The purpose of this research paper is to understand how an NGO in Pakistan perceives the utility of its performance measurement system and thus what drives design of its PMS. The study explores the phenomenon from the perspective of NGO managers by applying qualitative approach and using critical realism to explore the issue. The paper presents the findings on the basis of an instrumental case study conducted in Pakistan. The research identifies the main objective of PMS in this NGO is to help the organization remain sustainable and its managers’ desire for legitimacy has deeply influenced the design of the PMS of the NGO. Results suggest managers perceive organizational credibility and not the accountability as the most important factor in determining its sustainability. The evidence is based on findings of a single NGO case study from Pakistan. Furthermore, the findings are based only on the perceptions of the managers of the selected organisation. Future research including perception of other stakeholders in other NGOs may help in deepening the understanding of the issue and validating the presented results. However, given that little research has been conducted within the NGO sector on drivers of performance measurement this research provides useful evidence that can be further developed. The paper specifically contributes by extending prior PM literature in an NGO environment. It has implications for the further development of legitimacy theories in the NGO sector. It raises issues about how primary focus of reporting in NGOs is shifting from accountability to show-casing.

Purpose of this study is to explore how changes in business environment are affecting organizational performance measurement (PM) and furthermore what direction is the PM expected to take in the future. A single instrumental case study was conducted to explore the issue of PM and the changing environment from the perspective of the practitioners. Research was carried out in a large manufacturing organization in Karachi, Pakistan. The key findings from the study include: 1) The concept of a tightly bounded organization as a single, self-contained unit is being replaced by a complex, social structure comprising of multiple interdependent units. 2) Contemporary PM systems use historical data to address the accountability and progress monitoring needs of organizations. 3) The organizations are now realising a need for a PM system capable of predicting the future performance rather than analysing the past achievements, hence it is expected that the future PM system may shape up into a dynamic and flexible planning tool rather than a rigid assessment tool. The study contributes to the extant literature by pointing out the deficiencies in the contemporary PM systems and suggests critical characteristics of the future PM systems which might help organizations in aligning its strategies enabling it to successfully compete in the changed environment.