Proceedings of the Journal are located in the Databases Scopus.

and Educational Research

No.1. (4), January-June, 2014

VOLUME II

“Columbia Press”

New York 2014

Proceedings of the Journal are located in the Databases Scopus.

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Editor-in-Chief: Prof. Samuel Raymond, S. J. D.(USA) Executive Editor: Prof. John Williams, D. Litt. (USA) Technical Editors: Robert Martin, Julia Scott (USA)

Editors:

Prof. Norman Green, D. S. Sc. (UK) Prof. Robert Barclay, D. C. S. (UK) Prof. Henry Simmons, D. I. T. (USA) Prof. Harry Viddal, D. C. S. (USA) Prof. Dominic Stiles, D. P. E. (Canada) Prof. Lane Hewitt, D. M. Sc. (Australia) Prof. Charles West, D. I. T. (UK)

Prof. Elizabeth Moore, D. Tech. (USA) Prof. Emma Allen, Ed.D. (Australia) Prof. Denis Cumming, Ed.D. (UK) Prof. Leslie Bragg, Psy. D. (Canada) Prof. Paul Bryant, Psy. D. (UK)

Prof. Linda Graves, Psy. D. (USA) Prof. Ronald Hall, D. G. S. (USA) Prof. Daniel Smith, D.F. (Canada) Prof. Sienna Paige, D. B. A. (USA) Prof. Harry Read, D. B. A. (UK)

© “Columbia Press”, 2014

© Columbia University , 2014 ISSN: 0002-9476

Contents

Agriculture, Economics and Geography

Alan C. Maltz, Aaron J. Shenhar, Dov Dvir and Haoyu Gao

Success Comes in Many Dimensions: The Critical Role of the Human Capital

and Preparing for the Future in Every Organizational Scorecard ... 8 Eugene Gopchenko, Valeriya Ovcharuk, Alina Traskova

Application of the method of repeatability the extrema for calculating characteristics

of spring flood rare frequency in the Dniester River basin ... 33 Assandé Désiré Adom and Nasr G. Elbahnasawy

Saving-Investment Gap and Economic Growth in Developing Countries: Simulated Evidence

from Selected Countries in Africa ... 39 Bohdan Koshovyi

On Stimulus-Response basement in overcoming of demotivative effects at work according

to the present-day notions of economic security management ... 52 Victor Fursov, Natalia Lazareva

Theoretical aspects of synergy in the management of the transport services market ... 59 Viktor Yakimtsov

Theoretical basis of research on the socio-economic systems in terms of synergetic ... 64 Galina Polskaya

The optimal relationship material motivation and performance organizations of consumer

cooperation ... 68 Abdurakhman Guseynov, Nikolai Mironenko, Eldar Eldarov

Relationship “house - destination” and “guest - host” in tourist clusters ... 73 J. N. Nmadu, R. C. Iwuajoku and E. Z. Jiya

Commercialisation Level of Poultry Production in Minna Metropolis, Niger State, Nigeria ... 79 E. Borisova

The innovative infrastructure of the United States: peculiarities of formation

and the possibility of application in the high-tech sector of the Russian economy ... 94 Elena Denisova

The measurement of the intensity of use of agricultural land Gorodishche district

of the Volgograd region and identification of the main reasons leading to soil degradation ... 102 Izida Ishmuradova, Alfia Ishmuradova

Reengineering of business processes, as the basis of standard management

of the industrial enterprises ... 107 Elena Karanina, Irina Bykova, Nina Ilysheva

Management Accounting System and the Balanced Scorecard: Reflecting Enterprise Risks ... 112 Irina Ketova, Anastasia Graf

Analytical assessment of the investment potential of the regional banking system

(for example Chelyabinsk region) ... 122 Larisa Belousova, Mikhail Smirnov

Improvement of the methodology integrated assessing the effectiveness of building projects ... 130 Larisa Belousova, Mikhail Smirnov

Priorities for development of the fuel-energy complex of Kursk region ... 134 Larisa Belousova, Pavel Pochechun, Sergey Frolov

Innovation and investment aspects of waste mining production and comprehensive utilization

of raw materials ... 139

Nina Pestereva, Olga Nadeina

Human resources as a key factor in the development of the competitiveness of the tourism

cluster of Primorsky Region ... 150 Nina Pestereva, Larissa Savinkina, Olga Nadeina

The main objectives of the formation of a regional development programs labor resources

of Primorsky Region ... 159 O. Zavyalov, A. Kharlamov, A. Miroshnikov, A. Frolov, M. Kurilkina,

Peculiarities of using nutrients of diets by the Kazakh white-headed bulls of different calving seasons ... 163 Rustam Galiev

Economy on the threshold of the New Era: East or west? ... 167 Saif S. Al Qaydi

Food Security in the United Arab Emirates; the Role of the State in Overseas Farm Crops Production .... 172 Svetlana Zenchenko, Evgeny Egorkin

Formation of methodical approach to an assessment of bank financial stability ... 184 Sergey Klevtsov, Maria Klevtsova

