A Comparative Case Study on Performance Management System in Architecture, Engineering, and Construction Start-up Enterprises in Indonesia
Keywords:AEC firms, Balanced Scorecard, Performance Management System, Start-up Lifecycle
Abstract. Despite a growing sense that start-up enterprise is critical to economic growth, the topic of performance management affects strategic and organizational processes remains largely understudied. In Indonesia, as a sphere where the entrepreneurial ecosystem is on the rise, we explored the strategy of Architecture, Engineering, and Construction (AEC) start-up firms using a Balanced Scorecard (BSC). This research aims to determine how suitable the BSC is applied to AEC start-ups and how this tool is implemented as the enterprise evolves. We conduct in-depth case studies using multiple data sources, including interviews and field observation. By performing the comparative analysis, we identified managerial practices that enable the networking of BSC perspectives – learning and growth, internal process, customer, and financial – during the start-up lifecycle. From the contribution to the literature perspective, this study provides empirical evidence that the BSC is a valuable performance management tool for early-stage firms. However, the BSC must be reconfigured regularly to reflect the current development stage’s objectives throughout implementation. As the business implications, this research helps AEC entrepreneurs see the significance of achieving organizational balance to drive growth and transition from agile start-ups to sustainable companies. Future research may examine the interconnection between managerial control systems and leadership attributes in different business contexts.
Keywords: AEC firms, Balanced Scorecard, Performance Management System, Start-up Lifecycle
Baluch, N., Sobry, C., Abdullah, B., & Bin Mohtar, S. (2010). Maintenance management performance-an overview towards evaluating Malaysian Palm Oil Mill. The Asian Journal of Technology Management, 3(1), 1–5. www.sbm.itb.ac.id/ajtm
Basuony, M. A. K. (2014). The balanced scorecard in large firms and smes: a critique of the nature, value, and application. Accounting and Finance Research, 3(2), 14–22. https://doi.org/10.5430/afr.v3n2p14
Bianchi, C., & Cosenz, F. (2013). A Dynamic performance management approach to evaluate and support smes competitiveness: Evidence from a Case Study. 31st International Conference of the System Dynamics Society, July 2013.
Chan, A. P. C., & Chan, A. P. L. (2004). Key performance indicators for measuring construction success. Benchmarking, 11(2), 203–221. doi: 10.1108/14635770410532624
Costa, D., & Formoso, C. (2003). Guidelines for conception, implementation, and use of performance measurement systems in construction companies. 11th International Conference of the International Group for Lean Construction, Virginia Tech, Blacksburg, Virginia, USA.
Dubois, A., & Gadde, L. E. (2002). The construction industry as a loosely coupled system: Implications for productivity and innovation. Construction Management and Economics, 20(7), 621–631.
Eccles, R. G. (1981). The quasi-firm in the construction industry. Journal of Economic Behavior and Organization, 2(4), 335–357. doi: 10.1016/0167-2681(81)90013-5
Fernandes, K. J., Raja, V., & Whalley, A. (2006). Lessons from implementing the balanced scorecard in a small and medium-size manufacturing organization. Technovation, 26(5–6), 623–634. doi: 10.1016/j.technovation.2005.03.006
Giannopoulos, G., Holt, A., Khansalar, E., & Cleanthous, S. (2013). The use of the balanced scorecard in small companies. International Journal of Business and Management, 8(14), 1–22. https://doi.org/10.5539/ijbm.v8n14p1
Gumbus, A., & Lussier, R. N. (2006). Entrepreneurs use a balanced scorecard to translate strategy into performance measures: What is a BSC and why should small. Journal of Small Business Management, 44(3), 407–425.
Hartmann, T., Gao, J., & Fischer, M. (2008). Areas of Application for 3D and 4D Models on Construction Projects. Journal of Construction Engineering and Management, 134(10), 776–785. doi: 10.1061/(ASCE)0733-9364(2008)134:10(776)
Henschel, T. (2006). Risk management practices in German SMEs: An empirical investigation. International Journal of Entrepreneurship and Small Business, 3(5), 554–571. doi: 10.1504/IJESB.2006.010543
Hudson, M., Smart, A., & Bourne, M. (2001). Theory and practice in SME performance measurement systems. International Journal of Operations & Production Management, 21(8), 1096–1115.
Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard: measures that drive performance. Harvard Business Review, 83(7–8).
Kaplan, R. S., & Norton, D. P. (2004). The strategy map: Guide to aligning intangible assets. Strategy & Leadership, 32(5), 10–17. doi: 10.1108/10878570410699825
Kennerley, M., & Neely, A. (2002). A framework of the factors affecting the evolution of performance measurement systems. International Journal of Operations and Production Management, 22(11), 1222–1245. doi: 10.1108/01443570210450293
Kreiner, K. (1995). In search of relevance: project management in drifting environments. Scandinavian Journal of Management, 11(4), 335–346.
Lonbani, M., Sofian, S., & Baroto, M. B. (2016). Balanced scorecard implementation in smes: addressing the moderating role of environmental uncertainty. Global Business and Organizational Excellence.
Malina, M. A., & Selto, F. H. (2001). Communicating and controlling strategy: an empirical study of the effectiveness of the balanced scorecard.
How to Cite
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Copyright @2017. This is an open-access article distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License (http://creativecommons.org/licenses/by-nc-sa/4.0/) which permits unrestricted non-commercial used, distribution and reproduction in any medium