Who has the last word?

Every now and then one cannot help of thinking that often management research focuses too much on justifying and strengthening its own agenda than providing something valuable for management practice.

I started to think of this when writing a guest editorial addressing the intersections of knowledge management and performance management disciplines. I think, there is too little discussion on how to integrate various perspectives to actually help managers in their managerial duties.

Knowledge has a two-dimensional role in performance management. First, knowledge is a resource that is argued to yield sustainable competitive advantage. Second, information and generated knowledge form a basis for decision-making and management control. With these two complementary perspectives knowledge management provides an essential tool for improving organizational performance.

Our interpretation of performance is evolving together with society and our understanding. Efficiency, productivity and effectiveness continuum is a good example of the evolving focus. Together with the phenomenon also managerial frameworks and concrete tools change. When the world around us is changing at a tremendous pace management research needs to provide new understanding and deliver managerial tools that help organizations to perform in the contemporary business environment. Then, it becomes essential that various management approaches have a shared vision.

Management control is used to ensure that organizations’ vision and strategy are put into practice. Specific and clear performance targets are associated with reduced confusion leading to performance-driven behavior and better performance. The quintessential aspect of performance management is the actual use of performance information; mere provision does not lead to performance improvements.

Increasingly, especially when the management focus is turning from organizations to customer-perceived value and inter-organizational value configurations, practical challenges arise from the ability to access, integrate and analyze information across organizational boundaries. Here, the possibilities of knowledge management as a management paradigm of the information-age are emphasized.

Along with digitalization, social media and ‘Internet of Things’ a significant change is taking place. It is not only business and management that are changing – a more fundamental change is under way. This will change our perceptions of organizational performance and significantly transform our understanding and perceptions about management. The change is already taking place – lower hierarchies, participatory approaches, ecosystems and customer-driven approaches etc. New tools are needed to adapt to this change and renew the management agenda.

As regards performance measurement we need more flexible measurement approaches and methods. Yearly reporting is not able to fulfill managerial knowledge needs in a rapidly changing environment. Also, horizontal and inter-organizational value processes challenge vertical reporting silos and information systems that are built on a different management ideology. Top-down measurement strategies need to be complemented with approaches that report customer-perceived value.

In addition, capturing the performance of knowledge work, which continues to be a highly relevant management issue, requires new measurement frameworks. There are already several interesting initiatives in this area. For example, approaches like work engagement, inner work life and emotional intelligence shed light on the motivational and wellbeing aspects of performance, which are crucial elements of knowledge work performance. This brings us back to a discussion concerning the use of performance information – how do we use it to manage our employees, to control them and to promote learning?

Thus, it should not be a game of who gets the last word. Instead, various management disciplines need to collaborate and jointly seek answers to timely management challenges. More than ever it is time for inter-disciplinary research and solutions.

This blog was inspired by my guest editorial where you can find a bit more detailed discussion and references:

Laihonen, H. (2015), Guest editorial: “Knowledge-based performance management in twenty-first century organizations“, Special issue on “Performance improvement in the 21st century”, Measuring Business Excellence, 19(3).


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