Reproduction of tangible assets: the spatial aspect ... 191 T. K. Yao, E. K. Kouadio, M-S.Oga, O. Fouché, T. Lasm and C. Pernelle

Contribution of Major Ions in Identifying of Groundwater Flow in Dense Vegetation Cover Area:

Case of Sassandra watershed (South-western Côte d’Ivoire) ... 196 Tatyana Belyaeva, Irina Кozieva

Resource ensuring of innovative development of the region ... 213 Т. Kuznetsova

Sales promotion in modern marketing practice ... 219 Yu. Maksimova, Nadezhda Martynenko

An innovative model of development of the microfinance sector in the Russian Federation ... 229 Yu. Subbotina

Hydrobotanical method of wastewater treatment using higher aquatic vegetation... 234 Yuriy Khan

Adaptation of agriculture to climate change in Kazakhstan ... 240

Education

Alfia Ishmuradova, Izida Ishmuradova

Using the method of the research project activities in teaching English language of the students

of the technical university ... 247 Vladа Bilogur

Increasing the motivation of students of pedagogical university to sports and sports activities

in the mode training of the day ... 254 Vladimir Egorov

Experience of applying psycological audit to business ... 261 Gerasimos Koustourakis, Chris Panagiotakopoulos and Panagiotis Papadouris

An Investigation of the Use of Information Communication Technologies (ICTs) by Teachers

in the Primary Cycle of the European School Brussels III: An Empirical Study... 269 Grygoriy Gryban, Sergiy Romanchuk, Victor Romanchuk, Oleksandr Boyarchuk, Oleksandr Gusak

Physical preparation of students in Ukraine ... 286 Dmitry Kasatkin, Olga Kasatkina

Conditions of realization methods of using computer-oriented learning environment as vocational

training of future ecologists ... 292

Irina Brynza, Nikolay Budiyanskiy

Intercommunication of psychological prosperity of parents and presentations

of child about the system of domestic mutual relations ... 304 Irina Fokina

Charitable Help to the Vulnerable Stratums Children’s Social Organizations: Theory and Practice ... 312 Marcel Lourel, Nicolas Gueguen and Alexandre Pascual

Complex Systems: Thoughts on the Causes of Nature ... 317 D. Makhmudova

On the role of problem tasks in the development of independent analytical and creative

thinking of students ... 325 Natalia Kryvtsova

Psychological features of personality are in realization of innovative potential ... 331 Leonid Burlachuk, Nadejda Zhiyenbayeva, Olga Tapalova

Psychodiagnostics of achievement motivation in obsessive-compulsive disorder ... 338 Ruslan Kubanov

Terminology concept of «training» and «quality of training» in scientific pedagogical discourse ... 343 Tetiana Golub

Methodology of analysis and synthesis in scientific activity ... 348

Humanities and Social Sciences

A. Sani, B. Z. Abubakar, D. H. Yakubu, T. K. Atala and L. Abubakar

Socio-economic Factors Influencing Adoption of Dual-purpose Cowpea Production

Technologies in Bichi Local Government Area of Kano State, Nigeria ... 352 Anna Nivnya

Correlative connection of ritual and time in modern society ... 372 Vitalyi Pavlikovskyi

Criminal law maintenance of freedom of speech and the media: comparative legal analysis ... 377 Abdurakhman Guseynov

Interethnic conflicts: system- institutional analysis ... 384 Vladimir Ignatyev, Evgeniya Komf

“Virtual strata” as agents of social instability: the consequences of “informational resonance” ... 395 Irina Sizova

The museology of Tomsk region in the XIX–XXI centuries: the analysis of a historical

and bibliographical study ... 402 Muhu Aliev

Institutes consent: general view ... 406 Marfua Khamidova

National art culture as an object of theoretical understanding ... 413 Olga Boyko, Larisa Otroshchenko

Creation of myths in the modern world ... 417 Oleg Antonov

State power as an object of evaluational changes, the subject of which society is ... 423 Oleg Peshev

“The value to be educated” in analytical philosophy of R.S. Peters ... 431

Svetlana Sokolova

Biosecurity of Modern Society and Bioterrorism ... 455 Sevil Aydin Ismailova

The essence of charitable activities in Azerbaijan ... 461 Temur Rashidov

Variety art (historical and social experience) ... 465 Yury Neduzhko

Legislation of Ukraine on cooperation with Foreign Ukrainian in 1991-2010 years. ... 469

Medicine, Biology, Chemistry

Ambika P. Ashraf, Jessica Alvarez, Carrie Huisingh. Krista Casazza and Barbara Gower Higher Serum Insulin Concentrations Positively Influence the Bone Mineral Density

in African American Adolescents ... 483 Fu Chaowei, Liu Jianxiang, Luan Rongsheng, Chen Kun, Wang Hongqiang, Liu Li and Xu Biao

