Analyzing the current incorporation of social, environmentalAnd economic measures into business strategic performancemeasu...
Hahn ,Frank Figge ,Stefan Schaltegger (2001) social, environmental, and economic performance have becomeincreasingly impor...
The concept of ESR has been first developed by Bowen (1953). In this research, we define ESR as a complete set ofprograms,...
Marrewijk (2004) in his study, describes a set of ideal types of enterprises, and develops a system of values andassociate...
Beside the four perspectives of the balanced Scorecard, a fifth aspect (society) can integrate social andenvironmental asp...
In the formulation of a balanced scorecard all the objectives and measures are estimated from the long-termstrategic finan...
The respondents were also asked to indicate the type of business strategy or performance measurement systems theyuse to co...
Table 1: Performance Measures average level of presenceTable 2: Comparison tests of mean level of presence and Standard De...
Sustainability 5.00Innovation and learning 3.80Internal processes 4.08Customer 4.66Financial 4.70Table 5: comparison tests...
Additionally, the development of ethical investing(also known as sustainable, socially-conscious .It describes aninvestmen...
Integrating sustainability into enterprise strategic PMS ultimately gives enterprise a competitive advantage lowersshort-t...
Proceedings of the 2001 Eco-Management and Auditing Conference. ERP Environment: Shipley; 83–90.Figge F, Hahn T, Schaltegg...
Van Marrewijk, M. & Hardjono, T. (2003). European corporate sustainability framework for managingcomplexity and corporate ...
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Analyzing the current incorporation of social, environmental And economic measures into business strategic performance measurement systems: the case of Enterprises operating in Shanghai

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We theorize about the incorporation of social, environmental and economic dimensions into strategic performance measurement systems. 81Chinese companies were surveyed for the analysis. Along with the increasing of social responsibility pressure, numbers of enterprises are promoting environmental, social and economic performance as strategic sustainability measures. Although the addition of sustainability measures to enterprise’s long term business strategy has long time been a major preoccupation of literature. Some empirical researches have examined if these nonfinancial measures are effectively incorporated into strategic performance measurement systems. In this research, we will examine why the incorporation of sustainability measures into enterprise business strategy vary across enterprises operating in Shanghai.

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Analyzing the current incorporation of social, environmental And economic measures into business strategic performance measurement systems: the case of Enterprises operating in Shanghai

  1. 1. Analyzing the current incorporation of social, environmentalAnd economic measures into business strategic performancemeasurement systems: the case of Enterprises operatingin ShanghaiJing Zhou (Corresponding author)Fudan University, School of ManagementStarr Building 670 Guoshun Road, Shanghai, P.O Box 200433 ChinaE-mail: Zhoujing1985@yahoo.cnLi XuFudan University, School of ManagementStarr Building 670 Guoshun Road, Shanghai, P.O Box 200433 ChinaE-mail:xiaoli_xu@hotmail.comAbstract:We theorize about the incorporation of social, environmental and economic dimensions into strategic performancemeasurement systems .81Chinese companies were surveyed for the analysis. Along with the increasing of socialresponsibility pressure, numbers of enterprises are promoting environmental, social and economic performance asstrategic sustainability measures. Although the addition of sustainability measures to enterprise’s long term businessstrategy has long time been a major preoccupation of literature. Some empirical researches have examined if thesenonfinancial measures are effectively incorporated into strategic performance measurement systems. In this research,we will examine why the incorporation of sustainability measures into enterprise business strategy vary acrossenterprises operating in Shanghai.Keywords: Sustainability measures, Shanghai enterprises, Enterprise strategic performance measurement systems.1. IntroductionThe beginning of 21th century observed unprecedented important changes in enterprise long term strategy andmanagement towards sustainable concerns, the incorporation of sustainability measures as enterprise strategy, andadopting sustainability as entire part of an enterprise’s business strategy in order to obtain important benefits(Epstein 2008).This tendency has been confirmed by S.Gates and C.Germain(2010)who demonstrated that numberof enterprises are developing new strategy approaches in relationship with attempts to incorporate sustainabilitymeasures into business strategies such as the balanced scorecard (BSC).According to Marcus Wagner, TobiasJournal ofEnvironmentAvailable on: http://wajbas.webs.com/Journal of Environment (2013)
