Business Performance Measurement System Research Articles

The effects of digital business strategy on the collaboration performance of companies: the moderating effect of digitally enabled performance measurement

PurposeDigital transformation shapes industries and influences the forms of collaboration between companies. This study aims to investigate digital business strategy as a key to facilitating collaboration beyond organizational boundaries.Design/methodology/approachThe study focuses on the connection between digital business strategy and collaboration performance. The authors identify five types of digital business strategy elements based on the literature: development, objectives, resources, management capabilities, and digital leadership. The authors then studied the implications of these elements for collaboration performance using a survey. The study’s empirical data were collected from manufacturing and service companies, and 202 valid responses were received. The implications of the research elements were tested through regression analysis, which included the moderating effects of digitally enabled performance measurement.FindingsThe theoretical research framework identifies digital business strategy as a key determinant of collaboration performance, thus advancing the understanding of how companies can utilize digital business strategies and achieve enhanced collaboration performance. The results also show that the effect of digital business strategy on collaboration performance may be moderated by digitally enabled performance management.Practical implicationsThe results suggest that management capabilities associated with digital strategy are a crucial element in positively influencing collaboration performance. Further, digital strategy-related resources can be better managed with digitally enabled performance measurement system, which is reflected in improved collaborative performance. Thus, companies should invest in management capabilities and connect their digital business strategies and performance measurement systems to develop collaboration in digital transformation.Originality/valueThe study is among the first to translate an empirical understanding of the digital transformation of small and medium-sized companies into a conceptual framework of a digital business strategy.

Tactical economic business performance measurement system for urban public transport

Tactical economic business performance measurement system for urban public transport

Tactical economic business performance measurement system for urban public transport

With the emergence of new transportation modals, a large part of the population has been looking for better cost-benefit means of transportation. In this context, public transport by bus remains the most traditional, safest, and environmentally sustainable. The present study aims to identify the performance measurement level of tactical economic business aspects of urban public transport to provide a more effective service. A hierarchical structure based on the analytic hierarchy process composed of fundamental points of view and key performance indicators was developed, applied to a university bus line case study linked to the public transport system in the City of Santa Maria, which presented a moderate performance.

Private Higher Education Institutions in the Digital and Pandemic Era

Enterprise risk management (ERM) is created to identify risks and helps organizations to achieve their targets successfully with less obstacles. ERM is to assist senior management be more aware of the increasingly wide spectrum of threats affecting them and thus more proactive, taking action to avoid what they can but also prepare for worse case scenarios to lessen the damage of events that are out of their control. ERM as an important part of a business performance measurement systems, in managing risks and uncertainties, for the successful implementation of strategic initiatives of an organization. ERM acts as an internal control mechanism with safeguard which provides rule and regulation, policies and guidelines. The main risk management standard that has been developed is the ISO31000 which provides a statement of risk management principles, as well as a description of the risk management framework and process. One of the standards which involve technology in risk management is ISO27000. It provides the overview of information security management systems (ISMS). While the environment of constant change and disruption creates opportunities for institutions to differentiate themselves in a crowded market, it also creates a growing array of risks that can quickly derail their strategy. Further, institutions should consider developing an “integrated and enterprise wide” approach to risk management, as opposed to siloed plans that exist within specific divisions or units to deal with risks specific to their overall institutional function or mission. This paper offers the conceptual integrated ERM (IERM) business model, in the form of Business Model Canvas (BMC), for private higher education institutions’ (PHEI) ability to generate adequate revenue and, in some cases, to even exist. Business model risks challenge an institution’s ability to remain relevance in an environment where new approaches to education delivery, revenue generation, and enrollment are evolving rapidly. PHEI that do not plan for these factors through innovation, enhancing productivity, and leveraging and protecting their strategic information and digital asset may find themselves outpaced by more agile competitors. Especially, during this era of globalization, digitalization and pandemic that have constantly change the livelihood and economic of nations, institutions, businesses, and people.