Tea Consumption and Health Beneficences of Green Tea Drinking- ACommunity-based

Cross-sectional Study in Urban Chinese Men ... 496 M. D. Chandrasegaram, D. Y. Chen, C. P. Tan, E. L. Neo, P. M. Dolan, J. W. Chen, M. E. Brooke-Smith,

G. Cheetham, A. Ruszkiewicz and C. S. Worthley

KRAS Mutation is a Local Tumour Event and Not a Field Change in Pancreatobiliary Tumours ... 508 Shi-Ni Lim, Zaheedah Yahya, Dimphy Zeegers, Thiha Moe, Ei Ei Phyo Kyaw, George SH Yeo,

M Prakash Hande and Ene-Choo Tan

Distribution of Telomere Length in the Cord Blood of Chinese Newborns ... 515 M. Amanbaeva, P. Esenbekova, Zh. Childebaev

Materials to the fauna of hemiptera (heteroptera) state national park “Altyn-emel” ... 526 Irina Tarasova, Tatyana Klimenko, Svetlana Kasyan, Vitaliy Markevich, Viktoria Petrashenko,

Maksim Pogorelov, Elena Redko, Valentina Markevich

The effect of hypoxia on lead tissue concentration in newborn rats ... 530 Igor Revechuk

Methodological contradictions of modern researches of ethnic tolerance and identity

in psychology and psychiatry ... 535 Anna Fleysher, Inna Trus, Mykola Gomelya, Volodymyr Tokarchuk

Utilization of the residues obtained during the process of chemical purification

of water as cement hardening accelerators ... 542 D.S. Avetikov, Ye.P. Lokes, S.O. Stavytskyi, S.I. Danylchenko, I.M. Tkachenko

Oncologic Alarm in Dental Practice ... 547

Philology

Ellada Gerayzade

Philosophical content of Nizami Ganjavi’s poetry ... 553 Kornelia Choroleeva,

Some Aspects of word-Forming Shortening Devices in Specialized Discourse ... 559 Alina Guzak

Precedent texts in political discourse and their role in the creation of the positive image

of the modern political leader (based on the speeches of American presidents) ... 566

Olena Babenko

Features of the 20th century Canadian prose in a short story “To reach Japan” by Alice Munro ... 578 Inna Rumiga

The expansion of original model of the English postmodern text ... 583 Olga Bragarnik-Stankevich

Onomasiological Aspect of Verbal Predicates Studying: Bestial Verbal Lexicon ... 587 U. Zhornokui

«The Tale of the Shoe» by Emma Donoghue in the context of the queer studies ... 692

Technology

Alexander Shmatov

Thermo-hydrochemical treatment for strengthening hard alloys ... 597 Aleksey Martyshkin

Mathematical models management of critical resources in multiprocessor systems ... 604 Alex Remnev

Technology elements of the heat exchange systems ... 610 S. German-Galkin, A. Bormotov

Analytical and model study of a modular electrical machine in the electrical drive. ... 614 Vladimir Markov

Competition technologies of precision laser marking the articles ... 626 M. Rubanovich, V. Khrustalev, K.Aubakirov, V. Razinkin, A.Stolyarenko, P. C. Bogomolov

Film attenuators new generation ... 634 Ildar Salaкhov, Vladimir Voloshko, Ilnur Galimyanov, Ildus Mavleev

Research of universal differential mechanism ... 648 Ramon Ferreiro Garcia, Beatriz Ferreiro Sanz and Cristina Ferreiro Sanz

Preliminary Study of an Efficient OTEC Using a Thermal Cycle with Closed Thermodynamic

Transformations ... 654 Sunil Kr Singh, Aman Madaan, Ankur Aggarwal and Ankur Dewan

Computing Power Utilization of Distributed Systems Using Distributed Compilation:

A Clustered HPC Approach ... 668

Alan C. Maltz1*, Aaron J. Shenhar2, Dov Dvir3 and Haoyu Gao1 1Stevens Institute of Technology, Castle Point, Hoboken NJ 07030, USA.

2Technological Leadership Institute and Tel-Aviv University, United States and Israel. 3Ben Gurion University of the Negev and West Galilee College, Israel.

Success Comes in Many Dimensions: The Critical Role of the Human Capital and Preparing for the Future in Every

Organizational Scorecard

ABSTRACT

Our paper synopsizes our empirical research over the past twenty years on the components of success across the organization. While many articles detailing multi-dimensional models of success have been published, few of these articles have studied success across all structural levels–the project, the business unit and the corporate levels. While there are clearly some differences at the varying levels, some common themes have developed. Our framework covers a time spectrum from short-term measures (e.g., financial and efficiency measures) to long-term (e.g., investing for the future). This framework could provide a foundation for many organizations to develop success measures throughout its structural levels. We especially note the importance of the role of the human capital and the investment in creating future opportunities. Our research provides guidelines for management on each success dimension.

Keywords: Success dimensions; performance measures; organizational effectiveness; human capital; human resources management; leadership; efficiency;

customer’s benefits.

