Performance measurement and control systems for implementing strategy : text and cases

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Performance measurement and control systems for implementing strategy : text and cases

Robert Simons, Antonio Dévila, Robert S. Kaplan

01 Jan 2000-

About: The article was published on 2000-01-01 and is currently open access. It has received 263 citations till now. The article focuses on the topics: Strategic planning & Management accounting.

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Journal Article•DOI•

Linking Balanced Scorecard Measures to Size and Market Factors: Impact on Organizational Performance

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Zahirul Hoque, Wendy James¹•Institutions (1)

Griffith University¹

01 Jan 2000-Journal of Management Accounting Research

TL;DR: In this paper, the authors examined the relationship between organization size, product life cycle stage, market position, and balanced scorecard (BSC) usage and organizational performance and found that larger firms make more use of a BSC.

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Abstract: This paper examines the relationship between organization size, product life‐cycle stage, market position, balanced scorecard (BSC) usage and organizational performance. Using financial and nonfinancial measures, the BSC appraises four dimensions of performance: customers, financial (or shareholders), learning and growth, and internal aspects. Based on a survey of 66 Australian manufacturing companies, the paper suggests that larger firms make more use of a BSC. In addition, firms that have a higher proportion of new products have a greater tendency to make use of measures related to new products. A firm's market position has not been found to be associated significantly with greater BSC usage. The paper also suggests that greater BSC usage is associated with improved performance, but this relationship does not depend significantly on organization size, product life cycle, or market position.

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1,052 citations

Cites methods from "Performance measurement and control..."

...The balanced scorecard (BSC) approach to management (Kaplan and Norton 1992, 1993, 1996) has gained prominence in management accounting research as a way of integrating financial and nonfinancial performance measures (for reviews, see Atkinson et al. 1997; Ruhl 1997; Shields 1997; Simons 2000)....
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Journal Article•DOI•

An Empirical Analysis of the Levers of Control Framework

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Sally K. Widener¹•Institutions (1)

Clemson University¹

01 Nov 2005-Social Science Research Network

TL;DR: The study finds that strategic risk and uncertainty are associated with both the role of the performance measurement system regarding whether it functions as a diagnostic or interactive control, and the importance of the belief and boundary systems.

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Abstract: The purpose of this paper is to use the levers of control framework to explore the antecedents of control systems - various facets of strategy that drive the use of controls, and to explore the costs and benefits of the control system - costs in terms of consumption of a constrained resource (i.e., management attention) and benefits (i.e., learning). Using data from a survey of 122 Chief Financial Officers, this study tests a structural equation model that relates strategic risk and uncertainty to control systems, which in turn are hypothesized to affect learning and attention, and ultimately firm performance. The study finds that strategic risk and uncertainty are associated with both the role of the performance measurement system regarding whether it functions as a diagnostic or interactive control, and the importance of the belief and boundary systems. Managerial attention is facilitated by diagnostic controls and belief systems, while the interactive use of the performance measurement system consumes management attention. The efficient use of management attention and organizational learning is associated with higher levels of firm performance. Implications along with ideas for future research are discussed.

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639 citations

Cites background or methods from "Performance measurement and control..."

...3 Simons (2000) asserts that the control components in the LOC framework are integrated to form an eVective control system....
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...However, Simons (1990, 1991, 2000) speciWcally singles out the interactive system as a facilitator of organizational learning....
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...Since this study is cross-sectional in nature, I capture a variety of types of strategic risk using Simons (2000) identiWcation of three types of strategic risk Wrms’ face....
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...4 Note that Porter’s (1980) “Wve forces” are encompassed in Simons’ (2000) treatment of competitive market dynamics....
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...…competitive uncertainty (e.g., new industry entrants), and technological uncertainty (e.g., new technology); and three types of strategic risks that Simons’ (2000) identiWes: operating risk (e.g., safety of operations), asset impairment risk (e.g., accounts receivable turnover), and competitive…...
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Journal Article•DOI•

The effect of comprehensive performance measurement systems on role clarity, psychological empowerment and managerial performance

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Matthew Hall¹•Institutions (1)

London School of Economics and Political Science¹

01 Feb 2008-Accounting Organizations and Society

TL;DR: In this paper, the effect of comprehensive performance measurement systems (PMS) on managerial performance is indirect through mediating variables of role clarity and psychological empowerment, and the results indicate that comprehensive PMS influences managers' cognition and motivation, which, in turn, influence managerial performance.

