Performance Measurement Systems

07 Dec Performance Measurement Systems

It is widely recognised that effective Performance Measurement Systems and Performance Management Practices (PMM) bring improvements in the form of efficiency and effectiveness to organisations (Neely et al., 1995). Whilst, there has been a plethora of literature in the design of performance measurement systems (PMS) (Neely et al., 1995; Garengo et al., 2005), implementation and the use of PMS also started to receive attention (Bourne, 2001; Kennerley and Neely, 2002; Davenport et al., 2010). In this context, several researchers have also explored the dynamics between measurement, culture and change (Bititci et al., 2006; Garengo and Bititci, 2007; Franco-Santos et al., 2007; Nudurupati et al., 2011). It is apparent from the literature that the focus of the PMM literature has been evolving from performance measurement systems, i.e., what to measure, towards performance management practices i.e., how to use measures to manage performance of organisations (Bititci et al., 2012); some of these changes have also been in response to technological, economic and social trends (Melnyk et al., 2014; Nudurupati et al., 2011).

As we approach the third decade of the 21st century, the rate of change in the world is set to increase further, coming from unexpected directions (Bailey et al., 2019; Gunasekaran et al., 2019; Sheng et al., 2019). While this change is fuelled by technological developments, increasing globalisation and changes in trade barriers, political, social and environmental considerations are also becoming key concerns. Based on these trends, Bititci et al. (2012) conducted a review identifying ten grand challenges for PMM research. Similarly, Melnyk et al. (2014) investigated the evolving nature of PMM, highlighting the importance of maintaining “fit” between an organisation’s purpose and PMM to compete in an increasingly turbulent environment.

Whilst the impact of emerging business trends on organisations is widely recognised in general terms, their specific impact on PMM are rarely explored. Furthermore, the literature also recognises that businesses may operate in more or less turbulent operating environments where the rate of change and the impact of business trends could be considerably different (Prajogo, 2016; Cai and Yang 2014; Pérez-De-Lema et al. 2019). Once again, although this phenomenon is widely recognised in the literature, the specific implications on PMM are rarely explored. It is expected that these business trends and the stability or turbulence of the operating environment has significant impact on the way the performance of organisations is managed. However, the literature does not provide sufficient insights to predict how business trends impact on PMM particularly in this new dynamic, volatile and highly turbulent environment. Hence, this paper aims to empirically investigate how these business trends are impacting PMM.

References

• Neely, A.D., Adams, C., Kennerley, M. 2002. The performance prism: The scorecard for measuring and managing business success. London: Prentice Hall Financial Times.
• Neely, A., Gregory, M., Platts, K. 1995. Performance measurement system design-A literature review and research agenda. International Journal of Operations and Production Management, 15(4), 80-116.
• Kennerley, M., Neely, A. 2002. A Framework of the factors affecting the evolution of performance measurement systems. International Journal of Operations and Production Management, 22(11), 1222-1245.
• Bourne, M., 2001. Implementation issues, handbook of performance measurement. GEE Publishing Ltd.
• Davenport, T.H., Harris, J.G., Morison, R. 2010. Analytics at Work: Smarter Decisions, Better Results. Boston, MA: Harvard Business School Press.
• Garengo, P., Biazzo, S., Bititci, U. 2005. Performance Measurement Systems in SMEs: a review for a research agenda. International Journal of Management Reviews, 7(1), 25-47.
• Garengo, P., Bititci, U. 2007. Towards a contingency approach to performance measurement: An empirical study in Scottish SMEs. International Journal of Operations and Production Management, 27(8), 802-825.
• Bititci, U.S., Garengo, P., Dörfler, V. Nudurupati, S., 2012. Performance Measurement: Challenges for Tomorrow. International Journal of Management Reviews, 14(3), 305- 327.
• Melnyk, S.A., Bititci, U., Platts, K., Tobias, J., Andersen, B. 2014. Is performance measurement and management fit for the future. Management Accounting Research, 25(2), 173–186.
• Prajogo, D.I. 2016. The strategic fit between innovation strategies and business environment in delivering business performance, International Journal of Production Economics 171, 241-249.
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• Pérez-De-Lema, D. G., Hansen, P. B., Madrid-Gujjarro, A., Silva-Santos, J. L., 2019. Influence of The Business Environment in The Dynamics of Innovation And In The Performance of SMEs, International Journal of Innovation Management, 23(5), 1073-1085.