Evaluating the usefulness of two proposed performance management frameworks: evidence from business practice

Purpose: This paper aims to evaluate the usefulness of two conceptual frameworks: levers of control (LOC) (Simons, 1995) and performance management systems (PMSs) (Ferreira and Otley, 2009) for studying PM practices using a case study. Design/methodology/approach: A case study method is used whereby data are collected through semi-structured interviews, examination of the group’s annual reports and internal documents. Findings: A key finding of this study is the use of a PMS at the case company which is formally structured and with objectives, mechanisms and processes designed beyond a mere “performance measurement system.” While the case analysis indicates that most of the key components of the two frameworks are featured in the company’s PMS design, the uses of Simons’ (1995) LOC, however, are not consistent with the notion of “balance” as advocated by the model. Research limitations/implications: The evidence presented in this study is based on one large manufacturing company, and hence the findings cannot be generalized. Practical implications: The findings of this study can be used in enriching the design of current proposed theoretical frameworks and also in encouraging management accounting researchers to continue the efforts of studying performance management (PM) practices. Originality/value: A deeper understanding of PM practices using holistic frameworks has yet to receive more contested efforts from management accounting researchers. This paper attempts to contribute to this endeavor and fill in the gap in this area of research.