Explorative study on performance measurement systems’ usage practices and outcomes

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Journal Title
Journal ISSN
Volume Title
School of Business | Master's thesis
Date
2017
Major/Subject
Mcode
Degree programme
Accounting
Language
en
Pages
112
Series
Abstract
Objective of the study: This study explores how performance measurement systems are used in practice, and how satisfied users are with their systems. Further, the study focuses on assessing benefits and challenges that users of performance measurement systems are experiencing, as well as identifies specific usage practices that influence the experienced benefits and challenges. The context of the study is QPR Software’s customer base. Research method: The research project was conducted in two phases; first a survey was prepared and sent to contacts in QPR Software’s customer relationship management (CRM) database. The objective of the survey was to explore how sophisticated and strategic usage practices the users have, what are the systems mainly used for, and how satisfied they are with their systems. The survey also categorized the respondents’ according to their usage practices. In the second phase, a multiple case study was conducted with selected respondents from the most represented usage category found in the survey. In total, seven interviews were conducted with interviewees from five different organizations. The multiple case study’s objective was to further increase understanding on what the systems are used for, what sort of benefits and challenges the users are experiencing, as well as recognize usage practices affecting the benefits and challenges. Findings of the study: Majority of the respondents were found to belong to a category where the usage practices were seen as operational; they combined both financial and non-financial measurements, but hadn’t separated the measurements into a specific framework for strategic performance measurement. Among the cases, the systems were used for a variety of purposes when assessed in organizational context. However, although the usage practices among the category were not seen to reflect strategic usage, in most cases, the systems were also used for developing and implementing strategy. The main benefits of PM were found to be related to supporting in decision-making and control, enabling and increasing communication and transparency, and promoting learning. Particularly, appropriate balance between interactive and diagnostic use of controls, the use of cause-and-effect relationships, standardized measurements, standardized terminology, and benchmarking, were found to be usage practices contributing to the benefits. It was however found in the interviews, that the organizations’ context was seen to affect the way in which specific usage practices contributed to the benefits and challenges experienced among the case organizations. Common main challenges with performance measurement among the case organizations were for the most parts, related to ambiguity of performance measurement objectives, and data quality.
Description
Thesis advisor
Malmi, Teemu
Keywords
performance measurement, performance measurement systems, usage practices, measurement outcomes
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