Globalization discourses and performance measurement systems in a multinational firm

This paper examines the role of management control systems, in particular performance measurement systems (PMSs) such as the Balanced Scorecard and key performance indicators, in a multinational context. We begin by exploring how globalization discourses are engaged with, consumed, appropriated, re-produced, disseminated and promoted in a major multinational company. We link the adaptation and dissemination of global discourses of senior managers with Said’s (1975/1997) concepts of authority and molestation. We then examine how PMS are translated and customized within local manufacturing plants and sales units in the UK and China, the significance of benchmarking and the extent to which PMS render managerial discourses of globalization practical. We comment on the importance of discourse in understanding control systems in general and the way in which external discourses impact the internal practices of the organization. We also explore some of the sources that give rise to molestation (deviation of practice from global aspirations of senior managers). We conclude by stressing the potential for the globalizing effects of PMS through the interaction of the discourses of HQ and subunits, even in the absence of explicit statements about globalization.     

Translating sustainable and smart city strategies into performance measurement systems

This paper shows how sustainable and smart strategies can be implemented in cities and how these strategies influence, and are influenced by, performance measurement systems. Drawing upon the Foucauldian notion of governmentality, the authors present the case of Gothenburg in Sweden, where they interviewed the key actors involved in a new sustainability strategy. Translating strategy into performance measurement systems requires collaboration across organizational boundaries and considerations of financial goals and social and human aspects.     

Exploring the generative power of performance measurement systems design

Prior studies recognise the enabling power of incompleteness in the design of Performance Measurement Systems (PMS). We add to these studies by exploring the ‘time dimension’ of incompleteness as a way to delve into the generative power of design. To this aim, we rely upon the experience of a knowledge-intensive organization during the design of a new PMS. While knowledge complexity engaged the participants within an open-ended design process, incomplete measures were associated with unfolding memories of the past and confident beliefs in future solutions, which generated effects through the knowledge gaps that they entailed, as well as through the projections in the past and in the future that they enabled. By delving into the time dimension of incompleteness, we add to prior studies on PMS design by showing the relationships between managers' hopes for the future, patterns of memory (and forgetting) of the past and incompleteness in design. In particular, we show that although incomplete measures stimulate managers' aspirations and search for further possibilities, it is forgetting about the past (its evolving memories) that triggers this search, facilitates new actors entering the design process and enables unpredictable outcomes of design.     

Organizational learning and management information systems

The current debate around the implementation crisis of management information systems is re-examined in the light of a theory of organizational learning (the detection and correction of error). The analysis suggests that many of the recommendations to overcome the difficulties may be inadequate and, in some cases, counterproductive.     

The use of performance measurement systems in the public sector: Effects on performance

We study the use of performance measurement systems in the public sector. We hypothesize that the way in which these systems are being used affects organizational performance, and that these performance effects depend on contractibility. Contractibility encompasses clarity of goals, the ability to select undistorted performance metrics, and the degree to which managers know and control the transformation process. We expect that public sector organizations that use their performance measurement systems in ways that match the characteristics of their activities outperform those that fail to achieve such fit. We test our hypotheses using survey data from 101 public sector organizations. Our findings indicate that contractibility moderates the relationship between the incentive-oriented use of the performance measurement system and performance. Using the performance measurement system for incentive purposes negatively influences organizational performance, but this effect is less severe when contractibility is high. We also find that an exploratory use of the performance measurement system tends to enhance performance; this positive effect is independent of the level of contractibility. The effectiveness of the introduction of performance measurement systems in public sector organizations thus depends both on contractibility and on how the system is being used by managers. These findings have important implications, both for practice and for public policy.     

The effect of comprehensive performance measurement systems on role clarity,psychological empowerment and managerial performance

This study examines how comprehensive performance measurement systems (PMS) affect managerial performance. It is proposed that the effect of comprehensive PMS on managerial performance is indirect through the mediating variables of role clarity and psychological empowerment. Data collected from a survey of 83 strategic business unit managers are used to test the model. Results from a structural model tested using Partial Least Squares regression indicate that comprehensive PMS is indirectly related to managerial performance through the intervening variables of role clarity and psychological empowerment. This result highlights the role of cognitive and motivational mechanisms in explaining the effect of management accounting systems on managerial performance. In particular, the results indicate that comprehensive PMS influences managers’ cognition and motivation, which, in turn, influence managerial performance.     

Organizational control systems in research and development

This paper empirically examines an organizational control framework in research and development (R/D) settings. Data were collected from 76 R/D work group leaders. Analysis of the data indicates that the importance of controls is associated with knowledge of the task transformation process (technological uncertainty) but not with measurability of the work group's outputs, task complexity or task dependence. It is suggested that the results of this and other research indicate the need for a more complete theoretical framework as well as attention to measurement issues.     

