DEVELOPMENT OF A CONCEPTUAL FRAMEWORK FOR VALUE-BASED SUSTAINABILITY BALANCED SCORECARD A CASE STUDY OF STATE-OWNED PLANTATION ENTERPRISES (SOPE)

• Main Author: Trisyulianti, Erlin
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/81042
• Institution: Institut Teknologi Bandung

The three-dimensional principles of Sustainable Development Goals (SDGs), namely economic, social and environmental, which are global stakeholders' demands, have driven companies to adopt economic, social and environmental goals. These three-dimensional principles of SDGs become companies' sustainability goals, which are also in line with the Triple Bottom Line (TBL) concept. The TBL concept encompasses the company's economic, social and environmental goals. The company's goals in these three dimensions need to be formulated in organizational strategic management, thus requiring practical strategic management tools to achieve these goals. One widely used and deemed effective organizational strategic management tool is the Balanced Scorecard (BSC). Therefore, companies must integrate the TBL and BSC concepts into the SBSC (Sustainability Balanced Scorecard). However, an issue arises: implementing the SBSC concept in companies will generate numerous performance indicators, while companies have resource limitations. Therefore, this research proposes using value-driven business processes (efficiency, quality, agility, compliance, integration, and networking) to formulate strategic goals and determine the prioritization of performance indicators within the SBSC framework. It is expected that this will assist companies in prioritizing resource allocation to support achieving Economic, Social and Environmental (ESL) goals. This study aims to develop a conceptual framework for a value-based Sustainability Balanced Scorecard. The research proposition to be proven is that "value-driven business processes (efficiency, quality, agility, compliance, integration, and networking) can be used as a basis for formulating strategic goals and determining the prioritization of performance indicators". The methodology is a case study exploring the value-based SBSC conceptual framework in three state-owned plantation companies. The data and information obtained are primary and secondary data. Data analysis is conducted using qualitative research coding and cross-case analysis approaches. Subsequently, from the results of this cross-case analysis, performance indicators prioritized by the companies are identified based on the criteria (a) relevance to company needs and (b) reflecting the use of minimum resource allocation with a significant impact on the performance targets. These performance indicators are then grouped into a value-based SBSC framework. The research results in the three case studies of state-owned plantation companies show that the cross-case analysis produces performance indicators that have similarities in performance target achievements: increasing on-farm productivity by 89%, increasing off-farm productivity by 95%, and implementing the Roundtable on Sustainable Palm Oil (RSPO) by 100%. Moreover, these indicators are relevant to the needs of the companies, and their implementation significantly contributes to achieving performance targets without requiring substantial resources. Mapping performance indicators in a value-based SBSC framework reflects indicators that have value-driven efficiency, quality, agility, compliance, integration, and networking. Similarly, the comparison of value-driven strategic goals is the same as value-driven performance indicators. Thus, it can be concluded that the value- based SBSC framework can be used to formulate strategic goals and determine the prioritization of performance indicators in state-owned plantation companies in Indonesia. The benefits of this research include guiding decision-makers in implementing SBSC with a value-based approach, using value-driven principles to formulate strategic goals and determine the prioritization of performance indicators, and adding references in sustainability strategic management. The innovation and originality of the research lie in developing a value-based SBSC as a method for formulating strategic goals and determining the prioritization of performance indicator usage. However, further development is needed, especially in proving it in different case studies, exploring the company's strategic goals comprehensively, and analyzing the interrelationships between strategic goals and performance indicators. Besides that, further research is needed to design technical guidelines for building value-based performance indicators derived from the company's strategic goals.