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Article
Publication date: 2 July 2018

Mohammad Akhtar and Sushil Sushil

Business performance management describes the processes, methodologies, metrics and systems needed to measure and manage the performance of an enterprise. Traditional…

Abstract

Purpose

Business performance management describes the processes, methodologies, metrics and systems needed to measure and manage the performance of an enterprise. Traditional performance management systems were based on financial and productivity measures but the alternate measures proposed in last more 25 years have strategic focus and incorporate variety of performance measures such as efficiency, effectiveness, productivity, quality, customer satisfaction, innovation and employee satisfaction in addition to financial. Globalization and modernization have created a business environment uncertain with associated risks which has necessitated the incorporation of various types of flexibilities such as strategic, technical, operational, information system (IS), etc. Critical success factors and implementation issues also need to be incorporated to succeed. The purpose of this paper is to present the strategic performance management system (SPMS) designed, incorporating flexibility and implementation issues, and its effectiveness empirically validated from Indian oil industry.

Design/methodology/approach

Based on literature review and gaps identified, a proposed model of enterprise performance management system incorporating flexibility, critical success factors and implementation issues was developed. Macro- and micro-level factors impacting the effectiveness of the model were identified, and hypotheses were developed and tested empirically from the survey study of Indian oil industry.

Findings

The finding met, by and large, most of the research objectives. In total, 7 macro- and 11 micro-level factors came out from the study. The strategy planning, strategy implementation, strategic flexibility (SF), SPMS design, information system flexibility (IF) flexibility, implementation issues and critical success factors, and performance feedback and learning are the macro-level factors impacting the SPMS effectiveness in measuring and managing performance of an enterprise. The SPMS implementation issues have proved to be major driver of effectiveness.

Research limitations/implications

The research like many such researches had limited resources, data availability and bias of respondents. However, the model was statistically validated for its reliability and hypothesis testing. The research has added to literature on SPMS as integrated model incorporated SF, information flexibility and critical success factors. However, the effect of other types of flexibilities such as organizational, operational, HR, marketing, etc., and other stakeholders should also be studied in future research to broaden the findings.

Practical implications

The validated SPMS has practical implications for academics and researchers. Strategic and IF, and critical success factors have been incorporated in the integrated model to take care of business uncertainties so that it is strategically aligned and facilitate in effective SPMS use and implementation.

Social implications

Though it has no direct social implication but, if adopted for social projects and not-for-profit organizations, it will have social benefits of efficient and effectiveness delivery of social projects and initiatives.

Originality/value

This is an original work carried out by the authors. The validated model along with interpretation is presented.

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Book part
Publication date: 28 June 2016

Takahito Kondo and Takeshi Nishii

We examine the effectiveness of strategic performance measurement system (SPMS) in creating and steering a tension characterized by the two competing values of…

Abstract

Purpose

We examine the effectiveness of strategic performance measurement system (SPMS) in creating and steering a tension characterized by the two competing values of transformation and consistency.

Methodology/approach

We identify problems with a dynamic tension and propose an alternative approach to deepen understanding of tension management. The data were collected from 312 strategic business units of Japanese firms listed in the first and second sections of the Tokyo Stock Exchange.

Findings

We obtained the following results through a cluster analysis, a multiple comparison test, a multiple regression analysis containing interactions, and a post hoc analysis. First, we found that SPMS is positively associated with the creation of tension. Second, while the organizations facing tension averagely show higher performance than the others, the group shows larger variance in the performance. Third, SPMS contributes to the steering of the tension to some extent; however, the effect is not strong enough to attain the highest performance.

Research implications

The findings have some implications for management accounting literature in the following ways; by providing a new perspective for deepening a consideration of the steering of the tension, emphasizing that the organizations facing tension give us an interesting research opportunity, and suggesting a need to search a composed mechanism (including SPMS) to steer the tension effectively.

Originality/value

We define and operationalize the tension with the competing values so that we can clearly recognize the effects of SPMS on the creation and steering of the tension.

Details

Performance Measurement and Management Control: Contemporary Issues
Type: Book
ISBN: 978-1-78560-915-2

Keywords

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Article
Publication date: 9 February 2015

Riccardo Silvi, Monica Bartolini, Anna Raffoni and Franco Visani

For over 20 years, management control literature has indicated the importance of supporting the strategy development and implementation process with strategic performance

Abstract

Purpose

For over 20 years, management control literature has indicated the importance of supporting the strategy development and implementation process with strategic performance measurement systems (SPMS) and integrating traditional financial indicators with a set of multidimensional forward-looking measures focusing on the long term and linked to cause-effect relationships. Nevertheless, knowledge on the specific SPMS models used in practice and their effectiveness in supporting the managerial decision-making process is still fragmented and ambiguous. The purpose of this paper is to first analyse the SPMS models used in practice, also considering the role of strategy and firm size as drivers of adoption, thereafter analysing the capability of SPMS models to provide managers with measures that are consistent with their strategic information needs.

