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  • 1. POPPPerformance Management System of Public-Private Partnership organization: A Case of Norwegian Microfinance Initiatives (NMI). Course Code: VT302E Student name Candidate number Kesav Neupane 132 Suman Nepal 114 BODO-2011 1
  • 2. Table of Contents1. Introduction………………………….………………………………………..32. The Frame of Reference………………………………………………………5 2.1. Overview of the Model……………………………...……………………53. Research Methodology………………………………………….…………….7 3.1. Research Design…………..………………………………………...…....8 3.1.1 Understanding Philosophical Issues……..…….……………..…8 3.2. Research Choices……. ……………………………………………….…9 3.2.1 Involvement of Researcher……………………………………..10 3.2.2 Testing Theories…………………………………………………11 3.2.3 Experimental design or fieldwork……………………………….11 3.2.4 Verification Vs Falsification…………………………………….12 3.2.5 Sampling………………………………………………………….13 3.3. Purpose of the study………………………………………………………..14 3.4. Qualitative Vs Quantitative Method………………………………………..15 3.5. Unit of Analysis…………………………………………………………….16 5.6. Ethical Consideration……………………………………………………….16 3.7. Data Collection Method…………………………………………………….17 3.7. Inconsistencies of the Research Methodology………………………………19 References……………………………………………………………………….20 Appendix…………………………………………………………………………23 2
  • 3. 1. IntroductionOur specialization is on Management Control System (BE314E).The measurement of theperformance of business (and other) organization has long been of central interest to bothmanagers and management accounting researchers (Otley .,1999). Empirical research hasbasically focused on issues related to the diversity of performance management and theconcept of ‘Use’. For instance Aldonio Ferreira and David Otley developed a new extendedframework that is: The design and use of Performance management system: An ExtendedFramework for analysis. This paper uses the framework for analyzing the design and use ofPerformance Management System (PMS) in Public-Private partnership and we have selectedNorwegian Microfinance Initiative (NMI) for our study. The concept of Public-privatepartnership (PPP) has been a hot issue in late 20th century and we do understand thatknowledge of PPP, management control and PMS is worthwhile to gain, since to a largeextent, these three topic are interrelated with each other and also there is lack of conceptualframework to study design and use of PMS with regard to PPP. So we are more interested onexploring our framework with regard to Norwegian Microfinance Initiative.The conceptualization of PMS in this paper is based on the work of Fitzgrald et al. (1991),Fitzgerlald and Moon (1996), Otley (1999) and Ferreira and Otley (2009) that PMS areconcerned with defining, controlling and managing both the achievement of outcomes or endsas well as the means used to achieve these results at a societal and organizational, rather thanindividual level (see Broadbent, J., Laughlin R., 2009). The concept of PMS is moreestablished by following view PMS is the evolving formal and informal mechanisms,processes, systems, and networks used by organizations for conveying the key objectives andgoals elicited by management, for assisting the strategic process and ongoing managementthrough analysis, planning, measurement, control, rewarding, and broadly managingperformance, and for supporting and facilitating organizational learning and change (SeeFerreira A., Otley D., 2009). Hence this paper uses the term performance management systemto encapsulate these more general processes. Since it is a case study the understanding of casestudy as research method is based on the definition of Yin, R. K (2003) as ‘an empiricalinquiry that investigates a contemporary phenomenon within its real life context, when theboundaries between the phenomenon and context are not clear, and in which multiple sourcesof evidence are used’ (cited from Zainal, Z. 2007) 3
  • 4. From the research it appears that organizations with formal performance managementoutperform organizations without it. Beyond this, things become more confused (Fitzgrald etal. 2007). PMS was realized more important than organizational measurement forimprovements in organization because PMS was able to understand the company’s strategy,organization and process for evaluation and accountability. It was more capable to identifyobjectives, provide relevant information, monitor them and translate strategy into a set ofobjectives. Therefore we felt PMS as a good research topic to add some knowledge and viewa microfinance institute through the eyes of extended framework of Ferreira and Otley. Thus,the main aim of our research is to describe and analyze how PMS is designed and used inpublic-private partnership organization in the case of NMI.The Norwegian Microfinance Initiative (NMI) was established in 2008 as cooperationbetween the public authorities and private investors in Norway. Norfund, the NorwegianDevelopment Finance Institution, represents the Government of Norway, and the privateinvestors consist of DnB NOR. NMI consists of NMI AS, the NMI Global Fund and the NMIFrontier Fund. These funds were established under Norwegian law as limited partnerships.NMI was established as a private limited company to act as the general partner for the NMIfunds with the mission to contribute to the empowerment of poor people and to the creation ofjobs, wealth and economic social sustainability in developing countries by investing in andsupporting MFIs ( http://www.nmimicro.no/index.php?section=0The most recent study on the design and use of PMS has been done by (Ferreira A., Otley D.,2009). We found the paper relevant for our research question so we have used the same in ourproject paper. Our research is on the investment institution in the field of microfinance. Theresearch method followed in this work is the Case study method. Our research questions areas follows.Research Questions 1. How performance Management System (PMS) are designed and used in Norwegian Microfinance Initiatives (NMI) 2. What are the challenges of designing and implementing PMS? 4
