Developing a performance management system using soft systems methodology: A Chinese case study

Abstract

The economic crisis created major problems for a successful, hi-tech Chinese company -Tonsan. They already had in place a performance management system based around the balanced scorecard which worked successfully in times of growth and high demand. However, with the world downturn they suddenly found that their current system was not able to cope with the demands placed on it. The authors were called in and decided to design a new, strategic performance management system to overhaul all the key business processes. The approach taken to develop the PM system was based around soft systems methodology (SSM), a well established systems-based approach to problem solving and organizational design. The methodology progressed from the development of key strategic objectives (using the BSC and strategy maps), through a structured decomposition of necessary organizational activities, the construction of key performance indicators, the specification of targets, to communication and future planning. It involved significant levels of participation and communication throughout the organization. The results were judged by senior management to have been very successful, and the company has grown significantly.2

A systemic method for organisational stakeholder identification and analysis using Soft Systems Methodology (SSM)

“…Instead of being carried out as a separate activity, in real-world applications stakeholder identification and analysis are often embedded into processes of strategic planning or deploying as described for example by Bryson (2004), or as a part of strategic performance management exercise (Liu et al, 2012). In this regard, our method differs from these well-known approaches in that our method utilizes a comprehensive system approach.…”

“…In our approach we have developed a method based on Soft Systems Methodology (SSM) which allows us to both identify the top level strategic direction of the organisation as well as decomposing that down into key activities at a more detailed level. The approach is derived from the 3E methodology (which is based on SSM) for defining key performance indicators (Liu, Meng, Mingers, Tang, & Wang, 2012;Mingers, Liu, & Meng, 2009). …”

“…A variety of particular constructs are used in the conceptual world and then compared with the complex and messy real-world in order to develop learning for change. The approach that we will take is developed from the 3E methodology for performance management, which is based on SSM and has been used in a variety of organisations (Liu et al, 2012).…”

Supply Chain Management as the Company Engine in Automotive Manufacturing

“…With respect to the literature reviewed, this paper can be positioned near to the works by Giannoccaro (2011), Agami et al (2012) and Liu et al (2012) but from an organizational point of view of the SCM department into the company rather than from a SCM performance measurement approach. Contrarily to the work by Giannoccaro (2011), this paper does not try to change the integration level of supply chain between different companies or belonging to the same business group.…”

“…This approach considers the SC as a whole rather than just considering individual entities. In this sense, in Liu et al (2012), where is developed a performance management system using a soft systems methodology for a hi-tec Chinese company, it is presented as a novelty as the initial performance plans are established for the staff from top to bottom and then bottom to top iteratively. Other systems thinking applications can be found in project management (Kapsali, 2011), service supply chains (Maull et al 2012), supply chain design (Bashiri et al 2010), conflict resolution (Li et al 2012) and logistics (Lindskog, 2012).…”