1. INTRODUCTION

What does organizational success mean? Is it the organization’s profits, its sales, or cash flow? Is it the current level of growth, or something else? And if success is measured by the company’s market value, how could a firm sustain and grow its value year after year? Even prior to the recent series of financial crises, most in the business world realized that financial measures alone do not provide a sufficient basis for measuring organizational success. ‘Managing’ quarterly results, only emphasized the inadequacy of financial measures such as profit, revenue, and even growth. This is not new. Over forty years ago, Hayes and Abernathy [1] claimed that one of the dangers to the American economy is the

rely on quantitative short-term financial criteria.

Today, many have realized that long-term aspects of any organization's effectiveness are equally critical [2]. Technology-based firms, which operate in markets and environments that evolve rapidly, have to manage with longer-term horizons. Hamel and Prahalad [3], in their bestselling book “Competing for the Future” advocated new ways to look at the modern organization that is facing continuous change. These firms must have the vision to capitalize on emerging opportunities by investing for the future in their core competencies and thusly help shape the future of their industries.

This article represents twenty years of empirical research on the elements of sustainable success throughout an organization. Our journey began looking at the outcomes of discrete business decisions; it became apparent that present business success was the result of decisions made years earlier. Consequently, looking forward, many of today’s strategic decisions will only have an effect five or ten year from now.

Thus, in addition to current performance and short-term activities, organizations must focus their attention on decisions and plans dedicated to tomorrow. We concluded, as others, that organizational success should be viewed in multiple dimensions, and focus on different time horizons.

In our quest to understand organizational effectiveness, we explored different structural levels within the organization. We looked at different data samples, and at different times. Our empirical studies addressed separately, the corporate level, the strategic business unit level, and the individual project level.

Our previous published research looked at success at the corporate and project levels [4]. We have benefited from important existing concepts such as the Balanced Scorecard [5], but sought to go a step further, by empirically pursuing the critical elements, which constitute success at distinct levels.

We found that organizations would benefit from adapting a multi- dimensional framework, which would be used to scan their entire success landscape at different time horizons-from very short-term to very long-term. Such framework will serve as a basis for the development of specific success measures for each organizational level. While major differences may be found among hierarchical levels, we also found that some common themes extend across all levels. The most important is the human capital element. As many would agree, leading people is perhaps the most critical part pertaining to organizational success;

yet, it has been largely missing as a stand-alone dimension in previous frameworks. The second theme that is recurring across levels is ‘preparing for the future’. As in the people dimension, in today’s rapid world, preparing for the future or in other words, creating future opportunities, must be addressed at all levels and almost by all managers. The purpose of this article is to summarize the lessons we learned from our combined studies on success dimensions, as well as to discuss the critical role of the human and future dimensions at each organizational level.

The next chapter begins by describing the process of studying the entire

specifically address the role of people and their leadership, as well as the role of preparing for the future and how can this part be nurtured by selecting the right measures. We conclude with several organizational and managerial implications.

2. THE DYNAMIC MULTIDIMENSIONAL SUCCESS FRAMEWORK

Perhaps the most important work in recent years about organizational success measures is the Balanced Scorecard, which was developed by Kaplan and Norton [6,7]. Kaplan and Norton’s assertion is that traditional financial accounting measures (e.g., ROI, EPS) can give misleading signals for continuous improvement and innovation, and are out of step with the skills and competencies needed by today’s organizations. The Balanced Scorecard is a multi-dimensional framework that translates a company’s strategy into specific measurable objectives. This includes a combination of financial measures, indicating results of actions previously taken, and operational measures that are drivers of future performance. Typically, 15-20 measures are developed in four major dimensions, which address different perspectives–financial, customer, internal, and innovation and growth. These dimensions manifest themselves in various forms for different organizations. For example, innovation is treated as an internal perspective measure, while developing new technologies is part of the growth perspective.

The Balanced Scorecard represents a critical step in understanding organizational success, and while it has a substantial impact on strategy formulation and implementation, some limitations and difficulties have been noted. While Kaplan and Norton [6] did provide a “learning and growth”

dimension, the broader role of managing the human capital was not specifically discussed. For example, Atkinson et al. [8] suggested that The Balanced Scorecard model was incomplete because it fails to adequately highlight the contributions that employees and suppliers make to help the company achieve its objectives. The argument is that learning is only one part of managing people; other aspects such as motivation, retention, should also be considered. Similarly, Smith [9] noted that The Balanced Scorecard fails to account for the role of “motivated employees”, a critical issue especially in the service sector. And Edvinsson and Malone [10] suggested that the Balanced Scorecard is only part of what they call the Intellectual Capital of the firm, which consists of the human capital and the structural capital.