  • 5. 2.The Frame of ReferenceIn this section of our POPP we will talk about theoretical framework which will hopefullyanswer our research question.Overview of ModelsOtley (1999) and Ferreira and Otley (2005) argue that there needs to be greater conceptualunderstanding of PMS before detailed measurement in considered. Otley (1980, 1999) andFerreira and Otley (2005) have done more than most to take forward the conceptualunderstanding of PMS and it is their model which forms the starting point forconceptualization in this paper. Otley (1999) and Ferreira and Otley (2005) build theirconceptual model of PMS empirically by drawing from an analysis of management controlsystem in a range of organizations. Otley (1999) poses his conclusion from this analysis interms of five ‘issues’ or ‘questions’ that need to be answered by any organization in relationto the design and nature of its PMS. This is extended in Ferreira and Otley (2005,2009) totwelve questions – Eight of which relate to PMS design and the other four to issues andquestions related to what they refer to as the underlying ‘culture and context’ which are seento influence the nature of the PMS in any organization.Many writers, Fitzgerald et al (1991) and Fitzgerald and Moon (1996), Otley (1999), buildand develop the initial work of Otley (1987), seeking to provide a development of this broaderconceptualization. Otley ( 1999:365) reshapes understanding to develop ‘…………..five mainissues that need to be addressed in developing a framework for managing organizationperformance.’ They posed as questions on the grounds that empirical answers to thesequestions would, according to Otley, supply insights into the design of particular PMS.As Otley (1999:366) makes plain ‘………..these questions relate very closely to some of thecentral issues of modern management and management accounting practice.’ They also givemore conceptual definition to the management of results (ends) (questions 1 and 3) and themanagement of the determinates of these results (means) (issues 2, 4 and 5). It is alsoapparent that the HRM understanding of PMS is also swept into Otley’s framework in issue 4but with an acknowledgement that ‘rewards’ needs to be ‘……….understood in the widestpossible sense, and not restricted to just short term financial rewards’ (Otley, 1999:366).Ferreira and Otley(2005) develop Otley’s (1999) framework in a number of ways. First, theyrename PMS, Performance Management and Control Framework (PMC). Second, they add 5
  • 6. another dimension to the understanding of PMS by drawing from Simons’ (1995) concept of‘Levers of Control’. Third, they draw from a further set of case studies data that can be usedto help reform the insights of Otley (1999) and Simons (1995) into a more developedconceptual framework of PMS. Forth, they expand the five questions to twelve – eight ofwhich relate to more functional concerns about PMS design and four to more ‘contextual andcultural’ factors which underpin and to an extent guide the more functionalconcerns.(J.Broadbent, R. Laughlin., 2009)Questions 1, 2 (in part) 5 and 6 are concerned with the results (ends), the means to achievethem can be seen in questions 2 ( in part), 3. 4, 7 and 8. It is also possible to see that the HMRemphasis is expanded in this framework relative to Otley (1999) with questions 7 and 8 beingaligned to these HR concerns.Ferreira and Otley (2005:41) position these questions in what they refer to as an underlying‘culture’ and ‘context’ since these ‘……..permeate the whole of the performance managementand control (PMC) system’ but ‘……are not addressed by the above questions.’ Drawingfrom a range of literature from Perrow (1967) to Chow, Harrison, McKinnon and Wu (1999),Ferreira and Otley (1999:41) point out that it has been ‘…..shown that variables relating toexternal environment, strategy, culture, organizational structure, size technology andownership structure have an impact on the control system’.Their understanding context and culture is expressed in terms of a further four questions thatneed to be considered to help understand the design of any PMS in any organizationalcontext.The twelve questions around which Ferreira and Otley’s (2005:41) PMS framework is buildprovide ‘………..an heuristic tool to facilitate the rapid description of significant aspects ofcontrol systems design and operation’.This figure (Appendix B) illustrates that the actual PMS is at the core of any organizationwith the design guided by the eight functional questions which are closest to this centre point.These questions, in turn, are modeled by four further questions related to culture and context –mapped in the outer rim of the figure (Appendix B), being somewhat distant from the actualPMS design but moulding its nature.Unquestionably the framework of Ferreira and Otley (2009) has made considerable progressin defining the generic, conceptual nature of any PMS. This following, however, develops 6
