Keywords: Trade credit, financial performance, SMEs, capital structure, pecking order, alternative 4, pp. Schneiderman, A.M. (2001), “The first balanced scorecard: analog devices, 1986-1988”, Journal of Cost Management, September/October, pp. If we reflect on the current theories used to inform PMMS research, it can be argued that they ignore the mechanisms by which the PMMS operates. These theories are the information theory, the decision making theory and the measurement theory. One such approach is the adoption of routines (Pavlov and Bourne, 2011). 21 No. What is the relationship between innovation and performance of women owned small and medium enterprises in Uasin Gishu County? In reality, they may be “systems of systems” (Bourne et al., 2018) but this framework does align with a recent call to take a more systemic approach to developing theory in performance measurement and management (Bittitci et al., 2018). 5 No. Bititci, U., Garengo, P., Dörfler, V. and Nudurupati, S. (2012), “Performance measurement: challenges for tomorrow”, International Journal of Management Reviews, Vol. 14 No. The development was based on the literature and empirical research, whilst the testing was undertaken through workshops and feedback obtained from semi-structured interviews. Barney, J.B. (1991), “Firm resources and sustained competitive advantage”, Journal of Management, Vol. 181-192. 846-873. Describes research undertaken to evaluate the appropriateness of strategic performance measurement (PM) system development processes for small‐ and medium‐sized enterprises (SMEs). 2.1 Theoretical Literature The Production Theory as in Laidler (1972) Faisal Shahzad, An Analysis of Internationalization Theories and Behavior of Finnish Retail SMEs in Russia, Handbook of Research on Entrepreneurship, Innovation, and Internationalization, 10.4018/978-1-5225-8479-7.ch019, (490-520), (2019). How it Works, and Why it’s Everyone’s Business, Reviewing performance: an analysis of the structure and functions of performance management reviews, Metrics and performance measurement in operations management: dealing with the metrics maze. What mechanisms, processes and networks are used to convey the organisation’s overarching purposes and objectives to its members? The work builds on ten longitudinal case studies selected from the UK’s high value manufacturing sector highlighting the links between policy deployment, operational control and improvement to open collaborative partnerships. Dixon, J.R., Nanni, A.J. Ferriera, D. and Otley, O. 17 No. So, for this special issue, we were particularly interested in papers that explore the interface between theory and practice and that add richness, as described in the preceding discussion, to the resulting theoretical developments. 1095-1117. (Centre for Business Performance, Cranfield School of Management, Advances in Experimental Social Psychology, Firm resources and sustained competitive advantage, Journal of Manufacturing Technology Management, Integrated performance measurement systems: a development guide, Dynamics of performance measurement and organizational culture, Towards a theoretical foundation for performance measurement and management, International Journal of Management Reviews, Performance measurement and management: a system of systems perspective, International Journal of Production Research, Why some performance measurement initiatives fail: lessons from the change management literature, International Journal of Business Performance Management, Researching performance measurement system implementation: the dynamics of success and failure, International Journal of Performance Management, Handbook of Managing Organisational Performance, The success and failure of performance measurement systems implementation: perceptions of participating managers, International Journal of Production and Operations Management, Designing, implementing and updating performance measurement systems, The capabilities of market-driven organizations, The New Performance Challenge: Measuring Operations for World-Class Competition, Building theories from case study research, Performance-measure congruity and diversity in multitask principal–agent relations, The design and use of performance management systems: an extended framework for analysis, An examination of the literature relating to issues affecting how companies manage through measures, Contemporary performance measurement systems: a review of their consequences and a research agenda, Towards a definition of business performance measurement systems, The impact of balanced scorecards in a public sector environment: empirical evidence from Duneden County Council, New Zealand, Organizational justice: yesterday, today, and tomorrow, The contingency theory of managerial accounting, Strategic entrepreneurship: creating value for individuals, organizations, and society, Theory of the firm: managerial behaviour, agency cost and ownership structure, Performance pay and top-management