Holistic Performance Measurement Research Articles

Measuring and managing organizational performance based on organizational capitals, service quality and BSC performance outcomes

Purpose The purpose of this paper is to develop and test empirically a new holistic performance measurement model that integrates the best of current performance measurement frameworks and methodologies and builds upon the resource-based view to strategic management. Design/methodology/approach A survey collected responses from 379 top-, middle- and supervisory-level managers from 3 telecommunications service providers in Egypt. The hypothesized direct relationships were tested through multiple linear regression (using SPSS software), and the mediating effect was tested using the structural equation modeling technique (using AMOS software). Findings The results reveal that the proposed model is a reliable and valid instrument for measuring and managing holistic organizational performance. The results also reveal that Egyptian telecommunications companies have primarily emphasized the use of structural and relational capital to enhance their service quality (SQ) and performance outcomes (POs). Moreover, SQ was found to significantly and partially mediate the effect of organizational capitals (OCs) on POs. Research limitations/implications The proposed model is a novel model that needs further investigation using various research designs and multiple research methods to assure its reliability and validity as a holistic performance measurement system. Practical implications The Egyptian telecommunications companies should efficiently manage and leverage all four components of OCs, especially the components of intellectual capital to improve their SQ and consequently enhance their POs. Originality/value To the best of the authors’ knowledge, this is the first research to study the relationships among OCs, SQ and POs, merge them in an integrated performance measurement model and test this model empirically in the Egyptian telecommunications setting.

Measuring Sustainable Performance of Islamic Banks: Integrating the principles of Environmental, Social and Governance (ESG) and Maqasid Shari’ah

To fulfil the Maqasid Shari’ah of Islamic banks in promoting the welfare of society, Islamic banks are expected to consciously align their performance measurement according to the principles of Islamic banks that are derived from Islamic economic philosophy. In the meantime, in light of the agenda of Sustainable Development Goals (SDG) 2030, the principle of environment, social and governance (ESG) has become part of the sustainability reporting and become a central concern of the investors. The tenets of ESG and Islamic finance basically intersect and share similar principles of responsibility, accountability, and stewardship in providing protection and benefits to the environment and humankind as a whole which is in line with the principle of Maslahah in the Maqasid Shari’ah. Hence, there is ample room for the ESG element to be harmonized with the Maqasid Shari’ah elements in a holistic performance measurement index of Islamic banks. Therefore, the performance of Islamic banks can be measured in a more holistic approach by combining financial and non-financial performance with the ultimate objective of Islamic banks being sought as the primary reference, and the sustainability issue can be well addressed. This paper reviews the previous literature on the performance of Islamic banks, ESG principles in the context of Islamic banks and the Maqasid Shari’ah performance index that has been developed by previous researchers. Fulfilling Maqasid Shari’ah and sustainability agenda in the performance measurement index would further strengthen the performance of Islamic banks in the effort to maintain Malaysia as the leader in the regional and world Islamic financial hub.

Directors’ Perceptions of Board Effectiveness and Internal Operations

We contribute to the growing literature on the effectiveness of corporate boards by examining the effect of two insights that have been largely unexplored in prior studies that use public data. First, since boards’ responsibilities are wide-ranging, more holistic performance measures may better capture the full range of their duties than specific public actions and outcomes (e.g., disclosure of risk management processes, financial restatements, acquisition returns, CEO turnover). And second, because corporate boards share many characteristics of other types of teams, their effectiveness is likely to be influenced by their internal operations. To examine the performance effects of these insights, we use data from 577 directors of U.S. public firms that responded to a survey we conducted in 2015–2016 and qualitative data from interviews of 75 directors. Our study establishes a strong relation between director perceptions of board performance effectiveness and internal board operations. Further, by highlighting the critical role of internal operations, identifying areas of relative strength and weakness in boards’ effectiveness in various activities, and probing director perceptions of their primary responsibilities, we are able to offer concrete suggestions for future research on board effectiveness. This paper was accepted by Shiva Rajgopal, accounting.

The role of enterprise social networking in the measurement and management of competences

PurposeThe purpose of the paper is to examine how enterprise social networking (ESN) measures and manages competences and the impact of this on the development of a holistic performance management and measurement system (PMMS).Design/methodology/approachA multiple-case methodology was used to carry out a qualitative meta-analysis on published case studies from 32 multinational companies.FindingsIt was found that the use of ESN was supportive in the development of a holistic PMMS based on high maturity in performance measurement and democratic and participative approach in performance management.Practical implicationsThe study shows ways in which ESN implementation can be used in PMMS to transform individual competences into firm-specific competences, thus improving outcomes for the success of a business.Social implicationsThis study shows that ESN can be of value to the workforce in social terms by giving them an outlet for self-expression to promote their well-being.Originality/valueThis paper shows originality, in that it contributes to the research in support of the role of ESN in performance management and measurement and the effective inclusion of competences in a holistic PMMS.