  • 7. three areas in a more detailed fashion. First, we wish to be clearer about the focus of anyPMS. The second and third areas of development relate to Ferreira and Otley’s (2005:41 etseq) elements of ‘context’ and ‘culture’ which, whilst rightly recognized in their frameworkas being significant, needs further explication. However, according to Simons (1995), Management Control System are the formal,information based routines and procedures managers use to maintain or alter patters inorganization activities. A number of MCS definitions have been proposed in recent years.While Simons (1995) views Management Control Systems as the means used by top levelmanagers to successfully implement their intended strategies, others have definedManagement Control Systems as the systematic use of management accounting in conjunctionwith other forms of control such as personal or cultural controls to achieve some goals. Simons (1995) contribution in terms of his Lever of Control (LOC) seemsconsiderable, PMS can provide such valuable information to allow managers to trail their ownperformance and evaluate employees’ performance in an effective manner. Simons’ conceptsof diagnostic and interactive use have substantial commonalities with other concepts found inthe literature. According to Simon (1995, p. 151), contains interactive uses of PMS by toplevels in two ways: generating discussion and promoting a positive information environmentthat persuade information sharing. Thus, a simple interpretation of interactive control asstrategy- sense making and communication of strategy is made. He puts forward two levels oforganizational learning (i. e. single loop and double loop). The single loop inspires acybernetic logic designed to recognize and correct inaccuracy of operations to ensure theattainment of original objective. Even though diagnostic use of PMS can be expected to bebest for corrective action, it may not encourage dialogues that generate greater innovativeways of actions. For our research we are going to use Ferreira and Otley (2009) and Simon(1995) as frame of reference.CHAPTER 3: RESEARCH METHODOLOGYThe main intention of this chapter is to depict how the study was designed and conducted. Thechapter is partly written in a theoretical vein and partly written in a ‘‘pragmatic research’’vein to reveal some of the practicalities of the study. The issues addressed concern researchdesign, purpose of the study, qualitative vs quantitative methods, and data collection methods.Finally some methodological inconsistencies of the research discussed. 7
  • 8. Note: we have done our POPP work on Norwegian Microfinance Initiative finance, so far wehave already done two interviews and we will do more interviews on our thesis. You will seesome grammatical awkwardness which results due the confusion arising from presentperfect tense and future tense.Type of research question determines different methods of investigation. The discussion thatfollows will establish the idea.3.1 Research DesignResearchers offer different opinions on what should be included in an explanation of theresearch design. In our opinion research design examples include case-study design, survey,description etc. we believe that in order to develop a complete research design it is valuable tounderstand the nature of this issue from philosophical viewpoint first.3.1.1 Understanding Philosophical issuesUnderstanding Philosophical issues before a study is very important. Philosophical issues helpto clarify research design; more specifically it saves researchers on going too many blindalleys (Easterby et. Al 2008).Philosophies have been developed in both classical and contemporary forms to effectivelyguide actions. Denzin and Lincoln (2003) describe three major research paradigms inphilosophy of science formed from basic ontological and epistemological positions. They are:positivist, interpretivist /constructivist and relativist. After the fundamental understanding ofall three philosophical grounds we came to the conclusion that to conduct this research socialconstructivism suits best. Therefore, we go to the reason behind the choice now.The position of constructivist has been described by Hatch and Cunliffe (2006) as anti-positivist and as post-positivist by Blaikie (1993). It has been developed in reaction to thelarge application of positivism to the social sciences (Easterby et. Al 2008). There is afundamental difference between the subject matter of natural and social sciences. In socialworld it is argued that individuals and groups make sense of situation based upon theirexperience, memories and expectations. Meaning therefore is constructed and constantly re-constructed through experience resulting in many differing interpretations. It is these multipleinterpretations that create a social reality in which people act. Therefore constructivist arguesthat ‘reality’ is not objective and exterior, but is socially constructed and given meaning by 8
  • 9. people. Social constructionism is one of a group of approaches that Habermas (1970) hasreferred to as interpretive method (Easterby et. Al 2008). Hence, the essence of socialconstructionism is that ‘reality’ is determined by people, focus should be on what people,individually and collectively think, feel and communicate. The center of researcher is onunderstanding the meaning and interpretations of ‘social actors’ and to understand their worldfrom their point of view, is highly contextual and hence is not widely generalisable (Saunders,Lewis and Thornhill, 2009).In our research social constructionist approach is best suited. We cannot gather and analyzedata with positive assumptions: being, independent, value free observation can make ourresearch incomplete. Our research involves the experience of people using PMS, designinguser friendly PMS, challenges involving in designing and using PMS is possible only whenwe are aware of the background of the company, employees, experience of managers, wecommunicate with employee, owner, managers, customer etc. After the completion of ourresearch we purpose some general statements on certain criteria based on our knowledge ofthis particular case which could be some ground for further research. Philosophical groundsallow