Journal of Information Technology Management
ISSN #1042-1319 A Publication of the Association of Management
FACTORS AFFECTING THE OUTCOMES OF PERFORMANCE MANAGEMENT SYSTEMS AL BENTO UNIVERSITY OF BALTIMORE firstname.lastname@example.org REGINA BENTO UNIVERSITY OF BALTIMORE email@example.com
This paper proposes and tests a model to explain three critical outcomes of Performance Management Systems: information quality, effectiveness, and usefulness of the PMS to managerial decision-making. Drawing from Organizational Information Processing Theory (OIPT), we examined how those three outcomes may be influenced by factors that affect OIP requirements (industry, size, and geographic scope of operations) and by organizational and technological factors that affect OIP capabilities. Organizational factors included management's decision-making style and organizational structure. Technological factors included the types of technology used in the PMS (ERP; specialized tools such as EIS and DSS; and generic tools such as Excel, Access and Lotus Notes), and the degree of use of e-commerce and Internet technologies. We used stepwise regression to analyze data from a sample of 1,990 respondents in small, medium and large organizations, operating at regional, national, international and global levels across a broad range of the Dow Jones Global Industry Groups. Keywords: Performance Management Systems, Organization Information Processing, Information Quality, Effectiveness, Usefulness.
Organizations are investing ever-increasing amounts of resources into Performance Management Systems, but it is still not clear what they can expect in return, or how they might influence the likelihood of positive system outcomes. This study applies Information Processing Theory to develop and test a model of environmental, organizational and technological factors that are hypothesized to contribute to PMS outcomes. The empirical test of the model was conducted using a database with findings from a survey of 1,990 organizations. The goal of the study is to explain three critical PMS outcomes: information quality, effectiveness, and usefulness of the Performance Management System to
managerial decision-making. Drawing from the literature on Information Processing, we propose a model that examines how those three PMS outcomes may be influenced by a variety of factors that affect, on the one hand, an organization's information processing requirements and, on the other hand, its information processing capabilities. The empirical test of the model explored three main environmental and organizational factors affecting information requirements: the nature of the industry, the size of the organization, and the geographic scope of its operations (ranging from regional to global). The empirical study also examined two sets of factors, organizational and technological, that affect the capability of the firm to process information. The organizational factors considered in the study were management's decision-making style (command and control vs. 23
Journal of Information Technology Management Volume XVII, Number2, 2006
FACTORS AFFECTING PERFORMANCE MANAGEMENT SYSTEM OUTCOMES
collaborative), as well as organizational structure. Technological factors included the types of technology used in the PMS (ERP; specialized tools such as EIS and DSS; and generic tools such as Excel, Access and Lotus Notes), and the degree of use of e-commerce and Internet technologies. The study used stepwise regression to analyze data from a sample of 1,990 respondents in accounting, finance, general management, information technology etc. The sample included small, medium and large organizations, operating at regional, national, international and global levels across a broad range of the Dow Jones Global Industry Groups. The following sections summarize the relevance of the study, the model that was used...