1. POPP
Performance Management System of Public-Private Partnership organization: A
Case of Norwegian Microfinance Initiatives (NMI).
Course Code: VT302E
Student name Candidate number
Kesav Neupane 132
Suman Nepal 114
BODO-2011
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2. Table of Contents
1. Introduction………………………….………………………………………..3
2. The Frame of Reference………………………………………………………5
2.1. Overview of the Model……………………………...……………………5
3. Research Methodology………………………………………….…………….7
3.1. Research Design…………..………………………………………...…....8
3.1.1 Understanding Philosophical Issues……..…….……………..…8
3.2. Research Choices……. ……………………………………………….…9
3.2.1 Involvement of Researcher……………………………………..10
3.2.2 Testing Theories…………………………………………………11
3.2.3 Experimental design or fieldwork……………………………….11
3.2.4 Verification Vs Falsification…………………………………….12
3.2.5 Sampling………………………………………………………….13
3.3. Purpose of the study………………………………………………………..14
3.4. Qualitative Vs Quantitative Method………………………………………..15
3.5. Unit of Analysis…………………………………………………………….16
5.6. Ethical Consideration……………………………………………………….16
3.7. Data Collection Method…………………………………………………….17
3.7. Inconsistencies of the Research Methodology………………………………19
References……………………………………………………………………….20
Appendix…………………………………………………………………………23
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3. 1. Introduction
Our specialization is on Management Control System (BE314E).The measurement of the
performance of business (and other) organization has long been of central interest to both
managers and management accounting researchers (Otley .,1999). Empirical research has
basically focused on issues related to the diversity of performance management and the
concept of ‘Use’. For instance Aldonio Ferreira and David Otley developed a new extended
framework that is: The design and use of Performance management system: An Extended
Framework for analysis. This paper uses the framework for analyzing the design and use of
Performance Management System (PMS) in Public-Private partnership and we have selected
Norwegian Microfinance Initiative (NMI) for our study. The concept of Public-private
partnership (PPP) has been a hot issue in late 20th century and we do understand that
knowledge of PPP, management control and PMS is worthwhile to gain, since to a large
extent, these three topic are interrelated with each other and also there is lack of conceptual
framework to study design and use of PMS with regard to PPP. So we are more interested on
exploring our framework with regard to Norwegian Microfinance Initiative.
The conceptualization of PMS in this paper is based on the work of Fitzgrald et al. (1991),
Fitzgerlald and Moon (1996), Otley (1999) and Ferreira and Otley (2009) that PMS are
concerned with defining, controlling and managing both the achievement of outcomes or ends
as well as the means used to achieve these results at a societal and organizational, rather than
individual level (see Broadbent, J., Laughlin R., 2009). The concept of PMS is more
established by following view PMS is the evolving formal and informal mechanisms,
processes, systems, and networks used by organizations for conveying the key objectives and
goals elicited by management, for assisting the strategic process and ongoing management
through analysis, planning, measurement, control, rewarding, and broadly managing
performance, and for supporting and facilitating organizational learning and change (See
Ferreira A., Otley D., 2009). Hence this paper uses the term performance management system
to encapsulate these more general processes. Since it is a case study the understanding of case
study as research method is based on the definition of Yin, R. K (2003) as ‘an empirical
inquiry that investigates a contemporary phenomenon within its real life context, when the
boundaries between the phenomenon and context are not clear, and in which multiple sources
of evidence are used’ (cited from Zainal, Z. 2007)
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4. From the research it appears that organizations with formal performance management
outperform organizations without it. Beyond this, things become more confused (Fitzgrald et
al. 2007). PMS was realized more important than organizational measurement for
improvements in organization because PMS was able to understand the company’s strategy,
organization and process for evaluation and accountability. It was more capable to identify
objectives, provide relevant information, monitor them and translate strategy into a set of
objectives. Therefore we felt PMS as a good research topic to add some knowledge and view
a microfinance institute through the eyes of extended framework of Ferreira and Otley. Thus,
the main aim of our research is to describe and analyze how PMS is designed and used in
public-private partnership organization in the case of NMI.
The Norwegian Microfinance Initiative (NMI) was established in 2008 as cooperation
between the public authorities and private investors in Norway. Norfund, the Norwegian
Development Finance Institution, represents the Government of Norway, and the private
investors consist of DnB NOR. NMI consists of NMI AS, the NMI Global Fund and the NMI
Frontier Fund. These funds were established under Norwegian law as limited partnerships.