A business performance measurement system for incubated startups

Purpose – The development of a model to measure and assess the performance of start-ups in a standard incubation process, based on 99 critical success factors identified as the most relevant for the context.Design/methodology/approach – A total of three sequential steps were developed to reach the objectives proposed (Problem overview; modeling; and usage). The model was tested on four development stage incubation processes start-ups and three maturity stage incubation processes start-ups, located at the Technological Incubator of Santa Maria (ITSM).Findings – After the modeling phase, compromising results were found for only one developed stage start-up evaluated. Meanwhile, for the maturity stage, all three evaluated start-ups are competitive. To support the strategic decision-making process, the scores obtained were stratified to diagnose which perspective may compromise the performance of each start-up.Originality/value – This research proved to be adaptable to the decision context, thus being amenable to be used in different scenarios. The model presented in this work is composed of a systematic tool suitable to support the continuous improvement and learning processes for incubated start-ups, in specific to measure and assess the performance of start-ups.

BALANCED SCORECARD AND LEAN BUSINESS CONCEPT

Changing modern business environment necessarily triggers the need to constantly search for new business concepts, management modes, and performance measurement systems. In recent decades, lean business concept has been widely applied in companies. This concept focuses on creating value for customers. The value refers to the delivery of products and services with all the characteristics required by customers, just in time, and at the lowest price possible. As the basic task of the company is to satisfy different needs, it is understandable that the company success will depend on the success in satisfying its customers’ needs. In this sense, the research subject in this paper is defining a possible system of performance measures in companies that apply lean business concept. The research results show that Balanced Scorecard can be applied in companies that apply the basic lean principles. This is because it primarily takes into account the value delivered to customers, and, based on this value, forms performance measures within the given perspectives. Also, an important aspect of Balanced Scorecard refers to internal processes and learning and growth, which lean concept particularly concerns.

Method for performance measurement of car companies from a stability-value leverage perspective

PurposeToday, most of the car manufacturers world-wide have embraced the principles of lean manufacturing on strategic and operational level. On strategic level car companies like Toyota (Womack et al., 1990) shifted 63 per cent of the value of the car towards the first, second and third tier suppliers for the co-production and co-development of cars as an effect of lean implementation. However, lean implementation was also followed by for instance Ford and GM in the USA, the latter company faced a sudden disruption in 2009 due to the break-out of the financial crisis in 2008, while Ford survived. Could this be foreseen? The exclusive use of (classic) financial performance indicators may give a false image of a company’s current and future performance. There is a need for a model to identify “the stars and the laggards’ regarding car companies by taking into account non-financial and intangible dimensions as advocated by Neely et al. (2003) regarding the third generation of business performance measurement systems. The purpose of this paper is therefor to propose a method to measure and benchmark car company performance which includes the non-financial R&D dimension as well as supply chain, value creating and employee dimensions. These dimensions are present in the value leverage model (van Blokland et al., 2012a, 2012b) which can serve as a basis for this method. The aim is to contribute to the third generation business performance measurement systems by further development of the value leverage model towards a maturity model for benchmarking car company performance. The proposed method can provide a big picture and give insight regarding company performance and direction of the performance.Design/methodology/approachValue leverage can be measured by a correlation analysis regarding three dimensions, namely, supply chain, R&D and value creation, all relative to the employee or capita which results in the average value leverage (AVL) factor. This AVL factor can be used to compose a combined relative and absolute ranking. The score regarding the AVL results in a relative ranking expressing the level of stability regarding the car companies value chain and system. For the absolute ranking the car companies receive per variable parameter a score according to their absolute performance relative to the other car companies. The relative and absolute ranking are presented on the vertical and horizontal axes forming a matrix. The matrix is the basis for the stability-value leverage maturity model for measuring and benchmarking company performance. With the proposed method, the following main research question can be answered: “How can company performance be measured and benchmarked from a stability-value leverage perspective?”.FindingsWith the proposed method, stability-value leverage performance can be measured. The relative ranking on the vertical axis and the absolute ranking form together a matrix which is presented by a scatterplot. A matrix with four maturity levels emerged from the analysis by introducing the average score of all the car companies together in the data set crossing the matrix vertical and horizontal. The four levels are as follows: Level I, low stability – low value leverage; Level II, low stability – high value leverage; Level III, high stability – low value leverage; and Level IV, high stability – high value leverage. Stability-value leverage performance of car companies can be measured over time which makes it possible to observe to which direction the car company migrates for instance from Level I to Level III, before and after the financial crises in 2008. The car companies BMW, Daimler, Audi, Ford and Honda are the best performing companies in stability-value leverage over the period 2000-2014, as they are situated at Level IV. With the findings, the main research question can be answered. The value leverage indicators can be used for measuring and benchmarking company performance regarding four maturity levels of stability and value leverage. The direction of performance can be observed as well.Research/limitations/implicationsThis research is limited to the car industry. Further research is devised to test the indicators for instance on the truck manufacturing industry. Further research towards new variables is part of the ongoing research.Practical/implicationsWith the value leverage maturity model, it is possible to inform stakeholders about stability, value leverage and value creation capability of car companies. Weak performing companies can be identified in an early stage with this method to anticipate for instance on possible discontinuation of a car company effecting in merger an acquisition processes.Social/implicationsWith the method stakeholders such as employees, users of cars and investors can be informed about how and why car companies perform in an unstable or stable manner.Originality/valueThis research towards ranking and classification of car companies aligns with theories regarding lean manufacturing and maturity models, as these models are used to compare companies on their level of perfection or excellence.

