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Impacts of Industrial Revolutions on the Enterprise Performance Management: A Literature Review

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Purpose – Developments in the industrial revolutions also influence enterprises which are indispensable for commercial life, as well as social and cultural life. These changes which occur in the enterprises about production methods and technologies with the revolutions, naturally affect all the processes of the enterprises, and the methods and tools used also change. As structures of enterprises change the ways in which their performances are evaluated, inevitably change. The methods of evaluating the performance of progressively growing businesses also have to change inevitably and get more complicated. It is obvious that enterprises need to evaluate their performance in order to survive and reach business excellence. Enterprise performance management is an important tool which is driven by strategies of the enterprises and pushes the enterprises to use their resources effectively at the same time. Therefore in this study, interaction of enterprise performance evaluation methods with the facts up to the Industry 4.0 is discussed in the historical development process. Method – Literatures on the enterprise performance evaluation methods up to the 2010 and the industrial revolutions up to the Industry 4.0 were researched and the relations between the facts have been tried to be established. Findings – When the results are evaluated, developments in the field of enterprise performance management have taken place with the first, second and third industrial revolutions. These developments have gained momentum especially in the Industry 3.0 and the most known and the most used methods in the field of enterprise performance evaluation have emerged in this period. Limitations – In this study, the effect of industrial revolutions on the field of enterprise performance management is evaluated by examining the relationship between industrial revolutions and enterprise performance evaluation methods. In future studies, this impact can be evaluated by examining the relationship between the different facts in the field of enterprise performance management and the industrial revolutions. Implications – Industrial revolutions have profoundly affected the field of enterprise performance management as well as every area of life and will continue to affect. It is excepted to be used the artificial intelligence techniques which form basis of the fourth industrial revolution, in the future studies at the field of enterprise performance management. Originality – The significance of this paper is examination of the impacts of industrial revolutions up to the Industry 4.0 on development of the field of enterprise performance management. This study will pave the way for better predictions about how the fourth industrial revolution will create a trend in the field of enterprise performance management.
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Taşkan, Karatop, Kubat / Journal of Business and Management, 26 (1), March 2020, 79-119.
79
Impacts of Industrial Revolutions on the
Enterprise Performance Management:
A Literature Review
Buşra Taşkan
Buket Karatop
Cemalettin Kubat
Abstract
PurposeDevelopments in the industrial revolutions also influence enterprises which are
indispensable for commercial life, as well as social and cultural life. These changes which
occur in the enterprises about production methods and technologies with the revolutions,
naturally affect all the processes of the enterprises, and the methods and tools used also
change. As structures of enterprises change the ways in which their performances are
evaluated, inevitably change. The methods of evaluating the performance of progressively
growing businesses also have to change inevitably and get more complicated. It is obvious
that enterprises need to evaluate their performance in order to survive and reach business
excellence. Enterprise performance management is an important tool which is driven by
strategies of the enterprises and pushes the enterprises to use their resources effectively at
the same time. Therefore in this study, interaction of enterprise performance evaluation
methods with the facts up to the Industry 4.0 is discussed in the historical development
process.
MethodLiteratures on the enterprise performance evaluation methods up to the 2010
and the industrial revolutions up to the Industry 4.0 were researched and the relations
between the facts have been tried to be established.
Findings – When the results are evaluated, developments in the field of enterprise
performance management have taken place with the first, second and third industrial
revolutions. These developments have gained momentum especially in the Industry 3.0 and
the most known and the most used methods in the field of enterprise performance evaluation
have emerged in this period.
Limitations – In this study, the effect of industrial revolutions on the field of enterprise
performance management is evaluated by examining the relationship between industrial
revolutions and enterprise performance evaluation methods. In future studies, this impact
can be evaluated by examining the relationship between the different facts in the field of
enterprise performance management and the industrial revolutions.
Taşkan, Karatop, Kubat / Journal of Business and Management, 26 (1), March 2020, 79-119.
