A Comparative Study on Strategic Performance Management of Dutch
2008
Strategic performance management (SPM) has become an important vehicle for business
management in today’s turbulent business environment. SPM has in recent years attracted much
research interest from the side of both scientists and policy-makers. This interest is warranted because
of the fundamental transformations (e.g. increased competition, changes in the regulatory
environment, the impact of technology, growing globalization, shifts in customer behaviour and
expectations) in industrial systems created a challenging business environment, which prompted firms
to call for insight into their business activities and operational performance at all times. The growing
importance of these changes has further intensified the need for alternative strategic control and
performance measures to allow businesses to stay competitive and profitable. The performance
measures should provide a complete picture of a firm’s progress towards the achievement of its
mission and goals. The study addresses the need for an efficient SPM and operational Performance
Measurement System (PMS) for assessing business performance to cope with continous changing
business circumstances, to develop systematic strategic tools/approaches that shape and measure a
firm’s capability for continuous competitiveness, to innovate and renew themselves business-oriented
climate, which potentially determine the success of the firms. Both the popular and scientific
literature indicate that there is evidence that SPM is now implemented (in use) in approximately 70%
of medium-to-large firms in the US and Europe, as well as in many governmental departments. There
is however, much unjustified belief in the assumed potential offered by the implementation of SPM in
Dutch firms. Most studies are anecdotal, case studies, speculative and less based upon empirical facts
or solid business management theory. Much work has been carried out on the design and deployment
of SPM, but relatively little attention has been paid on the impact of SPM on firms’ results. The paper
aims to investigate on an empirical basis whether SPM yield the benefits and/or disbenefits, as
predicted by the literature, for Dutch firms. And to provide an insight into the reasons behind the
implementation of SPM, as predicted by the literature, because each of the reasons for implementing
SPM should yield particular benefits or disbenefits. The overarching analysis framework of this paper
is based on SPM, because particular attention is paid to the lessons from the strategic performance
management literature for measuring the successes (and failures) of Dutch firms. Much empirical
studies provide mixed evidence on the strategic benefits from the implementation of SPM. Various
literature sources, case studies and practical experience show that firms that have implemented SPM
obtain better financial and non-financial results, and improve more their overall quality than
competitors or comparable firms that are less SPM-driven over a longer period of time. But, other
literature sources reported that SPM has failed through incorrect identification of non-financial
indicators, poorly defines metrics to address the requirements of all the stakeholders, wrong and too
little or much measurements, use the metrics ineffectively, no clear existence of the link between nonfinancial
and the expected financial results and no clear interactions (correlation(s)) among the
benefits, disbenefits and reasons behind the implementation of SPM. The research will deploy
sophisticated statistical tools (exploratory factor analysis and multiple regression analysis) to assess
systematically the business activities success and (and failures) after implementing SPM in practice.
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