The role of performance measurement in aligning operations with strategy: sustaining cognitive processes of internal alignment

Purpose This paper aims to address an important theoretical shortcoming in the conceptualization of internal alignment by investigating the cognitive processes involved in aligning operations with strategy and the role of performance measurement (PM) in sustaining these processes. Design/methodology/approach A theory-building study investigates the process of using PM to drive the implementation of a new strategy in a large beer manufacturer in Italy. The study uses a sensemaking perspective to theorize the findings. Data were collected through semi-structured interviews, field observations and company documents. Findings This study develops a theoretical model suggesting that establishing and maintaining internal alignment occurs through seeking, assembling, adjusting and finalizing the meaning of how strategic priorities inform local action. PM plays a central role in this process by providing interpretive support. Research limitations/implications This article advances a cognition-centred view of internal alignment that complements the behavioural aspect of the phenomenon emphasized in prior literature. Practical implications Using PM for aligning operations with strategy is a complex and iterative process that requires time and effort and generates temporary stability. Managers may need to complement traditional approaches to alignment with providing space for sensemaking. Originality/value The paper proposes a view of internal alignment as an ongoing interpretive process that is sustained by PM. This process brings about the consistency of meanings that generates strategy-consistent behaviours.

Automated summary

This study explores how performance measurement drives the implementation of a new strategy in a large beer manufacturer in Italy, suggesting that internal alignment is an ongoing interpretative process sustained by performance measurement. Performance measurement plays a central role in establishing and maintaining internal alignment by providing interpretive support.