80
Implications – Industrial revolutions have profoundly affected the field of enterprise
performance management as well as every area of life and will continue to affect. It is
excepted to be used the artificial intelligence techniques which form basis of the fourth
industrial revolution, in the future studies at the field of enterprise performance
management.
Originality – The significance of this paper is examination of the impacts of industrial
revolutions up to the Industry 4.0 on development of the field of enterprise performance
management. This study will pave the way for better predictions about how the fourth
industrial revolution will create a trend in the field of enterprise performance management.
Keywords: industrial revolutions, enterprise performance management, enterprise
performance measurement, performance measurement models
Reference to this paper should be made as follows: Taşkan, B., Karatop, B., Kubat, C.
(2020). Impacts of industrial revolutions on the enterprise performance management: A
literature review. Journal of Business and Management, 26(1), March, 79-119. DOI:
10.6347/JBM.202003_26(1).0004.
Introduction
All developments in the history are mainly originating from the needs of
human beings and the industrial revolutions that occurred and are coming are the
result of these needs. The first industrial revolution (the Industry 1.0), the second
industrial revolution (the Industry 2.0) and the third industrial revolution (the
Industry 3.0) were respectively realized through mechanization, electricity and
information technology. At the beginning of the Industry 1.0, there was domestic
production. Towards the end of the Industry 1.0, it was began to shift to textile mills,
which we can call the first modern enterprises of that time. As a result of the
industrial revolutions which have occurred, the technology has developed gradually,
but of course, the developing technology has brought new problems.
Enterprise performance evaluation is very important for businesses to
maintain their assets. Prior to the Industry 1.0, the domestic system was dominant in
production, and the performance information in the simplest sense was provided
only by registrations held by traders in order to record past exchanges and to keep
track of highly disorganized stocks. Then the first modern commercial enterprises of
that time began to emerge and subsequent developments led to the inevitable change
in the area of enterprise performance evaluation. Therefore, new methods were
needed to evaluate the performance of developing enterprises.
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The Industry 1.0, first appeared in the textile, iron and coal production and
water transport sectors in the UK in the 1700s (Weetman, 2016), and was later seen
in eastern Europe and the United States in a few decades (World Heritage
Encyclopedia(a)). The invention of the steam engine by James Watt in 1788, the use
of coal instead of wood as the energy source, the use of machine power instead of
human or animal power, the first application of internal combustion engines, the
transformation of chemical energy obtained from coal into thermal energy and
mechanical energy are significant developments which made this revolution possible.
The Industry 2.0, also known as the Technological Revolution, has emerged as
a result of changes in energy resources and basic raw materials. In this period oil,
steel, electricity and chemicals as well as steam, coal and iron were used in the
production processes. Internal combustion engine, telephone, microphone,
gramophone, radio, lamp, car tire, bicycle, typewriter, cheap newsprint are the
innovations of this revolution. The impacts of the Industry 2.0 have been extensively
seen in the United States, Germany and the United Kingdom, as well as in France,
the Low Countries (geographical region including Belgium, Luxembourg and the
Netherlands) and Japan. It is thought that the Industry 2.0 started in 1860 with the
invention of the cheap steel production method by the British Inventor H. Bessemer
and reached its peak in the mass production and production line prior to the first
world war as a result of the enormous increase in early factory electrification through
the spread of this method (World Heritage Encyclopedia (b)).
The Industry 3.0 which is characterized by the automation and digitalization
of production, is the result of developments such as the discovery of nuclear energy
and the invention of computers (Evan &
Manion, 2002). The determinative features
of this period were innovations in areas such as biogenetic, synthetic materials,
microelectronic technology, fiber optics, biotechnology, laser technology, nuclear
energy, computer technology, and telecommunication. As a result of the revolutions
that occurred, oil and other fossil fuels started to run out and the technologies
acquired and sustained by these energy sources began to become obsolete and got
difficult to maintain their sustainability. Worse still, the annoying effects of climate
change resulting from fossil fuel-based industrial activities have increased,
ecosystems have deteriorated and natural disasters have reached tremendous levels.
