Design and implementation of performance management systems, KPIs and responsibility centres : A case study

Dwarkanath Prabhu (prabhu.db@gmail.com) IIM Bangalore

PGPPM Office, IIM Bangalore, Bannerghatta Road, Bangalore 560076 Cell : +91 81 477 53043

Sateesh Hegde (hedge.sateesh@gmail.com) IIM Bangalore

PGPPM Office, IIM Bangalore, Bannerghatta Road, Bangalore 560076 Cell : +91 94 480 91428

Design and implementation of performance management systems, KPIs and responsibility centres A case study

Abstract Responsibility centres, balanced score cards, EVA, performance management system, KPIs etc are organizational systems of great significance for creating corporate performance. Glories of successful corporate transformations using these systems have been well documented and studied in depth. However, there have also been multitudes of partial or total failures of such organizational transitions which are often neglected by researchers. Study of failure cases can provide the control group necessary to test the critical factors influencing successful transformations which are often credited to top management involvement, charismatic leadership, capacity building etc. Moreover, most case studies are about large, especially fortune 500 companies, usually headquartered in the US or Europe the lessons from whose experience may not be applicable to Asian companies, particularly those in the SME and MME sectors. This paper describes and discusses a case study of a small Indian enterprise in order to highlight the issues required to be considered when designing and implementing organizational transformation programs for smaller Asian organizations.

Design and implementation of performance management systems, KPIs and responsibility centres A case study
As the Binoy roy, CEO of TechEdge, walked out of the meeting room followed by the Vice Presidents of the different departments, the expressions on their faces betrayed various feelings ranging from relief to frustration. It was not easy to develop a consensus even among the top management team on such a critical issue as performance management. TechEdge was a system integration company in core business of providing IT solution and services for multiple industry verticals. The company partnered with various technology vendors in various capacities such as System Integrator, Value Added Technology Partner, Technology Consultant etc. It was a B2B business model. TechEdge sold their technology consulting services, Business Technology Optimization services, project implementation services and maintenance services for complex information technology infrastructure. The main departments of the company were sales, consulting, support and services, backoffice operations, finance and software. The formal structure of the company was very lean. Each department was headed by a vice president who was assisted by managers who in turn handled teams independently. The branch offices across the country had a similar structure with the branch manager (a V.P. level position), reporting directly to the CEO. All the vice presidents were at the same level in the hierarchy, but at different pay scales depending on their experience and perceived importance or the criticality of the department for the company. Sales was supposed to be the most powerful department, followed by support & services and finance. All VPs reported directly to the CEO in terms of day to day business activities, internal financing for new assets, salaries, etc. Reporting Structures and the Role of HR

Though the roles and responsibilities of each department were clearly defined within the department, members of all departments were required to work in temporary teams with members of other departments for delivering projects. The role of HR was reduced to routine recruitment. The individual department needs of training, appraisal, performance measurement, and the like were completely driven by individual VPs. The HR department was never taken into confidence on people management issues and they responded to such issues as if they were under learnt helplessness. Though all the departments worked together to deliver the final project, none of them was answerable to each other. Each department had a clear focus on their individual tasks. Within each temporary team, the project leader was responsible for the teams performance but each member of the team reported directly to his/her own VP. The project leader usually was from the support and services team. The entire business transaction comprised broadly of understanding the customers business problem, creating a feasible solution to address the problem, selling the contract for concept design, consulting and delivering the desired service, mobilizing resources to meet the contract obligations, and collecting the payment. All the departments had a clearly mandated goal to provide the best service to the customers. The people Binoy was a soft spoken person with a great individual charm and ability to motivate people by his sheer conduct. He had a keen sense of organizational ethics, people orientation, work culture, employee satisfaction, organizational culture of honesty, independence, flexibility and such other softer and finer qualities of the organization. To that effect, he set high standards through personal excellence and commitment by example. He was a great believer in the efficacy of efforts and worked hard for the singular reward of personal