Design/methodology/approach

The research is based on a survey involving 88 Italian medium-large sized firms (or subsidiaries of multinational firms) operating on a global level.

Findings

The cluster analysis identifies two very different SPMS models used in practice. The first is the Short-term Financial Model, and as its name indicates, is based on short-term, internally focused and unconnected financial indicators. The second is the Multidimensional Additive Model, which integrates financial and non-financial measures but without a fully developed fit with the strategy. The research primarily indicates unsatisfied information needs in both clusters, presenting a significant challenge to the further development of existing SPMS models and in defining new theoretical SPMS frameworks.

Practical implications

The adoption of an incremental approach to SPMS, simply adding new operational and strategic non-financial measures without a real fit with the strategy does not increase the information effectiveness of the system.

Originality/value

The paper analyses the characteristics and use of SPMS models in practice from an exploratory perspective, defining and applying a model to evaluate the information effectiveness of SPMS.

Details

International Journal of Productivity and Performance Management, vol. 64 no. 2
Type: Research Article
ISSN: 1741-0401

Keywords

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Article
Publication date: 31 May 2011

Suwit Srimai, Nitirath Damsaman and Sirilak Bangchokdee

This paper aims to examine the role of performance measurement in the Thai public sector. It seeks to explore the interactive use of strategic performance measurement

Abstract

Purpose

This paper aims to examine the role of performance measurement in the Thai public sector. It seeks to explore the interactive use of strategic performance measurement systems (SPMS) and organizational learning as a means to achieve strategic alignment at the provincial level of government, inter‐organizational networks of public agencies.

Design/methodology/approach

Questionnaires were sent to all chief officials of the Office of Governors in Thailand. Path analysis was used to test the hypotheses.

Findings

The findings revealed significant relationships between interactive use of SPMS and organizational learning and between interactive use of SPMS and strategic alignment. The results also showed an indirect effect of interactive use of SPMS on strategic alignment through organizational learning.

Originality/value

This paper provides a considerable contribution about the use of performance measurement in inter‐organizational networks which is relatively limited in the public arena.

Details

Measuring Business Excellence, vol. 15 no. 2
Type: Research Article
ISSN: 1368-3047

Keywords

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Book part
Publication date: 10 February 2010

Al Bento and Lourdes Ferreira White

This exploratory study aims at identifying the main characteristics of strategic performance measurement systems (SPMS) that influence SPMS outcomes, which, in turn…

Abstract

This exploratory study aims at identifying the main characteristics of strategic performance measurement systems (SPMS) that influence SPMS outcomes, which, in turn, impact firm performance. Using data from 1,990 companies in a wide range of industries, we employed path analysis and stepwise regression to test the model. We found empirical support for the model, in that SPMS have a significant effect on human resource practices and business results. The degree of BSC adoption, the impact of SPMS on human resources, the purposes for which the SPMS were designed, and the use of nonfinancial performance measures were found to have the most effect on the impact of the SPMS on business results.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-84950-755-4

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Article
Publication date: 12 October 2015

Ahmed Abdel-Maksoud, Said Elbanna, Habib Mahama and Raili Pollanen

The purpose of this paper is to investigate how the importance of different components of strategic performance measurement systems (SPMS) and their deployment influence…

Abstract

Purpose

The purpose of this paper is to investigate how the importance of different components of strategic performance measurement systems (SPMS) and their deployment influence the use of performance information from the SPMS in making strategic decisions.

Design/methodology/approach

Data were collected through a survey of 143 managers of Canadian public organizations.

Findings

The findings indicate that two SPMS components, namely, the importance of non-financial performance measures and the use of operational efficiency measures, have significant positive associations with performance information use for strategy implementation and strategy assessment decisions. The extent to which SPMS models were used is found to be positively associated with performance information use for strategy implementation, but not for strategy assessment, decisions. Furthermore, the relationships between SPMS variables and strategic decision making are moderated by information systems/data limitations and management’s commitment to attaining strategic goals. Managerial skills acquired through training or experience with SPMS also contribute positively to such relationships.

Research limitations/implications

The results are affected by limitations associated with the survey method used.

Practical implications

The findings could be useful for supporting public policy, strategic decision making, public service improvement, operational efficiency, and effectiveness.

Originality/value

The study contributes to public management and performance measurement literature by investigating multiple determinants of performance information use in a cross-section of Canadian public organizations.

Details

International Journal of Public Sector Management, vol. 28 no. 7
Type: Research Article
ISSN: 0951-3558

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Article
Publication date: 12 November 2018

Yuliansyah Yuliansyah and Johnny Jermias

Considering the significant contribution of service sector of the whole contribution of the economics, this study aims to investigate the impact of strategic performance

Abstract

Purpose

Considering the significant contribution of service sector of the whole contribution of the economics, this study aims to investigate the impact of strategic performance measurement sytstem (SPMS) on sustainability strategic outcomes in the industry through organizational learning and service strategic alignment.

