Global Production Management pp 219-225 | Cite as
Performance measurement for planning and control in SMEs
Abstract
This paper explores the concept of strategic performance measurement in SMEs. To provide some depth and breadth for the investigation the research was structured into two phases. The first phase of the research focused on identifying whether SMEs develop and use strategic performance measures. A survey of eight SMEs, in the south west of England, was undertaken using semi-structured interviews. The second phase involved a more in-depth study and was based on observing the introduction of a strategic performance measurement system in a small company. The results gained to date indicate that SMEs have a good understanding of financial measurement, and are moving towards customer focused measures. However, these measures typically lack strategic alignment and many may be questioned in regard of their value for business improvement. The observations made during phase two of the research, the development of a new strategic performance measurement system in an SME, indicated the potential planning and control benefits from the design process that was utilised. However, particular difficulties were evident in the development and implementation of the performance measurement system. Further research (phase three) is now being undertaken to analyse these difficulties. This paper describes the first two phases of the work. An introduction is provided which establishes both the relationship of this work to existing literature and the context for the study. The key fmdings from the work are shown following a description of the research methodology that was employed. The paper concludes by summarising the key findings and by presenting a set of propositions that will be used to extend the research into phase three.
Keywords
Strategic Performance Measures SMEs Performance Measurement System Design Forward Planning.References
- Barnes, D. Gill, R. Mills, J. O’Brien, T, and Rowbotham, F. (1999) Proceedings of the Second International SMESME Conference — Stimulating Manufacturing Excellence in Small and Medium Sized Enterprises, Plymouth, UK, pp 135–142.Google Scholar
- Bourne, M. and Neely, A. (1998) Why do Performance Measurement InitiativesGoogle Scholar
- Succeed and Fail? Proceedings of the 1 st International Conference on Performance Measurement — Theory and Practice,Cambridge, UK, pp 165–173.Google Scholar
- Cagliano, R. Spina, G. Verganti, R. and Zotteri, G. (1998) Designing BPR Support Services for Small Firms, International Journal of Operations and Production Management,Vol 18, No 9/10, pp865–885.Google Scholar
- Eccles R. (1991) The Performance Measurement Manifesto. Harvard Business Review, Jan-Feb, 131–137.Google Scholar
- Ghalayini, A. and Noble, J. (1996) The Changing Basis of Performance Measurement. International Journal of Operations and Production Management, Vol 16, No 8, 63–80.CrossRefGoogle Scholar
- Ghalayini, A. Noble, J. and Crowe, T. (1997) An Integrated Dynamic Performance Measurement System for Improving Manufacturing Competitiveness, International Journal of Production Economics, Vol 48, pp 207–225.CrossRefGoogle Scholar
- Glaser, B. and Strauss, A. (1967) The Discovery of Grounded Theory: Strategies for Qualitative Research. Aldine Publishing Co. Publications, New York.Google Scholar
- Greatbanks, R. and Boaden, R. (1998) Can SMMEs Afford to Measure Performance? Proceedings of the l’ International Conference on Performance Measurement — Theory and Practice, Cambridge, UK, pp 117–124.Google Scholar
- Kaplan, R. and Norton, D. (1992) The Balanced Scorecard: The Measures that Drive Performance. Harvard Business Review, Jan-Feb, 71–79.Google Scholar
- Lochamy III, A. and Cox, F. (1994) Reengineering PerformanceGoogle Scholar
- Measurement. Irwin Professional Publishing, New York.Google Scholar
- Lynch, R. and Cross, K. (1991) Measure Up! Yardsticks for Continuous Improvement. Blackwell, Oxford.Google Scholar
- Mintzberg, H. Quinn, J and Ghoshal, S. (1998) The Strategy Process. Prentice Hall, London.Google Scholar
- Neely, A. Mills, J. Gregory, M. Richards, H. Platts, K. and Bourne, M. (1996) Getting The Measure of Your Business, Works Management, Cambridge.Google Scholar