The roles of performance measurement and management in the development and implementation of business ecosystem strategies

Abstract

PurposePerformance measurement and management (PMM) systems have traditionally enabled strategy execution within and across firms. However, PMM have been criticized as overly static and deterministic and therefore inappropriate for emergent and dynamic contexts, such as those that characterize business ecosystems.The study aims to address the roles of organizational PMM practices in the development and implementation of business ecosystem strategies.Design/methodology/approachThe authors carried out a qualitative, longitudinal study during 2016–2020 at a Japanese multinational technology corporation attempting to create an ecosystem strategy to expand its market and diversify its offering. The authors collected interview, observation and archival data, spanning the period from framing the initial strategy to establishing the ecosystem.FindingsThe process of developing and implementing the ecosystem strategy was emergent and highly iterative, rather than planned and linear, eventually requiring key decision-makers in the company to challenge some of their deeply held assumptions. PMM practices first acted as barriers to ecosystem development by promoting an excessive focus on revenue generation. Once modified, PMM helped capture, convey and reassess the ecosystem strategy. Performance targets, indicators and strategy maps were not just data gathering and reporting mechanisms but key means to express competing perspectives.Practical implicationsWhen developing an ecosystem strategy, managers should adopt a participatory and iterative approach, reviewing the complementary effects of various PMM tools at different points in time.Originality/valueThe study is among the first to provide an in-depth account of ecosystem strategy creation and implementation and to identify the diverse roles and effects of PMM practices in dynamic and complex contexts.

Rethinking organizational performance management: a complexity theory perspective

“…Second, the VSM, although explicitly recognizing organizations as open systems, calls for a fairly strict delineation of an organizational context's boundaries, potentially leaving critical drivers of performance outside the system. This is especially important for managing performance in supply chains or ecosystems, where key determinants of organizational performance may be outside an organization's control or indeed be unknown (Micheli and Muctor, 2021). Finally, cybernetics-based approaches to managing complexity tend to focus on meso-and macrolevel phenomenai.e., groups and organizationsand downplay the agency, identity, and interpretive capacity of people in the organizations (Jackson, 2019).…”

“…The field would therefore benefit from developing the stakeholder-based perspective (e.g., Neely et al, 2002;Barney, 2020;Conaty and Robbins, 2021) and understanding its implications for the use of performance management tools and performance information. This will be even more relevant in the context of supply chains, networks, and business ecosystems, where tools such as performance targets, indicators, and strategy maps are important not only for individual organizations to understand and manage their performance, but also for various stakeholder to signal their priorities (Micheli and Muctor, 2021). Explicitly engaging with different perspectives, in a participatory and iterative way, may lead to better results at the interorganizational level.…”

Financial Performance – Determinants and Interdependencies Between Measurement Indicators

“…Specific to the economic environment: industry size, concentration, or industry affiliation (Izquierdo, 2015;Margaretha & Supartika, 2016;Golubeva, 2021); capital investment, advertising, business ecosystems (Micheli & Muctor, 2021); legal framework, market specificity, barriers to entry, consumer/user behaviour (Capon et al, 1990); competitiveness (Herciu & Ogrean, 2013). Specific to the economic context: economic growth (Dinu & Vintilă, 2017;Golubeva, 2021;Asimakopoulos et al, 2009); economic cycle (Vu et al, 2019), crisis (Batrancea, 2021); interest rate, inflation rate, exchange rate and the gross domestic product growth rate (Egbunike & Okerekeoti, 2018); stock market performance (Hamann & Schiemann, 2021); internationalisation (Zainudin et al, 2021), consumer price index, cost of financing (money and financial market); the degree of development of financial markets, the degree of openness of national economies, the balance of trade, exchange rate volatility.…”

Organizing for permanent beta: performance measurement before vs performance monitoring after release of digital services

“…Researchers have argued that most knowledge about performance measurement has been captured from organizations operating in stable environments, and that similar knowledge is required for dynamic and complex environments (Bititci et al, 2018;Micheli and Muctor, 2021). A performance measure is defined here as the qualitative or quantitative assessment of the efficiency and/or effectiveness of action (Bititci et al, 2018).…”