The Role of Effective KPIs in Shaping the Future for the Sustainable Economy

This research proposal evaluates the effectiveness of key performance indicators in improving the prospects of sustainability in the economy, with a focus on the banking sector in Abu Dhabi, UAE. The report proposes to evaluate the effectiveness of key performance indicators in improving the prospects of sustainability in the economy. The financial sector has always played a significant role in enhancing the growth of the economy, and there has been considerable contribution made by the different financial institutions.

KPI AND SUSTAINABILITY
Doctorate Research Proposal
Name of the student
Name of the university
Author note

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Topic: The Role of effective KPIs in shaping the future for the sustainable economy: A
critical analysis to address the dilemma in the Banking sector in Abu Dhabi, UAE.
1.0 Research overview
The report proposes to evaluate the effectiveness of key performance indicators in
improving the prospects of sustainability in the economy. The financial sector has always
played a significant role in enhancing the growth of the economy, and there has been
considerable contribution made by the different financial institutions. Sustainability has a
broader meaning to it and refers to economic, social and environmental aspects which refers
to the all-round growth of a nation. On the other hand, the role of key performance indicators
is noteworthy in moving toward sustainable economy. The green economic approach has
been widely used in various developed countries to achieve economic growth using different
policies by considering environmental issues and social implications. The United Arab
Emirates has been at the forefront in developing a sustainable economy, and they have made
considerable efforts in moving away from oil to diversify resources of income (Nasr Abdeen
2014). The development of a green perspective in economy has been established to support
economic growth in the long-term basis. The research has chosen the Abu Dhabi
Commercial Bank as the case for analysis as one of the most recognisable public banks in the
country.
1.1 Rationale
In light of the context of sustainable economy and implementation of KPIs, it can be
seen that even though the economic stability and growth is measured through GDP (gross
domestic product, a holistic approach is required for understanding the progress of the nation
in reaching a greener economy. It requires a considerable shift in paradigm implementing
various key performance indicators in monitoring and addressing the changes towards
greener economy. However, it needs to be in alignment with the strategy of the nation and
indicators needs to be developed across all the sectors to analyse the impact and drive the
strategies forward. The research will focus on the financial sector, especially the public
banks. The contribution of the financial sector is most relevant in improving the sustainability
of the economy. In light of the past literary sources, a gap is identified in highlighting the
role of key performance indicators in enhancing the sustainability of an economy. It has also
failed to address the role of public banks in contributing to a sustainable economy (Boutabba
2014). It is one of the major reason making this topic appealing and help me further in

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understanding the way a sustainable economy can be developed. Moreover, it helps in
understanding the dilemma of this financial institution in focusing on all round growth of the
economy and addressing the needs of all the stakeholders at the same time.
1.2 Aim
The aim of the investigation is evaluation of key performance indicators in public
banks for contributing to the development of a sustainable economy. Abu Dhabi Commercial
Bank has chosen as the case and the dilemma of the bank in implementing in sustainability
practices will also be analysed.
1.3 Objectives
 To perform a macro environment analysis to highlight key performance indicators
 To conduct internal analysis on understanding the factors essential for organisational
excellence and sustainability
 To evaluate the role of key performance indicators in public banks in developing a
sustainable economy.
 To recommend suitable strategies for aligning the key performance indicators with the
sustainable growth strategies
1.3.1 Research questions
What are the different key performance indicators for developing a sustainable economy?
How does key performance indicators influence in developing a sustainable economy?
2.0 Literature review
The shift is focus on the other sectors in the industry other than oil industries has been
a great challenge for the government in United Arab Emirates. The banking sector in UAE
had been key to future growth of the economy once the oil resources are dried up. It is the
main reason behind which the banking industry has witnessed significant attention from
investors and experienced rapid growth. In light of this context, the study investigates past
literary sources on key performance indicators in the public banks for improving the
sustainability of the economy.
Lorek and Spangenberg (2014) states that past literary sources suggest noteworthy
investigation on the performance of commercial banks and there has been increase in
attention of these banks for the past few years. The examination of the past empirical studies