  2. 2. Hahn ,Frank Figge ,Stefan Schaltegger (2001) social, environmental, and economic performance have becomeincreasingly important for business. To the level that environmental, social and economic problems are shown in thetransactions of markets, many enterprises have implemented environmental, social and economic managementstrategies during the last ten years. These strategies have rarely been incorporated with the general managementstrategy of an enterprise. The role of enterprises in achieving sustainability has been discussed both on instrumental( Bennett & James, 1999) and strategic level ( Roome, 1998) .If enterprises are to achieve at the same timeimprovements of the environmental ,social and economic performance of businesses , this lack of integration turnsout to be a major obstruction. The Global Reporting Initiative (GRI) that is“a network-based organization thatpioneered the world’s most widely used sustainability reporting framework”, shows that environmental, social andeconomic performance (sustainability measures) are evolving in some of Asian countries such as China. Andnumber of these countries is incorporating sustainability measures in enterprises long term performance strategies(OECD-DAC, 2011).Some empirical studies have examined if sustainability measures are integrated into enterprisesperformance measurement systems which are crucial for the implementation of business strategy.This paper has two main objectives. The first objective is to investigate to what degree Enterprise operating inShanghai (China) incorporate sustainability measures in their performance measurement systems (PMS) and alignthem with long term business strategy. The second objective is to evaluate the determinants which explain why thesepractices vary across these enterprises.2. Literature review2.1 Strategic performance measurement systemStrategic performance measurement system determines both the scope and focus of management accounting.Particularly the requisite is that practice of management accounting should reflect the choices of strategies made inenterprises for management accounting to be consistent. The process of SPMS has four important steps. Identifying:1. The enterprise’s primary goals ( as established by its owners)2. The role the enterprise’s stakeholders play as the enterprise pursues its primary objectives3. The requirements of each stakeholder in exchange for pursuing its role in supporting the enterprise’s strategy.4. How to evaluate the enterprises objectives and stakeholder roles.The process of PMS starts with the specification of enterprises primary objectives. In profit-seeking enterprises, theprimary objectives are financialIn not-for-profit enterprises the primary objectives reflect the objectives of the enterprise’s membersFor the purpose of strategic performance measurement the enterprise’s objective can be mainly financial, social, or amix of both social and financial objectives. But, if there are primary objectives that can conflict, the enterprisesplanners should identify rules that instruct how decision-makers should make trade-offs among the objectives(Anthony A. Atkinson, 1998)Finally, Strategic performance measurement systems have three characteristics in common:1. They integrate financial measures that capture the short-term consequences of managers’ decisions regardingasset utilization, revenue growth and cash flows problems (Kaplan & Norton, 2001a)2. They enhance financial measures with nonfinancial measures (that indicate operational achievements likely todrive future financial performance);3. They are created to achieve multiple objectives (cost determination and value creation)2.2 Enterprise Social Responsibility (ESR) and Sustainability
  3. 3. The concept of ESR has been first developed by Bowen (1953). In this research, we define ESR as a complete set ofprograms, practices and policies that are incorporated into specific business operations, decision-making and supplychains processes throughout an enterprise, aiming to instruct responsibility for past and actual actions as well asfuture influences (Business for Social Responsibility, 2008). The Brundtland Commission report (1987) defines theESR as “meeting current needs without compromising the capacity of future generations to meet their own needs”.A sustainable corporate contributes to sustainability by bringing social economic and environmental benefitssimultaneously (by achieving the triple bottom line) (Dyllick & Hockerts, 2002). Enterprises have been developingnew policies and strategies and redelimiting their action domains, roles, and interdependency (Van Marrewijk, M. &Hardjono, T.2003).ESR and sustainability have gradually converged and nowadays they include similar aspects and are often utilized ascomparable terms (Mazon, 2004).First, both ESR and sustainability concepts include different levels of analysis and different stakeholders (suppliers,clients, community members, shareholders, employees, partners.). Secondly, these concepts deal with problemsrelated to environmental, social, and economic. The economic dimension is not centralized to short-termperformance indicators (return on investment), but also refers to aspects that contribute to long-term financialsuccess (enterprise’s reputation and relationships).Managing ESR and sustainability implies seeking equilibrium between long and short-term factors, and among theinterests of a larger group of stakeholders than those applied by traditional management (Raynard and Forstarter,2002).ESR and sustainability have come represent an important aspect of enterprise strategy, with an increasingnumber of enterprises trying to monitor, improve and determine the environmental and social influences of theiractivities. Despite such interest, effective integration of sustainability into performance measurement systems andmanagement faces many obstacles, raising the need for new research.2.3 The triple bottom lineAfter the World Commission on Environment and Development (WCED), many definitions of sustainability havebeen made and this concept has been interpreted in different ways. Most of these definitions are based upon theconcept of triple bottom line (or three-pillar): social, environment and economy (P., J., Annandale, D. and Morrison-Saunders, A., 2004). According to the Portland state university (2011) “The triple bottom line term is a phrase thatoriginated in the corporate sector as a way to think about the