Design/methodology/approach

Using a survey study, 158 usable data were analysed using SmartPLS.

Findings

The results show that service strategic alignment and organizational learning mediate the relationship between SPMS and performance for product differentiation companies. For cost leadership companies, the results indicate that there is no mediation of service strategic alignment and organizational learning on the relationship between SPMS and performance.

Research limitations/implications

This study first provides evidence that SPMS improves performance through service strategic alignment and organizational learning for product differentiation companies in which innovation is crucial to thrive and succeed. Second, it introduces to the literature the characteristics of SPMS.

Originality/value

New insights of implementation of SPMS in improving companies’ performance in Indonesian financial institutions are provided.

Details

International Journal of Ethics and Systems, vol. 34 no. 4
Type: Research Article
ISSN: 0828-8666

Keywords

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Article
Publication date: 16 February 2021

Vieri Maestrini, Andrea Stefano Patrucco, Davide Luzzini, Federico Caniato and Paolo Maccarrone

Grounding on resource orchestration theory, this paper aims to study the relationship between the way buying companies use their supplier performance measurement systems

Abstract

Purpose

Grounding on resource orchestration theory, this paper aims to study the relationship between the way buying companies use their supplier performance measurement systems and the performance improvements obtained from suppliers, with relationship trust identified as a mediator in the previous link.

Design/methodology/approach

The authors design a conceptual model and test it through structural equation modelling on a final sample of 147 buyer-supplier responses, collected by means of a dyadic survey.

Findings

Results suggest that the buyer company may achieve the most by balancing a diagnostic and interactive use of the measurement system, as they are both positively related to supplier performance improvement. Furthermore, relationship trust acts as a mediator in case of the interactive use, but not for the diagnostic. This type of use negatively affects relationship trust, due to its mechanistic use in the buyer-supplier relationship.

Originality/value

The authors’ results contribute to the current academic debate about supplier performance measurement system design and use by analyzing the impact of different supplier performance measurement system uses, and highlighting their relative impact on relationship trust and supplier performance improvement. From a methodological perspective, adopting a dyadic data collection process increases the robustness of the findings.

Details

The International Journal of Logistics Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0957-4093

Keywords

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Article
Publication date: 9 January 2017

Kevin Baird

The purpose of this paper is to examine how the characteristics of strategic performance measurement systems (SPMSs) influence the effectiveness of such systems

Abstract

Purpose

The purpose of this paper is to examine how the characteristics of strategic performance measurement systems (SPMSs) influence the effectiveness of such systems. Specifically, the study examines the association between the following three strategic performance measurement approaches with the effectiveness of SPMSs: the use of multidimensional performance measures, the use of performance measures that are linked to value drivers, and the use of performance measures that are linked to strategy.

Design/methodology/approach

Data were collected using a mail questionnaire distributed to a random sample of 800 Australian manufacturing and service business units.

Findings

The use of multidimensional performance measures is found to positively influence the effectiveness of SPMSs.

Practical implications

Organisations need to strive to design their SPMSs in a manner which considers the achievement of both performance- and staff-related goals, with the findings suggesting that managers need to focus on a broad set of performance measures relating to the four dimensions of the BSC (financial, internal, customer, and learning and growth measures).

Originality/value

This study contributes to the literature by examining the important role that SPMSs play in the achievement of organisational process outcomes. The incorporation of a measure of organisational process effectiveness, and the subsequent identification of the performance-related outcome and staff-related outcome dimensions, provides future researchers with an alternative approach to analyse SPMS effectiveness and provides managers with an insight into how to adjust their SPMS to improve their organisational processes.

Details

International Journal of Productivity and Performance Management, vol. 66 no. 1
Type: Research Article
ISSN: 1741-0401

Keywords

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Book part
Publication date: 21 November 2018

Lan Guo, Theresa Libby, Bernard Wong-On-Wing and Dan Yang

The multiple performance measures in strategic performance measurement systems should be selected to represent a set of causally linked strategic drivers and outcomes. The…

Abstract

The multiple performance measures in strategic performance measurement systems should be selected to represent a set of causally linked strategic drivers and outcomes. The pattern of results thus can provide information concerning the proper execution of the strategy (i.e., the performance evaluation role) and the strength of the cause-and-effect linkages assumed by the strategy (i.e., the strategy evaluation role). Unfortunately, managers’ tendency to re-evaluate the strategy when performance falls short of target is low in practice. Possible explanations include motivational and cognitive biases. We experimentally examine two decision aids, an attribution aid, and a decomposition aid, designed to help managers ease these challenges. Study 1 shows the decision aids, individually and in combination, increase managers’ tendency to re-examine a problematic strategy. Study 2 demonstrates the effectiveness of the two decision aids, when used together, under a different pattern of results and among a sample of more experienced managers.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-78756-543-2

Keywords

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