- Email: [email protected]
The forces that shape organisational performance measurement systems:
Int. J. Production Economics 60—61 (1999) 53—60
The forces that shape organisational performance measurement systems: An interdisciplinary review Daniel B. Waggoner*, Andy D. Neely, Mike P. Kennerley The Judge Institute of Management Studies & The Manufacturing and Management Division, Department of Engineering, University of Cambridge, Cambridge CB2 1AG, UK
Abstract The aim of this paper is to explore those forces that help shape the structure of performance measurement systems used in organisations. In stark contrast to much of the work that is currently ongoing in the field of organisational performance measurement, the paper adopts a dynamic perspective. It recognises that measurement systems are not simply designed and implemented, but that they also evolve over extended periods of time. Hence, the research question which underpins the discussion is as follows: what forces shape the evolution and change of organisational performance measurement systems? To address this question the article reviews several different streams of academic literature, such as operations management, social psychology, management accounting, organisational behaviour. This synthesis results in the identification of four generic categories of force that can be said to shape the evolution and change of organisational performance measurement systems. These categories are: (i) internal influences, e.g. power relationships and dominant coalition interests; (ii) external influences, e.g. legislation and market volatility; (iii) process issues, e.g. manner of implementation and management of political processes; and (iv) transformational issues, e.g. degree of top-level support and risk of gain or loss from change. The discussion ends by presenting a framework which integrates these four different categories and explores how this can be used by: (a) members of the academic community, when researching the evolution of performance measurement systems; and (b) members of the practitioner community, when seeking to manage the evolution and change of their measurement systems. 1999 Elsevier Science B.V. All rights reserved. Keywords: Performance measurement; Evolution; Transformation; Change
1. Introduction As espoused in both academic literature and the business press, the phenomenon commonly refer* Corresponding address. The Judge Institute of Management Studies, Cambridge University, Trumpington Street, Cambridge CB2 1AG, UK. Tel.: #44 01223 339 597; fax: #44 01223 339 701; e-mail: [email protected].
red to as “globalisation” is creating both opportunities and challenges for innovative enterprises, forcing companies to make dramatic improvements not only to compete and prosper but merely to survive. Corporate initiatives designed to bolster competitiveness are accompanied by heightened awareness that the assumptions underlying many traditional financial measures of performance are inadequate in today’s operating environment, and
0925-5273/99/$ - see front matter 1999 Elsevier Science B.V. All rights reserved. PII: S 0 9 2 5 - 5 2 7 3 ( 9 8 ) 0 0 2 0 1 - 1
54
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
that financial measures of performance alone cannot guide an organisation to market dominance [1,2]. Non-financial performance indicators (e.g. customer service and satisfaction, product quality, productivity, learning and innovation) also have to be measured and improved [3]. The literature provides several examples of manufacturing and service firms that have re-engineered their performance measurement systems [3—9]. But how were these measurement systems initially developed and how have they evolved since their implementation? Most commentators in the field concentrate on the first of these questions [3]. Few recognise, let alone tackle the second, which demands that the forces that shape the evolution of performance measurement systems be identified. A central aim of the present discussion is to identify these forces. In doing so the paper reviews several different streams of academic literature, such as operations management, social psychology, strategic management, management accounting and organisational behaviour and economics. This synthesis results in the identification of four generic categories of force that can be said to shape the evolution and change of organisational performance measurement systems. The categories are: (i) internal influences, e.g. power relationships and dominant coalition interests; (ii) external influences, e.g. legislation and market volatility; (iii) process issues, e.g. manner of implementation and management of political processes; and (iv) transformational issues, e.g. degree of top-level support and risk of gain or loss from change. The discussion concludes by presenting a framework which integrates these four different categories and explores how this can be used by: (a) members of the academic community, when researching the evolution of organisational performance measurement systems; and (b) members of the practitioner community, when seeking to manage the evolution and change of their measurement systems.
Following along the definitional framework espoused by Faber et al. [47], ‘evolution’ can be viewed as the process of changing and shaping performance measurement systems over time.
2. Managing performance measurement Performance measurement can play an important role in focusing people and resources on particular aspects of a business. In many organisations, the things that are measured are considered important while the things not measured are generally considered of less importance. It has been asserted by Kaplan [1,2], among others, that developing a “balanced set” of measures, making better use of existing measures, and generally improving measurement systems can lead to enhanced business performance. As noted in the literature, performance measures within an organisation can be designed on the basis of several different disciplinary approaches, such as: (1) the engineering approach, which relates expected output to specified input at each stage in the value chain and thus measures the input/output ratio; (2) the systems approach, which sets objectives for each work unit or individual and measures the achievement of these objectives; (3) the management accounting approach, which measures the achievement of a set of financial results by each cost/performance centre; (4) the statistical approach, which extends the engineering approach by providing empirically tested information on the strength of relationships in the input/output process; (5) the consumer marketing approach, which measures consumer satisfaction; and (6) the ‘conformance to specifications’ variant of quality management approaches, which advocate the use of a checklist of attributes of a product or service together with its service delivery system [5,10]. The practical reasons that are frequently mentioned for implementing performance measurement systems usually fall into five general categories: monitoring of performance, identification of areas that are in need of attention, enhancing motivation, improving communications, and strengthening accountability [11]. From an administrative point of view, a performance measurement system needs to be designed,
As used here, ‘performance measurement’ can be viewed as the process of quantifying the efficiency and effectiveness of purposeful action [11].
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
managed, and evaluated periodically to ensure that it yields the desired business results [12]. The system itself is typically comprised of several key elements, including: (a) a set of procedures for collecting and processing data; (b) timetables and protocols for distributing information about performance to users within and outside the organisation; (c) an organisational learning mechanism to identify what actions can be taken to further improve performance; and (d) a review process which ensures that the performance measurement system itself is regularly updated [6,13]. The work highlighted above points to the fact that a performance measurement system is of no use if it is not able to adjust itself to changes in today’s competitive environment. Consequently, the authors are engaged in on-going research to determine what factors influence the evolution of the portfolio of performance measures used by an organisation, thereby enabling the identification of: (1) the factors that tend to encourage managers to introduce new performance measures; (2) the factors that tend to inhibit managers from introducing new performance measures; (3) the factors that tend to encourage managers to delete obsolete performance measures; (4) the factors that tend to encourage managers not to delete performance measures; and (5) the relationship, if one exists, between the aforementioned set of factors. The need for the research was established following interviews of managers from several leading British firms. A principal aim of the research effort is to identify mechanisms which businesses can use to ‘manage’ the evolution and subsequent change of their performance measurement systems.
