Rethinking Performance Measurement: Beyond the Balanced Scorecard

Description

Performance measurement remains a vexing problem for business firms and other kinds of organizations. This book explains why: the performance we want to measure (long-term cash flows, long-term viability) and the performance we can measure (current cash flows, customer satisfaction, etc.) are not the same. The 'balanced scorecard', which has been widely adopted by US firms, does not solve these underlying problems of performance measurement and may exacerbate them because it provides no guidance as to how to combine dissimilar measures into an overall appraisal of performance. A measurement technique called activity-based profitability analysis (ABPA) is suggested as a partial solution, especially to the problem of combining dissimilar measures. ABPA estimates the revenue consequences of each activity performed for the customer, allowing firms to compare revenues with costs for these activities and hence to discriminate between activities that are ultimately profitable and those that are not.

MARSHALL W. MEYER is Professor of Management and Sociology at The Wharton School of the University of Pennsylvania.

'This book is a must-buy for any senior managers of service firms that aspire to have their companies survive and prosper even as competition inevitably increases.' Professor Ian MacMillan, Wharton School of Management, University of Pennsylvania 'Rethinking Performance Measurement challenges fundamentally some of the assumptions held about measurement today.' Professor Andy Neely, Cranfield School of Management 'This book is a 'must read' for managers in balanced scorecard organizations.' Professor Harold Doty, School of Management, Syracuise University 'There is much management theory and much management practice and mountains of books on each. This is a rare book that seeks to use theory to enhance practice.' Professor Sandra Dawson, Director, The Judge Institute of Management Studies, University of Cambridge