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Traditional approaches to organizational performance management that emphasize objectivity, control and predictability are rapidly losing relevance in an environment characterized by increasing levels of complexity and dynamism. This paper draws on complexity theory to suggest a new paradigm for managing performance in organizations.

The paper draws on the common features of complex systems and the corresponding concept of emergence to revisit key themes in organizational performance management and propose a set of implications for research and practice.

Understanding organizations as complex systems and performance as an emergent property of such systems leads to a set of new research questions, the adoption of alternative methods and the formulation of novel propositions. It also has various implications for both academic research and managerial practice, from moving away from the traditional notion of organizational alignment to adopting a more explicit stakeholder-based view in the design and use of measurement systems.

The paper highlights the great potential of complexity theory for addressing contemporary issues in the field of organizational performance management and charting the landscape for its future development.

The purpose of this paper is to examine the influences of performance measurement (PM) on not-for-profit (NFP) organizations’ stakeholders by studying how PM practices interact with understandings of legitimate performance goals. This study invokes institutional logics theory to explain interactions between PM and stakeholders.

An in-depth case study is conducted in a large NFP organization in the UK. Managers, employees, and external partners are interviewed and observed, and performance-related documents analyzed.

Both stakeholders and PM practices are found to have dominant institutional logics that portray certain goals as legitimate. PM practices can reinforce, reconcile, or inhibit stakeholders’ understandings and propensity to act toward goals, depending on the extent to which practices share the dominant logic of the stakeholders they interact with.

A theoretical framework is proposed for how PM practices first interact with stakeholders at a cognitive level and second influence action. This research is based on a single case study, which limits generalizability of findings; however, results may be transferable to other environments where PM is aimed at balancing competing stakeholder objectives and organizational priorities.

PM affects the experience of stakeholders by interacting with their understanding of legitimate performance goals. PM systems should be designed and implemented on the basis of both their formal ability to represent organizational aims and objectives, and their influence on stakeholders.

Findings advance PM theory by offering an explanation for how PM influences attention and actions at an individual micro level.

Performance measurement and management (PMM) systems have traditionally enabled strategy execution within and across firms. However, PMM have been criticized as overly static and deterministic and therefore inappropriate for emergent and dynamic contexts, such as those that characterize business ecosystems.The study aims to address the roles of organizational PMM practices in the development and implementation of business ecosystem strategies.

The authors carried out a qualitative, longitudinal study during 2016–2020 at a Japanese multinational technology corporation attempting to create an ecosystem strategy to expand its market and diversify its offering. The authors collected interview, observation and archival data, spanning the period from framing the initial strategy to establishing the ecosystem.

The process of developing and implementing the ecosystem strategy was emergent and highly iterative, rather than planned and linear, eventually requiring key decision-makers in the company to challenge some of their deeply held assumptions. PMM practices first acted as barriers to ecosystem development by promoting an excessive focus on revenue generation. Once modified, PMM helped capture, convey and reassess the ecosystem strategy. Performance targets, indicators and strategy maps were not just data gathering and reporting mechanisms but key means to express competing perspectives.

When developing an ecosystem strategy, managers should adopt a participatory and iterative approach, reviewing the complementary effects of various PMM tools at different points in time.

The study is among the first to provide an in-depth account of ecosystem strategy creation and implementation and to identify the diverse roles and effects of PMM practices in dynamic and complex contexts.

This study aims to examine how different uses of performance measurement systems (PMS) enable or hinder organizational ambidexterity (OA), intended as the simultaneous pursuit of exploitation and exploration.

Following a qualitative research design, we gathered data through semi-structured interviews, observations and reviews of documents at four departments of an automotive firm.

We contribute to operations management research and practice by demonstrating how PMS, which are typically associated with exploitation, can also foster exploration and enable organizations to become ambidextrous. Specifically, we show how PMS can be structured and used in more agile ways and, in relation to innovation, we identify which PM practices should be introduced and with what effects and those that should be avoided. We also contribute to organization theory by highlighting how a single management tool can promote the achievement of both exploration and exploitation.

In investigating PMS uses and their effects, we identify several positive practices. For example, we show how managers can use PMS more effectively and how targets could be deployed to stimulate creativity and innovation. We also emphasize the need for managers to opt more often for team incentives rather than individual ones to encourage the collaboration needed for OA.

We provide in-depth insight into how PM tools affect an organization’s ability to pursue exploitation and exploration, thus contributing to research in operations, innovation and organization theory.

This study aims to investigate how dynamic tensions between performance measurement system (PMS) uses enable organizations to achieve both exploitation and exploration and enhance firm performance.

