International Conference on Islamic Economics, Governance and Social Enterprise (IConIGS) 2015

 

DEVELOPING PERFORMANCE MEASUREMENTS TO ENHANCE EFFECTIVENESS OF INTERNAL CONTROL AND STRATEGY IN MICROFINANCE INSTITUTIONS

 

Syed Mohamad Sadeq Bolourchian, Jamaliah Said

Abstract  

One recurrent theme within the literature is the study of organizational performance. Nonetheless, most researches have focused on types of performances, including financial and non-financial performances. There is great concern relating to the relevancy of the performance measurements with organizational strategy that enables the organization to measure the performance of the organization in line with organizational strategies. This paper incorporates the organizational performance based on strategy and focusing on identifying the measurements to be matched within a performance model. The model is tested using structural equations model, employing a survey of 278 top managers from microfinance industries in Malaysia. The causal analysis resulted that the combination of valid and reliable measurements by using SEM in step of confirmatory factor analysis. The results revealed that four groups, which consist of financial, social, service and operation, are the most relevant measurements to organizational performance within microfinance industries. The results can be useful for either further researches or policy makers in microfinance industries to make better decisions regarding to improve organizational performance.