For all these reasons, renewable energy sources such as solar and wind have become
important and the concept of sustainability has come to the fore.
Due to the increasing conditions of competition, enterprise performance
evaluation is vital and becomes increasingly complex for different reasons. In this
study, the historical development of enterprise performance evaluation is analyzed
in relation to the revolutions up to the Industry 4.0. The aim of this study is to help
the researchers to make predictions for the future and to help them make sense of the
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trends, based on the historical relationships between industrial revolutions and
enterprise performance management.
Historical Development of the Enterprise Performance Management
Field Taking into Consideration the Industrial Revolutions up to the
Industry 4.0
The area of enterprise performance management is examined in four main
periods based on the industrial revolutions up to the Industry 4.0 as shown below;
Enterprise Performance Management for the Pre-Industry 1.0 Period
Before the first modern commercial enterprises emerged, the domestic system
was dominant in production and in this system raw materials were transformed into
products by the mutual cooperation of merchants and artisans. While merchants
provided the necessary raw materials to the artisans, the artisans were transforming
these raw materials into products. In return for this production, merchants were
paying to the artisans a piece-by-piece and selling finished products in the markets.
Market prices provided all the managerial information that merchants needed, while
merchants kept accounts to record past exchanges and to keep track of highly
dispersed stocks. It was clear, therefore, that they did not keep these accounts in
order to provide decision and control information (Johnson, 1981).
Along with merchant entrepreneurs began to coordinate the textile-making
processes at the central business locations, market prices were insufficient to provide
the needed knowledge. With the wage contracts carried out in this new factory
system, the employees started to be paid hourly instead of part-time payment. In
addition, as non-labor conversion inputs were provided from within the company,
managers considered it necessary to explain the internal conversion costs (Johnson,
1981).
Enterprise Performance Management for the Industry 1.0 Period
The first modern business organizations which needed internal accounting
information for decision-making and control, were mechanized, multi-process textile
mills in the UK and the United States around the 1800s. These textile mills used double-
sided cost calculations to determine the direct labor and fixed costs of converting the raw
material into finished yarn and fabric (Johnson, 1981). According to historians, cost
records of the factories which are integrated, multi-process textile mills, such as Charlton
Mills in England (Stone, 1973), Boston Manufacturing Company during the 1820s and
Lyman Mills Company, a cotton textile company founded in Boston in 1854, are the oldest
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ones known up to now. These new records which include labor costs, the daily movement
books recording the cotton pound transformed every day in the textile processes and
general expenses, were kept to make short-term decisions and to control the conversion
of raw materials to finished products (Johnson, 1981).
Enterprise Performance Management for the Industry 2.0 Period
During the 1850s and 1860s almost all of the basic techniques of modern accounting
were discovered by the executives of the major American railways. New accounting
practices were divided into three categories as financial, capital and cost accounting. The
“operating ratio” that companies began to use in the late 1850s was a standard way to
assess the financial results of a railway as well as balance-sheets. The type of renewal
accounting that was specified by the 1870s was the standard form of capital accounting
used by American railways and their repairs and renewals was charged to operating
expenses, not in capital or fixed assets accounts (Chandler, 1977). The mass-production
enterprises were established in the 1880s for the production of tobacco products, matches,
detergents, photographic films and flour, and these enterprises adapted the internal
accounting reporting systems of the railways to their own organizations. The most
important was the emergence of the metal making and manufacturing industries. One of
the most famous steel companies of that period was Carnegie's steel company (Kaplan,
1984). Although Carnegie and her colleagues did not generally deal with overheads and
depreciation, their interests were almost exclusively focused on basic costs. Due to the
long-term economic crisis of the 1870s, manufacturers began to turn their attention from
technology to organization, and this new interest led to the first steps of the scientific
management movement in the American industry (Chandler, 1977). The scientific
management approach, in which names such as Frederick Taylor, A. Harrington
Emerson, Hamilton Church and Henry Towne contributed to the emergence and
development of, included not only the development of business standards, but also a new
form of organization (Kaplan, 1984). The names such as Garcke and Fells (1887), A.
