to gain more profits. The latter is production of goods or services at a satisfactory price that consumers distinguish as being diverse in conducts that are essential to them. Financial and Non Financial Information Performance management is a structure that is founded on assessment of both financial and non financial pointers that are referred to as Key Performance Indicators. These pointers constitute an all-inclusive process plan that is completely incorporated into the management system with a future direction. A non financial key performance indicator plays a major role in facilitating companies to gauge their outcome towards sustainability. Through integrating the major performance pointers into their practices, the companies are capable of accomplishing a broad perceptive of planning their commercial sustainability aspirations (Kocmanova & Docekalova, 2012). Sustainability Performance Management This structure is aimed at sustainable business focal point on financial, ecological and social characteristics of corporate governance in order to achieve sustainability. It highlights on the connection between environmental and social management together with economic governance and competitiveness whilst it engages to incorporate environmental and social information with economic performance. For that reason companies will approve the models of sustainable development if it will add to the economic success in opulence of interrelationship of environmental, economic and social performance Organizational strategy comprises value establishment that translates to profits over costs (Hubbard, 2006). The balanced scorecard as a framework for performance management The BSC summarizes essentials of strategic management that translates financial and non financial perceptions into performance procedures. Furthermore, unlike other approaches that are finance centered, the BSC allows for the incorporation of the human feature. According to Martello et al. (2008), the BSC structure presents the possibility of surveying marketing prospects in order to establish an affirmative reflection, hoist public understanding, progress client and stakeholder fulfillment and elevate returns (Martello et al 2008). Hence the rationale behind BSC is to amalgamate information and facts gathering, interactive statement, accountability with performance supervising. For that reason BSC should be developed as a consistent gauge to inform resource distribution, control of service delivery, upcoming knowledge, expansion and advancement. Thus the BSC approach merges both the financial and non financial procedures in the interior corporate exposure course that allows companies to appraise the effectiveness of strategic policies and proceedings. According to Janet (2011), BSC generally reveals four interconnected approaches of a given company: Monetary Client Interior business procedures and knowledge and expansion Each one of the perception constitutes a sequence of performance events, aims and objectives that replicate the company’s protracted period plans. The financial outlook captures the view point of company stakeholders and characteristically applies traditional financial procedures like operating currency surges, income on assets and transformation in the operating earnings over a period of time. The client perception tackles the merchandise and company’s demarcation approaches incorporating it with significance conception to suit organization’s client support. Hence the client perception consists of non financial actions such as market allocation, consumer fulfillment and product or service delivery that form an important aspect of future economic accomplishment (Janet, 2011). The interior business viewpoint encompasses procedures of the efficiency and efficacy of the company’s processes. It includes non financial dealings of product and service worth, manufacture or performance phase moment and process quality outcome. Lastly the knowledge and expansion perspective emphasizes on the establishment of organizational significance with the use of human resources and inventive performance. Thus non financial metrics in this perspective relates to employee turnover, employee cross-training and skill levels. It is important to note that each perspective eventually is reproduced in the financial angle. A company will therefore be able to realize its financial objectives through ensuing success in fulfillment of its clients, optimizing interior processes and being continually inventive (ANZMAC 2009) Research objectives and aims To investigate the relationship between competitive strategy, performance measurement and organizational financial performance on Saudi Arabia listed companies To investigate the need for companies to integrate corporate governance, competitive strategy, use of both financial and non financial information so as to enhance sustainable organization performance in Saudi Arabia companies To carry out literature reviews on how different companies can enhance their performance hence remain in competitive market and gain returns or profits in regards to Saudi Arabia listed companies Research Hypothesis Hypothesis 1: Corporate governance, competitive strategy and the use of both financial and non financial information have a constructive impact on organizational performance Hypothesis 2: Corporate governance, competitive strategy and the use of financial and non financial information are positively interrelated to performance measures Hypothesis 3: There is a circumlocutory affirmative association between a strategic importance on competitive policy and organizational performance through the exploitation of performance procedures. Research Questions 1. What are the impacts of corporate governance, competitive strategies and financial and non financial information in the sustainability and performance of companies? 2. Do the above mentioned factors contribute positively or negatively to the organization? 3. How do corporate governance, competitive strategies and both financial and non financial information enhance the performance sustainability of organizations? Research Methodology The anticipated outcome of the practical research will involve the examination of financial setting, social and Corporate Governance features Performance Company. Scrutinize, evaluate and classify modern uniqueness of the character stakes: economic, ecological, social and corporate governance in relation to the quantification of growth or dynamics of expansion of the general company performance. Hence this research will use the Balance Score Card as illustrated below to investigate the relationship between corporate governance, competitive strategy and the use of both financial and non financial information to organizational sustainable performance among Saudi Arabia listed companies. The Relationship of Corporate Governance Competitive Strategy; the Use of Financial and Non-Financial Information to sustainable Organizational Performance Conclusion This research will provide a framework of exploring BSC in different perspectives while interconnecting various aspects that enhance sustainable performance process. Hence the mult-dimensional structure of performance management will permit companies to operationalize performance information gathering from four diverse but interconnected viewpoints and consequently implement performance management devoid of jeopardizing service delivery. Given the involvedness of perceptions, undeveloped existing circumstances of coverage and the current deficiency of information on matters that may necessitate to be accounted, uncomplicated resolutions will deem to be essential so as to compose this nature of exposure understandable to an extensive faction of stakeholders who have vested interest and affected by the procedures of the organizations. Bibliography CAMAC, Corporations and Markets Advisory Committee 2006, The Social Responsibility of Companies, December, Sydney. Globescan Inc 2005, Definition of corporate social responsibility survey, Retrieved on 14 November, 2012, . Hubbard, G, 2006, Sustainable organisation performance: Towards a practical Measurement system. Graham Monash Business Review Volume 2 Issue 3. Kocmanova A., Nemecek, P. Docekalova M. 2012, Environmental, Social And Governance (Esg) Key Performance Indicators For Sustainable Reporting. 7th International Scientific Conference “Business and Management 2012” Al-Nodel, A. & Hussainey K., 2012, Corporate Governance and Financing Decisions by Saudi Companies. College of Economy and Administration, Qassim University. ANZMAC 2009 The balanced scorecard as a framework for performance management in the Non-profit sector. Teeratansirikool, L. & Siengthai S. 2012, Competitive strategy, performance measurement and organizational performance: empirical study in Thai listed companies Janet B., 2011, Balanced Scorecard: Integrating Green Measures into Business Reporting. Management Accounting Quarterly Winter, Vol. 12 No. 2 Martello, M., Watson, J. G. and Fischer, M. J., 2008. Implementing A Balanced Scorecard. In A Not-For-Profit Organisation. Journal of Business and Economics Research (September). Read More