Is more really better? Performance measure variety and environmental uncertainty
Purpose This paper asks the question of whether more environmental uncertainty affects the design of performance measurement systems in terms of a greater variety of performance measures and whether this leads to more management satisfaction with the performance measurement system and improved firm...
Published in: | International Journal of Productivity and Performance Management |
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cremerald:10.1108/ijppm-11-2019-0539 2024-06-23T07:54:03+00:00 Is more really better? Performance measure variety and environmental uncertainty Rikhardsson, Pall Wendt, Stefan Arnardóttir, Auður Arna Sigurjónsson, Throstur Olaf 2020 http://dx.doi.org/10.1108/ijppm-11-2019-0539 https://www.emerald.com/insight/content/doi/10.1108/IJPPM-11-2019-0539/full/xml https://www.emerald.com/insight/content/doi/10.1108/IJPPM-11-2019-0539/full/html en eng Emerald https://www.emerald.com/insight/site-policies International Journal of Productivity and Performance Management volume 70, issue 6, page 1446-1469 ISSN 1741-0401 journal-article 2020 cremerald https://doi.org/10.1108/ijppm-11-2019-0539 2024-05-29T08:10:55Z Purpose This paper asks the question of whether more environmental uncertainty affects the design of performance measurement systems in terms of a greater variety of performance measures and whether this leads to more management satisfaction with the performance measurement system and improved firm performance. Design/methodology/approach Information processing theory is used to frame the hypotheses and findings. A questionnaire was sent to the 300 largest companies in Iceland, where environmental uncertainty has been prevalent. Findings The results indicate that increased uncertainty leads to a larger variety of non-financial performance measures, such as customer measures. A positive relationship is found between management satisfaction with the performance measurement system and firm performance. However, the variety of performance measures was not linked to management satisfaction or firm performance. Research limitations/implications The results suggest that managers increase the variety of performance measures when uncertainty increases. However, it is not the variety itself that increases management satisfaction or improves firm performance. Practical implications Performance measurement design is affected by environmental uncertainty. Managers focus on important stakeholder groups such as customers under such conditions and can consult research and practice for the purpose of customer relationship management and customer profitability measurement to improve measurement selection. Originality/value This work focusses on performance measurement system design, examining the use of more than 50 different performance measures, and differentiates between small and medium-sized firms and between service and non-service firms. Article in Journal/Newspaper Iceland Emerald International Journal of Productivity and Performance Management 70 6 1446 1469 |
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Emerald |
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cremerald |
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English |
description |
Purpose This paper asks the question of whether more environmental uncertainty affects the design of performance measurement systems in terms of a greater variety of performance measures and whether this leads to more management satisfaction with the performance measurement system and improved firm performance. Design/methodology/approach Information processing theory is used to frame the hypotheses and findings. A questionnaire was sent to the 300 largest companies in Iceland, where environmental uncertainty has been prevalent. Findings The results indicate that increased uncertainty leads to a larger variety of non-financial performance measures, such as customer measures. A positive relationship is found between management satisfaction with the performance measurement system and firm performance. However, the variety of performance measures was not linked to management satisfaction or firm performance. Research limitations/implications The results suggest that managers increase the variety of performance measures when uncertainty increases. However, it is not the variety itself that increases management satisfaction or improves firm performance. Practical implications Performance measurement design is affected by environmental uncertainty. Managers focus on important stakeholder groups such as customers under such conditions and can consult research and practice for the purpose of customer relationship management and customer profitability measurement to improve measurement selection. Originality/value This work focusses on performance measurement system design, examining the use of more than 50 different performance measures, and differentiates between small and medium-sized firms and between service and non-service firms. |
format |
Article in Journal/Newspaper |
author |
Rikhardsson, Pall Wendt, Stefan Arnardóttir, Auður Arna Sigurjónsson, Throstur Olaf |
spellingShingle |
Rikhardsson, Pall Wendt, Stefan Arnardóttir, Auður Arna Sigurjónsson, Throstur Olaf Is more really better? Performance measure variety and environmental uncertainty |
author_facet |
Rikhardsson, Pall Wendt, Stefan Arnardóttir, Auður Arna Sigurjónsson, Throstur Olaf |
author_sort |
Rikhardsson, Pall |
title |
Is more really better? Performance measure variety and environmental uncertainty |
title_short |
Is more really better? Performance measure variety and environmental uncertainty |
title_full |
Is more really better? Performance measure variety and environmental uncertainty |
title_fullStr |
Is more really better? Performance measure variety and environmental uncertainty |
title_full_unstemmed |
Is more really better? Performance measure variety and environmental uncertainty |
title_sort |
is more really better? performance measure variety and environmental uncertainty |
publisher |
Emerald |
publishDate |
2020 |
url |
http://dx.doi.org/10.1108/ijppm-11-2019-0539 https://www.emerald.com/insight/content/doi/10.1108/IJPPM-11-2019-0539/full/xml https://www.emerald.com/insight/content/doi/10.1108/IJPPM-11-2019-0539/full/html |
genre |
Iceland |
genre_facet |
Iceland |
op_source |
International Journal of Productivity and Performance Management volume 70, issue 6, page 1446-1469 ISSN 1741-0401 |
op_rights |
https://www.emerald.com/insight/site-policies |
op_doi |
https://doi.org/10.1108/ijppm-11-2019-0539 |
container_title |
International Journal of Productivity and Performance Management |
container_volume |
70 |
container_issue |
6 |
container_start_page |
1446 |
op_container_end_page |
1469 |
_version_ |
1802645997080281088 |