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A decision theory perspective on complexity in performance measurement and management

Alexander, Anthony Edward, Kumar, Maneesh and Walker, Helen Lisbeth 2018. A decision theory perspective on complexity in performance measurement and management. International Journal of Operations and Production Management 19 (5) , pp. 204-522. 10.1108/IJOPM-10-2016-0632

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Abstract

Purpose – The purpose of this paper is to apply the aspects of decision theory (DT) to performance measurement and management (PMM), thereby enabling the theoretical elaboration of volatility, uncertainty, complexity and ambiguity in the business environment, which are identified as barriers to effective PMM. Design/methodology/approach – A review of decision theory and PMM literature establishes the Cynefin framework as the basis for extending the performance alignment matrix. Case research with seven companies explores the relationship between two concepts under-examined in the performance alignment matrix – internal dominant logic (DL) as the attribute of organisational culture affecting decision making, and the external environment – in line with the concept of alignment or fit in PMM. A focus area is PMM related to sustainable operations and sustainable supply chain management. Findings – Alignment between DL, external environment and PMM is found, as are instances of misalignment. The Cynefin framework offers a deeper theoretical explanation about the nature of this alignment. Other findings consider the nature of organisational ownership on DL. Research limitations/implications – The cases are exploratory not exhaustive, and limited in number. Organisations showing contested logic were excluded. Practical implications – Some organisations have cultures of predictability and control; others have cultures that recognise their external environment as fundamentally unpredictable, and hence there is a need for responsive, decentralised PMM. Some have sought to change their culture and PMM. Being attentive to how cultural logic affects decision making can help reduce the misalignment in PMM. Originality/value – A novel contribution is made by applying decision theory to PMM, extending the theoretical depth of the subject

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Publisher: Emerald
ISSN: 0144-3577
Funders: ESRC
Date of First Compliant Deposit: 20 July 2018
Date of Acceptance: 19 September 2017
Last Modified: 20 Aug 2018 10:15
URI: http://orca.cf.ac.uk/id/eprint/105489

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