The role of performance measurement models in multi level alignment

Abstract

Purpose – Market deregulation in the utilities sector has led to increased competition and rising customer expectations in both established and new markets. This, in turn, has forced organisations such as electricity and telecoms to make rapid, enterprise-wide changes on an increasingly frequent basis which in turn has led to problems with alignment. Misalignment can occur at many levels and can result in misused resources, loss of competitiveness, excessive cycle times, higher costs and loss of agility. The purpose of this paper is twofold. Given the lack of overarching theory, the paper begins by borrowing from contingency, dynamic capability and organisational learning constructs, to explore the role that performance measurement models can bring to improve the alignment between business strategy and functional strategy (level 1 alignment). Second, the paper analyses the role of performance measurement models in developing functional practices aligned with supply chain management (SCM) strategies (level 2 alignment). Design/methodology/approach – The study adopts an exploratory theory-building approach using four case studies. These are used as key supply chains in both established and new business areas within two longitudinal university-industry research partnerships (each of three years duration). Data from repeat interviews (n=42), focus groups (n=10), documentation and observations is analysed and forms the basis for the development of a conceptual framework and a set of related propositions. The data analysis followed Radnor and Boaden's (2004) method for analysing interpretive research. Findings – The findings show the role and impact of performance measurement models and methods on alignment at two levels, i.e. level 1 alignment – between business strategy and functional (SCM) strategy, and level 2 alignment – between the functional strategy (SCM) and SCM routines and practices. Originality/value – To date, there are few studies which explore the development of theory and practice in relation to the role and impact of performance measurement models and methods in improving organisational alignment. This exploratory theory building study makes a contribution to this gap through the development of the conceptual framework and propositions.

How performance measurement influences stakeholders in not-for-profit organizations

“…In other words, when stakeholders perceive alignment between 26 their understanding of performance goals and the demands imposed by performance measures, they are more capable of acting towards the achievement of such goals. If, however, PM practices do neither reinforce nor reconcile understandings of performance, it is doubtful that they will lead to achieving strategic outcomes (McAdam et al, 2014).…”

“…Reinforcement could explain how organizations might go about achieving the multilevel alignment necessary for successful PM (McAdam et al, 2014), by connecting stakeholders' day-to-day practices to the PM system, which, in turn, should be aligned with the organization's strategy. In other words, when stakeholders perceive alignment between 26 their understanding of performance goals and the demands imposed by performance measures, they are more capable of acting towards the achievement of such goals.…”

Exploring the Nexus Between Supply Chain Ambidexterity, Supply Chain Agility, Supply Chain Adaptability and the Marketing Sensing of Manufacturing Firms in Indonesia

“…Sensing market fluctuations is an essential aspect of supply chain agility which makes it necessary for the firms to quickly and adequately respond to uncertain market variations. (McAdam et al, 2014) stated that such quick response is not possible for the firms, unless they have a sound understanding regarding the future results of these opportunities. More accurate and faster responses against business opportunities which retain customers and prevent competition occur because of the ability to spread market information and better sensing these.…”

Key Factors for Information Integration in the Supply Chain – Measurement, Technology and Information Characteristics

“…Organisations must collaborate on defining performance metrics (Ramanathan, Gunasekaran, & Subramanian, 2011) and agree how to describe, calculate, share and use metrics at both strategic and operational levels. Moreover, there should be the alignment between the organisational strategy, the functional supplychain strategy and practices (McAdam, Hazlett, & Galbraith, 2014).…”