satisfaction. Yet, as a CEO he was equally concerned about the revenues, profitability and cost control. His management style was a unique combination of consultative and authoritarian where he made people a part of the decision making process, but at the same time pushed the organizational agenda in a rather unobtrusive manner. He only served as a convenor of the think tank meetings, usually making each one feel that he/she had played a significant role in the decision making and that each one had an important stake in the organizations strategic directions and business initiatives. The vice presidents were also excellent and dedicated performers, worked closely with each other and shared a great sense of bonding. However, each one had concerns of his or her own. Ram, VP-Sales, was concerned about the increasing difficulty in getting new contracts due to increased competition in the market and increasing customer demands. Kishore, VP-Services, was constantly overstretched and there was a tremendous strain on talent due to attrition. He also seemed to complain that his people were overworked fulfilling unreasonable customer demands which he believed were due to the tall promises made by the sales teams. This feeling was also echoed by the VP-Software who felt that the sales team often undersold their value. All the teams felt that they had inadequate support from the operations department while Aparna, VP-Operations, had her own story of woes. She complained about overload of work and dependencies on external factors beyond her control such as delays from other suppliers. She also felt that the other departments took her for granted and never gave enough time to mobilise the resources required for a project. Rajesh, VP-Finance, complained about lack of funds and issue of collections. He seemed to be convinced that the sales team did not do enough to follow up on the outstanding payments. Rams stand on this was that they could not ask for payments in the absence of proper documentation and timely and satisfactory achievement of milestones, for which the

administration and the support delivery teams were responsible. All the VPs shared a common feeling that there were never enough people and pressed hard for additional resources. Given the cost of headcount, getting people was a highly competitive activity and more often than not, they tried to squeeze in more people within the same budget allotted to them, just to take care of attrition and provide for redundancy. The VP-HR, Monica, was perennially challenged for recruiting high quality talent at lower costs. You cannot get the best at the lowest costs, she argued. The challenges In the increasing competition, Binoy was under pressure to increase sales and profits. Ram shared the opinion that the sales team was performing at suboptimal levels. He attributed this to 5 major reasons - a weak level of motivation to perform, low quality of people, cost and time required for training and re-training, attrition of trained resources and low visibility of the company in the market place. Trained performing people are lured away by the competition such as IBM, CAP Gemini, Accenture etc even though we pay as handsomely as they do. What is the point in training people for competitors, was his remark. At the same time he also had a point that people were not motivated enough. The sales teams worked at fixed salaries and yearly increments were based on their annual performance. The sales team therefore focussed on getting the large and complex contracts which had a much higher contract value and a long sales cycle. Also since the organization culture supported a value system where efforts, skills and knowledge were perhaps more important than results, the sales team found higher respect in working with a few larger cases rather than a large number of small quick opportunities. Such larger cases were intensely competitive and often resulted in substantial price cutting situations, reducing the overall profits. In addition since the projects were also long term, the revenues were delayed. Finally, when it came to really

large contracts, their brand also mattered. Though the company possessed the skills, proven expertise, a rich history of projects, it was seen as a small company by most customers in comparison to its competitors. Customers chose the larger competitors such as IBM or Wipro simply because they felt it to be a safer choice. Early initiatives towards creating a performance-driven organization Between the two of them, Binoy and Ram agreed to settle the problems one by one, starting with the motivation issue. Ram was convinced about the potency of money as a motivator. Binoy was of the opinion that money would motivate people only till a certain limit, beyond which the marginal motivation derived from increase in pay would start diminishing. But this threshold may be the function of an individuals attitudes and behavioral characteristics within his own context argued Ram. He further reasoned that money is slightly different from other motivating factors in the sense that it operates across various levels of needs and wants. For example, even at the self actualization level, a certain amount of money may be required to pursue the self actualization needs. Or in case of the the deontic motivation which arises from a sense of duty, money may be the means through which a sense of loyalty and obligation are induced in the employees. Since money is a medium of exchange, in any effort to fulfil ones needs, money becomes an intrinsic factor Ram insisted. Binoy had other concerns; The thing that worries me is one major uncertainty. How much money really motivates people? How do we know whether we are offering too less or leaving too much on the table? Finally they agreed to start with Rams money-based motivation plan. If and when it may soon lose its charm they would replace it with something else. In line with the organizational culture of participative decision making, Ram got together his sales team to hammer out a formula for an incentive-driven pay structure. Initially it came as a surprise to the team. However given that the industry worked

at a fixed/variable pay structure of 60:40, the sales team settled for a ratio of 70:30. Since it did not fit in with Binoys ideology to cut down peoples monthly cheques overnight, he adopted a very generous approach. The prevailing salaries were treated as the fixed 70% component, and 30% variable component was declared over and above that as performancebased variable pay, for which challenging but achievable targets were set. The achievement slabs were fixed in such a way that it seemed very fair and just to the entire sales team. (See table below) Sales Achievement Upto 60% of the target 61-80% of the target 80-95% of the target 96-100% of the target >100 % Entitlement Fixed salary component only Fixed plus 50% of variable component Fixed plus 75 % of variable component Fixed plus 100% of variable component Fixed + Variable + Acceleration points

