Balancing Performance Measurement By Using
The Tradition Of Islam, Tao, And Java
I\VAN T R I Y UW O N O
D e p a r t m e n t o f A c c o u n t i n g - B r a w i j a y a U n i v e r s i t y
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T r a d i t i o n a l f i n a n c i a l m e a s u r e m e n t (e .g . r e tu r n o n i n v e s t m e n t ) is u s u a l l y u t i li z e d t o m e a s u r e m a n a g e m e n t p e r f o r m a n c e . H o w e v e r , it
d o e s n o t a d e q u a t e l y r e p r e s e n t t h e re a l p e r f o r m a n c e o f m a n a g e m e n t . A n a l t e r n a t i v e is o f f e re d , i.e. “ B a l a n c e d S c o r e c a r d ’' ( B S ) . It is n o t o n l y t r e a te d a s a p e r f o r m a n c e m e a s u r e m e n t , b ut
a l s o a s s t r a t e g i c m a n a g e m e n t s y s te m s . B S is m o r e e x t e n s i v e a n d e q u i t a b l e t h a n t h e t r a d i t i o n a l o n e .
T h i s p a p e r e v a l u a t e s a n d e x a m i n e s t h e g e n d e r o f t r a d i t i o n a l f i n a n c i a l m e a s u r e m e n t (R .01) a n d B S t h r o u g h a c u l t u r a l a n a l y s i s , i.e. I s l a m , T a o a n d J a v a n e s e t ra d i t io n . H a v i n g e v a l u a t i n g t h e g e n d e r o f t h e m e a s u r e m e n t s , t h e p a p e r c o n t i n u a l l y e v a l u a t e s t h e i r w e a k n e s s e s a n d a t t e m p t s t o r e f o r m u l a t e t h e m in a p r o p e r m a n n e r . A n i n s t r u m e n t o f a n a l y s i s is f o r m u l a t e d b a s e d o n I s la m , T a o a n d J a v a n e s e t r a d i t i o n . In e s s e n c e , t h e i n s t r u m e n t u t i li z e s ' ‘s y n e r g y o f b i n a r y o p p o s i t i o n " w h i c h d e c o n s t r u c t s “ t h e C e n t e r ” t h r o u g h i n t e r n a l i z i n g “ t h e o t h e r s . ”
T h e r e s u l t s o f t h e a n a l y s i s i n d i c a t e t h a t t h e p e r f o r m a n c e m e a s u r e m e n t s a r e s t r o n g l y m a s c u l i n e - l a d e n . T h e m a s c u l i n e v a l u e s a r e t h e o n e s t h a t t e n d t o b e e x p a n s i v e a n d d e s t r u c t i v e fo r s o c i a l o r d e r s o f h u m a n life a n d n a t u r a l e n v i r o n m e n t . T o e l i m i n a t e t h e n e g a t i v e e f f e c t s o f t h e m a s c u l i n e v a l u e s , t h e p a p e r s u g g e s t s m o d i f i c a t i o n o f t h e p e r f o r m a n c e m e a s u r e m e n t s b y h a r m o n i z i n g a n d b a l a n c i n g m a s c u l i n e v a l u e s w i th f e m i n i n e o n e s .
K e y w o r d s : r e tu r n o n i n v e s t m e n t , b a l a n c e d s c o r e c a r d , d e c o n s t r u c t i o n , b i n a r y o p p o s i t i o n , I s l a m , T a o , J a v a n e s e t r a d i t i o n , M a s c u l i n e a n d f e m i n i n e v a l u e s
The International Journal o f Accounting an d Business Society
1Vol. 15, No, 1
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August 2007
_________________________________ In t r o d u c t i o n______________ __
T r a d i t i o n a l l y , p e r f o r m a n c e m e a s u r e m e n t in g e n e r a l c o n s t a n t l y l i n k e d to t h e f i n a n c i a l a s p e c t . T h e m e a s u r e p a y s a tt e n t i o n o n p r i m a r i l y a c o m p a n y ’s p r o f i t a b i l i t y t h a t i n d i c a t e s t h e a b i l i t y o f t h e c o m p a n y to a c q u i r e p ro f it . T h e m e a s u r e f r e q u e n t l y u s e d is r e t u r n o n i n v e s t m e n t ( R O l ) . D u e t o t h e f r e q u e n t u s e o f t h e m e a s u r e , t h e m a j o r i t y o f b u s i n e s s s o c i e t y is n o t b e i n g c r it i c a l t o t h e m e a s u r e . B u s i n e s s s o c i e t y is d r a g g e d i n to o n l y o n e i n t e r e s t to a c q u i r e m a x i m u m p ro f it . It is a c t u a l l y o n e - s i d e d i n t e re s t , i.e. t h e i n t e r e s t o f s h a r e h o l d e r s .
P e r f o r m a n c e m e a s u r e m e n t e s s e n t i a l l y a f f e c t s m a n a g e m e n t b e h a v i o r ( o r o t h e r c o n c e r n e d p a r ti e s ) . B y u s i n g R O l , f o r e x a m p l e , m a n a g e m e n t i m p l e m e n t s v a r i o u s w a y s - e v e n t e n d s t o d i s r e g a r d p r o c e d u r e / m e t h o d - t o r e a c h h ig h R O l . A c c o r d i n g to t h e e t h i c s o f u t i l i ta r ia n is m , p r o c e d u r e / m e t h o d is n o t t h e m a i n c o n c e r n ; t h e m a in c o n c e r n is t h e a c h i e v e m e n t o f u ti li ty ( o f t e n c o n s i d e r e d w i th
m a t e r ia l a s p e c t ; i.e. m o n e y ) . T h e b i g g e r t h e s i z e o f u t ili ty , t h e m o r e ' ‘e t h i c a l " t h e p e r f o r m a n c e is. T h i s v ie w d o e s n o t w e ll ru n a l o n g w i th o t h e r e th i c s ( s u c h as d e o n t o l o g i c a l e th i c s , t h e n a t u ra l l aw o f e t h i c s , t h e o l o g i c a l e t h i c s , a n d r e l i g i o u s e t h i c s ) . In o t h e r w o r d s , a n a c ti o n t h a t a c c o r d i n g t o u t il i t a r i a n i s m is c o n s i d e r e d as e t h ic a l, b u t a c c o r d i n g t o t h e o t h e r e th i c s is c o n s i d e r e d a s n o t e th i c a l.
I r o n ic a l l y , u t i l i t a r i a n i s m is a c c e p t e d a s a d o m i n a n t e t h i c s t h a t a f f e c t s o c i e t y in l a rg e , b e it in b u s i n e s s p r a c t i c e o r in s c i e n c e . It is w o r t h t o k n o w th a t t h e e x i s t i n g e c o n o m i c s , m a n a g e m e n t s c i e n c e , a n d a c c o u n t i n g d i s c i p l i n e a r e c o n s t r u c t e d a n d p r a c t i c e d b a s e d o n t h e e t h i c s o f u t i li t a r i a n i s m . T h e e t h i c s j u d g e s g o o d o r b a d , r i g h t o r w r o n g , j u s t i c e o r i n j u s t ic e o n l y b a s e d o n u ti li ty a s a re s u lt o f a n a c t i o n . Y e t t h i s e t h i c s b e c o m e a f u n d a m e n t a l v a l u e o f c a p i t a l i s t i c e c o n o m i c s y s t e m .
T h e e t h i c s o f u t i l i t a r i a n i s m p o w e r f u l l y a f f e c t c a p i t a l i s t s ' ( s h a r e h o l d e r s a n d c r e d i t o r s ) b e h a v i o r w h o h a v e c o n c e r n o n c a p it a l i n v e s t e d t o e a r n s p ro f it . B a s e d on t h i s v i e w , it n o t s u r p r i s i n g , i f f i n a n c ia l p e r f o r m a n c e m e a s u r e m e n t , e s p e c i a l l y p r o f i t a b i l i t y b e c o m e s a m a i n i n d i c a t o r f o r s h a r e h o l d e r s t o k e e p a h o l d o f a n d e x t e n d t h e i r c a p it a l .
B a s e d o n t h e a b o v e d e s c r i p t i o n , it is u n d e r s t o o d t h a t f in a n c i a l p e r f o r m a n c e m e a s u r e m e n t is in f a c t a p a r ti a l m e a s u r e m e n t , t e n d s t o t a k e s i d e o n u t il it a r ia n s h a r e h o l d e r s , a n d t e n d s t o e x p l o i t o t h e r s t a k e h o l d e r s a n d n a t u r a l e n v i r o n m e n t . T h i s p a p e r a t t e m p t s t o a n a l y z e c r i t i c a l l y t r a d i t i o n a l p e r f o r m a n c e m e a s u r e m e n t th a t m e n t i o n e d e a r l i e r t o p r o v i d e a n a l t e r n a t i v e m e a s u r e m e n t ( w h i c h is h o p e d to p r o v i d e a p o s i t i v e i n f l u e n c e o n s t a k e h o l d e r s a n d n a tu r e ) . A n a n a l y s i s b e g i n s w i th s o m e c r i t i c s a l o n g s i d e t h e e x i s t i n g m e a s u r e m e n t s , t h a t is, t h e t r a d i t i o n a l a n d 2
Balancing Performance M easurem ent
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th e a d v a n c e d o n e s . T h e n a n a ly s is is c o n tin u e d b y d o in g d e c o n s tr u c t i o n th r o u g h S y n e r g y o f B in a r y O p p o s itio n w h ic h is d e v e lo p e d b a s e d o n t r a d itio n a l w is d o m o f I s la m , T a o , a n d J a v a .