us to do so. This is supported by (Easterby-Smith et al., 2008) by arguing socialconstructionist usually aim at, increasing general understanding of the situation, by gatheringrich data from which ideas are induced.3.2 Research ChoicesEasterby- Smith, Thorpe and Lowe (1991, 2008) claim that research designs are aboutorganizing research activity, including the collection of data, in ways that are most likely toattain the research aims. There are many probable choices to make when developing aresearch design, and there are few algorithms, which can direct the researcher into making theultimate choices for a particular situation. However, many of these options are allied quiteintimately to different philosophical positions, and a consciousness of this can at least ensurethat the different elements of a research design are consistent with each other. Jacobsen(2000) argues that the choice of research design involves two main options. Firstly, one has todecide if the research is intensive or extensive. Secondly, one decides if the research isdescriptive or casual.Smith, Thorpe and Lowe (1991, 2008) describe five choices that are of particular significance.According to them, the first four relate closely to the basic dichotomy between the use of 9
  • 10. positivist and social constructionist approaches and the last is a debate located mainly withinpositivist paradigm. (See figure 3.2)Adopted from: Easterby-Smith, Thorpe and Lowe (1991, 2001)Research is independent vs researcher is involvedTesting theories vs generating theoriesExperimental design vs Fieldwork methodsLarge samples vs Small numbersVerification vs FalsificationWe will give short discussion of these choices; the practical comments for our research aregiven after theoretical discussion. We would like to concentrate more not on descriptions, butrather on comparisons of different research option.3.2.1 Involvement of researcherAccording to Smith, Thorpe and Lowe (2008), the first choice is whether the researchershould remain distanced from, or get involved with, the material that is being researched.Sekaran(2000) also provides the same discussion, but uses the term ‘researcher’s inference’.She claims that extent of researcher inference has a straight bearing on whether a casual orcorrelational study is undertaken. The traditional assumption in science is that the researchermust preserve total independence if there is to be any validity in the results produced. Inother words, logical positivists hold that a study is valid only when value-neutral observationtakes place. Easterby-Smith, Thorpe and Lowe (2008), describe also the concept of actionresearch, which supposes that any social phenomena are frequently changing rather than still.Many people schooled in positivist research methods are doubtful about the worth of actionresearch but as Susman and Evered (1978) point out, action research is bound to be foundwanting if it is considered against the criteria of positivist science; whereas it is perfectlyjustifiable from the view point of other philosophies, such as phenomenology (Smith, Thorpeand Lowe, 2001). Gummesson (2000) provides a thorough discussion of action. Oneimportant conclusion of the action science discussion for us is that ‘qualitative, informal, in-depth interviews and the anthropological/ethnographical methods of observation andparticipation are important as part of action science.’ 10
  • 11. As for our research, some questions will need our involvement while others will not. We havenoticed, sometimes it is not possible to find the answer to my questions in secondary datasources. Then we conducted interviews and we have more interviews to be taken. Ourinterviews were of semi-structured and unstructured nature. The interview guide is presentedin Appendix. As questions of our interviews were rather open-ended and implied in-depthdiscussions, our involvement into process was rather high.3.2.2 Testing TheoriesAccording to Smith, Thorpe and Lowe, (2008), the second choice is about which shouldapproach first: the theory or the data. One view is that one should initiate with a theory, orhypothesis, about the nature of the world, and then look for data that will confirm ordisconfirm that theory. An opposite is co-called grounded approach, which was firstoriginated in a classic book by Glaser and Strauss (1967), and seeks the key task of theresearcher as being to develop theory thorough ‘comparative method’. The main theoreticalbenefit of grounded approach is that it allows ‘finding the truth’; the main practical advantageof grounded approach is flexibility in providing both explanations and new results. The maindisadvantages are time-consuming, the fear of insignificance of findings, lack of clearness andstandardization of methods. As for the ‘hypothesis testing’ approach, the main practicaladvantage is that there is preliminary clarity about what is to be investigated, and henceinformation can be collected quickly and competently. Clarity means that it is easier foranother researcher to replicate the study which enhances the possibility of generalization, andhence any claims arising from the research can be subject to public examination (Easterby-Smith, Thorpe and Lowe 2008). The main theoretical disadvantage are that its contributionmay be quite irrelevant, conforming what is already known, at the same time, if the results areopen to doubt or negative, the approach can give little guidance on why this is so (Easterby-Smith, Thorpe and Lowe (2008).As to our research, we have carried out literature search of several articles and texts aboutNMI and management control in NMI in the theoretical part. Then we formulated researchquestions and will test them in empirical and analysis part.3.2.3 Experimental designs or fieldworkMany researchers face this problem in the research design. For example, Sekaran (2000) usesother terms for this selection: contrived (experiments) and non-contrived (field) study 11