NMI was established as a private limited company to act as the general partner for the NMI
funds with the mission to contribute to the empowerment of poor people and to the creation of
jobs, wealth and economic social sustainability in developing countries by investing in and
supporting MFIs ( http://www.nmimicro.no/index.php?section=0
The most recent study on the design and use of PMS has been done by (Ferreira A., Otley D.,
2009). We found the paper relevant for our research question so we have used the same in our
project paper. Our research is on the investment institution in the field of microfinance. The
research method followed in this work is the Case study method. Our research questions are
as follows.
Research Questions
1. How performance Management System (PMS) are designed and used in Norwegian
Microfinance Initiatives (NMI)
2. What are the challenges of designing and implementing PMS?
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5. 2.The Frame of Reference
In this section of our POPP we will talk about theoretical framework which will hopefully
answer our research question.
Overview of Models
Otley (1999) and Ferreira and Otley (2005) argue that there needs to be greater conceptual
understanding of PMS before detailed measurement in considered. Otley (1980, 1999) and
Ferreira and Otley (2005) have done more than most to take forward the conceptual
understanding of PMS and it is their model which forms the starting point for
conceptualization in this paper. Otley (1999) and Ferreira and Otley (2005) build their
conceptual model of PMS empirically by drawing from an analysis of management control
system in a range of organizations. Otley (1999) poses his conclusion from this analysis in
terms of five ‘issues’ or ‘questions’ that need to be answered by any organization in relation
to the design and nature of its PMS. This is extended in Ferreira and Otley (2005,2009) to
twelve questions – Eight of which relate to PMS design and the other four to issues and
questions related to what they refer to as the underlying ‘culture and context’ which are seen
to influence the nature of the PMS in any organization.
Many writers, Fitzgerald et al (1991) and Fitzgerald and Moon (1996), Otley (1999), build
and develop the initial work of Otley (1987), seeking to provide a development of this broader
conceptualization. Otley ( 1999:365) reshapes understanding to develop ‘…………..five main
issues that need to be addressed in developing a framework for managing organization
performance.’ They posed as questions on the grounds that empirical answers to these
questions would, according to Otley, supply insights into the design of particular PMS.
As Otley (1999:366) makes plain ‘………..these questions relate very closely to some of the
central issues of modern management and management accounting practice.’ They also give
more conceptual definition to the management of results (ends) (questions 1 and 3) and the
management of the determinates of these results (means) (issues 2, 4 and 5). It is also
apparent that the HRM understanding of PMS is also swept into Otley’s framework in issue 4
but with an acknowledgement that ‘rewards’ needs to be ‘……….understood in the widest
possible sense, and not restricted to just short term financial rewards’ (Otley, 1999:366).
Ferreira and Otley(2005) develop Otley’s (1999) framework in a number of ways. First, they
rename PMS, Performance Management and Control Framework (PMC). Second, they add
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6. another dimension to the understanding of PMS by drawing from Simons’ (1995) concept of
‘Levers of Control’. Third, they draw from a further set of case studies data that can be used
to help reform the insights of Otley (1999) and Simons (1995) into a more developed
conceptual framework of PMS. Forth, they expand the five questions to twelve – eight of
which relate to more functional concerns about PMS design and four to more ‘contextual and
cultural’ factors which underpin and to an extent guide the more functional
concerns.(J.Broadbent, R. Laughlin., 2009)
Questions 1, 2 (in part) 5 and 6 are concerned with the results (ends), the means to achieve
them can be seen in questions 2 ( in part), 3. 4, 7 and 8. It is also possible to see that the HMR
emphasis is expanded in this framework relative to Otley (1999) with questions 7 and 8 being
aligned to these HR concerns.
Ferreira and Otley (2005:41) position these questions in what they refer to as an underlying
‘culture’ and ‘context’ since these ‘……..permeate the whole of the performance management
and control (PMC) system’ but ‘……are not addressed by the above questions.’ Drawing
from a range of literature from Perrow (1967) to Chow, Harrison, McKinnon and Wu (1999),
Ferreira and Otley (1999:41) point out that it has been ‘…..shown that variables relating to
external environment, strategy, culture, organizational structure, size technology and
ownership structure have an impact on the control system’.