The International Journal o f Accounting and Business Society
3Fi n a n c i a l Pe r f o r m a n c e Me a s u r e m e n t ( Re t u r n o n In v e s t m e n t )
P e r f o r m a n c e m e a s u r e m e n t u s in g R O I w a s d e v e lo p e d u n til e a r ly 2 0 th c e n tu r y . T h is in s tr u m e n t is m u c h in f lu e n c e d b y b u s in e s s t r a d itio n o f 19 th c e n tu r y th a t g e n e r a lly m e a s u r e s p e r f o r m a n c e b a s e d o n r a tio b e tw e e n n e t e a r n in g s a n d s a le s r e v e n u e o r c o s ts o f o p e r a tio n . In e a r ly 19th c e n tu r y , b u s i n e s s m e n ( o w n e r -
e n t r e p r e n e u r ) u s u a lly c o n c e n tr a te d o n o n e s in g le e c o n o m ic a c tiv ity , th e r e f o r e it is f a v o r a b le to u s e o p e r a tin g r a tio o f c o s ts to r e v e n u e o r r e tu r n o n s a le s to m e a s u r e t h e i r p r o f ita b ility ( K a p la n a n d A tk in s o n 1 9 9 8 , 5 0 0 ).
B u s in e s s m o d e l o f 2 0 th c e n tu r y is d if f e r e n t fr o m p r e v io u s c e n tu r y . 2 0 th c e n tu r y b u s in e s s is n o t o n ly f o c u s e d o n o n e s in g le e c o n o m y a c tiv ity , b u t m o re th a n o n e . O r ig in a lly , b u s in e s s a c tiv itie s w e r e s e p a r a te d a n d in d e p e n d e n t, a f te r w a r d th e y w e r e in te g r a te d ; f o r e x a m p le , to c o o r d in a te a n d a llo c a te r e s o u r c e s , a d if f e r e n t a c tiv ity is n e e d e d , s u c h a s p r o d u c in g , b u y in g , a n d s e llin g a c tiv ity . T h e r e f o r e , a n e w m e a s u r e m e n t is r e q u ir e d to m e a s u r e p r o f ita b ility o f a c o m p a n y . T h e m e a s u r e m e n t is r e tu r n o n in v e s tm e n t ( R O I ) w h ic h is in itia te d b y D u P o n t P o w d e r C o m p a n y th a t e s ta b lis h e d in 1 9 0 3 . T h e m e a s u r e m e n t is a c o m b in a tio n o f r e tu r n o n s a le s a n d a s s e ts t u r n o v e r ( K a p la n a n d A tk in s o n 1 9 9 8 ,
5 0 0 ).
B a s e d o n th e e x p la n a tio n a b o v e , w e s e e t h a t in 19th c e n tu r y o w n e r - e n t r e p r e n e u r h e ld a n e s s e n tia l r o le in b u s in e s s . T h e r e f o r e , th e p r im a r y a tte n tio n o f th e b u s in e s s is r e tu r n o f c a p ita l in v e s te d in th e b u s in e s s . T h e p r o p e r m e a s u r e m e n t o n th a t p o in t in tim e is th e c o m p a r is o n o f n e t e a r n in g s a n d s a le s r e v e n u e o r c o s ts o f o p e r a tio n s . O n n e x t p e r io d , o w n e r ’s r o le s till a p p a r e n t ( a lth o u g h “ th e s t r u c t u r e ” o f o w n e r h i m s e l f is n o l o n g e r in d iv id u a l, b u t c o lle c tiv e a n d th e b u s in e s s “ s t r u c t u r e ” is m o r e c o m p le x ) . It is r e f le c te d o n th e m e a s u r e m e n t u tiliz e d , th a t is, r e tu r n o n in v e s tm e n t ( R O I ) w h ic h r e p r e s e n ts th e p r im e in te re s t
o f th e o w n e r s o f c a p ita l.
In th e c o n t e x t o f a c c o u n tin g , th e f ir s t m o d e l is r e f le c te d in p r o p r i e t a r y
t h e o r y , w h ile th e s e c o n d is r e p r e s e n te d in e n t i t y t h e o r y . U n d e r th e fo r m e r, p r o p r ie to r o r o w n e r tu r n o u t to b e th e c e n te r o f a tte n tio n . It m e a n s , a il a c c o u n tin g c o n c e p ts , p r o c e d u r e s , a n d r e g u la tio n s a r e f o r m u la te d b a s e d o n th e in te r e s t o f th e o w n e r ( K a m 1 9 9 0 , 3 0 2 ; s e e a ls o C h a tf ie ld 1 9 7 7 , 2 2 0 ) . U n d e r th e la tte r, th e o w n e r is s till th e c e n te r o f a tte n tio n . T h e d if f e r e n c e o n ly a p p e a r s in th e
Vol. 15. No. ], August 2007
4 liu la n cm x Fe,1 for m ane t M easurem ent
s e p a r a t i o n b e t w e e n t h e o w n e r s p e r s o n a l a f f a i r s w i t h a c o m p a n y a s a n e n ti t y
(K.am 1 9 9 0 , 3 0 4 ) . "
E n ti ty t h e o r y r e c o g n i z e s a r e l a t i o n s h i p b e t w e e n o w n e r ( p r i n c i p a l ) a n d a g e n t w h i c h is c a l l e d a s p r i n c i p a l - a g e n t r e l a t i o n s h i p ( m o d e l ) . S o m e s t u d i e s il lu s t r a te t h a t t h e r e l a t i o n s h i p g i v e s r is e t o a g e n c y c o s t s , f o r i n s t a n c e , m o n i t o r i n g e x p e n d i t u r e s t h a t p a i d o u t b y t h e p r in c i p a l ( s u c h a s, t h e c o s t to a p p o i n t an a u d i t o r ) , b o n d i n g e x p e n d i t u r e s t h a t p a id o u t b y t h e a g e n t ( s u c h a s , t h e c o s t t o set u p a n n u a l f i n a n c i a l r e p o r t ) , a n d r e s id u a l c o s t s ( W h i t t r e d a n d Z i m m e r 1 9 9 0 , 2 3 ).
1 h e c o s t s a r i s e b e c a u s e o f b o t h p a r ti e s h a v e d i f f e r e n t i n t e r e st s .
A w a y f r o m t h e e x i s t i n g a g e n c y c o s ts , p r i n c i p a l - a g e n t r e l a t i o n s h i p is s t ro n g ly c r i t i c i z e d by its o p p o n e n t s , o n e o f t h e m is C h w a s t i a k ( 1 9 9 9 ) . C h w a s t i a k ( 1 9 9 9 ) o p i n e s t h a t p r i n c i p a l - a g e n t m o d e l is m u c h i n f l u e n c e d b y c a p it a l i s t i c v a l u e s t h a t t e n d t o b e e x p l o i t a t i v e . S h e a r g u e s th a t
1 h e [ p r i n c i p a l - a g e n t ] t h e o r y a c t u a l l y i m p o s e s a c a p i t a l i s t i c s u b j e c t i v i t y o n t h e o b j e c t o f t h e r e s e a r c h , la b o r , a n d in so d o i n g , r a t i o n a l i z e s a n d l e g i t i m i z e s e x p l o i t a t i o n ( C h w a s t i a k
1 9 9 9 , 4 2 5 ) .
B a s e d o n t h e s t a t e m e n t a b o v e , it c o m e s i n to i n s i g h t t h a t t h e t h e o r y r a t i o n a l i z e s a n d l e g i t i m a t e s e x p l o i t a t i o n t o w a r d p a r ti e s t h a t is in a w e a k p o s i t i o n , i.e. l a b o rs .
R a t i o n a l i z a t i o n o f p r i n c i p a l - a g e n t m o d e l is d e r i v e d f r o m a n a s s u m p t i o n t h a t s e l f - i n t e r e s t b e h a v i o r o f h u m a n g e n e t i c a l l y s t e m s f r o m “ b i o l o g i c a l ”
c h a r a c t e r o r m o s t c o m m o n l y s a i d b i o l o g i c a l d e t e r m i n i s m , n o t a s a p r o d u c t o f s o c i a l i n te r a c t io n . T h i s a s s u m p t i o n r a t i o n a l i z e s r e p r e s s i v e - e x p l o i t a t i v e c u s t o m s a s a n e f f e c t o f u n c o n t r o l l a b l e p r o c e s s . T h u s , it is t y p i c a l w h e n t h e c h a r a c t e r is u s e d t o l e g i t i m a t e e x p l o i t a t i o n . T h i s a s s u m p t i o n b e c o m e s f u n d a m e n t a l c o n c e p t s a n d v a l u e s o f t h e p r i n c i p a l - a g e n t m o d e l .
F u r t h e r , it is s a i d t h a t s e l f - i n t e r e s t s t r e n g t h e n s t h e i n d i v i d u a l i s t i c b e h a v i o r o f a s o c i e t y , w h i c h is t h e n i s o l a t e d , f r a g m e n t e d , a n d a l i e n a t e d f r o m its a l t r u i s ti c c h a r a c t e r ( C h w a s t i a k 1 9 99 ; I k e d a 1 992).
In r e g a r d t o t h e p r i n c i p a l - a g e n t m o d e l , “ s t r u c t u r a l v i o l e n c e ” ( w h i c h a s s u m e s t h a t t h e p r o c e s s o f a c c u m u l a t i n g c a p it a l is m o r e i m p o r t a n t t h a n h u m a n life) t u r n o u t t o b e s o m e t h i n g r a ti o n a l a n d le g a l. A s a r e s u lt o f t h e “ s tr u c t u r a l v i o l e n c e ” , h u m a n b e i n g b e c o m e s i g n o r a n c e , a p a t h y ( C h w a s t i a k 1 9 9 9 , 4 3 3 - 4 3 4 ) , a n d in t u r n d o e s n o t p e r c e i v e h i s / h e r - o w n n a t u r e .
