Performance Measurement Systems In Business Essay

592 words - 2 pages

Business firms may seem to be similar, relying on guide of organizational models. However, in practice, all business is unique, functioning as a distinct arrangement of organizational models, designs and practices. Adoptation of any plan is all to support ‘’inimitable’’ business strategy. Performance measurement is critical in assessing organization overall performance and results are used for strategic planning to develop range of strategies (Tapinos & Dyson, 2005) for achievement of sustainable business success. Without this information and understanding, organizational strategies will not be in configuration with or effective in the business environment. Performance measurement is a multifaceted management tool that centres on how a business generates value. Performance measurement systems are used to reinforce the behaviours required for business success as well as for achieving organizational direction.

Study On the impact of performance measurement in strategic planning process (Tapinos & Dyson, 2005) described the effectiveness of performance measurement system and explains the important role that it play in organizational directions and in strategic planning. The result showed that the need for organizational practices like performance measurement is adopted as a basis for supporting strategic initiatives. Larger organizations and flurry of activities in the business environment demand managers to take on performance measurement systems, while it has less impact on SMEs due to centralized control, decision-making and initiatives around a leadership figure (Child, 2005). The existing practices of strategic planning greatly depend on the size of the company/extent of diversification and in what market segment it operates. Child (2005) stressed the choice of organizational forms depends on the contingencies factor a firm is pursuing and this why organization adopt strategies that suit their environment and to enable decision-making. The fast accelerating rate of Change in the marketplace demands a different mix of models than was obtainable in the 80’s. For instance, Nortel Networks Corporation (Mcadam &...

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