3. Theoretical overview A number of theories and explanatory propositions can be found in the academic literature which attempt to enhance current understanding regarding process change and evolutionary tendencies in diverse organisations. While space limitations will not permit an in-depth discussion, it is important to recognise that institutional theory, organisational ecology, strategic choice, evolutionary economics, and organisational learning have been applied to
55
help understand organisational processes and practices [14—22]. Such theories have three major foci: (1) entities (e.g. organisations); (2) processes (e.g. institutionalisation); and (3) events (e.g. transformation and change). As an open system, an organisation is influenced by, and influences, the environment in which it operates. Internal influences, specifically, have been conceptualised in different ways. Scott [21] suggests that organisations are ‘political arenas’ in which divergent ‘constituencies’ attempt to institutionalise performance criteria that serve their interests. These interests may be material, but may also include enhancement or maintenance of status, control over work activity and work schedule [23]. Pettigrew and Whipp [24] maintain that because management decision making is a political process, change is inevitably suffused with organisational politics. In major decisions (e.g. regarding a change in performance measurement), who is powerful among the decision group will likely determine the outcome. Pfeffer [25] and Walsh et al. [26] concur with this line of argument and go on to explain that the potential conflict among various constituencies as they try to promote self-interested measures of performance is resolved through the use of power. Furthermore, consensus on measures to be used is achieved through a process of bargaining among constituencies or their representatives in the dominant coalition [27]. In other words, performance measures found in an organisation tend to reflect the interests of those who comprise the dominant coalition within the firm. The organisational change literature would also seem to suggest that the evolution of performance measures involves bargaining among internal and external constituencies of the firm. Each constituency consists of a cluster of members that share distinct values and interests. Every constituency evaluates an organisation from its own idiosyncratic perspective [27], and the measures of performance that become commonly accepted represent the outcome of a process of negotiation among diverse constituencies. In addition, various kinds of peer pressure, and the search for legitimacy at the organisational level, can generate the need to copy or imitate practices
56
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
of successful enterprises [21]. Because the context in which performance measures are deployed is critical to their success, it makes sense only to pursue those measures that can be shown to be effective in similar contexts. Unlike the models discussed previously, Meyer and Gupta’s (1994) performance paradox model posits a somewhat predictable ‘running down process’ which causes existing measures to lose their validity and new measures orthogonal to existing measures emerge in their place [28]. In essence, existing measures lose purpose or validity and are replaced or supplemented by new measures having greater utility.
4. The landscape of evolution and change Much of the literature on organisational change has been based on Lewin’s [29] three states of unfreezing, moving and refreezing. A large portion of the contemporary studies in this area seek to explain organisational change by looking to the environment, with particular emphasis on market volatility and competitive position [30]. An example of this in the performance measurement area is provided by Johnson’s [31] review of the evolution of management accounting. He argues that financial measures, such as cashflow and return on investment, were developed in direct response to the changing nature of the marketplace at the turn of the century. Prior to the establishment of the first industrial enterprises, traders would purchase products from individual artisans who manufactured them at home. When these traders centralised their productive resources, and became owner/managers with investments in plant and premises, they naturally became interested in how great a return they were receiving on their investments. Hence, the development and introduction of measures such as return on investment.
4.1. Evolutionary tendencies In most business activities one factor alone rarely accounts for any given action. Usually, a combination of factors result in organisations taking steps
in a particular direction. The forces driving and demanding change appear in a variety of guises, but typically fall into the following categories: internal and external stakeholders, information technology, the marketplace, legislation (public policy), new industries, nature of work (e.g. outsourcing) and future uncertainty [9,32—34]. It is relevant to note that change generally enters the organisation through an individual [8,33,34]. That individual, as a ‘generator’ [35], goes through her or his own reaction to the need for change by initially denying the validity, relevance and pertinence of the change. Once it is recognised that the change does apply — then it can either be avoided or pursued [36,37]. Hammer [8] was one of the first authors to explore the notion of reengineering in creating change within an organisational environment. According to Hammer, reengineering should be viewed as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance — such as service, speed, cost and quality. This often requires a balanced set of new measures which enables organisations to enhance their knowledge regarding the reasons for changing their business processes and the implementation of the change process itself [38,39]. In addition, reengineering generally requires securing management and stakeholder support, monitoring the dynamics of political forces, and nurturing new values and beliefs [40].
4.2. Structuring and managing change Gabris [41] notes that although change management techniques can enhance a firm’s performance measurement system, they can also represent barriers or constraints if applied or implemented incorrectly. Gabris categorizes such impediments as:
A stakeholder can be viewed as anyone who may be affected by the business, and who may, in turn, bring influence to bear upon the firm and its activities. This includes not only employees involved with process activities, but also suppliers, customers, stockholders, government and various special interest groups.
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
(1) process burden, the procedural and control requirements associated with the implementation and maintenance of a technique that takes employees away from their actual responsibilities; (2) internal capacity, the result of superimposing a technique on an organisation that lacks the in-house capacity to implement and monitor the technique beyond its initial phases; (3) credibility anxiety, a condition where a multitude of management techniques are ‘piled on top’ of one another, even though the techniques may not be beneficial and useful; and (4) the ‘Georgia giant syndrome’, where management techniques work only under rigorous and closely supervised control conditions. Under various scenarios it is possible to envision how the introduction of a particular performance measure could fall victim to any one of the impediments espoused by Gabris. Greiner [10] also reports that several factors can play a part in inhibiting a performance measurement system within an organisation. He categorizes the impediments as institutional, pragmatic, technical and financial. These particular obstacles to the introduction and use of performance measures can be viewed, more generally, as a lack of institutional “readiness” for such efforts [10]. Another way of assessing the evolution of performance measurement systems is to look at the way implementation of performance measures is carried out. Writers such as Nutt [42,43] suggest that toplevel managers choose from a repertoire of implementation tactics to achieve action upon corporate decisions. According to Nutt, the tactics comprise intervention, where key executives justify the need for change by introducing new processes and norms to identify performance inadequacies; participation, where task forces are set up to facilitate implementation and identify key stakeholders; persuasion, when implementation strategies are delegated to technical staff or experts who then ‘sell’ their ideas back to senior-level decision makers; and finally, edict, where decision makers use control and personal power while avoiding any form of participation. As discussed elsewhere, the facilitation of movement from one phase in the changing of a performance measurement system to another, of necessity, requires awareness and active manage-
57
ment of the political processes within an organisation [37]. However, a change or transformation of a performance measurement system will not progress smoothly without a design, a blueprint that explains how components of the new system fit together to achieve an organization’s strategic objectives [13]. Following from the recent work of Tolbert and Zucker [44], it is worth noting that changing or creating a new performance measurement system generally requires greater resources than maintaining the old one, since alteration and creation of measures do constitute cost for the organisation. Thus, performance measures that are altered or created must therefore be perceived to provide some positive value for the firm. Otherwise decision makers typically would not be inclined to allocate resources for such activities.