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In th e c o n t e x t o f m ic r o a n d c u r r e n t c ir c u m s ta n c e s , o n e fo r m o f th e s tr u c tu r a l v i o le n c e is th e p a r tia l m e a s u r e m e n t o f m a n a g e m e n t p e r f o r m a n c e th a t m e a s u r e d b y R O I. T h i s m e a s u r e m e n t is o b v io u s ly th e p r im a r y to o l f o r o w n e r to c o n tr o l a c o m p a n y in o r d e r to m a in ta in a n d d e v e lo p c a p ita l. S u c h c o n d itio n is in d e e d e x i s t i n g in o u r s o c ie ty , a n d e v e n lo s in g c o n tr o l. T h u s , n o o n e c a n e s c a p e fro m th is c o llis io n c ir c le .
B a s e d o n th e a b o v e d e s c r ip tio n , it is p e r c e iv e d th a t p r i n c ip a l- a g e n t m o d e l is fu ll o f s e lf - in te r e s t. A s c o m m o n ly k n o w n , s e lf - in te r e s t is th e b a s ic v a lu e o f c a p ita lis m . T h e v a lu e f u n d a m e n ta lly tr a n s f o r m s h u m a n life . It is a s o r t o f life th a t e n tr a p s h u m a n b e in g in to m a te r ia lis tic a n d h e d o n ic n e tw o r k s o f life . H u m a n b e in g a s th e c r e a t o r c a n n o t c o n tr o l h is /h e r o w n c r e a tio n a n d e n t r a p s h i m /h e r s e l f in to th e c r e a tio n . H e /s h e is e n tr a p p e d h i m s e l f / h e r s e lf in c a p ita l a c c u m u la tio n a n d
m a te r ia l a c c u m u la tio n .
The International Journal o f Accounting and Business Society
5_________Ba l a n c e d Sc o r e c a r d: An Al t e r n a t i v e Me a s u r e m e n t?_________
R O I is th e re a l m e a s u r e m e n t th a t is c r e a te d fo r th e in te r e s t o f o w n e r s . M a n y p e o p le h a v e u n d e r s to o d th e w e a k n e s s e s o f th e in s tr u m e n t. T h e r e is a n e e d to in v e n t a n a lte r n a t iv e o n e . A n in s tr u m e n t th a t c u r r e n tly b e c o m e s a c e n te r o f a tte n tio n is B a la n c e d S c o r e c a r d (B S ) . T h is in s tr u m e n t is fo r m e d to c o m m u n i c a t e v a r io u s r e la te d o r g a n iz a t i o n ’s o b je c tiv e s th a t h a v e to b e a c h ie v e d o n th e b a s e s o f c a p a c ity a n d in n o v a tio n , n o t b a s e d o n p h y s ic a l a c tiv ity ( K a p la n a n d A tk in s o n 1 9 9 8 , 3 6 8 ) a s w e n o tic e in th e 19th a n d 2 0 th c e n tu r y m o d e ls .
B S h a s f o u r p e r s p e c tiv e s , n a m e ly : ( 1 ) fin a n c ia l p e r s p e c tiv e ; ( 2 ) c u s to m e r p e r s p e c tiv e ; (3 ) in te rn a l b u s in e s s p r o c e s s p e r s p e c tiv e ; a n d ( 4 ) le a r n in g a n d g r o w th p e r s p e c tiv e . F in a n c ia l p e r s p e c tiv e is still u tiliz in g f in a n c ia l p e r f o r m a n c e m e a s u r e m e n ts a s in d ic a to r s w h e th e r c o m p a n y ’s s tr a te g y , i m p le m e n ta tio n , a n d e x e c u tio n h a v e c o n t r i b u t e d to th e b o tto m - lin e im p r o v e m e n t. M e a s u r e m e n t in th is p e r s p e c tiv e u s u a lly c o v e r s o p e r a tin g in c o m e , re tu r n o n c a p ita l e m p lo y e d , o r e c o n o m ic v a lu e a d d e d .
C u s to m e r p e r s p e c tiv e g iv e s its c o n c e r n to c u s to m e r s . U n d e r th e p e r s p e c tiv e , c u s t o m e r s a n d m a r k e t s e g m e n ts id e n tif ie d in a c e r ta in b u s in e s s u n its w h ic h in tu rn t h e ir m e a s u r e m e n ts a r e lin k e d to c u s to m e r s a tis f a c tio n , c u s to m e r r e te n tio n , n e w c u s t o m e r a c q u is itio n , c u s to m e r p r o f ita b ility , a n d m a r k e t a n d a c c o u n t s h a r e o n m a r k e t o b je c tiv e .
In th e p e r s p e c tiv e o f in te rn a l b u s in e s s p r o c e s s , c o m p a n y e x e c u tiv e s id e n tify c r itic a l in te rn a l p r o c e s s th a t s h o u ld b e u n d e r ta k e n b y m a n a g e m e n t. It
Vol. 15, No. 1, A ugust 2007
6 Balancing Performance M easurem ent
.w ill a s s i s t c o m p a n y t o fill u p v a l u e p r o p o s i t i o n t h a t m a y a t t r a c t a n d m a i n t a i n m a r k e t s e g m e n t a s a t a r g e t . A d d i t i o n a l l y , it a l s o s a t i s f i e s s h a r e h o l d e r s o n e x p e c t e d r e t u r n ( s e e K a p l a n a n d N o r t o n 1 9 9 6 , 2 5 - 2 9 ; K a p l a n a n d A t k i n s o n
1998, 3 6 8 - 3 7 5 ) .
F i n a n c i a l m e a s u r e m e n t e s s e n t i a l l y p r o v i d e s p a s t i n f o r m a t i o n o f m a n a g e r i a l p e r f o r m a n c e . T h e i n f o r m a t i o n b e c o m e s le s s a d e q u a t e t o e v a l u a t e c o m p a n y ' s d e v e l o p m e n t t h a t o r i e n t s t o t h e c r e a t i o n f u t u r e v a l u e t h r o u g h i n v e s t m e n t s o n c u s t o m e r , s u p p l i e r , l a b o r , p r o c e s s , t e c h n o l o g y , a n d i n n o v a t i o n . T h e r e f o r e , B S f u r n i s h e s its f i n a n c i a l m e a s u r e m e n t w i t h a d r i v e r o f f u t u r e p e r f o r m a n c e ( K a p l a n a n d N o r t o n 199 6, 7 -8 ).
B S a u g m e n t s a set o f o b j e c t i v e s b e y o n d f in a n c ia l m e a s u r e m e n t . F o r th is r e a s o n , m a n a g e m e n t c a n m e a s u r e h o w t h e i r b u s i n e s s c a n c r e a t e v a l u e - a d d e d to th e e x i s t i n g c u s t o m e r s a n d p o t e n t i a l c u s t o m e r s , a n d h o w t h e y e x p a n d in t e rn a l c a p a b i l i t y a n d h u m a n r e s o u r c e s , s y s t e m s a n d p r o c e d u r e s t h a t a r e n e e d e d to
i m p r o v e f u t u r e p e r f o r m a n c e . T h u s , B S is n o t j u s t a n i n s t r u m e n t o f p e r f o r m a n c e m e a s u r e m e n t , b u t a l s o - a n d m a i n l y - f u n c t i o n s a s s t r a t e g i c m a n a g e m e n t s y s te m ( K a p l a n a n d N o r t o n 1 9 9 6 , 8).
T h e c o n c e p t o f B S m e a s u r e m e n t is m o r e c o m p l e t e a n d c o m p r e h e n s i v e t h a n t h e t r a d i t i o n a l o n e t h a t o n l y m e a s u r e s p e r f o r m a n c e h i s t o r i c a l l y . B S is c o n c e r n e d w i th i n t e r n a l a n d e x t e r n a l , f i n a n c ia l a n d n o n - f i n a n c i a l a s p e c ts , h is t o r ic a l a n d f u t u r e p e r f o r m a n c e , a n d s o f o r th . H o w e v e r , b e s i d e t h e s e s t r e n g t h s , B S h a s a l s o s o m e w e a k n e s s e s ( s e e B e s s i re 2 0 0 0 ) .
B e s s i r e ( 2 0 0 0 , 1 1 -1 3 ) s e e s s o m e i m p o r t a n t w e a k n e s s e s , f o r i n s t a n c e , f i r s t l y
K a p l a n a n d N o r t o n ( 1 9 9 6 , 2 4 ) d o e s n o t c le a rl y d e f i n e s t h e v i s i o n a n d m i s s i o n . In fact, v i s i o n a n d m i s s i o n a r e t h e e s s e n ti a l a s p e c t t o i m p l e m e n t B S a s s t ra te g i c
m a n a g e m e n t s y s t e m a n d m e a s u r e m e n t . A c c o r d i n g t o B e s s i r e ( 2 0 0 0 ) , K a p l a n a n d N o r t o n ’s ( 1 9 9 6 ) “ m i s s i o n ” a c t u a l l y is n o t t h e t r u e m i s s i o n , b u t m o r e l ik e l y as ■‘o b j e c t i v e '’ o r “ s t r a t e g y . ” T h u s , it d o e s n o t i n s p i r e a s t h e y m e n t i o n e d .
S e c o n d l y, t h e r e is d u b i o u s r a ti o n a l i t y o f t h e s e l e c t e d f o u r p e r s p e c t i v e s ( f in a n c i a l , c u s t o m e r , i n t e r n a l b u s i n e s s p r o c e s s , a n d g r o w t h ) . T h e fi rs t a n d s e c o n d p e r s p e c t i v e i n d i c a t e s a n o b j e c t i v e t o b a l a n c e t h e i n t e r e s t s o f s h a r e h o l d e r s a n d
c u s t o m e r s . W h i l e t h e la s t t w o p e r s p e c t i v e s l i n k e d to t h e i n s t r u m e n t u s e d to a c h i e v e g o a l o f s a t i s f y i n g s h a r e h o l d e r s a n d c u s t o m e r s ( B e s s i r e 2 0 0 0 , 12-1 3 ).