While the Balanced Scorecard is widely accepted in a broad range of profit and non-profit organizations; e.g., financial services [11], higher education [12], and health care [13], during our research interviews, many managers frequently mentioned the lack of a people component in The Balanced Scorecard. The most notable problem in The Balanced Scorecard’s view of organizational success is therefore the lack of focus on the company’s human resources dimension. Many managers frequently mentioned during our research interviews the need for people orientation. For example, Best Foods (now part of Unilever) [14] has been using The Balanced Scorecard for years; however, the

Similarly, European firms (e.g., Nokia) have emphasized the importance of human resources management and the way they treat their employees as a critical component to their success. These realizations have prompted companies to include specific assessment of management training, slack time, knowledge worker retention, and issues relating to the company’s global employee population. Consequently, these observations have motivated us to look further into the human dimension in assessing organizational success.

2.1 Toward a Dynamic Model of Success

Management still struggles with the entire domain of performance management, and is provided with an overwhelming deluge of performance data. As a result, it is difficult to determine which data is critical to the organization. As a result, many firms continue to focus on short-term financial criteria such as sales, revenue and net income.

Traditional models of accounting alone are no longer sufficient.

Corporate financial statements are proving to be only static representation of what goes on in the modern organization–or rather, what “happened”. The creation of new technologies, ventures, and skills and are only apparent much later in the future. However, their presence in organizational success measures is seldom observed. Rogers and Ghauri [15] posited that while measurement at the project level yields great insights and lessons for New Product Development success, assessment is also needed at the firm-level.

Success at the project level, does not always improve the firm’s competitiveness. The difficulty in defining organizational success was evident in the Conference Board’s concerns which was reported in “New Corporate Performance Measures” [16]. This report discussed the increasing corporate focus on performance, along with the inadequacies of traditional financial measures in the dynamic turbulent environment of today.

Once the idea that organizational success is multi-dimensional has been recognized, it is the role of the researcher to identify the specific dimensions, with which an organization can monitor itself. Any framework for success assessment should look, however, not just at different dimensions, but also at different time horizons, from the immediate, short-term view, which relates to months or quarters, to the very long-term, which is focused on years to come. In the three studies that we conducted and are summarized here, we have taken this view. We tried to identify what are the specific dimensions, which are typical to various organizational levels, and what time frames are associated with each dimension.

From our studies, a dynamic view of organizational success developed, with multiple dimensions representing temporal horizons–from the short to long- term. An organization needs to perform well across these dimensions to sustain their success. Performing well in the short-term does not assure long-term success, and likewise, poor short-term performance does not necessarily long-term failure. We call our model the “Dynamic Multidimensional Success

American Journal of Scientific and Educational Research

12

Model” or DMDS, and it will be described more fully in the following discussion.

Taken together, the success of most organizations can be divided into five major dimensions, each consisting of several specific measures (see Table 1). These dimensions represent different time horizons. Furthermore, at each organizational level we found the human element to be critical at different times. The emergence of the human dimension, however, was not clear at the outset of our studies. Only after integrating all levels were we able to place the people’s issues across levels (the shaded areas in Table 1).

Analogously, we found that the “preparing for the future” dimension provides a significant role in looking at long-term organizational success. We thus summarize these two dimensions in separate chapters toward the end of this paper.

Table 1. Overview of “dynamic multidimensional success model”

Success dimension Time horizon

1 2

Very short Short

3 4

Mid-term Long

5

Very long Organization level

Project

Business unit

Corporate

Project efficiency Profitability

Financial performance

People skills Orders and marketing Market/

customer

Impact on customer People Development Process

Direct business success New opportunities

Human capital

Preparing the future Future infrastructure Creating the future

Our studies do not imply that there are universal success measures for all projects, strategic business units or corporations. We do suggest that our results act as guidelines as an organization develops its strategic plans and develops its measures for sustainable success assessment and growth.

As each organization is different, we would suggest that the various measures and dimensions would be utilized with varying degrees of importance.

However, the DMDS model provides a fair basis with which to start the journey of success assessment for most organizations. In the next chapter we begin by discussing the first level, the corporate level.

The details of our research methodology can be found in Appendix A.

Analogously, we found that the “preparing for the future” dimension provides a significant role in looking at long-term organizational success. We thus summarize these two dimensions in separate chapters toward the end of this paper.

Table 1. Overview of “dynamic multidimensional success model”

Success dimension Time horizon

1 2

Very short Short

3 4

Mid-term Long

5

Very long Organization level

Project

Business unit

Corporate

Project efficiency Profitability

Financial performance

People skills Orders and marketing Market/

customer

Impact on customer People Development Process

Direct business success New opportunities

Human capital

Preparing the future Future infrastructure Creating the future

Our studies do not imply that there are universal success measures for all projects, strategic business units or corporations. We do suggest that our results act as guidelines as an organization develops its strategic plans and develops its measures for sustainable success assessment and growth.

As each organization is different, we would suggest that the various measures and dimensions would be utilized with varying degrees of importance.

However, the DMDS model provides a fair basis with which to start the journey of success assessment for most organizations. In the next chapter we begin by discussing the first level, the corporate level.

The details of our research methodology can be found in Appendix A.

Analogously, we found that the “preparing for the future” dimension provides a significant role in looking at long-term organizational success. We thus summarize these two dimensions in separate chapters toward the end of this paper.

