Evolutionary paths of performance

measurement and management system:

the longitudinal case study of a
leading SME
Alberto Sardi, Enrico Sorano, Alberto Ferraris and Patrizia Garengo

Abstract Alberto Sardi and

Purpose – The literature highlights the relevance of performance measurement and management Enrico Sorano both are
system in small and medium enterprises (SMEs) to face the current competitive environment. However, a based at the Department of
number of studies investigate how performance measurement and management system is effective for Management, University of
evolving and how contingency factors could influence this change. Newer experiences are sporadic and Turin, Turin, Italy.
rarely investigated by researchers and practitioners. The purpose of this study is to identify the feasible
Alberto Ferraris is based at
evolutionary path of performance measurement and management system in leading SMEs to respond to
the Department of
current business challenges. Furthermore, it aims to contribute to the understanding of the role of key
contingency factors influencing this evolution. Management, University of
Turin, Turin, Italy and Ural
Design/methodology/approach – A longitudinal case study, based on retrospective and real-time
Federal University, Russian
investigations, is performed to investigate the primary evolutions of the performance measurement and
management system and its key determinants. Federation.
Patrizia Garengo is based
Findings – The findings highlight two evolution paths, increasing the maturity of performance
at the Department of
measurement. The first path highlights a strong command and control of performance management; the
second path shows a democratic and participative of performance management. Moreover, Industrial Engineering,
management information system, organizational culture and management style are highlighted as key University of Padua, Padua,
contingency factors in the change of performance management. Italy.
Originality/value – The authors contribute to knowledge in performance measurement field, showing how the
efforts for developing performance measurement and management system in a leading SME could determine
two different evolutionary paths. Furthermore, the paper describes the increasing role of organizational culture,
management style and management information system in performance management evolution, as well as the
relevance of online chats and social media in performance management activities.
Keywords Performance measurement, Performance management,
Small and medium enterprises, Manufacturing, Performance measurement system, Social media
Paper type Case study

Introduction
The adoption of performance measurement and management system (PMMS) is
recognized essential in all organizations (Bititci et al., 2012; Franco-Santos et al., 2012;
Piscitelli and Mancini, 2018). It is defined as a holistic, balanced and dynamic system able
to support the decision-making process through a set of performance measurement
activities, e.g. gathering, elaborating and analysing performance (Neely et al., 2001), as
well as performance management activities, e.g. communicating, learning and improving
Received 22 January 2020
performance (Sardi et al., 2018; Smith and Bititci, 2017; Willis et al., 2018). It provides Revised 17 April 2020
feedback to employees on the outcome of actions reflecting the procedures used to Accepted 24 May 2020

