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Executing strategy through comprehensive performance measurement systems

Pietro Micheli (Warwick Business School, University of Warwick, Coventry, UK)
Matteo Mura (Department of Management, University of Bologna, Bologna, Italy)

International Journal of Operations & Production Management

ISSN: 0144-3577

Article publication date: 3 April 2017

4098

Abstract

Purpose

The purpose of this paper is to investigate the mediating role of comprehensive performance measurement systems (PMS) – i.e. measurement systems that comprise financial and non-financial indicators, and which also consist of indicators related to different aspects of an organisation’s operations – in the relationship between strategy and company performance.

Design/methodology/approach

Survey data of top managers of large European companies were collected and analysed by means of exploratory factor analyses and hierarchical regressions in order to validate the proposed hypotheses.

Findings

This research shows that different strategies lead to the use of different types of performance indicators. Also, it finds that the utilisation of a comprehensive PMS enables the implementation of both differentiation and cost-leadership strategies. Specifically, a comprehensive PMS positively mediates the effect of differentiation strategy on organisational and innovative performance, and of cost-leadership strategy on organisational performance.

Research limitations/implications

Further research could be undertaken in other contexts and consider additional factors, such as the structure, maturity and different uses of PMS, and the cost of measuring performance. Qualitative studies could examine the role of PMS in dynamic environments, as well as the evolution of PMS during strategic transitions.

Practical implications

Greater consideration should be given to the utilisation of different types of performance indicators when implementing and re-formulating strategy.

Originality/value

This study clarifies the links between strategy and performance measurement, and it is the first to identify the mediating effect of comprehensive PMS between strategy and company performance.

Keywords

Citation

Micheli, P. and Mura, M. (2017), "Executing strategy through comprehensive performance measurement systems", International Journal of Operations & Production Management, Vol. 37 No. 4, pp. 423-443. https://doi.org/10.1108/IJOPM-08-2015-0472

Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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