Hamilton Church (beginning of 20th century) and J. Maurice Clark (1923) also
contributed to cost accounting, while the use of break-even point graphs can be found in
written works in the UK and the USA in 1903 and 1904 (Solomons, 1968); and in the
mentioned studies, it was generally focused on the general expenses and how to allocate
them. Typical manufacturing firms in the middle of the 19th century were transformed
into vertically-integrated industrial firms, as seen in the large number of mergers between
1897 and 1903 (Johnson, 1975b). Thus, the organizations at unitary form emerged
(Johnson, 1975a), and these enterprises included the design of complex accounting
systems to carry out evaluations, transactions and planning across the firm (Johnson,
1975b).
In 1903, the DuPont Powder Company was transformed into a vertical-integrated
company while it was formerly a single-function company (Johnson, 1975b) and F.
Donaldson Brown also found the DuPont system in 1914, expanding the ROI approach
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in about 1912 (Kaplan, 1984; Mark and Birkinshaw, 2015). Despite the aforementioned
developments, in 1917 modern industrial enterprises still had structural weaknesses and
the administrative class was just beginning of professionalization. DuPont and other new
managerial businesses in the field, which were segmented according to central and
functional, had serious flaws in the coordination of flows and the allocation of resources.
Due to the severe economic recession that occurred from the summer of 1920 until the
spring of 1922, there was a sudden and permanent decline in demand. In addition to Du
Pont, General Electric, United States Rubber and other large enterprises, General Motors
and Sears Roebuck responded to the stock crisis of 1920-1921 by developing techniques
to determine and correct their flows according to carefully presumed future demand
(Chandler, 1977). Du Pont and General Motors went further and developed a new form
of organizational structure called the multi-divisional firm (Kaplan, 1984). General
Motors' managerial accounting system introduced regulations that would help senior
management to achieve "centralized control with distributed responsibility” (Johnson,
1978). By the 1930s, process engineers in France were guided to explore ways to improve
production processes through better understanding of cause-and-effect relationships
(Epstein and Manzoni, 1998) and as a result of these efforts a performance management
system called Tableau de Bord, which is usually seen equivalent to the American
Balanced Scorecard, was developed (Pezet, 2009). Enterprises performance evaluation
methods in the Industry 2.0 period are described as the following in Table 1;
Enterprise Performance Evaluation for the Industry 3.0 Period
The limitations of ROE and ROI opened door for the search of alternative measures,
although these measures were still based on the financial statements (Arnaboldi et al.,
2014). One of these indicators is the residual income that emerged as the expansion of the
ROI criteria in the period after World War II (Kaplan, 1984). In multi-divisional firms, the
problem of transfer pricing related to the price of goods or services sold among business
units in the same company may be a problem, but this problem could help companies to
monitor the profitability of each segment (Collier et al., 2013). The mainstream approach,
which began in the field of management accounting in the 1960s, was the application of
numerical models to various planning and control problems. This literature which was
encouraged by the development of operations research after the Second World War,
described how analytical methods could be applied to cost accounting problems (Kaplan,
1984). The last 15 years are defined by the application of knowledge economy and agency
theory to management accounting problems (Kaplan, 1984). The transaction cost
economy, which emerged in the 1970s. It is a variation of the agency theory and very
suitable for internal audit (Spraakman, 1997).
Yadav et al. (2013) examined the enterprises performance evaluation methods in 3
periods in their respective study. Therefore in this study, enterprises performance
evaluation methods developed during the Industry 3.0 are examined in three main
periods as 1945-1990 period, 1991-2000 period, 2001-2010 period. Enterprises
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performance evaluation methods in the Industry 3.0 period are described as the following
in Table 2 – Table 22.
