Strategic Performance Management

339 Pages·2022·5.223 MB·English

by  Ralph W. Adler

Strategic Performance Management
Effective performance management is core to successful organizations. The new edition
continues to look at performance management as an interdisciplinary field of study and
practice and draws upon a wide set of business disciplines, including strategic management,
organizational behaviour, organizational theory, and management accounting.
The book provides a contemporary examination of theories, issues, and practices related to
performance management with an original performance management framework, grounded
in concrete organizational phenomena, therefore making it more accessible and meaningful
to practitioners, scholars, and students. The updated edition also examines organizations’
evolving use of digital business transformation and the effect on performance management
design.
With updated cases, the latest edition will help readers to gain insights into the fields of
strategic management, organizational behaviour, organizational theory, and management
accounting and how they contribute to the study and practice of performance management.
Ralph W. Adler is Professor of Accounting at the University of Otago, New Zealand. He has
taught graduate and undergraduate students in the USA and New Zealand for more than 35
years. Ralph is the Director of Otago’s Centre for Organisational Performance Measurement
and Management and serves as the Chairman of the Performance Measurement Association of
Australasia. He qualified as a Certified Public Accountant (USA) in 1984 and was made a Fellow
Chartered Accountant of Chartered Accountants Australia and New Zealand in 2016. Ralph is
a past holder of the Coopers and Lybrand Peter Barr Fellowship and the American Chamber of
Commerce Business Education Fellowship. He is a graduate of Colgate University, NY (BA),
Duke University, NC (MBA), and State University of New York Albany (PhD).
“An important aspect of corporate culture is a strong performance culture that recognises
and rewards the right behaviour beyond achieving short-term financial goals. This must
be underpinned by an effective performance measurement system. The focus on ESG and
digitalisation of businesses also challenge the performance management systems of many
companies. The new edition of Ralph W. Adler’s book provides a useful framework for
approaching the design of a performance measurement system and is a timely reminder of
the importance of an effective performance measurement system for a high-performing and
ethical organisation.”
Mak Yuen Teen, PhD, FCPA (Aus),
Professor (Practice) of Accounting, National University of Singapore
“I love when a book not only contains all the relevant information but is written in a way
that can be understood by many, not just elite academics. This is one such book. From
what I have read, I would recommend this book for those studying, teaching, or working
in the area of management accounting – with an emphasis on performance management.
By critiquing and comparing respective early frameworks and providing a clear history of
performance management, Adler has cleverly derived a new and original performance man-
agement framework. This conceptual model then informs the remainder of the new edi-
tion with the addition of ethical behaviours and digital business transformation. Providing
detailed knowledge of prior research is essential to informing these new and improved ways
of organizational structure and ensuring the capture of 21st-century innovations.”
Robyn Pilcher, PhD (USyd), MCom, BBus, FCPA, FIPA, CMA,
Adjunct Associate Professor, Curtin University, Australia
“This textbook does an excellent job of condensing and presenting in a manner understand-
able to students the multifarious field of performance management (management control).
The framework developed and used throughout the textbook captures the various elements
of performance management in a manner that can be readily applied in practice.”
Ralph Kober, Associate Professor of Accounting, Monash University, Australia
Strategic Performance
Management
Accounting for Organizational Control
Second Edition
Ralph W. Adler
Cover image: © Getty Images
Second edition published 2023
by Routledge
4 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2023 Ralph W. Adler
The right of Ralph W. Adler to be identified as author of this work has been asserted in
accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any
form or by any electronic, mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information storage or retrieval system,
without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or registered trademarks,
and are used only for identification and explanation without intent to infringe.
First edition published by Routledge 2018
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Adler, Ralph William, author.
Title: Strategic performance management: accounting for
organizational control / Ralph W. Adler.
Description: 2nd edition. | Abingdon, Oxon; New York, NY: Routledge, 2023. |
Includes bibliographical references and index. |
Identifiers: LCCN 2022025546 (print) | LCCN 2022025547 (ebook) |
ISBN 9781032211893 (hardback) | ISBN 9781032211886 (paperback) |
ISBN 9781003267195 (ebook) | ISBN 9781032383163 (ebook other)
Subjects: LCSH: Organizational effectiveness. | Performance. | Organizational
behavior. | Strategic planning. | Managerial accounting. | Management audit.
Classification: LCC HD58.9 .A35 2023 (print) |
LCC HD58.9 (ebook) | DDC 658.4—dc23/eng/20220601
LC record available at https://lccn.loc.gov/2022025546
LC ebook record available at https://lccn.loc.gov/2022025547
ISBN: 9781032211893 (hbk)
ISBN: 9781032211886 (pbk)
ISBN: 9781003267195 (ebk)
ISBN: 9781032383163 (eBook+)
DOI: 10.4324/9781003267195
Typeset in Bembo Std
by codeMantra
Access the Support Material: www.routledge.com/9781032211886
For my father, John, and in loving memory of my mother Anita and son Peter.

Contents
List of Figures ix
List of Tables xi
Preface xiii
1 Performance management: An introduction 1
PART 1 Performance management beginnings 9
2 What is performance management? 11
3 The rise of performance management 21
4 Theory and performance management 32
PART 2 Organizational strategy 45
5 Organizational goals and objectives 47
6 Business ethics as an element of organizational strategy 58
7 Introduction to organizational strategy 79
8 Competitive strategy 91
9 Digital business transformation: Connections to
competitive strategy 111
viii Contents
PART 3 Levers of control 121
10 Organizational structure 123
11 Organizational systems, processes, and procedures 142
12 Organizational culture 176
PART 4 Contingent factors 199
13 Internal environment 201
14 External environment 216
15 Conclusion 230
Cases 239
Review Question Answers 283
Company Index 309
Subject Index 312
Figures
1.1 Multidisciplinary and interdisciplinary perspectives 2
3.1 A revised framework of performance management 26
3.2 The relationship between organizational performance and the
right amount of control 29
5.1 Organizational goals as the constrained product of key stakeholders’ goals 50
5.2 Connections between an organization’s mission statement, vision
statement, strategy, and goals and objectives 54
7.1 An illustrated mapping of strategic business units on the GE/McKinsey
Matrix 87
8.1 Generic strategy as a function of competitive scope and competitive position 98
8.2 Visual portrayal of cost leader and differentiators operating in unique
competitive spaces 102
8.3 Collapse of survival zones and implications for cost leaders and
differentiators 102
8.4 The relationship between OWC and the strategy taxonomies of
Miles and Snow, Porter, Cooper, and Kim and Mauborgne 107
10.1 Organizational chart for hypothetical landscaping business 127
10.2 Organizational complexity represented by the three dimensions of
horizontal differentiation, vertical differentiation, and spatial dispersion 128
11.1 The performance pyramid 160
15.1 Malmi and Brown’s model of performance management as a package
of control 232