Designing a Strategy-Oriented Performance Measurement System Prototype for Sustainability-Focused Growth Firm

Abstract

Pressure for change from relevant stakeholders drives firms perceiving corporate sustainability as an integrated part of their business activity. Even then, the use of performance measurement systems in translating sustainability-oriented strategies into action has not been widely researched, because of the manifold and incomplete nature of the construct of corporate sustainability.

From the aforementioned points of departure, this study attempts to design a strategy-oriented performance measurement system prototype for the case organisation. The case organisation of this Masters Thesis is a front running sustainability-focused growth firm. It offers software tools and professional services for environmental and sustainability management.

In the theoretical part of this study the business case for corporate sustainability is discussed and varying strategies for managing sustainability and growth in business are introduced. Also the concepts of strategic management and performance measurement are taken aboard into the conversation. A sustainability-oriented variation on the Balanced Scorecard is finally introduced as a rise to the challenges presented in the early phases of the literature review.

The empirical part of this Masters Thesis is a result from the semi-structured theme interviews, as well as from the interpretation of the case organisations internal documents and the knowledge analysis provided by the focus group sessions. The acquitted knowledge has been analysed and structured by the author. Recognition of critical success factors, design of potential measures and the ultimate analysis of the designed metrics were the three primary phases within the prototypes definition process. The measures having the highest relevance for the decision-making as well as the measures earning the highest marks for cost efficiency in relation to available resources eventually formed the case organisations strategy-oriented performance measurement system prototype.

Referring to the conclusions of this study, a notable observation was that the case organisation holds limited resources for carrying out multifaceted performance measurement. Noteworthy was also the need to organise and systemise the flows of information as well as the reporting practices appropriately in order to systematically analyse and exploit the data in the development of the case organisations business activity.