Institutional Influences on Performance Measurement Systems

Performance measurement systems are embedded within a web of institutional forces that shape their design, implementation and evolution. Regulatory requirements, professional norms and cultural expectations combine to influence which metrics are selected, how they are interpreted and the roles they play in organisational decision-making. In public and non-profit sectors, legitimacy concerns often compel organisations to adopt multiple performance dimensions that address economy, efficiency, effectiveness and social equity. In commercial and hybrid entities, competing logics—such as market-driven profit objectives and social-mission imperatives—generate tensions that performance measurement systems seek to mediate through roles as mediator, disrupter or symbolizer. Institutional complexity arises when organisations face overlapping demands from state agencies, professional bodies and stakeholder constituencies, prompting strategies such as decoupling, compromise and negotiation of resource allocations. At the micro-level, individual actors and teams engage in institutional work to adapt performance systems to local contexts, blending business logics with long-standing professional values. Globally, the influence of performance measurement extends to higher education, public utilities, social enterprises and corporatised public services, with practical applications in resource allocation, accountability reporting and governance reforms. Emerging methodological approaches emphasise relational diffusion of measurement instruments, the situated rationalities of key actors and the need to study performance systems across diverse organisational forms.

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Institutional Influences on Performance Measurement Systems publication trend

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Technical terms

Institutional logic: A set of organising principles and values that guide behaviour and shape perceptions of appropriate practices within an organisational field.

Performance measurement system (PMS): A structured framework of metrics and processes used to evaluate and manage organisational performance against strategic objectives.

Hybrid organisation: An entity combining elements of different institutional logics (for example, public, private and social) that must balance competing demands.

Decoupling: The strategic separation between formal policies or structures and actual practices to satisfy institutional requirements while maintaining internal flexibility.

Institutional complexity: The condition arising from exposure to multiple, potentially conflicting institutional demands, leading to tensions in decision-making.

References

1. Actors constructing accountability in hybrid organisations: The case of a Swedish municipal corporation. The British Accounting Review (2024).
2. Institutional logic and scholars' reactions to performance measurement in universities. Accounting Auditing & Accountability Journal (2021).
3. Situated rationalities and management control change – an empirical note on key actors, situated rationalities and generalised practices. Qualitative Research in Accounting & Management (2021).
4. “What is going on in the ‘big tent’?” Current developments in (new) institutional theory and performance measurement and management research. Journal of Public Budgeting Accounting & Financial Management (2022).