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Three modes of measurement: theory and practice

Neely, A (1998) Three modes of measurement: theory and practice. International Journal of Business Performance Management, 1. pp. 47-64. ISSN 1368-4892

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Today’s conventional wisdom appears to assert that a balanced approach is the one best way of measuring business performance. The aim of this paper is to challenge this wisdom. It is argued that performance measures can be used in three distinct ways: (1) as a means of control versus critical performance parameters; (2) as a means of checking health; and (3) as a means of challenging the assumptions that underpin the strategy of the business. It is also argued that each of these modes of measurement is appropriate for all organizations; that each requires different performance review processes to be established; and that all organizations should therefore consider operating three distinct performance review processes. One which allows the critical performance parameters to be controlled. A second which enables the health of the business to be checked. And a third which encourages the assumptions underpinning the organization’s strategy to be challenged. The paper draws on both academic literature and organizational practice to support these arguments. The three modes of measurement – control, check and challenge – are defined and their application demonstrated. In closing a framework is presented, which encapsulates the arguments put forth in the paper and summarises the implications for the theory and practice of business performance measurement. © 1998 Inderscience Enterprises Ltd.

Item Type: Article
Divisions: Div E > Strategy and Policy
Depositing User: Cron Job
Date Deposited: 17 Jul 2017 19:40
Last Modified: 30 Jul 2020 13:46
DOI: 10.1504/IJBPM.1998.004544