Strategic or operational perspectives on performance: what is prioritized in a large construction company?

Purpose – This case study sets out to discuss the balance of operational and strategic perspectives on performance measurement in a large construction company. Design/methodology/approach – In interviews, managers at two middle organizational levels in the case company were asked to prioritize which criteria they found most important to direct their business. The results from these interviews were compiled in success maps in order to describe how the managers thought these criteria were interrelated. Findings – A gap was found between operational and strategic perspectives at the two organizational levels: lower management ranked criteria that corresponded to strategic objectives lower than did the middle management. One reason for this gap seems to be the lack of incentives for aligning with the strategic objectives. If there were no incentives, lower managers tended to prioritize operational criteria prior to strategic criteria. Practical implications – This study emphasizes the need to link strategic objectives to criteria that give incentives for lower management to comply with the strategic objectives, to formulate unambiguous strategies and to communicate these strategies clearly. Originality/value – In large construction companies, measurement of effectiveness is particularly complicated since adjustment to local markets must be balanced with alignment with corporate strategies in order to benefit from the competitive advantages of a large organization. Managers in a large construction company have to combine operational and strategic perspectives in measurement and management. Little research has been done to investigate and understand this area and therefore this paper can make a useful contribution.