The forces that shape organisational performance measurement systems:: An interdisciplinary review

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.