Their understanding context and culture is expressed in terms of a further four questions that
need to be considered to help understand the design of any PMS in any organizational
context.
The twelve questions around which Ferreira and Otley’s (2005:41) PMS framework is build
provide ‘………..an heuristic tool to facilitate the rapid description of significant aspects of
control systems design and operation’.
This figure (Appendix B) illustrates that the actual PMS is at the core of any organization
with the design guided by the eight functional questions which are closest to this centre point.
These questions, in turn, are modeled by four further questions related to culture and context –
mapped in the outer rim of the figure (Appendix B), being somewhat distant from the actual
PMS design but moulding its nature.
Unquestionably the framework of Ferreira and Otley (2009) has made considerable progress
in defining the generic, conceptual nature of any PMS. This following, however, develops
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7. three areas in a more detailed fashion. First, we wish to be clearer about the focus of any
PMS. The second and third areas of development relate to Ferreira and Otley’s (2005:41 et
seq) elements of ‘context’ and ‘culture’ which, whilst rightly recognized in their framework
as being significant, needs further explication.
However, according to Simons (1995), Management Control System are the formal,
information based routines and procedures managers use to maintain or alter patters in
organization activities. A number of MCS definitions have been proposed in recent years.
While Simons (1995) views Management Control Systems as the means used by top level
managers to successfully implement their intended strategies, others have defined
Management Control Systems as the systematic use of management accounting in conjunction
with other forms of control such as personal or cultural controls to achieve some goals.
Simons (1995) contribution in terms of his Lever of Control (LOC) seems
considerable, PMS can provide such valuable information to allow managers to trail their own
performance and evaluate employees’ performance in an effective manner. Simons’ concepts
of diagnostic and interactive use have substantial commonalities with other concepts found in
the literature. According to Simon (1995, p. 151), contains interactive uses of PMS by top
levels in two ways: generating discussion and promoting a positive information environment
that persuade information sharing. Thus, a simple interpretation of interactive control as
strategy- sense making and communication of strategy is made. He puts forward two levels of
organizational learning (i. e. single loop and double loop). The single loop inspires a
cybernetic logic designed to recognize and correct inaccuracy of operations to ensure the
attainment of original objective. Even though diagnostic use of PMS can be expected to be
best for corrective action, it may not encourage dialogues that generate greater innovative
ways of actions. For our research we are going to use Ferreira and Otley (2009) and Simon
(1995) as frame of reference.
CHAPTER 3: RESEARCH METHODOLOGY
The main intention of this chapter is to depict how the study was designed and conducted. The
chapter is partly written in a theoretical vein and partly written in a ‘‘pragmatic research’’
vein to reveal some of the practicalities of the study. The issues addressed concern research
design, purpose of the study, qualitative vs quantitative methods, and data collection methods.
Finally some methodological inconsistencies of the research discussed.
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8. Note: we have done our POPP work on Norwegian Microfinance Initiative finance, so far we
have already done two interviews and we will do more interviews on our thesis. You will see
some grammatical awkwardness which results due the confusion arising from present
perfect tense and future tense.
Type of research question determines different methods of investigation. The discussion that
follows will establish the idea.
3.1 Research Design
Researchers offer different opinions on what should be included in an explanation of the
research design. In our opinion research design examples include case-study design, survey,
description etc. we believe that in order to develop a complete research design it is valuable to
understand the nature of this issue from philosophical viewpoint first.
3.1.1 Understanding Philosophical issues
Understanding Philosophical issues before a study is very important. Philosophical issues help
to clarify research design; more specifically it saves researchers on going too many blind
alleys (Easterby et. Al 2008).
Philosophies have been developed in both classical and contemporary forms to effectively
guide actions. Denzin and Lincoln (2003) describe three major research paradigms in
philosophy of science formed from basic ontological and epistemological positions. They are:
positivist, interpretivist /constructivist and relativist. After the fundamental understanding of
all three philosophical grounds we came to the conclusion that to conduct this research social
constructivism suits best. Therefore, we go to the reason behind the choice now.