Table 1. Overview of “dynamic multidimensional success model”

Success dimension Time horizon

1 2

Very short Short

3 4

Mid-term Long

5

Very long Organization level

Project Business unit Corporate

Project efficiency Profitability

Financial performance

People skills Orders and marketing Market/

customer

Impact on customer People Development Process

Direct business success New opportunities

Human capital

Preparing the future Future infrastructure Creating the future

Our studies do not imply that there are universal success measures for all projects, strategic business units or corporations. We do suggest that our results act as guidelines as an organization develops its strategic plans and develops its measures for sustainable success assessment and growth.

As each organization is different, we would suggest that the various measures and dimensions would be utilized with varying degrees of importance.

However, the DMDS model provides a fair basis with which to start the journey of success assessment for most organizations. In the next chapter we begin by discussing the first level, the corporate level.

The details of our research methodology can be found in Appendix A.

3. THE CORPORATE LEVEL

The corporate level represents a collection of business units and centralized units such as IT, Human Resources, central R&D, Financial, and Legal services. The corporation exists to create and increase value for the shareholders, offsetting the cost of this centralized overhead. Transferring and exploiting competitive skills across the business units and using them to gain competitive advantage defines the core competency concept, representing the sum of learning across individual organizational units [3]. The corporation’s effectiveness therefore depends on activities and synergies across the various business units–some will have immediate visibility, other will be evident in the long-term. The resulting synergies have to be measured from several vantage points. It has to reflect the company’s short-term (financial) performance, and importantly its success in establishing the vision, direction, and foundations for the future.

Our research at the corporate level [17] of 180 U.S. firms have resulted in the following five dimensions (see Table 2 above).

3.1 Financial Performance

This is the traditional short-term dimension of organizational success. It provides recent period results such as sales, margin and revenue growth on current services and products resulting from strategic decisions made years ago.

3.2 Market/Customer

Key measures in this dimension include customer satisfaction index, customer retention rate and service quality, as well as company’s reputation and image.

3.3 Processes

This dimension represents the company’s set of core competencies and its ability to deliver these competencies to its different collection of businesses while exploiting them as fundamental customer benefits. Process measures included ‘time to market for new products and services’, ‘quality of new product development and project management processes’, ‘quantity and depth of standardized processes’,

‘quality of manufacturing processes’, and ‘quality of its innovation processes’.

Table2.Asummaryofsuggestedsuccessmeasuresfordifferingfirmtypes Baseline

High technology firms Low technology firms Small firms Large firms

Firms- product life Cycle <3 years

Financial Sales Profit margin

ue growth

ice quality +customer benefits from product/ services +responsiveness

3.4 People and Leadership

Much research has linked the management of the firm’s human resources to its performance, highlighting the criticality of a ‘People Development’

dimension. Crook et al. [18] indicated that theory at both the micro and macro level predicts that investments in superior human capital generate better firm-level performance. Specific measures that were found significant in this dimension include ‘retention of top employees’, ‘quality of professional/technical development’, ‘quality of leadership development’, ‘encourage employees to suggest and test new ideas’ and ‘employee skills training’. However, theory and research during the years tend to be focused at the organizational level of analysis.

How human capital and social capital are created through HRM practices or how they are related to group or individual behavior are not explained or demonstrated explicitly [18].

The role of project team leadership has been studied extensively in recent years. A wide-ranging literature review on leadership style as a success factor on project success was provided by Turner and Muller [19]. Project leadership was one of the strong predictors of success [20] for large capital projects Surprisingly, a few studies have indicated a mixed result on project performance. Belout and Gauvreau [21] while finding a link between the personal factor and project success (non- significant) they have indicated that this link does exist according to life cycle stage.

Project success is also effected by the industry, project complexity and the age and nationality of the project manager [22].

3.5 Preparing for the Future

This final and longest-term dimension is aimed at its ability to see the future prior to its competitors and customers and to define new needs that no one has been able to define previously. Its ability to prosper depends on its ability to make a difference to customers, by creating unimagined products, and exceeding the expectations of customers and competitors.

Numerous measures could be utilized for this dimension. Is there an explicit process for identifying and exploiting new opportunities beyond the boundaries of existing business units? Are we providing investment in new technologies? Does the company’s opportunity horizon extend beyond existing product markets? Are there processes to identify new and unarticulated needs for customers, which are not presently met?

3.6 Baseline Measures

In addition to defining the Success Dimensions at the corporate level, our research shows that one set of measures cannot fit all organizations. Rather, different

types of organizations should employ different measures of success. Specific industries may have their own key metrics. For example, ROI may be a critical measure for investment firms, while market position can be critical to firms in competitive markets. Individual firms would look, among other things, at their industry, technology and strategy, and would perform a sensitivity analysis as to the applicability of these measures to their own unique requirements.

