The Effectiveness of Strategic Performance Measurement System in Creating and Steering Tension

We examine the effectiveness of strategic performance measurement system (SPMS) in creating and steering a tension characterized by the two competing values of transformation and consistency. We identify problems with a dynamic tension and propose an alternative approach to deepen understanding of tension management. The data were collected from 312 strategic business units of Japanese firms listed in the first and second sections of the Tokyo Stock Exchange. We obtained the following results through a cluster analysis, a multiple comparison test, a multiple regression analysis containing interactions, and a post hoc analysis. First, we found that SPMS is positively associated with the creation of tension. Second, while the organizations facing tension averagely show higher performance than the others, the group shows larger variance in the performance. Third, SPMS contributes to the steering of the tension to some extent; however, the effect is not strong enough to attain the highest performance. The findings have some implications for management accounting literature in the following ways; by providing a new perspective for deepening a consideration of the steering of the tension, emphasizing that the organizations facing tension give us an interesting research opportunity, and suggesting a need to search a composed mechanism (including SPMS) to steer the tension effectively. We define and operationalize the tension with the competing values so that we can clearly recognize the effects of SPMS on the creation and steering of the tension