The position of constructivist has been described by Hatch and Cunliffe (2006) as anti-
positivist and as post-positivist by Blaikie (1993). It has been developed in reaction to the
large application of positivism to the social sciences (Easterby et. Al 2008). There is a
fundamental difference between the subject matter of natural and social sciences. In social
world it is argued that individuals and groups make sense of situation based upon their
experience, memories and expectations. Meaning therefore is constructed and constantly re-
constructed through experience resulting in many differing interpretations. It is these multiple
interpretations that create a social reality in which people act. Therefore constructivist argues
that ‘reality’ is not objective and exterior, but is socially constructed and given meaning by
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9. people. Social constructionism is one of a group of approaches that Habermas (1970) has
referred to as interpretive method (Easterby et. Al 2008). Hence, the essence of social
constructionism is that ‘reality’ is determined by people, focus should be on what people,
individually and collectively think, feel and communicate. The center of researcher is on
understanding the meaning and interpretations of ‘social actors’ and to understand their world
from their point of view, is highly contextual and hence is not widely generalisable (Saunders,
Lewis and Thornhill, 2009).
In our research social constructionist approach is best suited. We cannot gather and analyze
data with positive assumptions: being, independent, value free observation can make our
research incomplete. Our research involves the experience of people using PMS, designing
user friendly PMS, challenges involving in designing and using PMS is possible only when
we are aware of the background of the company, employees, experience of managers, we
communicate with employee, owner, managers, customer etc. After the completion of our
research we purpose some general statements on certain criteria based on our knowledge of
this particular case which could be some ground for further research. Philosophical grounds
allow us to do so. This is supported by (Easterby-Smith et al., 2008) by arguing social
constructionist usually aim at, increasing general understanding of the situation, by gathering
rich data from which ideas are induced.
3.2 Research Choices
Easterby- Smith, Thorpe and Lowe (1991, 2008) claim that research designs are about
organizing research activity, including the collection of data, in ways that are most likely to
attain the research aims. There are many probable choices to make when developing a
research design, and there are few algorithms, which can direct the researcher into making the
ultimate choices for a particular situation. However, many of these options are allied quite
intimately to different philosophical positions, and a consciousness of this can at least ensure
that the different elements of a research design are consistent with each other. Jacobsen
(2000) argues that the choice of research design involves two main options. Firstly, one has to
decide if the research is intensive or extensive. Secondly, one decides if the research is
descriptive or casual.
Smith, Thorpe and Lowe (1991, 2008) describe five choices that are of particular significance.
According to them, the first four relate closely to the basic dichotomy between the use of
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10. positivist and social constructionist approaches and the last is a debate located mainly within
positivist paradigm. (See figure 3.2)
Adopted from: Easterby-Smith, Thorpe and Lowe (1991, 2001)
Research is independent vs researcher is involved
Testing theories vs generating theories
Experimental design vs Fieldwork methods
Large samples vs Small numbers
Verification vs Falsification
We will give short discussion of these choices; the practical comments for our research are
given after theoretical discussion. We would like to concentrate more not on descriptions, but
rather on comparisons of different research option.
3.2.1 Involvement of researcher
According to Smith, Thorpe and Lowe (2008), the first choice is whether the researcher
should remain distanced from, or get involved with, the material that is being researched.
Sekaran(2000) also provides the same discussion, but uses the term ‘researcher’s inference’.
She claims that extent of researcher inference has a straight bearing on whether a casual or
correlational study is undertaken. The traditional assumption in science is that the researcher
must preserve total independence if there is to be any validity in the results produced. In
other words, logical positivists hold that a study is valid only when value-neutral observation
takes place. Easterby-Smith, Thorpe and Lowe (2008), describe also the concept of action
research, which supposes that any social phenomena are frequently changing rather than still.
Many people schooled in positivist research methods are doubtful about the worth of action
research but as Susman and Evered (1978) point out, action research is bound to be found
wanting if it is considered against the criteria of positivist science; whereas it is perfectly
justifiable from the view point of other philosophies, such as phenomenology (Smith, Thorpe
and Lowe, 2001). Gummesson (2000) provides a thorough discussion of action. One
important conclusion of the action science discussion for us is that ‘qualitative, informal, in-
depth interviews and the anthropological/ethnographical methods of observation and
participation are important as part of action science.’
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11. As for our research, some questions will need our involvement while others will not. We have
noticed, sometimes it is not possible to find the answer to my questions in secondary data
sources. Then we conducted interviews and we have more interviews to be taken. Our
interviews were of semi-structured and unstructured nature. The interview guide is presented
in Appendix. As questions of our interviews were rather open-ended and implied in-depth
discussions, our involvement into process was rather high.
