Factors affecting Performance Measurement System in manufacturing Companies in developing countries – selected cases from Bangladesh

Shaheen, Fateha (2025) Factors affecting Performance Measurement System in manufacturing Companies in developing countries – selected cases from Bangladesh. Doctoral thesis (PhD), Manchester Metropolitan University.

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Abstract

The aim of this study is to investigate how performance measurement system (PMS) is implemented in practice and how internal contingency factors affect implementation and use of PMS. The internal contingency factors investigated are – management/leadership style, senior management commitment, reward system, employees’ education level/knowledgeable workforce, training and IT. Case study research was adopted for data collection. Semi-structured interviews were conducted in six Bangladeshi companies. In addition to semi-structured Interviews, researcher also went through Personal observations and documentations review. A combination of Multinational and local companies was studied (2 Multinational and 4 local companies). The results indicate that multinational companies are using systematic frameworks for PMS. They use an authoritative style when designing PMS, but they use a participative style in implementation and use phase. In these cases, senior management commitment, regular training, sophisticated IT infrastructure, reward linked with performance play an important role in successful PMS implementation and use. On the other hand, the local companies do not use PMS holistically or apply an integrated PMS framework. They include measures when they are required. They use an authoritative style in the whole process of PMS. In these cases, non- linkage of rewards with performance, lack of integrated IT support and lack of educated workforce are barriers to PMS success. However, as the senior management of all these companies are committed to making PMS successful, they are trying to overcome these deficiencies. They are moving towards the implementation of integrated PMS holistically throughout the company. They are also hiring educated staff, providing training to the existing workforce and implementing integrated IT support. This research fills the gap of literature of management accounting in developing country, namely Bangladesh. This research contributes to the management accounting literature by identifying internal contingency factors that affect successful implementation and use of PMS in a developing country. These contingency factors are – management style/leadership style, senior management commitment, training, reward, integrated IT system, holistic PMS, non-resistance to change, educated employees and communication. At a general level, manufacturing companies in other developing countries can be benefitted from the findings of this research. Also, the findings of this study provide considerable knowledge to managers regarding the way contingency factors influence PMS in manufacturing organisations in Bangladesh. This research provides guidance for business practitioners of Bangladesh on how contingency factors influence the implementation of PMS to enhance business performance. This will help them to effectively design, implement and use performance measures to achieve better performance.