The acceleration point treatment seemed to be quite complex on which there were serious differences of opinion. The entire team seemed completely drained out after hours of deliberation, and hence Binoy proposed to decide on it at a later stage. However, Ram was keen on pushing his way through till the end. He knew that it would be difficult to make any changes later. Besides, he also wanted to use this opportunity to address the burning issue of attrition. Since we have already come so far, lets go the extra few steps to give at least an outline rather than keep it for yet another day, Ram persisted. Lets get it over in a few minutes. I think that keeping a track of all sales records and making claims on a monthly basis will be very difficult for the team. I suggest that we have a quarterly system of the

incentive payout. Let us also have the flexibility of adjusting the targets by balancing over two consecutive quarters, but keep the year-end as sacrosanct. The team was not too happy about the prospects of postponing their monthly incentives to the end of the quarter. Ram was able to convince them about the practical difficulties in processing the data and payments on a monthly basis due to long sales cycles, time required for the claim process, and the advantage that once a quarter they would get a little fatter sum rather than getting smaller payments each month. Lastly, I suggest that for every 1% extra achievement, one gets a bonus point. These bonus points will be used for considering the next years appraisal. In addition 5 % of the entire gross profit generated by the team in the year would be distributed as an ex-gratia payment on a pro-rata basis within the entire sales team. By then the energy levels of the team were already running very low. Sensing this, Ram kept pushing the scheme gently, but firmly and managed to get his way through. The very next morning Ram circulated a mail with a few additional eligibility conditions such as timely payment collections, customer satisfaction, minimum profit margins to be met to qualify for incentive even if one had met or surpassed the revenue targets, and minimum achievements across multiple business lines, etc. Though none of these conditions had been discussed in the meeting, they were not contested too much because they were perceived as legitimate. One cannot argue much against what is ethically correct, was the view of Ram. The initiative was a decent success (through not grand) in the first year. The sales team seemed to have picked up a competitive spirit. Yet there were a few who still refused to run that extra mile for the additional incentives. There were also other issues and some dissatisfactions about losing out on incentives because of somebody elses problems and inefficiency. Ram privately agreed. Another concern on his mind was that while they had all

reached or surpassed the collective profit targets, none of the sales persons had crossed the 100 % mark in terms of revenue, though it should have easily been possible for at least a few of the lot. He wondered what could have been wrong. Also he had been getting complaints that disbursement of incentives was not timely. The finance team had to check the claims made by the sales teams and more often than not they found disparities within their accounts and the claims. On further investigation, he found that these disparities were more due to allocation of the customer payments across multiple invoices. Neither the sales team nor the accounts maintained a consistent method. Often, customers also added to the confusion due to their own cost allocation methods resulting in multiple queries and clarifications that went back and forth. Ram decided to keep an eye on such teething problems and arrive at a permanent solution in the next year. However, he had a constraint that the problem did not entirely lie in his domain. Initiatives for organizational orientation towards a performance-driven culture Monica had been watching the entire sales appraisal system and the sales team dynamics throughout the year. There had not been a single attrition case from the sales department this year. She thought it would be a good idea to implement a performance-based pay system for the entire organization. The trouble was that sales were easy to measure. The other departments functions needed to be quantified first and a measurement scale needed to be established. She decided to talk to Binoy about it. Binoy welcomed the idea. He suggested that Ram and Monica chart out the scheme. He urged them to involve the other VPs as well. Monica offered to take the challenge of creating the yardsticks of measurement. Ram was more than happy to let her do it. Some worthwhile work for HR, finally! he teased. Monica didnt seem to mind it and came out

