Yilma, Yitagesu (2017) Performance Measurement System in Manufacturing Industry for Better Competitiveness: Case of Ethiopian Prioritized Manufacturing Industries. PhD thesis, Addis Ababa University.
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Abstract
Performance is a measure of success. Companies which perform better will have better growth and competitiveness. Performance measurement has been practiced since the middle ages. For several years, financial performance measures were used to assess the success of organizations. However, they have been blamed for lacking strategic focus, encouraging local optimization and absence of information on quality, delivery time and flexibility, and indeed missing information on customer requirements and competitors status. As a result performance measurement has become a topical issue for academicians in management studies and a number of performance measurement methodologies have been suggested. Moreover, the dynamic change in global, technological, business and natural trends has resulted in changing the nature of work, the need of specific improvement initiatives by companies, the emergence of national and international awards, the changing of organizational roles and the power and demand of external requirements. Consequently, acting on these organizational assignments and balancing their responses necessitates the use of more robust and comprehensive PM approach. This dissertation has been founded on these rationales. It has the general objective of identifying the recent challenges in the literatures of the field of PM and to empirically investigate the existing performance measurement practices of Ethiopian prioritized manufacturing industry and, finally, to suggest an improved PMS solution for the problems identified. To meet the dissertation objective, both theoretical and empirical approaches have been pursued and there were an interplay between the theory from PM literature and the practice in EPMI PM practices and, consequently, coming up with the suggested solution which can contribute in bridging the indentified gaps to some extent. The finding from the systematic literature review asserted that the PM literature should address issues such as inexistence of solid measurement theory (theories) that underpin performance measurement systems, lack of stronger necessary and sufficient conditions for performance characteristics should fulfill and inadequate due consideration of emerging PM and management subfields. These are resulted from changes in technological, global, natural and business trends. The challenges are found to be critical gaps to be bridged to maintain its progress and the literature convergence. The empirical investigation has been carried out on EPMIs. A randomly selected 109 companies were included in the survey study. Both descriptive and analytical statistical analysis were applied to analyze the survey data on the existing PM practices. The analysis result has shown that PM practice in EPMIs is dominated by financial measures. There is a serious problem in formulation of vision and objectives in a clear and workable manner. There is also a problem of information quality for the formulation and updating of strategies and measures among others. The introduction and use of modern performance measurement systems and performance improvement initiatives is limited. The most relatively supposed to be well-used performance measurement tool and performance improvement systems were QMS, kizen and BSC. About 13.1%, 7.3% and 4.7% of the surveyed companies successfully implemented the systems respectively. In the investigation process, major factors affecting the implementation and maintenance of performance measures and measurement systems have also been identified in this survey study. These factors are organization culture, strategy alignment, performance measurement information communication and reporting systems, a regular performance measures and measurement systems review and update, management understanding, management commitment and leadership, clear and balanced framework and target-setting. In response to the theoretical and empirical findings, a methodological PMS framework which is supposed to contribute to bridge the gaps identified from PM literature and EPMI empirical analysis has been developed. The framework bases on multiple theories. It composes four distinct and interrelated phases namely: the design phase, the implementation phase, the use phase and the review and update phase. Unlike many of the previously proposed frameworks which suggest some areas in which measures of performance might be useful with little guidance, this framework provides better guideline on how the appropriate measures can be identified, introduced and ultimately used to manage the business performance. The PMS design phase part of the proposed framework has been successfully implemented in a case company selected from EMPI. The limitation of the research is the findings on the existing PM practices of EPMI has been concluded based on the sampled companies. The whole phases of the newly developed PMS framework needs to be implemented in more case companies to test its applicability reliably.
| Item Type: | Thesis (PhD) |
|---|---|
| Uncontrolled Keywords: | Mechanical and Industrial Engineering |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management Q Science > Q Science (General) T Technology > TJ Mechanical engineering and machinery |
| Divisions: | Africana |
| Depositing User: | Andriamparany Edilbert RANOARIVONY |
| Date Deposited: | 06 Jul 2018 08:02 |
| Last Modified: | 06 Jul 2018 08:02 |
| URI: | http://thesisbank.jhia.ac.ke/id/eprint/6662 |
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