Paper #330

Título:

Strategy communication and measurement systems

Autor:

Pascal Courty

Fecha:

Octubre 1997

Resumen:

Organizations often face the challenge of communicating their strategies to local decision makers. The difficulty presents itself in finding a way to measure performance wich meaningfully conveys how to implement the organization's strategy at local levels. I show that organizations solve this communication problem by combining performance measures in such a way that performance gains come closest to mimicking value-added as defined by the organization's strategy. I further show how organizations rebalance performance measures in response to changes in their strategies. Applications to the design of performance metrics, gaming, and divisional performance evaluation are considered. The paper also suggests several empirical ways to evaluate the practical importance of the communication role of measurement systems.

Palabras clave:

Measurement systems, firm objective, performance measurament, communication

Códigos JEL:

L21, D21

Área de investigación:

Microeconomía

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