4.3. Transformational barriers Considerable research has also examined the individual, organisational, and technological variables that can affect the implementation success of strategies and initiatives within a business enterprise. Such predictors as top-management support for the implementation effort, user-designer
¹ransformation can be viewed as the process of engendering a fundamental change in a performance measurement system with the goal of achieving a dramatic improvement in performance. The fundamental change may involve a structural shift [4], but almost always includes strategic redirection and a noticeable alteration in the behaviour of individuals. It is relevant to note that one of the major factors affecting the rate of adoption of an innovation are the characteristics of the innovation itself [48]. Rogers [49] suggests five characteristics that have a major influence on the rate of adoption of an innovation or idea. They are: (1) relative advantage (i.e. the degree to which an innovation is considered superior to the ideas or techniques it supersedes); (2) compatibility (i.e. the degree to which an innovation is seen as consistent with existing values, past experiences, and the needs of recipients); (3) complexity (i.e. the extent to which an innovation is seen as relatively difficult to understand and use); (4) tryability (i.e. the degree to which an innovation may be experimented with on a limited basis); and (5) observability (i.e. extent to which the results of an innovation are visible to others).
58
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
relationship, resource availability, and technical quality have been proposed and investigated [7]. Further, the strength of the resistance to an evolutionary or change force depends on what individuals inside the organisation have to gain and/or lose by changing, and on how the culture of the organisation shapes the way they respond to change [32,45]. For instance, the findings reported by Harvey [9] suggest that corporate culture can represent an important barrier to changing or modifying performance measures and the pursuit of redesign activities. Consequently, a culture which discourages risk taking and innovation can block action steps that are essential for bringing about successful change to the firm’s performance measurement system. From the perspective of middle and line management, performance measurement has often been viewed as merely piles of paperwork to be completed and reams of information that no one ever evaluates [10]. Furthermore, key institutional obstacles can include the unfamiliarity of performance measurement use among managers, being unreceptive to using quantitative data as a basis for decision making, and ‘innovation saturation’ whereby performance measurement is seen as just another flavour of the month. In the beginning of this paper it was noted that the development of an effective, efficient and balanced set of financial and non-financial performance measures for a business enterprise is one of the principal challenges confronting organisations today. Whether the promise of performance measurement is fully achieved may depend on how those involved, representing a range of interests, respond to key issues, and how well those supporting increased use of measurement overcome critical obstacles and factors as described above.
5. Concluding observations and implications for research In this paper, several important issues and elements that can impact upon the evolution and change of organisational performance measurement systems have been outlined. Importantly, the synthesis of the literature has yielded a framework
or typology relevant to the evolution and change of performance measurement systems. As depicted in Fig. 1, this typology makes explicit the fact that there are four principal categories of force that can be said to influence the evolution of organisational performance measurement systems. These categories are: (i) internal influences, e.g. power relationships and dominant coalition interests; (ii) external influences, e.g. legislation and market volatility; (iii) process issues, e.g. manner of implementation and management of political processes; and (iv) transformational issues, e.g. degree of top-level support and risk of gain or loss from change. From an academic perspective, further investigations into those factors impacting the evolution and change of performance measurement systems are required and it is hoped that the framework presented here will assist in forming such studies. Key issues to address include comparative work which explores the development and deployment of different types of performance measures, both over time and within different settings. Useful insight could also be gleaned from in-depth case studies employing techniques such as measurement mapping [46], as well as nomothetic-based work comparing the diffusion and fate of particular non-financial performance measures across several industries and/or across several countries. Such research has the potential to address a number of puzzles surrounding the evolution of performance measurement systems. For instance, why are some generic measures found in particular industries and not others? How much convergence or variation in performance measurement can be observed among firms operating in the same industry, but different country settings? From a practitioner perspective it is hoped that the framework depicted in Fig. 1 will bring into sharper focus and provoke further thought regarding the issues and forces that impact upon an organisation’s efforts at managing their performance measurement systems. This is important because few organisations appear to systematically modify and manage their measurement systems over time. Many have specific measures which are redundant, largely because it is rare for an organisation to delete a measure which becomes obsolete or lacks utility. Collecting performance data, collating and analysing such data can consume time and
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
59
Fig. 1. Forces impacting performance measurement system evolution and change.
resources. In today’s competitive environment organisations cannot afford to expend financial and personnel assets on non-value added activities; yet this is exactly the situation that prevails for those organisations who neglect to effectively and efficiently manage the evolution and modification of their performance measurement systems. Acknowledgements This paper was produced during the research project — ¹he Evolution of Business Performance Measurement Systems — which was sponsored by the EPSRC under grant number GR/K88637. References [1] R.S. Kaplan, Measuring manufacturing performance: A new challenge for managerial accounting research, The Accounting Review 58 (4) (1983) 686—705. [2] R.S. Kaplan (Ed.), Measures for Manufacturing Excellence: A Summary, Harvard Business School Press, Boston, MA.
[3] R.S. Kaplan, D.P. Norton, The Balanced Scorecard: Translating Strategy into Action, Harvard Business School Press, Boston, MA, 1996. [4] C. Bainbridge, Designing for Change: A Practical Guide to Business Transformation, Wiley, New York, 1996. [5] M.G. Brown, Keeping Score: Using the Right Metrics to Drive World-Class Performance, Quality Resources, New York, 1996. [6] J.R. Dixon, A.J. Nanni, T.E. Vollmann, The New Performance Challenge: Measuring Operations for World-Class Competition, Dow Jones-Irwin, Homewood, IL, 1990. [7] T.J. Galpin, The Human Side of Change: A Practical Guide to Organization Redesign, Jossey-Bass, San Francisco, CA, 1996. [8] M. Hammer, Reengineering work — don’t automate, obliterate, Harvard Business Review July-August (1990) 104—112. [9] D. Harvey, Re-Engineering: The Critical Success Factors, 2nd ed., Business Intelligence Ltd, London, 1995. [10] J. Greiner, Positioning performance measurement for the twenty-first century, in: A. Halachmi, G. Bouckaert (Eds.), Organizational Performance and Measurement in the Public Sector, Quorum Books, London, 1996, pp. 11—50. [11] A. Neely, J. Mills, M. Gregory, H. Richards, K. Platts, M. Bourne, Getting the Measure of Your Business, Findlay Publications, Horton Kirby, UK, 1996.
