Choice and Change of Measures in Performance-Measurement Models
NAVAL POSTGRADUATE SCHOOL MONTEREY CA
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This paper uses management control, resource-based, systems-based, and contingency-based strategy theories to describe a large US manufacturing companys efforts to improve profitability by designing and using a performance-measurement model PMM. This PMM includes multiple performance measures relevant to its distribution channel for products, repair parts and maintenance services. The PMM is intended to reflect the companys understanding of performance relations among strategic resources, operational capabilities, and desired financial outcomes. The PMM also reflects its intended distribution strategy, the types of performance necessary to achieve that strategy by its distributors, and its desired financial outcomes. Furthermore, the company uses the model to evaluate its North American distributors and intends to use these evaluations as a partial basis for annual and long-term rewards. Thus, the PMM embodies the measurable portion of the firms management control system of its distribution channel.
- Administration and Management