3.2.2 Testing Theories
According to Smith, Thorpe and Lowe, (2008), the second choice is about which should
approach first: the theory or the data. One view is that one should initiate with a theory, or
hypothesis, about the nature of the world, and then look for data that will confirm or
disconfirm that theory. An opposite is co-called grounded approach, which was first
originated in a classic book by Glaser and Strauss (1967), and seeks the key task of the
researcher as being to develop theory thorough ‘comparative method’. The main theoretical
benefit of grounded approach is that it allows ‘finding the truth’; the main practical advantage
of grounded approach is flexibility in providing both explanations and new results. The main
disadvantages are time-consuming, the fear of insignificance of findings, lack of clearness and
standardization of methods. As for the ‘hypothesis testing’ approach, the main practical
advantage is that there is preliminary clarity about what is to be investigated, and hence
information can be collected quickly and competently. Clarity means that it is easier for
another researcher to replicate the study which enhances the possibility of generalization, and
hence any claims arising from the research can be subject to public examination (Easterby-
Smith, Thorpe and Lowe 2008). The main theoretical disadvantage are that its contribution
may be quite irrelevant, conforming what is already known, at the same time, if the results are
open to doubt or negative, the approach can give little guidance on why this is so (Easterby-
Smith, Thorpe and Lowe (2008).
As to our research, we have carried out literature search of several articles and texts about
NMI and management control in NMI in the theoretical part. Then we formulated research
questions and will test them in empirical and analysis part.
3.2.3 Experimental designs or fieldwork
Many researchers face this problem in the research design. For example, Sekaran (2000) uses
other terms for this selection: contrived (experiments) and non-contrived (field) study
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12. settings. Experiments are one of the key basics of scientific method. Classic experimental
method involves assigning subjects at random to either an experimental or a control group.
(Easterby-Smith, Thorpe and Lowe 2008). These authors argue that these methods work when
there is a ready supply of respondents upon whom to conduct the experiments. They are very
much harder to conduct within real organizations, or where there is no confined population
from which to draw volunteers. A more superior design for experiments is ‘quasi
experimental’ design. One of the most widespread methods is the ‘pre-test/post test
comparison design’. This has some weakness. For example, the design assumes that ‘nothing’
occurs to the control group during the period that the treatment is being given to the
experimental group.
The option to experimental and ‘quasi-experimental’ designs is fieldwork, which is the study
of real organizations or social setting. One example is ethnography. Here, the researcher tries
to throw himself or herself in setting and to become part of the group under study in order to
understand the meaning and significances that people put upon their own behavior and that of
others. (Easterby-Smith, Thorpe and Lowe 2008).
In our research design we employ fieldwork while conducting interviews with NMI staffs. We
cannot argue that my research can be described in ethnography paradigm. We will be
conducting in-depth interviews with NMI staffs and will observe the design and use of PMSs
through reports etc.
3.2.4 Verification vs. Falsification
We would like to comment the selection between verification and falsification, as we are
really interested in this issue. The problem of verification vs falsification was a central matter
of the scientific debates during XXth century. So called logical-positivists, being inspired by
progress of natural sciences were trying to apply the ideas and methods from natural science
into social science, thus, trying to verify theories. The main challenger of such an approach
was K. Popper (1959). Popper was a positivist initially, but was trying to explain social
science paradigm from another point of view. Popper claims that there is nothing we can call
‘plain facts’, for example, one can examine a bottle with liquid inside and conclude that
he/she observes a glass bottle of water. In reality, it can be a bottle of plastic and there could
be another kind of liquid inside. Another problem of interest of Popper was a problem of
induction. He says that if we observe the sun rise 365 days, we cannot make us to conclude
that we will observe the sunrise at the very next day. The solution that Popper proposes to
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13. these problems is not to verify, but rather falsify the theories. Then, according to Popper, we
can try to implement positivism to social science.
The main conclusion that could be done after the preceding discussion is that in reality there
is no pure perfect choice between these two groups of choices. At the same time we believe
that the previous discussion provides some insights to our research problem, though the image
is not absolutely clear yet. It is necessary to purify that in some way. We see our research as
being in more phenomenological paradigm then in positivist paradigm. The question of
applying methods from natural science to social science was a matter of discussion among
philosophers and methodologists during the last century. Some researchers were suspicious
about possibility of such application. Anyway this not a focus of our study here.
