Transfer of Performance Measurement System Innovations Across Economic Sectors

Abstract

Purpose

This chapter studies the transfer of performance measurement system (PMS) innovations across the three sectors of the economy: private, public, and nonprofit.

Methodology/approach

The spread of organizational innovations and learning from best practices is slow and complicated (Lillrank, 1995). Based on differences in languages used by writers and readers and differences in employee characteristics among the three sectors as well as cognitive biases, we expect the transfer of PMS innovations to be easier within sectors than across sectors. We use the frequency and timing of journal articles written about activity-based costing and the balanced scorecard as a proxy for the actual transfer of the innovations within and across economic sectors.

Findings

Our empirical results indicate that the transfer of the ideas across economic sectors does not happen as quickly as the transfer of the ideas within sectors. We provide evidence that it is the practitioners, not the academics, who lead the transfer of ideas in the open literature from one sector to another. Viewing a sector as unique limits the applicability of available solutions and applications, thereby inhibits useful change.

Originality/value of paper

By focusing on differences, the exchange of ideas and techniques among the three economic sectors can be hindered.

Citation

Euske, K.J. and Malina, M.A. (2014), "Transfer of Performance Measurement System Innovations Across Economic Sectors", Advances in Management Accounting (Advances in Management Accounting, Vol. 22), Emerald Group Publishing Limited, Leeds, pp. 25-42. https://doi.org/10.1108/S1474-7871(2013)0000022007