 RESEARCH AT CRANFIELD SCHOOL OF MANAGEMENT
EXPLORING THE ROLES OF PERFORMANCE MEASUREMENT SYSTEMS IN STRATEGY
IMPLEMENTATION – THE CASE OF A HIGHLY DIVERSIFIED GROUP OF FIRMS
Pietro Micheli
Senior Lecturer in Organisational Performance
Unconditional use of a performance measurement system is not the way forward. It needs
to incorporate a good proportion of non-financial measures as well.
Many of the developments in organizational
performance management, such as the
Balanced Score Card enable alignment
between organizational performance and
strategy implementation. The question of what
should be measured is constantly debated
although the authors assert that what gets
measured should depend on organizational
strategy. Meanwhile some writers argue that
over engineered performance management
regimes can lead to inertia and inflexibility.
Finding balance in both measures and
approach is therefore the quest here.
This study looks at a complex cooperative
group of 70 companies seeking to implement
strategy and achieve alignment without
deploying a systematic integrated
performance measurement system (PMS).
The implementation and alignment issues that
arise in the absence of such a system are
investigated. What makes this study
particularly interesting is its focus on efforts to
address organizational performance
measurement across such a diverse group.
Data for the research was gathered in two
phases. Firstly, via semi structured interviews
and a survey, and secondly through follow up
interviews four years later. The findings
demonstrated considerable varieties of
practice and sophistication across the group
along with a tendency to use only financial
measures as a gauge of performance. Some
non-financial measures were likely to be used
however where the company had longer
membership of the group or was facing high
levels of competition and technological
change.
It was found that the introduction of an IT
based performance measurement system and
specific governance mechanisms for reviewing
performance lent only limited support to
strategy implementation. Meanwhile the
expansion of the group resulted in a change in
strategy and what was measured. This led to
the conclusion that the absence of a
RESEARCH AT CRANFIELD SCHOOL OF MANAGEMENT
comprehensive performance measurement
system seemed to inhibit strategy
implementation.
For practitioners unconditional use of a PMS is
not the answer. Instead the authors propose a
contingent approach to PMS development that
incorporates a good proportion of non-financial
measures. This is especially so in periods of
expansion or re-organization.
Micheli, P., Mura, M. & Agliati, M. (2011)
Exploring the roles of performance
measurement systems in strategy
implementation – the case of a highly
diversified group of firms, International
Journal of Operations and Production
Management, vol. 31, no. 10, pp. 1115-1139
For further details on this research paper
please contact: pietro.micheli@cranfield.ac.uk
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Management Theme: Business
Performance Management
MANAGEMENT THEMES AT CRANFIELD SCHOOL OF MANAGEMENT
 Business Economics and Finance
 Business Performance Management
 Corporate Responsibility and Sustainability
 Entrepreneurship and Business Growth
 General Management
 Information Systems
 Innovation and Operations Management
 Leadership
 Managing People and Global Careers
 Marketing, Sales and Client Relationships
 Programme and Project Management
 Strategy, Complexity and Change Management
 Supply Chain and Logistics Management