DOI 10.1108/MBE-01-2020-0016 © Emerald Publishing Limited, ISSN 1368-3047 j MEASURING BUSINESS EXCELLENCE j
 implement business strategy, as well as the information needed for strategy validation
(Bititci, 2015; Bititci et al., 1997; Goshu and Kitaw, 2017; Ittner and Larcker, 2003). The
balance between performance measurement and performance management should result
from efficient systems (Nudurupati et al., 2016; Smith and Bititci, 2017).
Recent literature agrees to the successful implementation of holistic, integrated and
balanced performance measurement and management in large companies. The same
cannot be said for small and medium manufacturing enterprises (SMEs) where several
constraints obstruct performance measurement and management (Ates et al., 2013; Bititci
et al., 2012; Garengo, 2009; Garengo and Sharma, 2014; Moujib et al., 2017). For instance,
SMEs highlight lack of availability of human capital, managerial skills, reactive approach
and capital resources (Garengo et al., 2005; Hudson et al., 2001). Staff are primarily
involved in technical and operational processes, in which they excel rather than intangible
asset development. Therefore, SMEs have difficulty with performance measurement and
management activities (Sardi et al., 2020). Few of them use performance measurement and
management system to drive improvement of organizational performance, which in turn is
not very prominent in the literature (Bianchi et al., 2015; Bititci, 2015; Garengo and Biazzo,
2012). Scholars underline that the insufficient empirical and theoretical studies on how
performance measurement and management systems are not enough in SMEs and the
poor understanding of what organizational factors influence these systems (Bourne et al.,
2013; Garengo and Bititci, 2007; Garengo and Sharma, 2014; Jardioui et al., 2019; Taylor
and Taylor, 2014).
Adopting a longitudinal methodology, this paper aims to identify how the performance
measurement and management system evolves in a leading SME. Consequently, it focused
on the study of the organizational conditions in which the PMMS is implemented. In
particular, it investigated the impact of the contingency factors on PMMS. Contingency
factors are recognized by the literature as key elements that affect the implementation and
the use of PMMS. Among the main factors are organization corporate governance structure,
business model, management information system (Garengo and Biazzo, 2013; Garengo
and Bititci, 2007; Otley, 2016), organizational culture and management style (Bititci et al.,
2006; Garengo and Bititci, 2007; Jardioui et al., 2019), but few longitudinal empirical studies
support the understanding of how these factors influence the PMMS evolution. To contribute
to the above research gaps, the paper answers to the following research questions:
RQ1. How could PMMS evolve in a leading SME to face the new competitive
environment? How do contingency factors influence this evolution?
Firstly, we reviewed the existing literature to identify a framework supporting the study of
performance measurement and management system maturity. Secondly, we defined the
research methodology adopted. Thirdly, we present and discuss the findings. Finally, we
addressed the main practical and theoretical contributions, future opportunities and
research limitations.

Literature background
From the mid-1980s, scholars and practitioners developed several performance
measurement and management models, thus adopting a holistic approach highlighting the
significant relevance of tangible and intangible assets (Pimenta, 2017) – see for instance
the Balanced Scorecard (Kaplan and Norton, 1992, 1996) and the Performance Prism
(Neely et al., 2001; Neely and Adams, 2001). These new models challenged traditional
performance models based on control of financial and economic measures (Franco-Santos
et al., 2012; Kaplan, 2012; Kaplan and Norton, 2004, 2005; Nudurupati et al., 2016). Their
main purpose was to shift focus from control to learning and support the decision-making
process (Bititci et al., 2012; Bourne et al., 2013; Jääskeläinen and Laihonen, 2013;
Nudurupati et al., 2016; Sardi and Sorano, 2019).

