Int. Journal of Business Science and Applied Management, Volume 7, Issue 2, 2012
Managing change in performance measures An inter-company
case study approach
Mohammed Salloum
Volvo Construction Equipment, Technology, Department of Finance and Business Control
Hällby, 635 10 Eskilstuna, Sweden
Telephone: +46 737 65 63 88
Stefan Cedergren
Mälardalen University, School of Innovation, Design and Engineering
Smedjegatan 37, 632 20 Eskilstuna, Sweden
Telephone: +46 760 50 16 54
The field of performance measurement and management (PMM) is well filled with frameworks, models and
guidelines addressing what to measure and how to design a performance measurement system (PMS). However,
what has been less examined so far is how to ensure that PM evolve in tandem with their environments. Further,
the few approaches available today are prescriptive and outlines how or what practitioners should do in order to
manage change in their PM. Thus, a gap exists in understanding how organisations manage change in their PM
in practice. Thus, the purpose of this paper is to outline and compare the approaches of three case companies for
managing PM change. In order to fulfil the purpose of the paper, the data presented has been collected through
the deployment of case studies. The choice of case studies as means for data collection stems from the
possibility of an in-depth and holistic examination of the formulated phenomenon. All three case companies
belong to the same company-group that operates within the transportation industry. The industrial footprint of
the company is global with operations and sales spread out over the world. The findings suggest that all three
companies have processes in place for managing change in PM. However, the approaches differ in design and
context. Even though the case companies had different approaches in place to manage change in PM, they
shared several commonalities. Commonalities were shared in the way of execution, process input and challenges
in IT and culture. Furthermore, employee involvement seemed to be the biggest challenge for all three
companies. The findings put forward in this paper are limited as they are confined to three companies from the
same company-group. More studies, both from within and outside the company-group, are needed in order to
establish a solid base of empirical data for generalisation. However, this paper makes a contribution both
through describing how three companies manage PM change and through elaborating on the underlying factors
affecting functionality.
Keywords: performance measurement, performance measurement systems, performance management
Int. Journal of Business Science and Applied Management /
Performance measures (PM) are used in organisations for a wide array of reasons: to gauge performance
(Slack et al., 2004), direct behaviour and improve motivation (Spitzer, 2007), continuously improve processes
(Cross and Lynch, 1992), enhance productivity (Bernolak, 1997), identify areas of attention, improve
communication, increase accountability (Waggoner et al., 1999), implement strategy (Kaplan and Norton,
2001), support goal achievement (Tapinos et al., 2005) and provide information on strategy implementation
(Neely, 1999). Regardless of the reason to why PM are deployed, it is widely recognised in the literature that
PM need to be aligned with the strategic priorities, as well as the internal and external environments of the
organisation (Neely et al., 1996; Bourne et al., 2000; Bititci et al., 2001; McAdam and Bailie, 2002; Hass et al.,
2005; Lima et al., 2009). However, as these strategies and business environments are dynamic in nature
(Simons, 1995), organisations need to ensure that they are capable of managing change in their PM (Bititci et
al., 2000; Kennerley et al., 2003). Sticking to your PM for too long has been described by Likierman (2009) as
one of the five traps of performance measurement.
The field of performance measurement and management (PMM) is well filled with frameworks, models
and guidelines addressing what to measure and how to design a performance measurement system (PMS)
(Paranjape et al., 2006), most notably the Balanced Scorecard (Kaplan and Norton, 1992). However, what has
been less examined so far, is how to ensure that PM evolve in tandem with their environments (Kennerley and
Neely 2003). Barrows and Neely (2012) argue that contemporary methods do not adequately address the
challenges associated with managing performance in an increasingly turbulent business environment. Further,
the few approaches available today are prescriptive and outlines how or what practitioners should do in order to
manage change in their PM. None of the approaches take a descriptive stance and outlines how organisations
take on the challenge today. Thus, a gap exists in understanding how organisations manage change in their PM
in practice (Bourne, 2008). This gap is further amplified by the fact that only a few organisations have
procedures in place to manage the change of their PM (Neely, 1999; Bititci et al., 2002).
With this background in mind, the purpose of this paper is to outline and compare the approaches of three
case companies for managing PM change. The motive for the paper is to bridge the knowledge gap, by
contributing to the understanding of how PM change is managed in practice and assist in the development of
adequate theoretical models by shedding light on the problems encountered in practice. The paper is divided into
six sections. The following section presents the theoretical background. The third section outlines the
methodological approach and presents the case studies. This is followed by a presentation of the empirical
findings. The succeeding section then contrasts the empirical and theoretical findings through a cross-case
analysis. The sixth section summarises the findings and discusses the necessities of a future research agenda,
highlights the contributions and underlines the limitations of the conducted research.
Even though change in PM, in contrast to design of PM, remains an under-researched area, several
academics have addressed the topic over the last decade. The progress made so far is presented in this section.
