Strategic Performance Management

Performance Management Profile and Evolution

Also referred to as corporate, business or enterprise performance management, Strategic Performance Management is the highest level to assess organisational performance and success, being mainly focused on strategy and outcomes.

 

In order to guide achievement of organiaational goals, strategic performance management uses systems (Balanced Scorecard, Performance Prism), tools (Key Performance Indicators), frameworks and quality awards (Baldrige Award and the European Foundation for Quality Management (EFQM) Excellence Model).

 

Key processes

The key processes related to strategic performance management systems are strategy formulation and implementation, both subsets of strategic management (Brudan, 2010).

 

Evolution

Established only in the 20th century, strategic performance management has a recent history, mainly driven by strategic management and organisational behaviour practitioners. A turning point in the evolution of strategic management and strategic performance management was Peter Drucker's (1946) publication of "Concept of the Corporation". Interest in strategy as an area of management study followed the diffusion of strategic planning (‘long-range planning') among large companies during the 1950s and 1960s.

 

As strategic management developed as an area of academic study, interest in companies’ strategic planning practices waned. By the 1980s empirical research in strategic planning systems focused upon just two areas: the impact of strategic planning on firm performance and the role of strategic planning in strategic decision making (Grant, 2003). The first area spawned many studies but no robust findings. Ramanujam et al. (1986) observed: ‘The results of this body of research are fragmented and contradictory’, while Boyd’s (1991) survey concluded: ‘The overall effect of planning on performance is very weak’.


References

  • Boyd, B., K. (1991), Strategic planning and financial performance: a meta-analysis, Journal of Management Studies, Vol. 28, pp. 353–374.
  • Brudan, A. (2010), Rediscovering performance management: systems, learning and integration, Measuring Business Excellence, Vol. 14, No. 1, pp. 109-123.
  • Grant, R., M. (2003), Strategic Planning in a turbulent environment: evidence from the oil majors, Strategic Management Journal, Vol. 24, pp. 491-517.
  • Ramanujam, V., Ramanujam, N. & Camillus, J., C. (1986), Multiobjective assessment of effectiveness of strategic planning: a discriminant analysis approach, Academy of Management Journal, Vol. 29, Nr. 2, pp. 347–472.

Strategic : Profile and evolution

 

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