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Though highlighting important results in large companies, this approach could not be
extended to SMEs because these have specific attributes not shared by large companies,
especially in manufacturing, such as lack of financial resources, high reliance on few
customers and lack of a clear organizational structure (Ates et al., 2013; Bititci et al., 2012;
Cannavacciuolo et al., 2015; Garengo, 2009; Garengo et al., 2005; Garengo and Sharma,
2014). As stated by Garengo et al. (2005), these specific attributes can prevent the
implementation and use of PMMS. Staff are mainly involved in technical and operational
processes, in which they excel rather than intangible asset development. However, the
maturity of an SME affects the success of PMMS and quality management systems (Sousa
and Aspinwall, 2010).
Consequently, SMEs have difficulty with PMM. Performance measurement often involves
inadequate awareness of the causal relationship of measures, few managerial skills and
insufficient performance reviews as against balanced metrics, regular and short interval
control (Bititci, 2015; Smith and Bititci, 2017). Performance management implies work
specialization, job standardization and internal competition as against appreciation of
employees’ differences, willingness to share new ideas and encourage autonomy and self-
management (Bititci, 2015; Smith and Bititci, 2017).
Despite the significant progress made in terms of knowledge in performance measurement
and management model improvement, scholars and practitioners still highlight problems
impeding the effective adoption of PMMSs by SMEs (Bititci et al., 2012). Research papers
currently available point to the fact that few SMEs adopt an advanced PMMS (Garengo and
Bititci, 2007; Hudson Smith and Smith, 2007). The efforts made to identify an effective
approach to meet the needs of these companies are too sporadic considering the existing
competitive and challenging environment (Bititci et al., 2013; Garengo and Biazzo, 2012),
although recent researches offer new insights. For instance, some researchers describe
new low-cost PMMS using information that is easily available to owner-managers, showing
that SME performance can be managed using a simple system built around the firm’s
financial statements (Moujib et al., 2017).
To demonstrate that the context within which the use of PMM is changing, Bititci et al. (2012)
identified eight global trends affecting PMM, i.e. collaborative organizations, knowledge
work, networks, turbulent operating environment, culture, servitization, open innovation,
global sustainability and information technologies. They also explained numerous gaps and
specific challenges for PMM within a holistic systems-based framework.
To explain these new trends, scholars are studying PMMS as a system of systems (Bourne
et al., 2018) and as an interplay between performance measurement process (i.e. what to
measure) and performance management process (i.e. how the measures are used to
manage organizations’ performance, Bititci et al., 2012; Melnyk et al., 2014). Recently,
Smith and Bititci (2017) developed a framework to show the interplay between performance
measurement and performance management defined as two separate but interdependent
organizational control processes (Otley, 2012; Smith and Bititci, 2017). This theoretical
framework bases on the different maturity of two processes named performance
measurement and performance management. Performance measurement maturity
highlights characteristics such as the balance of target setting, interval control and the time
of performance reviews (Speckbacher et al., 2003); whereas the maturity of performance
management process depends by industrial democracy, the degree of autonomy and job
enrichment. This framework was recently upgraded with the new characteristics shown in
Figure 1 (Sardi et al., 2018). In terms of performance measurement dimension, this upgrade
highlighted the growing use of technological tools (e.g. social media and enterprise social
networking) to increase a real-time data collection, analysis and reports; self-control of
activity reports and the major use of key performance indicators. Considering the
performance management dimension, the increasing use of these tools shows the growing
relevance of continuous feedback, relationships, discussions and an inclination at a self-

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 Figure 1 Framework characteristics typical of performance measurement and
management

A. Provide real time data collection, analysis and reports

B. Allows self-monitoring of activity reports
PERFORMANCE C. Encourage the use of key performance indicators
MEASUREMENT
D Favour a self-performance measurement
Maturity

E. Provide continuous feedback, suggestions and supports

F. Facilitate relationship, knowledge sharing and discussions
G. Encourage self-management of knowledge, skills and abilities
H. Allow to open project on favourite topics

Democratic
PERFORMANCE
Control
MANAGEMENT

Immaturity

performance measurement (Sardi et al., 2018). The effective balance of the performance’s
dimensions supports the design, the implementation and the use of a PMMS (Bititci, 2015)
encouraging people to discuss performance (Otley, 2012; Smith and Bititci, 2017). This
theoretical framework gave a robust basis for research, especially to describe the
evolutionary path of the interplay between performance measurement and management
(Smith and Bititci, 2017).
Adopting a contingency approach, Garengo and Bititci, (2007) showed the
relationship between contingency factors and performance measurement, and they
highlighted the role of organizational governance structure, business model (Afuah
and Tucci, 2003), management information system (Garengo and Biazzo, 2013;
Mithas et al., 2011; Sardi et al., 2018; Sørensen et al., 2010), organizational culture
and management style (Bititci et al., 2006; Jardioui et al., 2019; Schein, 1996) (Table
1). They also showed that advanced information practices and behaviours impact
people engagement, a necessary condition for the effective its implementation and
adoption in SMEs (Garengo and Bititci, 2007).

Methodology
The case study methodology is more than simply researching a single individual or situation
(Baxter and Jack, 2010; Yin, 2018). It favours the exploration and explication of complex
situations and it allows the researcher to describe a phenomenon within its context (Baxter
and Jack, 2010; Easterby-Smith et al., 2002; Eisenhardt and Graebner, 2007).
We adopted the longitudinal case study based on retrospective (from 2004 to 2016) and
real-time investigations (from 2017 to 2019) of a leading SME and selected as a suitable
method for an in-depth understanding of little-explored managerial activities (Garengo and
Biazzo, 2013; Yin, 2018). The main stages of the longitudinal case study are as follows:
䊏 case study selection;
䊏 data collection; and
䊏 data analysis.