Neely et al. (2002b) argue that a process needs to be in place in order to ensure that temporary PM are
abolished and indispensable PM are fine-tuned continuously. For this purpose, an audit with 10 questions is
provided within their Performance Prism framework. Kennerley and Neely (2002; 2003) list a process that that
reviews, modifies and deploys PM as one of four critical factors in their framework for keeping PMS up to date.
Neely et al. (2002a) argue that PMS are often allowed to expand to the extent that they become unmanageable
and thus a PM review process needs to be in place. It is underlined that the understanding of the process evolves
over time. Medori and Steeple (2000) concurs and lists periodic maintenance as the last step in their framework
for auditing and enhancing PMS. They argue that a periodical PMS review is required as PM relevant at one
particular moment in time may become redundant at another point. Meekings (2005) has developed a set of
requirements for a functional review process, including a defined structure, connection throughout the
organisation, deliver value and PM change management. Kaplan and Norton (2005; 2008) argue that two
parameters are needed for managing PM change, a clearly defined and recurring process, and the establishment
of an entity responsible for its management and success. Bourne et al. (2000) support and develop earlier
findings by arguing that four processes need to be in place to review targets of current measures, review current
measures, develop new measures and to challenge the strategy. Bititci et al. (2000) highlights in their dynamics
PMS model that a PM review mechanism is needed which uses the performance information provided by the
internal and external monitors. Further, a deployment system is also required in order to revise objectives and
priorities to business units, processes, and activities using performance measures are required.
Besides the review process, the role of organisational culture is emphasised in the literature. Waggoner et
al. (1999) underline the impact that organisational culture can have on PMS evolution. They argue that a culture,
which discourages risk taking and innovation, can block steps that are essential for successfully changing a
Mohammed Salloum and Stefan Cedergren
PMS. Kennerley and Neely (2002; 2003) concur and underline the need of a culture within the organisation that
ensures that the value of measurement, and the importance of maintaining relevant and appropriate PM are
appreciated (Table 1). Salloum and Wiktorsson (2011) argue that in order to realise a dynamic PMS, a culture is
needed that encourages organisational involvement, openness, information sharing, and resource availability.
Farris et al. (2011) identified two critical factors for a supportive organisational culture in their investigation of
the PM review process: employee empowerment (including focus on teamwork, ownership of problems,
participation and entrepreneurship) and a focus on continuous improvement.
Table 1: Barriers and enablers for culture (Kennerley et al., 2003)
Culture Barriers to Measures Evolution
Culture Enablers of Measures Evolution
Management inertia towards measures due to other
Ad hoc approach to measurement
Measures not aligned to strategy
Actions not aligned to measures
Lack of management concern for non-investor
Senior management sponsorship
Consistent communication of multidimensional
performance to staff
Open and honest application of measures
No blame / No game environment
Integration and alignment of reward systems
Further, the role of management is another factor that is recurring in the literature. Waggoner et al. (1999)
highlight the impact and importance of management from several perspectives; top-level support, internal
influence, process, and transformational issues. Searcy (2011) underlines the influence that senior management
has on the change of PM. In order to succeed with the implementation of changes, senior management must
ensure that their support is apparent, their expectations are clear, and that the appropriate human, technological,
and financial resources are available for facilitating change. Spitzer (2007) concurs and underlines that PM
change has to be driven by the leader, from the top of the organisation. Kennerley and Neely (2002; 2003) argue
that management commitment and training are two factors needed in order to facilitate PMS evolution. Further,
Kennerley et al. (2003) highlight the risk of management inertia towards PM as a barrier for evolution. In an
empirical study conducted at a large manufacturing unit, it was concluded that management commitment, style,
competence, and politics are factors that have a high impact on the dynamic abilities of a PMS (Salloum and
Wiktorsson, 2011). Kennerley and Neely (2002; 2003) further stress the availability of flexible information
technology to enable the collection, analysis and reporting of appropriate data as crucial for the evolution of a
PMS (Table 2). Wettstein and Kueng (2002) argue that IT capabilities are pivotal for initiating and accelerating
PMS change. They argue that IT consistently offers new opportunities to automate processes, enhance
communication, and develop data analysis sequences. In the integrated model forwarded by Bititci et al. (2000),
the required capabilities for dynamic PMS are divided into two categories, framework capabilities and IT
platform capabilities. For the IT platform, four requirements were identified:
Able to provide an executive information system.
Capable of accommodating and incorporating all the elements of the framework.
Integrated within the existing business systems.
Capable of handling simple rules, such as alarms and warning signals, to facilitate performance
Table 2: Barriers and enablers for systems (Kennerley et al., 2003)
System barriers to Measures Evolution
System Enablers of Measures Evolution
Inflexible legacy systems
Poorly or partially implemented ERP systems
Difficult to tailor ‘off-the-shelf’ performance
reporting software
Poor use of graphical representation
Excess of raw data
Investment in IT hardware and software
Data mining / warehousing capability
Readily customisable information systems
Internal systems development and adaptation
2.1 Synthesising the theoretical background
The advancements within the PMM field regarding PM change can be perceived through two perspectives,
structural and behavioural. The structural perspective stresses the need for processes, mechanisms and
procedures for managing PM change. Furthermore, within the structural perspective, emphasis is put on the
capabilities and flexibility of the IT-systems. The need to have a process/mechanism/procedure in place for
continuously reviewing and changing PM is a feature that the researchers in general highlight as important.
