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.
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Changsok Yoo, Jihwan Yeon and Seoki Lee
The link between corporate social responsibility (CSR) and corporate firm performance (CFP) has been extensively studied, but a significant research gap remains when considering…
Abstract
Purpose
The link between corporate social responsibility (CSR) and corporate firm performance (CFP) has been extensively studied, but a significant research gap remains when considering potential mediating factors that can provide a more comprehensive and complete picture of the CSR-CFP link. Among the possible mediators, innovation is one of the most noteworthy factors, but previous studies have found inconsistent results between CSR and innovation in the service industry context. Existing studies have reported an insignificant or negative relationship between CSR and innovation in the service industry, including the hospitality industry. To clarify this controversy, this study aims to propose the positive mediating role of innovation to explain the CSR-CFP link in the hotel and casino industry.
Design/methodology/approach
To discover the relationship among CSR, innovation and CFP, a panel data analysis, the two-way fixed-effects model, is used with robust standard errors. Particularly, to examine the mediating role of innovation, this study conducts Sobel, Aroian and Goodman tests. The sample period is from 2000 to 2017, consisting of 342 firm-year observations.
Findings
With a sample of publicly traded US hotel and casino firms, this study confirms the mediating role of innovation and suggests a strategic direction of CSR, highlighting the importance of innovation in the hospitality industry.
Practical implications
This study presents an important piece of evidence regarding non-technological innovation and proposes a strategic direction of CSR in the hotel and casino industry to achieve competitive advantages.
Originality/value
Adopting a new measurement method of innovation using data envelopment analysis, this study serves as a reference for a better understanding of a role of innovation in the CSR-CFP link for hospitality scholars.
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Marie Marchand and Louis Raymond
Considering performance measurement and management systems (PMMS) to be “mission-critical” information systems for many business organisations, calls have been made for…
Abstract
Purpose
Considering performance measurement and management systems (PMMS) to be “mission-critical” information systems for many business organisations, calls have been made for researchers to shift from studying the use of such systems to studying their “effective” use, and in so doing to focus on their characterisation as information technology (IT) artefacts. The paper aims to discuss this issue.
Design/methodology/approach
In seeking to answer these calls, the authors apply Burton-Jones and Grange’s theoretical framework to study the dimensions, contextual drivers and benefits of the effective use of PMMS. This is done through a field study of 16 PMMS artefacts as used in small- and medium-sized enterprises (SMEs).
Findings
In characterising, contextualising and valuing the effective use of PMMS, this study provides answers to the following questions: What constitutes the effective use of PMMS? What are the user, artefactual and task-related drivers of such use? And what are the benefits for SMEs of using performance measurement and management (PMM) systems effectively?
Practical implications
With regard to the design of a PMMS artefact, the findings imply that one should concentrate on those artefactual attributes that most enable informed action on the part of owner-managers, as it is these actions have the greater consequences for the realisation of IT business value in SMEs. Moreover, the nomological network resulting from this research provides the theoretical and methodological underpinnings of a diagnostic tool meant to develop the PMM function in SMEs.
Originality/value
This study provides further empirical grounding and understanding. This study provides further empirical grounding and understanding of the concept of effective use, as well as further applicability and actionability to this concept and to the nomological network of its dimensions, contextual drivers and benefits in the case of PMMS and in the context of SMEs.
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Marie Marchand and Louis Raymond
As calls have been made to characterize and theorise performance measurement systems (PMS) and as these systems are highly contextualised because of their mission-critical nature…
Abstract
Purpose
As calls have been made to characterize and theorise performance measurement systems (PMS) and as these systems are highly contextualised because of their mission-critical nature, the purpose of this paper is to generate empirically-valid and useful findings with regard to their characterisation as information technology artefacts through an approach founded upon the user’s perspective.
Design/methodology/approach
Using both qualitative and quantitative data collection approaches, the authors conducted a field study through extensive interviews in situ with the owner-managers of 16 small- and medium-sized enterprises (SMEs).
Findings
The PMS are characterised, from their users’ point of view, in terms of their functional attributes as information systems dedicated to the management of organisational performance, that is, as being either operational, functional, managerial or organisational systems.
Research limitations/implications
Having modelled the PMS artefact in terms of its artefactual dimensions and features, the authors have empirically validated a characterisation approach that allows researchers to circumscribe this artefact within its specific usage context and to identify its salient attributes as study variables.