To begin with, a company may use a set of “Baseline Measures” that was identified in our research (shaded area of Table 2). Based on the specific company type, a number of suggested refined measures can then be added for the individual firm. For example, a high-technology organization may consider adding

‘customer benefits from products or services’, ‘cycle time’, ‘quality of innovation processes’ and ‘employee skills training’ to their performance metrics. Similarly, a firm with a relatively long product life cycle may consider the addition of ‘quantity and depth of standardized processes’, ‘company’s reputation and image’ and ‘employee skills training’ to their measures. The final set of measures would depend on the firm’s strategy, technology, and the particular industry and environment that a firm competes.

3.7 An Example from a Study of U. S. Corporations

To demonstrate the effectiveness of the multidimensional dynamic framework and its ability to address longer term business concerns, we have included in (Fig. 1) the relative ranking of five companies among the 76 public companies that were included in our study, in each of the five dimensions:

Company a is a software services provider. It fared rather poorly across four of the five dimensions. One of its major businesses has collapsed during the time of this research as a result of an invasion of new technology. Its financial positions as well as future prospects looked weak. In fact, with its stock price so low, the company’s management considered going private as a way of reducing expenses.

Company b is a successful licensed clothing manufacturer with high relative rankings in all dimensions except the ‘Customer’. At the time of the survey they perceived some issues with a major customer, which has since been resolved.

Their processes, people and future measures were strong. The company was sold with its stock price increasing more than 350% over three years.

Company c is a major engineering firm with relatively poor rankings in all dimensions. It has endured major reductions in staff over many years, and has recently replaced its CEO with an outsider. This company is in survival mode.

Company d is a leading financial services organization with high rankings in all dimensions. They are a leader in developing new products and understand their customers and markets; they are building a future.

Finally, company e serves a unique niche in the global technology market.

Although their short-term financial ranking was low (they were investing for the future), their longer-term rankings were very high. As a result of their future potential, this relatively new company was acquired for a very significant price.

70 60 50 40 30 20

a b c d e

10 0

Financial Customer Process People Future Success Dimension

Fig. 1. Corporate level success dimensions

Developed from: (17) Maltz, A.C., Shenhar, A.J., Reilly, R.R.: Beyond the Balanced Scorecard:

Refining the Search for Organizational Success Measures. Long Range Plann. 36, 187–204 (2003)

4. THE BUSINESS UNIT LEVEL

Organizational success at the business unit level rests upon the aggregation of results achieved by different projects and products. Typically businesses are measuring success in terms of gross sales, profit, return on investment and gross market share. Some of these measures may have longer time-horizons than others- for example, meeting backlog targets. While a few companies are using additional longer-term measures such as the percentage of sales from new products, a comprehensive framework of the business unit success is needed. Our studies [23,24] of business units in the high-tech industry found that business unit success measures could be based on the following five dimensions (see Table 3).

Rank

Table 3. Business unit success measures

Success dimension Specific typical measures

1. Profitability

2. Orders and Marketing

3. People Development

4. New Opportunities

5. Preparing for the Future

• Sales, profits

• Cash flow

• Margins

• Projected sales objectives

• Back log

• Market share

• Developing technical skills

• Managerial skills

• Human resources utilization

• Administrative services

• Sales from new products

• New markets

• Customer satisfaction

• Customer loyalty

• New technology

• New product lines

• Infrastructure for the future Developed from: (24) Dvir, D., Shenhar, A.: Measuring the success of technology-based strategic

business units. Eng. Manag. J. 4, 33–38 (1992)

4.1 Profitability

The first dimension addresses the issues of how well does the business unit meets their financial and profit objectives and do present sales generate enough cash to insure the smooth operation of the business? It reflects results of actions taken in the past that have generated recent sales. This dimension involves the traditional measures of sales and profits. However, the business should also ask, how its profit margins are doing relative to similar businesses in the industry and compared to its own profitability goals.

4.2 Orders and Marketing

This dimension involves the next step of success in the market. It includes measures indicating prospective revenues from existing orders scheduled for delivery in the near future. It addresses the question of how successful is the business in achieving sale objectives and in creating additional orders. Is there a continuous flow of orders and what is the current level of backlog? Of particular interest is the question how are these orders going to influence future cash requirements.

4.3 People Development

This dimension highlights the critical role of people in the business units’

success. Measures such as the quality of professional development and management skills are essential to a successful operation. It may also include utilization of skills across projects, placement of people, growth potential, and quality of administrative processes. These are elements that take perhaps 2-3 years to develop but contribute to the business unit success for many years.

4.4 New Opportunities

This dimension is focused on a longer range. It measures outcomes that influence longer-return results since exploiting new opportunities may take time. It addresses the question of how successful is the organization in opening up new opportunities for new products and new services and new markets. What are the prospects of entering into these markets in the foreseeable future? This dimension also includes assessing customer satisfaction and loyalty. Are customers happy with the quality of the products and services of the business unit and are they willing to come back for additional purchases?