However, how the process/mechanism ought to be designed and function is not agreed upon. The previous
research ranges from only mentioning the need for a review process (Medori and Steeple, 2000) to literature
Int. Journal of Business Science and Applied Management /
studies (Waggoner et al., 1999) and models for how manage PM change (Bititci et al., 2000). Some frameworks
(Neely et al., 2002a; Bourne et al., 2000) elaborate on the responsibilities of such a process but provide little
direction on how it might take shape in practice. Others (Kennerley and Neely, 2002; Neely et al, 2002a) debate
and argue more on the design by outlining important factors to consider, questionnaires to deploy, and
management tools to implement. From a behavioural perspective, the role of senior management, culture and
employee involvement/empowerment are all underlined as important factors (Waggoner et al., 1999; Kennerley
and Neely, 2002; Kennerley and Neely, 2003; Salloum and Wiktorsson, 2011; Farris et al., 2011).
Previous research generally neglects the context that PM operates in and research within manufacturing
organisations is missing. PM are deployed across organisations, from executive management teams to shop-
floor teams. The further down in the organisation you look, the more PM you will find in need of review.
Hence, any functional review process to work in practice needs to take a wide perspective and incorporate the
whole organisation. The approaches presented in the theoretical background appear to take a managerial rather
than an organisational perspective to the review of PM. Moreover, PM works in open production systems,
heavily influenced by their temporal, cultural, and social contexts. In practice, PM are surrounded by a
considerable amount of contingency (Tangen, 2005).
Thus, the final applicability and functionality can depend upon a number of factors beyond the actual
review process. In regards to the purpose of this paper the theoretical foundation is limited. None of the previous
publications neither illustrate how PM change is managed in practice nor takes an organisation-wide
perspective. Hence, no research has been found that can be contrasted with the empirics presented in this paper.
Instead, the empirics will be put in juxtaposition to the characteristics and advocacies of the theoretical
background and discussed from the basis of commonalities and divergences.
In order to fulfil the purpose of the paper, the data presented has been collected through the deployment of
case studies (Table 3). The choice of case studies as means for data collection stems from the possibility of an
in-depth and holistic examination of the formulated phenomenon (Merriam, 1994; Bell, 1999). The unit of
analysis (Yin, 1994) in all three cases has been the way of working for managing change in PM. Three factors
have guided the selection of case companies; the existing procedures for handling PM change at each case
company, the knowledge about the company practices that the researcher could obtain before the case execution
and the possibility to get unrestricted access to interviewees and databases.
All three case companies belong to the same company-group that operates within the transportation
industry. The industrial footprint of the company is global with operations and sales spread out over the world.
In total the case company employs over 100 000 individuals worldwide with sales of 35 billion EURO. None of
the three case companies operate within the same business area and all case studies were executed within an 18
months span (Table 3).
The theoretical findings presented in Section 2 played several important roles in the research. It has helped
to develop sharper and more profound objectives and questions in line with the arguments by Yin (1994).
Further, it has also served as an initial guide to the case study design and data collection and as a part of the
iterative process of data collection and analysis (Eisenhardt, 1989). The interview questionnaires used within the
interview studies have been based on the literature presented in the theoretical background. The interview
questionnaires consisted of three parts. The initial part focused on the design and features of the deployed PMS.
The second part revolved around how the case company managed PM change whilst the concluding part
focused on the factors and mechanisms that, in the perception of the interviewee, affected the management of
PM change. Each case study was analysed in isolation through of data reduction, theme clustering and pattern-
matching (Miles and Huberman, 1994; Yin, 1994; Merriam 1994) before the cross-case analysis. The cross-case
analysis was executed in line with what is advocated by Eisenhardt (1989) (Table 3).
Validity and reliability are highlighted by Yin (1994) as important research quality factors to consider. In
order to ensure validity, the research conducted has been structured in a logical flow with problem statement,
current state of the art and empirical investigations. The end-result describes how the studied phenomenon acts
in real organisational settings. Further, representative case companies and triangulation between data collection
components have been after sought (Table 3). Considerations in regards to the validity and reliability have to be
made in the case study design phase as it deals to a great extent with the choice of case studies/companies. By
collecting data from several companies the risk of conducting research in an exceptional and non-generalisable
context is mitigated. Further, Yin (1994), argues that the concept of analytical generalisation is useful for
establishing validity. Analytical generalisation dictates that the concluding research findings ought to be
juxtaposed against the existing base of theory. The comparison will underline the gap between the research
findings and the existing theory and highlight, depending on the extent of the gap, if more research is needed.
Throughout this paper, the theoretical findings have been compared to their empirical dittos. Finally, all the
documentation related to respective case study was stored in specific folders as highlighted by Yin (1994).
