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Implementing Strategy through Performance Management

Hellgren, Mikaela LU and Wang, Xiayu LU (2021) BUSN09 20211
Department of Business Administration
Abstract
Performance management systems (PMSs) are tools that connect a company's strategy and daily operations, play an essential role in achieving company goals, and have received more and more attention. However, current studies on PMSs focus more on the macro company perspective and pay less attention to cost centers that do not directly contribute to the company's strategy implementation and goal achievement. How to link cost centers' activities with the company's strategy by designing suitable PMSs has therefore become a topic worth exploring.
For international companies, cultural differences between countries or regions could have essential impacts on PMSs' design and should be considered. Therefore, the purpose of this thesis is to... (More)
Performance management systems (PMSs) are tools that connect a company's strategy and daily operations, play an essential role in achieving company goals, and have received more and more attention. However, current studies on PMSs focus more on the macro company perspective and pay less attention to cost centers that do not directly contribute to the company's strategy implementation and goal achievement. How to link cost centers' activities with the company's strategy by designing suitable PMSs has therefore become a topic worth exploring.
For international companies, cultural differences between countries or regions could have essential impacts on PMSs' design and should be considered. Therefore, the purpose of this thesis is to explore how to design PMSs for cost centers of international companies to promote the implementation of corporate strategies. This research is based on a single case study using a leading manufacturing company operating in various countries and regions. Semi-structured interviews were conducted with relevant staff of different management levels in five cost centers from Germany and Vietnam.
Our findings involve the entire process of PMSs design and improvement. Considering cultural differences, we put forward the focus of each step in the PMSs design process, including goal alignment, target setting, measurability, performance evaluation and feedback, and rewards and motivation. These findings deepen the understanding of PMSs' usage by exploring the connection between PMSs, cost centers, and cultural differences and supplementing the fields neglected in the previous literature. The findings could also give managers a hint on how to apply PMSs on cost centers to improve the overall company's strategy implementation. (Less)
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author
Hellgren, Mikaela LU and Wang, Xiayu LU
supervisor
organization
course
BUSN09 20211
year
type
H1 - Master's Degree (One Year)
subject
keywords
Performance Management Systems, Cost Centers, Cultural Differences
language
English
id
9049287
date added to LUP
2021-06-29 10:28:38
date last changed
2021-06-29 10:28:38
@misc{9049287,
  abstract     = {{Performance management systems (PMSs) are tools that connect a company's strategy and daily operations, play an essential role in achieving company goals, and have received more and more attention. However, current studies on PMSs focus more on the macro company perspective and pay less attention to cost centers that do not directly contribute to the company's strategy implementation and goal achievement. How to link cost centers' activities with the company's strategy by designing suitable PMSs has therefore become a topic worth exploring. 
For international companies, cultural differences between countries or regions could have essential impacts on PMSs' design and should be considered. Therefore, the purpose of this thesis is to explore how to design PMSs for cost centers of international companies to promote the implementation of corporate strategies. This research is based on a single case study using a leading manufacturing company operating in various countries and regions. Semi-structured interviews were conducted with relevant staff of different management levels in five cost centers from Germany and Vietnam.
Our findings involve the entire process of PMSs design and improvement. Considering cultural differences, we put forward the focus of each step in the PMSs design process, including goal alignment, target setting, measurability, performance evaluation and feedback, and rewards and motivation. These findings deepen the understanding of PMSs' usage by exploring the connection between PMSs, cost centers, and cultural differences and supplementing the fields neglected in the previous literature. The findings could also give managers a hint on how to apply PMSs on cost centers to improve the overall company's strategy implementation.}},
  author       = {{Hellgren, Mikaela and Wang, Xiayu}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Implementing Strategy through Performance Management}},
  year         = {{2021}},
}