Performance Measurement in Entrepreneurial Organisations

Abstract

The concept of entrepreneurship has attracted increased interest in recent years - within the field of business as well as in society as a whole. However, our knowledge of how management accounting - including the branch of performance measurement - is used in the entrepreneurial context is practically non-existent. The aim of this study is to enhance our understanding of how systems of performance measurement are designed and used in entrepreneurial organisations. A survey was conducted on the design and use of performance measurement systems in twelve Swedish manufacturing firms, all of which had experienced high organic growth. The findings show that performance measurement systems play a significant role in entrepreneurial organisations. This is reflected in the use of a large number of measures, a frequent reporting of the measures, and a relatively high variety of business aspects measured. In contrast with the normative literature, the different uses of performance measurement are mainly confined to operative and internal areas of business. The performance measurement was also studied in relation to five firm characteristics: entrepreneurial orientation, firm performance, firm size, firm age, and firm ownership. The findings indicate that the variables have, in some aspects, an effect on the performance measurement systems used by the firms.