Mohammed Salloum and Stefan Cedergren
Table 3: Deployed case study methodology
Case company 1 (CC1)
Case company 2 (CC2)
Case company 3 (CC3)
Employee size
Business area
Heavy automotives
Complex components
Heavy machines
Number of
20 interviews (from five
organisational levels)
19 interviews (from five
organisational levels)
21 Interviews (from six
organisational levels)
Site manager, production
manager, finance manager,
production engineering
manager, logistics manager
& quality manager. Six first-
line managers. Six team
leaders and two assemblers.
Overall production
manager, 2 production
function managers, 4
second-line managers, 6
first-line managers, 3 team-
leaders, 3 assemblers
Site manager, production
manager, quality manager,
logistics manager, finance
manager, HR manager,
financial controller,
logistics engineer, HR-
partner, 6 first-line
managers, 2 second-line
managers, 2 team-leaders, 2
7-51 minutes per interview
4-58 minutes per interview
5-48 minutes per interview
Transcribed and validated by
Transcribed and validated
by interviewees
Transcribed and validated
by interviewees
Factory tours, PM review
meetings, PM reporting
Factory tours, PM reporting
Factory tours, PM review
meetings, PM reporting
(PDF, Excel,
Word and
PM scorecards, PM reports,
PM process descriptions, IT-
system flowcharts,
Management system process
PM scorecards, PM reports,
PM process descriptions,
PM educational material,
Management system
process descriptions
PM scorecards, PM reports,
PM process descriptions,
PM presentations
Within case
data analysis
Data reduction, clustering,
Data reduction, clustering,
Data reduction, clustering,
Triangulation, representative
case study, analytical
representative case study,
analytical generalisation
representative case study,
analytical generalisation
Choice of case
establishment of a case study
Choice of case
establishment of a case
study database
Choice of case
establishment of a case
study database
Category selection, juxtapose
cases and by data source
Category selection,
juxtapose cases and by data
Category selection,
juxtapose cases and by data
Table 4 gives an overall outline of the findings made in each case study. The findings suggest that all three
companies have approaches in place for managing change in PM. However, the approaches differ in design,
execution and context. Each approach is presented in the sections below from two aspects, structural and
behavioural. The structural aspect focuses on how the case companies report that they ought and want to work
with PM change. The behavioural aspect focuses in contrast on how the intended ways of working have
unfolded. The distinction between the structural and behavioural sides provides a useful contrast of how the case
companies want to work vis-à-vis how they actually work.
Int. Journal of Business Science and Applied Management /
Table 4: Findings per case company summarised
Type of approach
One process with two loops
(deployment and
Two processes: business plan
(BP) and operational
development (OD)
Unstructured meetings
Ownership and
facilitation of approach
Site manager owns the
process. Facilitated by the
production system expert
CEO owns both processes. The
OD process is facilitated by
internal consultants
No owner & no facilitator
Frequency of approach
Twice a year: June &
December. No alterations in
BP: Yearly (autumn). OD:
Every 6 months. No alterations
in between
Yearly (each autumn).
Alterations in between
depending on function.
Time to execute the
2-3 weeks
BP: 1-5 months. OD: 1-3
Uncertain. Around 3-4
Defined and
documented approach
Defined and documented
BP: defined and vaguely
documented OD: defined and
Not defined nor documented
Factors affecting
Current performance,
requirements from above,
organisational politics,
business environment,
appropriateness of current
BP: Review of strategy, current
performance, internal and
external environments. OD:
Strategic dialogue, one mutual
Requirements from HQ,
strategic targets, current
performance, market demand,
appropriateness of current PM
Down to first-line managers
BP: Employee involvement
fragmented. OD: all employees
Organisational involvement
limited and fragmented
Supportive according to
Supportive for both according
to interviews, OD reduced due
to prioritisation
Supportive according to
IT-systems fragmented after
function and inflexible. High
level of manual impositions
through Excel
IT-systems limited and
inflexible to extraction of data.
Data quality doubted at some
organisational levels.
Newly implemented and
integrated IT-system.
Problems with extracting data
and developing competence.