Researchers are disagreed about what should be included into research design description. For
example, Easterby et al (2008) do not include the choice of qualitative vs quantitative
methods, data collection methods, unit of analysis etc.., because it has much to do with doing
and completing the research, not designing. We are not totally agree with that; consequently,
in the section below, we are going to touch upon some other important issues, such as purpose
of the study, data collection methods and qualitative vs quantitative methods.
3.2.5 Sampling
A third design choice is whether to try to sample across a large number of organizations or
situations, or whether to concentrate on a small number of situations and attempt to examine
them over a period of time. According to Smith, Thorpe and Lowe, (2008), this is essentially
a selection between cross-sectional or longitudinal design. This is the importance of time
horizon, thus distinguishing between one-short (cross-sectional) and longitudinal researches.
Cross sectional designs usually entail selecting different organizations, or units in different
contexts, the investigating how other factors vary across these units. The main advantage of
cross sectional designs is that they have the ability to describe economic features of large
numbers of people or organizations. According to Smith, Thorpe and Lowe, (2008), there are
two limitations of cross-sectional designs as well:
1. They do not enlighten why correlation exist;
2. They have difficulty in getting rid of all the external factors which could possibly have
caused the observed correlation.
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14. On the other hand, the main practical benefit of the longitudinal design is that it can create
significant results from a very small number of cases and this can trim down the problems of
gaining access if the research is to be carried out in organizations. The difficulties are that it is
extremely time consuming and complexity of data necessitates very high skill from all
researchers involved (Smith, Thorpe and Lowe, 2008).
As to our research, we have studied little bit and we will study one particular organization
(Norwegian Microfinance Initiative) for rather long period of time. However, we cannot
always take into account changes that appeared during our research. To be precise, an
accurate picture of what the NMI has changed since we commence our research. This can be
one of the methodological weaknesses of the thesis.
3.3 Purpose of the study
Different research methods have different purposes. One method in a study might not fulfill
all the purpose of the study. We distinguish between four types of purposes for research based
on Robson’s (2002) classification:
Exploratory-
 To find out what is happening, particularly in little understood
situations
 To seek new insights and generating ideas and hypotheses for new
research.
 To ask Questions, to access phenomena in a new light
Descriptive-
 To portray an accurate profile of a person, events or situations
 Requires extensive previous knowledge of the situation etc. to be
researched or described, so that you know appropriate aspects on which
to gather information.
Explanatory-
 To seek an explanation of a situation or a problem, traditionally but not
necessarily in the form of casual relationships.
 To explain patterns relating to the phenomenon being researched
 To identify relationships between aspects of the phenemon.
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15. Improving-
 Trying to improve a certain aspect of the studied phenemon
Our research design is conceived as exploratory with descriptive elements. It is clarified
below. Exploratory: To find out what is happening in NMI regarding the design and use of
PMS. To see new issues in the investment institution, to ask questions, to generate ideas and
hypotheses for further research. Descriptive: Portraying situation or phenomenon requires
extensive previous knowledge of the situation etc. to be researched or described, so that
appropriate aspects to gather information are known. Since we use case study methodology,
which was originally used primarily for exploratory purposes, and some researchers still
limit case studies for this purpose, as discussed by Flyvbjerg (2007). However we, use this
method for exploratory with descriptive purpose.
3.4 Qualitative vs Quantitative methods
The choice of methodology as the way the problem is being treated can be differ from one
research to another. One can distinguish between qualitative and quantitative research, or
qualitative and quantitative inquiry. (Cresswell 1998).
Mostyn(1985) summarizes the differences between quantitative and qualitative research
strategies. They are presented in Table below:
TABLE: THE MAJOR DIFFERENCES BETWEEN QUANTITATIVE AND
QUALITATIVE METHODS
Source: Mostym (1985), The Content analysis of Qualitative Research Data: A Dynamic Approach
Aspect Quantitative Qualitative
1. Sample Large, hundreds of thousands Small, typically less than 100
2. Interview length short, less than 1 hour Long, longer than 1 hour
3. Questioning Structured Following respondent reaction
4. Objective Refinement of existing data Expansion of existing data
5. Analysis Statistical Content analysis
6. Report based on Statistical summaries, ‘‘what?’’ Theories of motivation, ‘‘why?’’
7. Reliability and Validity can always be determined Can rarely be
determined
(Subjective nature of research)
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16. The above table indicates that a more qualitative approach will suit our study.
