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Purpose -This paper aims to identify the specific problems faced by the Finnish public sector organizations in designing and implementing performance measurement systems (PMS). Design/methodology/approach -An understanding of the problems is obtained by examining three case organizations in practice. In order to support the analysis of the empirical findings, a review of prior literature on the private and public sector PMSs is carried out. Findings -The design and implementation processes in the Finnish public sector organizations differ significantly from the way they are realized in industrial private sector companies. The four underlying reasons for problems in public sector organizations are the following: there are many stakeholders with conflicting needs; the end products and goals are undefined; there is a lack of property ownership and lacking management skills. Practical implications -By utilizing the results of the study, PMS design and implementation in the public sector can be carried out by taking into account and avoiding the evident pitfalls introduced in the study. Originality/value -A large portion of the prior research on public sector PMSs consists of surveys and conceptual studies. This paper describes three case studies and reveals new insights into the specific challenges faced by public sector organizations, especially in designing and implementing PMSs.

The aim of this research is to investigate the mediating effect of performance measurement systems (PMS) in the connection between digital-related capabilities and financial performance. Moreover, this research examines how different types of digital-related capabilities can fuel PMS, leading to improved financial performance. The findings show that PMS significantly mediate the relationship between digital-related human and collaboration capabilities and financial performance. However, a significant mediating effect of PMS was not found between digital-related technical and innovation capabilities and financial performance. Using a structured survey questionnaire, the data was collected from Finnish SMEs, which operate in both the service and manufacturing industries.

The study examines the relationship between innovation capability and firm profitability. The study has been executed by conducting a web‐based survey in Finnish small‐sized and medium‐sized enterprises (SMEs). Previous research has studied the effect of innovativeness on performance. This study went thus a one step further by providing a comprehensive description of the effects of the determinants of innovation capability on profitability of SMEs. According to the results, there is only a minor effect of the determinants of innovation capability on firm profitability. Copyright © 2014 John Wiley & Sons, Ltd.

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