Proposal for a Method of Deriving Performance Indicators Towards Alignment with External Factors to Organization
DOI:
https://doi.org/10.52731/lbds.003.099Keywords:
performance measurement, performance indicator, strategy, external environmentAbstract
Organizations formulate and implement strategies and evaluate their performance based on an analysis of their internal and external environment in order to solve problems and achieve their objectives. The promotion of globalisation and the development of information technology have made the external environment more influential on organizational performance. Organizations are therefore engaged in dynamic management of their strategies to respond to the impact of the external environment. However, performance indicators cannot be aligned with changes in the external environment and strategy, making timely assessment difficult. This study aims to support the design of performance indicators for the timely assessment of organizational performance. A methodology was designed to derive performance indicators that consider the impact of interventions from the external environment in addition to internal strategic interventions. The designed performance indicator derivation method was applied to a medium-sized organization to evaluate the effect of the added external factors perspective. As a result, performance indicators were derived to assess the impact of external factors on the organization, in addition to performance indicators to assess the effectiveness of strategic initiatives.It was also suggested that the process of deriving performance indicators facilitates direct reflection on risks related to the achievement of the organization's objectives, which were traditionally reflected via strategies.
References
J.R. Dixon, A.J. Nanni, and T.E. Vollmann, New performance challenge: Measuring operations for world-class competition, McGraw-Hill Professional Publishing, Homewood 1990.
U. S. Bititci, P. Garengo, A. Ates, and S. S. Nudurupati, “Value of Maturity Models in Performance Measurement,” International Journal of Production Research vol. 53, no. 10, 2015, pp.3062.
L.G. Berrah, Mauris, and F. Vernadat, “Information Aggregation in Industrial Performance Measurement: Rationales, Issues and Definitions.” International Journal of Production Research vol. 42, no. 20, 2004, pp. 4271.
A. Neely, “The Evolution of Performance Measurement Research: Developments in the Last Decade and Research Agenda for the Next,” International Journal of Op-erations & Production Management vol. 25, no. 12, 2005, pp. 1264.
M, Franco-Santos, L. Lucianetti, and M. Bourne, “Contemporary Performance Measurement Systems: a Review of Their Consequences. and a Framework for Research,” Management Accounting Research vol. 23, no. 2, 2012, pp. 79.
M. Bourne, S. Melnyk, and U. S. Bititci, “Performance measurement and man-agement: theory and practice,” International Journal of Operations & Production Management, vol. 38, no. 11, 2018, pp. 2010.
U. S. Bititci, P. Garengo, V. Dörfler, and S. Nudurupati, "Performance measurement: challenges for tomorrow,” International journal of management reviews, vol. 14, no. 3, 2012, pp. 305.
P. Taticchi, K. Balachandran, and F. Tonelli, “Performance measurement and management systems: state of the art, guidelines for design and challenges,” Measuring Business Excellence, vol. 16, no. 2, 2012, pp. 41.
N. Yadav, and M. Sagar, “Performance measurement and management frameworks: research trends of the last two decades,” Business Process Management Journal, vol. 19, no. 6, 2013, pp. 947.
S. A. Melnyk, U. Bititci, K. Platts, J. Tobias and B. Andersen, “Is performance measurement and management fit for the future ?” Management Accounting Re-search, vol. 25, no. 2, 2014, pp. 173.
G. Huber, “Performance measurement effects on organizational responses to threats,” Measuring Business Excellence, vol.19, 2015, pp. 24.
V. Martinez, A. Pavlov, and M. Bourne, “Reviewing performance: an analysis of the structure and functions of performance management reviews,” Production Planning & Control vol. 21, 2010, pp. 70.
K. Miura, N. Kobayashi, and S. Shirasaka, “A Strategic Performance Indicator Deriving Framework for Evaluating Organizational Change,” Review of Integrative Business and Economics Research, vol. 9, no. 4, 2019, pp. 36.
R. S. Kaplan, and D. P. Norton “Linking the balanced scorecard to strategy,” Cal-ifornia management review, vol. 39, no. 1, 1996, pp. 53.
N. Yadav, and M. Sagar, “Performance measurement and management frameworks,” Bus. Process Management J., vol. 19, 2013, pp. 947.
A. Neely, C. Adams, and P. Crowe, “The performance prism in practice,” Meas. Bus. Excell., vol. 5, 2001, pp. 6.
A. D. Neely, C. Adams, and M. Kennerley, “The performance prism: The scorecard for measuring and managing business success,” London: Prentice Hall. Financial Times 2002.
M. Kazemi, D. Riley, S. Asadi, and P. Delgoshaei, “Improving the performance profile of energy conservation measures at the Penn State University Park Campus,” Engineering, Construction and Architectural Management, vol. 24, no. 4, 2017, pp. 610.
P.H. Rossi, M.W. Lipsey, and G.T. Henry, Evaluation: a systematic approach, sage publications, 2018.
S. Shirasaka, “A standard approach to find out multiple viewpoints to describe an architecture of social systems: designing better payment architecture to solve claim-payment failures of Japan's insurance companies,” Singapore, INCOSE 2009.
J. Long, “Relationships between common graphical representations in Systems Engineering,” Vitech white paper, Vitech Corporation, Vienna, VA, 70 2002.
R. C. Tausworthe, “The work breakdown structure in software project management,” Journal of Systems and Software, vol. 1, 1979, pp.181.
K. M. Donaldson, K. Ishii, and S. D. Sheppard, “Customer value chain analysis,” International Design Engineering Technical Conferences and Computers and In-formation in Engineering Conference. vol. 46962. 2004.
L. Bernard. “Examining the organizational culture and organizational performance link,” Leadership & Organization Development Journal 1995.
International Organization for standardization, ISO 9001:2008 Quality management systems – requirements, 2008
ICH, ICH Harmonised Tripartite Guideline: Pharmaceutical Quality System Q10; June 2008.
X.Y. Lawrence, and M. Kopcha, “The future of pharmaceutical quality and the path to get there,” International Journal of Pharmaceutics, vol. 528, no. 1-2, 2017, pp. 354.
E.R. Arling, M.E. Dowling, and P.A. Frankel, “Creating and managing a quality management system,” Pharmaceutical Sciences Encyclopedia: Drug Discovery, Development, and Manufacturing, pp. 1.
