Understanding drivers of organizational achievement in Taiwan restaurant chains

In the past three decades restaurateurs in Taiwan have employed the chain organization concept to expand their businesses. In turn, competition in the Taiwanese restaurant sector has increased making the assessment of organizational achievement a high priority for maintaining market share. For chain restaurateurs, selection of effective performance measures that integrate the audit of financial and nonfinancial perspectives is key to maintaining competitive advantage and achieving sustainable success. The balanced scorecard (BSC) is recognized as an effective management tool for translating business strategies into clear indicators of financial and nonfinancial performance measures. This study builds on the concept of measuring organizational achievement for business survival (adaptive) and improved performance (proactive) in which performance is assessed on a multidimensional scorecard. Therefore, the purpose of this dissertation research was to (a) explore performance measures in Taiwan chain restaurants based on BSC financial and nonfinancial perspectives (i.e., customer, internal business process, and learning and growth); (b) identify and rate BSC based performance measures which are essential in assessing organizational achievement in Taiwan chain restaurants; (c) compare franchised and company-owned chain restaurants in Taiwan regarding the importance of financial and nonfinancial performance measures; (d) propose a model of chain restaurant organizational achievement based on interactions among internal organization factors and BSC performance measures, and (e) assess the relationships among internal organization components (i.e., personality, leadership, risk propensity, organizational size, organizational structure, organizational culture, and decision making outcomes) and performance measures attributed to BSC perspectives in a model of chain restaurant organizational achievement in the context of the Taiwan chain restaurant environment. The research design combined qualitative and quantitative research methods. Findings are presented in a journal article format. For article one, a three round Delphi study was conducted in Fall 2008 with managers (N=24) in franchised and company-owned chain restaurants in Taiwan in order to identify performance measures based on the four BSC perspectives critical in the assessment of organizational achievement. In article two, a model based on the BSC performance measures was proposed and checked in Spring 2009 by surveying a national cross-sectional sample of managers (N=213) in franchised and company-owned chain restaurants in Taiwan. The Delphi panel identified and reached high consensus on specific performance measures for each of the BSC perspectives; financial, customer, internal business process, and learning and growth; as critical to the assessment of organizational achievement in chain restaurants. The most important performance indicator in the financial perspective was the audit of operation expenses. For the three nonfinancial perspectives (a) customer satisfaction was the most important performance indicator in the customer perspective, (b) implementation of strategies and goals was viewed as the most important performance indicator for the internal business process perspective, while (c) payroll executed on time was considered to be the most important performance indicator in the learning and growth perspective. Furthermore, differences in the importance of financial and nonfinancial perspectives were evidenced in the comparison of franchised and company-owned chain restaurants in Taiwan. Franchises paid more attention to customer complaints, fair treatment of employees, and employee absentee rate; while the primary focus in company-owned units was on budget and expense control. For the industry survey, results of structural equation modeling (SEM) indicated that personality, risk propensity, organizational structure, decision making outcomes, organizational culture, and performance measures significantly affect organizational achievement in Taiwanese chain restaurants. Agreeable / kind personality and centralized / integrated organizational structure had a negative association with decision making outcomes. Extraverted / enthusiastic personality had a negative association with flexible organizational culture; while dependable / organized personality, risk propensity, and centralized / integrated organizational structure had a positive association with flexible organizational culture. Flexible organizational culture had a positive association with decision making outcomes and performance measures (i.e., cost control, customer satisfaction, purchasing, and communication) and a negative association with organizational achievement. Performance measures (i.e., cost control, customer satisfaction, purchasing, and communication) had a positive association with decision making outcomes. Decision making outcomes and performance measures (i.e., cost control and purchasing) had a positive association with organizational achievement. However, leadership and organizational size did not have a significant affect on organizational achievement in Taiwanese chain restaurants. Further, participative, instrumental, and supportive leadership as well as large and medium organizational size had no association with decision making outcomes and flexible organizational culture. The study extended the extant literature on measuring organizational achievement utilizing the BSC concept in the chain restaurant sector of the foodservice industry in Taiwan. Results suggest the BSC approach has the potential to assist management in Taiwanese chain restaurants to improve the effectiveness of organizational achievement. Although this research provided insights into the application of the BSC approach in Taiwan chain restaurants, more research is needed to continue broadening and deepening the understanding of how the BSC approach could be implemented. Therefore, future research in the Taiwan chain restaurant sector might (a) use qualitative research methods (i.e., focus group and depth-interviews) to gain a deeper understanding of how to construct and implement the basic indicators of the BSC and (b) test the proposed organizational achievement model with a larger number and wider geographic sample of chain restaurants to achieve better goodness-of-fit and expand the understanding of the effect of performance indicators in Taiwan chain restaurants.