Practical implications
The research findings provide an empirical basis for the design and evaluation of PMS that is coherent with the specific context of their use in SMEs.
Originality/value
This study validates a novel and demonstrably useful artefactual perspective to characterize and theorise PMS as objects of empirical research.
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Fabiola Bertolotti, Diego Maria Macrì and Matteo Vignoli
This paper aims to proposes a framework, labeled strategic alignment matrix, to attain organizational alignment by integrating the horizontal dimension of performance (results…
Abstract
Purpose
This paper aims to proposes a framework, labeled strategic alignment matrix, to attain organizational alignment by integrating the horizontal dimension of performance (results driven by activities carried out by multiple organizational units) and the vertical one (results of single units) through the use of a sophisticated information structure composed by quantitative measures and management processes.
Design/methodology/approach
A science-based design approach was adopted. A review of the literature on strategic performance measurement systems (SPMS) and coordination allowed the identification of a set of design principles (guidelines reflecting the accumulated knowledge in the literature). The design principles guided the design of the proposed framework. The framework was tested in a tiles company on the new product development process.
Findings
Five design principles are presented for the design of a working SPMS as follows: to integrate the horizontal and vertical dimensions of performance; to have all the relevant information in one place (package); to understand how actors contribute to the overall performance; to favor the emergence of integrating conditions for coordination; and to enrich the role of quantitative non-financial information to attain inter-functional integration. During the test of the framework, managers highlighted the increased ability to coordinate actions and the existence of double-loop learning.
Research limitations/implications
The model was tested in one organization. The study should be replicated in other contexts connecting the strategic alignment matrix to the budgeting and incentive systems.
Originality/value
Working at the interface between science and design helps to address the theory-practice gap that has been a priority in management studies for long.
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Eirik Bådsvik Hamre Korsen, Marte Daae-Qvale Holmemo and Jonas A. Ingvaldsen
This paper aims to explore how manufacturing organisations’ performance measurement and management (PMM) systems are evolving when digital technologies (DTs) are deployed. It…
Abstract
Purpose
This paper aims to explore how manufacturing organisations’ performance measurement and management (PMM) systems are evolving when digital technologies (DTs) are deployed. It focusses on the operational level, asking whether DTs are used to promote command-and-control or empowerment-oriented performance management.
Design/methodology/approach
The findings are based on a single case study from a department of a Norwegian electrochemical plant. The department recently implemented a performance measurement system (PMS) supported by DTs to capture, analyse and visualise close-to-real-time performance data on individuals and teams. The authors analysed both the management practices associated with the new PMS and how those related to other PMM-subsystems in the organisation.
Findings
When seen in isolation, the new PMS was used to promote empowerment and operators reported a significant increase in perceived psychological empowerment. However, other parts of the organisation’s PMM system remained control-oriented, so that the overall balance between control and empowerment remained stable.
Practical implications
New PMSs might be added to support local needs and create arenas for empowerment without disturbing the overall balance in the PMM system.
Originality/value
Building on the insights from the case study, the authors propose that DTs may be deployed to promote both command-and-control and empowerment within different PMM subsystems in the same organisation. Hence, the deployment of DTs is likely to have contradictory effects, which are best understood through a “system of systems” perspective on PMMs.
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Marten Schläfke, Riccardo Silvi and Klaus Möller
Increased business competition requires even more rapid and sophisticated information and data analysis. These requirements challenge performance management to effectively support…
Abstract
Purpose
Increased business competition requires even more rapid and sophisticated information and data analysis. These requirements challenge performance management to effectively support the decision making process. Business analytics is an emerging field that can potentially extend the domain of performance management to provide an improved understanding of business dynamics and lead to a better decision making. The purpose of this positional paper is to introduce performance management analytics as a potential extension of performance management research and practice. The paper clarifies the possible application areas of business analytics and their advantages within the context of performance management.
Design/methodology/approach
The paper employs a literature based analysis and from this a conceptual argument is established. Finally, a business analytical model is presented to be used to undertake future research.
Findings
The paper clarifies the possible application areas of business analytics and their advantages within the context of organizational performance management.
Originality/value
The main implication is that the paper provides evidence of the use of business analytics for understanding organizational performance. Several insights are provided for management accounting research and education.
