Corporate Performance Management Systems Research Articles

Improving target budgeting in a corporate performance management system

Currently the portrayal of the procedure for developing management actions during the planning process in the scientific and professional community does not align with the practice of systematic and consistent plan creation supported by an informational analytical system. Alternatively, the non-formalized decision-making activity of the planner, which involves a situational expert approach, becomes a dependency in the planning process. This study is aimed at developing an analytical approach for implementing the plan reconciliation procedure in the process of corporate performance planning. This will increase the utilization of capabilities of the corporate performance management system and formalize the task of generating managerial actions by adjusting targeted budgeting values using mathematical methods. For this purpose, the standard planning process is enhanced by analytical support units, including the algorithm of inverse calculations of individual key performance indicators (KPI) and an advanced module for scenario modeling. The improved model of target budgeting process presented here delivers automated formation of management actions of the budgeting department and subdivision management, guided towards accomplishing strategic goals. The application of inverse calculations provides a mathematical formulation of the task of calculating indicators of planned key values, and the Sense and Respond (SaR) system allows you to supplement the mathematical formulation with weighting coefficients of key performance indicators calculated algorithmically, relying on the manager’s decisions rather than expert evaluation. The implementation of the approach we developed will improve the quality of planning by the highest priority criteria of operability, accuracy and adaptability due to the consistency and methodology of budgeting with the use of modern information technology.

Proposed Corporate Performance Management System for XYZ City Government


 
 
 XYZ City Government has 3 Regionally-Owned Enterprises or Badan Usaha Milik Daerah (BUMD) that are managed independently to support the XYZ economic sector. In fact, one of the three BUMD management is bad, so that it makes the company go bankrupt because it produces losses. In addition, the Regional Original Revenue of XYZ City is very small when compared to other regions in West Java.
 The purpose of this research is to propose a Performance Management System that can help to improve the performance of XYZ City Government. The improved performance can imply an indicator of success for the mayor's 5-year tenure and his deputy. The design of the Performance Management System was made by translating the vision and mission that was launched by the Mayor and his Deputy into a business strategy that was breakdown to each work unit (department).
 This research uses the combined of Balance Scorecard and Integrated Performance Management System (IPMS) framework. This framework is used to assist organizations in achieving excellent performance seen from all aspects of the existing organization. Balance Scorecard Framework has 4 perspectives, such as Financial, Customer, Internal Process, and Learning & Growth. The IPMS framework has 5 stages, Foundation, Background Information, Design, Implementation, and Maintenance and Update. IPMS has 3 perspectives, Organizational Output, Internal Process, and Resource Availability. The results of this study propose a Performance Management System with 62 Key Performance Indicators (KPI) derived from the company's vision, mission and strategy.
 
 

The Role of Management Control in the Operationalization of Corporate Social Responsibility

Cet article contribue à une réflexion actuellement encore peu développée sur l’opérationnalisation de la responsabilité sociale des entreprises (RSE) et son intégration dans les systèmes de gestion de la performance. Il mobilise la théorie de l’acteur-réseau en tant que cadre d’analyse. À travers l’étude de deux situations de gestion au sein d’entreprises françaises du secteur de l’immobilier, il met en évidence le rôle du contrôle de gestion en tant que traducteur des recommandations de développement durable auprès des parties prenantes internes et externes des entreprises. Le management du changement qu’implique le développement durable nécessite des efforts de planification à long terme, mais également un ajustement permanent de la stratégie, au fur et à mesure que les connaissances sont capitalisées. Les résultats des deux cas étudiés montrent qu’en matière d’opérationnalisation de la RSE, le rôle du contrôle de gestion ne peut être limité au déploiement des orientations stratégiques de l’entreprise. Il contribue également à la formulation de la stratégie organisationnelle, en traduisant les innovations nécessaires au développement durable, en coordonnant les parties prenantes contribuant à la réalisation de ces innovations et en capitalisant les nouvelles connaissances générées par ces innovations.

