Before conducting a review of the consequences of CPM
systems, we first need to clarify what we mean by CPM
systems. Most scholars define CPM3 systems in terms of
their features. For example, Cheng et al. (2007) hold that
“contemporary performance measurement systems, such
as the balanced scorecard, advocate the use of an array
of financial and non-financial performance measures” (p.
221). Other scholars have defined CPM systems not only
in terms of their features but also in terms of their role or
main processes. For instance, Hall (2008) defines CPM as a
system that “translates business strategies into deliverable
results [. . .] combining financial, strategic and operating
business measures to gauge how well a company meets
its targets” (p. 43). Similarly, Ittner et al. (2003b) suggest
that CPM “provides the information [financial as well as
nonfinancial] that allows the firm to identify the strategies
offering the highest potential for achieving the firm’s
objectives, and aligns management processes, such as target
setting, decision-making, and performance evaluation,
with the achievement of the chosen strategic objectives” (p.
715). As there are different perspectives used to study CPM
systems, the literature lacks an agreed definition. This issue
creates confusion, limiting the potential for researchers to
compare different studies in this field.
To overcome this limitation and facilitate our review,
we follow the approach suggested by Franco-Santos et al.
(2007). We clarify the definition of a CPM system by focusing
on its necessary and sufficient conditions. We argue
that a CPM system exists if financial and non-financial performance
measures are used to operationalize strategic
objectives. This definition is based on a number of assumptions.
Firstly, the definition assumes that the role of CPM
systems is to evaluate performance for either informational
or motivational purposes (regardless of the organizational
level at which performance is evaluated). Secondly, it
assumes that CPM systems comprise a supporting infrastructure,
which can vary from being a simple method of
data collection and analysis (using, for example, Excel) to a
sophisticated information system facilitated by enterprise
resource planning platforms or business intelligence solutions.
Finally, it assumes that CPM systems involve specific
processes of information provision, measure design, and
data capture, regardless of how these processes are conducted.
According to the definition proposed, systems such as
those based on the BSC (Kaplan and Norton, 1992, 1996,
2001), the performance prism (Neely et al., 2002), or the
Before conducting a review of the consequences of CPM
systems, we first need to clarify what we mean by CPM
systems. Most scholars define CPM3 systems in terms of
their features. For example, Cheng et al. (2007) hold that
“contemporary performance measurement systems, such
as the balanced scorecard, advocate the use of an array
of financial and non-financial performance measures” (p.
221). Other scholars have defined CPM systems not only
in terms of their features but also in terms of their role or
main processes. For instance, Hall (2008) defines CPM as a
system that “translates business strategies into deliverable
results [. . .] combining financial, strategic and operating
business measures to gauge how well a company meets
its targets” (p. 43). Similarly, Ittner et al. (2003b) suggest
that CPM “provides the information [financial as well as
nonfinancial] that allows the firm to identify the strategies
offering the highest potential for achieving the firm’s
objectives, and aligns management processes, such as target
setting, decision-making, and performance evaluation,
with the achievement of the chosen strategic objectives” (p.
715). As there are different perspectives used to study CPM
systems, the literature lacks an agreed definition. This issue
creates confusion, limiting the potential for researchers to
compare different studies in this field.
To overcome this limitation and facilitate our review,
we follow the approach suggested by Franco-Santos et al.
(2007). We clarify the definition of a CPM system by focusing
on its necessary and sufficient conditions. We argue
that a CPM system exists if financial and non-financial performance
measures are used to operationalize strategic
objectives. This definition is based on a number of assumptions.
Firstly, the definition assumes that the role of CPM
systems is to evaluate performance for either informational
or motivational purposes (regardless of the organizational
level at which performance is evaluated). Secondly, it
assumes that CPM systems comprise a supporting infrastructure,
which can vary from being a simple method of
data collection and analysis (using, for example, Excel) to a
sophisticated information system facilitated by enterprise
resource planning platforms or business intelligence solutions.
Finally, it assumes that CPM systems involve specific
processes of information provision, measure design, and
data capture, regardless of how these processes are conducted.
According to the definition proposed, systems such as
those based on the BSC (Kaplan and Norton, 1992, 1996,
2001), the performance prism (Neely et al., 2002), or the
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