Level of beneficial
Hierarchical culture, hard to
get wide involvement
Blame-game culture,
characterised by reactivity
Reporting-culture, measures
decided from above
Visual aids
PM tree charts and payback
Connection of PM and
reward (Bonus system)
Cash flow
Variable product cost and
4.1 Case company 1 The single process approach
4.1.1 Structural aspect
Management system documentation and management interview results revealed that CC1 deployed a
process labelled the KPI review. Interview responses from managers across the organisation exhibited that the
process was based on a set of meetings initiated and closed by the top-management team. The inputs to the first
meeting of the process are outlined in Table 4. Once the top-management finished their review meeting, the
function management did the same exercise with the above hierarchy’s (top-management) output as input. This
interlinked chain of meetings was meant to continue down to the production teams in order to create alignment
in the goal and PM review. Once all the review meetings have been executed a set of meetings referred to by the
top-management interviewees as the agreement/feedback meetings were initiated. The purpose of these
meetings was to foster consensus of the goals and PM for the coming year and was held between members of
two hierarchical levels. The KPI review was accomplished once the top-management team held the last
agreement/feedback meeting. The top-management team has the power to either accept the proposed PM or ask
for refinements. However, during the interviews these managers underlined that even though the general
manager was the owner of the process the local production system expert facilitated it. The role played by the
expert was hailed by several management interviewees. One first-line manager explained that the expert was
instrumental to him in getting the work done. Moreover, the interview results strongly advise that the review
process was an established way of working at CC1 as 16 of the 20 interviewees acknowledged it. It is notably
however that the four employees not recognising it came from the lower levels of the organisation. In order to
enhance the communication and promote the use of PM, a payback tracker was publicly accessible at the
intranet. The tracker communicated the financial effects of the PM to the organisation. Moreover, all PM were
Mohammed Salloum and Stefan Cedergren
connected throughout the hierarchical levels of the organisation through the use of publicly available KPI-trees
(Figure 1). The general manager explained: “…And then we do have these KPI-trees that show how everything
is related throughout the organisation… I think that they [the KPI-trees] can play an important role in
explaining that yes it [the measures] matters.
Figure 1: Example of one measurement tree for the cost, delivery and quality PM at a department.
4.1.2 Behavioural aspect
Even though interview results, especially from the top-management team, made it explicit that the intention
was to involve everyone, the process was never deployed on a team level in production. One team-leader
elaborated when asked how he though his team felt about working with PM: I do not think they care…painting
is pretty much all that they are interested in that…how can I say it…their main goal is the paint and to keep
painting. So that is pretty much all that they are worried about…
The interviewees for the top-management team were united in their view that they had not reached out fully
and had a contribution to make in order to engage the whole organisation. The general manager explained that
an attempt had been made to involve the teams but it was deferred as many others things came up that needed to
be dealt with. The general manager described the attempt as “half-hearted”. However, all six top-management
interviewees still believed that the KPI review was important and supported it. One of the managers argued that
the attempt failed due to the lack of management understanding regarding how to make the organisation to want
to get involved. The consequences of not involving the masses in the KPI review were believed to be negative
and were best expressed by the production engineering manager who argued that the involvement of the teams
was crucial for the ability of the whole organisation to get something worthwhile out of the PM. Further, another
contributing factor to the lack of involvement was the culture of the organisation. The production manager
argued: Here at this plant, to engage your employees equals to inform them and nothing else. No dialogue or
feedback exists. You must always control that things are getting done. This is fundamentally wrong and in order
to redeem this we must change the culture…this journey starts with us, the top-management team”.
When asked about the culture and its impact on the PM, several managers highlighted the negative
behavioural effect that the PM ownership structure had. The quality manager argued that the ownership needed
to be driven down beyond the team-leaders in order to trigger involvement. Those thoughts got support by
recently promoted team-leaders that expressed that their acquired PM responsibilities made them get involved.
Further, the organisation did not offer any PM training to the production teams. This education was given once
an operator/assembler became a team-leader. The team-leaders highlighted that the education was important for
their understanding of the PM. Moreover, direct observations and interview results indicate that that CC1 had
problems with their inflexible and disintegrated IT-systems. All five top-management interviewees underlined
that the IT-system was inflexible in regards to what they wanted to measure. High levels of manual impositions
for collecting and compiling data encroached on the time for analysis, limited the measurement scope and
amplified the risk for human errors. The general manager explained that it sometimes felt like a project to just
start measuring a new PM.
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4.2 Case company 2 The dual process approach
PM process documentation and interview responses exhibit that CC2 deployed two processes for managing
PM change. The first process, labelled at CC2 as the business plan and goal steering process (BP&GS) adopted
a top-down approach and was confined to all the main strategic and operational PM. In converse, the second
process, named the operational development process (OD) was designed as a bottom-up approach with focus on
a single strategic goal.
4.2.1 Structural aspect
Analysis of management system guidelines and interview responses from across CC2 revealed that the first
review process adopted a top-down approach and consisted of two loops, a business planning (BP) loop and a
goal steering (GS) loop (Figure 2). According to management interviewees and documentation obtained from
the intranet, the purpose of the BP loop was to ensure that the strategy of the organisation had been reviewed
whilst the GS loop aligned the PM scorecards across the organisation with the reviewed strategy. Once the top-
management team had finished their BP loop and updated the strategic material and main PM, the objectives
and PM of the organisation were reviewed through the GS loop. The BP loop was thus the first process step and
was confined, participation wise, to the top-management. Process material and interview responses exhibit that
the GS loop was executed in a chronological fashion with output of higher hierarchical levels serving as input
for the lower dittos. Moreover, the output was meant to become more specific and detailed the further down the
GS loop was drilled (Figure 2). At, first-line management level specific actions were meant to be assigned to the
PM and goals through the development of local business plans. The GS loop was concluded once the lowest
levels of CC1 had reviewed and updated their PM and goals for the coming year.
Figure 2: The BP&GS loops and their outputs.
