Linking performance metrics to financial performance from perspective of agency theory

One of the key tasks of performance management is to implement the company's strategy by directing operations towards goals. However, companies may have challenges defining suitable metrics and understanding their overall impact on the company's goals. The aim of this master's thesis...

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Main Author: Pirskanen, Laura Annika
Other Authors: Jyväskylä University School of Business and Economics, Jyväskylän yliopiston kauppakorkeakoulu, University of Jyväskylä, Jyväskylän yliopisto
Format: Master's thesis
Language:eng
Published: 2024
Subjects:
Online Access: https://jyx.jyu.fi/handle/123456789/95457
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author Pirskanen, Laura Annika
author2 Jyväskylä University School of Business and Economics Jyväskylän yliopiston kauppakorkeakoulu University of Jyväskylä Jyväskylän yliopisto
author_facet Pirskanen, Laura Annika Jyväskylä University School of Business and Economics Jyväskylän yliopiston kauppakorkeakoulu University of Jyväskylä Jyväskylän yliopisto Pirskanen, Laura Annika Jyväskylä University School of Business and Economics Jyväskylän yliopiston kauppakorkeakoulu University of Jyväskylä Jyväskylän yliopisto
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description One of the key tasks of performance management is to implement the company's strategy by directing operations towards goals. However, companies may have challenges defining suitable metrics and understanding their overall impact on the company's goals. The aim of this master's thesis was to investigate the relationship between performance metrics and financial metrics in a production organization, and to identify the connections between these metrics. The research was conducted as a case study in an organization that is part of a larger international production company. The theoretical framework of the research was based on performance management and agency theory. Data was collected in the target organization through observations, interviews, and documents. The results showed that, based on the literature, the performance metrics used in the target organization were relevant to the management of a production company. The research also identified performance management issues within the target organization, which aligned with the reasons for performance management failures as outlined by agency theory. The research provides the target organization with basic information to improve the performance measurement system. It highlights some important points about their current measurement system. A clear deficiency was found in monitoring the costs and effects of poor quality based on both the literature and the interviews. In addition, reducing the number of metrics could streamline and simplify management processes. Yksi suoritusjohtamisen keskeisistä tehtävistä on toteuttaa yrityksen strategiaa ohjaamalla toimintaa kohti tavoitteita. Yrityksillä voi kuitenkin olla haasteita määritellä sopivia mittareita ja ymmärtää niiden kokonaisvaltainen vaikutus yrityksen tavoitteisiin. Tämän pro gradu -työn tavoitteena oli tutkia suorituskykymittareiden ja taloudellisten mittareiden välistä suhdetta tuotanto-organisaatiossa, ja tunnistaa näiden mittareiden välisiä yhteyksiä. Tutkimus tehtiin tapaustutkimuksena organisaatiossa, joka on osa suurempaa kansainvälistä tuotantoyhtiötä. Tutkimuksen teoreettinen viitekehys perustui suoritusjohtamiseen ja agenttiteoriaan. Data kerättiin kohdeorganisaatiossa havaintojen, haastattelujen ja asiakirjojen avulla. Tulokset osoittivat, että kohdeorganisaatiossa käytetyt suorituskykymittarit olivat kirjallisuuden perusteella relevantteja tuotantoyrityksen johtamiseen. Tutkimuksessa tunnistettiin myös kohdeorganisaation suorituksen johtamiseen liittyviä ongelmia, jotka puolestaan ilmensivät hyvin niitä syitä, jotka agenttiteorian perustella johtavat suorituksen johtamisen epäonnistumiseen. Tutkimus tarjoaa kohdeorganisaatiolle pohjatietoa suorituksen mittauksen kehittämistä varten. Tutkimuksen perusteella voidaan nostaa kohdeorganisaation kannalta kiinnostavia huomioita nykyiseen mittaristoon liittyen. Huonon laadun kustannusten ja vaikutusten seurannassa havaittiin selkeä puute niin kirjallisuuden kuin haastattelujenkin perusteella. Lisäksi mittarien määrän vähentäminen voisi virtaviivaistaa ja yksinkertaistaa hallintaprosesseja.
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spellingShingle Pirskanen, Laura Annika Linking performance metrics to financial performance from perspective of agency theory Economics Taloustiede
title Linking performance metrics to financial performance from perspective of agency theory
title_full Linking performance metrics to financial performance from perspective of agency theory
title_fullStr Linking performance metrics to financial performance from perspective of agency theory Linking performance metrics to financial performance from perspective of agency theory
title_full_unstemmed Linking performance metrics to financial performance from perspective of agency theory Linking performance metrics to financial performance from perspective of agency theory
title_short Linking performance metrics to financial performance from perspective of agency theory
title_sort linking performance metrics to financial performance from perspective of agency theory
title_txtP Linking performance metrics to financial performance from perspective of agency theory
topic Economics Taloustiede
topic_facet Economics Taloustiede
url https://jyx.jyu.fi/handle/123456789/95457 http://www.urn.fi/URN:NBN:fi:jyu-202406034220
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