1945-1990 Period
In this period, not only performance measurement frameworks based on financial
measures, but also multi-dimensional performance measurement frameworks were
developed. Management and cost accounting have been further developed and the
concept of the social responsibility for enterprises has emerged for the first time in
enterprise performance evaluation. In addition, the enterprise performance management
area has begun to be linked to the strategies of the enterprises with the new accounting
methods developed. Furthermore, quality concept has gained importance in the field of
enterprise performance management with the methods based on total quality
management principles.
1991-2000 Period
In this period, not only the methods based on financial measures, but also a
balanced combination of financial and non-financial measures have been developed. In
addition, causal relationships are considered and quality is also emphasized. During this
period, a sustainability-oriented performance measurement system was developed for
the first time. Conceptual maps, cause-effect diagrams and multi-criteria decision-
making techniques are used in performance measurement methods. Performance
measurement has begun to become more connected to strategies.
Companies have begun to lose market share against overseas competitors that can
provide better quality products with lower cost and more variety. In order to regain
competitive advantage, companies need not only to change their strategic priorities from
low-cost production to quality, flexibility, short preparation time, reliable delivery, but
also they applied the new philosophies and technologies of production management (e.g.
computer integrated manufacturing, flexible manufacturing systems, just in time
production, optimize production technology and total quality management). The
implementation of these changes revealed that traditional performance metrics have
many limitations and require the development of new performance measurement
systems for success (Ghalayini and Noble, 1996).
2001-2010 Period
In this period, the methods developed based on the Balanced Scorecard as well as
the methods focusing on the various stakeholders of an enterprise are noteworthy.
Developed performance measurement methods generally have a holistic performance
perspective.
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Table 1:
Performance measurement frameworks/models taking into consideration the Industry 2.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of
the Performance
Measures
Advantage(s) Disadvantage(s)
DuPont System
(These references are
used for the method:
Parrino et al., 2011;
Mark and Birkinshaw,
2015; Bruns, 1998)
Brown, 1914
The system is used to
calculate firms’ return on
equity (ROE).
Net profit margin,
total asset turnover,
financial leverage
The DuPont system
provides a way to
examine the
underlying factors of a
firm's profitability as
well as it’s an easy and
practical approach, it’s
also a good method to
examine how the rates
of a company change
over time and to
compare two similar
companies.
But like other financial
analysis methods, the
DuPont system doesn’t
reflect the current situations
in the firm, it doesn’t
consider the cost of capital
of the firm, besides being
cost-oriented of the method
provides a historical
perspective, it gives little
indication of future
performance and
encourages short termism.
Tableau De Bord
(These references are
used for the method:
Pezet, 2009; Epstein and
Manzoni, 1998; Lebas,
1996; Bourguignon et
al., 2004; Bessire and
Baker, 2005 )
Process engineers,
1930s
The French Tableau De
Bord which is generally
seen equivalent to the
American Balanced
Scorecard, is a
performance
management system
which is developed
while seeking ways to
improve production
processes by better
understanding cause and
effect relationships.
Financial measures,
quality measures,
social measures,
customer-focused
measures, process-
focused measures
Tableau De Bord is
designed as a
"balanced"
combination of
financial and non-
financial indicators
and is more than just a
single document, too
much value can be
obtained from Tableau
De Bord's
development process.
While the method is more
interested in daily
operations, it’s less
interested in strategic issues.
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Table 2:
Performance measurement frameworks/models at the 1945-1990 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework Author(s) and Year Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Residual Income
(These references are
used for the method:
Arnaboldi et al., 2014;
Kaplan, 1984)
Marshall, 1890
Due to the limitations of
ROE and ROI, the
method emerged by
being developed of ROI
criteria in the period after
the second world war.
Net operating income,
cost of capital, invested
capital
It takes into account the
cost of capital of the
firm and eliminates the
shortcomings of the
ROE and ROI.
Non-financial measures
are not considered, the
approach is not widely
adopted.
