Strategic Performance Measurement in an SME Through the Implementation of a Performance Measurement System
Metso, Robert (2024)
Metso, Robert
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024053119346
https://urn.fi/URN:NBN:fi:amk-2024053119346
Tiivistelmä
This project-based bachelor’s thesis explores the area of performance measurement in business through the implementation of a performance measurement system (PMS). The project was carried out for a commissioning company, with the objective of developing a PMS that meet the company’s specific needs. The company is a key player in the Finnish second-hand clothing market, specialising in carefully curated clothing and utilising distinctive social media marketing strategies. Although the business has been highly successful since it was founded in 2020, the company, like most SMEs, can benefit from enhanced performance measurement practices. The company has incorporated performance measurement in some areas to an extent, but it has been fragmented with a lack of a centralised system. A PMS in its most basic form, is a set of performance measures, tracked within a single system.
This thesis comprises both theoretical and empirical components. The theoretical framework is divided into two parts. The preliminary research sets the foundation for the project by exploring the most well-known PMS, the Balanced scorecard (BSC), combined with its counterpart, the strategy map. Performance measurement through such system involves a balanced approach by incorporating both financial and non-financial performance measures that align with the company’s strategy. The extended secondary research focuses solely on financial performance measurement to ensure alignment with the author’s specialisation in Financial Management, and to provide the most value for the company. Subsequently, the empirical part involves the author developing a PMS for the company that focuses on the financial measures, while providing a sustainable foundation that allows for easy incorporation of non-financial measures. The primary research methods included qualitative insights from discussions with the company’s management to find out the specific needs, and quantitative data analysis performed on the company’s financial statements.
The outcome of the project is an Excel based PMS that translates the company’s Finnish financial statements to align with global standards performs horizontal analysis, automatically calculates key financial ratios, and integrates the ratios into a Balanced Scorecard framework. The PMS provides the company with easy analysis of its financial health, enhances operational efficiency, and assists in strategic decision-making. This thesis emphasises the importance of a balanced approach to performance measurement with measures that align with a company’s strategy to promote sustainable business growth.
This thesis comprises both theoretical and empirical components. The theoretical framework is divided into two parts. The preliminary research sets the foundation for the project by exploring the most well-known PMS, the Balanced scorecard (BSC), combined with its counterpart, the strategy map. Performance measurement through such system involves a balanced approach by incorporating both financial and non-financial performance measures that align with the company’s strategy. The extended secondary research focuses solely on financial performance measurement to ensure alignment with the author’s specialisation in Financial Management, and to provide the most value for the company. Subsequently, the empirical part involves the author developing a PMS for the company that focuses on the financial measures, while providing a sustainable foundation that allows for easy incorporation of non-financial measures. The primary research methods included qualitative insights from discussions with the company’s management to find out the specific needs, and quantitative data analysis performed on the company’s financial statements.
The outcome of the project is an Excel based PMS that translates the company’s Finnish financial statements to align with global standards performs horizontal analysis, automatically calculates key financial ratios, and integrates the ratios into a Balanced Scorecard framework. The PMS provides the company with easy analysis of its financial health, enhances operational efficiency, and assists in strategic decision-making. This thesis emphasises the importance of a balanced approach to performance measurement with measures that align with a company’s strategy to promote sustainable business growth.