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have addressed the performance of commercial banks in different countries but there is
significant lack of literature on the commercial banks in the United Arab Emirates. Roome .
and Louche (2016) states that banking failure has significant consequences for any economy
as it is provides stability and highlights two approaches for measuring the performance of
banks. These are accounting approaches and parametric Stochastic Frontier Approach and
non-parametric DEA. The first approach is completely based on econometric calculation and
financial ratios. However, this approach had limitations which is overcome by the use of
other method. As stated by Boutabba, (2014), the whole concept of analysing the
performance of any bank results in providing information the government regarding the
policies and the impact of mergers, market structures and deregulations on efficacy.
Samargandi, Fidrmuc and Ghosh (2014) states that banking industry provides stability
to any economy as it offers funds for other sectors and financial assistance to the government.
The ability of a bank to pay its debts determines the solvency which helps in bringing
stability in the economy. However, past research shows that there is an ongoing debate in
understanding whether economy growth affects the financial performance of banking
industry or the vice versa. Tang and Tan (2014) states that banks have the capability of
playing dynamic role in enhancing the overall growth of the organisations. While evaluating
the concept of sustainable economic development, Campiglio, (2016) states that sustainability
can only be achieved by developing measures that promote long term environmental
sustainability. It implies that sustainability of any economy depends on the sustainability of
the industries within it and their long term commitment to contributing to the society and the
environment at large.
Zucchella and Urban (2014) performed a study to examine the key performance
indicators while measuring sustainability which highlighted the use of both financial and non-
financial measurement techniques. Sustainability with an organisation is root of development
for the organisations. Liotou et al. (2015) stated that triple bottom line method is one of the
most useful ways of measuring the holistic growth of any economy. However, none of the
studies have been able to provide the link between the uses of key performance in improving
the sustainability of the economy. The analysis of the scholarly literature shows that various
approaches have been taken to measure the sustainable performance of companies but there is
lack of literature in specific to the banking industry.

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3.0 Research Methodology
Research methodology is the concept of gathering information based on the objectives
of a paper. Research is the method of gathering meaningful data to fulfil the purpose of a
given investigation. This research will follow the Saunders research onion framework to
discuss the different steps in the process of data collection (Kumar 2019). The research will
make sure that the methods are developed to ensure reproducibility in future studies. The
Saunders research onion will assist in explain each layer of the research methodology. This is
an applied research which means that it will address a specific problem and develop practical
results to resolve the issue. This research will propose a mixed method design to facilitate
better understanding of all the dynamics in the research. It will consist of various instruments
and methods necessary for gathering relevant information and performing examination on it.
3.1 Research philosophy and approach
Taylor, Bogdan and DeVault (2015) states that research philosophy includes specific
assumptions and frameworks necessary for creating knowledge in the inquiry. An efficient
research philosophy consists of distinct assumptions that helps in shaping up the research
question and helps in gathering knowledge. Pragmatism, positivism, realism and
interpretivsim are the four types of philosophies in research. This research proposes to
choose the pragmatic stance to identify the necessary KPIs and the role of KPIs in developing
a sustainable economy (Mackey and Gass 2015). Pragmatism considers theories that are
supported by relevant action which means that it help in upholding the objectivity of the
given research. As per this philosophical stance, there are several ways of interpreting a
research problem so multiple realities exist while performing a research. This research will
facilitate in using a mixed method research design. Pragmatism emphasises on the research
question and develop methods based on the needs of each of the question. Therefore,
pragmatism will help in quantification of the gathered information using different research
tools and instruments.
The research approach is based on logical reasoning and the way hypothesis will be
used in the investigation. The research approach is chosen is based on two components the
logical behind the gathering of information and process of data collection. It has classified
into deductive and inductive approach based on the different ways of addressing the research
problem and performing the investigation (Choy 2014). This research will use inductive
approach as it will assist in developing new paradigms and theories. Deductive approach is

