Making up performance: the construction of “performance” in venture capital firms’ portfolios
Qualitative Research in Accounting & Management
ISSN: 1176-6093
Article publication date: 10 October 2016
Abstract
Purpose
The purpose of this paper is to investigate performance measurement practices in venture capital firms. Specifically, the author examines how two organizations make complexity and uncertainty manageable by mobilizing performance measurement. This study draws on the framework of pragmatic constructivism (PC) (Nørreklit et al., 2016; Nørreklit et al., 2006, 2010), focusing on the integration between the four dimensions of PC, namely, facts, values, possibilities and communication.
Design/methodology/approach
The paper adopts a comparative case study methodology.
Findings
The findings show that performance measurement practices are strongly influenced by values playing out via integration in actor-world relations, whereas Venture A mobilizes an actor-centric approach, leading to an open, holistic performance measurement system (PMS) which is based on non-financials, a close involvement in operational matters and actors’ judgement using accounting as “learning machines” (Burchell et al., 1980); and Venture B draws on an analytical approach emphasizing on the role of financial indicators and control enacting accounting as “answer machines” and as “tool for computation” (Burchell et al., 1980). These different approaches to PMS, actor-centric vs analytical, are guided by different values about actor-world relation(s).
Originality/value
The paper provides a context-sensitive account on the relationship between uncertainty and performance measurement practices. First, this paper contributes by providing evidence on how actors use accounting to manage uncertainty and complexity by differently integrating actor-world relation(s) (Nørreklit, et al., 2016; Nørreklit et al., 2006). Second, this study resonates with recent calls for more industry-specific and context-sensitive investigations (Messner, 2016). Finally, the author contributes to the literature asking for more research on the role accounting plays in managing uncertain conditions (Chenhall and Moers, 2015).
Keywords
Acknowledgements
First of all, the author would like to thank the editor Deryl Northcott and the two anonymous reviewers for their valuable comments as well as Erik Nordbø for his valuable assistance. Secondly, the author would like to thank the interviewees. Thirdly, the author would like to thank the participants of the Fifth Conference on Actor-Reality Construction 2015, ESCP, Paris, and the Manufacturing Accounting Research Conference 2016, Nova School of Business and Economics, Lisbon. Finally, special thanks go to Hanne Nørreklit who provided very helpful and constructive feedback on earlier drafts of the paper. The author also acknowledges funding from NHH Norwegian School of Economics (SNF-Project No. 4346).
Citation
Heinzelmann, R. (2016), "Making up performance: the construction of “performance” in venture capital firms’ portfolios", Qualitative Research in Accounting & Management, Vol. 13 No. 4, pp. 445-471. https://doi.org/10.1108/QRAM-09-2015-0078
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited