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How Strategic Priorities Are Reflected in Features of Strategic Performance Measurement System?

Název česky Jak se strategické priority odrážejí do charakteristik systémů pro měření výkonnosti?
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ŠIŠKA Ladislav

Rok publikování 2018
Druh Článek v odborném periodiku
Časopis / Zdroj Engineering Economics
Fakulta / Pracoviště MU

Ekonomicko-správní fakulta

Citace
www http://inzeko.ktu.lt/index.php/EE/article/view/17463
Doi http://dx.doi.org/10.5755/j01.ee.29.5.17463
Klíčová slova Contingency Theory; Differentiation Strategy; Cost-leadership Strategy; Performance Measurement; Performance Measurement Systems; Management Control; Levers of Control
Přiložené soubory
Popis Strategic Performance Measurement Systems (SPMSs) are designed to present integrated information, which together with other controls in Management Control Systems (MCSs) helps managers to implement strategy properly and thus outperform the company’s competitors. A wide range of potential factors impacting the design and use of SPMS and MCS has been studied by proponents of the contingency theory since the 1980s who soon found strategy to be one of the most dominant contingencies. But recent reviews of contingency theory provide mixed, sometimes even conflicting evidence, partly because of inconsistent definitions of MCS and SPMS, partly because of exploring contingencies in isolation from other context factors and components. This article addresses both of these challenges. Firstly, it introduces four distinctive features of SPMS and complements them with often neglected “Beliefs” and “Boundaries” controls from the influential MCS framework “Levers of Control” devised by Simons (1995). Secondly, the resulting MCS concept is tested by PLS-SEM whether or not it is influenced by contingency factors of size, industry and especially by two opposing Porter’s generic strategic priorities – differentiation and/or cost-leadership (low prices). Surprisingly, only the former is found to be positively connected to the features of SPMS, however, the link is not direct but mediated by improvements in Boundaries and Beliefs. So the study broadens current knowledge on antecedents of SPMSs, that are applied in the medium-sized and large companies. At the same time, the study urges managers trying to implement differentiation strategy not only to establish the SPMS with all analyzed features, but concurrently to promote values and other belief controls as well as to set organizational rules and boundaries. In other words, the implementation of differentiation strategy has to be accompanied by establishment of the MCS incl. Beliefs and Boundaries, not just SPMS. Contrary to this implication, in case of low-price strategy, the detailed analysis proves that Belief and Boundary components of MCS are not very important tools for achieving cost-leadership.
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