60
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
[12] M.J. Gregory, Integrated performance measurement: A review of current practices and emerging trends, International Journal of Production Economics 30 (1) (1993) 281—296. [13] A. Neely, M. Gregory, K. Platts, Performance measurement system design: A literature review and research agenda, International Journal of Operations and Production Management 15 (4) (1995) 80—116. [14] T.L. Amburgey, H. Rao, Organizational ecology: Past, present, and future directions, Academy of Management Journal 39 (5) (1996) 1265—1286. [15] C. Argyris, Overcoming Organizational Defenses: Facilitating Organizational Learning, Allyn & Bacon, Needham, MA, 1990. [16] J.A.C. Baum, Organizational ecology, in: S.R. Clegg, C. Hardy, W.R. Nord (Eds.), Handbook of Organization Studies, Sage Publications, London, 1996, pp. 77—114. [17] J. Child, Strategic choice in the analysis of action, structure, organizations and environment: Retrospect and prospect, Organization Studies 18 (1) (1997) 43—76. [18] M.T. Hannan, J. Freeman, Structural inertia and organizational change, American Sociological Review 49 (1984) 149—164. [19] M.T. Hannan, J. Freeman, Organizational Ecology, Harvard University Press, Boston, MA, 1989. [20] R.P. Rumelt, Inertia and transformation, in: C.A. Montgomery (Ed.), Resource-Based and Evolutionary Theories of the Firm: Towards a Synthesis, Kluwer Academic Publishers, London, 1995, pp. 101—132. [21] W.R. Scott, Institutions and Organizations: Theory and Research, Sage Publications, London, 1995. [22] P.N. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization, Century Business Press, London, 1992. [23] J.A. Wiggins, B.B. Wiggins, J.V. Zanden, Social Psychology, 2nd ed., McGraw-Hill, New York, 1994. [24] A. Pettigrew, R. Whipp, Managing Change for Competitive Success, Blackwell, Oxford, 1991. [25] J. Pfeffer, Managing with Power: Politics and Influence in Organizations, Harvard Business School Press, Boston, MA, 1992. [26] K. Walsh, C.R. Hinings, R. Greenwood, S. Ranson, Power and advantage in oganizations, Organization Studies 2 (2) (1981) 131—152. [27] R.F. Zammuto, Assessing Organizational Effectiveness: Systems Change, Adaptation, and Strategy, State University of New York Press, Albany, NY, 1982. [28] M.W. Meyer, V. Gupta, The performance paradox, in: B.M. Staw, L.L. Cummings (Eds.), Research in Organizational Behavior, vol. 16, JAI Press, Greenwich, CT, 1994, pp. 309—369. [29] K. Lewin, Field Theory in Social Science, Harper & Row, New York, 1951. [30] W.P. Barnett, G.R. Carroll, Modeling internal organizational change, Annual Review of Sociology 21 (1995) 217—236. [31] H.T. Johnson, The search for gain in markets and firms: A review of the historical emergence of management accounting systems, Accounting, Organizations and Society 2 (3) (1983) 139—146.
[32] D. Besanko, D. Dranove, M. Shanley, The Economics of Strategy, Wiley, New York, 1996. [33] R.M. Kanter, The Change Masters: Innovation for Productivity in the American Corporation, Simon and Schuster, New York, 1983. [34] J.P. Kotter, Leading Change, Harvard Business School Press, Boston, MA, 1996. [35] R.N. Ottaway, The change agent: A taxonomy in relation to the change process, Human Relations 36 (4) (1983) 361—392. [36] W.A. Pasmore, M.R. Fagans, Participation, individual development and organisation change: A review and synthesis, Journal of Management 18 (2) (1992) 375—397. [37] N.S. Rashford, D. Coghlan, Phases and levels of organisational change, in: J. Billsberry (Ed.), The Effective Manager: Perspectives and Illustrations, Sage Publications, London, 1996, pp. 119—130. [38] R. Feurer, K. Chaharbaghi, Performance measurement in strategic change, Benchmarking for Quality Management and Technology 2 (2) (1995) 64—83. [39] L.S. Vansina, T. Taillieu, Business process reengineering or socio-technical system design in new clothes? in: R.W. Woodman, W.A. Pasmore (Eds.), Research in Organizational Change and Development. vol. 9, JAI Press, Greenwich, CT, 1996, pp. 81—100. [40] J.T.C. Teng, V. Grover, K.D. Fiedler, Developing strategic perspectives on business process reengineering: From process reconfiguration to organizational change, Omega: The International Journal of Management Science 24 (3) (1996) 271—294. [41] G.T. Gabris, Recognizing management techniques dysfunctions: How management tools often create more problems than they solve, in: A. Halachmi, M. Holzer (Eds.), Competent Government: Theory and Practice, Chatelaine Press, Burk, VA, 1986, pp. 3—19. [42] P.C. Nutt, Identifying and appraising how managers install strategy, Strategic Management Journal 8 (1987) 1—14. [43] P.C. Nutt, Selecting tactics to implement strategic plans, Strategic Management Journal 10 (1989) 145—161. [44] P.S. Tolbert, L.G. Zucker, The Institutionalization of Institutional Theory, in: S.R. Clegg, C. Hardy, W.R. Nord (Eds.), Handbook of Organization Studies, Sage Publications, London, 1996, pp. 175—190. [45] N.M. Tichy, Managing Strategic Change: Technical, Political, and Cultural Dynamics, Wiley, New York, 1983. [46] A. Neely, J. Mills, K. Platts, M. Gregory, H. Richards, Mapping measures and activities: A practical tool for assessing measurement systems, in: K.W. Platts, M.J. Gregory, A. D. Neely (Eds.), Proceedings of the First International Conference of the European Operations Management Association, University of Cambridge, Cambridge, 1994, pp. 313—318. [47] M. Faber, R. Manstetten, J. Proops, Ecological Economics: Concepts and Methods, Edward Elgar, Cheltenham, 1996. [48] P. Anderson, M. Tushman, Technological discontinuities and dominant design: A cyclical model of technological change, Administrative Science Quarterly 35 (1990) 604—633. [49] E.M. Rogers, Diffusion of Innovations, 4th ed., The Free Press, New York, 1995.