social, environmental and economic, value that isadded (or destroyed) by an investment”. In others words the meaning behind the “three pillar” is that the health andsuccess of an enterprise not only can be estimated by the economical dimension but also is influenced by social andenvironmental determinants. Triple bottom line model has been developed by Elkington, J.,(1998).Nowadaysnumber of business companies are implementing this model in their business strategy, and utilizing the terminologyin their annual press releases. According to Russel (2008) an active sustainability policy can be advantageous for anenterprise in terms of image and the way the enterprise is profiled in a market.Enterprises developed a need for a model that could help them to integrate the sustainability in their business in away that was beneficial in according to the triple bottom line.2.4 Incorporating environmental, social and economic dimensions into strategic PMSEnterprises are progressively inclined to incorporate social and economic dimensions into their business strategies,to respond to increasing pressure of employees, consumers, and other important stakeholders and also to examineopportunities for building competitive advantage (Bielak, Bonini, & Oppenheim, 2007). Management researchersare aiming to identify a set of determinants for promoting effective incorporation of sustainability into enterprisespractices.Leadership has been recognized as a fundamental alternative, promoting the commitment of enterprise as a whole(Environmental Protection Agency of United States, 2001).
  4. 4. Marrewijk (2004) in his study, describes a set of ideal types of enterprises, and develops a system of values andassociated institutional structures (governance and the role of leadership).Fineman (1996) debates the role of leadership in the process of change, highlighting that leadership appears to playan important role in the enterprise adoption of sustainability practices. Others determinants such as communicationand training (institutional mechanisms) have been recognized as promoters of sustainability initiatives. Stone (2006)demonstrates that, in order to achieve a high degree of organizational commitment, well-defined training andcommunication plans are key determinants in promoting a clear understanding of the role of sustainable practices forenterprise strategy and objectives.Tregidga and Milne (2006) investigate enterprise reports in order to understanding the development of the discourseof sustainability. They mainly debate the role of reporting and communication mechanisms in creating enterprisesustainability initiatives.Bansal (2003) affirms that organizational commitment to sustainability is promoted when top management buy theconcept (but also when lower organizational levels engage in sustainability)Henriques and Sadorsky (1999) link perception of management of stakeholders pressures with more proactiveundertakings towards environmental commitment.Sharma and Henrique (2005) suggest an analysis associating different types of stakeholder influence strategies withdifferent sustainability practices adopted by enterprises.The literature review proposes that even if researchers are aiming to identify and understand the factors that mightinfluence the incorporation of sustainability by enterprise. Few studies have suggested a more centralized view ofthese factors. Basu and Palazzo (2008)’s article is one of the rare articles that consider internal and external impacts,suggesting a group of cognitive, linguistic and conative aspects in order to identify an enterprise’s intrinsicorientation toward the choice of ESR .The cognitive aspect has to do with dimensions including enterprise orientation, identity and legitimacy, managerialbeliefs and values regarding the choice of sustainability (USEPA, 2001). The linguistic aspect includesorganizational modes of justification and is associated to considerations of transparency and communication(Marrewijk, 2004; Stone, 2006; Tregidga and Milne 2006). The conative aspects involves the way enterprises tendto operate, including coherence among strategic policies and levels of commitment (Marrewijk, 2004; Sharma andHenriques, 2005)。2.5 Performance measurement system and sustainability managementThe Balanced Scorecard (BSC) was created as a new approach to performance measurement (PMS) because ofproblems of past orientation and short-termism in corporate management (Figge F, Hahn T, Schaltegger S, WagnerM., 2001a.). The Balanced Scorecard is found on the assumption that the efficient utilization of investment capital isnot the sole factor for enterprise competitive advantages, but factors such as intellectual capital, customer orientation,knowledge, become very important .Norton and Kaplan proposed then a new performance measurement systemapproach centered on enterprise strategy in four perspectives(figure1): financial, customer, internal businessprocesses, and learning and growth (Kaplan and Norton, 2001).The balanced scorecard’s purpose is to contribute and to transform “soft factors” and intangible assets into long-term financial success explicit .The balanced scorecard’s four perspectives can be summarized as follows (Kaplan& Norton, 2001,Weber & Schaffer, 2000)(1) The financial perspective shows if the transformation of a strategy leads to ameliorated economic success.(2) The customer perspective determines the customer or the market segments in which the enterprise competes.(3) The internal process perspective defines internal business processes that enable the firm to meet thecustomers’ expectations in the target markets.(4) The learning and growth perspective identifies the infrastructure necessary for the achievement of theobjectives of qualification, motivation and goal orientation of employees, and information systems.
