Performance Measurement Systems in Service SME: A Brunei Case Study

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Abstract

The purpose of this study was to investigate the practice of performance measurement systems (PMS) in Small and Medium-sized Enterprises (SME) operating in the service sector in Brunei Darussalam. A further aim was to find the drivers and barriers of PMS adoption for such companies. Quantitative and qualitative methods were applied in this research. Documentary data, questionnaires, and interviews were used to collect the data. 357 questionnaires were sent out to service SME and a total of 62 responses were received. 29 managers from four case study companies were interviewed and semi-structured questions were used during the interviews. The results from the questionnaires showed that 26 per cent of the sample practice advanced PMS, 16 per cent still use a traditional PMS and the rest use a balanced system. The results of the interviews showed two additional drivers and one additional barrier to those found in the literature review. Business process and external stakeholders were identified as the additional drivers of PMS adoption and the former was also identified as the additional factor that could block such adoption. The additional findings indicated that organizational strategy, appropriate management style and management experience and qualifications were the core factors that could either drive or block the adoption of PMS. The lack of a clear mission and vision influenced all the other blocking forces. At the same time, the existence of a clear policy, such as a mission and vision statement, influenced the other driving forces. Furthermore, exercising an appropriate management style which takes into account the current organizational culture of the company has a significant positive impact on the acceptance of performance measurement. The employment of a qualified and experienced management team that understands the concept of performance measurement is also valuable in ensuring that the design of the PMS is appropriate and the implementation successful. A practical framework based on the findings was created to overcome the key identified problems associated with PMS adoption. From these findings, the research results offer both useful and actionable implications for practitioners such as managers and external consultants involved in PMS, particularly in Brunei. Consideration was given to the breadth of the interviews and the use of other documentary data, as well as the limitations of the case study method employed in the research. This should ensure the findings will be useful for companies currently implementing PMS or those intending to in the future. Given the context of this research, the findings will predominantly be of use in developing countries.

Keyword(s)

Brunei Darussalam; Performance Measurement System; Service SME

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