B e s i d e s t h e w e a k n e s s e s m e n t i o n e d b y B e s s i r e ( 2 0 0 0 ) , t h i s p a p e r a t t e m p t s t o d i s c l o s e s o t h e r w e a k n e s s e s . F i r s t l y , in f a c t B S still p o s e s f i n a n c i a l o b j e c t i v e s ( t h a t is, p r o f i t m a x i m i z a t i o n ) a s t h e o n l y o b j e c t i v e o f a c o m p a n y a s K a p l a n a n d
N o r t o n ( 1 9 9 6 , 6 1 ) s a i d ,
Vol. 15
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No. 1, August 2007
The International Journal ofA ccounting and Business Socienv
E v e n tu a lly , a ll o b je c tiv e s a n d m e a s u r e s in th e o th e r s c o r e c a r d p e r s p e c t i v e s s h o u ld b e lin k e d to a c h ie v i n g o n e o r m o r e
o b j e c t i v e s in th e f in a n c ia l p e r s p e c t i v e s . .. T h is lin k a g e to f in a n c ia l o b je c tiv e s e x p lic itly r e c o g n iz e s th a t th e lo n g - r u n g o a l f o r th e b u s in e s s is to g e n e r a te f in a n c ia l r e tu r n s to i n v e s to r s , a n d a ll s tr a te g ie s , p r o g r a m s , a n d in itia tiv e s s h o u ld e n a b le th e b u s in e s s u n it to a c h ie v e its f in a n c ia l o b je c tiv e s .
E v e n tu a lly , B S e n d s u p w ith fin a n c ia l o b je c tiv e s w h ic h in tr a d itio n a l m e a s u r e m e n t a r e u s u a lly m e a s u r e d b y p r o f ita b ility a s K a p la n a n d N o r t o n ( 1 9 9 6 , 6 1 ) n o tic e b e lo w :
E v e r y s c o r e c a r d w e h a v e s e e n u s e s t r a d itio n a l f in a n c ia l o b j e c t i v e s r e la tin g p r o f ita b ility , a s s e ts r e tu r n s , a n d r e v e n u e e n h a n c e m e n t s . T h is e v id e n c e r e in f o r c e s th e s tr o n g lin k s o f
t h e b a la n c e d s c o r e c a r d to th e l o n g - e s ta b lis h e d b u s in e s s u n it o b je c tiv e s .
T h u s , e v e r y p e r s p e c tiv e o f B S is d e s ig n e d in s u c h a w a y to a c h ie v e f in a n c ia l o b je c t i v e o f c o m p a n y . In o t h e r w o r d s , B S k e e p s a d o p t i n g a b u s in e s s p e r s p e c tiv e t h a t o r ie n ts to p r o f it m a x im iz a tio n .
S e c o n d l y, th e a d o p tio n o f p r o f it m a x im iz a tio n p a r a d ig m in d ic a te s th a t e th ic a l v a lu e s u tiliz e d a r e th e e th ic s o f u tilita r ia n is m . T h e e th ic s d i c ta te th a t:
A n a c tio n is r ig h t fr o m a n e th ic a l p o in t o f v ie w i f o n ly th e s o m e to ta l u tilitie s p r o d u c e d b y th a t a c t is g r e a t e r th a n th e s u m to ta l o f u tilitie s p r o d u c e d b y a n y o th e r a c t th e a g e n t c o u ld h a v e p e r f o r m e d in its p la c e ( V e la s q u e z 1 9 9 2 , 6 1 ).
T h e o n ly e th ic a l m e a s u r e m e n t, f o r th is e th ic s , is th e s iz e o f u tility c r e a te d b y a n a c tio n . T h e r e f o r e , th e m e a s u r e m e n t is o n ly c o n c e r n e d w ith “ r e s u lt ” o r “ c o n s e q u e n c e ,” n o t “ p r o c e s s ” .
T h e e t h ic s o f u tilita r ia n is m d o m in a te s m o d e m life . A lm o s t a ll a s p e c ts o f life a r e m e a s u r e d w ith u tility . T h u s , th e c r e a tio n o f u tility b e c o m e s “ th e c e n te r ”
o f th e m o d e m life . E v e n , s c ie n c e ( s u c h a s , e c o n o m ic s , m a n a g e m e n t, a c c o u n tin g , te c h n o lo g y , a n d s o f o r th ) is d e v e lo p e d b a s e d o n th e s e e th ic a l v a lu e s . U ltim a te ly , h u m a n b e h a v io r in g e n e r a l t e n d s to lo o k f o r o p p o r tu n itie s t o g a in a g r e a t d e a l o f u tility w i t h o u t e v e n c o n s i d e r th e tr u e e th ic a l v a lu e s .
T h e e t h ic s o f u tilita r ia n is m is a ls o r e c o g n iz e d a s th e e t h i c s t h a t u tiliz e d as th e b a s e s o f c a p it a li s t i c e c o n o m ic s y s te m , a g e n c y t h e o r y , a n d p r in c ip a l- a g e n t m o d e l. T h e s y s te m , t h e o r y , a n d m o d e l in s o m e a s p e c ts h a v e b e e n c r itic iz e d by
VoL IS, No. 1, A ugust 2007
8
B a l a n c i n g i Je r j o r n i u n c e i V i e a s u r e m t n is o m e e x p e r ts ( t o r in s ta n c e , Ik e d a i 9 9 2 , O iw a s u a K ; ^ 9 9 , t i e s s u c .:0UUj i rr. ji ii ic> ia ll in to th e a r e a s o f th e e x p lo ita tiv e c h a r a c te r o f th e e th ic s , io r i n s t a n t e x p lo ita tio n to w a r d s la b o r s , n a tu r a l e n v ir o n m e n t, h u m a n s p ir itu a l life , a n d su o n
r h e t h i r d w e a k n e s s is p u ttin g " th e o w n e r s o f th e c a p it a l ” - th e c a p tia iis ii. 'i.iic iio ld e r s a n d c r e d ito r s ) a s a c e n te r p o in t o f s tr a te g ic m a n a g e m e n t s y s te m n ii >act is p r o v e n b y d e m o n s tr a tin g th e f o llo w in g c o n c e p t
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K a p la n an:: No rto n . ’■ -Vn. 6 I )^ n a n c i a i D je c u v e s . c p r e s e n t th e lo n g - te r m g o a i oi m e jf g a n iz a tio n . i o p r o v i d e s u p e r i o r r e t u r n s b a s e d o n t h e c a p i t a l
n v e s t e d in ih e u n it. U s in g th e b a la n c e d s c o r e c a r u a o e s h u l o o n llic t w ith th is v ita l g o a l. In d e e d , th e b a la n c e d s c o r e c a r d c a n
m a k e th e f in a n c ia l o b je c tiv e s e x p lic it, a n d c u s to m iz e f in a n c ia l -)b je c tiv e s to b u s in e s s u n its in d if f e r e n t s ta g e s o f t h e ir g r o w th a n d iife c y c l e . . . T h is lin k a g e to f in a n c ia l o b je c t i v e s e x p lic itly re c o g n iz e s th a t th e lo n g - r u n g o a l fo r th e b u s in e s s is to g e n e r a te fin a n c ia l r e tu r n s to i n v e s t o r s , a n d a ll s tr a te g ie s , p r o g r a m s , a n d i n itia tiv e s s h o u ld e n a b le th e b u s in e s s u n it to a c h ie v e its fin a n c ia l o b j e c tiv e s ( ita lic s a d d e d ) .
T h e s ta te m e n t c le a r ly e x p la in s th a t th e lo n g - te r m g o a l o f th e c o m p a n y is
to p r o v id e s u p e r io r r e tu r n s b a s e d o n th e c a p ita l in v e s te d in th e b u s in e s s . B a s e d
o n t h e c a p i t a l - i n v e s t e d m e a n s th e e x p e c te d r e tu r n s a r e f o r th e o w n e r s o f th e c a p ita l ( c a p ita lis ts ) . W h ile , th e o t h e r s e n te n c e c le a r ly s ta te s t o g e n e r a t e f i n a n c i a l
r e t u r n s t o i n v e s t o r s, t o p r o d u c e r e tu r n s f o r in v e s to r s .
T h e fa c t is a ls o s u p p o r te d b y a c c o u n tin g b o d y o f U n ite d S ta te s o f A m e r ic a th a t f o r m u la te s th e o b je c tiv e o f f in a n c ia l s ta te m e n ts f o r a s follow ':
An o b je c tiv e o f f in a n c ia l s ta te m e n t is to p r o v id e in f o r m a tio n js e f'u l to i n v e s t o r s a n d c r e d i t o r s f o r p r e d ic tin g , c o m p a r in g , a n d e v a lu a tin g p o te n tia l c a s h f lo w s to th e m in te r m s o f a m o u n t, t im in g a n d r e la te d u n c e r ta in ty ( M a tth e w a n d P e r e r a 1 9 7 3 , 76 ; ita lic s a d d e d ) .
B a s e d o n th e d e s c r ip tio n a b o v e , it is c le a r th a t th e o w n e r s o f th e c a p ita l ( in v e s to r s a n d c r e d i t o r s ) h a v e s ig n if ic a n t p o s itio n fo r th e c o m p a n y to s u rv iv e . T h e r e f o r e , th e in te r e s ts o f c a p ita lis ts b e c o m e a f irs t p r io r ity in d e s i g n i n g a n d p r e p a r in g f in a n c ia l s ta te m e n ts . F u r th e r m o r e , w e n o tic e th a t f in a n c ia l s ta te m e n ts a r e d e s ig n e d to m e a s u r e f in a n c ia l p e r f o r m a n c e t o m e e t t h e c a p i t a l i s t s ’ in te r e s ts
In other aspect, w e can say that BS is designed to meet the interests o f
only limited stakeholders, i.e. investors, customers, and em ployee. Under the
V ol 15, No. 1, A ugust 2007
le a r n in g a n d g r o w th p e r s p e c tiv e , e m p lo y e e d o e s g e t a tte n tio n a s s e e n o n c o r e e m p lo y e e m e a s u r e m e n t s th a t c o n s is t o f e m p lo y e e s a tis f a c tio n a n d e m p lo y e e r e te n tio n . H o w e v e r , it s e e m s t h a t e m p lo y e e is m a d e u s e o f b y m a n a g e m e n t to p r o v id e a n e x c e l l e n t s e r v ic e t o c u s to m e r s th a t b y d o in g th is , th e c o m p a n y w ill e a rn h ig h r e tu r n s . T h e c u s to m e r s a ls o s e e m to b e p la c e d a s a n o b je c t th a t to b e w e ll s e r v e d s o th e c o m p a n y c a n g a in h ig h r e tu r n s . F in a lly , w e c a n s e e th a t th e f irs t to p r a n k o f s ta k e h o ld e r s is in v e s to r. T h is m e a n s t h a t th e in v e s to r a c ts a s a s u b je c t w h o c o n t r o l s a n o b je c t.
