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

KPI AND SUSTAINABILITY
Doctorate Research Proposal
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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.