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The Influence of Performance Measurement on the Processual Dynamics of Strategic Change

Author

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  • Margaret A. Abernethy

    (Department of Accounting, University of Melbourne, Melbourne, Victoria 3010, Australia;)

  • Henri C. Dekker

    (Department of Accounting, Vrije Universiteit Amsterdam, 1081 HV Amsterdam, Netherlands)

  • Jennifer Grafton

    (Department of Accounting, University of Melbourne, Melbourne, Victoria 3010, Australia;)

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.

Suggested Citation

  • Margaret A. Abernethy & Henri C. Dekker & Jennifer Grafton, 2021. "The Influence of Performance Measurement on the Processual Dynamics of Strategic Change," Management Science, INFORMS, vol. 67(1), pages 640-659, January.
    • Handle: RePEc:inm:ormnsc:v:67:y:2021:i:1:p:640-659
    DOI: 10.1287/mnsc.2019.3442
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    References listed on IDEAS

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    3. Cherchye, Laurens & Rock, Bram De & Saelens, Dieter & Verschelde, Marijn & Roets, Bart, 2024. "Productive efficiency analysis with unobserved inputs: An application to endogenous automation in railway traffic management," European Journal of Operational Research, Elsevier, vol. 313(2), pages 678-690.

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