with a nice-looking plan in about a month. She had charted out the entire organizations workflow process and identified all the time intervals required at each stage in the workflow that added up to the entire delivery cycle. At a glance, Ram was convinced that there was a lot more work to do. They called for a meeting of all the VPs. After much deliberation, they decided to keep Binoy out of this in the beginning. He would be called in at a later stage. The groups reaction was short of a commotion. While it was obvious to everyone that the workflow chart was as accurate as it possibly could be, they refused to accept the internal time lags that boldly stared out at them. Please understand, these time lags are not just due to us. We are dependent on someone else too. How do we cut down that time? argued Aparna. Kishore said that many times customers demanded out-of-turn services which caused delays in other cases as well. How was he to rectify that problem? He could not possibly antagonise the customer just to keep his time lines look neat. Rajesh argued that his team was always short of manpower and especially with such kind of system, he would be needing even more people to absorb the additional load. It was time Monica did something about her own deadlines rather than talk about other departments timelines Ram and Monica sensed that the meeting was not going anywhere and was leading to more and more internal allegations about who should own the responsibility of sticking to timelines. Arguments and accusations flew in the air. Finally the comprehensiveness of the workflow itself got under scanner and each member claimed that the process was far more complex than the chart could possibly cover. Heated arguments finally ended with a simple question. If all this is in the organizations interest, why is Binoy not here? The meeting was adjourned without any concrete decision, a very unusual occurrence at TechEdge. Usually they had always been able to come to quick solutions and consensus on issues. This was the first time a VP-level meeting had ended without any conclusion.

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Ram and Monica spent a rather uneasy time for the rest of the entire week in office. Their otherwise nice colleagues were suddenly not as nice any more. No one was being nasty, and work did not suffer; however the undercurrent seemed to be full of strains. One could almost feel it in the air. Even Binoy could feel the tension among his VPs. He could guess that it must have been because of some discussion on Monicas performance-based pay-plan. Though he himself liked the idea because it ensured that good money was spent only on good work, he was not sure how it could be implemented for other departments. He mulled over the idea of hiring an external consultant and decided to discuss this with Monica and Ram. Binoy, I think we can understand our business and our people much better than an external consultant, reasoned Monica and promised him to figure out a way. Binoy knew his peoples capabilities too well to doubt her. But his dilemma was to choose between the cohesive integration of the team versus the mathematical precision of efficiency. He decided to leave the matter to the team and keep a close tab on the relationship factor so that he could step in when appropriate. Ram and Monica decided to put to use the learning they had acquired from their MBA courses which had been pushed to the background in the rush of daily routines. They changed their approach and decided to win over the VPs one by one instead of all together. Another change was that they constructed a whole new performance measurement instrument with a minor weightage to the time of response for each activity being measured, but with a large weightage to all those factors that would ensure the response times. Further the tool would adjusted for each departments needs with some of the parameters common and others changed to suit the needs of different departments. Each department head was to specify the parameters unique to their department. It almost looked like a balanced score card. This time

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they first took it to Binoy. Their first experience had taught them that it wont move without Binoy pushing it himself. Binoy liked the overall idea, but could not attend to it because he was under tremendous pressure for time due to his other commitments. He also wanted to postpone it a bit in the view of the strains that had developed recently in the relationship among his chieftains. Besides he wasnt very much convinced about the success of Rams initiative in the last year. The team had delivered better results than the previous year. But the team had not completely met their target. None of the sales people had been able to cross the 100% mark. Yet, their revenues had gone up by about 30%. The PAT had increased by 25% over the previous year. The collection had remained at the same level as previous year. The creditor column in the balance sheet was disturbing him. Some of the projects would run for more than 3 years. Though the contracts looked profitable on paper, the uncertainties of long term contracts were too many to say that the company would actually be profitable at the end of those projects. The attrition rate with services and software departments was as high as ever. That had a potential to create future customer satisfaction problems. There were too many questions on his mind that he first had to attend to. He was also mulling over the idea of designating the sales, services and software teams as profit centres. But he was not sure whether to convert the Internal Administration, IT, and Finance into some sort of responsibility centres. Notwithstanding Binoys reservations, Ram and Monica were determined to push this through and after about a month of their persistence, Binoy called a meeting of all VPs. Monica and Ram briefed Binoy completely about the entire Key Performance Indicator (KPI)

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system and the reward workings. Binoy was not fully convinced that all the KPIs were required. He was also not very sure about the efficacy of the reward system. He held the view that KPIs should be specified only for external customer-facing and finance-related activities where measurements were easy. For internal activities, it was impractical and unnecessary according to him. He believed that people have a certain value system inculcated in them and they behave accordingly. A KPI-based formal workflow will never work. People dont work by looking at charts. They work through their habits, was his argument. But we need to reorient their habits of working. KPIs serve as the directions for them. Once they start working in this way, it would automatically become a new habit over a period of time, reasoned Monica. Finally after intense discussion, they decided to go ahead with the KPIs as defined by Ram and Monica. But Binoys outlook prevailed over the rewards and penalties. Both Ram and Monica felt that the rewards were too less for internal KPIs, though for the external facing KPIs, they were comparatively high. The penalty system also seemed to be skewed towards the external-facing teams. The internal misses faced much lower penalties. Though the lower penalties were consistent with lower rewards for the internal-facing teams, and vice-versa for the external-facing teams, Monica was not completely convinced that there should be such discrimination in the first place. Ram cribbed about the penalty part, but decided to go along with Binoy. Furthermore, the Sales team, Consulting team, Service and Support team and Software project delivery teams were constituted as profit centres. The backoffice team was designated as an investment centre and finance team was made the cost centre. The rollout and the results The proposal was rolled out by Binoy, which was a bit abnormal. He usually had someone else put forward any proposal and would endorse it. However considering that

