Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of boxes
- List of contributors
- Introduction
- Part I Performance measurement – functional analyses and theoretical foundations
- Part II Performance measurement – frameworks and methodologies
- 7 Performance measurement frameworks: a review
- 8 Beyond budgeting to the adaptive organization
- 9 Theoretical conditions for validity in accounting performance measurement
- 10 The validity of measurement frameworks: measurement theory
- Part III Performance measurement – practicalities and challenges
- Part IV Performance measurement in public services
- Part V Performance measurement – emerging issues and enduring questions
- Index
- References
10 - The validity of measurement frameworks: measurement theory
Published online by Cambridge University Press: 22 September 2009
Edited by
Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of boxes
- List of contributors
- Introduction
- Part I Performance measurement – functional analyses and theoretical foundations
- Part II Performance measurement – frameworks and methodologies
- 7 Performance measurement frameworks: a review
- 8 Beyond budgeting to the adaptive organization
- 9 Theoretical conditions for validity in accounting performance measurement
- 10 The validity of measurement frameworks: measurement theory
- Part III Performance measurement – practicalities and challenges
- Part IV Performance measurement in public services
- Part V Performance measurement – emerging issues and enduring questions
- Index
- References
Summary
Introduction
When considering measurement, the first practical questions faced by managers should be: what is it that requires measurement, and what is measurement? Answering these two questions at something more than a superficial level can take managers a long way towards the design and development of a measurements system suited to their needs.
One surprising issue often overlooked when measuring systems are designed concerns the nature and purpose of the measurement. Quite often this is brutally exposed by the chief executive if, when presented with new results for the first time, he or she says “So what?”. A considerable benchmarking industry has grown up around the subject of performance measurement. Performance measurement assumes that the results it provides and the benchmarking activities that accompany it are useful in themselves. The motivation of the chief executive in the statement above is to question value – that is, how valuable this performance is to the company. Would it make a difference to any of his/her stakeholders or shareholders if the performance of certain factors were to increase by 10 per cent or if they were to decline by 10 per cent? The distinction between value and performance is critical, and, in general, performance measurement should be seen only as the first step on the way to providing useful value-based output. Measuring value adds some particular difficulties, especially with the definition of value, and involves the axiology of the individual.
- Type
- Chapter
- Information
- Business Performance MeasurementUnifying Theory and Integrating Practice, pp. 218 - 236Publisher: Cambridge University PressPrint publication year: 2007
References
, , and (1999). What matters to CEOs? An investigation into stakeholder attributes and salience, corporate performance and CEO values. Academy of Management Journal, 42(5), 507–25.Google Scholar
, and (2004). Measuring, managing and delivering value performance in the public sector. International Journal of Learning and Intellectual Capital, 1(2), 132–49.CrossRefGoogle Scholar
Dawes, R., and Smith, T. (1985). Attitude and opinion measurement. In , and (eds.), The Handbook of Social Psychology, vol. I, 509–66. New York: Random House.Google Scholar
(2000). The Intangible Economy: Impact and Policy Issues, Report of the High-Level Expert Group on the Intangible Economy. Brussels: European Commission.Google Scholar
(2001a). Business Combinations, Statement no. 141. Washington, DC: Federal Accounting Standards Board.Google Scholar
(2001b). Goodwill and other Intangible Assets, Statement no. 142. Washington, DC: Federal Accounting Standards Board.Google Scholar
, , , , and (2003). Mapping stakeholder perceptions for a third sector organization. Journal of Intellectual Capital, 4(4), 505–27.CrossRefGoogle Scholar
(1993). Building a learning organization. Harvard Business Review, 71(4), 78–91.Google ScholarPubMed
, , and (2004). What intangible resources do companies value, measure and report? A combination of UK and Finnish research. International Journal of Learning and Intellectual Capital, 1(3), 242–61.CrossRefGoogle Scholar
Helmholtz, H. (1887). Zahlen und Messen erkenntnistheoretisch betrachtet. In Philosophische Aufsatze, 17–52. Leipzig: Fues's Verlag. (Trans. Bryan, C. L. (1930). Counting and Measuring. New York: Van Nostrand.)CrossRef
, and (2003). Coming up short on nonfinancial performance measurement. Harvard Business Review, 81(11), 88–95.Google ScholarPubMed
, and (1976). Decisions with Multiple Objectives: Preferences and Value Tradeoffs. New York: John Wiley.Google Scholar
, , , and (1971). Foundations of Measurement, vol. I, Additive and Polynomial Representations. London: Academic Press.Google Scholar
; ; and (1989). Foundations of Measurement, vol. II, Geometrical, Threshold and Probabilistic Representations. London: Academic Press.Google Scholar
; ; and (1990). Foundations of Measurement, vol. III, Representation, Axiomatization and Invariance. London: Academic Press.Google Scholar
M'Pherson, P., and Pike, S. (2001). Strategic analysis adapted for IC networks and Ebusiness networks. Paper presented at Twenty-First Annual International Conference of Strategic Management Society, San Francisco, 21–4 October.
