Open Access Open Access  Restricted Access Subscription or Fee Access
Total views : 1036

A Clever Approach to Measure Organizational Performance: An Overview

Affiliations

  • Ph.D Research Scholar, Department of Management Lovely Professional University, Phagwara, Punjab, India

Abstract


If organizations cannot appraise their performance, they cannot manage their businesses. The traditional approach to organizational performance has been to consider profitability, which is normally regarded as return on investment. However, the study has provided a thorough view of organizational performance. Therefore, performance measurement literature has been reviewed; which has focused on various approaches such as the performance prism, the balanced scorecard (BSC), the performance pyramid, and the triple bottom line. The study has discussed the multi-dimensionality of organizational performance and suggests that organizations need to incorporate both dimensions of organization's performance (subjective and objective). The main purpose of the study was to provide a holistic view of various approaches with respect to organizational performance.

Keywords

Triple Bottom Line Approach, Balance Score Card Approach, Performance Pyramids, Organizational Performance

L25, M1, M40

Paper Submission Date : January 1, 2014 ; Paper sent back for Revision : March 10, 2014 ; Paper Acceptance Date : April 9, 2014.


Full Text:

 |  (PDF views: 6)

References


  • Abran, A., & Buglione, L. (2002). A multidimensional performance model for consolidating Balanced Scorecards. Advances in Engineering Software, 34(6), 339-349. DOI : http://dx.doi.org/10.1016/S0965-9978(03)00033-4
  • Abu-Jarad, I. Y., Yusof, N. A., & Nikbin, D. (2010). A review paper on organizational culture and organizational performance. International Journal of Business and Social Science, 1(3), 26-46.
  • Akroush, M. N., & Al-Mohammad, S. M. (2010). The effect of marketing knowledge management on organizational performance: An empirical investigation of the telecommunications organizations in Jordan. International Journal of Emerging Markets, 5(1), 38-77. DOI:10.1108/17468801011018266
  • Alexandru, C. (2012). The impact of supply chain performance on organizational performance. Journal of Electrical and Electronics Engineering, 5(2), 45-48.
  • Allen, R. S. & Helms, M. M. (2006). Linking strategic practices and organizational performance to Porter's generic strategies. Business Process Management Journal, 12(4), 433-454. DOI:10.1108/14637150610678069
  • Al-Saeed, R. Rajamohan, P. & Upadhya, A. (2010). Entrepreneurial orientation, knowledge process and marketing performance: An investigation in small organizations in Sharjah Emirate. Journal of Asia Entrepreneurship and Sustainability, 6(2), 103-119.
  • Aluko, M. A. O. (2003). The impact of culture on organizational performance in selected textile firms in Nigeria. Nordic Journal of African Studies, 12(2), 164-179.
  • Archel, P., Fernandez, M., & Larrinaga, C. (2008). The organizational and operational boundaries of triple bottom line reporting: A survey. Environmental Management, 41(1), 106-117.
  • Atkinson, A. A., Waterhouse, J. H., & Wells, R. B. (1997). A stakeholder approach to strategic performance measurement. MIT Sloan Management Review, Spring 1997. Retrieved from http://sloanreview.mit.edu/article/a-stakeholder-approach-tostrategic- performance-measurement/
  • Balanced Scorecard Institute. (n.d.). Balanced scorecard basics. Retrieved from https://balancedscorecard.org/Resources/AbouttheBalancedScorecard/tabid/55/Def ault.aspx
  • Bartuševičienė, I., & Šakalytė, E. (2013). Organizational assessment: Effectiveness vs. efficiency. Social Transformations in Contemporary Society,1, 45-53.
  • Carley, K. M., & Lin, Z. (1997). A theoretical study of organizational performance under information distortion. Management Science, 43(7), 976-997.
  • Chavan, M. (2009). The balanced scorecard: A new challenge. Journal of Management Development, 28(5), 393-406. DOI:10.1108/02621710910955930
  • Chen, L., & Mohamed, S. (2008). Contribution of knowledge management activities to organizational business performance. Journal of Engineering, Design and Technology, 6(3), 269-285. DOI:10.1108/17260530810918289