4.5 Preparing the Infrastructure for the Future

This very long-term dimension addresses the question of how well is the business prepared for future opportunities and changes. It reflects past and future

investments that may determine the business unit's results in the years to come, and sometimes may even hurt business in the short-term. Had the business identified and made the necessary strategic decisions on future technologies and future types of products? Had it invested enough in developing skills required for future markets? Does it have enough long-term programs, whose goals are beyond two or three years from now; and is it working on next generations of technology and products which are focused on five, seven, or ten years away?

4.6 Specific Measures for Each Business

While most organizations are using the first and second measures (profits and backlog), only a few are formally looking at longer-term dimensions. Many companies are currently using frameworks such as the Balanced Scorecard and some pioneering companies such as Hewlett-Packard and 3M have instituted a longer-term perspective for many years. To focus their businesses on continuous innovation they are assessing, among other things, the percentage of sales from new products developed within the last few years (part of the fourth dimension-opening the window for new opportunities).

4.7 Using the Framework for Predicting Future Business Success

The multi-dimensional framework of business unit success was used in a study of 76 business units in the electronics and computer industry in Israel [23].

The results indicate that the success of a business unit may be divided into two parts. One encompassing the first two dimensions (profitability level and orders) and reflecting the short run economic success; while the other including the last two dimensions and reflecting the prospects for the future.

The difference among the four dimensions and how short-term success differs from long-term success is demonstrated in (Fig. 2). At the time of this study, we examined only four dimensions. It exhibits the performance achieved by five business units and their relative ranking among the group of all businesses studied along the four success dimensions. A high rank means high performance.

4.4 New Opportunities

This dimension is focused on a longer range. It measures outcomes that influence longer-return results since exploiting new opportunities may take time. It addresses the question of how successful is the organization in opening up new opportunities for new products and new services and new markets. What are the prospects of entering into these markets in the foreseeable future? This dimension also includes assessing customer satisfaction and loyalty. Are customers happy with the quality of the products and services of the business unit and are they willing to come back for additional purchases?

4.5 Preparing the Infrastructure for the Future

This very long-term dimension addresses the question of how well is the business prepared for future opportunities and changes. It reflects past and future investments that may determine the business unit's results in the years to come, and sometimes may even hurt business in the short-term. Had the business identified and made the necessary strategic decisions on future technologies and future types of products? Had it invested enough in developing skills required for future markets? Does it have enough long-term programs, whose goals are beyond two or three years from now; and is it working on next generations of technology and products which are focused on five, seven, or ten years away?

4.6 Specific Measures for Each Business

While most organizations are using the first and second measures (profits and backlog), only a few are formally looking at longer-term dimensions. Many companies are currently using frameworks such as the Balanced Scorecard and some pioneering companies such as Hewlett-Packard and 3M have instituted a longer-term perspective for many years. To focus their businesses on continuous innovation they are assessing, among other things, the percentage of sales from new products developed within the last few years (part of the fourth dimension-opening the window for new opportunities).

4.7 Using the Framework for Predicting Future Business Success

The multi-dimensional framework of business unit success was used in a study of 76 business units in the electronics and computer industry in Israel [23].

The results indicate that the success of a business unit may be divided into two parts. One encompassing the first two dimensions (profitability level and orders) and reflecting the short run economic success; while the other including the last two dimensions and reflecting the prospects for the future.

The difference among the four dimensions and how short-term success differs from long-term success is demonstrated in (Fig. 2). At the time of this study, we examined only four dimensions. It exhibits the performance achieved by five business units and their relative ranking among the group of all businesses studied along the four success dimensions. A high rank means high performance.

80 70

60 a

50 b

40 c

30 d

e 20

10 0

Profitability Orders Opportunities Infrastructure SBU Success Dimension

Fig. 2. SBU level success dimensions

Developed from: (24) Dvir, D., Shenhar, A.: Measuring the success of technology-based strategic business units. Eng. Manag. J. 4, 33–38 (1992)

Unit a was one of the best units in terms of short and very short-term success (measures include profitability, orders and marketing). However, it was one of the worst in terms of longer-term success such as preparing for the future. Obviously, such a situation requires immediate corrective action for preparing the unit for future challenges. Without such action, the situation might rapidly deteriorate, and then affect its short-term results as well. In fact, three years after the study was conducted, unit a went into severe financial problems and previous sales levels has significantly declined.

In comparison to unit a, the position of unit b is quite strong regarding long- term measures. Its short-term measures, however, are rather poor. It is likely however, that due to its good technological infrastructure and its new product and market opportunities, that it will soon recover and present good performance, regarding profitability and orders as well. And in fact, three years later this unit proved itself as a very successful one.

Intermediate cases have also been observed. Unit c was ranked high in terms of profitability. Regarding other dimensions, however, its ranks were quite low.

Although this unit has good profits at the moment, there are no orders to provide time for reorganizing and opening new opportunities. Furthermore, it seems that management has not taken the right steps to establish the technological and human infrastructure, nor has it taken the steps for getting new orders. Obviously, this unit is on its way to decline and so indeed happened later.