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Monica and Ram had already gone through the first round of discussions and had faced bitter resistance, Binoy felt it would be good to neutralize that effect. The meeting went not without resistance. The internal-facing teams felt that their KPIs were too stringent and the rewards were not commensurate with the same. The external-facing teams felt their penalties were stiff and they were not really directly responsible for many of the KPIs. Moreover, since this was the beginning of recession, they had apprehensions that their performance targets may not be met. After prolonged resistance, finally the proposal was accepted without change on the condition of a pilot year. TechEdge would run with the new system of performance management for a year and revisit the same later. They would have a quarterly audit of the new system and a final review after one year wherein the necessary modifications would be made. Three months into the new model, there were serious inter-departmental allegations. Each department claimed to have incurred a loss of incentive due to the lethargy of the other department. The finance team was annoyed since the payment collection had fallen almost 15% below the normal rate. The sales team defended it alleging that the payments had been delayed due to late commissioning of projects. The services team seemed to say that the sales team had overcommitted, and the scope of the project had extended much beyond the initial agreement. The sales team did not agree to this allegation and blamed the services team that they themselves had agreed to service the customers extended demands for which the sales team should not be held responsible. The sales team also pointed out that the overall C-SAT (Customer Satisfaction) for existing customers had come down due to call-ageing. Support team declared that C-SAT had come down due to hardware and software resources not being available in time from the logistics people in the backoffice operations. The backoffice team promptly pointed out to the finance team saying that they did not get approval for purchases

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in time. Finance defended its delays saying that they were restricted by cash flows as well as their mandate of cutting costs at least by 10%. While the bickering amongst managers intensified, employees were continuously demanding for their increments which had been stalled due to recession. This added to the frustration of the VPs including Monica. Every VP had a resource crunch, and Monica had no extra resources to give to anyone due to budget constraints. Finally in the 4th month, Binoy called a meeting of all VPs. In an unusually abrupt way, Binoy simply announced the rollback of the performance-management initiative. Well, guys, I am doing away with this performance-management system that we piloted some time back. Its causing too much of unnecessary conflict and bitterness among all of us. I dont think this system works for an organization such as ours. At 120 crores we are too small for these things. Perhaps we may adopt the system in the next 3 years when we reach our 500 crore target. We may go back to our original working style. The Sales team shall continue to work on the variable compensation plan like earlier. But all others can forget the KPIs and measurements. The team spirit is more important than a program-driven behaviour. We are an IT consulting company. Such balanced score-card-oriented methods may be great for manufacturing. Perhaps not for a services company like us. Let us get back to our earlier ways of working together as a family and give our complete cooperation to all so that each one of us performs in the larger interests of the organization was the decisive statement by Binoy. Binoys talk ended in a deafening silence. Ram looked crestfallen, angry and humiliated. Kishore looked confused. Aparna was relieved. Rajesh seemed happy. Monica appeared thoughtful. Though each one tried to hide their emotions, it was all out in the open when Ram simply said with an audible sigh, I guess the meeting is over, Binoy. Lets hope we get to 500 crores soon. But its not possible without this throttle., blurted out Kishore.