The decision-influencing use of performance measurement systems in relationships between headquarters and subsidiaries

Although theoretical frameworks assume that performance measurement systems (PMS) can be employed for different uses, there is a lack of prior empirical research examining the use of PMS. In addition, recent International Business studies reveal many unresolved issues about the use of PMS to manage relationships between headquarters and subsidiaries. After summarizing the evolution of the use of PMS over three International Business eras, we focus on the decision-influencing use of PMS, operationalized as the influence of the PMS implemented by headquarters on subsidiaries’ decisions. Based on International Business literature and Management Accounting research, we hypothesize that the subsidiary participation in PMS design, measurement diversity in PMS structure, the linking of PMS to reward, as well as headquarters’ national culture, subsidiary size, and global pressure affect the influence of PMS on subsidiaries’ decisions. We collected data through questionnaires emailed to 100 subsidiaries. Findings show that PMS have a greater influence on decisions in cases of higher subsidiary's participation in PMS design, headquarters’ cultural tolerance for uncertainty, subsidiary size, and global pressure. Contrary to what is contended by advocates of multidimensional approaches to PMS, measurement diversity and the linking of PMS to reward mechanisms do not have a significant impact on the decision-influencing use. We discuss the empirical evidence providing qualitative arguments derived from a focus group, which reveals the existence of a PMS decoupling and helped us to describe four situations with different levels of decision-influencing use of PMS and different economic performance results. The presented quantitative and qualitative empirical evidence offers several insights for research on PMS within multinational companies.     

Organizational culture and career development in the British civil service

ABSTRACT

Quantitative analysis has rarely been used to assess the organizational culture of the British civil service. This paper matches a framework based on features of prominent theories against British Civil Service People Survey data for 2010–2018 for 71 organizations. The analysis shows a shift over that timescale to a culture giving significantly greater emphasis to personal development, with staff given more responsibility to achieve their organization’s mission come what may.     

Government accountability and performance measurement

This paper studies accountability structures and strategy in the Province of Alberta, Canada. The Alberta government has presented performance measurement and reporting as an accountability technology, but a theoretically informed analysis suggests that performance measurement could be understood otherwise. Argyris’s notion of “espoused theory" vs. “theory-in-use" is used to illuminate Latour’s analysis of Plato’s Gorgias Dialogues and the combination is applied to highlight possible unintended consequences of the use of scientific managerialist techniques in the public sector. By mapping elitism of knowledge and elitism of special position (Right and Might) onto the Alberta experience, we make visible techniques that distance Albertans from their government. Questionably designed survey instruments have produced data interpreted by government as meaning Albertans are satisfied with government’s heritage efforts. Publication of such results has the effect of telling voters that they are happy with what they have, instead of asking the people what they want.     

Specific knowledge and performance measurement

I examine optimal incentives and performance measurement in a model where an agent has specific knowledge (in the sense of Jensen and Meckling) about the consequences of his actions for the principal. Contracts can be based both on “input” measures related to the agent's actions and an “output” measure related to the principal's payoff. Whereas input‐based pay minimizes income risk, only output‐based pay encourages the agent to use his knowledge efficiently. In general, it is optimal to use both kinds of performance measures. The results help to explain some empirical puzzles and lead to several new predictions.     

Multilevel design of performance measurement systems: enhancing strategic dialogue throughout the organization

Strategy (re)formulation and implementation pertains to the collective ambition and responsibility of an entire organizational population. This perspective justifies an integral approach to the design of organizational controls, implying a design effort throughout the organization at multiple organizational levels. The article proposes a normative framework for multilevel design of diagnostic controls, i.e. performance measurement systems. The framework is an attempt to synthesize a design theory from systems theory and cybernetics, using a composite of the goal-oriented model, the multiple-constituency model and the natural-systems model of organization. Although the framework concerns design of diagnostic controls, these products of designing are not an end in themselves. Rather, the process of designing is a means for enhancing strategic dialogue throughout the organization, thereby interactively controlling strategy. Hence, participation in the process of designing, during which the collective attitude of mind is reset in accordance with changed or even new strategic priorities, is essential. Application of the framework is explored in the illustrative case of a service organization.pc 1999 Academic Press     

Contemporary performance measurement systems: A review of their consequences and a framework for research

The main purpose of this paper is to develop a conceptual framework for understanding the literature on the consequences of contemporary performance measurement (CPM) systems and the theories that explain these consequences. The framework is based on an in-depth review of 76 empirical studies published in high-quality academic journals in the areas of accounting, operations, and strategy. The framework classifies the consequences of CPM into three categories: people's behaviour, organizational capabilities, and performance consequences. This paper discusses our current knowledge on the impact of CPM, highlighting inconsistencies and gaps as well as providing direction for future research.     