Marichal, J.-L. (1998). Aggregation operations for multicriteria decision aid. PhD thesis, University of Liège, Belgium.
(1992). Measurment, models and autonomous agents. Psychological Science, 3, 93–6.CrossRefGoogle Scholar
, and (1981). Challenging Strategic Planning Assumptions: Theory, Cases and Techniques. New York: John Wiley.Google Scholar
, and (1993). The Unbound Mind: Breaking the Chains of Traditional Business Thinking. Oxford: Oxford University Press.Google Scholar
OECD (1999). Measuring and Reporting Intellectual Capital: Experience, Issues and Prospects, Proceedings of the International Symposium, Amsterdam, 9–11 June. Paris: Organisation for Economic Co-operation and Development.
Pfanzagl, J. (1971). Theory of Measurement (in cooperation with Baumann, V., and Huber, H.), 2nd edn. Würzburg: Physica Verlag.
, and (2004a). Mathematics and modern business measurement. Journal of Intellectual Capital, 5(2), 243–56.CrossRefGoogle Scholar
Pike, S. and Roos, G.(2004b). Measurement issues in intellectual capital: a review. Paper presented at International Intellectual Capital Conference, Taipei, 11–12 October.
Pike, S., Rylander, A., and Roos, G. (2002). Intellectual capital management and disclosure. In , and (eds.), The Strategic Management of Intellectual Capital and Organizational Knowledge, 657–72. New York: Oxford University Press.Google Scholar
, and (eds.) (2005). Intellectual Capital, Management, Measurement and Disclosure. Hyderabad: ICFAI University Press.Google Scholar
Roos, G., Pike, S., and Fernström, L. (2004). Intellectual capital, magement, measurement and disclosure. In , and (eds.), Intangibles in der Unternehmungssteuerung: Strategien und Instrumente zur Wertsteigerung des immateriellen Kapitals, 127–58. Munich: Verlag Frans Vahlen.
, , and (2006). Managing Intellectual Capital in Practice. New York: Butterworth Heinemann.Google Scholar
, and (1958). Foundation aspects of theories of measurement. Journal of Symbolic Logic, 23, 113–28.CrossRefGoogle Scholar
Suppes, P., and Zines, J. (1963). Basic measurement theory. In , , and (eds.), Handbook of Mathematical Psychology, vol. I, 1–76. New York: John Wiley.Google Scholar
Turner, L. (2001). The times, they are a-changing. Speech given at Thirty-third Rocky Mountain Securities Conference, Colorado, 18 May. Available at www.sec.gov/news/speech/spch493.htm.
, , and (1988). Contingent weighting in judgment and choice. Psychological Review, 95, 371–84.CrossRefGoogle Scholar
- 5
- Cited by