Organizational culture and dynamics of performance measurement

Pages: 28-31
Sonia Verma (Department of Management, Singhania University, Jhunjunu, Rajasthan)

This research paper aims to model the dynamic relationship between performance measurement, management styles and organisational culture, in order to develop a better understanding of the causal linkages between these three areas. The related literature on performance measurement, management control systems and management information systems, in the context oforganisational culture, is examined and a framework for mapping the interplay of the three areas is developed. The research is based around five case studies where performance measurement systems were implemented in action research programmes, using identical implementation methods, by the same research team. The use of the performance measurement systems was then observed over a period of time in relation to the implementation lifecycle, changes to management style and organisational structure over time. The dynamic relationships were then mapped using the framework developed. Patterns were observed, which led to new insights. Organisational culture and management style seem to be interdependent throughout the lifecycle of the performance measurement system. That is, management styles need to evolve as the maturity of the performance measurement system and the organisational culture evolve. A successfully implemented and used performance measurement system, through cultural change, leads to a more participative and consultative management style. Similarly, the correct use of performance measurement systems can encourage an achievement culture to emerge. All five cases suggested that an authoritative management style was essential at the start but this would change with the emerging culture. The research results are limited to five socially constructed case studies. Whilst these findings remain valid, they cannot be used for universal generalisations. In terms of modelling the organisational culture, the research focuses on the organisation as a whole and does not take into account the possible existence of sub-cultures within the organisation. Practical implications A better understanding of management styles and organisational culture will allow practitioners to better assess the organisations’ readiness to implement performance measurement systems. Similarly, the results provide guidance towards the management styles that would be appropriate when implementing performance measurement systems in different cultural settings. The framework for modelling the dynamic relationship between performance measurement, management style and organisational culture, together with the findings, should provide useful insights and methods for future researchers in this area.