Performance Measurement System in the Governance of Waqf Institution: A Concept Note

Although reports revealed substantial improvements have been reported in the accounting and reporting of waqf properties, the lack of a sound internal control mechanism is of concern. The existing practice of performance measurement among waqf institutions is less standardised and did not consider their overall performance as a religious and voluntary institution. Organisations engagement in waqf affairs has also caused various issues relating to the ineffectiveness of management and administration of waqf assets. Thus, a systematic and comprehensive performance measurement system is required to adequately assess the performance and ensure proper governance of waqf institutions. Drawing from the Balance Scorecard (BSC) framework and Islamic concept, the paper aims to study and analyse relevant literature on the performance measurements for waqf institution and to develop a holistic performance measurement model suitable to assess the performance of waqf institutions. In this concept paper, the inductive and deductive methods besides analysis of relevant literature were utilised to arrive at the findings. A fifth perspective has been added to the traditional BSC framework. The fifth dimension focuses on the assessment of all activities of waqf institutions in accordance with the Shariah principles. The paper concludes that the governance of waqf entity can be achieved through a sound internal control system, which suggests the implementation of a shariah-based performance measurement system that incorporates both qualitative and quantitative dimensions to examine its current stance better. This type of performance measurement system can also ensure accountability and transparency of waqf institutions, as well as for them to strategize their initiatives better to contribute to long-term wealth creation of the society. The framework developed in this study can be utilised to provide one possible way for management of waqf institutions to address the issues arise from the inefficiency in managing waqf resources.

Measurement and management of competences by enterprise social networking

PurposeLiterature describes the transformation process of employees’ individual competences into firm-specific competences as a great challenge in the performance management and management field. Recently, to favor the transformation of competences, some companies have adopted enterprise social networking (ESN). However, not enough studies support the understanding of its role in performance management and measurement and scant attention is given to the inclusion of competences in a holistic performance measurement and management system (PMMS). To help close this gap, the purpose of this paper is to develop knowledge on the role of ESN in measurement and management of competences to favor the development of a holistic PMMS.Design/methodology/approachThe research adopts a multiple case study methodology using a qualitative meta-analysis. It investigates 32 multinational companies by case studies available in the scientific literature.FindingsThe results highlight the use of ESN as a relevant support for the development of a holistic PMMS based on a high maturity in performance measurement and a democratic and participative approach in performance management. ESN provides real-time data collection, analysis and reports that encourage a democratic and participative performance management. It facilitates relationships, knowledge sharing and favors a high maturity performance measurement.Originality/valueThe paper provides implications for theory, practice and society. First, the paper rationalizes the impact of ESN usage on performance measurement and management. Second, it offers new knowledge supporting practitioners in the development of holistic PMMS. Third, it highlights that ESN favors people in self-expression of own capacity, sharing artwork and knowledge on specific topics.

Performance Measurement System in the Governance of Waqf Institution: A Concept Note.

Although reports revealed substantial improvements have been reported in the accounting and reporting of waqf properties, the lack of a sound internal control mechanism is of concern. The existing practice of performance measurement among waqf institutions is less standardised and did not consider their overall performance as a religious and voluntary institution. Organisations engagement in waqf affairs has also caused various issues relating to the ineffectiveness of management and administration of waqf assets. Thus, a systematic and comprehensive performance measurement system is required to adequately assess the performance and ensure proper governance of waqf institutions. Drawing from the Balance Scorecard (BSC) framework and Islamic concept, the paper aims to study and analyse relevant literature on the performance measurements for waqf institution and to develop a holistic performance measurement model suitable to assess the performance of waqf institutions. In this concept paper, the inductive and deductive methods besides analysis of relevant literature were utilised to arrive at the findings. A fifth perspective has been added to the traditional BSC framework. The fifth dimension focuses on the assessment of all activities of waqf institutions in accordance with the Shariah principles. The paper concludes that the governance of waqf entity can be achieved through a sound internal control system, which suggests the implementation of a shariah-based performance measurement system that incorporates both qualitative and quantitative dimensions to examine its current stance better. This type of performance measurement system can also ensure accountability and transparency of waqf institutions, as well as for them to strategize their initiatives better to contribute to long-term wealth creation of the society. The framework developed in this study can be utilised to provide one possible way for management of waqf institutions to address the issues arise from the inefficiency in managing waqf resources.

