Organisations use various management tools; standards, in order to reach their goals. Fads or best practice?

 

RESEARCH @BI: Performance Management

There is a rich array of ideas, recipes, doctrines, management tools and other types of standards for organisation, and many of them come with catchy two or three-letter names.

One of them goes for instance by the name of PM, which many know better as Performance Management.

In his doctorate study at BI Norwegian Business School, Atle Raa has researched how such organisational standards work in the organisations which are exposed to them.

  • Is it the case that organisations adopt new management tools because they represent best practice and almost guarantee improvement in the organisation?
  • Or is it the case that methods spread like fads and myths without the foundation of empirical documentation?

Meeting reality

Atle Raa selected the organisation Statskonsult for his research case. Statskonsult had a central role in spreading Performance Management as a standard for management and leadership in the governmental sector in Norway.

Statskonsult had several roles in this. The organisation had to take its own medicine, and at the same time it functioned as a standardisation body for the governmental sector.   

Raa followed its work of Performance Management in the government over a period of 17 years from 1987 to 2004.

He studied the standard of Performance Management in relation to three different perspectives:

  1. Performance Management as a tool for more goal-oriented budgeting and to make the money allocated in the government budget go further.
  2. Performance Management as a tool for steering the organisation in the desired direction. Based on the belief that the organisation can be governed instrumentally. 
  3. Criticism of Performance Management: questions whether it really is possible to govern organisations instrumentally.

Three main phases

Performance Management is about concretising the organisation’s vision in performance indicators, preferably money. Following this, measures will be selected to ensure goals are reached. Then the results are evaluated. If the goals have not been reached, corrections are made where possible/applicable.

Statskonsult really believed Performance Management was the standard with a capital S which would make organisations much better equipped to solve their tasks.

Raa identifies three main phases in the development of Performance Management:

  1. In the initial phase, the honeymoon, the standard was treated almost as if it was set in stone, once and for all. “From the beginning, Statskonsult was very particular about sticking to the standard, and followed it strictly and almost slavishly,” states Atle Raa.
  2. The approach developed and became more pragmatic and flexible. The engineer-style view of organisational development had to give way to a more organic view of how organisations worked. The introduction of organisational standards was seen as organic processes. Now, Statskonsult’s publications  sometimes came with illustrations built on plant metaphors, rather than with boxes and arrows as had been the norm previously. 
  3. At the end of the 1990s, a new change took place. Statskonsult evaluated their experience of ten years’ practice of Performance Management and expressed a critical view of the approach to the standard in the initial phase. At the same time, Statskonsult sought to integrate elements from newer organisational standards such as Balanced Scorecard and quality models in the original version of the standard. Raa characterises this third approach to Performance Management as ambiguous.

Standards need to be adjusted

In his thesis, Atle Raa documents that standards are liable to change over time. “Organisations need to be prepared to adjust their standard as they go along,” Raa recommends.

Does the study show that standards such as Performance Management are a fad or an expression of best practice?

“It’s more likely to be a combination. That a standard is fashionable, can increase people’s interest in trying it out. At the same time, this interest is likely to be short-lived if the standard doesn’t have any positive effects for the organisations who adopt it.”

Reference:

Atle Raa presented his doctoral thesis on 18 March 2011 with the title "Fra instrumentell rasjonalitet til tvetydighet. En analyse av utviklingen av Statskonsults tilnærming til standarden Mål- og resultatstyring (MRS) 1987 - 2004" (Dissertation in Norwegian).

Comments?:

Send your comments and questions regarding this article by E-mail to forskning@bi.no

 Text: Audun Farbrot, Head of Science Communication at BI Norwegian Business School (E-mail: forskning@bi.no)


 

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