  • Christen, E. W., Shepheard, M. L., Meyer, W. S., Jayawardane, N. S., & Fairweather, H. (2006). Triple bottom line reporting to promote sustainability of irrigation in Australia. Irrigation Drainage System, 20(4), 329-343. DOI : 10.1007/s10795-006- 9011-1
  • Dess, G. G., & Robinson, R. B. (1984). Measuring organizational performance in the absence of objective measures: The case of the privately-held firm and conglomerate business unit. Strategic Management Journal, 5(3), 265-273.
  • Dixon, S. E. A., & Clifford, A. (2007). Ecopreneurship- A new approach to managing the triple bottom line. Journal of Organizational Change Management, 20(3), 326-345. DOI:10.1108/09534810710740164
  • Ekwueme, C. M., Egbunike, C. F., & Onyali, C. I. (2013). Benefits of triple bottom line disclosures on corporate performance: An exploratory study of corporate stakeholders. Journal of Management and Sustainability, 3(2), 79-91. DOI:10.5539/jms.v3n2p79
  • Elkington, J. (1997). Cannibals with forks: The triple bottom line of 21st century business. Capstone, U.K. : Oxford University Press.
  • Fox, J. M. (2005). Organizational entrepreneurship and the organizational performance linkage in university extension (Dissertation). The Ohio State University, USA. Retrieved from https://etd.ohiolink.edu/ap:0:0:APPLICATION_PROCESS=DOWNLOAD_ETD_SUB_DOC_ACCNUM:::F1501_ID:osu1133286266,inline
  • Giovanni, P. D. (2012). Do internal and external environmental management contribute to the triple bottom line? International Journal of Operations & Production Management, 32(3), 265-290. DOI:10.1108/01443571211212574
  • Glaser, J. A. (2006). Corporate responsibility and the triple bottom line. Clean Technologies and Environmental Policy, 8(4), 225-228. DOI:10.1007/s10098-006-0067-2
  • Gosselin, M. (2005). An empirical study of performance measurement in manufacturing firms. International Journal of Productivity and Performance Management, 54(5/6), 419-437. DOI:10.1108/17410400510604566
  • Granados, A. C., & Gamez, G. G. (2010). Sustainability and triple bottom line: Key issues for successful Spanish school principals. International Journal of Educational Management, 24(6), 467-477. DOI:10.1108/09513541011067656
  • He, X., Zhang, X., Li, X., & Piesse, J. (2011). Stakeholder orientation and organizational performance in an emerging market. Journal of General Management, 36(3), 67-91.
  • Homburg, C., Artz, M., & Wieseke, J. (2012). Marketing performance measurement systems: Does comprehensiveness really improve performance? Journal of Marketing, 76(3), 56-77. DOI:10.1509/jm.09.0487
  • Hsiao, Y.-C., Chen, C.-I., & Chang, S.-C. (2011). Knowledge management capacity and organizational performance: The social interaction view. International Journal of Manpower, 32(5/6), 645-660. DOI:10.1108/01437721111158242
  • Indradevi, R. (2012). Relationship between appraisal and organizational performance. Prabandhan: Indian Journal of Management, 5(6), 19-25.
  • Jaafreh, A. B., & Al-abedallat, A. Z. (2013). The effect of quality management practices on organizational performance in Jordan : An empirical study. International Journal of Financial Research, 4(1), 93-109. DOI:10.5430/ijfr.v4n1p93
  • Jackson, A., Boswell, K., & Davis, D. (2011). Sustainability and triple bottom line reporting-What is it all about ? International Journal of Business, Humanities and Technology, 1(3), 55-59.
  • Kaplan, R. S., & Norton, D. P. (1996). Linking the balanced scorecard to strategy. California Management Review, 39(1), 53-79.
  • Kaplan, R. S., & Norton, D. P. (2001). Transforming the balance scorecard from performance measurement to strategic management: Part I. Accounting Horizons, 15(1), 87-104.
  • Katou, A. A. (2008). Measuring the impact of HRM on organizational performance. Journal of Industrial Engineering and Management, 1(2), 119-142.
  • Kohli, A. K., Jaworski, B. J., & Kumar, A. (1993). MARKOR: A measurement of market orientation. Journal of Marketing and Research, 30(4), 467-477.
  • Kroeger, J. W. (2007). Firm performance as a function of entrepreneurial orientation and strategic planning practices (Unpublished Doctoral Dissertation). Cleveland State University, Ohio, USA.