Analysis of interviews and archived data reveals that the OD process revolved around the notion that the
organisation cooperatively concentrates on one strategic focus. The OD process consisted of five steps, was
well-documented and had both process descriptions and educational material describing it in detail (Figure 3).
Educational material outlined that the initial step revolved around justifying the need for action to the
organisation. This was done through a seminar held by the general manager. The second step sets the direction
of the company by selecting one common strategic focus. Once the focus was set it was broken down into goals,
PM and action lists within all OD teams. Then, the output and progress was monitored through revised action
lists, recurrent team meetings and creation and finalisation of PM. The OD teams had full authority of creating
the goals, PM and action lists as long as they supported the strategic focus. It was believed by interviewees
across CC2 that all employees were members of at least one OD team. Further, all employees had been given
training in the OD philosophy and how to work within the OD teams by the internal consultants. The final step
of the process purposed to use gained insights as part of the input for the next loop of the process and to improve
it. Educational material and interview responses underline the role of the internal consultants played. From
helping the general manager with the strategic focus to support the OD groups with their PM, actions and
improving the process.
Mohammed Salloum and Stefan Cedergren
Figure 3: The OD process. The process steps are highlighted in rectangles and the outputs in spheres.
4.2.2 Behavioural aspect
It was underlined by several interviewees that the BP&GS process did not work as intended, some first-line
managers admitted that this was the first time in several years that they got any input from their managers.
Others acknowledged that they received their input only after they had finished reviewing their PM and
assignment of actions. The first-line managers that received input perceived it to be problematic that the upper
management absorbed much time and thus reduced the time left for them. One of top-managers acknowledged
the problem: The further down you come the organisation the less time they have and I think that is generally
speaking…we need to get better here that thing is clear…considering the vast change in activities that this work
[the GS loop] creates I do believe that we are putting down too little resources and time…
First-line management interviewees established that they did not have a coherent way of engaging their
production teams in the GS loop. These arguments were strengthened by the non-existence of process
documentation. A couple of first-line managers described how they gathered all the operators for an afternoon in
order to together create the business plan. In converse, other managers argued that they had no possibility to
engage their production teams in the process due to the impact on production output. One first-line manager
explained why he could not engage his production teams: …the thought is that we should involve our teams, we
have not done that yet…it has not been possible to involve the teams because we have shift teams that work on
different hours...we cannot involve everyone because that would require paying overtime and supplementary
The consequence of not being involved was highlighted by one of the team-leaders: It only becomes a
number, the culture here is that it is really cool to measure stuff, but then nothing is really done. You measure
and pile it up and then they go “bother! Let’s measure this instead”. Not many union workers [the blue collars]
are interested in it [the performance measures].
Questions about the culture and the support that it lends to the PMS generate diversified answers.
According to the top-management a culture existed in which people did not question, challenge or improve the
operations. It was a culture characterised by reactivity, something needs to be dysfunctional in order to trigger
an action. In contrast, one blue collar respondent argued: …we on the shop floor are not interested in
measuring anything. We know that they [the PM] are flavours of the month. We have so much fact that it is
ridiculous but no actions are taken.
Top-management interview responses revealed that the top-management team supported the BS&GP
process. However, the support of the OD process was not as established as it had been severely reduced in
scope. CC2 was undergoing a transformation of the production system from functional to lean and the general
manager argued that the resources were not sufficient for both. The OD process was still active in some parts of
the organisation, however, the decrease in utilisation had a distinct effect on the cost savings made from, from 4,
1 to 1, 9 MUSD. Moreover, the functionality of the IT-systems was emphasised by interviewees across the
organisation. Interviewees from the higher organisational levels acknowledged that the IT-systems had
limitations, were inflexible in regards to data extraction and that the data quality was not always fully reliable.
The production manager shared an example: …a typical and good example of this is when the hours logged in
the system are suspiciously low…after asking around you get the answer that the central finance department
made a small definition error in the system...
Int. Journal of Business Science and Applied Management /
4.3 Case company 3 The unstructured meeting approach
4.3.1 Structural aspect
The accounts on how the review was executed differed widely across CC3. Further, no documentation was
identified nor acknowledged by the interviewees. However, several top-management interviewees
acknowledged that the approach started with a top-management meeting in which the PM and objectives were
reviewed. In the review several factors would guide the decision-making (Table 4) but it was emphasised by
several interviewees (general manager, finance manager, production manager) that much of the changes were
dictated by the company HQ. According to the general manager it was not unconventional that CC3 were
simply handed new PM and goal levels without space for questioning. Interview responses from top-
management members underlined that the execution of the review meeting would differ from year to year. The
unstructured characteristic of the process was acknowledged as burdensome by the general manager: We need
to make it [the review process] distinct… we are in a phase in which we need to type out the process I can admit
that it does not work well today… I addressed all the leaders [managers] with the factory measures and goals
just before December…they were however not finished until March. But that is too late, it is not functional.