incentives, Early cost Accounting for internal management control: Lyman Mills in the 1850s, Management accounting in an early integrated industrial: E.I. It is argued that the methods of boosting the motivation of the personnel can be produced from the key theories of human motivation and the concept of leadership. Confounding this confusion is the tight interrelationship that exists between theory and practice. Bittitci, U.S., Bourne, M., Cross, J., Nudurupati, S. and Sang, K. (2018), “Towards a theoretical foundation for performance measurement and management”, International Journal of Management Reviews, Vol. The paper demonstrates how external context creates local conditions that may be detrimental to lean in manufacturing. The fundamental function of accounting and book keeping is Whether they deal in services or manufacturing, exporting SMEs show higher total revenues, faster total revenue growth, and higher labor productivity than their nonexporting SME counterparts. and Meckling, W.H. 1288-1310. mining SMEs’ performance in Nigeria (Bowale and Ilesanmi 2014). 1, pp. Bourne, M., Kennerley, M. and Franco-Santos, M. (2005), “Managing through measures: a study of impact on performance”, Journal of Manufacturing Technology Management, Vol. What processes, if any, does the organisation follow for evaluating individual, group and organisational performance? 7 SMEs Performance and operating profit growth rate 50 . LII No. 16 No. 6 No. The situation is more disturbing and Because these mechanisms are routines, they develop over time as the mental models of what is happening influences the pattern of behaviours and the pattern of behaviours influence the mental models. 101-113. The other two focus on the impact of the wider environment, be this the external (contingency theory) or internal (resource-based view) context. 429-453. Testing the hypothesis statistically, it was concluded that, there is a positive relationship between internal factors and organizational performance. Previous research has identified two forms of “abnormal” growth – styled as business dwarfism and gigantism - which can both lead to missed opportunities for owners/entrepreneurs and local economies, and even to business crisis and collapse. 466-474. and Bourne, M.C.S. Kennerley, M. and Neely, A. The paper uses survey research to investigate the impact of social control mechanisms, behavioural control mechanisms and their complementarity on firm performance using data collected from over 4,000 subjects in nearly 700 facilities. Hayes, D.C. (1977), “The contingency theory of managerial accounting”, The Accounting Review, Vol. 8, pp. Vol. equity, distributive and procedural justice theories (Adams, 1965; Greenberg, 1990). (2007), “Towards a definition of business performance measurement systems”, International Journal of Production and Operations Management, Vol. and Norton, D.P. LVI No. (1994), “Performance-measure congruity and diversity in multitask principal–agent relations”, The Accounting Review, Vol. Olve, N., Roy, J. and Wetter, M. (1999), Performance Drivers: A Practical Guide to Using the Balanced Scorecard, John Wiley & Sons, Chichester. (1998), “On theory in operations management”, Journal of Operations Management, Vol. Individual managers involved in running one routine (performance review meeting) will usually be participants in a higher level performance review meeting, whilst the people attending this manager’s meeting may well be running their own routine (performance review meeting) at a lower level in the organisation. 22 No. What specific information flows – feedback and feedforward – systems and networks has the organisation in place to support the operation of its PMSs? & Devi, S. (2011). 31 No. This study is to investigate the relationship between the products, process, marketing and organizational innovations of SMEs with its innovative performance, Use of profesional accountantsâ€™ advisory services and its impact on SME performance in an emerging economy : a resource-based view. 413-428. (1965), “Inequity in social exchange”, in Berkowitz, L. 1131-1152. 3 No. 1, pp. Feltham, G.A. How have the PMSs altered in the light of the change dynamics of the organisation and its environment? We have five papers looking at the complexities and interactions between different elements of the performance measurement system inside organisations with two of these focusing on lean. They found ROT to be a suitable theoretical framework to explain the role of a mature supplier performance measurement system in orchestrating the suppliers. 