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Table 1 Contingency factors
Factors Definition

Management information system It is part of the overall management system in an organization and form parts of
company technology such as enterprise resource planning. It supports almost all
management activities providing the identification of key performance indicators
(Sørensen et al., 2010). The adoption of technology often leads organizations to focus
their attention on technical aspects rather than on human aspects (Garengo and
Biazzo, 2013), Mithas et al. (2011), Sardi et al. (2018). Although scholars outline the
importance of analysing human behaviours concerning the information system, they do
not enough investigate their impact on information systems Garengo and Bititci (2007)
Organizational culture and management style Organizational culture is a set of values, beliefs and way of working for individuals in an
organization Schein (1996). Change culture is a challenging process. So, it is
considered a shared and stable factors by members of an organization for a long time
Jardioui et al. (2019).
Management style is a practice adopted by leaders in people engagement, information
management and decision-making process Schein (1996). It is recognized as a key
factor influencing organizational culture due to its impact on work sharing, decision-
making time and activities control (Garengo and Bititci, 2007).

Case study selection

To select a leading manufacturing SME, we adopted the two criteria suggested and
used by Kirby (2005) and Richard et al. (2009) and Bititci et al. (2012). These two
criteria were to be the best performer in its business sector according to some
economic and financial indexes (Kirby, 2005; Richard et al., 2009; Bititci et al., 2013)
and to match the emerging performance measurement and management trend as
shown in recent literature (Bititci et al., 2012). AA, to preserve anonymity, was a
leading SME operating in Italy:
䊏 AA was globally the best performer in its sector. It had a significant increase in turnover
(þ480%), number of employees (þ173%) and ROE (þ231%) from 2004 to 2019.
䊏 AA matched the performance measurement and management trend stated by Bititci
et al. (2012). A preliminary interview with the Company Director revealed that the
Company exhibited all the emerging trends suggested by the literature as shown in the
below list:
Emerging performance measurement and management trends:
Emerging trends

1. Collaboration and networks – PMMS includes relationships and trust between

stakeholders:

䊏 AA collaborates with customers, suppliers and other business partners. AA

believes that internal and external relationships are essential to improve
employees’ skills, knowledge and products. To foster relationships, the company
has set up a laboratory that hosts international students and designers to promote
creativity, friendliness and knowledge exchange. It also proposes an online blog
for continuous discussion of how to improve furniture.
2. Multicultural environment – PMMS includes diversity management:

䊏 AA thrives to develop innovative initiatives to introduce new products and new

ideas. An example is “The Apartment” initiative, comprising a temporary shop that
embodies the continued insight of AA in the idea of redefining and re-inventing
spaces for selling and uniting stakeholders.

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 3. CSR and sustainability – PMMS includes quality measures of social performance:

䊏 Corporate social responsibility is a crucial point for the Company. Headquarters

premises are made of wood and glass, thus providing a peaceful environment for
staff. AA promotes cultural initiatives, e.g. open days to show the features of its
business, and has an environmentally friendly approach in the design and
manufacture of its products, thus monitoring the impact of products on the
environment.
4. Innovation and knowledge-based work – PMMS covers innovation and knowledge
base:

䊏 Innovation and knowledge are distinctive features of all functions. For instance, AA
communicates with customers through social media and interactive showrooms.
Living showrooms enable people to learn about furniture design.

Data collection
We collected the data using a retrospective approach (twelve years) and real-time
investigation. From 2004 to 2016, we gathered data through interviews, historical
information and documents, whereas from 2017 to 2019, data were collected from three
sources: interviews, documents and observations. Because of these three sources of
evidence, we collected documents, information and reports to understand their actual
PMMS. As required by Yin (2018), the information was collected as follows:
䊏 Interviews– No. 24 semi-structured interviews with middle-senior managers.
䊏 Documents– No. 165 documents with the main performance measures.
䊏 Observations– No. 120 full-job-days subdivided between all functions.
We recorded and printed all the available data on digital and paper supports. The data
were entered on predefined forms to facilitate summarizing and comparison.