Managing business performance: The contrasting cases of two multiple retailers 1920 to 1939

Business performance measurement and management (PMM) systems are often viewed as relatively recent phenomena, responding to the failure of historical practices which prioritised financial measures. But despite the considerable focus on these systems over the last 25 years, they have not lived up to their early promise. This article looks backwards to understand how practitioners managed their performance in the past. It focuses on two British multiple retailers between 1920 and 1939 and highlights not only the formal processes they adopted but also the role of the informal processes which shaped how they achieved their objectives.

A life cycle approach to business performance measurement systems

Virtually every company has implemented a Business Performance Measurement System (BPMS) with the purpose of monitoring production and business performance and to execute the corporate strategy at all levels in a company. The purpose of this article is to shed light on common pitfalls related to the practical use of BPMS and further to present a life cycle model with the purpose of introducing structured approach to avoiding the pitfalls. The article contributes to further development of the BPMS life cycle concept and practical examples of how it can be used.

Banking Business Process Management Implementation

Scholars and practitioners in the fields of Business Process Management (BPM), performance measurement and business information systems tend to use different approaches for implementing BPM Programs without arguing about the quality strategy set to ensure successful implementation and adoption. This lack of quality standards makes it difficult for researchers and practitioners to build on each other's work. The purpose of this article is to present a model for a BPM Program implementation in the banking sector. The authors' four steps implementation model is based on a quality strategy monitoring the different phases of the entire procedure. Through this work, they aim to identify the key characteristics of a BPM system as well as open a debate on what are the necessary and sufficient conditions for the full implementation of a BPM Program. The authors review the relevant literature and present their BPM implementation approach. Based on their research, they presented a case study on the implementation of a BPM program in a Greek bank. Some of the subjects discussed included the integration plans for the projects, Human Resources management issues, and other concepts for the improvement of the bank's processes. The main part of the case study was the integration themes that the bank in question had identified and separated in order to produce a viable and continuous plan for the full implementation of the projects. The analysis in this paper provides an approach that researchers could use as a reference framework in their efforts for implementing BPM Programs in general and more specifically in banking sector.