57-75. This section presents three theories advanced by scholars that were considered relevant to understanding the effects of bookkeeping on the growth of SMEs. To develop such a theory, we need to understand the mechanisms at play in the organisation when performance measures are being used to manage activities, changes of activity and future direction of the organisation. One of the overarching pieces here was the Bititci et al. However, the interest in this paper is the use of resource orchestration theory (ROT) as the theoretical framework for their analysis. du Pont de Nemours Powder Company, 1903-1912, Management Accounting in an early multidivisional organization: general motors in the 1920s, Towards an understanding of nineteenth century cost accounting, The balanced scorecard – measures that drive performance, The Strategy Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, Measuring performance in a changing business environment, A Theory of Goal Setting and Task Performance, What Management is? (2010), “The balanced scorecard as a strategy-evaluation tool: the effects of implementation involvement and a causal-chain focus”, The Accounting Review, Vol. The Commission found that U.S. exporting SMEs outperform their nonexporting SME counterparts by several measures. Neely, A. How does it influence and how is it influenced by the strategic management process? (2006) paper which identified the need for different cultures and management styles when moving from the design and implementation phases to measurement in use phases. (2005), “Researching performance measurement system implementation: the dynamics of success and failure”, International Journal of Performance Management, Vol. 37-52. 510-518. In their paper, Franco-Santos et al. Snowden, D. (2002), “Complex acts of knowing: paradox and descriptive self-awareness”, Journal of Knowledge Management, Vol. 4, pp. Of importance to this study is the poor the relationship between entrepreneurial orientation and performance of SMEs in Uasin Gishu County Research Questions This study was guided by the following research questions: 1. 114-124. 267-297. and Norton, D.P. The board and managers also needed to be enlightened on the importance of corporate governance. (1995), “Performance measurement system design – a literature review and research agenda”, International Journal of Operations & Production Management, Vol. From Franco-Santos et al.’s (2012) six theories, four of them (agency, cognitive, goal setting and equity theories) focus on the influence of system parameters on what is usually considered to be the individual decision maker. 26 No. 2, pp. are an essential source of jobs, create entrepreneurial spirit and innovation in the EU and are thus crucial for fostering competitiveness and employment. (2011), “Strategic entrepreneurship: creating value for individuals, organizations, and society”, Academy of Management Perspectives, Vol. The first part, SMEs characteristics, was adapted from Cordeiro; 29 this part used ordinal scales to assess the number of employees, the years of existence, the business field and the industry sectors. However, we still believe that future research in this field would benefit from adopting a more systems-based approach to understanding the mechanisms at play in PMMS. In this special issue, we have seen the development of interesting new frameworks and understanding based on using theory to reflect on practice and practice to inform our development of theory. (1997), “Designing performance measures: a structured approach”, International Journal of Operations & Production Management, Vol. Furthermore, SMEs have the potential of increasing a country’s exports of manufactured goods and reduce over dependency on the export of primary commodities. Papers published here are using resource-based view (2), cognitive theories and decision making (2) and contingency theory. Sutton, R.I. and Staw, B.M. (1981), “Towards an understanding of nineteenth century cost accounting”, The Accounting Review, Vol. In this paper, they present a tool they have called the “Relationship Regulator” which they develop, test and refine. Theories of Growth of Small Enterprises Various theoretical models have been developed which describe the growth of small businesses. Early literature on PMMS focused on the four phases of PMMS, design, implementation, use and refresh (Neely et al., 2000; Bourne et al., 2000). Ultimately, it suffers from being a theoretical, using Sutton and Staw (1995) categorisation scheme. 17 No. 2788-2799. An evaluation is undertaken of ten PM approaches found in the literature. This paper highlights the need for organisations to adjust their performance measurement and management system over time to adapt to the external environment as a way of reformulating strategy, promoting intended behaviour and organisational learning. Locke, E. and Latham, G. (1990), A Theory of Goal Setting and Task Performance, Prentice Hall, Englewood Cliffs, NJ. 56-72. (2011), Handbook of Managing Organisational Performance, John Wiley & Sons, London. 1, pp. 20 No. Let us begin with an overview of the early literature and the development of the four phases of PMMS before turning our attention to the need for theory to focus on the use of PMMS in directing and managing organisations. 