Choice and Change of Measures in Performance-Measurement Models

Abstract

This paper uses management control, resource-based, systems-based, and contingency-based strategy theories to describe a large US manufacturing company's efforts to improve profitability by designing and using a performance-measurement model (PMM). This PMM includes multiple performance measures relevant to its distribution channel for products, repair parts and maintenance services. The PMM is intended to reflect the company's understanding of performance relations among strategic resources, operational capabilities, and desired financial outcomes. The PMM also reflects its intended distribution strategy, the types of performance necessary to achieve that strategy by its distributors, and its desired financial outcomes. Furthermore, the company uses the model to evaluate its North American distributors and intends to use these evaluations as a partial basis for annual and long-term rewards. Thus, the PMM embodies the measurable portion of the firm's management control system of its distribution channel.

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Document Details

Document Type
Technical Report
Publication Date
May 01, 2005
Accession Number
ADA496644

Entities

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  • Frank H. Selto
  • Mary A. Malina

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  • Naval Postgraduate School

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