Short answer
Integrate fairness, transparency, and responsibility into the design of performance measurement systems to maximize their effectiveness and stakeholder buy-in.
- Field
- Commercial Production
- Source
- Journals & Books Hosting (International Knowledge Sharing Platform) (2016)
- Method
- Mixed-methods research, combining quantitative survey analysis with qualitative case study.
- Sample
- 128 participants (survey), 1 company (case study)
- Evidence
- Strong effect
Implementing corporate governance principles significantly improves the effectiveness and perceived importance of performance measurement systems in manufacturing organizations. This commercial production research insight is drawn from a 2016 study published in Journals & Books Hosting (International Knowledge Sharing Platform). Using Mixed-methods research, combining quantitative survey analysis with qualitative case study. with 128 participants (survey), 1 company (case study), researchers explored how this design variable affects real-world outcomes. The key design takeaway: Integrate fairness, transparency, and responsibility into the design of performance measurement systems to maximize their effectiveness and stakeholder buy-in.
Corporate Governance Enhances Performance Measurement Systems in Manufacturing
Implementing corporate governance principles significantly improves the effectiveness and perceived importance of performance measurement systems in manufacturing organizations.
Journals & Books Hosting (International Knowledge Sharing Platform) · 2016
Key Findings
- 01There is a strong positive relationship between performance measurement systems and corporate governance factors.
- 02Most individual measures within the proposed PMS are highly important.
- 03The perceived importance of input and output measures differs significantly based on the application of corporate governance.
Application
Design takeaway
Integrate fairness, transparency, and responsibility into the design of performance measurement systems to maximize their effectiveness and stakeholder buy-in.
How to apply
When designing or refining performance measurement systems, explicitly consider how principles of fairness, transparency, and accountability can be embedded within the metrics and reporting structures.
Project actions
- 01When designing a system to measure performance, think about how to make it fair and clear to everyone involved.
- 02Consider how different parts of the system (inputs, processes, outputs) might be viewed differently by stakeholders depending on the company's ethical standards.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Combines quantitative survey data with qualitative case study insights for a more comprehensive understanding.
- +Applies established theoretical frameworks (Institutional Theory) to explain observed relationships.
Limitations
The findings are specific to manufacturing and may not apply directly to service industries. The study relies on self-reported importance of measures, which can be subjective.
Reliability & validity
The use of statistical analysis on survey data and a case study provides a degree of reliability and validity, though generalizability may be limited by the sample and context.
Think critically
How might the 'fairness' aspect of corporate governance specifically influence the selection and weighting of performance metrics in a competitive market?
Design Principles
"Performance measurement systems are most effective when aligned with ethical governance frameworks."
Understanding how governance structures influence performance metrics is crucial for optimizing operational efficiency and strategic decision-making. This insight helps design systems that are not only comprehensive but also aligned with ethical and accountability standards.
What This Means for Your Design
Good company rules (like being fair and open) make the ways companies measure their success work much better.
How to use in your project
- 1.Reference this study when discussing the importance of integrating ethical considerations into the design of performance tracking or management systems.
Add to My Project
Quick Cite
Paragraph starter
This research highlights a significant link between corporate governance and the efficacy of performance measurement systems (PMS) in manufacturing. The study found that principles of fairness, transparency, and responsibility inherent in good governance positively correlate with the perceived value and importance of PMS metrics. This suggests that for a PMS to be truly effective, its design must be underpinned by robust governance structures, influencing how input, process, and output measures are prioritized and utilized.
Source
Journals & Books Hosting (International Knowledge Sharing Platform)
Performance Measurement and CG: New Perspective in Management Accounting
journal · 2016
View sourceQuestions About This Research
- What does the research say about corporate governance enhances performance measurement systems in manufacturing?
- Integrate fairness, transparency, and responsibility into the design of performance measurement systems to maximize their effectiveness and stakeholder buy-in. Evidence: Journals & Books Hosting (International Knowledge Sharing Platform) (2016).
- Why does "Corporate Governance Enhances Performance Measurement Systems in Manufacturing" matter for design?
- Understanding how governance structures influence performance metrics is crucial for optimizing operational efficiency and strategic decision-making. This insight helps design systems that are not only comprehensive but also aligned with ethical and accountability standards.
- How can designers apply this research?
- Integrate fairness, transparency, and responsibility into the design of performance measurement systems to maximize their effectiveness and stakeholder buy-in.
- What were the main findings?
- There is a strong positive relationship between performance measurement systems and corporate governance factors.. Most individual measures within the proposed PMS are highly important.. The perceived importance of input and output measures differs significantly based on the application of corporate governance.
- What research method was used?
- Mixed-methods research, combining quantitative survey analysis with qualitative case study. with 128 participants (survey), 1 company (case study).
- How strong is the evidence?
- Evidence strength is rated Strong effect, based on a 2016 journal from Journals & Books Hosting (International Knowledge Sharing Platform).
- What should I do differently in my next project?
- When designing or refining performance measurement systems, explicitly consider how principles of fairness, transparency, and accountability can be embedded within the metrics and reporting structures.
- What are the limitations?
- The study focused on manufacturing companies and a specific geographical context (Egypt), which may limit generalizability. The proposed PMS model includes 37 measures, which might be complex for some organizations to implement fully.