PERANCANGAN PENGUKURAN PERFORMANCE OF BUSINESS PROCESS DI PT AJINOMOTO INDONESIA MOJOKERTO FACTORY DENGAN MENGGUNAKAN METODE "THE PERFORMANCE PRISM"

performance measurement of an organization recently becomes a trend for some reasons. First, the company or the organization can estimate the efficient use of its resources. Secondly the company can plan future target performance more realistically in relation to the existing coundition. Thirdly, the company can apply proper strategies to improve the performance on the basic of actual achievement and expected performance. Until recently PT Ajinomoto Indonesia Mojokerto has not conduct holistic performance measurement. measurement is conducted partially in each department. method of performance measurement applied in this research is The Performance Prism focusing on stakeholders satisfaction which is a method developed in response to the previous methods such as Balance scorecard. This method deals with 5 aspects: stakeholders satisfaction, stakeholders Contributions, Strategies, Processes, and Capabilities. This reflects the facets of three — dimentional prism. performance measurement of PT Ajinomoto Indonesia Mojokerto Factory using the Performance Prism obtains 28 Key Performance Indicator (KPI) for stakeholders Customer, Investor, Supplier, Employee and Community. Analitycal Hierarching Process (AHP) is applied to KPI. Having scared using OM4X the research results 14 KPI categorized as good in green 4 KPI is fair in yellow, and 10KPI is bed in red. aggregate value is 5,6 showing fairly good infair condition yellow.

Making up performance: the construction of “performance” in venture capital firms’ portfolios

Purpose The purpose of this paper is to investigate performance measurement practices in venture capital firms. Specifically, the author examines how two organizations make complexity and uncertainty manageable by mobilizing performance measurement. This study draws on the framework of pragmatic constructivism (PC) (Nørreklit et al., 2016; Nørreklit et al., 2006, 2010), focusing on the integration between the four dimensions of PC, namely, facts, values, possibilities and communication. Design/methodology/approach The paper adopts a comparative case study methodology. Findings The findings show that performance measurement practices are strongly influenced by values playing out via integration in actor-world relations, whereas Venture A mobilizes an actor-centric approach, leading to an open, holistic performance measurement system (PMS) which is based on non-financials, a close involvement in operational matters and actors’ judgement using accounting as “learning machines” (Burchell et al., 1980); and Venture B draws on an analytical approach emphasizing on the role of financial indicators and control enacting accounting as “answer machines” and as “tool for computation” (Burchell et al., 1980). These different approaches to PMS, actor-centric vs analytical, are guided by different values about actor-world relation(s). Originality/value The paper provides a context-sensitive account on the relationship between uncertainty and performance measurement practices. First, this paper contributes by providing evidence on how actors use accounting to manage uncertainty and complexity by differently integrating actor-world relation(s) (Nørreklit, et al., 2016; Nørreklit et al., 2006). Second, this study resonates with recent calls for more industry-specific and context-sensitive investigations (Messner, 2016). Finally, the author contributes to the literature asking for more research on the role accounting plays in managing uncertain conditions (Chenhall and Moers, 2015).

Pursuing Sustainability with the Balanced Scorecard: Between Shareholder Value and Multiple Goal Optimisation

A rising awareness about the limitations of measuring organisational success merely with financial metrics has motivated researchers and practitioners to call for more holistic performance management and measurement systems. The balanced scorecard (BSC) as proposed by Kaplan and Norton is maybe the most popular framework which aims at a balance between multiple performance dimensions and objectives. Moreover, the increasing strategic importance of environmental and social aspects have led to the suggestion of a so called sustainability balanced scorecard (SBSC), which promises the consideration of even further performance dimensions. More specific, the SBSC aims at balancing financial objectives with environmental and social objectives. However, the SBSC approaches proposed strongly differ in the way they deal with managing multiple objectives. Against this background, we conduct a systematic review of the research field dealing with the SBSC in order to advance the knowledge on managing multiple corporate objectives. As part of our results, we first give a brief description of the research field using bibliographical analysis. Second, we derive a typology of generic SBSC architectures showing that the architecture is contingent on the value system the organisation chooses to operate in (profit driven, care driven, systemic driven) and the corporate sustainability strategy opted for (defence, accommodation, proaction). We further show that the architectures can generally be applied by various types of organisations (public listed, large private, and small and medium-sized companies), but that some combinations are more likely than others. Implications for management and research are also derived.