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He was among the worst faring in terms of performance. Such reaction from him surprised everyone including Binoy. I was the one complaining the most, I agree. But that does not mean we should throw out the system. I was only unhappy about the way it was implemented and the amount of load it was exerting on my team. Rajesh seemed to want to object, when Ram calmly responded, I guess Binoy is right. This cant work here. We will need the system when we become large enough. The way he said it, Monica instinctively guessed it would have to be without Ram. Teaching Note Money as a control instrument is observed to produce mixed results. It can be effectively used as an incentive through performance-based pay systems, but not without its pitfalls (Hertzberg et al.,1959, Eisenberger et al., 1999 ; Banker et.al., 2000). The TechEdge case brings out various aspects of design and implementation of a performance management system. It also illustrates how the organizational culture and history which is a part of its corporate identity have an impact on implementation of such systems (Steiner, 1979 ; Mintzberg 1994a,b, Mooraj et al., 1999). It may be noted that the KPIs in this case were decided considering the entire organization as a single monolithic entity. The responsibility centres were created later, and the same KPIs were adopted for all. The pilot implementation of the KPI system in the sales team where they introduced a performance-based variable pay also did not see much success in terms of increase in revenues or profits. It may be interesting to investigate whether the variable component was not attractive enough or whether the fixed component itself was above industry standards, so much so that the sales team may have been satisfied with the fixed component itself. The impact of various leadership styles and issues related to each style, ranging from leading by example to authoritarian decision making can also be illustrated using this case. Internal relationships among the managers are also an

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interesting point of study. It is observed that in the absence of any control structures, the managers are extremely cooperative. As control systems are implemented through KPIs and performance starts getting measured objectively, managers start behaving with a selfish motive resulting from competition and driven by the desire for performance-numbers which may mean different things to different people - ranging from monetary incentives to recognition and ego satisfaction. Also, as performance starts getting reflected and documented in numbers, managers may engage in fault finding exercises in the event of shortfalls from targets which may eventually turn the employees attention away from the organizational goals. Whether this means that the laissez faire system is better than using controls for directing managerial behaviour is a point to ponder. The CEOs leadership style contexts and constraints are very different from the VPs style, constraints and contexts. Another important point to think about is what criteria should be used for creating responsibility centres. For most companies, the change from a monolithic organization to a structure based on responsibility centres needs to be gradual, so that the required temperamental capacities may be developed so that the people are able to accept and implement the change (Chenhall and Euske, 2007). It may be a good idea to initially start with one or two least critical responsibility centres and then gradually expand the system to other departments, one at a time. Notwithstanding this, it may be noted that there is no single clear formula for a successful implementation of change. For a big bang approach to change to be successful, an organization needs to have a dedicated change management team (Brumback,2003). This change management team needs to guide the organization through the troubled waters of change by gradually building empathy and engaging people in the transformation-generating energy, who in turn pump in the energy and vibrancy required for facilitating enforcement of the new norms (Marks, 2007). The effectiveness of the change

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management team depends on many aspects such as their charisma, vision, persuasiveness, commitment etc. Apart from having these intrinsic capabilities, change managers further need to be empowered with the ability and authority to administer rewards and penalties and they must use these as tools to enable desirable behaviour (Brumback, 2003). Even with the best of intentions, half hearted approach towards ushering in structural and/or processual changes in an organization is bound to fall flat. Lastly, growing to a large size is not a pre-requisite for an organization to create appropriate management systems for itself. In fact, it may be better to have systems in place while the organization is small and young rather than bring in radical changes at a later stage (Chenhall and Euske, 2007). It is easier to bring in desirable transformations in a smaller company and more often than not, a transformed small company holds the potential of growing into a well organized large business organization. The TechEdge case may also be used to discuss issues such as efficacy of performance-based pay and effects of performance-based pay on inter personal relationships among individuals, teams, and managers. Finer subjects such as self gratification, tendencies to push personal agenda ahead of organizational goals, agency behaviour, etc. may be explored as potential results of a mis-managed performance-based incentive system. In organizations where cross departmental teams are formed for temporary projects, interdepartmental conflict is usually the most common fallout of performance management systems. The TechEdge case may be useful to highlight and discuss cause-effect relationships of such conflicts. The case also brings forth aspects of intrapreneurial leadership. Based on this case, the CEO -intrapreneur relationship may be highlighted. How should CEOs empower, encourage and manage ambitious intrapreneurs and how intrapreneurs should support their CEOs in organizational building may be an interesting point for study.

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Finally, as highlighted earlier, if self regulation the best form of control system, how such self management may be embedded in an organizational culture may be explored.

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9. Mintzberg, H., 1994a , Rethinking Strategic Planning Part I : Pitfalls and Fallacies, Long Range Planning, 27(3) : 12-21 10. Mintzberg, H., 1994b , Rethinking Strategic Planning Part II : New roles for planners, Long Range Planning, 27(3) : 22-30 11. Mooraj, S., Oyon, D., Hostettler, D., (1999), The Balanced Score Card : a necessary good or an unnecessary evil? , European Management Journal, 17(5) : 481-491 12. Steiner, G., (1979), Strategic planning : What every manager must know, The Free Press, New York 1979.

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