Exploring the status and effects of balanced scorecard adoption in the non-western context

PurposeThe purpose of this paper is to explore the status of corporate performance management (PM) in the Middle Eastern context, represented by the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA). In addition, the current study investigates the effects of the adoption of the balanced scorecard (BSC) and aims to explore the impact of the BSC on workplace attitudes and behaviors, as shown by accountability, inspiration, and motivation.Design/methodology/approachDue to the limited knowledge about the subject matter and the limited number of companies adopting the BSC in the Middle East, this study has adopted a descriptive approach to verify the significance of the BSC and to explore the causal relationship amongst the performance perspectives and the different dimensions of the BSC. The sample was drawn from five major business sectors in the UAE and KSA.FindingsThe results indicate that the BSC indicators are effective tools to evaluate and reflect on corporate performance. The concept of the BSC is considered good practice in the UAE and the KSA. Because of the concept’s compatibility with the local culture and business practices, it can be used to balance shareholder and stakeholder demands.Research limitations/implicationsOne of the main limitations of this study is that the sample is drawn from only two countries from the Middle East and, hence, cannot be generalized.Originality/valueThis study is one of the first attempts to explore the status of the corporate PM systems in a non-western context using a BSC technique created and typically applied in the western world. In addition, this study is considered a valuable attempt at exploring the effects of the adoption of this technique on an organization’s performance.

SURVEY OF INFORMATION SYSTEMS FOR STRATEGIC MANAGEMENT

The article contains survey of information systems for strategic management. There is a numeration and description of the IT-system classes that may be applied in strategic management; survey and analytics for computer-based corporate performance management system; the scope of problems which is unsettled in CPM systems.

Benefits and Barriers to Corporate Performance Management Systems

Corporate performance management (CPM) systems using business intelligence technologies can help enterprises monitor and manage business performance. In this research, we explored and presented empirical evidence on the key benefits of, and barriers to, the use of CPM systems through a survey of 283 organisations across North America and China. We identified three key benefits (strategy execution, process efficiency, and fact-based decision-making) and ten inhibiting barriers under respective project and organisational dimensions. Moreover, we found that in regard to the use of CPM systems, Chinese organisations perceived higher benefits, as well as higher barriers, than did their counterparts in North America. The socio-cultural differences between the two regions explain these issues. The research findings are useful for multinational organisations that are planning, or are in the process of implementing or reviewing their CPM systems, as well as for consulting companies that are assisting with such systems implementation in different regions.

Enhancing Corporate Performance Management with Performatica Application

This paper presents the use of a software tool, called Performatica, to enhance Corporate Performance Management (CPM) in organizations. CPM has been recognized as having an important role to play in the effective management of organizations. However, a number of researchers have identified that developing IT support for CPM systems can be difficult. Organization s needs clear idea of the characteristics of CPM, and clear guidelines on how to bring IT support to effective CPM. This paper demonstrates the use of Performatica constructed based on the concept of evolutionary development, data quality, and data warehousing. The feasibility and effectiveness of Performatica was evaluated in two participatory case studies at large Thai companies.