DEVELOPMENT OF A MODEL OF BUSINESS PERFORMANCE MEASUREMENT SYSTEM FOR ORGANISATIONAL SELF-ASSESSMENT. THE CASE OF POLAND

Purpose: The paper introduces a model of business performance measurement system for organizational self-assessment. The model is made up of five elements including areas, elements, functions and processes of the BPMS as well as the introduction procedure. The paper is based on the research project conducted in 2007, entitled “Self-assessment in quality management systems of companies” which concerned the engagement of Polish enterprises in initiatives aiming at business excellence. Methodology: The detailed characteristics of the business performance measurement system were identified through the analysis of BSC and excellence model concepts as well as the BPMS definitions found in literature. Three different research methods were applied, namely, a questionnaire survey and an interview conducted among the most active companies in the Polish economy and a Delphi method. As a result 230 companies were examined and 19 experts were interviewed. Findings: The results collected with the use of the Delphi method make it possible to indicate which components of the BPMS are absolutely indispensable for the system to operate efficiently as well as to identify the procedure for introducing BPMS. Originality/value: The paper combines the data collected from two sources: the representatives of Polish companies and the experts representing academia, business, auditing and certificating companies. The authors are convinced that the model presented in the paper although developed for Polish companies can successfully serve as a reference model also for non-Polish companies. Its value results from its universality.

Influence of business performance measurement systems and corporate sustainability concept to overal business performance: “save the planet and keep your performance”

Nowadays the dissatisfaction with only fi nancial indicators has led to a focus on non-traditional areas of performance measurement as Balanced Scorecard, environment indicators and others. Moreover many recent studies has focused on the corporate sustainability concept and performance measurement interconnection. The aim of this paper is to identify the relationship between selected management tools and concepts of various development phases of strategic performance measurement systems to overall business performance measured by indicator ROE. Similarly the aim is to identify the relationship between the sustainability index and indicator ROE as a key aspect in terms of the current climate crisis. Our most important fi ndings bring new information and knowledge for the strategic transformation from traditional business performance measurement system to strategic and sustainable performance measurement system. Specifi cally we found out that the BSC methodology has a demonstrable impact on the business performance. Also KPI system and orientation on the environment affect the performance of enterprises. In the case that companies do not have the knowledge information system as a complex system and do not take into account its implementation they tended to have a lower level of performance. This means that the BI knowledge information system has a major impact on business performance. Regarding to the corporate sustainability concept we can confi rm that the direct moderate correlation is apparent between economic sub-index and also composite index of sustainable development and indicator of ROE. The connection of environmental and social sub-index separately to ROE had not been shown suffi ciently. Based on results we can conclude that the index of sustainable development is a challenge for enterprises refl ecting a growing need for change purely short-term oriented, consumerist patterns of production and consumption.

Introduction to Performance Prism:A Tool of Performance Measurement System

This research paper describes and illustrates the practical application of a new measurement framework- The Performance Prism- Which addresses the shortcomings of many of the traditional measurement frameworks being used by organizations today. The Performance Prism, with its comprehensive stakeholder orientation, encourages executives to consider the wants and needs of all the organization's stakeholders, rather than a subset, as well as the associated strategies, processes and capabilities. DHL's board for the UK have used this framework to re-engineer their corporate measurement and reporting system and the research paper explain DHL and other firms' experiences with the Performance Prism. An extensive literature survey on performance measurement is used to identify the main aspects of the review in such systems. Various dimensions related to the characteristics of Performance Prism are explored. All the findings are then routinely put together to develop the proposed conceptual framework. The paper presents a conceptual model to review performance measurement systems (PMS) which are designed based on Performance Prism. The presented framework categorizes review processes and tools into two main categories; Business Performance Review (BPR) and Performance Measurement System Review (PMSR). In BPR, a loop is presented in three levels with regards to the five facets of Performance Prism which indicates the performance management process. PMSR deals with reviewing the efficiency and effectiveness of the design and implementation of the PMS it. Several methods and tools have been gathered from the literature in this section to examine the relevance of measures and some have been introduced to study and challenge the validity of strategic assumptions and strategies and appropriateness of the infrastructure. Implications of various factors such as organizational culture, change management and characteristics of the measures are highlighted. The framework provides a procedural action for reviewing both business performance and PMS performance when applying the Performance Prism in practice. It provides a foundation for further empirical research. This study adds to the body of literature, by proposing a comprehensive review framework to be used in Performance Prism.