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Abstract: This study examines how comprehensive performance measurement systems (PMS) affect managerial performance. It is proposed that the effect of comprehensive PMS on managerial performance is indirect through the mediating variables of role clarity and psychological empowerment. Data collected from a survey of 83 strategic business unit managers are used to test the model. Results from a structural model tested using Partial Least Squares regression indicate that comprehensive PMS is indirectly related to managerial performance through the intervening variables of role clarity and psychological empowerment. This result highlights the role of cognitive and motivational mechanisms in explaining the effect of management accounting systems on managerial performance. In particular, the results indicate that comprehensive PMS influences managers’ cognition and motivation, which, in turn, influence managerial performance.

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577 citations

Journal Article•DOI•

Configuring management control systems: Theorizing the integration of strategy and sustainability

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Jean-Pascal Gond¹, Suzana Grubnic², Christian Herzig³, Jeremy Moon³•Institutions (3)

University of London¹, Loughborough University², University of Nottingham³

01 Sep 2012-Management Accounting Research

TL;DR: In this article, the role and uses of management control systems and sustainability control systems (SCSs) in the integration of sustainability within organizational strategy are discussed. But little is known about the processes whereby SCSs contribute to a deeper integration of sustainable within organizational strategies.

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404 citations

Cites background or methods from "Performance measurement and control..."

...Following the lead of Simons [68,69], firstly, the MCSs are confined to accounting controls....
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...In recent works, Simons (2006) applies strategic renewal at different stages in a firm’s business life-cycle and by newly appointed managers seeking to promote agendas....
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Journal Article•DOI•

An exploratory study on the emergence of management control systems: formalizing human resources in small growing firms

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Tony Davila¹•Institutions (1)

Stanford University¹

01 Apr 2005-Accounting Organizations and Society

TL;DR: In this paper, the authors build upon existing management control theory, mostly focused on established organizations, and existing predictions based on extended field observations to explore how these systems are adopted within growing firms.

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Abstract: The adoption of management control systems (MCS) is a key element in managing the tension that growth imposes on young growing firms. Despite its importance to a large number of organizations, only recently has the empirical literature devoted attention to the evolution of these systems over the lifecycle of firms [Moores and Yuen, Account. Organizat. Soc. 26 (2001) 351]. This paper builds upon existing management control theory, mostly focused on established organizations, and existing predictions based on extended field observations to explore how these systems are adopted within growing firms. To advance theory, the paper also draws from the entrepreneurship and life cycle literatures. It identifies several variables as drivers of the emergence of management control systems including the size of the organization, its age, the replacement of the founder as CEO, and the existence of outside investors. The empirical evidence, from a database on the adoption of human resource management systems, is consistent with these variables being associated with the adoption of MCS. The paper also provides initial results on how the emergence of various types of management control systems depends on which systems the organization has already adopted.

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362 citations

Cites background from "Performance measurement and control..."

...Various lines of research provide guidance to inform explanations of the emergence of management control systems including: experience-based models (Flamholtz & Randle, 2000; Greiner, 1972, 1998; Simons, 2000), the entrepreneurship literature (Bhide, 1999; Covin & Slevin, 1997), and contingency research in MCS (Bruns & Waterhouse, 1975; Chenhall, 2003; Govindarajan, 1988; Otley, 1980)....
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...So far, our understanding of how these systems emerge in growing firms is captured through experiencebased models (Flamholtz & Randle, 2000; Greiner, 1972, 1998; Simons, 2000)....
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...…explanations of the emergence of management control systems including: experience-based models (Flamholtz & Randle, 2000; Greiner, 1972, 1998; Simons, 2000), the entrepreneurship literature (Bhide, 1999; Covin & Slevin, 1997), and contingency research in MCS (Bruns & Waterhouse, 1975;…...
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...To make this distinction, ‘‘mechanism’’ includes both formal and informal procedures, while ‘‘systems’’ refer to formal mechanisms only. of MCS, size is proposed as a driver in all cases 8 (Flamholtz & Randle, 2000; Greiner, 1972, 1998; Simons, 2000, p. 310)....
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...Predictions are grounded on existing knowledge in the management control systems and entrepreneurship literatures and variables that existing models of the emergence of MCS have identified (Flamholtz & Randle, 2000; Greiner, 1972, 1998; Simons, 2000)....
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Performance measurement and control systems for implementing strategy : text and cases

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Cites methods from "Performance measurement and control..."

Cites background or methods from "Performance measurement and control..."

Cites background or methods from "Performance measurement and control..."

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