AN INTEGRATED PERFORMANCE MANAGEMENT FRAMEWORK FOR A MULTI-BUSINESS COMPANY

A multi-business company is a complex entity. Evaluating corporate performance of such an organisation is even more challenging. Corporate performance is inherently multidimensional in nature, is viewed from various perspectives, and has to satisfy multiple objectives. It is multi-dimensional in the sense of being a function of many variables that drive firm performance; multi-perspectival, from various stakeholders’ standpoints; and multi-objectives are to be optimised. So there is no single corporate performance evaluation tool that can be prescribed as a stand-alone gauge; however, a unified and holistic corporate performance management system can be developed from multiple tools. This paper attempts to bring together a variety of performance management tools that have evolved and developed in theory, and have been tested and applied in practice. In developing this convergence, first a set of criteria that answers the multi-dimensional, multi-perspectival, and multi-objective requirements of a firm’s performance will be identified and weighted. Second, management tools that have been used either singly or in combination by multi-business companies are reviewed and ranked against the chosen criteria. Finally, an integrated model or framework that brings together and unifies the elements of these ranked performance management tools is proposed. OPSOMMING ‘n Multi-maatskappy-onderneming is ‘n komplekse entiteit. Die evaluasie van maatskappyprestasie van so ‘n onderneming is self meer van ‘n uitdaging. Maatskappyprestasie is inherent multidimensioneel, word uit verskeie perspektiewe beskou en moet veelvuldige doelwitte bevredig. Geen enkele maatstaf is beskikbaar om hierdie fasette van maatskappyprestasie te evalueer, alhoewel ‘n holistiese prestasiebestuurstelsel ontwikkel kan word gebaseer op verskillende maatstawwe. Hierdie artikel bring verskillende metodologiee byeen vir die meting van maatskappyprestasie wat multi-dimensioneel, multiperspektiewelik en multi-doelwit-georienteerd is. Sodoende word ‘n geintegreerde raamwerk vir die meting van maatskappyprestasie ontwikkel.

Corporate Performance Management

Two of the most important duties of a chief executive officer are (1) to formulate strategy and (2) to manage his company’s performance. In this article we examine the second of these tasks and discuss how corporate performance should be modeled and managed. We begin by considering the environment in which a company operates, which includes, besides outside stakeholders, the industry it belongs and the market it supplies, and then proceed to explain how the functioning of a company can be understood by an examination of its business, operational and performance management models. Next we describe the structure recommended by the authors for a corporate planning, control and evaluation system, the most important part of a corporate performance management system. The core component of the planning system is the corporate performance evaluation model, the structure of which is mapped into the planning system’s database, simulation models and budgeting tools’ structures, and also used to shape information contained in the system’s products, besides being the nucleus of the language used by the system’s agents to talk about corporate performance. The ontology of planning, the guiding principles of corporate planning and the history of 'MADE,' the corporate performance management system discussed in this article, are reviewed next, before we proceed to discuss in detail the structural components of the corporate planning and control system introduced before. We conclude the article by listing the main steps which should be followed when implementing a performance planning, control and evaluation system for a company.

Requirements for Performance Management Systems: A Delineation of the Comprehensive Set of Criteria

The paper deals with the problem of identification of the requirements that should be ful-filled by modern corporate performance management systems. In the first part of the article the essence of corporate performance management was depicted very briefly taking into ac-count the evolution of management accounting. Next, the overview of different ideas on the subject was presented and some opinions taken from literature were discussed. On this basis the original and comprehensive set of criteria treated as the requirements for performance management systems was proposed.

Perspectives on Performance Management

Dear readers, Presenting a research paper at international conference and publishing it in the prestigious academic journal, both represent outstanding opportunity for researchers to bring out their research results and share them with other experts. It is really valuable tradition to publish sound and innovative conference papers in leading academic journals. Thanks to such tradition, progressive ideas can be disseminated all over the researchers’ community and thus, the journals can initiate and support future research directions. Considerable synergy effect can be realized as the result of such mutual collaboration. Following these reasons, it is our great pleasure to introduce this volume of European Financial and Accounting Review which includes selection of papers presented at the research forum of 5th International Conference Integrating Perspectives on Performance Management. Selection of papers is based on careful peer review among 25 papers presented at the conference. The conference has been organized by Management Accounting Department and under the auspices of Prof. Richard Hindls, rector of the University of Economics, Prague from 10th to 12th September 2008. Papers published in this volume show the variety of topics corresponding to performance management issues. The reason for that is evident. In global economy with strong competitive pressures, concepts and methods for managing and controlling all external as well as internal performance factors and determinants shall be considered in an integrated business performance management system. To achieve the organizational performance goals belongs to crucial dimension of everyday job for each manager and executive rather than to task for individuals in finance and controlling area. Browsing the papers, many particularly interesting topics are announced. In the first paper Bartlomiej Nita is searching for the comprehensive set of criteria - requirements which should be fulfilled by modern corporate performance management system regardless of concrete type of organization. Following the same issues Jaroslav Wagner deals with “conceptual framework questions” which should be serviceable as start-point for design and analysis of the performance measurement system. Financial markets belong to really important sector of business nowadays. The next paper of Eleftherios Thalassinos analyses how changes in European financial sector influence the requirements on their organizational performance. Shifting our attention to public educational sector, in the last paper, Sanna Pekkola and Juhani Ukko aim to create a measurement system which can be used for evaluating the effectiveness and innovative capability of the university consortium. How to set appropriate transfer price in large multibusiness enterprises? Analyzing relevant implication Tomas Buus and Jaroslav Brada focus on optimal transfer price setting. The papers make evident the two recent tendencies in performance management research. The authors join to co-operate on international basis and the applied methods confirms that they respect interdisciplinary approach. Let us enjoy the reading and feel free to discuss the papers critically!