  • 12. settings. Experiments are one of the key basics of scientific method. Classic experimentalmethod involves assigning subjects at random to either an experimental or a control group.(Easterby-Smith, Thorpe and Lowe 2008). These authors argue that these methods work whenthere is a ready supply of respondents upon whom to conduct the experiments. They are verymuch harder to conduct within real organizations, or where there is no confined populationfrom which to draw volunteers. A more superior design for experiments is ‘quasiexperimental’ design. One of the most widespread methods is the ‘pre-test/post testcomparison design’. This has some weakness. For example, the design assumes that ‘nothing’occurs to the control group during the period that the treatment is being given to theexperimental group.The option to experimental and ‘quasi-experimental’ designs is fieldwork, which is the studyof real organizations or social setting. One example is ethnography. Here, the researcher triesto throw himself or herself in setting and to become part of the group under study in order tounderstand the meaning and significances that people put upon their own behavior and that ofothers. (Easterby-Smith, Thorpe and Lowe 2008).In our research design we employ fieldwork while conducting interviews with NMI staffs. Wecannot argue that my research can be described in ethnography paradigm. We will beconducting in-depth interviews with NMI staffs and will observe the design and use of PMSsthrough reports etc.3.2.4 Verification vs. FalsificationWe would like to comment the selection between verification and falsification, as we arereally interested in this issue. The problem of verification vs falsification was a central matterof the scientific debates during XXth century. So called logical-positivists, being inspired byprogress of natural sciences were trying to apply the ideas and methods from natural scienceinto social science, thus, trying to verify theories. The main challenger of such an approachwas K. Popper (1959). Popper was a positivist initially, but was trying to explain socialscience paradigm from another point of view. Popper claims that there is nothing we can call‘plain facts’, for example, one can examine a bottle with liquid inside and conclude thathe/she observes a glass bottle of water. In reality, it can be a bottle of plastic and there couldbe another kind of liquid inside. Another problem of interest of Popper was a problem ofinduction. He says that if we observe the sun rise 365 days, we cannot make us to concludethat we will observe the sunrise at the very next day. The solution that Popper proposes to 12
  • 13. these problems is not to verify, but rather falsify the theories. Then, according to Popper, wecan try to implement positivism to social science.The main conclusion that could be done after the preceding discussion is that in reality thereis no pure perfect choice between these two groups of choices. At the same time we believethat the previous discussion provides some insights to our research problem, though the imageis not absolutely clear yet. It is necessary to purify that in some way. We see our research asbeing in more phenomenological paradigm then in positivist paradigm. The question ofapplying methods from natural science to social science was a matter of discussion amongphilosophers and methodologists during the last century. Some researchers were suspiciousabout possibility of such application. Anyway this not a focus of our study here.Researchers are disagreed about what should be included into research design description. Forexample, Easterby et al (2008) do not include the choice of qualitative vs quantitativemethods, data collection methods, unit of analysis etc.., because it has much to do with doingand completing the research, not designing. We are not totally agree with that; consequently,in the section below, we are going to touch upon some other important issues, such as purposeof the study, data collection methods and qualitative vs quantitative methods.3.2.5 SamplingA third design choice is whether to try to sample across a large number of organizations orsituations, or whether to concentrate on a small number of situations and attempt to examinethem over a period of time. According to Smith, Thorpe and Lowe, (2008), this is essentiallya selection between cross-sectional or longitudinal design. This is the importance of timehorizon, thus distinguishing between one-short (cross-sectional) and longitudinal researches.Cross sectional designs usually entail selecting different organizations, or units in differentcontexts, the investigating how other factors vary across these units. The main advantage ofcross sectional designs is that they have the ability to describe economic features of largenumbers of people or organizations. According to Smith, Thorpe and Lowe, (2008), there aretwo limitations of cross-sectional designs as well: 1. They do not enlighten why correlation exist; 2. They have difficulty in getting rid of all the external factors which could possibly have caused the observed correlation. 13