An Assessment of Business Performance Measurement at a Petroleum Refining Business Unit in Ndola

This study involved the assessment of business performance measurement at a refining business unit, in Ndola, Zambia. The goal of the study was to assess the current business performance measurement at the business unit, its significance on organisational performance and how it could be enhanced. This was done by using a survey method through a questionnaire distributed to a sample that was selected by stratified sampling and analysing the collected data to assess the knowledge, opinions and attitudes of the respondents as regards business performance measurement in the selected organisation. The research found that while business performance measurement exists in the organisation, the business unit concentrates more on business performance measures that enable it communicate business results to shareholders and industry regulators than measures which facilitate improvements in efficiency and business competitiveness. To enhance business performance measurement, the business unit should modify its current business performance measurement system, aligning it with a framework that will enhance internal business processes, satisfy multiple stakeholder needs and achieve greater growth and competitiveness.

A framework to review Performance Prism

PurposeThe purpose of this paper is to develop an exclusive review framework for the Performance Prism.Design/methodology/approachAn extensive literature survey on performance measurement is used to identify the main aspects of the review in such systems. Various dimensions related to the characteristics of Performance Prism are explored. All the findings are then rationally put together to develop the proposed conceptual framework.FindingsThe paper presents a conceptual model to review performance measurement systems (PMS) which are designed based on Performance Prism. The presented framework categorizes review processes and tools into two main categories; Business Performance Review (BPRw) and Performance Measurement System Review (PMSR). In BPRw, a loop is presented in three levels – with regards to the five facets of Performance Prism – which indicates the performance management process. PMSR deals with reviewing the efficiency and effectiveness of the design and implementation of the PMS itself. Several methods and tools have been gathered from the literature (e.g. relevance test, measures profile, etc) in this section to examine the relevance of measures, and some have been introduced (including a method to determine inconsistencies in organization's performance trends between stakeholder, strategic and operational level) to study and challenge the validity of strategic assumptions and strategies, and appropriateness of infrastructure. Implications of various factors such as organizational culture, change management, and characteristics of the measures (level of the measure, managers who receive reports including the measure, and supporting infrastructure) are highlighted.Research limitations/implicationsIn contrast to PMS design and implementation, research on PMS review is limited. This is more evident in the literature concerning Performance Prism. The empirical evidence of usefulness is beyond the scope of this article.Practical implicationsThe framework provides a procedural action for reviewing both business performance and PMS performance when applying the Performance Prism in practice and provides a foundation for further empirical research.Originality/valueThe paper adds to the body of literature, by proposing a comprehensive review framework to be used in Performance Prism.

PERFORMANCE MEASUREMENT SYSTEM COMPATIBILITY WITH BUSINESS ENVIRONMENT

In order to analyze business environment and performance measurement system institutional theory was chosen and shows that institutional theory identifies internal and external environmental factors as institutional factors, according to which the behaviour of an organization could be disclosed and researched. This shows that according to institutional factors internal and external environment of organization could be recognized. The synthesis, comparative analysis methods of scientific literature which involves the generalization of theoretical propositions were applied for the analysis of performance measurement. The criterion list for identification of internal and external environment was systematized. Theoretical assumptions and hypothetical model of the structure and features of performance measurement system in different internal and external environment are developed. According to this aspect the compatibility between performance measurement and environment of organization was selected for further research, striving to summarize research results of other this field scholars and develop the model of performance measurement system compatibility with business environment.DOI: http://dx.doi.org/10.5755/j01.em.17.2.2163

Towards a theory of supply chain alignment enablers: a systematic literature review

PurposeThe importance of supply chain alignment has been discussed since the birth of supply chain management (SCM). Yet it remains a major challenge for supply chains. This paper aims to systematically review the cross disciplinary literature on supply chain alignment in order to identify, and develop constructs for enablers to alignment, and an associated set of hypotheses.Design/methodology/approachA systematic approach has been taken to the literature review, which ensures it is auditable and repeatable. The selection criteria are clearly aligned with the review question ensuring all literature pertinent to the question is identified and reviewed. Relevant information is extracted from the selected papers and synthesised into a set of hypotheses.FindingsSix main constructs for the enablers of alignment are identified and defined: organisational structure, internal relational behaviour, customer relational behaviour, top management support, information sharing and business performance measurement system. While the literature is disparate, across different disciplines there is good support for these enablers. The relationships between supply chain alignment and shareholder and customer value are also argued with the support of the literature. Although each of the enablers is argued to positively affect shareholder and customer value, their interactions with one another are not well supported in the literature, either theoretically or empirically, and therefore this could be an area for further research.Research limitations/implicationsWhile the hypotheses remain theoretical, it is now possible to test them and understand the relative significance of the various enablers to alignment.Practical implicationsThe significance of shareholder and customer alignment on the delivery of shareholder and customer value can be examined, thus moving towards a theory of supply chain alignment. This is needed since in practice companies are struggling with supply chain alignment.Originality/valueThe existing literature on supply chain alignment is disparate and multi‐disciplinary as this descriptive analysis shows, with 72 papers published in 43 different journals. Moreover, most of the papers focus on particular enablers, while this paper brings together six key enablers from the literature to produce a set of hypotheses.

