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ALPHA has adopted a strategic thinking approach, which can be seen in its planning documents. The Office produced its newest strategic plan, 2014-2019, as a guideline for the Office in drawing up its annual plans and budgets. The strategic plan was prepared once the new Mayor was elected. The plan articulates the programs, activities, and performance indicators to be used in measuring how ALPHA has achieved intended outcomes. Exploring the structure of ALPHA’s strategic plan informs the examination of the quality of performance information collected and used, and more specifically, whether the information is relevant to the vision and mission.

ALPHA’s strategic plan entails vision, missions, goals, objectives, performance indicators, strategy, policies, programs, and activities. The Office has the vision to establish City A as a world-class, beautiful and comfortable city. This vision is the translation of the Mayor’s vision to make City A a world-class livable city for all (Bappeda, 2015b; MoLC, 2014). ALPHA has translated its missions into specific goals, objectives, and strategies. The Office also identifies performance indicators and sets targets to measure how the objectives have been achieved (MoLC, 2014). In addition, ALPHA has

drawn up specific programs and actions, including the projected budget for the five year period from 2014 to 2019, to achieve the targeted performance (MoLC, 2014).

Three aspects of the strategic plan examined in this section are: the strategic issues and objectives; the performance indicators; and the performance targets. These are critical in preparing strategic plans. Strategic issues are the basis for formulating vision, missions, objectives, and strategies as mandated by the regulations for regional development planning (MoIA, 2010). Therefore, it is essential to examine the source of information and how the issues have captured the four perspectives of the BSC. Analysing the objectives is also necessary to understand whether the offices have addressed the strategic issues appropriately. Performance indicators receive greater analysis in this section as these are a central tenet in the literature on the use of performance information. Performance targets are also important. While performance indicators are the measure of the degree to which organisations have achieved their objectives, the presence of targets can motivate staff to improve their performance (Behn, 2003; Locke & Latham, 2013).

The strategic issues and objectives

In formulating its strategic plans, ALPHA has considered issues that challenge the Office. These are conditions or factors that should be considered in regional development planning as they have a significant impact on the region. These issues have the following characteristics: essential, fundamental, urgent, long-term, and they influence the objectives of the local government (MoIA, 2010). ALPHA identifies the external and internal factors that affect its performance. As the reference point in conducting analysis for formulation of strategy, ALPHA uses the Ministry of Internal Affairs regulation number 54/2010 and Government regulation number 8/2008 as guidelines for preparing, controlling, and evaluating its regional development plan.

Table 4-2 (below) has been developed to show ALPHA’s strategic issues, as identified in its strategic plan 2014-2019 (MoLC, 2014). These are mapped against the four perspectives of the BSC. This table is compared and contrasted with those of the other case studies in Section 4.4, in order to understand how the three offices have identified their strategic issues.

Table 4-2: Strategic Issues

Perspectives Issues

Customer The increase in solid waste production

Internal business process

The poor quality of waste management The limitation of landfills

The low community participation in waste management Learning and growth

Poor organisational capability Poor law enforcement

The low capacity to manage green spaces

Financial Limited financial resources

The low investment generated from businesses

Source: ALPHA’s strategic plan, 2014-2019 (MoLC, 2014)

It is clear from the table that the BSC perspectives have been implicitly manifested in the ALPHA’s strategic issues. The nature of the issues and their classification into BSC perspectives are discussed below.

Customer perspective

The customer perspective embodies the issue: increase in solid waste production. The ability of the Office to manage this increase will determine the city’s cleanliness levels which, in turn, will impact on the level of citizen satisfaction. To cope with this issue, ALPHA has formulated an objective: to control the rate of waste production.

Internal business process

The internal business perspective captures three issues: the poor quality of waste management, the limitation of landfills, and the low community participation in waste management. These three issues illustrate the problems regarding facilities and infrastructure that needed to be improved and maintained. The ability of ALPHA to deal with these issues will potentially enhance the capacity of the Office to manage waste production which, in turn, would contribute to effectively managing the increase in solid waste production. Highlighting these issues indicates the commitment of the Office to addressing the internal business process perspective. ALPHA is addressing these issues through Although ALPHA does not explicitly use the four perspectives of the BSC methodology, its strategic issues have addressed all the perspectives. As defining the strategic issues lays a foundation to develop vision, missions, objectives, programs, and activities, it is expected that ALPHA generates and uses better balanced performance information than those that do not consider the BSC.

the following two objectives: to improve facilities and infrastructure for waste management; and to optimise the use of facilities and infrastructure for managing waste.

Learning and growth

Issues relating to the learning and growth perspective are: poor organisational capability; poor law enforcement; and the low capacity to manage green spaces. These issues demonstrate an awareness of the need for improvement in delivering services related to organisational and individual capacity. To cope with these issues, ALPHA has developed the following objectives: to develop policies and to achieve waste and green space management standards; and to enforce laws consistently to those who violate the local government regulation regarding waste and green space management.

Financial

Issues related to the financial perspective are: limited financial sources and the low investment generated from businesses. To address these issues, ALPHA has formulated two objectives: to optimise financial resources generated from the local government budget, national government budget, and corporate social responsibility (CSR); and to maximize efficiency in waste/cleanliness management.

Performance indicators

ALPHA has used outputs, outcomes and KPIs in its strategic plan. In the current plan (MoLC, 2014), the Office created a table providing evidence for the translation of vision into missions, goals, objectives, programs, actions, and performance indicators ─ outputs for measuring activities and outcomes for measuring objectives and programs. Table 4-3, which is an excerpt from the Office’s strategic plan 2014-2019, shows examples of two programs carried out in ALPHA together with the outcome indicators, the activities conducted for achieving the objective of the programs, and output indicators to measure the products of the activities.