  • 14. On the other hand, the main practical benefit of the longitudinal design is that it can createsignificant results from a very small number of cases and this can trim down the problems ofgaining access if the research is to be carried out in organizations. The difficulties are that it isextremely time consuming and complexity of data necessitates very high skill from allresearchers involved (Smith, Thorpe and Lowe, 2008).As to our research, we have studied little bit and we will study one particular organization(Norwegian Microfinance Initiative) for rather long period of time. However, we cannotalways take into account changes that appeared during our research. To be precise, anaccurate picture of what the NMI has changed since we commence our research. This can beone of the methodological weaknesses of the thesis.3.3 Purpose of the studyDifferent research methods have different purposes. One method in a study might not fulfillall the purpose of the study. We distinguish between four types of purposes for research basedon Robson’s (2002) classification:Exploratory-  To find out what is happening, particularly in little understood situations  To seek new insights and generating ideas and hypotheses for new research.  To ask Questions, to access phenomena in a new lightDescriptive-  To portray an accurate profile of a person, events or situations  Requires extensive previous knowledge of the situation etc. to be researched or described, so that you know appropriate aspects on which to gather information.Explanatory-  To seek an explanation of a situation or a problem, traditionally but not necessarily in the form of casual relationships.  To explain patterns relating to the phenomenon being researched  To identify relationships between aspects of the phenemon. 14
  • 15. Improving-  Trying to improve a certain aspect of the studied phenemon Our research design is conceived as exploratory with descriptive elements. It is clarified below. Exploratory: To find out what is happening in NMI regarding the design and use of PMS. To see new issues in the investment institution, to ask questions, to generate ideas and hypotheses for further research. Descriptive: Portraying situation or phenomenon requires extensive previous knowledge of the situation etc. to be researched or described, so that appropriate aspects to gather information are known. Since we use case study methodology, which was originally used primarily for exploratory purposes, and some researchers still limit case studies for this purpose, as discussed by Flyvbjerg (2007). However we, use this method for exploratory with descriptive purpose.3.4 Qualitative vs Quantitative methodsThe choice of methodology as the way the problem is being treated can be differ from oneresearch to another. One can distinguish between qualitative and quantitative research, orqualitative and quantitative inquiry. (Cresswell 1998).Mostyn(1985) summarizes the differences between quantitative and qualitative researchstrategies. They are presented in Table below:TABLE: THE MAJOR DIFFERENCES BETWEEN QUANTITATIVE ANDQUALITATIVE METHODSSource: Mostym (1985), The Content analysis of Qualitative Research Data: A Dynamic ApproachAspect Quantitative Qualitative 1. Sample Large, hundreds of thousands Small, typically less than 100 2. Interview length short, less than 1 hour Long, longer than 1 hour 3. Questioning Structured Following respondent reaction 4. Objective Refinement of existing data Expansion of existing data 5. Analysis Statistical Content analysis 6. Report based on Statistical summaries, ‘‘what?’’ Theories of motivation, ‘‘why?’’ 7. Reliability and Validity can always be determined Can rarely be determined (Subjective nature of research) 15
  • 16. The above table indicates that a more qualitative approach will suit our study.This is consistent with yin (1989) who asserts that qualitative approaches are generally betterfor understanding how and why questions-that is for explaining complexity. For example, ourresearch will (to some extent was) a case study, thus it is based on one organization, NMI. Sofar our interviews were pretty short, but we have to do long interviews, we say more than onehour or so, to understand and explore design and use of Performance Management System inNMI. The interviewees will be semi structured, thus we will be following respondents’response, and we will have to ask supplementary questions that are not integrated in theinterview guide originally. Moreover, depending upon the answers that we get, we can changethe direction of the interview sometimes. Also, as it happens with case study researchparadigm, the research is subjective and reliability and validity is difficult to determine.Finally, the analysis of data collected will not be statistical, but contextual.3.5 Unit of AnalysisThe unit analysis refers to the level of aggregation of the data during succeeding analysis.Sekran (2000) describe the following units of analysis: individual, dyads, groups,organizations and cultures. The subject of unit of analysis is important since individual do nothave the same features as groups and groups do not have same characteristics as individuals.The unit of analysis in our research is particular organization (Norwegian MicrofinanceInitiative). Thus, based on the information possessed from our interviews with NMI’s staffs,we would try to make some conclusions with regard to design and use of PerformanceManagement System (PMS).3.6 Ethical ConsiderationsEthical issues arise at a variety of stages in business and management research. Ethical issuescannot be ignored, in that they relate directly to the integrity of a piece of research and ofdisciplines that are involved (Bryman and Bell, 2011). Research ethics relates to questionsabout how researcher formulates and clarifies his research topic, designs his research, gainsaccess, collects, processes and stores the data and writes the research findings in a moral andresponsible way (Saunders et al., 2009)Our focus of study is a particular system of a single case. Case study approach is being used.We will be studying the response from all levels of that organization this presents probableethical dilemmas therefore (Diener and Crandall 1978) have provided a four main ethicalprinciples(areas) to consider in a business research. They are: whether there is harm to 16