Th e De c o n s t r u c t i o n Ep i s t e m o l o c y o f Pe r f o r m a n c e Me a s u r e m e n t
B a s e d o n th e p r e v io u s e x p la n a tio n , w e k n o w th a t ( 1 ) p r o f it m a x im iz a tio n ,
(2 ) th e e th ic s o f u tilita r ia n is m , ( 3 ) c a p ita lis ts , a n d ( 4 ) lim ite d s ta k e h o l d e r s a r e th e c e n tr a l e l e m e n ts o f B S . In m o d e r n c iv iliz a tio n , th e y h a v e p o w e r to d o m in a te a n d
e lim in a te s o m e t h i n g e ls e , th a t is, “ T h e O t h e r s .” T h is w a y o f th i n k in g is r e c o g n iz e d a s “ b in a r y o p p o s i t io n .” B in a r y o p p o s itio n m e a n s tw o t h i n g s a lw a y s in c o n t r a d i c t o r y p o s itio n ( f o r in s ta n c e , s tr u c tu r e - s u b s ta n c e , e g o is tic - a ltr u is tic , m a te r ia l- s p ir itu a l, e c o n o m y - s o c ia l, a n d s o o n ) th a t e a c h p a r t a tte m p ts to d o m in a te o r e li m in a t e th e o th e r s .
T h is w a y o f t h in k in g h a s a n e g a tiv e e f f e c t, s in c e th e c o n c e p t i t s e l f d o e s n o t h a v e a b a la n c e d v a lu e . W h ile , th e w is d o m o f Is la m ic t r a d itio n ( th r o u g h th e c o n c e p t o f p a ir ) , C h in e s e t r a d itio n ( th r o u g h th e c o n c e p t o f T a o is m , i.e . th e b a la n c e o f y i n a n d y a n g ) ( s e e C a p r a 1 9 7 5 ; 1 9 9 6 ), a n d J a v a n e s e t r a d itio n ( th r o u g h a s ta te m e n t o f '" n g o n o y o n g o n o n i n g y o o j o n g o n o” w h ic h m e a n s m o r e o r le ss “ d o it, b u t d o n o t b e e x c e s s i v e ” ) t e a c h e s u s a s e n s e o f b a la n c e , o f h a r m o n y , a n d o f j u s t ic e . T h e s e t r a d i t i o n s in th e m o d e m c iv iliz a tio n is m a r g in a liz e d . T h e y a r e
b r u s h e d o ff ; b r u s h e d o f f fro m “ T h e C e n t r a l ” a n d tr a p p e d in a m a r g in a l p o s itio n . E v e n , e v e r y e f f o r t th a t w a s d o n e to d is p o s e “ th e O t h e r s ” is a c tu a lly a n a c tio n to tr a p o u r s e lv e s o r to d a m a g e o u r s e lv e s . T h e d e s tr u c tio n o f o u r n a tu ra l e n v i r o n m e n t ( f lo o d a n d la n d e r o s io n ) , e c o n o m ic c r is is , p o litic a l c r is is , a n d s o c ia l c r is is a r e a r is i n g b e c a u s e o f fa ls e c o n c e p ts o f m o d e r n is m th a t p la c e s m o n e y o r c a p ita l a b o v e a ll - a s “ T h e C e n t r a l ” .
I s la m ic t r a d itio n in H o ly K o ra n ( f o r in s ta n c e , Q S 3 6 :3 6 ) t e a c h e s u s th e n a tu r e o f th e w o r ld o f e x is te n c e w h ic h a lw a y s is in “ p a ir ,” t h a t is, p a ir s y s te m o f tw o o p p o s i n g m a tte r s ( p a ir s o f o p p o s ite fo r c e s ) . O t h e r Q u r ’a n ic v e r s e ( Q S 9 4 : 6 ), i.e “ B e h in d a d if f ic u lty th e r e s h o u ld b e a n e a s in e s s ,” a ls o s h o w s th e s a m e m a tte r , n a m e ly , th e u n io n o f tw o o p p o s in g m a tte r s . T h is is th e la w o f n a tu r e ; th e la w o f G o d . E m p ir ic a lly , w e n o tic e th e la w , f o r in s ta n c e , in a to m th a t h a s p ro to n
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9Vol. 15, No. 1, A ugust 2007
to B a l a n c i n g P e r f o r m a n c e M e a s u r e m e n t...
a n d e le c tr o n , in e le c tr ic ity th a t h a s p o s itiv e a n d n e g a tiv e p o le s , a n d s o o n . I s l a m i c t r a d itio n b e lie v e s th a t th e tw o o p p o s in g m a tte r s ( o p p o s ite f o r c e s ) a r e in a u n ity ( u n i t y o f o p p o s ite s ) , n o t tw o s e p a r a te d m a tte r s ( s e e A li 1 9 8 9 , 1 1 2 4 ).
T h e c o n c e p t is n o t s o d if f e r e n t w ith th e te n e ts o f T a o is m . T a o is m is a s y s te m o f b e l i e f th a t is m o r e b a s e d o n in tu itiv e w is d o m th a n r a tio n a l k n o w le d g e . O n e o f th e c o n c e p ts is th a t th e w o r ld e x is te n c e is g o v e r n e d b y a d y n a m ic in te r p la y o f tw o o p p o s i n g m a tte r s , i.e. Y i n a n d Y a n g . In th is r e g a r d , C a p r a (1 9 7 S , 1 0 2 ) s a y s th a t
. . . a l l c h a n g e s in n a tu r e a s m a n if e s ta tio n s o f d y n a m ic in te r p la y b e tw e e n th e p o la r o p p o s itio n y in a n d y a n g , a n d th u s th e y ( T a o is t) c a m e to b e lie v e th a t a n y p a ir o f o p p o s ite s c o n s titu te s a p o la r r e la t io n s h i p w h e r e e a c h o f th e tw o p o le s is d y n a m ic a lly lin k e d to
th e o th e r.
F o r W e s te r n tr a d itio n , a c c o r d in g to C a p r a ( 1 9 7 5 , 1 0 2 ), th e id e a th a t u n ite s tw o o p p o s i n g f o r c e s is h a r d to re c o g n iz e . E v e n , a c c o r d i n g to W a tts ( 1 9 7 9 , 2 0 ), th e c o n c e p t is a p u z z lin g o n e , b e c a u s e th e r a tio n a l a n d m a te r ia lis tic w e s te r n c iv iliz a tio n o b s e r v e a n y th in g in a lin e a r ( n o t c y c lic ) m o d e l. I n te r d e p e n d e n c y o f tw o o p p o s i n g m a tte r s , a c c o r d in g to th is v ie w , m e a n s r e je c tin g a “ p r o g r e s s ” ( w h ic h is s e e n a s a lin e a r m o d e ). A ll W e s te r n v ie w s a g r e e to s a y , “ m a k in g th e
w o r ld b e t t e r ” in a lin e a r w a y o f th in k in g ( th a t is d if f e r e n t w ith E a s te r n c iv iliz a tio n w h ic h b e lie v e s in c y c lic m o d e ) - h a p p y w ith o u t s a d , ric h w ith o u t p o o r, a n d h e a lth y w ith o u t b e in g s ic k . T h e s e v ie w s a r e a g a in s t th e s ta te m e n t o f L a o T z u w h o s a y s ( C a p r a 1 9 7 5 , 103):
In o r d e r to c o n tr a c t a tilin g , o n e s h o u ld s u r e ly e x p a n d it firs t.
In o r d e r to w e a k e n , o n e w ill s u re ly s tr e n g th e n firs t. In o r d e r to o v e r th r o w , o n e w ill s u re ly e x a lt first. In o r d e r to ta k e , o n e w ill s u re ly g iv e firs t.
W e s t e r n t r a d i t i o n is h a v i n g d i f f i c u l t y t o a c c e p t t h e c o n c e p t t h a t is e v i d e n c e d o n i t s c i v i l i z a t i o n . F o r i n s t a n c e , in e c o n o m i c s , t h e r e is a c o n c e p t o f t i m e v a l u e o f m o n e y t h a t is b a s e d o n t h e a s s u m p t i o n o f p o s i t i v e t i m e p r e f e r e n c e . T h i s a s s u m p t i o n c o n s i d e r s t h a t a n y t h i n g w o r k s in a l i n e a r m o d e ; c o m p a n y ’s o b j e c t i v e is t o g a i n a m a x i m u m
p r o f i t b y n e g a t i n g a p o s s i b i l i t y to s u f f e r a lo s s . I n t h i s r e g a r d , H i n e s o p i n e s t h a t :
B o th o p p o s ite s e x is t in a ll life b u t o n e o f th e m m a y b e r e p r e s e n t i n g o r n e g le c te d . L e a d in g to a n im b a la n c e in f a v o r o f th e o th e r . S u c h im b a la n c e b e c o m e s a n tith e tic a l to s u r v iv a l,
g r o w th a n d w h o le n e s s p s y c h o lo g ic a lly , p h y s ic a lly , a n d s p i r itu a lly ( 1 9 9 2 , 3 1 4 ).