Behavioral effects of fairness in performance measurement and evaluation systems: Empirical evidence from France

The measurement and evaluation of employee performance are crucial aspects of the management accounting system because of their effects on employee motivation. It is therefore important for management accountants to understand how such effects occur. Fairness may be a key explanatory factor. This study proposes that the effects of the fairness of employee performance measurement and evaluation procedures on employee job satisfaction and organizational commitment are indirect. The results, based on a sample of 60 French managers, support these expectations. For the relationship between procedural fairness and job satisfaction, the effects are indirect through trust and fairness of outcomes. For the relationship between procedural fairness and organizational commitment, the effects are indirect through fairness of outcome, trust and job satisfaction. The results also indicate that affective effects through trust and satisfaction are substantially stronger than that through fairness of outcome. Fair performance evaluation procedures therefore do more than the mere provision of equitable outcomes among French managers.     

Organizational commitment and performance in a professional accounting firm

In recent years, the concept of employee commitment to the organization has received increased attention as a determinant of employee performance. Research on the relationship between these two variables, however, has produced conflicting results. The study reported herein examines the relationship between a group of antecedent variables and organizational commitment, and the relationship between commitment and employee performance. The study was carried out using a sample of 123 junior-level staff accountants and a validation sample of 46 senior-level accountants. It was found that for both samples, work-related antecedent variables influenced commitment whereas personal variables did not. With respect to the commitment-performance relationship, the results differed between the two samples. At the junior-level, performance was found to be influenced by a willingness to exert effort on behalf of the organization, whereas at the senior-level, performance was found to be influenced by a desire to maintain membership in the organization.     

Business intelligence systems use in performance measurement capabilities: Implications for enhanced competitive advantage

The purpose of this study is to better understand how the quality of a Business Intelligence (BI) system improves the diagnostic and interactive dimensions of management control systems (MCS), thereby enhancing performance measurement capabilities, which in turn are positively associated with competitive advantage. Integrating theory from performance measurement, organizational learning and the knowledge-based view of the firm, a theoretical model is developed that considers three concepts of BI quality (infrastructure integration, functionality, and self-service) and the roles they play in enhancing diagnostic and interactive performance measurement capabilities. Data collected via survey from 324 CEOs and CFOs provides support for the theorized effects of BI quality on performance measurement capabilities. These capabilities in turn are positively associated with competitive advantage.     

Mutual fund corporate culture and performance

In this paper we test if a mutual fund's own corporate culture predicts fund performance. To do this we use Morningstar's corporate culture ratings for mutual funds and then examine the ability of these corporate culture ratings to predict risk-adjusted performance of domestic equity funds over the period 2005–2010. Using methods that are robust to survivorship bias, we find there is little significant evidence that corporate culture predicts better fund performance. Indeed, we find that no individual component of the Morningstar stewardship rating including board quality, fees, manager incentives and regulatory issues is able to consistently predict fund performance.     

Impact of the interactive and diagnostic uses of performance measurement systems on procedural fairness perception,cooperation and performance in supply alliances

We examine the effects of interactive and diagnostic uses of performance measurement systems (PMSs) on two behavioural factors (procedural fairness perception and cooperation) in inter-firm alliances. We further investigate whether the two behavioural factors mediate the relationship between PMS uses and alliance performance. We find that both interactive and diagnostic uses of PMS are significantly related to procedural fairness perception but only the interactive use is significantly related to cooperation. The relationships between the two uses of PMS and alliance performance are serially mediated by procedural fairness perception and cooperation. These findings contribute to management accounting studies in inter-firm alliances.     

The performance measurement manifesto

The leading indicators of business performance cannot be found in financial data alone. Quality, customer satisfaction, innovation, market share--metrics like these often reflect a company's economic condition and growth prospects better than its reported earnings do. Depending on an accounting department to reveal a company's future will leave it hopelessly mired in the past. More and more managers are changing their company's performance measurement systems to track nonfinancial measures and reinforce new competitive strategies. Five activities are essential: developing an information architecture; putting the technology in place to support this architecture; aligning bonuses and other incentives with the new system; drawing on outside resources; and designing an internal process to ensure the other four activities occur. New technologies and more sophisticated databases have made the change to nonfinancial performance measurement systems possible and economically feasible. Industry and trade associations, consulting firms, and public accounting firms that already have well-developed methods for assessing market share and other performance metrics can add to the revolution's momentum--as well as profit from the business opportunities it presents. Every company will have its own key measures and distinctive process for implementing the change. But making it happen will always require careful preparation, perseverance, and the conviction of the CEO that it must be carried through. When one leading company can demonstrate the long-term advantage of its superior performance on quality or innovation or any other nonfinancial measure, it will change the rules for all its rivals forever.