  • 17. participants, whether there is lack of informed consent, whether there is an invasion ofprivacy, whether deception is involved.Harm to Participants:In order to not to harm participants we will be very careful of real and potential harm toparticipants. We will be informed before our empirical study, interview about the code ofconduct of the organization if they have. We will also be careful about different facets ofharm: physical harm, stress, career and future employment greed.Lack of informed consent:We are aware of this ethical consideration thus; we will prepare the general and specific listabout what kind of data will be required and its potential use. We will take consent with thetop management as well as prospective participants.Invasion of Privacy:This point is related to the informed consent to some degree. (Bryman and Bell, 2011) arguesthat, ‘the objectives of any study do not give researchers a special right to intrude on arespondent’s privacy nor to abandon normal respect for an individual’s values’. Issue ofconfidentiality, recording of information, maintenance of records, and accumulation of dataare very critical issues which we have thought in a front line regarding ethical issues. Afterthe completion of research we will send all the collected data for conformity of non privacyissues.Deception:Deception occurs when researcher represent their research as something other than what it is.Metaphorically it is real electric shock. This is done intentionally therefore it can beprevented. In our case to avoid deception in our report we will be sending draft of our reportto the organization before publishing.3.6 Data Collection MethodWe would like to comment only some practical connotation for our case-study research.Smith, Thorpe and Lowe (2001) argue that techniques primarily associated with qualitativemethods are interviews, observation and diary methods. We will be using semi-structured andunstructured interviews in our research. Thus, we will enter with a list of preliminaryquestion. The interviews guide is presented in Appendix. Sekran (2000) claims thatunstructured interviews are so labeled because the interviewer does not enter the interviewsetting with a planned sequence of questions that he will be asking the respondent. Theobjective of the unstructured interview is to surface some preliminary issues so that the 17
  • 18. researcher can formulate a good idea of what variables need further in-depth investigation.Together with unstructured and semi-structured interviews, the primary data sources areemployed.InterviewInterview in a case study is the only empirical source of data so it is very important. Ininterview-based data collection, the researcher asks a series of question to a set of subjectsabout the elements of case. Interview is guided by a structured interview guide and thosequestions are based on the topic of interest or research question. There are various types ofinterview such as unstructured, semi-structured and fully structured (Robson 2002). In ourcase semi-structured interview best suits where we will try to gather data with the structurequestion and informal conversation. Our questions (Appendix A) are planned and we will dointerview in one to one basis rather than group interview. Our interview will be divided in todifferent phases. First the objectives of the interview and the case study will be presented andexplained. Then a set of introductory question will be asked about the background etc. of thesubject, more general questions. After the introductory section main questions will be asked.Since we will follow semi-structured method the main part of interview will be more informaland guided by set of questions (Appendix A). Both telephone and face to face Interviews willbe conducted in Norwegian Microfinance Initiative’s office in Akersgaten. A rough form ofinterview guide “Appendix A” is developed, based on knowledge of design and use of PMS.The entire interview will be recorded taking the consent of the interviewees. We are expecting10 interviews. We will be taking interviews with 3 top management, 4 office administrationand 3 external users of PMS (Investment vehicle of NMI).Archival dataArchival data refers to, for example, meeting minutes, documents from different developmentphased, organizational charts, financial records, and previously collected measurements in anorganization. In our case we will collect annual reports of different years, organization charts,and financial reports. Along with that we will also collect data from microfinance investordata source www.cgap.org, www.mixmarket.org. Information related to organization will becollected from Official website of Norwegian Microfinance initiative(http://www.nmimicro.no). To understand the nature and trend of investment in microfinancewe will use the official website of International Association of Microfinance Investors 18
