Performance management and organizational strategy: How to design systems that meet the needs of confrontation strategy firms

Ralph W. Adler

The British Accounting Review, 2011, vol. 43, issue 4, 251-263

Abstract: The link between organizational strategy and performance management system design has been examined in numerous studies. Invariably, strategy is conceptualized using archetypes developed in the 1970s and 1980s. Scholars have increasingly questioned the wisdom of relying on strategic archetypes that are plainly dated and conspicuously disconnected from the possibility of firms competing head-to-head, not out of choice but out of necessity. Cooper (1995) calls such a situation the undertaking of a confrontation strategy. Using an exploratory research design, this paper draws on nine qualitative case studies to examine how performance management systems are designed to meet and support the implementation of a confrontation strategy. Initially six firms, spanning a variety of what were expected to be mature, highly competitive industries likely to feature confrontation strategies, were recruited for participation. This initial study was then followed by a more concentrated examination of one particular industry: the banking industry. Findings from the total case study sample of nine firms lead to the presentation of an original table contrasting the unique performance management system designs associated with the three distinct strategies of cost leadership, differentiation, and confrontation. In particular, and in contrast to firms pursuing cost leadership or differentiation strategies, firms with confrontation strategies are likely to feature collaborative organizational cultures, lean organizational structures, and training and development programs that focus on developing empowered, multi-skilled teams of self-governing and coordinating employees. The exploratory intent of the paper, and thus its reliance on a small sample size of nine organizations, may limit the generalizability of the paper’s findings. In spite of this limitation, the findings offer opportunities for researchers to move beyond the exploratory approach presently adopted and empirically test the confrontation strategy and performance management system linkages proposed. Additionally, practitioners are likely to benefit from a clearer understanding of the type of performance management system design needed to support confrontation strategies.

Keywords: Performance management; Management control; Strategy (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0890838911000692
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:43:y:2011:i:4:p:251-263

DOI: 10.1016/j.bar.2011.08.004

Access Statistics for this article

The British Accounting Review is currently edited by Nathan Lael Joseph and Alan Lowe

More articles in The British Accounting Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().