This is consistent with yin (1989) who asserts that qualitative approaches are generally better
for understanding how and why questions-that is for explaining complexity. For example, our
research will (to some extent was) a case study, thus it is based on one organization, NMI. So
far our interviews were pretty short, but we have to do long interviews, we say more than one
hour or so, to understand and explore design and use of Performance Management System in
NMI. The interviewees will be semi structured, thus we will be following respondents’
response, and we will have to ask supplementary questions that are not integrated in the
interview guide originally. Moreover, depending upon the answers that we get, we can change
the direction of the interview sometimes. Also, as it happens with case study research
paradigm, the research is subjective and reliability and validity is difficult to determine.
Finally, the analysis of data collected will not be statistical, but contextual.
3.5 Unit of Analysis
The unit analysis refers to the level of aggregation of the data during succeeding analysis.
Sekran (2000) describe the following units of analysis: individual, dyads, groups,
organizations and cultures. The subject of unit of analysis is important since individual do not
have the same features as groups and groups do not have same characteristics as individuals.
The unit of analysis in our research is particular organization (Norwegian Microfinance
Initiative). Thus, based on the information possessed from our interviews with NMI’s staffs,
we would try to make some conclusions with regard to design and use of Performance
Management System (PMS).
3.6 Ethical Considerations
Ethical issues arise at a variety of stages in business and management research. Ethical issues
cannot be ignored, in that they relate directly to the integrity of a piece of research and of
disciplines that are involved (Bryman and Bell, 2011). Research ethics relates to questions
about how researcher formulates and clarifies his research topic, designs his research, gains
access, collects, processes and stores the data and writes the research findings in a moral and
responsible way (Saunders et al., 2009)
Our focus of study is a particular system of a single case. Case study approach is being used.
We will be studying the response from all levels of that organization this presents probable
ethical dilemmas therefore (Diener and Crandall 1978) have provided a four main ethical
principles(areas) to consider in a business research. They are: whether there is harm to
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17. participants, whether there is lack of informed consent, whether there is an invasion of
privacy, whether deception is involved.
Harm to Participants:
In order to not to harm participants we will be very careful of real and potential harm to
participants. We will be informed before our empirical study, interview about the code of
conduct of the organization if they have. We will also be careful about different facets of
harm: physical harm, stress, career and future employment greed.
Lack of informed consent:
We are aware of this ethical consideration thus; we will prepare the general and specific list
about what kind of data will be required and its potential use. We will take consent with the
top management as well as prospective participants.
Invasion of Privacy:
This point is related to the informed consent to some degree. (Bryman and Bell, 2011) argues
that, ‘the objectives of any study do not give researchers a special right to intrude on a
respondent’s privacy nor to abandon normal respect for an individual’s values’. Issue of
confidentiality, recording of information, maintenance of records, and accumulation of data
are very critical issues which we have thought in a front line regarding ethical issues. After
the completion of research we will send all the collected data for conformity of non privacy
issues.
Deception:
Deception occurs when researcher represent their research as something other than what it is.
Metaphorically it is real electric shock. This is done intentionally therefore it can be
prevented. In our case to avoid deception in our report we will be sending draft of our report
to the organization before publishing.
3.6 Data Collection Method
We would like to comment only some practical connotation for our case-study research.
Smith, Thorpe and Lowe (2001) argue that techniques primarily associated with qualitative
methods are interviews, observation and diary methods. We will be using semi-structured and
unstructured interviews in our research. Thus, we will enter with a list of preliminary
question. The interviews guide is presented in Appendix. Sekran (2000) claims that
unstructured interviews are so labeled because the interviewer does not enter the interview
setting with a planned sequence of questions that he will be asking the respondent. The
objective of the unstructured interview is to surface some preliminary issues so that the
17

18. researcher can formulate a good idea of what variables need further in-depth investigation.
Together with unstructured and semi-structured interviews, the primary data sources are
employed.
