scholarly journals Making up performance: the construction of “performance” in venture capital firms portfolios

2017 ◽  
Vol 5 (1) ◽  
pp. 18-19
Author(s):  
Rafael Heinzelmann
Keyword(s):  
Venture Capital ◽  
Performance Measurement ◽  
Control Function ◽  
Performance Measurement System ◽  
Accounting Systems ◽  
Accounting Data ◽  
Portfolio Company ◽  
Venture Capital Firms ◽  
And Control ◽  
Measurement And Control

Performance measurement is understood as a corner stone of organizations’ accounting and control function (Chenhall,2003; Merchant & Van der Stede, 2012). In the wake of the relevance lost debate accounting systems have beencriticized for being obsessed with historical financial accounting information making accounting data inadequate fordecision making and insufficiently useful for creating a future alertness in organizations (Johnson & Kaplan, 1987). Inthe aftermath of this, more strategically-oriented accounting systems fostering on the non-financial dimension ofperformance, as most prominently presented by the balanced scorecard, gained increasingly attention by organizationsand accounting scholars (Ax & Bjørnenak, 2005; Nørreklit, 2000, 2003). Yet, there is a substantial body of researchstudying the adoption of MAIs (Management Accounting Innovations) addressing questions of how MAIs such as theBalanced Scorecard travel and change in the course of diffusion and organizational implementation (e.g. Ax &Bjørnenak, 2005; Jones & Dugdale, 2002; Qu & Cooper, 2011). What the literature does not reveal in depth is how dointegrated systems for performance measurement and control comprising financial and non-financial KPIs supportorganizations in handling uncertainty and complexity (Chenhall & Moers, 2015). In this paper, we aim for exploringperformance measurement and control and thus contributing to existing literature by studying how venture capital firmsmobilize ideas of performance measurement and control to handle uncertainty and complexity in their investmentportfolio. More specifically, we investigate two firms of the venture capital industry that use financial and non-financialindicators to manage their portfolio and make decisions. Consequently, this paper addresses the following researchquestions: How do venture capital firms use performance measurement to manage their investment portfolios? And howis “performance” constructed in this context?Exploring how firms from a quite volatile industry use performance measurement is regarded to be interestingfrom various perspectives: First of all, we know little about the link between uncertainty and performance measurement.Second from a theoretical perspective of ActorReality Construction (ARC) there is little empirical evidence on howorganizations construct facts or the factual dimension of accounting and management – facts in the context of ourempirical setting, the venture capital industry, are measures used in the performance measurement system (PMS).Particularly, venture capital firms having a big stake in early phase seed investments, are uncertain in the sense thatattaching a score or a number to a performance dimension of a portfolio company is maybe not that stable over time andambiguous. However, doing the exercise of reviewing each portfolio company according to a dashboard-like PMS givesthe KPIs, despite of their uncertain nature, a factual character. The PMS numbers allow managers to discuss andevaluate “performance” of the portfolio companies in management meetings as well as to make decisions, on forexample, investing additional money, based on the performance facts of the portfolio company. Interestingly, thecombination of “hard” and “soft” numbers – thus, financial and non-financial indicators, plays a pivotal role for VCcompanies in order to be capable to assess “the performance” of the portfolio companies. In other words, it enablesventure capital firms to better take into account the particular organizational contexts of portfolio companies.

Making up performance: the construction of “performance” in venture capital firms’ portfolios

2016 ◽  
Vol 13 (4) ◽  
pp. 445-471
Author(s):  
Rafael Heinzelmann
Keyword(s):  
Venture Capital ◽  
Performance Measurement ◽  
Comparative Case Study ◽  
Performance Measurement System ◽  
Case Study Methodology ◽  
Content Type ◽  
Four Dimensions ◽  
Context Sensitive ◽  
Venture Capital Firms ◽  
Measurement Practices

Purpose The purpose of this paper is to investigate performance measurement practices in venture capital firms. Specifically, the author examines how two organizations make complexity and uncertainty manageable by mobilizing performance measurement. This study draws on the framework of pragmatic constructivism (PC) (Nørreklit et al., 2016; Nørreklit et al., 2006, 2010), focusing on the integration between the four dimensions of PC, namely, facts, values, possibilities and communication. Design/methodology/approach The paper adopts a comparative case study methodology. Findings The findings show that performance measurement practices are strongly influenced by values playing out via integration in actor-world relations, whereas Venture A mobilizes an actor-centric approach, leading to an open, holistic performance measurement system (PMS) which is based on non-financials, a close involvement in operational matters and actors’ judgement using accounting as “learning machines” (Burchell et al., 1980); and Venture B draws on an analytical approach emphasizing on the role of financial indicators and control enacting accounting as “answer machines” and as “tool for computation” (Burchell et al., 1980). These different approaches to PMS, actor-centric vs analytical, are guided by different values about actor-world relation(s). Originality/value The paper provides a context-sensitive account on the relationship between uncertainty and performance measurement practices. First, this paper contributes by providing evidence on how actors use accounting to manage uncertainty and complexity by differently integrating actor-world relation(s) (Nørreklit, et al., 2016; Nørreklit et al., 2006). Second, this study resonates with recent calls for more industry-specific and context-sensitive investigations (Messner, 2016). Finally, the author contributes to the literature asking for more research on the role accounting plays in managing uncertain conditions (Chenhall and Moers, 2015).