Automating the construction of supply chain key performance indicators

PurposeThis paper aims to automate the supply chain operations reference (SCOR) model as an enabler for process‐oriented supply chain business intelligence.Design/methodology/approachThe hypothesis is the following: SCOR model automation is possible using data that is directly extracted from integrated enterprise systems. To test the hypothesis, an alignment product that allows the SCOR model to be automated with information that is directly extracted from the Oracle E‐Business Suite was developed.FindingsIn order to achieve the full benefits from the SCOR model, effective business process management and the SCOR key performance indicators (KPIs) must be implemented and used. Unless data collection to support KPI construction is automated, it is difficult to institutionalize the SCOR model as a measurement and benchmarking framework. We have demonstrated that automated support for KPIs is feasible and achievable.Research limitations/implicationsThe E‐Business Suite is a single enterprise solution, but we assert that the same procedures could be followed with other enterprise solutions or even applied in a legacy system environment.Originality/valueThe developed solution described in the paper can immediately be applied to the design, development, and deployment of corporate performance management systems.

Relationship between intellectual capital-oriented corporate performance management systems, intellectual capital and corporate performance: an exploratory study

This study examines whether an intellectual capital (IC)-oriented corporate performance management (CPM) system drives corporate performance through supporting the development and accumulation of intellectual capital. Data were collected from 211 firms in Taiwan and analysed using a structural equation model (SEM) analysis. We document that greater adoption of an IC-oriented CPM system is significantly associated with higher IC levels. In addition, greater adoption of an IC-oriented CPM system has a significant and positive indirect effect on corporate performance through its association with IC levels. The results highlight the importance and benefits of adopting an IC-oriented CPM system. This study extends existing research on the association between IC and corporate performance by explicitly identifying IC-oriented CPM systems as a contributing factor to corporate IC developments.

Corporate performance management system in a devolved UK governmental organisation

This paper is a case study exploring the design of a new corporate performance management (CPM) system for a UK government agency. The UK Environment Agency employs 11,000 staff in more than 40 discrete management units (comprising hierarchical, geographic and functional divisions). It is pursuing a strongly devolved approach to the development of strategic and operational plans. This paper describes work done by the agency to introduce a novel corporate management system based on best practice third‐generation balanced scorecard processes. The case describes how this system was deployed at the corporate level and then within directorate, regional and area level units. The work in total involved the design and implementation of 44 balanced scorecards across the organisation. Within this framework, the new CPM system was positioned as the key mechanism of control for the entire organisation. The CPM is, however, taking different forms across the organisation, reflecting the differences in balance between management and strategic control priorities faced by different management groups. This paper explores the reasons the agency undertook the redesign of the CPM system, and looks at the design approach used to develop a system of control compatible with the needs of the organisation's devolved business units. The paper reports that the experience to date has been positive, and concludes with recommendations on future areas of research and ways to approach the issue of measure selection and use within complex devolved organisations.