Research of the Performance Measurement system: Environmental Perspective

Abstract

This article presents the results of empirical research performed in Lithuanian organizations. Theoretical background is based on assumptions that changing environment of organizational performance has a direct impact on changes in performance measurement, which, in its turn, are realized in close connection with projects on re-organizing internal management systems. The main feature of modern performance measurement system is putting the theoretical descriptive method into practices, incorporating it to decision making process, and improving the system according to changing external conditions and internal potential of an organization. Those processes mean organizational changes based on relations with the environment (Alas, Sharifi, & Sun, 2009; Ginevicius & Podvezko, 2009; Gudas, 2009). The dimensions that lead to the deeper analysis of relations between performance measurement system and environment of organization were disclosed in this article. In order to disclose those relations changes of the organizational system could be analyzed in the context of different theoretical assumptions – contingency and complexity theories. According to this aspect, changes of performance measurement system could be analyzed according to contingency theory, which will answer the question – what external environment is surrounding organization and influencing its internal environment. Complexity theory will answer the question - how organization reacts to its external environment. Combining the main presumptions of complexity and contingency theories it could be maintained that the level of environmental uncertainty and organizations reactions to it could be dimensions according to which features and content of PMS in different organizations could be researched. Those two dimensions in different size organizations form different internal organization’s environment peculiarities of which performance measurement system should be reflected. In order to point out performance measurement changes according to environment of the organization, quantitative research (survey) was performed. Survey was performed in Lithuanian organizations, which were chosen by handily selection method. The purpose of the research is to analyze the usage of performance measurement system in Lithuanian organizations: what factors (internal, external) influence the changing process and frequency of performance measurement system according to different aspects of an organization.