Understanding Process Performance Measurement Systems

Understanding Process Performance Measurement Systems The purpose of this paper is to analyze the current state of Process Performance Measurement Systems (PPMS) by means of a systematic review of literature. The PPMS literature is reviewed using a systematic approach. Based on an extensive literature review only twelve articles that contain the term PPMS in the title were found. The literature analysis showed that PPMS is a relatively new topic in the area of performance measurement. In order to understand PPMS, it was crucial to explain the concepts of business process management, business performance measurement and Performance Measurement System (PMS) which are well known and used in the literature and practice. PPMS is a special type of PMS that should be used in process-oriented organizations. Limitations of this research lie in the fact that all the conclusions were derived only from the literature, not empirical research. The results presented in the paper continue towards providing an updated overview of the current state of performance measurement, especially PPMS in order to identify the existing research gaps on which ongoing and future research efforts regarding this topic can be focused.

General Motors India (2009)

Subject area Management control system, corporate performance management, budgeting, planning, multinational organization. Study level/applicability Graduate and executive education level management programs. Case overview General Motors India (GMI) operations established in 1994 and grew steadily, unlike her startling global performance. In 2007, GMI unveiled its new vision and mission for aggressive growth, expansion and establishing presence across all segments. With increased globalization of General Motors Corporation (GMC), the strategic importance of GMI for sourcing was envisaged. The case describes the organization structure and management control systems at GMI and the changes onto new strategy and vision. The case narrates the unique futures of its control systems such as dual reporting and matrix organization, business plan deployment (BPD), budgeting, performance measurement and compensation system. Expected learning outcomes The financial planning and control system in a large decentralized multinational subsidiary. Typical organizational responsibility structure and administrative and functional, dual-control mechanism. Appreciate strategic planning and budgeting process and how the strategy is cascaded through multiple key result areas and the BPD board. The business environment and strategy dynamics and its relationship with the prevalent control system. Opportunity for students to speculate the changes in control system in wake of radical changes in the business and company environment. Opportunity to introduce Simmons (1995) levers of controls and management control system package. Supplementary materials Teaching notes.

Towards a definition of a business performance measurement system

PurposeScholars in the field of performance measurement tend to use the term business performance measurement (BPM) systems without explaining exactly what they mean by it. This lack of clarity creates confusion and comparability issues, and makes it difficult for researchers to build on one an each other's work. The purpose of this paper is to identify the key characteristics of a BPM system, by reviewing the different definitions of a BPM system that exist in the literature. This work aims to open a debate on what are the necessary and sufficient conditions of a BPM system. It is also hoped that a greater level of clarity in the performance measurement research arena will be encouraged.Design/methodology/approachThe performance measurement literature is reviewed using a systematic approach.FindingsBased on this research, a set of conditions of a BPM system has been proposed from which researchers can choose those which are necessary and sufficient conditions for their studies.Research limitations/implicationsThe analysis in this paper provides a structure and set of characteristics that researchers could use as a reference framework to define a BPM system for their work, and as a way to define the specific focus of their investigations. More clarity and precision around the use of the BPM systems phrase will improve the generalisability and comparability of research in this area.Originality/valueBy reviewing the different definitions of a BPM system that exist in the literature this paper will hopefully stimulate a debate on the necessary and sufficient conditions of a BPM system and encourage a greater level of clarity in the performance measurement research arena.