  • Kuo, Y.-K., & Ye, K. D. (2010). How employees' perception of information technology application and their knowledge management capacity influence organizational performance. Behavior and Information Technology, 29(3), 287-303. DOI:10.1080/01449290701852166
  • Kurien, G. P., & Qureshi, M. N. (2011). Study of performance measurement practices in supply chain management. International Journal of Business, Management and Social Sciences, 2(4), 19-34.
  • Lai, H. - H. (2012). Study on influence of employee promotion system on organizational performance. International Journal of Organizational Innovation, 5(1), 231-251.
  • Lakhal, L. (2009). Impact of quality on competitive advantage and organizational performance. Journal of the Operational Research Society, 60, 637-645. DOI:10.1057/palgrave.jors.2602601
  • Leitao, J., & Franco, M. (2010). Non-economic organizational performance of SMEs: Is there a rationale for a cognitive entrepreneur? Retrieved from http://webs2002.uab.es/edp/workshop09/Papers%20Workshop/5Joao.pdf
  • Lipe, M. G., & Salterio, S. E. (2000). The balanced scorecard: Judgmental effects of common and unique performance measures. The Accounting Review, 75(3), 283-298.
  • Lynch, R. L., & Cross, K. F. (1991). Measure up-the essential guide to measuring business performance. London : Mandarin.
  • Mahmoodsalehi, M., & Jahanyan, S. (2009). The effect of knowledge management on relationship between intellectual capital and business performance: A case study of Iran's industrial development and renewal organization (IDRO). Journal of Knowledge Management Practice, 10(3), 1-9.
  • Majid, I. A., & Koe, W. L. (2012). Sustainable entrepreneurship (SE): A revised model based on triple bottom line (TBL). International Journal of Academic Research in Business and Social Sciences, 2(6), 293-310.
  • Makkar, U., & Kumar, H. (2011). Impact of implementation of balanced business score card (BBSC) on organizational effectiveness: A case study of Bharat Sanchar Nigam Ltd (BSNL). Prabandhan: Indian Journal of Management, 4(1), 17-35.
  • Malmi, T. (2001). Balance scorecards in Finnish companies: A research note. Management Accounting Research, 12(2), 207-220. DOI: http://dx.doi.org/10.1006/mare.2000.0154
  • March, J. G., & Sutton, R. I. (1997). Organizational performance as a dependent variable. Organization Science, 8(6), 698-706.
  • Meijer, M. M., & Schuyt, T. (2005). Corporate social performance as a bottom line for consumers. Business and Society, 44(4), 442-461. DOI: 10.1177/0007650305281659
  • Metawie, M., & Gilman, M. (2005). Problems with the implementation of performance measurement systems in the public sector where performance is linked to pay: A literature review drawn from the UK. Paper presented at the 3rd Conference on Performance Measurements and Management Control, Nice September 22-23, 2005. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.104.9267&rep=rep1&type=pdf
  • Milne, M. J., Ball, A., & Gray, R. (2013). Whither ecology? The triple bottom line, the global reporting initiative, and the institutionalization of corporate sustainability reporting. Journal of Business Ethics, 118, 13-29.
  • Murphy, R., Sepehri, M., & Werner, M. (2013). Is market orientation an advantage for business performance ? The Journal of American Academy of Business, Cambridge, 18(2), 106-112.
  • Narver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20-35.
  • Neely, A., Adams, C., & Kennerley, M. (2002). The performance prism: The scorecard for measuring and managing business success. U.K. : Pearson Education.
  • Neely, A., Adams, C., & Crowe, P. (2001). The performance prism in practice. Measuring Business Excellence, 5(2), 6-11.
  • Neely, A. (1995). Performance measurement system design: Developing and testing a process- based approach. International Journal of Operations & Production Management, 20(10), 1119-1145.
  • Nganwa, P. K. (2002). Taking on the triple bottom line. Accountancy, SA, 13-14.
  • Norman, W., & MacDonald, C. (2003). Getting to the bottom of "Triple Bottom Line". Business Ethics Quarterly, 1-19. Retrieved from http://isites.harvard.edu/fs/docs/icb.topic549945.files/Canadian%20Paper.pdf
  • O'Boyle, I., & Hassan, D. (2013). Organizational performance measurement: Examining the practical utility of the performance prism. Organization Development Journal, 51-58. Retrieved from http://www.highbeam.com/doc/1P3- 3153977981.html
