Sustainable Microfinance - Balanced Scorecard's added value for ...

6.2.4. Sustainability Entrepreneur
Theory suggested that small businesses are a critical component of the global
economy. Policy makers generally believe that small businesses play a crucial role in
reducing unemployment and generating economic growth (Council for microfinance,
2007; Lämmermann et al., 2007; Molenaar, 2009). This view has been contested by
other theory, since the typical start up is not innovative, creates few jobs and
generates little wealth, rather they are founding wage-substitution business that have
more in common with self-employment than with the creation of high quality, high
growth companies (Shane, 2009). Empirical evidence supports this last view and
mentioned the phenomenon ‘copying behaviour’, which creates a stiff competition,
few jobs and high failure rates. Theory indicated managerial inadequacy, unfamiliarity
with established business practices, integration of strategic and operational
management processes, lack of managerial experience, inadequate planning and
poor financial control and record-keeping as causes of high failure rates within the
first three to five years (Gaskill et al., 1993; Pickle and Abrahamson, 1990; Meredith,
1989).
Theory suggested that government officials, although not able to ‘pick winners’, can
identify start-ups with a low probability of generating jobs and enhancing economic
growth. By eliminating incentives to create these low probability companies, policy
makers can improve the average performance of new businesses (Shane, 2009).
Empirical evidence supports this suggestion. The new model will enable government
officials and starting entrepreneurs to indentify the potential growth.
6.2.5. Customer and Market research
The customer perspective plays an important role in all traditional BSC models
(Kaplan and Norton, 1996a; Lynch and Cross, 1991), by indentified recent models it
has only been replaced once (Meadows and Pike, 2009). For all other model of the
BSC beyond the private sector the customer perspectives plays an important role
(MFC, 2007; Gomes and Liddle, 2009; McNair and Watts, 2009; Watts et al., 2009b).
Empirical evidence strongly confirms this importance and confirms that the market
research needs to be a continuing process in order to identify trends and changes in
the needs of customers, allowing an entrepreneur to adjust his product or service
towards these needs and secure demand. The theory identified, this flexibility and
ability to proactively shift operations and focus to meet changing customers
Elmar Hoogendoorn 72
Sustainable Microfinance