Data analysis
Scholars suggest the analysis of data collected during qualitative studies through within-
case and cross-case analysis (Eisenhardt, 1989; Garengo and Bititci, 2007; Miles and
Huberman, 1984; Yin, 2018). According to these scholars, we analysed data in two ways:.

1. Within-case study:

The within-case study focuses the researchers’ attention on the search for explanations
and causality within the case study (Eisenhardt and Graebner, 2007; Yin, 2018); it aims
to understand the case and identifying emerging models (Eisenhardt, 1989; Miles and
Huberman, 1984). The within-case analysis is conducted through an accurate
description of the cases that highlights the relationships between the factors
investigated (Yin, 2018).
To understand the enterprise context, we summarized the main company information
(e.g. turnover and number of employees) and the main features of their performance
measurement and management (Table 2).
2. Cross-analysis:
The cross-case analysis supports the generation of models deriving from the case
study (Yin, 2018). It is essential to increase internal validity and the ability to generalize
research results. Eisenhardt (1989) argues that subjects have a limited analytical ability
because they have access to a limited amount of data, are excessively influenced by
other individuals and sometimes ignoring basic statistical properties or inadvertently

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 Table 2 Company history and PMMS evolution
Enterprise AA
Main information
Turnover e29m
Employees 194
Country Italy
Profile Innovative brand in the field of Italian furniture design, producing home furniture
Main events
1900s Family business in woodworking.
1950s Launched production of bedrooms and other furniture.
1980s Started to produce the living room furniture.
2006 Changed to joint-stock company, supplying over 400 stores and various single brands
PMMS
2006 Company reported, collected and analysed information without specific measurement method, frequency
and purpose
2009 Company implemented the first PMMS, but did not cover all departments. Method and frequency of collating
data based on financial, sales and production requirements. Management communicates performance data
weekly
2013 Company improved PMMS through the implementation of business object and other tools

neglecting evidence that does not confirm the expected results (Eisenhardt, 1989;
Miles and Huberman, 1984).
To develop the cross-analysis, we used Smith and Bititci’s (2017) theoretical framework
because it is one of the best conceptualized in performance measurement literature
and it considers the current turbulent operating environment in which a company acts
today, one of the key elements on the design, implementation and adoption of PMMS
(Bititci et al., 2012). Its adoption supports the develop of the cross-analysis (Table 4)
and the identification of the evolutionary path of the performance measurement and
management in SME (Figure 3).
To carry out the cross-analysis, we first assessed the two processes by the scoring
dimensions of the main PMM characteristics in 2004, according to the historical
documents and interviews with the senior managers. Consequently, we assessed the
characteristics of two processes in 2019, according to the documents and interviews
with various functions as shown in Figure 2. We evaluated the PMM characteristics to
score their maturity (Garengo, 2009; Smith and Bititci, 2017). Range of evaluation scale
was 0 to 5, i.e.:

䊏 0 = PMMS does not show the characteristic; and

䊏 5 = PMMS shows fully the characteristic.
To graphically compare the data collected, we described the evolutionary path of PMMS
through the theoretical framework suggested to Smith and Bititci (2017).
We analysed two contingency factors proposed to Garengo and Bititci (2007), i.e.
organizational culture and management style and management information system.
Corporate governance structure and business model were not investigated as they did not
change during 15 years.
To evaluate these factors, we assessed data collected through interviews using the
frameworks shown in Figure 4. To investigate organizational culture and management style,
we used the framework proposed to Bititci et al. (2006) because it has already shown its
validity in previous studies (Garengo and Bititci, 2007; Garengo and Sharma, 2014; Jardioui
et al., 2019). It allowed studying the relationship between performance measurement,
organizational culture and management styles through categorization of culture with
corresponding management styles (Hofstede, 1980).