scholarly journals Organizational Performance Measurement: A Study in a Pubic University Hospital

2018 ◽  
Vol 17 (1) ◽  
pp. 112-129
Author(s):  
Joice Chiareto ◽  
Hamilton Luiz Corrêa ◽  
Júlio Araújo Carneiro da Cunha
Keyword(s):  
Performance Measurement ◽  
Organizational Performance ◽  
Measurement System ◽  
Single Case ◽  
Strategic Decision ◽  
University Hospital ◽  
Performance Measurement System ◽  
Daily Routine ◽  
Organizational Goals ◽  
And Control

This study aim to evaluate the organizational prerformance measurement system from a university hospital daily routine. To achieve the objectives of this research, the methodology of single case study was used, and as data sources an interview with the manager responsible for performance evaluation and documentary research. The results demonstrated that the performance measurement system had a lot of characteristics foreseen by the academic literature, challenges still may arise. Although the existence of direct relationship between performance measurement results with the financial results along with the high of involvement of senior management and departments of the institution with the performance measurement activities, some challenges were identified. The main one is related to the misalignment between the selection and categorization of some indicators and the organizational goals. Such disalignment may be caused by the existence of punctual feedback instead of global ones, priority focus on control and not in establishing goals, and priority approach for the measurement system usage in legitimacy and control and not in the strategic decision making.

scholarly journals The effects of performance measurement system uses on organizational ambidexterity and firm performance

2021 ◽  
Vol 41 (13) ◽  
pp. 127-151
Author(s):  
Matteo Mura ◽  
Pietro Micheli ◽  
Mariolina Longo
Keyword(s):  
Firm Performance ◽  
Performance Measurement ◽  
Measurement System ◽  
Positive Association ◽  
Ordinary Least Squares ◽  
Performance Measurement System ◽  
Organizational Ambidexterity ◽  
Accounting Data ◽  
Content Type ◽  
Diagnostic Use

PurposeThis study aims to investigate how dynamic tensions between performance measurement system (PMS) uses enable organizations to achieve both exploitation and exploration and enhance firm performance.Design/methodology/approachThe authors collected survey data on 153 Italian companies. Scales for each construct were validated through an exploratory factor analysis. Data on firm performance were cross-validated by using lagged accounting data. The authors tested our hypotheses using hierarchical ordinary least squares regressions, together with bootstrapping procedures for the test on mediation.FindingsA diagnostic use of PMS has a positive association with both exploitation – e.g. reductions in total costs and lead times – and exploration, e.g. introduction of new products and extension of product ranges. The dynamic tension created by a joint diagnostic and interactive use has the strongest association with organizational ambidexterity, measured as the multiplicative interaction between exploration and exploitation.Practical implicationsIf an organization or business unit is mainly pursuing exploitative goals, a mainly diagnostic use of PMS would be most suitable. If goals are both exploitative and explorative, a mix of diagnostic and interactive uses would be most effective.Originality/valueThis research helps reconcile conflicting views in the literature. The diagnostic use of PMS, far from acting as a “negative force,” appears to be necessary to guide opportunity search and to establish an appropriate scope for exploration-related activities. The authors’ focus on the uses of PMSs shows that ambidexterity is achieved through managerial capability, rather than just through the introduction of systems and structures.

Digital technologies and the balance between control and empowerment in performance management

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Eirik Bådsvik Hamre Korsen ◽  
Marte Daae-Qvale Holmemo ◽  
Jonas A. Ingvaldsen
Keyword(s):  
Performance Measurement ◽  
Performance Management ◽  
Management Practices ◽  
Single Case ◽  
Command And Control ◽  
Digital Technologies ◽  
Performance Measurement System ◽  
Content Type ◽  
And Control

Purpose This paper aims to explore how manufacturing organisations’ performance measurement and management (PMM) systems are evolving when digital technologies (DTs) are deployed. It focusses on the operational level, asking whether DTs are used to promote command-and-control or empowerment-oriented performance management. Design/methodology/approach The findings are based on a single case study from a department of a Norwegian electrochemical plant. The department recently implemented a performance measurement system (PMS) supported by DTs to capture, analyse and visualise close-to-real-time performance data on individuals and teams. The authors analysed both the management practices associated with the new PMS and how those related to other PMM-subsystems in the organisation. Findings When seen in isolation, the new PMS was used to promote empowerment and operators reported a significant increase in perceived psychological empowerment. However, other parts of the organisation’s PMM system remained control-oriented, so that the overall balance between control and empowerment remained stable. Practical implications New PMSs might be added to support local needs and create arenas for empowerment without disturbing the overall balance in the PMM system. Originality/value Building on the insights from the case study, the authors propose that DTs may be deployed to promote both command-and-control and empowerment within different PMM subsystems in the same organisation. Hence, the deployment of DTs is likely to have contradictory effects, which are best understood through a “system of systems” perspective on PMMs.

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