  • Protogerou, A., Caloghirou, Y., & Lioukas, S., (2012). Dynamic capabilities and their indirect impact on firm performance. Industrial and Corporate Change, 21, 615-647. DOI:10.1093/icc/dtr049
  • Purbey, S., Mukherjee, K., & Bhar, C. (2007). Performance measurement system for healthcare processes. International Journal of Productivity and Performance Management, 56 (3), 241-251.
  • Ramayah, T., Samat, N. & Lo, M-C. (2011). Market orientation, service quality and organizational performance in service organizations in Malaysia. Asia-Pacific Journal of Business Administration, 3(1), 8-27. DOI:10.1108/17574321111116379
  • Rašula, J., BosiljVukšić, V. B., & Štemberger, M. I. (2012). Impact of knowledge management on organizational performance. Economic and Business Review, 14(2), 147-168.
  • Richards, P. J., Devinney, T. M., Yip, G. S., & Johnson, G. (2008). Measuring organizational performance as a dependent variable: Towards methodological best practice. Strategic Management Journal. Retrieved from http://www.researchgate.net/publication/228136632_Measuring_Organizational_Performance_as_a_Dependent_Variable_Towards_Methodological_Best_Practice/file /9fcfd5080dcfcb36f3.pdf
  • Rose, R. C., Kumar, N., & Ibrahim, H. I. (2008). The effect of manufacturing strategy on organizational performance. Performance Improvement, 47(1), 18-25. DOI:10.1002/pfi.175
  • Shahzad, F., Luqman, R. A., Khan, A. R., & Shabbir, L. (2012). Impact of organizational culture on organizational performance: An overview. Interdisciplinary Journal of Contemporary Research in Business, 3(9), 975-985.
  • Sherman, W. R. (2012). The triple bottom line: The reporting of "doing well" and "doing good". Journal of Applied Business Research, 28(4), 673-682.
  • Sitlington, H., & Marshall, V. (2011). Do downsizing decisions affect organizational knowledge and performance. Management Decision, 49(1), 116-129. DOI:10.1108/00251741111094473
  • Sridhar, K. (2012a). The relationship between the adoption of triple bottom line and enhanced corporate reputation and legitimacy. Corporate Reputation Review, 15(2), 69-87. DOI:10.1057/crr.2012.4
  • Sridhar, K. (2012b). Corporate conceptions of triple bottom line reporting: An empirical analysis into the signs and symbols driving this fashionable framework. Social Responsibility Journal, 8(3), 312-326. DOI:10.1108/17471111211247901
  • Tsai, C.- J., Edwards, P., & Sengupta, S. (2010). The association between organizational performance, employee attitudes and human resource management practices: An empirical study of small businesses. Journal of General Management, 36(1), 1-20.
  • Tsolakis, D. (2004). Triple-bottom-line evaluation approach shows promise for local government. Road &Transport Research, 13(4), 87-88.
  • Uncles, M. D. (2011). Researching market orientation and business performance. Australasian Marketing Journal, 19(3), 161-164.
  • Venkatraman, N., & Ramanujam, V. (1986). Measurement of business performance in strategy research: A comparison of approaches. The Academy of Management Review, 11(4), 801-814.
  • Vytlacil, L. L. (2010). Market orientation and business performance: The role of positional advantage (Doctoral Dissertation), Capella University.
  • Walker, L. J. H. (2001). The measurement of a market orientation and its impact on business performance. Journal of Quality Management, 6(2), 139-172. DOI : http://dx.doi.org/10.1016/S1084-8568(01)00035-9
  • Wang, C. L., & Ahmed, P. K. (2003). Knowledge management orientation and organizational performance. Working Paper Series, 1-19. Retrieved from https://www.wlv.ac.uk/PDF/uwbs_WP004-03%20Wang%20%20Ahmed.pdf
  • Wexler, M. N. (2009). Strategic ambiguity in emergent coalitions: The triple bottom line. Corporate Communications: An International Journal, 14(1), 62-77. DOI:10.1108/13563280910931081
  • Zaman, K., Javaid, N., Arshad, A., & Bibi, S. (2012). Impact of internal marketing on market orientation and business performance. International Journal of Business and Social Science, 3(12), 76-87.
  • Zeglat, D., Alrawabdeh, W., Almadi, F., & Shrafat, F. (2012). Performance measurement systems: Stages of development leading to success. Interdisciplinary Journal of Contemporary Research in Business, 4(7), 440-448.

Refbacks

  • There are currently no refbacks.