P h ilosop h ically, H ines (1992) proves that W estern scien tific tradition
only takes one side o f tw o opposing m atters. T hu s, the tradition
produces a partial approach o f science. H ines says:
U n til t h i s c e n tu r y , s c ie n c e w a s th e le a d e r in r e f le c tin g a n d r e p r o d u c i n g th e u n b a la n c e d U n iv e r s a l M a s c u lin e { Y a n g )
p e r s p e c tiv e . M o d e m s c ie n c e w a s p r e c e d e d a n d a c c o m p a n ie d b y a d e v e lo p m e n t o f p h ilo s o p h ic a l t h o u g h t w h ic h le d to a n e x tr e m e f o r m u la tio n o f d u a lis m b e tw e e n s p ir it a n d m a tte r ( 1 9 9 2 , 3 2 2 ).
C le a r ly , th e W e s te r n c o n c e p t a n d c iv iliz a tio n - i f w e o b s e r v e fr o m th e T a o p e r s p e c tiv e - h a s a m a s c u lin e { y a n g) c h a r a c te r a n d te n d s to n e g a te th e f e m in in e
{ y i n ) o n e . In c o n tr a s t, E a s te r n tra d itio n a c c e p ts m a s c u lin e a n d f e m in in e c h a r a c te r s in u n ity .
In E a s te r n t r a d itio n ( in c lu d in g Is la m ic o n e ) , th e c o n c e p t o f u n ity is c o n s id e r e d to b e a n im p o r ta n t th in g to re a c h e n lig h te n m e n t th a t g o e s b e y o n d w o r ld ly d u a lis m . W h a t C a p r a ( 1 9 7 5 ) s a id is r e a s o n a b le e n o u g h , b e c a u s e in fa c t W e s te r n t r a d itio n ( i n c lu d in g s c ie n c e a n d th e t e c h n o lo g y ) is a c tu a lly d e v e lo p b a s e d o n th e p a r a d ig m o f b in a r y o p p o s itio n s y s te m . T h e p a r a d ig m is d u a lis m in w h ic h tw o o p p o s ite f o r c e s a r e t r y in g to “ d e m o lis h e a c h o t h e r ” .
E p is te m o lo g ic a lly , H in e s ( 1 9 9 2 ) s u g g e s ts th a t c o n s t r u c ti o n o f s c ie n c e ( th r o u g h r e s e a r c h ) s h o u ld in te r n a liz e f e m in in e v a lu e s { y i n ) th a t h a v e b e e n n e g a te d b y W e s te r n m a s c u lin e v a lu e s . H in e s s a y s :
A l te r n a tiv e r e s e a r c h m a y b e c h a r a c te r iz e d a s a n a tte m p t to r e tr ie v e th e lo s t U n iv e r s a l F e m in in e o r Y i n, b y its c o n c e r n fo r th e s u b je c tiv e ; its illu m in a tio n o f th e in d e p e n d e n c e b e tw e e n th e in n e r a n d o u te r, s u b je c t a n d o b je c t, o b s e r v e r a n d o b s e r v e d , m in d a n d m a t t e r . .. ( 1 9 9 2 , 3 3 6 ).
T h e p o in t is, t h e r e s h o u ld b e a u n if ic a tio n b e tw e e n m a s c u lin e v a lu e s a n d f e m in in e o n e s in a s e n s e o f b a la n c e a n d h a r m o n y ; th e r e s h o u ld b e a “ m a r r ia g e ” b e tw e e n o b je c t a n d s u b je c t, b e tw e e n th e o b je c t b e in g r e s e a r c h e d a n d r e s e a r c h e r , a n d b e tw e e n m a t t e r a n d m in d , a n d s o fo r th . T h e c o m b in a tio n is in e s s e n c e m u t u a l ly - c o m p l e t i n g o r - s tr e n g th e n in g to e a c h o th e r . T h is c o n c e p t is k n o w n a s
s y n e r g y o f b i n a r y - o p p o s i t i o n ( s e e T r iy u w o n o 2 0 0 2 ) . W e s im p ly n o tic e th e m a s c u lin e a n d f e m in in e v a lu e s th a t h a v e to b e r e a c q u a in te d a s s h o w n in ta b le 1.
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11Vol. 15, No. 1, August 2007
12 B a l a n c i n g P e r f o r m a n c e M e a s u r e m e n t .
T able 1
T he Q uality o f M asculin e (Y ang) and Fem inine (Y in) V alues
Yang
(M asculine)
Yin
(F em inine)
A c tio n S tilln e s s , s ile n c e
D o in g B e in g
E c o n o m ic S o c ia l
E g o is tic A ltr u is tic
E x te r io r I n te r io r
F u ll E m p ty
H a r d S o ft
I m p e r s o n a l P e r s o n a l
I n d iv id u a l C o lle c tiv e
L o g ic /r a tio n a l I n tu itio n
M a te r ia l S p ir itu a l O b je c tiv e S u b je c tiv e
P r o d u c tiv e R e c e p tiv e
P r o g r e s s I n te g r a tio n
Q u a n ti t a t i v e Q u a lita tiv e
R e s u lt P r o c e s s
S e q u e n tia l S im u lta n e o u s
S ta n d a r d iz a tio n P r o lif e r a tio n
( S o u r c e : H in e s ( 1 9 9 2 , 3 2 7 ; m o d if ie d )
A lo n g s id e w ith I s la m ic a n d T a o b e lie f s , J a v a n e s e p h ilo s o p h y a ls o
b e lie v e s in th e “ L a w o f S y n e r g y o f B in a r y O p p o s itio n ” t h r o u g h a s ta te m e n t o f
n g o n o y o n g o n o n i n g y o o j o n g o n o . T h e s ta te m e n t e x p r e s s e s a ’’b a l a n c e d ” o r ' ‘m o d e r a te ” c o n d itio n . T h is c o n d itio n is th e id e a l o n e th a t u s e d to d e c o n s tr u c t m a n a g e m e n t p e r f o r m a n c e m e a s u r e m e n t.
I
n t e r n a l i z a t i o n o f“
t h eO
t h e r s”
t oD
e c o n s t r u c t______
P
e r f o r m a n c eM
e a s u r e m e n t__________________
A s m e n tio n e d a b o v e , B S h a s s o m e w e a k n e s s e s a n d s tr e n g th s . In c e r ta in a s p e c ts , B S h a s b a la n c e d ( s h o w n in th e w o r d b a la n c e d ) f e m in in e v a lu e s w ith m a s c u lin e o n e , fo r in s ta n c e : th e f o u r p e r s p e c tiv e s o f B S a r e a c tu a lly b a la n c in g in te rn a l a s p e c ts w ith a n d e x te r n a l o n e s ; b a la n c in g “ r e s u lt ” ( s h o w n in p r o f ita b ility
m e a s u r e m e n t o f f in a n c ia l p e r s p e c tiv e ) w ith “ p r o c e s s ” ( s h o w n in o th e r p e r s p e c tiv e ) , th e u n ity o f in v e s to r a n d c u s to m e r in te r e s t, a n d s o o n .
H o w e v e r , th e u n ity o r th e b a la n c e s e e m s to b e a p s e u d o o n e , b e c a u s e th e b a la n c in g v a l u e s (i.e . f e m in in e v a lu e s ) s im p ly b e in g u s e d to s tr e n g th e n th e m a s c u lin e v a lu e s . C o n s e q u e n tly , th e m a s c u lin e v a lu e s r e m a in o n t o p a n d p o w e r f u l. It is e v id e n c e d b y s h o w in g th e f o llo w in g s t a te m e n t o f K a p la n a n d N o r to n :
E v e n tu a lly , a ll o b je c tiv e s a n d m e a s u r e s in th e s c o r e c a r d p e r s p e c tiv e s s h o u ld b e lin k e d to a c h ie v in g o n e o r m o r e o b je c tiv e s in th e fin a n c ia l p e r s p e c t i v e ... ( 1 9 9 6 , 6 1 ).
B a s e d o n th e s ta te m e n t a b o v e , f in a n c ia l p e r s p e c tiv e is th e o n ly p r e f e r r e d
p e r s p e c tiv e , w h ile th e o th e r s is p la c e d o n a m a r g in a l p o s itio n .
T h is e v id e n c e is illu s tr a te d f o r a s fo llo w s :
T h is lin k a g e to fin a n c ia l o b je c tiv e s e x p lic itly r e c o g n iz e s th a t t h e lo n g - r u n g o a l f o r th e b u s in e s s is to g e n e r a te f in a n c ia l r e tu r n s to i n v e s t o r s. a n d a ll s tr a te g ie s , p r o g r a m s , a n d in itia tiv e s s h o u ld e n a b le th e b u s in e s s u n it to a c h ie v e its f in a n c ia l o b je c tiv e s (K a p la n a n d N o r to n 1 9 9 6 , 6 1 ; ita lic s
a d d e d ) .
T h e s e c o n d e v id e n c e in d ic a te s th a t in v e s to r is o n a s p e c ia l p o s itio n . I m p lic itly , B S is d e s ig n e d to m e e t th e in te r e s t o f in v e s to r s , i.e . s a tis f ie d fin a n c ia l re tu r n s . C u s to m e r a n d e m p lo y e e a r e s im p ly a s th e in s tr u m e n ts th a t a r e e x p lo ite d
f o r th e in te r e s t o f i n v e s to r s to e a rn m a x im u m p ro f it.
T h e f ir s t p r im e w e a k n e s s o f B S , a s m e n tio n e d b e f o r e , is p r o f it m a x im iz a tio n , w h ic h in d ic a te s th e a b ility o f m a n a g e m e n t to g e n e r a te u tility o v e r d is - u tility ( r e v e n u e s is h ig h e r th a n e x p e n s e s ) . P r o f it is e c o n o m ic m a te r ia l th a t c a n b e e a s ily m e a s u r e d . I f w e o b s e r v e th e ta b le a b o v e , w e w ill s a y th a t p r o f it is m a s c u lin e , b e c a u s e it h a s “ e c o n o m ic ” a n d “ m a te r ia l” e le m e n ts , c a n b e m e a s u r e d “ q u a n t i t a t i v e l y ” b y u s in g c e r ta in a c c o u n tin g “ s ta n d a r d s ” .