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used for verifying the already existing theories but the inductive approach develops new
generalisations. Inductive approach commences with observation and gathers data to propose
a theory and uses patterns within data to propose theories. The study is free to altering the
direction of the research as hypothesis are not proposed at the initial stage of the research.
Therefore, the inductive approach will make observations to propose theories and this
theories will be tested using other data collected in the process. However, this does not mean
that existing theories are not taken into consideration while evaluating the past data.
3.2 Research Design
Research design is the overall plan for gathering information and examining it using
suitable methods. It will determine the suitability between quantitative and qualitative study
in a research. Research design is divided into exploratory, explanatory and descriptive
research design. However, this study has chosen the explanatory research design to develop a
highly structured design for understanding the relationship between two variables and at the
same time formulate a new framework. Explanatory research design is known for measuring
the causation between two variables (McCusker and Gunaydin 2015). However, there are
certain factors which needs to be considered while performing the research, such as temporal
sequence, nonspurious association and concomitant variation. It suggests that the cause have
to start before the effect has started and the variation between the chosen variables has to be
systematic and finally, there is covariance between the chosen variables. In this research,
initially, secondary data will be collected by using the PESTLE framework to examine and
identify the key performance indicators in the industry. The factors identified will be used to
propose a framework based on KPI based on a SWOT analysis. This means that micro and
macro environmental factors will be used to identify the KPIs in the following research. The
second part is collection of relevant primary data from organisations in the banking sector to
understand to verify the framework proposed.
3.3 Research Instruments, data collection and Analysis
This research uses both primary and secondary data collection to develop a new
theory and framework. The secondary data will be collected from the past and present data on
the macro and micro environment through peer reviewed journals, web articles and
government websites. The data collected from these sites will be used for proposing the new
framework. In case of the primary data collection, the research will survey as the research
instrument (Palinkas et al. 2015). The survey will consist of close ended and open ended

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questions to gather data from the employees working in the banking industry in the Abu
Dhabi. The survey questionnaire will different measurement scales based on nominal,
ordinal, ratio and interval and will be divided into sections addressing each aspect carefully.
The secondary data will be analysed by identifying the relevance and pattern within
the data collected to understand the key factors affecting the industry. This will be done
through extensive content analysis of the secondary data collected. In case of the primary, the
research will use statistical tools and techniques of evaluation ((Palinkas et al. 2015). The
research will use Pearson’s correlation to examine the degree and nature of association
between two variables. On the contrary, the research will use regression analysis to verify the
proposed model and use it for trend analysis to provide better understanding of the research
paradigm.
3.4 Sampling methods and options
Sampling is the method of choosing elements from the whole population and it is
performed to reduce the overall cost, time and complexity of an investigation. The first step
of the process is choosing the target population and determining the sampling frame. The
target population consists of the populace in Abu Dhabi whereas the sampling frame will
include only the populace working in banking industry. While determining the sample size,
Cochran’s sample size collection formula has used to determine the ideal sample size for the
research. Based on the population in the banking industry and taking up a confidence interval
of 99% and margin of error of 4%, the research has reached a conclusion of using 1040
respondents as the suitable sample size for the quantitative research ((Palinkas et al. 2015).
On the other, in case of the secondary research, there is no specified sample size as vast
historical data needs to be evaluated to develop an effective framework.
The last part is choosing the sampling method in the investigation and based on the
usability, the research will use stratified random sampling to divide population into strata and
will choose elements randomly. Randomisation facilitates in reducing the chances of bias in
the research. It also provides equal opportunity to all the target population of being chosen.
3.5 Anticipated limitation
The major limitation of the given research is that the process and theory proposed will
be conceptual so there is risk of not attaining desired results. The research uses a mixed

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method comprising of both secondary and primary data collection which increases the
complexity of the process.
4.0 Ethical Considerations
The research will adhere to all the guidelines prescribed by the university and will
avoid any sort of manipulation, falsification or plagiarism of data collected. Anonymity and
privacy of the respondents will be protected by the clause of confidentiality. Informed
consent will ensure voluntary participation and finally, none of the respondents will be
harmed during this process.
5.0 Risk considerations
Inductive approach always comes with a risk and developing a new theory will also
be risky as no relevant results may not be extracted throughout the process. Moreover, there
are risks in developing the proposed model and the study will have to alter direction based on
the suitability of the study.
6.0 Assumed outcomes and implication
The research is expected to develop a new framework consisting of KPIs that will
help in developing a sustainable economy that can measure all the three aspect of progress
namely, social, economic and environmental. The research is also is expected to develop a
positive relationship between banking industry and sustainable environment.

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References
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Campiglio, E., 2016. Beyond carbon pricing: The role of banking and monetary policy in
financing the transition to a low-carbon economy. Ecological Economics, 121, pp.220-230.
Choy, L.T., 2014. The strengths and weaknesses of research methodology: Comparison and
complimentary between qualitative and quantitative approaches. IOSR Journal of Humanities
and Social Science, 19(4), pp.99-104.
Kumar, R., 2019. Research methodology: A step-by-step guide for beginners. Sage
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Appendix: Timeframe