The role of performance measurement in aligning operations with strategy: Sustaining cognitive processes of internal alignment

Purpose: This paper addresses an important theoretical shortcoming in the conceptualization of internal alignment by investigating the cognitive processes involved in aligning operations with strategy and the role of performance measurement (PM) in sustaining these processes.

Design/methodology/approach: A theory-building study investigates the process of using PM to drive the implementation of a new strategy in a large beer manufacturer in Italy. The study employs a sensemaking perspective to theorize the findings. Data were collected through semi-structured interviews, field observations, and company documents.

Findings: This study develops a theoretical model suggesting that establishing and maintaining internal alignment occurs through seeking, assembling, adjusting, and finalizing the meaning of how strategic priorities inform local action. PM plays a central role in this process by providing interpretive support.

Research implications: This article advances a cognition-centered view of internal alignment that complements the behavioral aspect of the phenomenon emphasized in prior literature.

Practical implications: Using PM for aligning operations with strategy is a complex and iterative process that requires time and effort and generates temporary stability. Managers may need to complement traditional approaches to alignment with providing space for sensemaking.

Originality/value: The paper proposes a view of internal alignment as an ongoing interpretive process that is sustained by PM. This process brings about the consistency of meanings that generates strategy-consistent behaviors.