  5. 5. Beside the four perspectives of the balanced Scorecard, a fifth aspect (society) can integrate social andenvironmental aspects that show nonmarket societal mechanisms (sociocultural mechanism).Figure 1: Four perspectives to integrate sustainability into the balanced scorecardSource: Kaplan, R. S. and Norton D. P. (1992, Jan-Feb) ‘The Balanced Scorecard – Measures That DrivePerformance’, Harvard Business Review, Vol.70, No.1, pp.71-79Thus the new approach is to create a balanced scorecard devoted to social and environmental problems that coverthe traditional balanced Scorecard. This choice of a balanced scorecard focused on sustainability (social andenvironmental) is very important for enterprises management departments that are devoted to social andenvironmental and issues.There are many possibilities to incorporate sustainability measures into performance measurement systems, butenterprises’ current practices and the determinants that explain their procedures remain uninvestigated.Sustainability management with the balanced Scorecard aims to focus on the problem of enterprises contributionsto sustainability in a centralized way. It assumes that for enterprises to contribute to sustainable development, it’svery important that enterprise performance improves simultaneously in social, economic and environmentaldimensions (Figge F, Hahn T, Schaltegger S.,Wagner M., 2001a).In a balanced scorecard all aspects appropriate for accomplishing a permanent competitive advantage should beincorporated. In the four perspectives of the balanced scorecard, therefore, the enterprise’s activities important forlong-term business success are included and causes are connected to effects.FINANCIAL“To succeed financially,how should we appear toour shareholders?”CUSTOMER“To achieve our vision,how should we appearto our customer?”LEARNING ANDGROWTH“To achieve our vision,how should we sustainour ability to change andimprove?”INTERNALBUSINESS PROCESS“To satisfy ourshareholders andcustomers, what businessprocess must we excel?”VISION ANDSTRATEGY
  6. 6. In the formulation of a balanced scorecard all the objectives and measures are estimated from the long-termstrategic financial objectives in a top-down process.This structure of the balanced scorecard ensures that all business activities are associated to the successfulapplication of the business strategy. This particularity of the balanced scorecard can also be utilized for themanagement of social and environmental dimensions. The capacity of the balanced scorecard to incorporate thethree dimensions of sustainability gives the opportunity to integrate the management of social and environmentaldimensions into normal business activities.The link between the three performance aspects of sustainability (environmental, social and economic) must betaken into account. Incorporating the three aspects of sustainability into business management offers three principaladvantages (Figge F, Hahn T, Schaltegger S, Wagner M. 2001a):(1) Sustainability management that is economically sound is not menaced by economic crisis because it is notonly achieved as long as the enterprise is successful.(2) Enterprises that want to promote their social and environmental management sometimes direct themselvestowards competitors.(3) An inclusion of social and environmental and dimensions into business management confirms that enterprisesustainability management take into account all three aspects of sustainability.There are three possibilities to incorporate social and environmental dimensions in the balanced scorecard. Firstly,environmental and social dimensions can be incorporated in the current four perspectives. Secondly, an additionalperspective can be added to consider social and environmental dimensions. Third, a particular social andenvironmental scorecard can be conceived (Deegen T., 2001, Figge F, Hahn T, Schaltegger S, Wagner M. 2001a).Environmental and social aspects can be classified under the four current bsc perspectives (Deegen T., 2001). Thissignifies that social and environmental dimensions are included in the four perspectives through particularperformance drivers for which leading indicators as well as objectives are conceived (Kaplan and Norton, 2001).The approach of the incorporation of social and environmental dimensions by classifying them under the fourperspectives is very important for social and environmental dimensions that are already incorporated in the marketsystem.3 Methodology3.1 Data collectionWe conducted an empirical study of large enterprises operating in Shanghai. We identified a sample of 250enterprises. But only 81 companies showed interest in the study which represented 32.4% responses. The type ofenterprises chosen for the study are: manufactured enterprises, service enterprises, and distribution enterprises(Table6,figure 4).We used the strategy of independent contingency variables(ICV) in the survey instrument developed byEdward J. Garrity, G. Lawrence Sanders (1998) to assess enterprise strategy. Respondents were asked to rate on afive-point likert scale to what extent they agreed with a number of statements relating to enterprise principalstrategic orientation (Sinkovics, Rudolf R, Roath, Anthony S.,2004,citing Gatignon and Xuereb ,1997 ,definestrategic orientation as the specific approach a firm implements to create superior and continuous performance.Strategic orientation provides a foundation of guidelines upon which to continuously improve a companysperformance).The statistical method we used to determine enterprises strategies in the overall sample is FactorAnalysis(It can be defined as a statistical technique used to describe variability among observed variables in terms ofa potentially lower number of unobserved variables called factor). We have chosen three dimensions (1.the strategyof product differentiation according to service and product quality; 2. strategy according to cost leadership; 3.thestrategy of product differentiation based on innovation) with eigenvalues higher than 1 (3.21, 1.79, and 1.3).And thepercentage of variance explained by each dimension is 32.15%, 17.9%, and 10.30%.
