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Developing a performance management system using soft systems methodology: A Chinese case study

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  • Liu, Wenbin B.
  • Meng, Wei
  • Mingers, John
  • Tang, Ning
  • Wang, Wei
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    Abstract

    The economic crisis created major problems for a successful, hi-tech Chinese company – Tonsan. They already had in place a performance management system based around the balanced scorecard which worked successfully in times of growth and high demand. However, with the world downturn they suddenly found that their current system was not able to cope with the demands placed on it. The authors were called in and decided to design a new, strategic performance management system to overhaul all the key business processes. The approach taken to develop the PM system was based around Soft Systems Methodology (SSM), a well established systems-based approach to problem solving and organizational design. The methodology progressed from the development of key strategic objectives (using the BSC and strategy maps), through a structured decomposition of necessary organizational activities, the construction of key performance indicators, the specification of targets, to communication and future planning. It involved significant levels of participation and communication throughout the organization. The results were judged by senior management to have been very successful, and the company has grown significantly.

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    Bibliographic Info

    Article provided by Elsevier in its journal European Journal of Operational Research.

    Volume (Year): 223 (2012)
    Issue (Month): 2 ()
    Pages: 529-540

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    Handle: RePEc:eee:ejores:v:223:y:2012:i:2:p:529-540

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    Web page: http://www.elsevier.com/locate/eor

    Related research

    Keywords: Productivity and competitiveness; Performance management; Soft systems methodology; 3E methodology;

    References

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    1. Papalexandris, Alexandros & Ioannou, George & Prastacos, Gregory & Eric Soderquist, Klas, 2005. "An Integrated Methodology for Putting the Balanced Scorecard into Action," European Management Journal, Elsevier, vol. 23(2), pages 214-227, April.
    2. W. B. Liu & Z. L. Cheng & J. Mingers & L. Qi & W. Meng, 2010. "The 3E methodology for developing performance indicators for public sector organizations," Public Money & Management, Taylor & Francis Journals, vol. 30(5), pages 305-312, September.
    3. Filipe Amado, Carla Alexandra & Dyson, Robert G., 2008. "On comparing the performance of primary care providers," European Journal of Operational Research, Elsevier, vol. 185(3), pages 915-932, March.
    4. Jain, Sanjay & Triantis, Konstantinos P. & Liu, Shiyong, 2011. "Manufacturing performance measurement and target setting: A data envelopment analysis approach," European Journal of Operational Research, Elsevier, vol. 214(3), pages 616-626, November.
    5. Mingers, John & White, Leroy, 2010. "A review of the recent contribution of systems thinking to operational research and management science," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1147-1161, December.
    6. Lohman, Clemens & Fortuin, Leonard & Wouters, Marc, 2004. "Designing a performance measurement system: A case study," European Journal of Operational Research, Elsevier, vol. 156(2), pages 267-286, July.
    7. Patel, Brijesh & Chaussalet, Thierry & Millard, Peter, 2008. "Balancing the NHS balanced scorecard!," European Journal of Operational Research, Elsevier, vol. 185(3), pages 905-914, March.
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