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Kati Tuulikki Stormi, Teemu Laine and Tuomas Korhonen
The purpose of this study is to reflect upon the feasibility of agile methodologies, Scrum in particular, to supplement the procedural design and implementation of performance…
Abstract
Purpose
The purpose of this study is to reflect upon the feasibility of agile methodologies, Scrum in particular, to supplement the procedural design and implementation of performance measurement systems (PMS).
Design/methodology/approach
The study is an interventionist case study that applied agile methodologies in the PMS development. Researchers actively participated in the PMS development, e.g. researchers designed some of the performance measurement prototypes in order to facilitate the agile development.
Findings
The study outlines an agile approach suitable for PMS development. The paper answers the topical needs for adaptability and agility in management accounting, by applying agile methodologies into PMS development. PMS development does not take place only as a project or process that systematically progresses from the measure selection to measure implementation. Instead, as the requirements for the PMS change during the development project, management may reject some measures and new measures emerge as the understanding about changing situations increase. Agile methodologies are a methodological way to respond to the inevitable change and to enhance management accounting adaptability.
Research limitations/implications
This study contributes to the PMS literature by proposing that agile development methodologies can advance organizational features that increase management accounting adaptability. As a result, the study proposes a new approach for PMS development to supplement existing ones. Agile methodologies are especially suitable for extending the PMS in new, yet relatively immature areas of performance measurement. The new approach applies Scrum principles in PMS development. By drawing from the theories of performance measurement (system) development and enabling PMS, the paper furthers academic understanding about agile development of accounting information systems.
Practical implications
Companies can use the proposed approach in PMS development, particularly after the initial system implementation in redesigning the system. The approach may increase the PMS impact in organizations and prevent PMS implementation failures.
Originality/value
The paper identifies the potential of using agile methodologies to enhance PMS adaptability and provides preliminary evidence of the potential of such approach in supplementing processual PMS development frameworks.
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Alberto Sardi, Enrico Sorano, Valter Cantino and Patrizia Garengo
Current literature recognised big data as a digital revolution affecting all organisational processes. To obtain a competitive advantage from the use of big data, an efficient…
Abstract
Purpose
Current literature recognised big data as a digital revolution affecting all organisational processes. To obtain a competitive advantage from the use of big data, an efficient integration in a performance measurement system (PMS) is needed, but it is still a “great challenge” in performance measurement research. This paper aims to review the big data and performance measurement studies to identify the publications’ trends and future research opportunities.
Design/methodology/approach
The authors reviewed 873 documents on big data and performance carrying out an extensive bibliometric analysis using two main techniques, i.e. performance analysis and science mapping.
Findings
Results point to a significant increase in the number of publications on big data and performance, highlighting a shortage of studies on business, management and accounting areas, and on how big data can improve performance measurement. Future research opportunities are identified. They regard the development of further research to explain how performance measurement field can effectively integrate big data into a PMS and describe the main themes related to big data in performance measurement literature.
Originality/value
This paper gives a holistic view of big data and performance measurement research through the inclusion of numerous contributions on different research streams. It also encourages further study for developing concrete tools.
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Hafiz Muhammad Naeem and Patrizia Garengo
This paper proposes an SME oriented Industry 4.0 maturity framework to explore the interplay between manufacturing processes, performance measurement system and management…
Abstract
Purpose
This paper proposes an SME oriented Industry 4.0 maturity framework to explore the interplay between manufacturing processes, performance measurement system and management practices (PMM). Given that the fourth industrial revolution, famously referred to as Industry 4.0, is a new paradigm for manufacturing firms, it is crucial to know the ‘as-is’ state or maturity of SMEs' manufacturing processes and link it with their PMM. Despite the availability of numerous maturity models, no previous study has tried to link the maturity of manufacturing processes with performance measurement and management.
Design/methodology/approach
Due to the exploratory nature of the study and the lack of theoretical base for Industry 4.0 maturity and PMM interaction, especially in the SME context, a multiple case study approach has been adopted due to its robustness and effectiveness under such circumstances.
Findings
There is a strong interplay between the maturity of manufacturing processes and PMM. The firms that have invested in their manufacturing processes have also developed performance measurements. Overall, performance measurement is more developed than performance management practices.
Originality/value
The characteristics of the interplay between the maturity of manufacturing processes and PMM are summarized in three main propositions. Moreover, the study provides practitioners with an assessment framework to help SMEs evaluate the current state of their manufacturing processes and PMM to highlight the areas of improvement towards the I4.0 expedition.