  7. 7. The respondents were also asked to indicate the type of business strategy or performance measurement systems theyuse to conduct performance, their business sector, and if their enterprise is classified as multinational company.We additionally asked them to indicate on a five-point likert scale to what extent they think the performancemeasurement system includes both performance and sustainability dimensions (financial PM, internal processes,innovation and learning, customers, and sustainability).We used SPSS software for performing data analysis.3.2 ResultsThe results of the data analysis show that among the financial PM, internal processes, innovation and learning,customers, and sustainability categories, only the sustainability measure is (on average) less present in theperformance measurement systems (table 1, figure 2).However, the results in table 2 show that sustainable practicesare more present in multinational enterprises. Moreover, manufactured enterprises are more likely to promote“sustainable lifestyles” than are both distribution and service enterprises. The results obtained also show thatnationality (Chinese or foreign) is not a determinant of the presence of sustainability measures in performancemeasurement systems.Figure 2:PerformanceMeasures averagelevel of presenceFigure 3: Mean level of alignment between core business strategy and sustainabilityFigure 4: Repartition of types of enterprises interviewed
  8. 8. Table 1: Performance Measures average level of presenceTable 2: Comparison tests of mean level of presence and Standard Deviations of Sustainability IndicatorsContingency variable NMean levelof sustainabilityindicatorStandardDeviationMeanDifferenceClassified as multinational enterprise 35 1.85 1.15Not classified as multinational enterprise 46 1.80 1.06 0.12*Manufactured company 47 1.87 1.08Distribution enterprise 17 1.53 0.89 0.34*Manufactured company 47 1.87 1.08Service enterprise 17 1.53 0.89 0.34*Chinese enterprises 60 1.89 1.09Foreign companies 21 2.00 1.14 0.11*P< 0.5Table 3: Correlations between level of presence of sustainability measures in PMS and the type of strategy.Table 4: Mean level of alignment between core business strategy and sustainabilityMeasures Level of alignment with strategyStrategy of quality Strategy of cost leadership Strategy of innovationSustainability dimensionslevel of presence -0.24 -0.33 0.42Measures level of presenceFinancial 4.35Customer 2.65Internal process 2.90Innovation and learning 2.45Sustainability 1.70P<0.05, correlations are significant
  9. 9. Sustainability 5.00Innovation and learning 3.80Internal processes 4.08Customer 4.66Financial 4.70Table 5: comparison tests mean of core business strategy and sustainability (by contingency variables)Contingency variable NMean levelof sustainabilityindicatorStandardDeviationMeanDifferenceClassified as multinational enterprise 35 2.40 1.45Not classified as multinational enterprise 46 2.15 1.20 0.25*Manufactured company 47 2.45 1.55Distribution enterprise 17 2.12 1.10 0.33*Manufactured company 47 2.45 1.55Service enterprise 17 2.12 1.10 0.33*Chinese enterprises 60 2.13 1.12Foreign companies 21 2.18 1.19 0.05*P< .01Table 6.Repartition of types of enterprises interviewedEnterprises Number of enterprises PercentagesManufactured enterprises 49 60.49%Service enterprises 22 27.16%Distribution enterprises 10 12.34Total 81 100%The results in table 3 show that there is no link between the presence of sustainability dimensions in performancemeasurement systems and business strategy.The table 4 and figure 3 show that among the categories of PMS, sustainability measures are the most correlated toenterprise strategy. This result has been confirmed by Rodney Mc Adam and Brian Bailie (2002). Theydemonstrated that “performance measures associated to strategy are more effective. Also, the alignment between themeasures, measurement framework and the strategy must be continually reviewed and treated as a dynamic andcomplex issue, rather than a linear mechanistic relationship”.The results in table 5 show that the alignment between core business strategy and sustainability is more correlatedwith multinational enterprises and with manufactured enterprises.4 Discussions and ConclusionIn investigating to what degree enterprises operating in Shanghai incorporate sustainability measures in theirperformance measurement systems (PMS) and align them with long term business strategy, we found that among theperformance measurement categories, only the sustainability measures appear to be faintly present in strategicperformance measurement system and are not fully aligned with business strategies(figure 1,table 2).The alignmentof SPMS with business strategies depend on each enterprise objectives .Nowadays only few enterprises align PMSwith business strategies. As the results suggest, in China, both multinational and manufactured enterprises align themost SPMS with their business strategies.We also