Chiara Demartini. Performance Management. Systems. Design, Diagnosis and Use. Physica -Verlag. A Springer Company

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1 Chiara Demartini Performance Management Systems Design, Diagnosis and Use Physica -Verlag A Springer Company

2 Contents 1 Introduction The Performance Management Revolution The Performance Management Shortcomings Contributions of the Present Work Structure of the Book 6 References 7 2 The Evolution of the Concept of 'Management Control': Towards a Definition of 'Performance Management System' Towards a Definition of Performance Management System Different Theoretical Approaches to Organizational Control Economic Theories of Organizational Control Sociological Theories of Organizational Control Psychological Theories of Organizational Control Behavioural Theories of Organizational Control From Organizational Control Theories to Management Control Approaches From Management Control Systems to Performance Management System The Italian Literature on Management Control The Forerunners of Management Control in the Italian Literature: Besta and His Disciples Gino Zappa and the Recent Literature on Management Accounting Conclusions on Management Control Revolution 46 References 46 3 Performance Management System. A Literature Review Introduction Systematic Literature Review of PMS Design 56 vii

3 vüi Contents 3.3 PMS Design and the Influential Theoretical Approaches Contingency Theory Other Theoretical Approaches Non-financial PMS. Critical Review of the Main PMS Frameworks The Strategy-driven PMS. The Levers of Control (LOC) Management Control Framework PMS as a Package. Critical Review of the Main Frameworks PMS Coupling and Innovation The Italian Literature on PMSs and Their Coupling Concluding Remarks on the PMS Design Review 83 References 83 4 Innovation and the Performance Management System. Literature Review Introduction Methodology Evolution of Organizational Control: from Management Control to Performance Management Taxonomies of Innovation PMS Studies According to the Type and Nature of Innovation Impact of Innovation Discussion. The Evolution of the Relationship Between MCS/PMS and Innovation MCSs/PMSs as Innovation Inhibitors Coexistence of MCSs/PMSs and Innovation MCSs/PMSs as Innovation Enablers Concluding Remarks and Future Research Directions 109 References The Loose Coupling Performance Management System The Diamond Structure Value Sharing Strategy Formulation Strategy Implementation Performance Measurement Incentive and Reward Strategy Execution The Concept of Loose Coupling in Managerial Studies and Other Related Disciplines The Couplings Within the Diamond Structure Values Sharing: Strategy Formulation and Implementation Relationship Values Sharing: Performance Measurement Relationship 127

4 Contents ix Values Sharing: Incentive and Rewarding System Relationship Strategie Formulation: Strategie Implementation Relationship Strategie Formulation and Implementation: Performance Measurement Relationship Strategie Formulation and Implementation: Incentive and Rewarding System Relationship Performance Measurement: Incentive and Rewarding System Relationship Strategy Formulation and Implementation: Strategy Execution Relationship Performance Measurement: Strategy Execution Relationship Incentive and Rewarding System: Strategy Execution Relationship 130 References The Values Sharing Mechanism Definition of Values Sharing and Organizational Values Impact of the Organizational Values and the Value Sharing Mechanism The Design of the Value Sharing Mechanism 136 References The Strategy Formulation Mechanism Strategy Formulation: Definition Strategy Formulation Process and Typologies Corporate Strategie Change Recent Trends in Strategy Formulation: Internationalisation and Innovation Recent Trends in Strategy Formulation: CSR 144 References The Strategy Implementation Mechanism Introduction: Definition and Strategy Implementation Tools Budgetary Control Non-financial Performance Indicators Target Setting 156 References The Performance Measurement Mechanism Introduction to Performance Measurement Features Strategie Performance Measurement/Balanced Performance Measures Integrated Performance Measurement System Reference Model

5 X Contents 9.4 Performance Prism SMART Pyramid Results and Determinants Matrix The Taxonomy of Performance Measurement Frameworks The Cost of Performance Measurement 173 References The Incentive and Rewarding Mechanism Incentive and Rewarding: Definition and Purposes Psychological and Economic Theories of Incentive and Rewarding Mechanism Design of an Effective Incentive and Rewarding Mechanism Selection of the Performance Measures Assessment Frequency Rewarding Model Selection The Link with Strategie Objectives The Assessment of the Incentive and Rewarding Mechanism Dysfunctional Effects of the Use of Biased Incentive and Rewarding Mechanisms 186 References The Strategy Execution Mechanism Definition and Recent Themes in Strategy Execution Conceptual Approaches to Strategy Execution Failures Frameworks and Tools for Effective Strategy Execution 192 References Implementation, Use and Diagnosis of the Performance Management System Performance Management System and Contextual Variables Fit External Environmental Variables Internal Contextual Variables Performance Management System Use Diagnosis and Review of the PMS Events Associated with Hypotheses of PMS Review Conclusions and Research Implications 210 References 212

Performance Management. Ch. 2 The Evolution of the Concept of Management Control

Performance Management. Ch. 2 The Evolution of the Concept of Management Control UNIVERSITY OF PAVIA Performance Management Ch. 2 The Evolution of the Concept of Management Control Chiara Demartini [email protected] Master in International Business and Economics Structure