Performance measurement and management special issue

Citation

Adler, R., Stringer, C. and Shantapriyan, P. (2012), "Performance measurement and management special issue", Pacific Accounting Review, Vol. 24 No. 3. https://doi.org/10.1108/par.2012.34224caa.001

Performance measurement and management special issue

Article Type: Guest editorial From: Pacific Accounting Review, Volume 24, Issue 3

Performance measurement and management fulfils an important organisational role. It comprises and involves the astute management of key organisational systems, processes, and practices whose collective purpose is to ensure the organisation is doing what it is meant to be doing. Performance measurement and management’s broad intent and mandate means that this field of study is approached from and contributed to by a wide range of business disciplines, with the two most notable being accounting and management.

As a field of academic study, performance management is relatively new. Prior to its appearance, accounting research largely focused on technical accounting issues. With the appearance of the management discipline’s human relations movement in the 1930s, and in particular the seminal work of Elton Mayo, the foundation was laid for the early performance management work of Robert Anthony in the 1950s. His work, and the subsequent contributions of Anthony Hopwood, Ken Merchant, David Otley, Clive Emanuel, Robert Simons, and Peter Brownell, to list a few of the more notable and prolific writers, recognised the importance of influencing human behaviour for the purpose of supporting an organisation’s implementation of its strategy and, when needed, its strategy’s reconsideration and reformulation.

Performance management continues to grow as a field of theory and practice, and this growth is reflected in the publishing trends of the Pacific Accounting Review. For example, between 1992 and 2001, only about 10 percent of the work appearing in Pacific Accounting Review featured a performance management topic. From 2001 to 2011, however, this percentage increased to 16 percent. Furthermore, while the earlier articles focused almost exclusively on budgeting aspects, more recent work has expanded on this theme of budgets to include such further influences as employee personality type, task and job characteristics, and cultural and political factors.

In this special issue we have five papers and one commentary that examine a range of performance management issues. The first paper, “Performance management under conditions of uncertainty: some valedictory reflections,” by Professor David Otley, identifies practitioners and academics’ limited understanding of how managers deal with uncertainty and manage risk as a critical gap in the literature. He also reiterates the need for future studies to examine the holistic performance management framework to understand how the various parts (e.g. measures and incentives) are interrelated.

In the second paper, “Performance measurement in Indonesia: the case of local government,” Rusdi Akbar, Robyn Pilcher, and Brian Perrin contend that performance measures are developed more for regulatory, external reporting purposes than for improving organisational performance. Based on findings from a survey of 100 senior finance officers from local government authorities in Indonesia, Akbar et al. find that coercive pressure exerted by Indonesia’s central government, management commitment and normative isomorphism (resulting from common training programmes and widespread sharing of knowledge) impact on the success of performance measurement system implementation.

The next paper, “Public sector commercial orientation and the government social contract: a study of performance management in a non-competitive environment,” by Ali Rkein and Brian Andrew, questions the costs and benefits of adopting new public management techniques into small and non-competitive environments like the Northern Territory Government in Australia. Findings from a case study of Northern Territory Government departments leads Rkein and Andrews to conclude that the commercialization process has failed to achieve its intended objectives, and has instead produced an inferior cost-benefit outcome.

The fourth paper, “Gender, operational efficiency, population density and the performance of microfinancing institutions,” by Gemunu Nanayakkara and Lokman Mia, develops and tests a model for assessing microfinancing institution (MFI) performance. Using data collected from 234 MFIs spread across 63 countries, the authors find that performance – which they measure as increase in outreach, depth of outreach, sustainability, and portfolio at risk – is significantly influenced by gender and operational efficiency, but not population density. The results challenge previous research findings and lead to the development of various policy implications for the management of MFIs and the undertaking of future research on MFI performance.

In the fifth paper, Professor Ken Merchant critically examines the usefulness of management accounting research, including performance management research, for academics and practitioners. He finds that the great majority of the field’s research is neither useful for practitioners nor for academic study. He believes that practice is invariably ahead of theory, and therefore there is a need for the greater use of field study research that both focuses on the “big issues” that practitioners are concerned about. Merchant offers practical help in solving these issues.

Professor Murray Lindsay, in his paper “We must overcome the controversial relationship between management accounting research and practice: a commentary on Ken Merchant’s ‘making management accounting research more useful’,” seeks to move the discussion of management accounting research relevance beyond the stage of debate and to the point of investigating and offering ways to promote the needed change. As one suggestion, he promotes the idea of creating a new top-level journal for showcasing the more practitioner-relevant research that both he and Professor Merchant champion.

This idea of conducting research that has greater likelihood of managerial relevance and the ability to impact on and inform organisational practice is at the heart of Otago’s Centre for Organisational Performance Measurement and Management (COPMM). In particular, the COPMM is committed to fostering collaboration between practitioners, academics and consultants for the purpose of promoting joint dialogue and best practice on inter-disciplinary performance management issues evident in the private, public, and not-for-profit sectors. The COPMM also serves to lead the Performance Management Association of Australasia (PMAA), whose mission is to link practitioners and researchers with a common interest in the performance measurement and management of organisations. The PMAA’s network of scholars includes members from the universities of Otago, Tasmania, Melbourne, Sydney, Cranfield, and Cambridge. The COPMM and the PMAA are always welcoming of new members, as well as open to suggestions for creating compelling community events, promoting practitioner and academic research collaboration, and fostering opportunities for networking. Towards this end, the PMAA will be organizing a major conference in Queenstown from 30 October to 1 November 2013. If you are interested in becoming involved, please contact the COPMM at copmm@otago.ac.nz or visit its web site at: www.otago.ac.nz/copmm/research/

As the editors of this special issue in Pacific Accounting Review, we highly recommend these six papers to you. We believe they will be instructive in informing practitioners and researchers alike about innovative and best practice in the field of performance management, and we therefore trust you will find them useful. We would also like to thank all the authors of this special issue for contributing their work and the reviewers whose constructive advice contributed to the improvement of the articles featured here.

Ralph Adler, Carolyn Stringer, Paul ShantapriyanGuest Editors