Table 4-3 indicates that each program has one outcome indicator. To achieve the intended outcomes, ALPHA conducts several activities and determines their output indicators. In a later section (Section 4.4.1), this table will be compared and contrasted with those of the other cases in order to investigate the conformity of indicators against the criteria of useful performance information.

Table 4-3: Type of information used in the management cycle

Program Outcome Activities Output

Improving waste management

The percentage of waste transported to landfill (%)

Increasing the capability of the staff in managing waste

The number of staff who have capability in managing waste Procuring infrastructure and

facilities for managing waste

The number of trucks procured The number of trucks maintained Preparing policies and regulations

for managing waste The number of regulations and standard operating procedures for managing waste produced Increasing the capacity of waste management Community satisfaction index in waste management

Promoting a city cleanliness movement

The number of community members attending training for establishing and operating community solid waste banks

Disseminating information about

the policy for managing waste The number of people to whom information is disseminated Conducting workshops for

integrated waste management The number of participants in the workshops

Source: ALPHA’s strategic plan, 2014-2019 (MoLC, 2014)

Apart from the output and outcome indicators, ALPHA’s strategic plan also presents additional performance information in the form of KPIs. The KPIs are used to show how the Office has achieved its goals and objectives over a five-year period. As part of the Local Government A (LGA) jurisdiction, these KPIs are linked with the LGA strategic plan. These KPIs are presented in the Office’s strategic plan in an independent matrix that links goals, objectives, KPIs, and the yearly targets for 2014-2019 (MoLC, 2014).

Table 4-4 has been developed from an examination of how the objectives and KPIs identified in the Office’s strategic plans 2014-2019, align with the BSC perspectives. The objectives and the KPIs noted in Table 4-4 and their alignment to the BSC perspectives are discussed below.

ALPHA does not explicitly use the BSC in selecting its KPIs, but an examination suggests that the KPIs presented in its strategic plan have addressed each of the BSC perspectives. ALPHA’s translation of the vision into missions, goals, objectives and the KPIs is in accordance with the BSC’s function of providing a balanced measurement of performance (Niven, 2008). The presence of KPIs allows ALPHA to measure to what extent the objectives have been achieved.

Table 4-4: ALPHA's KPIs

Perspective Objectives KPIs

Customer To control waste production The reduction of waste generation

Maintain park and middle road pathways

An increase in the quality and quantity of greenspace

Internal business process

Fulfill the need for cemeteries for City A citizens

The availability of public cemeteries An increase in the ratio of facilities and infrastructure to employees

Learning and growth Improve governance in managing waste

An increase in the employee satisfaction index

Absentee index

The number of staff who are capable in managing environmental issues

Financial Improving financial and

performance reporting systems

The availability of the financial and performance report

Source: ALPHA's strategic plan, 2014-2019 (MoLC, 2014)

Customer perspective

The two indicators aligned to the customer perspectives of the BSC reflect the demand of customers on ALPHA’s services. In this respect, the notion of ‘customer’ refers to the communities in which ALPHA provides city cleanliness. The ability of the Office to transport solid waste will result in minimising ‘dirty areas’ in the city and the communities would thus benefit from an increase in the quality and quantity of greenspace (MoLC, 2014).

Internal business process perspective

ALPHA’s KPIs related to the internal business perspective of the BSC (refer to Figure 4-2) shows that these KPIs only represent the responsibility of the heads of the cemetery sub-unit and the Secretary. The other divisions (Park, City Greening, City Cleanliness Capacity Building, and City Cleanliness Management) have not developed their KPIs. Discussion on the adequacy of this indicator will be explored in section 4.2.2 regarding the KPIs ownership and the KPIs’ causal effect among BSC perspectives.

Learning and growth perspective

The three indicators listed in Table 4-4 against learning and growth are used to measure: improvements in office administration services; maintaining staff discipline; and enhancing the capacity of staff. An investigation of the performance reports for 2014, however, revealed that the program for increasing the capacity of staff received a meagre budget. The activity identified to

achieve the outcome of increased staff capacity was training, but the current strategic plan also indicates that the budget allocation for this program is tight.

Financial perspective

ALPHA’s KPI against the financial perspective is the availability of financial and performance reports. This indicator is used to measure the objective of improving financial and performance reporting systems (refer to Table 4-4). However, this indicator simply looks at the availability of the information, not the quality.

Performance targets

Along with KPIs, ALPHA set yearly targets, which are disclosed in its strategic plan, both for outputs and outcomes indicators (MoLC, 2014). The presence of targets complies with Government regulation number 54 2010, which provides a guideline for preparing strategic plans, as mandated by the Head of the Planning Agency.

Comparing ALPHA’s current strategic plan (2014-2019) to its previous plan (2009-2014) confirms the benefits of using specific performance targets. The previous strategic plan presents information about the percentage of solid waste transported to landfills between 2004-2008 (MoLC, 2009). However, rather than setting a target as a tool for controlling waste generation, based on the information, ALPHA simply illustrates the historical data of the waste transportation to landfill. The absence of targets offers no incentive for managers to perform better as there is no obligation to show their accountability in achieving specific targets.

The absence of targets in the previous strategic plan has resulted in the failure to measure ALPHA’s performance. An investigation of the ALPHA’s 2013 performance report shows that the office failed to present outcome indicators. This report only provides information about ALPHA’s outputs, such as conducting integrated solid waste management in 14 sub-districts and conducting cleanliness competitions among 112 villages (MoLC, 2012). The presence of targets in the new strategic plan allows ALPHA to measure the progress of solid waste transportation. The nature of the Office targets was discussed in Section 4.4.1.