Case Creve Couer Pizza, Inc

Topics: Strategic management, Balanced scorecard, Management accounting Pages: 26 (8341 words) Published: August 17, 2010
The Emerald Research Register for this journal is available at

The current issue and full text archive of this journal is available at

An empirical study of performance measurement in manufacturing firms Maurice Gosselin
´ ´ School of Accountancy, Universite Laval, Quebec City, Canada Abstract
Purpose – The recent performance measurement literature suggests that organizations should put more emphasis on non-financial measures in their performance measurement systems, that organizations must use new performance measurement approaches such as the balanced scorecard and that measures should be aligned with contextual factors such as strategy and organizational structure. The purpose of this paper is to assess the extent to which organizations are following these prescriptions. Design/methodology/approach – A survey of a sample of Canadian manufacturing firms was conducted. In the questionnaire, organizations had to indicate the extent to which they use 73 performance measures. They also had to respond to questions about determinants such as strategy, organizational structure and environmental uncertainty. More than 100 organizations responded to the survey. The response rate was 50.5 percent. Findings – The results show that manufacturing firms continue to use financial performance measures. Despite the recommendations from experts and academics, the proportion of firms that implement a balanced scorecard or integrated performance measurement systems is low. Furthermore, organizations that use these approaches are not employing more extensively non-financial measures than those which are applying traditional performance measurement approaches. This research project also shows that there are some significant relationships between the types of measures and contextual factors like strategy, decentralization and environmental uncertainty. This research finally demonstrates clearly that there is a need to develop a theory that explains how firms can use their performance measurement system to enhance their performance. Originality/value – This paper provides information on performance measures used by organizations and their association with organizational determinants. Keywords Performance measures, Performance management, Balanced scorecard Paper type Research paper

Study of performance measurement 419

1. Introduction Since the beginning of the 1990s, performance measurement has become an important issue for academics and practitioners. The professional literature has suggested that managers should design new performance measurement systems that include financial and non-financial measures. Kaplan and Norton (1992, 1993, 1996) advocated in favor of the design of balanced scorecards. Dixon et al. (1990) and Nanni et al. (1992) proposed the use of integrated performance measurement systems. All these systems would put more emphasis on non-financial measures and would enable organizations to give more weight to customers and internal processes in their performance The author acknowledges the financial assistance provided by the FQRSC of the Gouvernement ´ du Quebec.

International Journal of Productivity and Performance Management Vol. 54 No. 5/6, 2005 pp. 419-437 q Emerald Group Publishing Limited 1741-0401 DOI 10.1108/17410400510604566

IJPPM 54,5/6


measurement systems. Overall, this change would help firms to improve ultimately their performance. These suggestions have been in general well received in the accounting community according to the large number of books, seminars and professional articles on performance measurement. However, there is not much information on the extent to which firms actually use these performance measurement “innovations”. A few studies have been conducted recently and have revealed that organizations are implementing to some extent performance measurement innovations such as the balanced scorecard (Ax and...

References: Anthony, R.N. and Govindarajan, V. (1995), Management Control System, Irwin, Chicago, IL. Ax, C. and Bjornenak, T. (2000), “Bunding and diffusion of management accounting innovations: the case of the balanced scorecard in Scandinavia”, paper presented at the European Accounting Congress, Munich. Chenhall, R.H. and Morris, D. (1986), “The impact of structure, environment, and interdependence on the perceived usefulness of management accounting systems”, The Accounting Review, Vol. 61, pp. 16-35. Dixon, J.R., Nanni, A.J. and Vollmann, T.E. (1990), The New Performance Challenge: Measuring Operations for World Class Competition, Dow-Jones Irwin, Homewood, IL. Gordon, L.A. and Narayanan, V.K. (1984), “Management accounting systems, perceived environmental uncertainty and organization structure: an empirical investigation”, Accounting, Organizations and Society, Vol. 9 No. 1, pp. 33-47. Govindarajan, V. (1986), “Decentralization, strategy and effectiveness of strategic business unit in multi business organizations”, Academy of Management Review, Vol. 11 No. 4, pp. 844-56. Govindarajan, V. (1988), “Contingency approach to strategy implementation at the business-unit level: integrating administrative mechanisms with strategy”, Academy of Management Journal, Vol. 31 No. 4, pp. 828-53. Gul, F.A. (1991), “The effects of management accounting systems and environmental uncertainty on small business managers’ performance”, Accounting and Business Research, Vol. 22, pp. 57-61. Gul, F.A. and Chia, Y.M. (1994), “The effects of management accounting systems perceived environmental uncertainty and decentralization on managerial performance: a test of three-way interaction”, Accounting, Organizations and Society, Vol. 19, pp. 413-26.
Ittner, C.D. and Larcker, D.F. (1998), “Innovations in performance measurement: trends and research implications”, Journal of Management Accounting Research, Vol. 10, pp. 205-38. Kaplan, R.S. and Norton, D.P. (1992), “The balanced scorecard – measures that drive performance”, Harvard Business Review, pp. 71-80. Kaplan, R.S. and Norton, D.P. (1993), “Putting the balanced scorecard to work”, Harvard Business Review, pp. 134-47. Kaplan, R.S. and Norton, D.P. (1996), The Balanced Scorecard, Harvard Business School Press, Boston, MA. Malmi, T. (2000), “Balanced scorecard in finnish companies: some empirical evidence”, paper presented at the European Accounting Congress in Munich. Miles, R.E. and Snow, C.C. (1978), Organizational Strategy, Structure and Process, McGraw-Hill, New York, NY. Miles, R.E. and Snow, C.C. (1994), Fit, Failure and the Hall of Fame, Free Press, New York, NY. Nanni, A.J., Dixon, R. and Vollmann, T.E. (1992), “Integrated performance measurement: management accounting to support the new manufacturing realities”, Journal of Management Accounting Research, Vol. 4, pp. 1-19. Slocum, J.W. Jr, Cron, W.L., Hansen, R.W. and Rawlings, S. (1985), “Business strategy and the management of Plateaued employees”, Academy of Management Journal, Vol. 28, pp. 133-54. Tymon, W.G., Stout, D.E. and Shaw, K.N. (1998), “Critical analysis and recommendations regarding the role of perceived environmental uncertainty in behavioral accounting research”, Behavioral Research in Accounting, Vol. 10, pp. 23-46. Further reading Gosselin, M. (1997), “The effect of strategy and organizational structure on the adoption and implementation of activity-based costing”, Accounting, Organizations and Society, Vol. 22 No. 2, pp. 105-22.
Study of performance measurement 437
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Creve Couer Pizza, Inc Essay
  • Creve Couer Pizza, Inc. Essay
  • Creve Couer Pizza Essay
  • Case 4.1 Creve Couer Pizza Essay
  • Donatos pizza case study Essay
  • Essay on Headgear Inc Case Study
  • Essay about Pizza Case

Become a StudyMode Member

Sign Up - It's Free