B y u s in g th e s y n e r g y o f b in a r y o p p o s itio n , t h e r e s h o u ld b e s o m e th in g e ls e w h ic h f u n c tio n s a s a c o u p le o f “ p r o f it” th a t b e c o m e s th e o r ie n ta tio n o f m a n a g e m e n t. T h e “ s o m e th in g ” m e a n t h e r e is s o m e th in g th a t h a s c o n tr a d ic t c h a r a c te r w ith th e “ p r o f it ,” i.e . a “ s o c ia l” th in g ( s e e ta b le 1). T h e “ s o c i a l ” th in g is s o m e th in g th a t a c c o m p a n ie s ( e c o n o m ic ) “ p r o f it” . B o th ( “ s o c i a l ” a n d “ e c o n o m i c ” t h in g ) s h o u ld b e c o m e a n in ta c t o r ie n ta tio n f o r th e m a n a g e m e n t. In th e c o n te x t o f Is la m ic , T a o , a n d J a v a n e s e tr a d itio n ( o r o t h e r t r a d itio n s ) , “ s o c ia l”
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c h a r a c te r is n o t s o m e t h i n g n e w , b e c a u s e e s s e n tia lly th is c h a r a c te r is
humanistic
c u ltu r e . T h e r e f o r e , it w ill n o t b e a p r o b le m i f th e c h a r a c te r is in te g r a te d to e c o n o m ic a f f a ir s .L ittle b it d i f f e r e n t w ith th e d e s c r ip tio n a b o v e , S ik u la c h a ll e n g e s u s to tr a n s f o r m p r o f it o r ie n ta tio n to m o r a l o n e b y s a y in g
T h e tr a n s f o r m a t i o n o f b u s in e s s , o r g a n iz a tio n s , a n d s o c ie ty r e q u ir e s n e w th e o r ie s a n d m o d e ls o f in d iv id u a ls a n d in s titu tio n a l b e h a v io r . A n e x a m p le o f a tr a n s f o r m a tio n a l th e o r y is “ m o r a l m a x i m iz a t i o n ” ... M y in te n t is to p r o p o s e th a t m o r a l m a x im iz a tio n b u t th a t la te r it b e c o m e a s u b s titu te a n d p e r m a n e n t r e p la c e m e n t ( 1 9 9 6 , 9 6 ).
M oral is fem inin e, w h ile profit is m asculine. Since the m asculine
ch aracter has very strong pow er in business, Sikula (1996) attem pts
to replace m asculine ch aracter w ith the fem inine one. I f w e use the
syn ergy o f binary opposition, then S ik u la’s (1996) suggestion w ill not
resolve
the
problem ,
because
he
replaces
a
pow er
(profit
m axim ization)
w ith
oth er
pow er
(m oral
m axim ization)
that
con seq u en tly still generate im balance.
It w ill be better if Sikula
(1996) op in es that m oral m axim ization is a cou p le o f profit
m axim ization.
In I s la m ic tr a d i t i o n , th e m e r g e o f th e p r o f it a n d m o r a l is s h o w n a n d im p le m e n te d in z a k a t . T h e tr a d itio n a llo w s S o m e o n e to s e e k p r o f it, b u t to e a rn th e p r o f it h e /s h e s h o u ld o b e y s h a r i ' a h e th ic s ( m o r a l) . T h e n , i f th e p r o f it h a s b e e n e a r n e d , s o m e o f th e p r o f it s h o u ld b e d is tr ib u te d to o th e r s w h o h a v e a rig h t to r e c e iv e . C le a r ly , th e z a k a t c o n c e p t c o n f ir m s th a t z a k a t u n ite s e c o n o m ic a s p e c t ( m a s c u lin e ) a n d s o c ia l a s p e c t ( f e m in in e ) .
In th is r e g a r d , T r iy u w o n o e x p la in s in m o re d e ta il th a t z a k a t c o v e r s s o m e im p lic a tio n s :
F ir s t, th e r e is a tr a n s f o r m a tio n fro m p r o f it o r ie n ta tio n to a
z a k a t o n e . T h is im p lic a te s th a t p r o f it a c h ie v e m e n t is n o t th e u ltim a te g o a l o f a c o m p a n y , b u t a s j u s t a m id d le g o a l. S e c o n d , s in c e th e o r ie n ta tio n is z a k a t, th e n a ll c o m p a n y ’s o p e r a tio n s s h o u ld c o m p ly w ith th e e th ic s a n d m o r a lity o f
s h a r i ' a h . T h ir d , z a k a t c o v e r s th e u n ity o f e g o is tic a n d 14
Balancing Performance M easurement
...
* Z a k a t is I s la m ic ta x ; ta x s y s te m th a t b a s e d o n I s la m ic te n e ts .
Vol. 15, No. 1, A ugust 2007
a l t r u i s t ic c h a r a c te r o f h u m a n b e in g . F o u r th , z a k a t h a s a s p ir it o f e m a n c i p a t i o n . .. T h e fif th , z a k a t is a b r id g e th a t lin k s b e tw e e n p r o f a n e a c tiv ity w ith r e lig io u s o n e ( 1 9 9 7 , 2 5 ).
In s h o r t, z a k a t ( o r m a y b e te r m e d a s “ s o c io - e c o n o m ic p r o f it ” ) is a s y m b o l th a t u n ite s m a s c u l i n e w ith f e m in in e v a lu e s , e c o n o m ic w ith s o c ia l a f f a ir s , p r o f a n e w ith r e lig io u s , a n d m a te r ia l w ith s p ir itu a l d e a lin g s . T h e c o n c e p t c a n b e u tiliz e d to im p r o v e th e B S c o n c e p t b y b a la n c i n g its p e r s p e c tiv e s . It is im p o r ta n t, s in c e B S is n o t j u s t a p e r f o r m a n c e m e a s u r e m e n t, b u t a ls o a s t r a te g ic m a n a g e m e n t s y s te m t h a t c e r t a i n l y a f f e c ts th e b e h a v io r o f m a n a g e m e n t a n d o t h e r s ta k e h o ld e r s .
B a s e d o n th e a r g u m e n ta tio n a b o v e , w e c a n f o r m u la te a n e w c o n c e p t. T h e c o n c e p t a s s u m e s t h a t w e a lth th a t s h o u ld b e a c c o m p lis h e d b y a c o m p a n y is n o t lim ite d to m a te r ia l/ e c o n o m ic w e a lth ( r e f le c te d in p r o f it m a x i m iz a t i o n ) , b u t a ls o to m e n ta l a n d s p ir itu a l w e a lth . C o n s e q u e n tly , t h e r e is a n e e d t o in n o v a te a n i n s tr u m e n t t o id e n tif y a n d m e a s u r e th e m e n ta l a n d s p ir itu a l w e a lth . T h e n ,
f in a n c ia l p e r s p e c t i v e m a y b e b e tte r to b e “S o c i o - e c o n o m i c P e r s p e c t i v e” to a c c o m m o d a t e t h e m e n ta l a n d s p ir itu a l w e a lth .
P r o f it m a x i m iz a t i o n is a n a c tu a liz a tio n o f th e e th ic s o f u tilita r ia n is m . T h is e t h i c s c l e a r l y h a s m a s c u lin e c h a r a c te r , s in c e e th ic a l tr u th is s im p ly m e a s u r e d b y u tility a s a “ c o n s e q u e n c e ” o f a n a c tio n a n d c o n v e r s e ly ig n o r e s a “ p r o c e s s ” o f th e a c tio n .
A lthough a process becom es a significant elem ent o f B S, esp ecially in
the p ersp ective o f internal business process, h ow ever, the process is
m erely d eveloped to satisfy the interests o f sh areh old ers and
cu stom ers. T his statem en t is transparently stated K aplan and
N orton:
F o r in te r n a l b u s in e s s p r o c e s s , m a n a g e r s id e n tif y th e p r o c e s s t h a t is m o s t c r itic a l f o r a c h ie v in g c u s to m e r a n d s h a r e h o ld e r s o b j e c t i v e s . . . T h is s e q u e n c e e n a b le s c o m p a n ie s t o f o c u s t h e i r in te r n a l b u s i n e s s p r o c e s s
F in a lly , “ p r o c e s s ” b e c o m e s a s u b o r d in a te a n d p a r t t h a t b e in g e x p lo ite d f o r th e in te r e s ts o f s h a r e h o ld e r s ( a n d c u s to m e r s ) . A d d itio n a lly , th e p r o c e s s in th e c o n te x t o f B S is in th e s e n s e o f p h y s ic a l- m e c h a n ic a l p r o c e s s , n o t in th e s e n s e o f m e n ta l- s p ir itu a l p r o c e s s . U n d e r th e f o r m e r u n d e r s ta n d in g , it is lik e ly th a t th e p r o c e s s is u s e d a s a n in s tr u m e n t th a t is d e s ig n e d a n d c o n tr o lle d f o r th e in te r e s ts o f s h a r e h o ld e r s . W h ile th e la tte r is m o r e p e r s o n a l, lin k e d to e m o tio n a l a n d s p ir itu a l in te llig e n c e ( s e e A g u s tin 2 0 0 1 ; Z o h a r a n d M a r s h a ll 2 0 0 0 ) .
The International Journal o f Accounting an d Business Society
1516 i J u t a n c i n g P e r f o r m a n c e M e a s u r e m e n t .
