Performance measurement: The next station

Abstract

Purpose of this study is to explore how changes in business environment are affecting organizational performance measurement (PM) and furthermore what direction is the PM expected to take in the future. A single instrumental case study was conducted to explore the issue of PM and the changing environment from the perspective of the practitioners. Research was carried out in a large manufacturing organization in Karachi, Pakistan. The key findings from the study include: 1) The concept of a tightly bounded organization as a single, self-contained unit is being replaced by a complex, social structure comprising of multiple interdependent units. 2) Contemporary PM systems use historical data to address the accountability and progress monitoring needs of organizations. 3) The organizations are now realising a need for a PM system capable of predicting the future performance rather than analysing the past achievements, hence it is expected that the future PM system may shape up into a dynamic and flexible planning tool rather than a rigid assessment tool. The study contributes to the extant literature by pointing out the deficiencies in the contemporary PM systems and suggests critical characteristics of the future PM systems which might help organizations in aligning its strategies enabling it to successfully compete in the changed environment.