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 Figure 2 Cross-analysis

To study management information system, we adopted Garengo and Bititci’s (2007)

framework, which was based on technology, management practices and human
behaviours dimensions. The technical aspects were assessed according to investment on
information technology (IT). To evaluate management practices and employees’ behaviours
concerning the information system, we gathered the main practices adopted and
employees’ perceptions of the use of technology through interviews and observations.

Findings
The enterprise in question was a furniture SME operating in Italy. It was set up at the end of
the nineteenth century as a family-run business, unchanged in the last 15 years. AA has
about 400 stores located in major cities including London, Paris and Barcelona, and is the
best performer in its field, exhibiting the performance measurement and management
system trend as per Bititci et al. (2012). It collaborates with an active network of customers,
suppliers and universities. The Research & Development (R&D) department has
international students participating in research projects to create new products and
services and promotes other initiatives with continuous interactions in a multicultural
environment.
The within-case study shows how the PMM approach has developed (Table 2) from initial
collection, analysis and reporting information without specific measurement methodology,
frequency or purpose, thus merely highlighting financial and economic indicators. In 2009,

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the first PMMS was implemented because of several managerial projects. Although
not yet covering all departments, the method and frequency of data collection were
adequate to meet financial, sale and production requirements. In 2013, the PMMS
was improved by implementing sophisticated information systems. However, some
departments still collected and analysed data using other tools. Employees often
autonomously collated and processed data using managerial software, Excel
spreadsheets and paper sheets. To move on, AA employed new staff for data
integration in a management information system, which facilitated collection,
processing and circulation of data in support of the decision-making process.
All company processes were controlled using financial and production indicators, sales
turnover and marketing data. Interviews yielded 165 performance parameters such as
production list per month (Operation Department), calls per month (IT Department), email
campaign per week/month (Marketing Department) and market analysis per year (Sale
Department). Parameters were compared to those of previous year or specific periods.
Parameters were placed on the internal managerial platform using automated
procedures to be accessed by all management functions and selected staff. They
were circulated as daily or weekly reports via email on the intranet or software. Some
were printed and posted on department boards to facilitate circulation. This visual
approach enabled all employees concerned to see the reports, especially benefiting
senior staff with limited technological fluency. Reports were often shared on an
internal platform and social media, e.g. Facebook and WhatsApp. Results were
discussed during one-to-one meetings (formally) and private group chat (informally).
In meetings, all management functions discussed operational aspects such as project
management and marketing campaigns. At the end of the presentations, the
management set out activities to achieve the targets for the period, e.g. week and
month.
To analyse the evolution of PMM characteristics over the years, we carried out a
cross-analysis. Figure 2 shows the job position of interviewer and the assessment of
the different PMM characteristics if the paper will be print in black and white we
should write light grey. The yellow cells show averagely the PMM characteristic as
listed in Figure 1. In turn, the blue cells show insufficiently the performance
management characteristic. This cross-analysis identified the two different
approaches below:

1. the first approach, namely “Maturity and Control Path”, based on the characteristics of
performance measurement and less frequently on the characteristics of performance
management; and
2. the second approach, namely by “Maturity and Democratic Path”, based on the
characteristics of PMM.
Both approaches were based on performance measurement activities for real-time data
collection, analysis and reporting, each employee self-monitoring own activities through the
use of parameters (key performance indicators), with new management software and
technological tools such as Facebook and WhatsApp playing a key role. In turn, these aids
permit continuous feedback, suggestions and support, facilitate knowledge sharing and
discussion and promote self-management of knowledge, skills and open-project proposals
on specific topics. They also support explorative organizational learning and encourage
connective networks and bonding among stakeholders.
To show PMMS paths through cross-case analysis between 2004 and 2019, we calculated
the average score for 2004 and 2019. We graphically compared case studies by the
evolutionary paths of PMM (Figure 3).
Finally, we carried out a contingency factor analysis (Figure 4).