found that multinational enterprises and manufactured enterprises influence the incorporation ofsustainability measures into business strategic performance measurement systems.Others reasons that explain the incorporation of sustainability measures are: the high impact nature of theseenterprises operations on the environment ;the need to be responsible to environment and build trust with importantstakeholders(NGOs and local communities ); high competition ; the need to influence business leaders; the need tomake difference between them and competitors in order to increase market share and improving profitability, therequirement of shareholder to monitor and to report sustainability measures internally and externally in order toenhance enterprise valuation’s prospect.
  10. 10. Additionally, the development of ethical investing(also known as sustainable, socially-conscious .It describes aninvestment strategy which seeks to maximize both financial return and social good.Ehical investors favor enterprisepractices that promote environmental stewardship, consumer protection and diversity) and its shareholder activismto get the best sustainability reporting constitute the main reason why multinational enterprises are more likely tointegrate sustainability reporting into performance measurement systems (S.Gates and C. Germain ,2010).We did not find any relationship between the presence of sustainability measures and enterprises nationality andbusiness strategy. Generally, performance measurement systems require that the performance measures mustemanate from enterprise’ strategic objectives, because sustainability aspects just now starting to be implemented intomany enterprise’ strategic objectives, the relationship between the process of business strategic planning and theformulation of PMS should be nearby to not dissociate the PMS from enterprise’ sustainability strategyBased on Gabriele Rosani and German Rueda (2011)’s recommendation, when building performance strategicmeasurement system there are important problems that we need to pay attention .The first problem is related towhether the performance measurement system is an instrument for strategy formulation or implementation. Thesecond problem refer to whether the most appropriate approach to sustainability aspects is to treat them collectivelyor in separately such as social, environmental, and economic. The third problem is related to whether sustainabilityactivities and measures must be controlled by a separate unit in the enterprise.Finally, aligning enterprise sustainability measures with Strategic PMS constitute one of the most complexchallenges enterprises are facing. While this important topic has broad implications that touch the enterprises dailyoperations as well as its budgeting, planning, and processes of goal-setting , at the end of the day if employees havenot produced enough goods( or services), enterprises will “take a hit” to the bottom-line and fall sadly short of goalachievement. Developing (or implementing) a strategic PMS will help enterprise to keep employees committed to aenterprises business system and objectives .Responsibility for implementing a strategic PMS lies with the enterprisemanagement department function.According to Althea DeBrule (2011), for successfully building a strategic performance measurement system, it’simportant to:1. Associate PM to enterprise business planning (tie resulting performance metrics to enterprise business result).2. Design training programs and worker orientation and to help employees become more conscientious about howtheir work influence the enterprises bottom line.3. Reexamine the program of current worker performance management .Remember integrating multiple-rater,360-degree feedback and transfer into the PMS4. Involve employees in the PMS project.5 Implement competency models and use them as a basis for connecting PMS with other people managementprocesses.6. Disassociated performance evaluation from professional development.Performing a measurement system can be a difficult task. The system becomes visible to the overall enterprise andits reliability is authenticated at this point. Operation must be very well projected and stakeholders’ involvement isimportant at this step.To answer to the question “where to start for incorporating sustainability measures into strategic performancemeasurement system?” Gabriele Rosani and German Rueda (2011) argue that, “decision makers in any enterprisecan create added value (AV) for their stakeholders by determining and implementing sustainability strategies”.Peter Drucker (Globally renowned management consultant) argues: “you can’t manage what you don’t measure”.The first step for integrating sustainability into strategic PMS is therefore to create an appropriate enterprisesustainability scorecard. Managers need to understand the impact their enterprises have across the value chain.
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