The forces that shape organisational performance measurement systems: An interdisciplinary review Daniel B. Waggoner*, Andy D. Neely, Mike P. Kennerley The Judge Institute of Management Studies & The Manufacturing and Management Division, Department of Engineering, University of Cambridge, Cambridge CB2 1AG, UK
Abstract The aim of this paper is to explore those forces that help shape the structure of performance measurement systems used in organisations. In stark contrast to much of the work that is currently ongoing in the field of organisational performance measurement, the paper adopts a dynamic perspective. It recognises that measurement systems are not simply designed and implemented, but that they also evolve over extended periods of time. Hence, the research question which underpins the discussion is as follows: what forces shape the evolution and change of organisational performance measurement systems? To address this question the article reviews several different streams of academic literature, such as operations management, social psychology, management accounting, organisational behaviour. This synthesis results in the identification of four generic categories of force that can be said to shape the evolution and change of organisational performance measurement systems. These categories are: (i) internal influences, e.g. power relationships and dominant coalition interests; (ii) external influences, e.g. legislation and market volatility; (iii) process issues, e.g. manner of implementation and management of political processes; and (iv) transformational issues, e.g. degree of top-level support and risk of gain or loss from change. The discussion ends by presenting a framework which integrates these four different categories and explores how this can be used by: (a) members of the academic community, when researching the evolution of performance measurement systems; and (b) members of the practitioner community, when seeking to manage the evolution and change of their measurement systems. 1999 Elsevier Science B.V. All rights reserved. Keywords: Performance measurement; Evolution; Transformation; Change
1. Introduction As espoused in both academic literature and the business press, the phenomenon commonly refer* Corresponding address. The Judge Institute of Management Studies, Cambridge University, Trumpington Street, Cambridge CB2 1AG, UK. Tel.: #44 01223 339 597; fax: #44 01223 339 701; e-mail: [email protected].
red to as “globalisation” is creating both opportunities and challenges for innovative enterprises, forcing companies to make dramatic improvements not only to compete and prosper but merely to survive. Corporate initiatives designed to bolster competitiveness are accompanied by heightened awareness that the assumptions underlying many traditional financial measures of performance are inadequate in today’s operating environment, and
0925-5273/99/$ - see front matter 1999 Elsevier Science B.V. All rights reserved. PII: S 0 9 2 5 - 5 2 7 3 ( 9 8 ) 0 0 2 0 1 - 1
54
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
that financial measures of performance alone cannot guide an organisation to market dominance [1,2]. Non-financial performance indicators (e.g. customer service and satisfaction, product quality, productivity, learning and innovation) also have to be measured and improved [3]. The literature provides several examples of manufacturing and service firms that have re-engineered their performance measurement systems [3—9]. But how were these measurement systems initially developed and how have they evolved since their implementation? Most commentators in the field concentrate on the first of these questions [3]. Few recognise, let alone tackle the second, which demands that the forces that shape the evolution of performance measurement systems be identified. A central aim of the present discussion is to identify these forces. In doing so the paper reviews several different streams of academic literature, such as operations management, social psychology, strategic management, management accounting and organisational behaviour and economics. This synthesis results in the identification of four generic categories of force that can be said to shape the evolution and change of organisational performance measurement systems. The categories are: (i) internal influences, e.g. power relationships and dominant coalition interests; (ii) external influences, e.g. legislation and market volatility; (iii) process issues, e.g. manner of implementation and management of political processes; and (iv) transformational issues, e.g. degree of top-level support and risk of gain or loss from change. The discussion concludes by presenting a framework which integrates these four different categories and explores how this can be used by: (a) members of the academic community, when researching the evolution of organisational performance measurement systems; and (b) members of the practitioner community, when seeking to manage the evolution and change of their measurement systems.
Following along the definitional framework espoused by Faber et al. [47], ‘evolution’ can be viewed as the process of changing and shaping performance measurement systems over time.
2. Managing performance measurement Performance measurement can play an important role in focusing people and resources on particular aspects of a business. In many organisations, the things that are measured are considered important while the things not measured are generally considered of less importance. It has been asserted by Kaplan [1,2], among others, that developing a “balanced set” of measures, making better use of existing measures, and generally improving measurement systems can lead to enhanced business performance. As noted in the literature, performance measures within an organisation can be designed on the basis of several different disciplinary approaches, such as: (1) the engineering approach, which relates expected output to specified input at each stage in the value chain and thus measures the input/output ratio; (2) the systems approach, which sets objectives for each work unit or individual and measures the achievement of these objectives; (3) the management accounting approach, which measures the achievement of a set of financial results by each cost/performance centre; (4) the statistical approach, which extends the engineering approach by providing empirically tested information on the strength of relationships in the input/output process; (5) the consumer marketing approach, which measures consumer satisfaction; and (6) the ‘conformance to specifications’ variant of quality management approaches, which advocate the use of a checklist of attributes of a product or service together with its service delivery system [5,10]. The practical reasons that are frequently mentioned for implementing performance measurement systems usually fall into five general categories: monitoring of performance, identification of areas that are in need of attention, enhancing motivation, improving communications, and strengthening accountability [11]. From an administrative point of view, a performance measurement system needs to be designed,
As used here, ‘performance measurement’ can be viewed as the process of quantifying the efficiency and effectiveness of purposeful action [11].
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
managed, and evaluated periodically to ensure that it yields the desired business results [12]. The system itself is typically comprised of several key elements, including: (a) a set of procedures for collecting and processing data; (b) timetables and protocols for distributing information about performance to users within and outside the organisation; (c) an organisational learning mechanism to identify what actions can be taken to further improve performance; and (d) a review process which ensures that the performance measurement system itself is regularly updated [6,13]. The work highlighted above points to the fact that a performance measurement system is of no use if it is not able to adjust itself to changes in today’s competitive environment. Consequently, the authors are engaged in on-going research to determine what factors influence the evolution of the portfolio of performance measures used by an organisation, thereby enabling the identification of: (1) the factors that tend to encourage managers to introduce new performance measures; (2) the factors that tend to inhibit managers from introducing new performance measures; (3) the factors that tend to encourage managers to delete obsolete performance measures; (4) the factors that tend to encourage managers not to delete performance measures; and (5) the relationship, if one exists, between the aforementioned set of factors. The need for the research was established following interviews of managers from several leading British firms. A principal aim of the research effort is to identify mechanisms which businesses can use to ‘manage’ the evolution and subsequent change of their performance measurement systems.