  • 19. (http://www.iamfi.com). Along with this for the understanding of literature and otheracademic requirement of study we will fulfill from the Nordland University, BI NorwegianBusiness School and university of Oslo libraries.3.7 Inconsistencies of the Research MethodologyAny method or technique has its own pros and cons. Case study approach in common iswidely criticized for problems with validity and reliability of results. At the same time, thismethod allows to get a deep understanding of internal processes. Gummesson (2000)disagrees with traditional view of troubles with validity and generalizability as well astestability of case study research based on social constructionist approach. He claims, forexample, ‘…I have become increasingly doubtful of the meaning of generalization. It is nolonger seems so ‘obvious’ that a limited number of observations cannot be used as a basis forgeneralization.’ As we understand the problem of validity/generalizability with case studyresearch, it is not possible to generalize to all the organizations but one can arrive at deepunderstanding of one particular case, thus increasing knowledge in that way. Another problemcomes from the subjectivity of our personal judgment. As we have described above, there willbe an element of subjectivity in all of the data collection and interpretation stages. However,as we can hope, these problems are typical for such an approach in general. In addition, as itwas stated above, it is sometimes difficult to distinguish between empirical data and analysis. 19
  • 20. ReferencesAlan Bryman and Emma Bell. Business Research Methods, Oxford University Press 2011Blaikie, N. (1993), Approaches to Social Enquiry, 1st ed, Polity Press, Cambridge.Broadbent, J., Laughlin R., 2009. Performance management systems: A conceptual model.Management Accounting Research 20, 283-295.Cresswell, John W. (1998). Qualitative Inquiry and Research Design: Choosing Among FiveTraditions. London, SAGE publicationConcise Paperback Edition. Sage, pp 390–404Denzin, N. K., & Lincoln, Y. S. (2003). Introduction: The discipline and practice ofqualitative research. In N. K. Denzin & Y. S. Lincoln (Eds.), Strategies of qualitative inquiryEsterby-Smith, M., Thorpe R., and Lowe, A., (2008). Management research: An introduction,SAGE publications Ltc.Ferreira, A., Otley.,2009. The design and use of Performance Management system: anextended framework for analysis. Management Accounting Research 20, 263-282Ferreira, A., Otley.,2005. The design and use of management control system: an extendedframework for analysis.Social Science Research Network.http://papers.ssrn.com/sol3/papers.cfm?abstract_id=682984Fitzgerald, L., Johnston, R., Brignall, T.J., Sivestro, R., Voss, C., 1991.PerformanceMeasurement in Service Businesses. CIMA, London.Fitzgerald, L. and Moon, P. (1996) Performance Measurement in Service Industries: Makingit Work, London: CIMAFitzgerald, L. (2007). Performance measurement (3rd Ed.) Hopper, T., Northcott, D.,Flyvbjerg B (2007) Five misunderstandings about case-study research. In QualitativeResearch Practice: 20
  • 21. Gummesson, E. (2000). ‘Case-Study Research’, in Qualitative Methods in ManagementResearch, Sage Publicatio, inc pp 83-155Habermas, J. (1970). Toward a rational society: student protest, science and politicsHatch, M. J. and Cunliffe, A. L. (2006), Organization Theory, 2nd ed, Oxford UniversityPress, Oxford.McKinnon, J.L. & Wu, A., Accounting, Organizations and Society (1999Otley, D., 1980. The Contingency theory of management accounting: achievement andprognosis. Accounting organizationations and Society 5, 413-428 Otley, D.T. (1999). Performance management: a framework for management controlsystems research. Management Accounting Research, 10(4), 363-382.Perrow C. A framework for the comparative analysis of organizations. Amer. Sociol. Rev.32:194-208, 1967.Runeson, P. and Host, M. (2008) Guidelines for conducting and reporting case study researchin software engineering, Sweden,Springer.Robson.C. (2002) Real World Research. Blackwell, (2nd edition)Saunders, M., Lewis, P., Thornhill, A. (2009) Research Methods for Business Students, 5thedition, Prentice Hall;Sekaran, U. (2000). Research Methods for Business, A skill Building Approach. John wileyand Sons, Inc.Susman, G.I., Evered, R. D.(1978). ’’An Assessment of the scientific merits of actionresearch’’ Administrative Science Quarterly, 23:582-603Simons, 1995, Levers of Control, Boston: Harvard Business School Press, P.5Yin, R. (2003). Case study research: Design and methods (3rd ed.). Thousand Oaks, CA:Sage Publishing 21
  • 22. Yin, R. (1989). Case study research: Design and methods (Rev. ed.). Newbury Park, CA:Sage Publishing.http://papers.ssrn.com/sol3.papers. cfm?www.mixmarket.orgwww.cgap.orgwww.nmimicro.nowww.iamfi.comDear respected sir we tried hard to remove the color on references but could not happen. Weare extremely sorry for that. 22
  • 23. Appendix AInterview Guide Personal Information 1. What is the main activity of your company? 2. Would you please give the full title of your position in the organizations? 3. How long have you been working in the company? 4. How long have you been occupying your current position? Then, some topic related questions were asked, we were adjusting questions during the interview process. Some additional questions were put forward and some preliminary planned questions were left. Still the preliminary list represents the following: 1. In your opinion how NMI uses PMS? 2. Can you provide us simple understanding of PMS with regard to NMI? 3. Do NMI’s strategy and goals correspond to each other? 4. Are you satisfied with PMS? 5. Would you tell something about design of PMS in your organization? 6. What factors are taken into consideration while designing and changing PMS? 7. In you view what role PMS play to converge individual goals with organizational goal? 8. How you view PMS in NMI, to what extent you believe that it is formal or informal, flexible or inflexible etc? 9. How do you promote organizational learning? And how PMS help doing that? 10. Do you have Balance Scorecard? If yes, would you please define Balance Scorecard in NMI? 11. Do you thing in case of inter-organizational relationships PMS is important and how PMS contribute to MC in such setting? 12. How change in PMS are taken place, do behavioral factors are taken into account? 23
  • 24. Appendix B 24