A risk-focused planning framework for performance measurement system change

Binh, Bui, Fowler, Carolyn, and Hunt, Chris (2008) A risk-focused planning framework for performance measurement system change. In: Proceedings of Global Accounting and Organisational Change Conference 2008 (3) pp. 1-41. From: Global Accounting and Organisational Change Conference 2008, 9-11 July, 2008, Melbourne, VIC, Australia.

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Purpose: The development of a risk-focused performance management system (PMS)planning framework for organisations undergoing externally-driven regulatory change within a constrained operating environment.

Methodology/Approach: This study focuses on New Zealand electricity generators and retailers (gentailers). It utilises a multiple theory framework drawing on elements of neoinstitutional and contingency theory and secondary data to predict PMS change implications, due the altered business risk exposure potential of the proposed emissions trading regime (ETS) and the associated carbon constraints this regulatory change imposes on these organisations’ operating environment.

Findings: The risk-focused PMS planning framework developed in this study identifies the drivers and attributes that, due to the ETS adoption potentially have significant negative business risks for some gentailers. These risks not only influence organisational-level PMS design, function, and operation needs but also have economic consequences at sectoral and national levels.

Implications: The paper provides insights into an organization’s potential internal adjustments in response to increases in internal and external business risks due to the introduction of the ETS and changing societal views. Theory implications relate to the role and use of risk in extending the application of contingency and institutional theories. Consequently, the findings of this study will be of potential interest to academics, managers, accountants, other professionals, governments, and policy-makers.

Originality/Value: The value of the study is in the way it views regulatory interventions and their associated business risks as drivers of changes in an organization’s strategies and PMS. Further, it is amongst the first to explore the implications of an ETS environment on an organization.

Item ID: 10326
Item Type: Conference Item (Research - E1)
ISSN: 1832-5912
Keywords: performance management system; risk; change; contingency
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Date Deposited: 16 Jul 2010 01:09
FoR Codes: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1501 Accounting, Auditing and Accountability > 150105 Management Accounting @ 100%
SEO Codes: 97 EXPANDING KNOWLEDGE > 970115 Expanding Knowledge in Commerce, Management, Tourism and Services @ 100%
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