Changing performance measurement towards enhanced accountability: insights from the British Museum

This paper aims to find out what are the factors that favour an innovation in performance measurement deemed to be effectively implemented and capable to assess museums' performance. The study is grounded on the link between accounting logic and accountability within public sector organisations broadened by taking into account the issues relating to cultural value. The framework of this study maintains that the multidimensional elements constituting the cultural value, if interpreted through the lenses of the accountability process - by identifying subjects, accountability demands, equity implications and value dimensions - can ease the realisation of a holistic performance measurement system able to capture both the economic-financial and the social-environmental results. We use the case of the British Museum showing how it has been able to effectively innovate its performance measurement system towards greater accountability.

Public Real Estate Performance Measurement: A case studyof a Bangkok Government Complex

Various studies have shown that corporate real estate can contribute to organisational performance. However, the concept of Public Real Estate Management (PREM) has not been well known in Thailand. This paper aims to present the concept of PREM, to describe Key Performance Indicators (KPIs) that are being used in practice, to discuss KPIs that should be developed furthermore, and to explore which organisational characteristics affect the selection and prioritisation of KPIs. The empirical study is based on data from a case study of Dhanarak Asset Development Company Limited (DAD). Research methods include interviews, walk-through observations and document analysis. The findings from the case study confirm the assumed relationships between performance measurement and organisational characteristics such as organisational objectives, structure and management style. Although the DAD organisation applies a systematic performance measurement approach, it is recommended to elaborate some KPIs furthermore such as employee satisfaction with the work environment and the rate of customer retention. The findings from the case study can be used to improve the current knowledge of the impact of public real estate management on organisational perfor-mance, and to develop a holistic performance measurement system for public real estate in Thailand.

Toward a Holistic Performance Measurement of the Pavement Management

With limited budgets and increasing pressure from related stakeholders, together with the threat of extreme weather, we may need brand-new thinking in PMS implementation. The purpose of this article is to explore how governance function may link to sustainability regarding PMS implementation. Our theoretical analysis found that governance notion and a sound governance structure may help top management in dealing with inter-agency affairs and aligning customers' needs with an agency's goal. Also, a holistic sustainable framework for pavement management allows us to take from a broader consideration within the pavement context. In the empirical study, we used a Quality Function Deployment (QFD) matrix that can incorporate 7 customers' needs into 25 technical requirements. After the revision of relative importance including subjective and objective weights, 10 performance indicators through sustainability perspective have been established.

The use of multiple performance measures and the balanced scorecard (BSC) in Bangladeshi firms

AimsThis paper aims to examine: the status and the use of financial and non‐financial measures, and the balanced scorecard (BSC) in Bangladeshi companies; the reasons for BSC adoption; and associated problems.Design/methodology/approachData via a questionnaire were obtained from the chief accounting and finance officers of a cross section of 60 Bangladeshi companies listed on the Dhaka Stock Exchange. A combination of descriptive statistics, bi‐variate, and multi‐variate techniques of statistics were used to test three research questions.FindingsThe results indicate that financial measures are more widely used, but that 78.4 per cent of companies use some non‐financial indicators. Further, the exercise of a full BSC is limited to only 10 per cent of the sample. The results also show that companies adopt these frameworks to aid decision making, and the problems associated with the adoption of BSC include a cost‐benefit perspective and a lack of management support.Practical implicationsThe findings suggest many companies are using a dashboard of financial and non‐financial performance measures that could possibly be a precursor to adopting more holistic performance measurement frameworks like the BSC.Originality/valueThere have been recent calls for more in‐depth analysis of the management accounting systems of emerging countries and these findings contribute further knowledge to an under researched area. In particular, the paper demonstrates how a performance measurement framework may evolve in an emerging country context.

A Comprehensive Approach in Assessing the Performance of an Automobile Closed-Loop Supply Chain

The ecological issues arising from manufacturing operations have led to the focus on environmental sustainability in manufacturing. This can be addressed adequately using a closed-loop supply chain (CLSC). To attain an effective and efficient CLSC, it is necessary to imbibe a holistic performance measurement approach. In order to achieve this, there is a need to adopt a specific approach for a particular product rather than being generic. Since sustainability has direct environmental footprints that involve organizational stakeholders, suppliers, customers and the society at large, complexities surrounding supply chain performance measurement have multiplied. In this study, a suitable approach has been proposed for CLSC performance measurement in the automotive industry, based on reviewed literature. It is believed that this approach will result in increased effectiveness and efficiency in CLSC performance measurement.

