The challenges of integrated performance measurement systems

Elena Giovannoni and Maria Pia Maraghini

Accounting, Auditing & Accountability Journal, 2013, vol. 26, issue 6, 978-1008

Abstract: Purpose - – The purpose of this paper is to explore some of the challenges involved in the development of integrated performance measurement systems (PMS). In particular, given the difficulties involved in the development process, and the “inherent incompleteness” of PMS, the authors seek to investigate whether and how these difficulties may challenge the integrating role of PMS and the eventual influence of alternative integrating mechanisms on this role. Design/methodology/approach - – The paper combines studies on PMS with empirical findings related to Monnalisa, a medium-sized Italian family firm, which designs and sells children ' s wear and accessories. Over the last ten years Monnalisa has adopted various design frameworks (such as the balanced scorecard and the integrated report) for integrated PMS. Through an analysis of the PMS development process within the company, the authors explore the challenges involved in this process. Findings - – In the case of Monnalisa, despite the adoption of a design framework for integrated PMS, various critical issues emerged during the implementation phase, mainly as a consequence of tensions between different performance dimensions and the need for creativity. While these critical issues compromised the integrating role of PMS, alternative integrating mechanisms (such as the direct intervention of the founder and social interaction) were stimulated and worked alongside PMS in achieving organizational integration. In so doing, these mechanisms operated in different ways, by complementing incomplete PMS when they were failing to achieve organizational integration, or improving their integrated nature. Originality/value - – Although the literature acknowledges some of the challenges involved in PMS development, understanding how to manage these challenges and how they actually affect PMS require further investigation. This paper provides new insights on the challenges involved in the development process (particularly in relation to the tensions caused by creativity, unpredictability, time gaps between operations and targets, as well as the distinct priorities of different levels of customers), and on the role played by alternative integrating mechanisms in the management of these challenges. While the founder ' s direct intervention may be peculiar to the context of medium-sized enterprises, the role played by social integrating mechanisms suggests potential ways to overcome the challenges of integrated PMS also within larger firms.

Keywords: Performance measurement; Garment industry; Small to medium-sized enterprises; Italy; Performance measurement systems; Development process; Integrating mechanisms; Integrated measures; Italian company; Creativity (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:aaajpp:v:26:y:2013:i:6:p:978-1008

DOI: 10.1108/AAAJ-04-2013-1312

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