Importance of performance information in managerial work
| Pages | 550-569 |
| Date | 24 April 2009 |
| Published date | 24 April 2009 |
| DOI | https://doi.org/10.1108/02635570910948669 |
| Author | Erkki K. Laitinen |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Importance of performance
information in managerial work
Erkki K. Laitinen
Department of Accounting and Finance, University of Vaasa, Vaasa, Finland
Abstract
Purpose – The purpose of this study is to analyse the connection between managerial job and
importance of job-relevant performance information.
Design/methodology/approach – Two hypotheses on the relationship of the nature of job to the
job-relevant information are tested by survey data gathered in spring 2008. The data include responses
from 76 Finnish CEOs in manufacturing industry. Managerial job, information, and information gap
types are extracted by the factor analysis. The hypotheses are tested by the regression analysis.
Findings – Evidence shows that the type of job strongly influences the importance of different
information types in managerial work. However, information gap does not depend on the type of work
but on contextual variables.
Research limitations/implications – The results limited by the small sample size and industry.
Larger data, advanced statistical methods, and different constructs to measure managerial job and
contextual variables should be used in further studies.
Practical implications – Contingency factors are important in affecting the nature of managerial
job. Managerial job largely determines the importance of information but the gap of information
depends on contextual environment. It is important to take account of the nature of managerial job in
designing information systems.
Originality/value – This study shows that managerial job mediates the effect of contingency factors
on the importance of information. However, these factors have a direct effect on the gap of information.
Keywords Performance management, Chief executives,Managers, Finland, Informationfacilities
Paper type Research paper
1. Introduction
Managerial work is supported by information delivered by management information
systems. The purpose of these systems is to provide information that is useful in
managerial planning, decision-making, and evaluation (Merchant and Otley, 2006).
Contingency-based research shows that the usefulness of information differs in firms
that are different with respect to contingency factors (Chenhall, 2003). In this line of
research, the influence of context variables (environment, technology, organizational
structure, size, and strategy) on the design of information systems has been
investigated. Thus, contingency research implies that the importance of inform ation is
largely determined by context. The argument of the present study is however that
context does not sufficiently explain the importance of information for mana gers.
Contingency-based research largely neglects the potential effect of managerial work
on the importance of information. Managers are assumed to do their traditional tasks
in a similar way. It is expected that the manager plans, makes decisions, and evaluates
The current issue and full text archive of this journal is available at
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This study has been financially supported by the Foundation for Economic Education
(Liikesivistysrahasto).
IMDS
109,4
550
Received 15 October 2008
Revised 24 November 2008
Accepted 19 December 2008
Industrial Management & Data
Systems
Vol. 109 No. 4, 2009
pp. 550-569
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570910948669
in a rational and systematic way. Especially, management accounting research has
followed these normative assumptions as to the nature of managerial work (Hall, 2006).
However, studies of managerial work show that these assumptions are far from the
reality (Noordegraaf and Stewart, 2000; Tengblad, 2002). Managerial work includes
activities like negotiating, recruiting, training, innovating, and contacting speci al to
individual managers. These tasks are not carried out in an ordered and systematic
way. Managerial tasks are characterized by great variety, brevity, fragmentation in
time and space, numerous interruptions, and encounters with others. Each task has its
own information needs. Thus, it is expected that the importance of information is
strongly affected by the nature of managerial job.
Traditional management accounting systems fail in providing managers with
relevant and useful information (Johnson and Kaplan, 1987). Especially, financial
measures are perceived as too limited and narrow for performance measurement (PM).
Therefore, firms have implemented integrated performance measurement systems
(IPMS) that supplement conventional financial measures with non-financial measures
focused on perspectives such as customers, internal processes, and learning and
innovation. The purpose of IPMS is to provide a powerful means to managers to
translate the vision and strategy into a tool that effectively communicates strategic
intent and motivates performance against established strategic goals (Ittner and
Larcker, 1998). The founding idea of IPMS is that the performance measures linked to
the system provide the management with a quick but comprehensive view of the
business (Kaplan and Norton, 1992).
The purpose of this study is to analyze the effect of managerial job on the
importance of PM information. The results are extracted from a survey responded by
76 managers (CEO) in Finnish manufacturing firms. Managerial job is described by
three types extracted from the ten Mintzberg (1973) roles by the factor analysis. Four
information types are drawn from a set of 27 information items in IPMS presented by
Laitinen (2002). The influence of managerial work and contextual variables on the
importance and gap of information is analyzed by the regression analysis. The results
are important because the choice of performance information is one of the most critical
challenges faced by organizations (Ittner and Larcker, 1998). The study will increase
understanding in managerial job and its relation to the importance of information. This
kind of understanding is essential when developing information systems for managers.
2. Development of hypotheses
2.1 Managerial job and information
This study concentrates on the work of CEO and the use of job-relevant PM
information. Mintzberg (1973 ) pointed out that managerial work of CEO is
characterized by variety, fragmentation, and brevity. He found that all activities in
managerial work are involved by one or more of three basic behaviors:
(1) interpersonal contact;
(2) the processing of information; and
(3) the making of decisions.
These basic characteristics (intrinsic conditions) of managerial job have been fou nd in
several further studies (Noordegraaf and Stewart, 2000; Tengblad, 2002).
Performance
information in
managerial work
551
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