Balancing perspectives on performance: “Measurement from the inside” and “measurement from the outside”

Abstract

This article investigates the nature of tensions “on the ground” between the internal and external stakeholders of arts organizations in terms of performance measurement. Based on the qualitative analysis of 19 interviews, the performance measurement practices of two different‐sized arts organizations highlight internal and external stakeholders' contrasting perspectives on a number of measurement dimensions. In endeavoring to understand tensions between internal and external stakeholders, the article highlights the main differences which result from seemingly opposed ways of knowing. Internal stakeholders tend more to reflect “phronesis,” based on value‐rationality, while external stakeholders are more inclined to technical (“techne”), or analytical (“episteme”) knowledge based on instrumental rationality. Nevertheless, there is some evidence of positive engagement between internal and external stakeholders. The article argues that in order to mitigate tensions, internal and external stakeholders should aim for culturally embedded understanding through evaluation‐focused dialogue. In providing both theoretical contributions to nonprofit literature and managerial implications, the article offers an original perspective that challenges existing practice and calls for greater understanding of conflicting interests when different stakeholders are involved in performance measurement.

The role of board skepticism in strengthening nonprofit performance measurement and accountability

“…Our findings suggest that internal and external stakeholders may prioritize different types of data when assessing performance, which is supported by Lee et al (2023). Specifically, government funders favor tracking quantified outcomes, believing they are easier to track, measure, and justify, whereas employees typically favor process accountability because it tracks what they actually do (Carman, 2010; Dormer, 2011; Hatry, 2001; Lee et al, 2023; Lynch‐Cerullo & Cooney, 2011).…”

How Managerial Practices Impact Perceived Organizational Effectiveness: A Study of Corporate Foundations

“…Furthermore, Liket and Maas (2015) consider transparency a core element of particularly effective organizations. Previous research notes that transparency and disclosure enable stakeholders of NPOs, such as beneficiaries or donors, to hold the organization accountable and verify that it is complying with its legal obligations and financial responsibilities (Lee et al 2023). To signal transparency and accountability, NGOs consider reporting and financial accounting to be the most important instruments (Goncharenko 2021).…”

“…Stakeholders' perceptions of organizational effectiveness are usually assessed by surveying external stakeholders, such as funders or beneficiaries, or leaders from within the organization, such as nonprofit leaders or staff (Balser and McClusky 2005;Mitchell 2013;Tran 2020;Willems et al 2016). Lee et al (2023) found that internal and external stakeholders have conflicting perspectives on how to measure performance, which creates tensions that organizations need to pay particular attention to resolve. This study seeks to contribute to the understanding of leader-perceived organizational effectiveness.…”