Interview responses by functional managers revealed that after the top-management had decided on their
PM it was their responsibility to take the review to the next hierarchical level. It was underlined in interviews
with top and second-line managers that the involvement of the organisation in the review was something that
was often repeated as important. However, it was at the same time acknowledged as the most challenging part to
do according to the production manager: Involving everyone is the most difficult thing to do when working with
KPI´s. You really want to get everyone to feel that they can contribute…in my world, if PM are generated by the
factory management [top-management] then it needs to be taken down to the local departments...bad PM will
lead to bad behaviour, no one will care because no one will be able to exert influence over them [the PM].
When asked about the autonomy to select PM in the lower levels of the organisation the general manager
explained: SQD [Safety, Quality, Delivery], these are the measures that should be on the shop floor level and
that is enough...this is simple and contributes to the whole. SQD… first we need to get our review process
functioning and then we can look into how to give autonomy to the teams.
4.3.2 Behavioural aspect
Interview accounts from functional managers underline that no formal requirements on how to push the PM
review to the next organisational level existed. Interview responses from the finance manager and one controller
revealed that the finance function discussed and decided on the PM at a department meeting. The controller
explained that this was a satisfactory way of working as the department only consisted of four members. In
contrast, the logistics department had a PM review day with the whole function. The logistics manager
explained why he wanted his function to work in this manner: …I do not do this, it is the function because they
are the ones that will be working with this in there group. We do this in order to create the environment that
makes them feel “that this is my way, this is what we should do in our group”.
The logistic function´s procedure was positively perceived by interviewees across the organisation and was
referred to as a good standard by a second-line production manager. The production function, which was the
most employee heavy function, deployed a contrasting procedure according to interviewees from within the
function. The second-line managers would receive the PM and goal levels to be deployed with suggestions of
how to cascade them down further to first-line managers, team-leaders and production-teams by their superior.
Accounts from team-leaders further strengthened this notion as they were simply handed their new PM from
their managers. These accounts were strengthened by the production manager: …I believe that we use a
commando-structure here, we do not really have that anchoring or cascading of the measures.
Questions regarding how well the IT-system facilitated change in PM generated different responses. Two
(HR top-manager & production second-line manager) out of the 21 interviewees were positive about the IT-
system. However, the majority of the respondents felt that the IT-system inhibited their ability to measure.
Several interviewees blamed the new IT-system and argued that the structures of queries that were built around
the old system had now vanished without anything replacements. Some interviewees however believed that with
time, the new IT-system would become more flexible and better than the old system. Other argued that once the
competence of how to handle the new IT-system increased the possibilities would surpass the old system´s. The
interviewees’ perception of the culture at CC3 was diversified. On one side of the extreme the finance manager
felt that the organisation had a large quantity of PM that no one really cared about. In contrast, the HR manager
argued that the leadership at the site was very ambitious about the PM and that they understood the need to have
good measures over time. The answers were diversified throughout the organisation regardless of hierarchical
belonging. However, several responses were consistent in regards to the reporting and control characteristics of
the culture.
Mohammed Salloum and Stefan Cedergren
5.1 Structural aspect
From a structural perspective, all three approaches revolved around the notion of top-down execution with
strategy as a starting point. The top-down feature seems to be in place in order to create PM alignment across
the organisation. Both the CC1 and CC2 approaches had this feature explicitly designed through the chain of
execution. Even though CC3 lacks an explicit approach, the chain of execution is evident in how they managed
PM change. The OD process (CC2) facilitated the alignment directly between the teams and strategic focus.
Further, the input to the decision-making is similar across the case companies (Table 4). This validates the
established belief that PM and strategy need to achieve alignment. Further, the approaches were executed
annually/semi-annually and were thus seen as recurring activities as argued by Neely et al. (2002b), and Medori
and Steeple (2000). Further, the liberty to develop PM is another common feature. CC1 and CC2 allowed their
employees to develop PM if they supported the overriding organisational direction. PM autonomy seemed to be
perceived as an important function for gaining the involvement. It seems that the underlying notion was that PM
autonomy would amplify involvement that in turn would drive performance. Involvement of employees is
underlined by Spitzer (2007) as pivotal factor.
Further, the possible relationship between the level of documentation/facilitation and the execution time
needs to be highlighted. The approaches with facilitators and documentation were executed between 1-3 weeks
whilst the dittos without took between 1-5 months to execute. These findings strengthen the calls for ownership
of the PM change process (Kaplan and Norton, 2005; 2008) and a structured and defined approach (Meekings,
2005). Thus, if adequate resources are dedicated from the start the conditions for involving the organisation are
plausibly greater. Furthermore, such a proactive stance will lead, in the long-run, to a process that requires fewer
resources to execute (Neely et al., 2002a). Moreover, several researchers underlined the need of adequate IT-
capabilities (Bititci et al., 2000; Wettstein and Kueng, 2002; Kennerley et al., 2003). The IT-system was
highlighted across the case studies as an influencing factor. The challenge highlighted was not being able to
measure due to inflexibility. Further, fragmented IT-systems had consequences beyond inflexibility such as time
for data extraction, compilation and human errors. Further, another aspect is the structure built around a given
IT-system. CC3 replaced an old fragmented system with a new and integrated ditto that would enhance
flexibility. However, with both competence and supporting structures erased the new system was perceived as
less flexible and more problematic.
