1. Strategic performance measurement systems
Henri Teittinen

2. Agenda Performance measurement systems
Performance measurement, by August
Simons Levers of Control
Kaplan & Norton, Balanced scorecard
KCI Konecranes
DAP BSC
Malmi & Brown, Control Package
Alvesson et al.
Teittinen et al.
Public listed companies vs. SME’s vs. Start Up’s vs. Public Organizations
Summarizing the course

3. Basic levers of control (Simons 1995)

4. Ferreira & Otley 2009

5. Key issues in performance measurement
How to measure? (formula, to calculate)
What is the target level in measure?
Who is responsible to reach the target?
Where the data will be gathered?
To whom the measure will be reported?
How often the measure will be reported?
Where the measure will be (officially) discussed? (Board of Directors? Weekly? Monthly?)
How is it able reach the target level? (Cause and effect)
How to avoid manipulation?

6. Balanced Scorecard BSC, Background (Kaplan & Norton, 1992)
Practice, Innovation
Future oriented, Financial and Non-financial measures, Internal and external measures
A tool for strategic management
Different perspectives
Financial
Customer
Internal processes
Learning and growth
BSC seeks to link performance measures to an organization’s strategy
Should be used to clarify, communicate and manage strategy.

7. BSC
BSC Advocates looking at the business from four different perspectives by seeking to provide answers to the following four basic questions:
How do our customers see us? (customer perspective)
What must we excel at? (internal business process perspective)
Can we continue to improve and create value? (learning and growth perspective)
How do we look to shareholders? (financial perspective)
A critical assumption of BSC is that each performance measure is part of a cause- and-effect relationship.
The BSC consists of two types of performance measures:
Lagging measures
Leading measures

9. Designing BSC Vision Strategy Financial targets
Critical success measures in Customer perspective
Critical success measures in Internal processes
Critical success measures in Learning and Growth

10. Atkinson &
Kaplan (2007)

12. Balancing the measurement
Financial and Non-financial, appr. 20/80%.
Leading measures and performance measures
External measures (shareholders, customers) and internal measures.
Shot and long term measures
Yrityksen taloudellinen johtaminen

13. Why study management control systems as a package? Malmi & Brown (2008)
MCS do not operate in isolation.
The use and impact of a new MCS element is related to the functioning of the existing broader MCS package.
Limited understanding of the impact of other types of control (such as administrative or cultural) and whether/how they complement or substitute for each other in different contexts.
Broader package approach to the study of MCS
Better theory: How to design MCS packages.

14. Why study management control systems as a package? Malmi & Brown (2008)
Difficulty to clearly define the concept of MCS.
Distinction between MCS and information/decision-support systems.
What is supposed to control; is it human behaviour or artefacts, such as cash or material flows; and at what level, the organisation, business unit, management, or individual?

16. Management control frame for flexibility
nlund_2017.pdf?sequence=2&isAllowed=y
Teittinen et al. p. 205
Taipaleenmäki p. 175

17. Management control frame for expertize / consulting organization

18. Benchmarking Performance
External, Internal, Target level of performance, Innovations
Internal benchmarking: BU competitions, Rankings, Bonuses
Divide one BU to two BU’s
Performance audit
Coordinated, Criteria, Competitions: Quality