T h e e th ic s o f u tilita r ia n is m a r e n o t c o n c e r n e d w ith p r o c e s s . H o w e v e r , >rher e th ic s , s u c h a s d e o n to lo g ic a l e th ic s , th e o lo g ic a l e th ic s , a n d r e lig io u s e th ic s a r e th e o n e s th a t a r e c o n c e r n e d w ith p r o c e s s a n d te n d to g iv e a tte n tio n o n iie n ta l a n d s p ir itu a l a s p e c ts . I f w e o b s e r v e th e g e n d e r o f th e e th ic s , th e n w e c a n sa y th a t th e e th ic s o f u tilita r ia n is m a r e m a s c u lin e , w h ile th e o th e r s ( d e o n to lo g ic a l e th ic s , t h e o lo g ic a l e th ic s , a n d r e lig io u s e th ic s a r e f e m in in e .
B y s till k e e p in g th e e p is te m o lo g y o f th e s y n e r g y o f b in a r y o p p o s itio n , id e a lly , in te rn a l b u s in e s s p r o c e s s p r e f e r a b ly s h o u ld b e b a s e d o n e t h i c s w h ic h a re th e c o m b in a tio n o f “ r e s u lt - o r ie n t e d ” e th ic s (i.e . th e e th ic s o f u tilita r ia n is m ) a n d p r o c e s s - o r i e n t e d ” e th ic s (i.e . d e o n to lo g ic a l e th ic s , t h e o lo g ic a l e th ic s , a n d r e lig io u s e th ic s ) . B y th e c o m b in a tio n , it is e x p e c te d th a t th e in te r n a l p r o c e s s o f a c o m p a n y w ill b e a h o lis tic a n d c o m p r e h e n s iv e p r o c e s s . B a s e d o n th is id e a , w e c a n m o d if y th e in te rn a l b u s in e s s p r o c e s s to b e I n t e r n a l E t h i c s - b a s e d B u s i n e s s
P r o c e s s P e r s p e c t i v e .
T h e th ir d w e a k n e s s o f B S is p la c in g c a p ita lis ts in th e h ig h e s t p o s itio n a m o n g o t h e r s ta k e h o ld e r s . A s m e n tio n e d b e f o r e , c a p ita lis ts a r e s p e c ia l s u b je c ts , a n d c o n v e r s e ly , o t h e r s ta k e h o ld e r s ( c u s to m e r , e m p lo y e e , m a n a g e m e n t, s u p p lie r , g o v e r n m e n t, e tc ) a r e th e c o n tr o lle d o b je c ts . In th a t h ie r a r c h y , it is lik e ly th a t c a p ita lis ts e x p lo it s ta k e h o ld e r s a n d e n v ir o n m e n t ( s e e C h w a s t i a k 1 9 9 9 ). T h e te n d e n c y to e x p lo it is p o s s ib le b e c a u s e th e e c o n o m ic a u th o r ity is in o n e h a n d , th a t is, c a p it a li s t ( T r iy u w o n o 2 0 0 2 ).
T h is c o n c e p t is e x tr e m e ly e g o is tic ( m a s c u lin e ) , s in c e th e c o n c e p t n e g a te s o th e r s ta k e h o ld e r s . T h e n , h o w a r e th e c u s to m e r s ? T h e y , o n c e a g a in , a r e c o n tr o lle d o b je c ts , th e y a r e s im p ly a n in s tr u m e n t u tiliz e d to i n c r e a s e th e w e a lth o f c a p ita lis ts ( s h a r e h o l d e r s a n d c r e d ito r s ) . K a p la n a n d N o r to n sa y :
D e c r e a s in g its o w n p r o f ita b ility to in c r e a s e its c u s t o m e r ’ m a y le a d to s a tis f ie d a n d lo y a l c u s to m e r s b u t n o t h a p p y s h a r e h o l d e r s a n d b a n k e r s ( 1 9 9 6 , 9 2 ).
B a s e d o n th e s ta te m e n t a b o v e , it s e e m s th a t t h e r e is a n u n w illin g n e s s to r e a lly s a tis f y c u s to m e r s . B e c a u s e i f th is is d o n e , th e n th e w e lth o f c a p ita lits w ill b e d e c r e a s e d . T h e e g o is tic c h a r a c te r is j u s t i f i e d b y S m ith ,
It is n o t f r o m th e b e n e v o le n c e s o f th e b u tc h e r , th e b r e w e r , o r th e b a k e r th a t w e e x p e c t o u r d in n e r , b u t fro m t h e i r r e g a r d to
th e i r o w n in te r e s t ( S m ith 1 7 7 6 , 2 7 ).
T h is c h a r a c te r c r e a te s c a p ita lis tic b u s in e s s a n d e c o n o m ic s y s te m g lo b a lly . H o w e v e r , a c c o r d i n g to T a o , th e c h a r a c te r s h o u ld b e a c c o m p a n i e d b y a ltr u s itic o n e .
VoL 15, No. 1, A ugust 2007
J a v a n e s e t r a d itio n d o e s n o t le t a n e x c e s s iv e e g o is tic c h a r a c te r . It is e x p r e s s e d in th e s ta te m e n t o f s e p i i n g p a m r i h ( f r e e fr o m r e w a r d ) . A c c o r d in g to th is c o n c e p t, m a n /w o m a n w h o h o ld s e p i i n g p a m r i h d o e s n o t fe e l s a d . H e /s h e is n o t h ig h ly c o n c e r n e d w ith h is /h e r o w n in te re s t. H e /s h e is a b le to c o n tr o l h is /h e r d e s ir e . O t h e r p h r a s e t h a t a lw a y s lin k e d to s e p i i n g p a m r i h is r a m e i n g g a w e
( w o r k in g h a r d ) th a t c a n b e in te r p r e te d a s w o r k in g h a r d f o r o u r s e lv e s , fa m ily , s o c ie ty , a n d h u m a n ity in g e n e r a l ( M a g n is - S u s e n o 1 9 9 6 , 4 5 ) . R a m e i n g g a w e, a c c o r d in g to M a g n is - S u s e n o ( 1 9 9 6 , 1 4 6 ), c a n b e v ie w e d fr o m s e p i i n g p a m r i h, w h ic h m e a n s th a t e a c h p e r s o n c a n b e a c tiv e ly fr e e t h e m s e l v e s fr o m p e r s o n a l
in te r e s t f o r s o c ia l h a r m o n y .
B a s e d o n th e p h ilo s o p h y , w e c a n u n d e r s ta n d th a t J a v a n e s e t r a d itio n h a s a c h a r a c te r o f “ c o l l e c ti v i t y ,” to u s e H o f s t e d e ’s ( 1 9 9 1 ) te rm . T h e c h a r a c te r o f
c o lle c tiv ity is a ls o r e f le c te d in o th e r p h r a s e s , n a m e ly , m a n g a n o r a m a n g a n s i n g
p e n t i n g k u m p u l ( w e e a t o r n o t, th e m o s t im p o r ta n t m a tte r is to b e t o g e th e r ) a n d
a n a s e t h i t h i k d i d u m s e t h i t h i k , a n a a k e h d i d u m a k e h ( i f w e h a v e a fe w , w e s h a r e it a fe w , i f w e h a v e p le n ty , w e s h a r e it p le n ty ) ( s e e M a g n is - S u s e n o 1 9 9 6 , 14 5). B y u s in g th e J a v a n e s e p h ilo s o p h y , th e n w e c a n n o tic e th a t th e B S (th a t p r io r itiz e s th e in te r e s t o f c a p ita lis ts ) d o e s n o t g o w e ll w ith th e tr a d itio n . B S is m o re i n d iv id u a lis tic , w h ile J a v a n e s e tr a d itio n is m o r e c o lle c tiv e .
P a r a lle l to J a v a n e s e tr a d itio n , I s la m ic tr a d itio n d o e s n o t r e c o g n iz e a s in g le a u th o r ity o n e c o n o m i c d e a lin g s . T h e tr a d itio n d o e s n o t a llo w a n a c c u m u la tio n o f w e a lth o w n e d b y o n ly a s in g le g ro u p . C o n v e r s e ly , it te n d s to s p r e a d th e w e a lth b r o a d ly to o t h e r g r o u p s f a ir ly th r o u g h z a k a t .
B a s e d o n t h o s e v ie w s , th e r e f o r e , a h ig h o r ie n ta tio n ( to f u lf ill th e in te r e s ts o f c a p ita lis ts ) s h o u ld b e b a la n c e d w ith f u lf illin g th e in te r e s ts o f o t h e r p a r tie s s u c h a s c u s to m e r , e m p lo y e e , s u p p lie r , a n d g o v e r n m e n t. T h is c o n c e p t w is h e s fo r th a t “ th e p i e ” o f w e a lth ( th a t is s u c c e s s f u lly p r o d u c e d b y a c o m p a n y ) s h o u ld be d is tr ib u te d a n d e n jo y e d b y a ll p a r tie s th a t h a v e p r o v id e d c o n tr ib u tio n s ( f in a n c ia lly o r n o n - f in a n c ia lly ) to th e c o m p a n y .
In r e g a r d s to th e c o n c e p t, T r iy u w o n o ( 2 0 0 2 ) h a s a n o p in io n th a t th e w e a lth is n o t o n ly d i s tr ib u te d to th e s ta k e h o ld e r s ( w h ic h a r e h u m a n b e in g s ) , a ls o to th e n a tu re . E v e n , th e s ta k e h o ld e r s w h ic h is m e n tio n e d b y T r i y u w o n o ( 2 0 0 2 ) a r e n o t lim ite d to s ta k e h o ld e r s w h o d ir e c tly lin k e d to th e c o m p a n y , b u t a ls o w h o d o e s n o t g iv e a n y c o n tr ib u tio n to th e c o m p a n y ( f o r in s ta n c e , th e p o o r ) . In Is la m ic t r a d itio n ( p a r tic u la r ly in z a k a t c o n c e p t) , th e la s t g r o u p m e n tio n e d ( b e s id e th e n a tu r a l e n v i r o n m e n t) d o e s h a v e r ig h ts to e a rn “ th e p ie ” o f w e a lth th a t is p r o d u c e d b y th e c o m p a n y .