5.1 Behavioural aspect
Even though the role of employee involvement was underlined as sought-after and important, all three
companies had problems in making it a reality. Several plausible explanations exist based on the empirical
evidence. The rigid and hierarchical chain of execution might make more damage than good. It became evident
at CC2 that the chain of execution can become a problem if not accompanied with the appropriate level of
resources. The managers at the lowest levels did not get their input in time and were not cleared resources to try
to involve their production teams. The OD approach deviated from the hierarchical execution and allowed each
team to develop goals and PM in support of the strategic focus without any intermediaries. The OD approach of
structuring the review process required less time to execute while including the whole organisation. Moreover,
in relation to the chain of execution, size matters. At CC3, the finance function had no problems involving the
employees. The employee-wise larger logistics function could involve most of its employees but had to work
around the production planning. In contrast, the function with the highest number of employees (production),
simply deployed the changes brought to them. Thus, a negative correlation seems to exist between the
department size and the level of involvement. An increase in size equals an increase in needed resources, mainly
time and additional labour costs. However, as illustrated at CC3, if resources are not made available the
involvement will be suffocated. The need to give sufficient resources is highlighted by Spitzer (2007). Further,
the challenge of employee involvement is further amplified by the lack of top-management understanding. As
illustrated in CC2, little time was given to the lower levels. Instead, the higher management levels consumed the
larger portion of the time available leaving the organisation, at best, with time constraints. As gatekeepers of
organisational resources, top-management plays an important role in establishing a functional review approach.
Several of the major hurdles identified regarding the involvement have their roots in management action and
decision-making. The top-management needs firstly to understand the requirements of executing a PM review
approach characterised by a chain of execution and secondly to make the required resources available.
However, there are other aspects of the challenges of involvement that are evident in the empirical data.
The situation at CC1 illustrates that ownership and education can be two barriers of employee involvement.
Once these two were given to promoted individuals they got involved. These two factors built a barrier at a CC1
which had; a defined and documented process, designated facilitators, visual aids and no resource complains
(Spitzer, 2007). Thus, even though CC1 had, in contrast to the other case companies, better conditions, it was
Int. Journal of Business Science and Applied Management /
restrained by a lacklustre employee attitude towards involvement that was only dispersed through education and
ownership. Top-management support is highlighted (Kennerley et al., 2003) as a factor affecting the ability to
manage change in PM. The empirical data underline that respective top-management team is committed to
respective review approach. However, if the commitment would be juxtaposed to the actions of respective top-
management team a different picture would emerge. CC2 confined the OD process regardless of the
considerable cost savings. Moreover, none of the CC2 and CC3 top-management teams did provide enough
resources for execution. Top-management´s actions at CC1 seem to be more in line with their claim of
commitment. Even though their attempt to involve the organisation was postponed, their process had both a
facilitator and solid structure. Moreover, Kennerley et al. (2003) underline the need of a beneficial measurement
culture. Judging by both interview responses and how each approach was executed, there is evidence that none
of the organisations had PM beneficial cultures in place. Even though the cultures shared this commonality, they
seemed to differ in characteristics. At CC1, the hierarchical rigidness made it challenging to involve the
employees and discussion was synonymous with informing. At CC2, the top-management teams and employees
perceived each other to be reactive with neither willing to act on the PM. At CC3, the limitations in autonomy
and liberty of action reduced PM to a reporting vehicle to be decided upon by superiors.
Even though the case companies had different approaches in place to manage change in PM, they shared
several commonalities. Commonalities were shared in the way of execution, process input and challenges in IT
and culture. Furthermore, employee involvement seemed to be the biggest challenge for all three companies.
From the empirics and conclusions presented in this paper, several interesting areas have emerged suitable for
the future research agenda:
More descriptive case studies are needed that sheds further light on how PM change is managed in
practice. Even though this paper has helped to bridge the knowledge gap, more research is needed.
How to gain organisational involvement is pivotal. This paper has elaborated over the causes but
more research is needed that specifically focuses on the involvement of the employees.
The relationship between involving employees and driving performance ought to be investigated.
As illustrated, involving the masses from an organisation of considerable size requires resources.
If the involvement does not impact on the performance it would be counterproductive to have it in
a review approach.
However, the findings put forward in this paper are limited as they are confined to three companies from
the same company-group. More studies, both from within and outside the company-group, are needed in order
to establish a solid base of empirical data for generalisation. Further, the theoretical background presented in
this paper is confined to the field of PMM. Even though there are limitations to the research put forward in this
paper, it helps to bridge the gap of knowledge regarding how PM change in managed in practice. This paper
makes a contribution both through describing how three companies manage PM change and through elaborating
on the underlying factors affecting functionality. Furthermore, the paper also provides insights for practitioners
regarding the challenges faced by manufacturing units in managing change in PM. As the challenges seem to be
similar across the case companies one implication could be to increase the cooperation and benchmarking across
company-groups in order to capitalise on best practices and proven solutions.
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