An Analytical Framework to Examine Changes in Performance Measurement Systems within the Banking Sector

Drawing on institutional theory, more specifically DiMaggio & Powell’s (1983) notion of institutionalisomorphism, and Oliver’s (1991) typology of strategic responses to institutional pressures, this paperdevelops an analytical framework to examine the factors that influence organisations to change theirperformance measurement systems, and the responses to consequential change efforts within the context ofthe banking industry. The paper suggests that various macro-level environmental factors which affect thefunctioning of banks (e.g. economic conditions, technological innovations, socio-cultural and politicalfactors) exert pressure (coercive, mimetic and normative) to change their performance measurementpractices. The paper proposes that rather than passively conforming to such pressure, banks respondstrategically, with the strategic responses taking various forms including non-compliance. The proposedframework could be used by managers and researchers to examine and understand changes in performancemeasurement systems in banks and to facilitate the effective adoption and implementation of performancemeasurement systems.