Understanding performance measurement dynamism: a case study
- PDF / 297,366 Bytes
- 24 Pages / 439.37 x 666.142 pts Page_size
- 42 Downloads / 196 Views
Understanding performance measurement dynamism: a case study Tuomas Korhonen • Teemu Laine • Petri Suomala
Published online: 1 May 2012 Ó Springer Science+Business Media, LLC. 2012
Abstract This paper elaborates on the notion of performance measurement (PM) dynamism. The paper’s argument is based on a literature review and an interventionist case study. The analysis of the structure of PM dynamism is deepened by using New Institutional Sociology theory as a tool. PM dynamism was found to occur at four different levels: in setting the role of performance measures for decision making in general, in the use of measures, in the selection of measures and within the components of single measures. PM dynamism allows, for instance, measures used only for specific and topical purposes (ad hoc), in contrast to the views presented in the extant literature, which reject measures that are not institutionalized. The use of up-to-date measures, a major implication of understanding PM dynamism more thoroughly, could lead to more efficient strategy implementation and enactment at different levels. The originality of the article consists of identifying the rationale and the levels of PM dynamism and of the consideration that the use of ad hoc measures may have a positive impact on managing performance. Keywords Performance measurement Dynamism Institutional theory Ad hoc measures
1 Introduction Performance measurement systems (PMSs) must be dynamic entities that continuously match their unique contexts (Henri 2010; Kennerley and Neely 2002; Wisner T. Korhonen (&) T. Laine P. Suomala Cost Management Center (CMC), Tampere University of Technology, P.O. Box 541, 33101 Tampere, Finland e-mail: [email protected] URL: http://www.tut.fi/cmc/
123
36
T. Korhonen et al.
and Fawcett 1991). Such matching of performance measurement (PM) and context, or updating PM, can be called PM dynamism (Henri 2010). PM dynamism comprises any changes that concern a PMS and the single measures within this system. These changes, typically made because of periodic reviews (Henri 2010), refocus the system and its single measures when the PM focus is lost. A refocused PMS can then be used as a relevant management tool. The topicality of measures also dictates the way the management can report to the board and how the board is then able to extend corporate governance and control to the management. However, PM dynamism and its implications in managing performance have received little attention in accounting literature (Henri 2010). Little has been said explicitly about what PM dynamism actually consists of, although scholars have attempted to conceptualize it (e.g., Bourne et al. 2000; Henri 2010). A comprehensive understanding of the elements and levels of PM dynamism is lacking in the literature. Moreover, empirical evidence of PM dynamism is scarce, resulting partly from the fact that firms have failed to introduce dynamic PMSs (Bititci et al. 2000, p. 694). Actually, Henri (2010) calls for a more holistic, qualitative approach to research o
Data Loading...
