Choice and change of measures in performance-measurement models:

The following article is taken as an excerpt from the proceedings of the annual Acquisition Research Program. This annual event showcases the research projects funded through the Acquisition Research Program at the Graduate School of Business and Public Policy at the Naval Postgraduate School. Featuring keynote speakers, plenary panels, multiple panel sessions, a student research poster show and social events, the Annual Acquisition Research Symposium offers a candid environment where high-ranking Department of Defense (DoD) officials, industry officials, accomplished faculty and military students are encouraged to collaborate on finding applicable solutions to the challenges facing acquisition policies and processes within the DoD today. By jointly and publicly questioning the norms of industry and academia, the resulting research benefits from myriad perspectives and collaborations which can identify better solutions and practices in acquisition, contract, financial, logistics and program management. For further information regarding the Acquisition Research Program, electronic copies of additional research, or to learn more about becoming a sponsor, please visit our program website at: www.acquisitionresearch.org. For further information on or to register for the next Acquisition Research Symposium during the third week of May, please visit our conference website at: www.researchsymposium.org.;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. The study addresses four research questions: (1) Are measure attributes important considerations for performance measure choice? (2) Does the importance of attributes differ according to firm strategy? (3) Does the importance of attributes for design and use differ according to firm strategy? (4) Does a company trade-off some individual attributes for others? The questions are investigated using qualitative and quantitative analyses of archival documents and interviews with top managers and distributors. Principal findings are that measure attributes are important considerations for choice and change of performance measures; design attributes are more important than use attributes; the importance of attributes does not appear to differ according to strategy; and some individual attributes are traded-off for other attributes.Second Annual Acquisition Research SymposiumApproved for public release; distribution is unlimited

Cost management : strategies for business decisions

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Building Performance Models from Expert Knowledge

Improving management control of knowledge-based organizations motivates building performance management models (PMM) of causally related, key success factors (KSF) . This study elicits knowledge maps of KSF from field experts. These knowledge maps are layered to create the foundation of the organization’s PMM. The study elicits causal knowledge from experts who through their experience, training, etc. have encoded relational or causal knowledge about complex systems; that is, they understand how things fit and work together, although they might not have articulated that knowledge. Converting experts’ tacit causal knowledge into organizational capability or explicit knowledge should a) perpetuate that knowledge in the organization, b) enable improved training of less experienced employees, and c) lead to deployment of improved systems (eg, PMM). Because no single method for eliciting mental models or knowledge maps dominates the literature, the study uses multiple methods and overlays their results to build a comprehensive causal model. This study reports the results of a field study to build the foundation of a PMM in a clinical department of a large hospital. The study uses three qualitative methods to elicit mental models of KSF and their interactions from key clinical program administrators, physicians, and nurses. The motivation of the present study is to report the results of (1) tapping the causal knowledge of individual experts in the field and (2) triangulating multiple methods of qualitative data analysis. The alternative method of building a PMM by using archival data-mining is rejected for reasons of (1) limited archival time-series data, (2) limited scope of archival data, (3) myopic focus on conveniently available data, and (4) inability to screen out spurious relations. Because these limitations are generally present in knowledge-intensive organizations, this study’s approach can have general application

Cost management : Strategies for business decisions

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