3. Theoretical overview A number of theories and explanatory propositions can be found in the academic literature which attempt to enhance current understanding regarding process change and evolutionary tendencies in diverse organisations. While space limitations will not permit an in-depth discussion, it is important to recognise that institutional theory, organisational ecology, strategic choice, evolutionary economics, and organisational learning have been applied to
55
help understand organisational processes and practices [14—22]. Such theories have three major foci: (1) entities (e.g. organisations); (2) processes (e.g. institutionalisation); and (3) events (e.g. transformation and change). As an open system, an organisation is influenced by, and influences, the environment in which it operates. Internal influences, specifically, have been conceptualised in different ways. Scott [21] suggests that organisations are ‘political arenas’ in which divergent ‘constituencies’ attempt to institutionalise performance criteria that serve their interests. These interests may be material, but may also include enhancement or maintenance of status, control over work activity and work schedule [23]. Pettigrew and Whipp [24] maintain that because management decision making is a political process, change is inevitably suffused with organisational politics. In major decisions (e.g. regarding a change in performance measurement), who is powerful among the decision group will likely determine the outcome. Pfeffer [25] and Walsh et al. [26] concur with this line of argument and go on to explain that the potential conflict among various constituencies as they try to promote self-interested measures of performance is resolved through the use of power. Furthermore, consensus on measures to be used is achieved through a process of bargaining among constituencies or their representatives in the dominant coalition [27]. In other words, performance measures found in an organisation tend to reflect the interests of those who comprise the dominant coalition within the firm. The organisational change literature would also seem to suggest that the evolution of performance measures involves bargaining among internal and external constituencies of the firm. Each constituency consists of a cluster of members that share distinct values and interests. Every constituency evaluates an organisation from its own idiosyncratic perspective [27], and the measures of performance that become commonly accepted represent the outcome of a process of negotiation among diverse constituencies. In addition, various kinds of peer pressure, and the search for legitimacy at the organisational level, can generate the need to copy or imitate practices
56
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
of successful enterprises [21]. Because the context in which performance measures are deployed is critical to their success, it makes sense only to pursue those measures that can be shown to be effective in similar contexts. Unlike the models discussed previously, Meyer and Gupta’s (1994) performance paradox model posits a somewhat predictable ‘running down process’ which causes existing measures to lose their validity and new measures orthogonal to existing measures emerge in their place [28]. In essence, existing measures lose purpose or validity and are replaced or supplemented by new measures having greater utility.
4. The landscape of evolution and change Much of the literature on organisational change has been based on Lewin’s [29] three states of unfreezing, moving and refreezing. A large portion of the contemporary studies in this area seek to explain organisational change by looking to the environment, with particular emphasis on market volatility and competitive position [30]. An example of this in the performance measurement area is provided by Johnson’s [31] review of the evolution of management accounting. He argues that financial measures, such as cashflow and return on investment, were developed in direct response to the changing nature of the marketplace at the turn of the century. Prior to the establishment of the first industrial enterprises, traders would purchase products from individual artisans who manufactured them at home. When these traders centralised their productive resources, and became owner/managers with investments in plant and premises, they naturally became interested in how great a return they were receiving on their investments. Hence, the development and introduction of measures such as return on investment.
4.1. Evolutionary tendencies In most business activities one factor alone rarely accounts for any given action. Usually, a combination of factors result in organisations taking steps
in a particular direction. The forces driving and demanding change appear in a variety of guises, but typically fall into the following categories: internal and external stakeholders, information technology, the marketplace, legislation (public policy), new industries, nature of work (e.g. outsourcing) and future uncertainty [9,32—34]. It is relevant to note that change generally enters the organisation through an individual [8,33,34]. That individual, as a ‘generator’ [35], goes through her or his own reaction to the need for change by initially denying the validity, relevance and pertinence of the change. Once it is recognised that the change does apply — then it can either be avoided or pursued [36,37]. Hammer [8] was one of the first authors to explore the notion of reengineering in creating change within an organisational environment. According to Hammer, reengineering should be viewed as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance — such as service, speed, cost and quality. This often requires a balanced set of new measures which enables organisations to enhance their knowledge regarding the reasons for changing their business processes and the implementation of the change process itself [38,39]. In addition, reengineering generally requires securing management and stakeholder support, monitoring the dynamics of political forces, and nurturing new values and beliefs [40].
4.2. Structuring and managing change Gabris [41] notes that although change management techniques can enhance a firm’s performance measurement system, they can also represent barriers or constraints if applied or implemented incorrectly. Gabris categorizes such impediments as:
A stakeholder can be viewed as anyone who may be affected by the business, and who may, in turn, bring influence to bear upon the firm and its activities. This includes not only employees involved with process activities, but also suppliers, customers, stockholders, government and various special interest groups.
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
(1) process burden, the procedural and control requirements associated with the implementation and maintenance of a technique that takes employees away from their actual responsibilities; (2) internal capacity, the result of superimposing a technique on an organisation that lacks the in-house capacity to implement and monitor the technique beyond its initial phases; (3) credibility anxiety, a condition where a multitude of management techniques are ‘piled on top’ of one another, even though the techniques may not be beneficial and useful; and (4) the ‘Georgia giant syndrome’, where management techniques work only under rigorous and closely supervised control conditions. Under various scenarios it is possible to envision how the introduction of a particular performance measure could fall victim to any one of the impediments espoused by Gabris. Greiner [10] also reports that several factors can play a part in inhibiting a performance measurement system within an organisation. He categorizes the impediments as institutional, pragmatic, technical and financial. These particular obstacles to the introduction and use of performance measures can be viewed, more generally, as a lack of institutional “readiness” for such efforts [10]. Another way of assessing the evolution of performance measurement systems is to look at the way implementation of performance measures is carried out. Writers such as Nutt [42,43] suggest that toplevel managers choose from a repertoire of implementation tactics to achieve action upon corporate decisions. According to Nutt, the tactics comprise intervention, where key executives justify the need for change by introducing new processes and norms to identify performance inadequacies; participation, where task forces are set up to facilitate implementation and identify key stakeholders; persuasion, when implementation strategies are delegated to technical staff or experts who then ‘sell’ their ideas back to senior-level decision makers; and finally, edict, where decision makers use control and personal power while avoiding any form of participation. As discussed elsewhere, the facilitation of movement from one phase in the changing of a performance measurement system to another, of necessity, requires awareness and active manage-
57
ment of the political processes within an organisation [37]. However, a change or transformation of a performance measurement system will not progress smoothly without a design, a blueprint that explains how components of the new system fit together to achieve an organization’s strategic objectives [13]. Following from the recent work of Tolbert and Zucker [44], it is worth noting that changing or creating a new performance measurement system generally requires greater resources than maintaining the old one, since alteration and creation of measures do constitute cost for the organisation. Thus, performance measures that are altered or created must therefore be perceived to provide some positive value for the firm. Otherwise decision makers typically would not be inclined to allocate resources for such activities.