The authors collected survey data on 153 Italian companies. Scales for each construct were validated through an exploratory factor analysis. Data on firm performance were cross-validated by using lagged accounting data. The authors tested our hypotheses using hierarchical ordinary least squares regressions, together with bootstrapping procedures for the test on mediation.

A diagnostic use of PMS has a positive association with both exploitation – e.g. reductions in total costs and lead times – and exploration, e.g. introduction of new products and extension of product ranges. The dynamic tension created by a joint diagnostic and interactive use has the strongest association with organizational ambidexterity, measured as the multiplicative interaction between exploration and exploitation.

If an organization or business unit is mainly pursuing exploitative goals, a mainly diagnostic use of PMS would be most suitable. If goals are both exploitative and explorative, a mix of diagnostic and interactive uses would be most effective.

This research helps reconcile conflicting views in the literature. The diagnostic use of PMS, far from acting as a “negative force,” appears to be necessary to guide opportunity search and to establish an appropriate scope for exploration-related activities. The authors’ focus on the uses of PMSs shows that ambidexterity is achieved through managerial capability, rather than just through the introduction of systems and structures.

The purpose of this paper is to investigate the mediating role of comprehensive performance measurement systems (PMS) – i.e. measurement systems that comprise financial and non-financial indicators, and which also consist of indicators related to different aspects of an organisation’s operations – in the relationship between strategy and company performance.

Survey data of top managers of large European companies were collected and analysed by means of exploratory factor analyses and hierarchical regressions in order to validate the proposed hypotheses.

This research shows that different strategies lead to the use of different types of performance indicators. Also, it finds that the utilisation of a comprehensive PMS enables the implementation of both differentiation and cost-leadership strategies. Specifically, a comprehensive PMS positively mediates the effect of differentiation strategy on organisational and innovative performance, and of cost-leadership strategy on organisational performance.

Further research could be undertaken in other contexts and consider additional factors, such as the structure, maturity and different uses of PMS, and the cost of measuring performance. Qualitative studies could examine the role of PMS in dynamic environments, as well as the evolution of PMS during strategic transitions.

Greater consideration should be given to the utilisation of different types of performance indicators when implementing and re-formulating strategy.

This study clarifies the links between strategy and performance measurement, and it is the first to identify the mediating effect of comprehensive PMS between strategy and company performance.

The purpose of this paper is to respond to recent calls for understanding how multiple management control (MC) and performance measurement (PM) systems are used simultaneously for managing performance, particularly in the context of small- and medium-sized enterprises (SMEs).

Data are collected during an in-depth case study of MC and PM and management practices in a Dutch SME using multiple data sources and elicitation methods, including interviews and participant observations.

This study identifies managerial practices that enable the interplay of the four control systems – beliefs, boundaries, diagnostic and interactive – helping the organization manage organizational tensions in relation to short- and long-term focus, predictable goal achievement and search for new opportunities, internal and external focus, and control and creativity.

This paper advances the research on integrating multiple aspects of performance management, particularly technical and social. This research is based on a single case study; future qualitative and quantitative studies could explore the interplay between the four control systems in other settings and explore the relationship between control systems and leadership style.

Managing performance requires active and continuous use of all four control systems. This is particularly salient in SMEs where less formal controls play a key role and where balance needs to be ensured despite the lack of managerial processes and capabilities.

The findings advance PM and management theory and practice in the context of SMEs.

Despite the numerous implementations of process improvement approaches (PIAs) in new product development (NPD), the espoused benefits of PIAs are rarely realized in practice. This paper explores how managers' cognitive frames provide knowledge structures that affect the use of PIAs in the development of new products.

A qualitative multiple case study method was used to elaborate theory in relation to the use of PIAs in NPD. Four large multinational companies were selected. Interviews with informants from different functional specialisms were conducted, and internal and online documents were collected and analyzed.

Two main findings emerge. First, the authors identify three types of managers' cognitive frames: conflicting, paradoxical, and supporting. Second, these cognitive frames are found to influence managers' decisions over whether to promote, adapt or prevent the implementation of PIAs, sometimes in contrast with the managers' organization’s strategic intent.

This paper generates insights into the importance of managerial decision-making in determining the scope and depth of implementation of PIAs in NPD.

This study helps explain conflicting findings in the literature regarding the implementation and effects of PIAs in NPD by identifying managers' cognitive frames as a key factor. Moreover, the paper highlights managers' roles in shaping an organization's approach for managing contradictory goals and shows how an organizational frame may conflict and sometimes be displaced by individual managers' cognitive frames.