Abstract
Achieving performance remains the desire of entities, both those present in the competitive market, and new start-ups that break the existing markets, capitalizing on the opportunities offered by an external environment characterized by volatility, uncertainty, complexity, and ambiguity, but also the present digitalization, internet of things (IoT), 5G internet, and e-platforms. Seen as a reflection of the clear vision of extremely powerful leaders, the overall performance of the entity is attained today against the background of the innovation process. This chapter presents radiography of the new research and deepening directions at the intersection of accounting and management, between science and practice, with the role of potentiating performance as a result of managerial accounting and leadership vision.
TopIntroduction
The organizational performance concept is directly influenced by the entity's evolution in a digitalized governance circular economy (Yadav & Sagar, 2013). Scientific research and literature reveal that new strategic transformations of entities are considered for the implementation of a performance management system which has the role of translating the strategic plan of long-term and medium-sized objectives into interrelated actions between the managerial plan and financial-accounting (Brown & Harvey, 2006; Satell, 2017). In order to prove the effectiveness of these strategic transformations, it is necessary for businesses to produce at their core level (Denison, 1990).
2030 represents the new time horizon that has led entities to shape their Vision, Strategy and Performance Objectives as clearly and convincingly as possible. Although it seems remote as a time horizon, an in-depth knowledge of the resources of each entity with performance potential, including the management system as a whole, methods and techniques implemented to define KPI's Performance Indicators, only build a bridge between Accounting and Management, with a vital role in the evolution of the entity (Lin, Peng & Kao, 2008).
This new global context and the entities' prospect to achieve and maintain Sustainability Performance impose and force the entity's leadership to synchronize managerial decisions with financial-accounting situations as well as industry-specific predictability reports (Tajeddini, 2015). In this way, one can envisage an escalation from a global level to the individual one, towards increasing the competitive advantage, global development, counteraction of the external environment threats, and capitalization of the opportunities through the adoption of pertinent managerial decisions based on economic and financial indicators.
From a conceptual point of view, performance has seen multiple interpretations and approaches from theoreticians and practitioners whose concerns have focused on studying it (Akgün, Keskin & Byrne, 2009; Davila, 2012). Specialized practice reveals the interference of the organizational performance concept with other concepts such as management, leadership, profitability, predictability, economic-financial indicators and metrics (Becker & Huselid, 1998). All of these interferences have led to an interdisciplinary approach and a deepening of the concept of performance, depending on the specificity of the field in order to extend its spectrum of applicability.
The term “performance” has appeared in literature around the middle of the nineteenth century and has been associated with the start of sports competitions as a result of the participation and winning of such a competition (Bourguignon, 2000). With the twentieth century, the concept begins to deepen, and new approaches are attributed to it by theorists and practitioners of the time, for today, in the digital age, performance is identified with the true measure of value for any business leader and manager (Hartnell, Ou & Kinicki, 2011). Those indicators that are directly related to performance and that affect its level are measurable, can be compared to pre-established benchmarks and can provide solutions for future corrections, added value and competitive advantage (Henczel, 2002).
Moreover, the performance and metric performance indicators have been ranked by industry practitioners in business intelligence techniques, but they are different (Rowland & Hall, 2014). Performance indicators are specific, refer to the expected results in the future, answering the question: Where are we going? - contributing to stakeholder decision-making and sending a signal if there is a variable that could produce inappropriate results. Metrics are generic, focusing strictly on performance results and on the current situation, responding to the question: Where are we today? - focusing on delivering work packages, achieving milestones and achieving performance goals.
Key Terms in this Chapter
Management: The process of manager’s coordinating and overseeing the work activities of others so that their activities are completed.
Decision: A person or group of persons’ social and deliberate act defining the purpose and the objectives of a certain action, the directions and the ways to achieve that action, all of them determined, according to a certain need, by a process of obtaining information, deliberation, and assessment of the means and consequences of carrying out that action.
Managerial Dashboard: Contains a set of actual information presented in a predetermined form, relating to the main results of the company’s activities or to some of them and to the main factors conditioning their effective and efficient progress.
Economic Management: The achievement of the budget objectives with minimum costs so that when the activity is completed the revenue exceeds the costs, namely there is a profit that ensures a level of profitability as high as possible both at general level and by product, department or service performed.
Organizational Performance: Elements affecting company performance such as financial and marketing factors, return on sales, return on investment, etc.