Executive Summary
Practitioners, consultants, and scholars have come up in the recent years with varied models in the sphere of performance measurement in a bid to come up with appropriate approaches for the improvement and sustaining of business.
Whereas there are suggestions that businesses that thrive are those guided by formalized, balanced performance measures, emerging scholars are of the view that indeed businesses that thrive are not necessarily those that have performance measurement systems.
Further, Holloway1 observes that in as much as many scholars have their focus on research that formulates models and frameworks that are bound to change the implementation of performance measurement, little or no attention is given to problems arising from the application of the same. Observably, very few of these scholars focus on keenly investigating the four stages of performance measurement systems.
Indeed, the interplay between performance measurement, organizational culture, and management styles has not been studied by many researchers. In fact, previous research has not been able to develop an effective model that has its focus on the relationship between performance measurement and organizational culture.
On the same note, the role of management styles with regard to the definition of organizational culture has not been as profound as it should be.
A unique approach to this research as noted by Claver2 is the need to understand Management control systems as noted by Chenhall3 cannot be compared to organizational culture. Rather, many businesses formulate a relationship between management control systems and national culture.
Many researchers have therefore formulated models in order to fully understand the relationship between organizational culture, management styles, and performance measurement.
Harrison4, bases his suggestions on Hofstede’s work and outlines four types of organizational culture namely, role culture, power culture, achievement culture and support culture.
The research has five case studies, A, B, C, D and E. Case A is a company with about 420 employees and with an autocratic (command and control) management style that creates a power culture with the impact being resentment by employees.
Case B is a company with about 1200 employees practicing an authoritative management style that results in the success of the company. Case C involves introduction of the PMS project whereby varied management styles are at work. The result is failure with regard to business productivity.
Case D involves laissez-faire and participative management styles and the initiation of the PMS project. It is a failure. Case E involves laissez-faire management style in a company with a support culture.
It is from the above that the impact of PMS is evaluated with regard to organizational culture, management culture, management style and their dyadic relationships evaluated.
Therefore, effective implementation of performance measurement systems results in participative and consultative management style that can only be achieved through cultural change.
It is therefore the role of the management to adapt an organization’s culture its management style and the model in place with regard to performance measurement system to be able to come up with a structure geared towards success through the targeting of a company’s specific needs.
Bibliography
Chenhall, RH, “Management Control systems design within its organizational context: findings from contingency-based research and directions for the future,” Accounting, Organizations and Society, Vol. 28, 2003, p 131.
Claver, E, “The performance of information system through organization culture,” Information Technology & People, Vol. 14 No. 3, 2001.
Harrison, R, Organization, Culture, and Quality of Service: A strategy for Releasing Love in the Workplace, Association for Management Education and Development, London, 1987.
Hollaway, J, “Investigating the impact of performance measurement,” International Journal of Business performance Management, Vol. 3 No. 2/3/4, 2001, p.167-80
Footnotes
1 J Hollaway, Investigating the impact of performance measurement, International Journal of Business performance Management, Vol. 3 No. 2/3/4, 2001, p.167-80
2 R H Chenhall, “Management Control systems design within its organizational context: findings from contingency-based research and directions for the future,” Accounting, Organizations and Society, Vol. 28, 2003, p 131.
3 E Claver, “The performance of information system through organization culture,” Information Technology & People, Vol. 14 No. 3, 2001, p. 248
4 R Harrison, Organization, Culture, and Quality of Service: A strategy for Releasing Love in the Workplace, Association for Management Education and Development, London, 1987, p. 230.