Performance measurement system in the situation of simultaneous vertical and horizontal integration

Abstract

Purpose The purpose of this paper is to extend the knowledge of the use of performance measurement systems (PMS) in situations where the benefits of both vertical and horizontal integration strategies are sought simultaneously. Design/methodology/approach This is a single case study, the purpose of which is to build a contextual theory. Findings The main results highlight three competing and partly contradictory tendencies in the development and use of PMS in organizational integration. In addition, the authors have identified features of PMS that may benefit or hinder integration. Grounded on empirical findings the paper presents a more complete theoretical framework of PMS for integration. Research limitations/implications The propositions of the framework need to be tested in different contexts with case and field studies or a large sample of data using statistical techniques to improve external validity. The causal relationships explored in this study may be further developed using longitudinal studies. Practical implications In acquisition situations there exists the need for vertical integration to control the growing complexity but at the same time for horizontal control to advance customer-centred production. Performance measurement is the key issue to examine the execution and results of such integrations. Originality/value Case study findings are used to develop a more comprehensive theory of PMS design and use in situations where both vertical and horizontal integration are sought. Contrary to current understandings, the central statement of this study is that horizontal organization is not an alternative to vertical organizational structure but they can be effectively coupled.

The use of management control and performance measurement systems in SMEs

“…The intensity of researcher involvement required by the action research approach and the focus on gaining an in-depth understanding of the tensions involved in managing performance in SMEs limited the sample to a single case. This is consistent with the literature, which has relied on single case studies for maximizing learning about similarly complex phenomena where prior knowledge was limited (e.g., Naor et al, 2015;Pellinen et al, 2016;Beer and Micheli, 2017).…”

“…This study has limitations, which provide potential avenues for future research. The findings are based on a single case study, and, despite this not being unusual in PM and MC research (see, e.g., Tuomela, 2005;Mundy, 2010;Naor et al, 2015;Pellinen et al, 2016;Beer and Micheli, 2017), larger qualitative as well as quantitative studies are needed to understand whether the interplay between the four levers of control is similar in other contexts. Such studies could also 36 compare various configurations of LOCs and evaluate their effects on performance.…”

Comprehensive performance measurement systems design and organizational effectiveness

“…Therefore, this research aims to extend previous literature in operations management, which explicitly calls for a better operational definition of PMS roles which should be explored further with emphasis on PMS design. The paper relies on two streams of literature: the literature (e.g., Pellinen et al, 2016) that examines the BSC as an exemplar of a comprehensive PMS linking together the corporate strategy with the key scorecard dimensions (i.e., learning and growth, internal business processes, customer, and financial), and the literature (e.g., de Leeuw and van den Berg, 2011;Pekkola and Ukko, 2016) that explores the relationships with organizational effectiveness. In this way, the paper aims to make a twofold contribution to the theory and the practice in the operations management field.…”

Conditions of success for earned value analysis in projects

“…Case based research is particularly appropriate in situations where there is little previous literature or prior empirical evidence about a phenomenon (Eisenhardt, 1989a) as with the topic of EVA implementation. It is also an approach that has been previously utilized in operations management research to gain better understanding of aspects of project management (see, for example, Mello, et al, 2015;Reddy et al, 2013;Verma and Sinha, 2002) and performance measurement (see, for example, Pellinen et al, 2016). Therefore, using multiple case studies offers the prospect of developing a good understanding of the impact of using EVA in a project environment.…”