Strategic performance measurement systems in small and medium-sized enterprises
Examensarbete för masterexamen
Quality and operations management (MPQOM), MSc
Since the 1980s, financially focused performance measurement systems have been heavily criticised for leading to, among other things, short-termism and a lack of strategic focus. Companies are instead recommended to use a wider variety of performance measurements and to derive the measurements from strategy. This is mirrored in popular frameworks such as the balanced scorecard. This development has further spurred the concept of strategic performance measurement systems. Strategic performance measurement systems can be defined as a subset of performance measurement systems fulfilling the four following criteria: 1. Translation of long-term strategy into used performance measurements 2. Using performance measurements from multiple performance dimensions 3. For each dimension where measurements exist, having goals and plans for how the goals are to be reached 4. Having causal relationships between different performance measurements, for example the notion of how increased performance in one measurement drives increased performance in other measurements There is a lack of research on the topic of to which extent and how small and medium-sized enterprises utilise these kinds of systems. The aim of this thesis was to study these questions. The study was conducted via semi-structured interviews with top management representatives from seven small and medium-sized enterprises from the greater Gothenburg region. It was in the study found that none of the included companies fulfil all four of the above stated criteria. Criterion number one, possibly the most essential one, was found only to be fulfilled by one of the companies. Potential explanations as to why this was the case were found to be a lack of regard of the performance measurement system as a strategic tool and a lack of general knowledge on the topic. Furthermore, it was found that the majority of the included companies do not conduct formal reviews of the performance measurement system as a whole, indicating a lack of understanding on possible interrelationships between different measurements. Finally, it was found that most of the companies utilise reward systems based only on the performance of financial measurements. This may lead to a situation where the strong focus on financial performance measurements prevail even though other types of performance measurements are used as well. Overall this shows that there seems to be room for implementing more strategically focused performance measurement systems in small and medium-sized enterprises.
Övrig industriell teknik och ekonomi , Other industrial engineering and economics