Interview
Interview in a case study is the only empirical source of data so it is very important. In
interview-based data collection, the researcher asks a series of question to a set of subjects
about the elements of case. Interview is guided by a structured interview guide and those
questions are based on the topic of interest or research question. There are various types of
interview such as unstructured, semi-structured and fully structured (Robson 2002). In our
case semi-structured interview best suits where we will try to gather data with the structure
question and informal conversation. Our questions (Appendix A) are planned and we will do
interview in one to one basis rather than group interview. Our interview will be divided in to
different phases. First the objectives of the interview and the case study will be presented and
explained. Then a set of introductory question will be asked about the background etc. of the
subject, more general questions. After the introductory section main questions will be asked.
Since we will follow semi-structured method the main part of interview will be more informal
and guided by set of questions (Appendix A). Both telephone and face to face Interviews will
be conducted in Norwegian Microfinance Initiative’s office in Akersgaten. A rough form of
interview guide “Appendix A” is developed, based on knowledge of design and use of PMS.
The entire interview will be recorded taking the consent of the interviewees. We are expecting
10 interviews. We will be taking interviews with 3 top management, 4 office administration
and 3 external users of PMS (Investment vehicle of NMI).
Archival data
Archival data refers to, for example, meeting minutes, documents from different development
phased, organizational charts, financial records, and previously collected measurements in an
organization. In our case we will collect annual reports of different years, organization charts,
and financial reports. Along with that we will also collect data from microfinance investor
data source www.cgap.org, www.mixmarket.org. Information related to organization will be
collected from Official website of Norwegian Microfinance initiative
(http://www.nmimicro.no). To understand the nature and trend of investment in microfinance
we will use the official website of International Association of Microfinance Investors
18

19. (http://www.iamfi.com). Along with this for the understanding of literature and other
academic requirement of study we will fulfill from the Nordland University, BI Norwegian
Business School and university of Oslo libraries.
3.7 Inconsistencies of the Research Methodology
Any method or technique has its own pros and cons. Case study approach in common is
widely criticized for problems with validity and reliability of results. At the same time, this
method allows to get a deep understanding of internal processes. Gummesson (2000)
disagrees with traditional view of troubles with validity and generalizability as well as
testability of case study research based on social constructionist approach. He claims, for
example, ‘…I have become increasingly doubtful of the meaning of generalization. It is no
longer seems so ‘obvious’ that a limited number of observations cannot be used as a basis for
generalization.’ As we understand the problem of validity/generalizability with case study
research, it is not possible to generalize to all the organizations but one can arrive at deep
understanding of one particular case, thus increasing knowledge in that way. Another problem
comes from the subjectivity of our personal judgment. As we have described above, there will
be an element of subjectivity in all of the data collection and interpretation stages. However,
as we can hope, these problems are typical for such an approach in general. In addition, as it
was stated above, it is sometimes difficult to distinguish between empirical data and analysis.
19

20. References
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22. Yin, R. (1989). Case study research: Design and methods (Rev. ed.). Newbury Park, CA:
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http://papers.ssrn.com/sol3.papers. cfm?
www.mixmarket.org
www.cgap.org
www.nmimicro.no
www.iamfi.com
Dear respected sir we tried hard to remove the color on references but could not happen. We
are extremely sorry for that.
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23. Appendix A
Interview Guide
Personal Information
1. What is the main activity of your company?
2. Would you please give the full title of your position in the organizations?
3. How long have you been working in the company?
4. How long have you been occupying your current position?
Then, some topic related questions were asked, we were adjusting questions during the
interview process. Some additional questions were put forward and some preliminary
planned questions were left. Still the preliminary list represents the following:
1. In your opinion how NMI uses PMS?
2. Can you provide us simple understanding of PMS with regard to NMI?
3. Do NMI’s strategy and goals correspond to each other?
4. Are you satisfied with PMS?
5. Would you tell something about design of PMS in your organization?
6. What factors are taken into consideration while designing and changing PMS?
7. In you view what role PMS play to converge individual goals with organizational
goal?
8. How you view PMS in NMI, to what extent you believe that it is formal or informal,
flexible or inflexible etc?
9. How do you promote organizational learning? And how PMS help doing that?
10. Do you have Balance Scorecard? If yes, would you please define Balance Scorecard in
NMI?
11. Do you thing in case of inter-organizational relationships PMS is important and how
PMS contribute to MC in such setting?
12. How change in PMS are taken place, do behavioral factors are taken into account?
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24. Appendix B
24