4.3. Transformational barriers Considerable research has also examined the individual, organisational, and technological variables that can affect the implementation success of strategies and initiatives within a business enterprise. Such predictors as top-management support for the implementation effort, user-designer
¹ransformation can be viewed as the process of engendering a fundamental change in a performance measurement system with the goal of achieving a dramatic improvement in performance. The fundamental change may involve a structural shift [4], but almost always includes strategic redirection and a noticeable alteration in the behaviour of individuals. It is relevant to note that one of the major factors affecting the rate of adoption of an innovation are the characteristics of the innovation itself [48]. Rogers [49] suggests five characteristics that have a major influence on the rate of adoption of an innovation or idea. They are: (1) relative advantage (i.e. the degree to which an innovation is considered superior to the ideas or techniques it supersedes); (2) compatibility (i.e. the degree to which an innovation is seen as consistent with existing values, past experiences, and the needs of recipients); (3) complexity (i.e. the extent to which an innovation is seen as relatively difficult to understand and use); (4) tryability (i.e. the degree to which an innovation may be experimented with on a limited basis); and (5) observability (i.e. extent to which the results of an innovation are visible to others).
58
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
relationship, resource availability, and technical quality have been proposed and investigated [7]. Further, the strength of the resistance to an evolutionary or change force depends on what individuals inside the organisation have to gain and/or lose by changing, and on how the culture of the organisation shapes the way they respond to change [32,45]. For instance, the findings reported by Harvey [9] suggest that corporate culture can represent an important barrier to changing or modifying performance measures and the pursuit of redesign activities. Consequently, a culture which discourages risk taking and innovation can block action steps that are essential for bringing about successful change to the firm’s performance measurement system. From the perspective of middle and line management, performance measurement has often been viewed as merely piles of paperwork to be completed and reams of information that no one ever evaluates [10]. Furthermore, key institutional obstacles can include the unfamiliarity of performance measurement use among managers, being unreceptive to using quantitative data as a basis for decision making, and ‘innovation saturation’ whereby performance measurement is seen as just another flavour of the month. In the beginning of this paper it was noted that the development of an effective, efficient and balanced set of financial and non-financial performance measures for a business enterprise is one of the principal challenges confronting organisations today. Whether the promise of performance measurement is fully achieved may depend on how those involved, representing a range of interests, respond to key issues, and how well those supporting increased use of measurement overcome critical obstacles and factors as described above.
5. Concluding observations and implications for research In this paper, several important issues and elements that can impact upon the evolution and change of organisational performance measurement systems have been outlined. Importantly, the synthesis of the literature has yielded a framework
or typology relevant to the evolution and change of performance measurement systems. As depicted in Fig. 1, this typology makes explicit the fact that there are four principal categories of force that can be said to influence the evolution of organisational performance measurement systems. These categories are: (i) internal influences, e.g. power relationships and dominant coalition interests; (ii) external influences, e.g. legislation and market volatility; (iii) process issues, e.g. manner of implementation and management of political processes; and (iv) transformational issues, e.g. degree of top-level support and risk of gain or loss from change. From an academic perspective, further investigations into those factors impacting the evolution and change of performance measurement systems are required and it is hoped that the framework presented here will assist in forming such studies. Key issues to address include comparative work which explores the development and deployment of different types of performance measures, both over time and within different settings. Useful insight could also be gleaned from in-depth case studies employing techniques such as measurement mapping [46], as well as nomothetic-based work comparing the diffusion and fate of particular non-financial performance measures across several industries and/or across several countries. Such research has the potential to address a number of puzzles surrounding the evolution of performance measurement systems. For instance, why are some generic measures found in particular industries and not others? How much convergence or variation in performance measurement can be observed among firms operating in the same industry, but different country settings? From a practitioner perspective it is hoped that the framework depicted in Fig. 1 will bring into sharper focus and provoke further thought regarding the issues and forces that impact upon an organisation’s efforts at managing their performance measurement systems. This is important because few organisations appear to systematically modify and manage their measurement systems over time. Many have specific measures which are redundant, largely because it is rare for an organisation to delete a measure which becomes obsolete or lacks utility. Collecting performance data, collating and analysing such data can consume time and
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
59
Fig. 1. Forces impacting performance measurement system evolution and change.
resources. In today’s competitive environment organisations cannot afford to expend financial and personnel assets on non-value added activities; yet this is exactly the situation that prevails for those organisations who neglect to effectively and efficiently manage the evolution and modification of their performance measurement systems. Acknowledgements This paper was produced during the research project — ¹he Evolution of Business Performance Measurement Systems — which was sponsored by the EPSRC under grant number GR/K88637. References [1] R.S. Kaplan, Measuring manufacturing performance: A new challenge for managerial accounting research, The Accounting Review 58 (4) (1983) 686—705. [2] R.S. Kaplan (Ed.), Measures for Manufacturing Excellence: A Summary, Harvard Business School Press, Boston, MA.
[3] R.S. Kaplan, D.P. Norton, The Balanced Scorecard: Translating Strategy into Action, Harvard Business School Press, Boston, MA, 1996. [4] C. Bainbridge, Designing for Change: A Practical Guide to Business Transformation, Wiley, New York, 1996. [5] M.G. Brown, Keeping Score: Using the Right Metrics to Drive World-Class Performance, Quality Resources, New York, 1996. [6] J.R. Dixon, A.J. Nanni, T.E. Vollmann, The New Performance Challenge: Measuring Operations for World-Class Competition, Dow Jones-Irwin, Homewood, IL, 1990. [7] T.J. Galpin, The Human Side of Change: A Practical Guide to Organization Redesign, Jossey-Bass, San Francisco, CA, 1996. [8] M. Hammer, Reengineering work — don’t automate, obliterate, Harvard Business Review July-August (1990) 104—112. [9] D. Harvey, Re-Engineering: The Critical Success Factors, 2nd ed., Business Intelligence Ltd, London, 1995. [10] J. Greiner, Positioning performance measurement for the twenty-first century, in: A. Halachmi, G. Bouckaert (Eds.), Organizational Performance and Measurement in the Public Sector, Quorum Books, London, 1996, pp. 11—50. [11] A. Neely, J. Mills, M. Gregory, H. Richards, K. Platts, M. Bourne, Getting the Measure of Your Business, Findlay Publications, Horton Kirby, UK, 1996.