7, pp. As this happens in performance review meetings (regular events where groups of managers meet to review, evaluate and act on performance information (Martinez et al., 2010); Pavlov and Bourne, 2011) when routines are developed which evolve into mechanisms used in the management of the organisation. Greatbanks, R. and Tapp, D. (2007), “The impact of balanced scorecards in a public sector environment: empirical evidence from Duneden County Council, New Zealand”, International Journal of Operations & Production Management, Vol. Have the changes in PMSs design or use been made in a proactive or reactive manner? Further, question 11 alludes to the dynamic nature of PMMSs and recognises that they evolve over time; so their development is not solely determined through interventions such as redesign initiatives. Martinez, V., Pavlov, A. and Bourne, M. (2010), “Reviewing performance: an analysis of the structure and functions of performance management reviews”, Production Planning and Control, Vol. Then we will move on to the range of theory used in empirical research and in the papers presented here before going on to describe the contributions made in this special issue. 20 No. (1994), “The capabilities of market-driven organizations”, Journal of Marketing, Vol. The study thus investigated the performance of the Small and Medium Enterprises sub-sector of the Nigerian economy, its problems and prospects ... of SMEs, it has also been a great cause of concern to all, the fact that the vital sub-sector has fallen short of expectation. Kaplan, R.S. The approach is designed to deal with complexity and emergence enabling managers in the positions of authority to take decisions. 11, pp. 23 No. This suggests (in all but the smallest organisations) a series of links between individuals at different levels of the organisation. Snowden, D. (2000), “The social ecology of knowledge management”, in Despres, C. and Chauvel, D. (Eds), Knowledge Horizons: The Present and The Promise of Knowledge Management, Butterworth-Heinemann, Woburn, MA. Are there significant omissions? 4, pp. Birch, 1981; OECD, 2002; Hijzen et al, 2010; Criscuolo et al, 2014). 100-111. 2, pp. 1264-1277. (1996), Getting the Measure of Your Business, Findlay, London. International Journal of Operations & Production Management, Bourne, M., Melnyk, S. and Bititci, U.S. (2018), "Performance measurement and management: theory and practice", International Journal of Operations & Production Management, Vol. What is the organisation structure and what impact does it have on the design and use of PMSs? 4, pp. In Ghana, very few studies have been conducted to decipher the specific effects that unreliable electricity supply on SMEs’ operations and activities. Bourne, M.C.S. Performance measurement and management is not only the preserve of the private sector. What the level of performance does the organisation need to achieve for each of its key performance measures (identified in the above question), how does it go about setting appropriate performance targets for them and how challenging are those performance targets? Franco-Santos, M. and Bourne, M. (2005), “An examination of the literature relating to issues affecting how companies manage through measures”, Production Planning and Control, Vol. Bhasin, S. and Burcher, P. (2006), “Lean viewed as a philosophy”, Journal of Manufacturing Technology Management, Vol. Magretta, J. and Stone, N. (2002), What Management is? (1988), “Triumph of the lean production system”, Sloan Management Review, Vol. 784-801. Kaplan, R.S. The entrepreneur becomes a role performer in conformity with the role expectations of the society, and such role expectations base on religious beliefs, taboos, and customs. If we review the theoretical approach taken both the papers in this special issue and by those empirical pieces identified in the Franco-Santos et al. The third paper by Andreas Glas, Florian Henne and Michael Essig is a literature review on the intersection of PBC and performance measurement and management. Kamyabi, Y. The process and Trahms, C.A. 22-38. Using case studies in three subsidiary companies, they suggest that lean can be severely constrained by the parent organisations accounting based control systems. Johnson, H.T. What strategies and plans has the organisation adopted and what are the processes and activities that it has decided will be required for it to ensure its success? What we are currently lacking is an underpinning theory to help us advance the field. & Devi, S. (2011). Neely, A.D., Mills, J.F., Gregory, M.J., Richards, A.H., Platts, K.W. These systems operate through practices and routines in organisations and it is to this subject we turn next. 4, pp. Kaplan and Norton, 1993; Neely et al., 1996; Bititci et al., 1997; Neely et al., 2000) and to the bottom up use of performance measurement in lean (Bhasin and Burcher, 2006; Krafcik, 1988). 