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 Management information system
AA introduced company management software several years ago. It invested in IT to obtain
an advanced management information system that supported the development of
performance measurement and management system based on a large data amount to
answer strategic and operative needs. This progressively increased the maturity of its
performance measurement inclusing real-time data collection, analysis and reporting with
each employee being able to self-monitor own activities. This management information
system was based on formal practices and consuetudinary behaviours.
In recent years, part of the company started the use of informal performance management
sources like social media, WhatsApp and other freeware, cross-platform messaging and
voice over internet protocol. This informal management information system encouraged
participative and democratic performance management permitting continuous feedback,
suggestions and support; it facilitates knowledge sharing and discussion, and self-
management of knowledge, skills and competences and proposals of open projects on
specific topics. This management information system was based on informal practices and
consuetudinary usual behaviours.

Organizational culture and management style

AA used an authoritative management style and power culture as a starting point. The
authoritative management style favoured the initial implementation of a PMMS in the
company. After the implementation, the use was split up in two different approaches.
The first was based on an achievement culture and a consultative management style. The
development of an achievement culture favoured people engagement. They worked hard to
achieve goals and better the company as a whole. The company had highly motivated
people who need little to no supervision but of sharing. This SME had ethical value but not
too many rules and procedures because they may interfere with the accomplishment of

Figure 3 Evolutionary paths of performance measurement and management

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 Figure 4 Contingency factors

work. The leadership style was based on humility and the ability to communicate equally to
anyone, especially between colleagues from the same department/office.
The second was based on support culture and a democratic management style. It
encouraged explorative organizational learning and facilitated connective networks and
bonding among stakeholders, often including informal activities based on the use of social
technologies. This style of leadership favoured a strong moral reinforcement that led to
product and process innovation. People often talked to each other of company
performance in formal and informal meetings. This dialogue made it possible to improve
listening and communication of company performance.

Discussion
The results of this research identified two evolution paths with a net increase in the maturity
of performance measurement. The first path, namely, maturity and control path, highlights a
strong command of performance management, whereas the second path, namely, maturity
and democratic path, highlights participative performance management. They also
encourage the use of performance measurement parameters and facilitate self-monitoring
of activity reports, but differ from performance management activities. The maturity and
control path applies to performance activities based on formal support without changes to
sharing, commenting and posting of main information, rarely allowing self-management of
information. The maturity and democratic path is the favourite among the new generations
of employees. Management is increasingly breaking new ground, thus opting for
completely different use and perception of information technologies. Different skills,
competencies, preferences and interaction processes are emerging, with continuous
feedback and widespread use of social media and nano-technology. In turn, wireless
sensor networks, cloud computing, embedded systems and mobile internet are supporting
the development of computer systems able to continuously interact with the physical
system in which they operate. New technologies are changing how enterprises perceive