60
D.B. Waggoner et al. /Int. J. Production Economics 60—61 (1999) 53—60
[12] M.J. Gregory, Integrated performance measurement: A review of current practices and emerging trends, International Journal of Production Economics 30 (1) (1993) 281—296. [13] A. Neely, M. Gregory, K. Platts, Performance measurement system design: A literature review and research agenda, International Journal of Operations and Production Management 15 (4) (1995) 80—116. [14] T.L. Amburgey, H. Rao, Organizational ecology: Past, present, and future directions, Academy of Management Journal 39 (5) (1996) 1265—1286. [15] C. Argyris, Overcoming Organizational Defenses: Facilitating Organizational Learning, Allyn & Bacon, Needham, MA, 1990. [16] J.A.C. Baum, Organizational ecology, in: S.R. Clegg, C. Hardy, W.R. Nord (Eds.), Handbook of Organization Studies, Sage Publications, London, 1996, pp. 77—114. [17] J. Child, Strategic choice in the analysis of action, structure, organizations and environment: Retrospect and prospect, Organization Studies 18 (1) (1997) 43—76. [18] M.T. Hannan, J. Freeman, Structural inertia and organizational change, American Sociological Review 49 (1984) 149—164. [19] M.T. Hannan, J. Freeman, Organizational Ecology, Harvard University Press, Boston, MA, 1989. [20] R.P. Rumelt, Inertia and transformation, in: C.A. Montgomery (Ed.), Resource-Based and Evolutionary Theories of the Firm: Towards a Synthesis, Kluwer Academic Publishers, London, 1995, pp. 101—132. [21] W.R. Scott, Institutions and Organizations: Theory and Research, Sage Publications, London, 1995. [22] P.N. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization, Century Business Press, London, 1992. [23] J.A. Wiggins, B.B. Wiggins, J.V. Zanden, Social Psychology, 2nd ed., McGraw-Hill, New York, 1994. [24] A. Pettigrew, R. Whipp, Managing Change for Competitive Success, Blackwell, Oxford, 1991. [25] J. Pfeffer, Managing with Power: Politics and Influence in Organizations, Harvard Business School Press, Boston, MA, 1992. [26] K. Walsh, C.R. Hinings, R. Greenwood, S. Ranson, Power and advantage in oganizations, Organization Studies 2 (2) (1981) 131—152. [27] R.F. Zammuto, Assessing Organizational Effectiveness: Systems Change, Adaptation, and Strategy, State University of New York Press, Albany, NY, 1982. [28] M.W. Meyer, V. Gupta, The performance paradox, in: B.M. Staw, L.L. Cummings (Eds.), Research in Organizational Behavior, vol. 16, JAI Press, Greenwich, CT, 1994, pp. 309—369. [29] K. Lewin, Field Theory in Social Science, Harper & Row, New York, 1951. [30] W.P. Barnett, G.R. Carroll, Modeling internal organizational change, Annual Review of Sociology 21 (1995) 217—236. [31] H.T. Johnson, The search for gain in markets and firms: A review of the historical emergence of management accounting systems, Accounting, Organizations and Society 2 (3) (1983) 139—146.
[32] D. Besanko, D. Dranove, M. Shanley, The Economics of Strategy, Wiley, New York, 1996. [33] R.M. Kanter, The Change Masters: Innovation for Productivity in the American Corporation, Simon and Schuster, New York, 1983. [34] J.P. Kotter, Leading Change, Harvard Business School Press, Boston, MA, 1996. [35] R.N. Ottaway, The change agent: A taxonomy in relation to the change process, Human Relations 36 (4) (1983) 361—392. [36] W.A. Pasmore, M.R. Fagans, Participation, individual development and organisation change: A review and synthesis, Journal of Management 18 (2) (1992) 375—397. [37] N.S. Rashford, D. Coghlan, Phases and levels of organisational change, in: J. Billsberry (Ed.), The Effective Manager: Perspectives and Illustrations, Sage Publications, London, 1996, pp. 119—130. [38] R. Feurer, K. Chaharbaghi, Performance measurement in strategic change, Benchmarking for Quality Management and Technology 2 (2) (1995) 64—83. [39] L.S. Vansina, T. Taillieu, Business process reengineering or socio-technical system design in new clothes? in: R.W. Woodman, W.A. Pasmore (Eds.), Research in Organizational Change and Development. vol. 9, JAI Press, Greenwich, CT, 1996, pp. 81—100. [40] J.T.C. Teng, V. Grover, K.D. Fiedler, Developing strategic perspectives on business process reengineering: From process reconfiguration to organizational change, Omega: The International Journal of Management Science 24 (3) (1996) 271—294. [41] G.T. Gabris, Recognizing management techniques dysfunctions: How management tools often create more problems than they solve, in: A. Halachmi, M. Holzer (Eds.), Competent Government: Theory and Practice, Chatelaine Press, Burk, VA, 1986, pp. 3—19. [42] P.C. Nutt, Identifying and appraising how managers install strategy, Strategic Management Journal 8 (1987) 1—14. [43] P.C. Nutt, Selecting tactics to implement strategic plans, Strategic Management Journal 10 (1989) 145—161. [44] P.S. Tolbert, L.G. Zucker, The Institutionalization of Institutional Theory, in: S.R. Clegg, C. Hardy, W.R. Nord (Eds.), Handbook of Organization Studies, Sage Publications, London, 1996, pp. 175—190. [45] N.M. Tichy, Managing Strategic Change: Technical, Political, and Cultural Dynamics, Wiley, New York, 1983. [46] A. Neely, J. Mills, K. Platts, M. Gregory, H. Richards, Mapping measures and activities: A practical tool for assessing measurement systems, in: K.W. Platts, M.J. Gregory, A. D. Neely (Eds.), Proceedings of the First International Conference of the European Operations Management Association, University of Cambridge, Cambridge, 1994, pp. 313—318. [47] M. Faber, R. Manstetten, J. Proops, Ecological Economics: Concepts and Methods, Edward Elgar, Cheltenham, 1996. [48] P. Anderson, M. Tushman, Technological discontinuities and dominant design: A cyclical model of technological change, Administrative Science Quarterly 35 (1990) 604—633. [49] E.M. Rogers, Diffusion of Innovations, 4th ed., The Free Press, New York, 1995.