11, pp. (2002), “The success and failure of performance measurement systems implementation: perceptions of participating managers”, International Journal of Production and Operations Management, Vol. The first paper by Vieri Maestrini, Veronica Martinez, Andy Neely, Davide Luzzini, Federico Caniato and Paolo Maccarrone looks at how buyers and suppliers can collaborate in their use of their performance measurement system. Furthermore, we need to build theory that operates at the various levels of the organisation – inter-organisational (relevant for a world where supply chain management is becoming so important); organisational at macro or top management levels (the focus of much of the current body of research in this area) and the lower levels of the organisation (i.e. Neely, A., Mills, J., Platts, K., Richards, H., Gregory, M., Bourne, M. and Kennerley, M. (2000), “Performance measurement system design: developing and testing a process-based approach”, International Journal of Operations and Production Management, Vol. 71-79. (2001), The Strategy Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, Harvard Business School Press, Boston, MA. No.4. We would argue that it is possible to theorise about the design and implementation phases but in reality, these are as much about the implementation of change (Bourne et al., 2004) as anything else. 213-229. XLIV No. 3, pp. 653-660. 97-113. (1993), “A process approach to researching manufacturing strategy”, International Journal of Operations and Production Management, Vol. But, if and when we develop this better understanding, we suspect that we will still be using other more encompassing management theories, such as those used and identified here, to understand the pressures and influences on the mechanism. So, from a theory and practice perspective, we must conclude that the special issue has attracted a wide variety of papers, research methods and applications from different contexts. 3, pp. SMEs, Institutions, and Performance: 10.4018/978-1-4666-3886-0.ch003: This chapter addresses at the outset the topic of SMEs and economic development from an institutions perspective. 16-26. SMEs learn from exporting, which increases their competitiveness, productivity and overall performance (Love and Ganotakis 2013). What type of use is made of information and of the various control mechanisms in place? The action theory approach (Frese & Zapf, 1994) describes the performance process — as any other action — from both a process and a structural point of view . 2, pp. Simon, H.A. 754-771. and Vollmann, T.E. 16 No. 3, pp. 245-269. 225-264. There is a strong argument that the debate has now moved on from the design and implementation of PMMS to its use, Franco-Santos and Bourne, 2005), impact (Franco-Santos et al., 2012) and emergence (Pavlov and Bourne, 2011). Pavlov, A. and Bourne, M. (2011), “Explaining the effects of performance measurement on performance: an organizational routines perspective”, International Journal of Operations and Production Management, Vol. The seventh paper by Bijana Pesalji, Andrey Pavlov and Pietro Micheli uses the levers of control framework from Simons (1991) to investigate practices in a Dutch-based SME. Kamyabi, Y. In their paper, the authors argue that performance measurement triggers, guides and intensifies the search for solutions to improve the performance of the organisation (see Figure 1). An emerging economy requires a sound industrial base which would stimulate growth (Bari, Cheema, & Haque, 2005). 263-282. It adds to our understanding on the three generalized factors by offering a situational model based on the Tangier entrepreneurs’ perceptions. Moxham, C. and Boaden, R. (2007), “The impact of performance measurement in the voluntary sector: identification of contextual and processual factors”, International Journal of Operations & Production Management, Vol. Articles in this journal have reported on the impact of PMMS in both public and third sector organisations (Greatbanks and Tapp, 2007; Moxham and Boaden, 2007). 98 No. 1, pp. The papers in this special issue are summarised in Table I. 1, pp. Visit emeraldpublishing.com/platformupdate to discover the latest news and updates, Answers to the most commonly asked questions here. 3, pp. Greenberg, J. and Bourne, M.C.S. 20 No. These may be formal board meetings, operational planning meetings, sales management meetings, project management meetings, etc. 80-116. (1975), “Management accounting in an early integrated industrial: E.I. medium-sized enterprises (SMEs). 16 No. 8, pp. 522-534. (2012) literature review, it must be noted that they are not theories of performance measurement and management, but more general management theories applied to this subject area. Melnyk, S.A., Stewart, D.M. du Pont de Nemours Powder Company, 1903-1912”, Business History Review, Vol. Understanding the mechanisms at play here would give us different insights. It also makes a contribution to the understanding of these factors that (Ed. Are performance evaluations primarily objective, subjective or mixed and how important are formal and informal information and controls in these processes?
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