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 and manage their assets (Nudurupati et al., 2016) because products and services are
enhanced with digital capabilities that increase their value. In this scenario, PMMS relies on
continuous feedback, open communication and knowledge sharing, helping interaction of
employees from different teams, departments and enterprises. Social media and chats now
enable employees to dialogue with peers about performance, as stated in the literature
(Bititci, 2015), thereby changing business communication, both internal and external. This
revolutionary tool and the new topics arising from it, which gives researchers opportunities
for future studies on performance management, although the performance measurement
literature does not carry much investigation on the relationship between PMM and the new
social technologies.
The maturity and democratic path answers to the recent literature, which defines PMMS
such as a holistic, balanced and dynamic system able to support the decision-making
process through a set of performance measurement activities and performance
management activities (Smith and Bititci, 2017; Willis et al., 2018). However, the balance
between performance measurement and performance management, which should give a
basis of an efficient system, it was still rarely identified especially in SME (Bourne et al.,
2018; Smith and Bititci, 2017).
To understand the contingency factors of the implementation and use PMMS, the study
emphasized the key role played by management information system and organizational
culture and management style for the development of a maturity and democratic path.
Firstly, high IT investment and informal practices and behaviours on management
information system strongly impact on the improvement of performance management.
Secondly, the study highlights the impact organizational culture and management style on
the different development of PMM. An achievement culture and a consultative management
style favoured the development of a maturity and control path, while a support culture and
participative management style favoured a maturity and democratic path.
As highlighted by the institutional theory, the resilient and deeper aspects of social structure
are recognized as authoritative guidelines for social behaviour perspective (Di Maggio and
Powell, 1991; Scott, 2001). Institutions are described as social structures that have attained
a high degree of resilience. The company investigated showed the same company
governance structure since the 1900s. AA was a traditional family; the company capital is
held by a small group of shareholders belonging to the same family; the board of directors
play a “service role”, while the decision-making regarding strategy and management is of
the owners. Although different components explain how organizations create, diffuse and
adapt over space and time, the institutions are stable but are subject to change processes
(Scott, 2001, 2004; Di Maggio and Powell, 1991). As specified to Burns and Scapens
(2000), the relationship between actions and institutions highlights the importance of
organizational routines and institutions in shaping the processes of management
accounting change (Burns and Scapens, 2000). As seen by the findings of this research,
the issue of PMMS implementation and evolution in the logic of management accounting
changed in the company. The results agree with the institutional theory and Burns and
Scapens (2000)’s study.
The findings gap iterature need as expressly required by recent publications, i.e. to
understand how SMEs respond to new and current business challenges and how to
improve performance management in SME (Garengo and Biazzo, 2013; Mithas et al., 2011;
Sardi et al., 2018; Sørensen et al., 2010). Moreover, recent literature underlined the need of
holistic, integrated and balanced PMMS in SMEs (Ates et al., 2013; Bititci et al., 2012;
Garengo, 2009; Garengo and Sharma, 2014). The findings connect these literature needs
offering a participative and democratic approach to managerial improvement in
manufacturing SMEs as required by scholars to the performance measurement field (Ates
et al., 2013; Bititci et al., 2012; Garengo and Sharma, 2014). These results address the
design of efficient and balanced PMMSs in SMEs based on new requirement of the digital

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era, i.e. engage people in conversations about performance (Bititci, 2015; Nudurupati et al.,
2016; Smith and Bititci, 2017). The maturity and democratic path connects performance
measurement activities and performance management activities supporting people on the
decision-making process by specific feedback based on real-time data collection, analysis
and reporting data (Bititci, 2015; Bititci et al., 1997; Goshu and Kitaw, 2017; Ittner and
Larcker, 2003).

Conclusion
The paper shows how the efforts for developing PMMS in a leading SME could determine
two different evolution paths into the same company because of the influence of
management information system, organizational culture and management style.
Research implications suggest how the results can be important for policy, practice, theory
and subsequent research. Through the frameworks adopted by this research, SMEs may
evaluate their PMMS to understand their weaknesses and seek improvement solutions. A
possible solution introduced by this research is the use of informal tools such as chats and
social media in performance management activities. In this sense, SMEs should forecast
strategical management of informal tools for improving performance management activities
to engage people in conversation about performance.
This project offers academic and practical contributions in the form of a longitudinal, in-
depth assessment of the PMMS adopted by a leading SME. The academic aspect covers
the understanding of the evolutionary path of performance measurement and management
in a manufacturing SME. The practical contribution offers a path, namely, maturity and
democratic path, to managerial improvement in leading manufacturing SMEs. Hopefully,
these results will drive the design of efficient and balanced PMMSs in SMEs. However, the
main purpose of the project remains the recognition of the increasing role of chats and
social media in performance management activities.
The main limitation of this study is that only one SME was investigated. However, its strength
is that it permits an in-depth understanding of performance measurement and management
of the best performing SME for 15 years.
The results give scope for future research opportunities, thus encouraging more case
studies for exploration, testing, validation or improvement. Note that additional research is
required to explain how performance measurement and especially performance
management activities are evolving in SMEs. Moreover, further investigation is required on
the use of innovative technology in performance management activities.

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Corresponding author
Patrizia Garengo can be contacted at [Link]@[Link]

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