A decomposition and hierarchical approach for business performance measurement and management

PurposePerformance measurement and management (PMM) is a key practice to drive modern businesses. The literature available in this field highlights a certain maturity regarding performance measurement systems, while few frameworks have been proposed for PMM, which is today's target. Hence this paper aims to focus on the development of a new framework for providing direction and guidance to an organization in measuring and managing its performance.Design/methodology/approachThe proposed framework is developed based on the strengths of the axiomatic design (AD) and the analytical hierarchy process (AHP) techniques.FindingsThe framework proposed, namely “Business System Design Decomposition” (BSDD), offers a holistic approach to PMM, identifies cause‐effect relationships in business processes, measures performance versus stakeholders, and offers interlinking between performance indicators. The result is a deep understanding of the business environment and a real step forward for PMM.Research limitations/implicationsThe proposed framework for PMM needs to be validated through an empirical approach or by a clinical approach utilizing a case study.Practical implicationsThe paper offers to academics, managers and practitioners a framework to understand, measure and manage business performance. Moreover, the application of the framework represents a learning process for the people involved in the project.Originality/valueLittle research is available regarding holistic performance measurement and management systems and the understanding of quantitative relations between performance indicators. By combining two existing methodologies, the framework proposed adds value to the existing body of knowledge and offers good insights for addressing future research.

Ground handling services at European hub airports: Development of a performance measurement system for benchmarking

The liberalization of ground handling in Europe forces airports to assess their performance relative to their competitors in order to remain competitive and sustain long-term competitive advantage. Together with main EU hub airports, action research was conducted for one year to develop a holistic performance measurement system (PMS) for ramp services. The resulting PMS entails a process-based perspective and reflects the supply chain of airport logistics. As the findings of an ex-post validation suggest, the system represents a suitable basis for competitive benchmarking activities.

Measuring business transformation at a small manufacturing enterprise in the UK

PurposeThe purpose of this paper is to validate the applicability of Strategic Quality Management (SQM) methods at a UK based manufacturing Small to Medium Enterprise (SME) for changing the organisational culture and improving the business performance results.Design/methodology/approachAction research was conducted in the form of a single company case study where an existing SQM methodology (Hoshin Kanri) was adapted and applied at the company.FindingsThe paper finds that this application of Hoshin Kanri is particularly innovative, as Western applications of this Japanese approach at SMEs are few as reported in the academic literature. This achievement represents a significant delivery of a cultural transformation to achieve business transformation by adopting a holistic performance measurement methodology.Research limitations/implicationsThe paper has limitations due to the single case study approach and possible influence of the researchers during the application. Further applications at other SME companies are required to verify the significant findings.Practical implicationsThe discussion and conclusions from this paper are practical and have business relevance to both manufacturing and service sector organisations.Originality/valueThis paper focuses on UK industry, and is of value to both academics and practising managers at an international level.

Interorganizational controlling of production equipment

Life cycle costs (LCC) of machine tools are many times higher than the actual investment. Therefore a rising number of operators no longer take into account only the initial costs of a machine. Now they demand warranties for LCC elements and performance figures respectively. To implement this, an interorganizational tracking of performance figures and controlling of measures like services have to be defined. The complexity of the prediction and controlling make a lean performance measurement system necessary for each case. The input for the configuration of the specific performance measurement system are aspects of corporate strategy and the production scenario. This article’s purpose is to present a computer based configuration method which identifies and selects relevant performance figures out of a holistic performance measurement system. Furthermore, the method defines a service package provided by the manufacturer and the necessary data exchange between operator and manufacturer.

Performance measurement of networks: towards a non-financial approach

This paper suggests that a holistic network-level Performance Measurement (PM) system could be used to control the business process and to guide the actors in networks to pursue common targets of the network. However, in the current literature, empirical evidence on network-wide PM seems to be limited to financial measures. Financial information alone is not adequate for determining overall performance. This paper examines the case study evidence from several Finnish organisations. The results provide a state-of-the-art review on how inter-organisational cooperation is currently managed in Finland using PM. Based on the empirical evidence and historical evolution of measurement, this paper goes on to discuss and illustrate how the non-financial performance of networks could be approached on the level of individual measures from the overall network management point of view. An illustrative conceptual example is built around delivery accuracy. This paper also discusses some new insights in applying holistic PM in networks.