The influence of performance measurement on the processual dynamics of strategic change

Margaret A. Abernethy, Henri C. Dekker, Jennifer Grafton

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Abstract

We draw on a five-year longitudinal data set to investigate the influence of performance measurement in the processual dynamics of strategic change, particularly in enacting effective strategic change. Our model examines the role of performance measurement in driving strategy-consistent operational changes and in ensuring that the desired objectives of the strategic change process are achieved. We investigate these roles for performance measurement over time and empirically document lags between changes in strategic priorities, changes in operational processes, and subsequent changes in firm performance. We find that performance measurement supports the implementation of strategic change by influencing the extent to which changes to operational tasks and activities are made in response to new strategic priorities, as well as influencing the quality and impact of these operational changes, as reflected in improved contemporaneous and future firm performance.

Original languageEnglish
Pages (from-to)640-659
Number of pages20
JournalManagement Science
Volume67
Issue number1
Early online date11 Jun 2020
DOIs
Publication statusPublished - Jan 2021

Keywords

  • Firm performance
  • Performance measurement
  • Strategic change

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