Abstract
Traditional performance measurement systems go back a long way in their origin and applications. The coming of the Industrial Revolution in the nineteenth century led to the creation of more comprehensive financial measurement systems to meet the requirements of entrepreneurs. The principles of capital investment appraisal, budgeting, performance measurement, variance accounting and return on investment were introduced in the 1920s. Both academics and business practitioners have been concerned about the limitations of existing performance measurement systems and are less willing to rely exclusively on the periodic reports produced by traditional management accounting systems and management information systems. The need for new performance measures originates from a number of influences. The management approach has moved from being manager-centred to customer-centred. Performance measurement has to fit the culture of the organization. Performance in each of the operating processes should be reviewed against current and future expectations, resulting in a list of opportunities for improvement.
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