An examination of the literature relating to issues affecting how companies manage through measures

Abstract

In the last decade, organizations have devoted enormous time and effort to the development of business performance measurement (BPM) systems. Many articles have been written on how to design and implement these types of systems. However, few studies have addressed the issue of why some organizations are better able to ‘manage through measures’ than others. In other words, why do some organizations struggle to ensure that action follows measurement, whilst others systematically use their metrics to inform their decision-making processes, and their subsequent actions? This paper aims to contribute to a more complete understanding of the use of BPM systems by reviewing the performance measurement literature developed in the management arena. It differs from previous examinations of performance measurement and management control systems in that it uses a broader scope and follows a new method of literature review applied to management research, namely, systematic review. The paper focuses on the thematic analysis of the review only. The insights extracted from the literature are articulated and presented in a management framework. In addition, the paper identifies different gaps in the literature that require further research.

Keywords:

• Performance measurement systems
• Performance measurement
• Performance measures

Acknowledgements

We thank the EPSRC for support of this project through the research grant, Managing through Measures (grant number GR/R56136/01).

Mike Bourne is Director of the Centre for Business Performance, Cranfield School of Management. He has spent the last 10 years researching the implementation of performance measurement systems focusing on identifying the main factors that drive and hinder the implementation and uptake of new performance measures. Before his academic career, Mike spent 15 years in business spanning the valve, paper and board, building materials and machine-tool industries. He held a number of positions, from production management to strategy and acquisition, including directorship positions in subsidiary companies. Mike has authored over 100 books, papers and articles. He is the editor of the journal Measuring Business Excellence and The Handbook of Performance Measurement, and co-author of The Balanced Scorecard in a Week. Since leaving industry, Mike has worked with and consulted to a number of organizations, including Accenture, BAE Systems, Lloyds TSB, McCormick Europe, Thomas Group Inc., Scheering, Shell, Unilever and Wolseley.

Monica Franco-Santos is a researcher in the Centre for Business Performance where she investigates issues related to performance measurement systems in general. She is also working on her PhD research, which specifically looks at the relationship among strategic performance measurement systems, executive compensation and firm performance. Prior to joining Cranfield School of Management, Monica worked in Spain as a human capital consultant for Watson Wyatt and as an internal consultant for Endesa. During her postgraduate studies, she also worked as a human resources officer for Iberia Air Lines.