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Table 3:
Performance measurement frameworks/models at the 1945-1990 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Social Accounting
(These references are
used for the method:
Basu, 2009; Everett and
Neu, 2000; Lehman,
1999)
A group which
consists of
accounting
scientists, 1970s
It advocates that large
companies also have
responsibilities towards
people outside their
shareholders.
Fringe benefits which are
given to employees,
pension arrangements for
employees, health and
safety measures,
employee training
programmers, industrial
relations, pricing policies
related to goods and
services provided, quality
control on the products
sold, the integrity of the
advertising campaigns,
pollution controls and
energy conservation.
The method also
addresses some
stakeholders apart
from an enterprise’s
shareholders.
From a critical accounting
perspective, it is argued that
the social accounting has
legalized the current situation
by providing mistake to the
development which can be
made by companies and by
no questioning the role that
capitalism plays in
maintaining different,
exploiter social relations,
Lehman (1999) states that
methodological and useful
trends within the reform
accounting models can stop
the formation of more serious
and explanatory models.
Strategic Management
Accounting
(These references are
used for the method:
Simmonds, 1981;
Tayles, 2011;
Langfield-Smith, 2008)
Simmonds, 1981
The method is defined
as the provision and
analysis of management
accounting data about a
business and its
competitors to be used
in developing and
following the business
strategy.
Strategy, goals, customers,
employees, processes,
information
The method is more
related to strategy
rather than tactic,
environmental or
marketing-oriented,
it focuses
competitors and is
long-term, it looks
forward and is
outward-oriented.
The concept itself is not
largely understood, and its
methods or techniques are not
widely adopted.
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Table 4:
Performance measurement frameworks/models at the 1945-1990 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Business Excellence
Models
(This reference is used
for the method: Rocha-
Lona et al., 2008)
Quality
organizations, the
end of the 1980s
Business Excellence
Models (BEM) are
quality management
frameworks based on
enterprise performance
criteria created
throughout the
development of total
quality management
principles.
Dimensions vary
according to each
Business Excellence
Model.
The implementation
objectives of the Business
Excellence Models vary
according to the priorities
of the organizations and
some of these identified
objectives are participation
to reward, self-evaluation,
business process
improvement,
measurement systems and
strategic planning.
Models are a self-
assessment rather than
an objective
measurement
framework, the
categories for
measurement are very
broad, and some
dimensions cannot be
measured.
Activity Based
Costing
(These references are
used for the method:
Fabozzi et al., 2007;
Wyatt, 2012; Neely,
2004; Mark and
Birkinshaw, 2015 )
Kaplan and Cooper,
1988
Activity-Based Costing
(ABC) is an expanded
cost allocation process
which assigns indirect
costs firstly to actual
activities and then to
products based on their
usage the activities.
Raw material cost,
labor cost, general
production cost
(machine activity pool,
assembly activity pool,
quality control activity
pool)
It resolves mistakes in
evaluating the
manufacturing cost of parts,
the approach has been
extremely supported in the
past by both academics and
consultants, ABC is
especially valuable in the
complex production
environment where many
products use the same
inputs and is strong clearly
recognizing the importance
of activities and processes.
Many businesses have
chosen to avoid from
this technique, believing
that the approach is too
complex, and the
method is weak due to
the fact that it doesn’t
reattach the processes to
strategies or
stakeholders.
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Table
5:
Performance measurement frameworks/models at the 1945-1990 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Sink and Tuttle Model
(These references are
used for the method:
Sink and Tuttle, 1989;
Tangen, 2004)
Sink and Tuttle,
1989
The model asserts that the
performance of an
organization is a complex
interrelationship between
the seven performance
criteria: effectiveness,
efficiency, quality,
productivity, quality of
work life, innovation, and
profitability/budgetability.
Effectiveness, efficiency,
quality, productivity,
quality of work life,
innovation,
profitability/budgetability
Although many things
have changed since the
model was first
introduced, the seven
performance criteria are
still important.
The model has some
major limitations, for
example the model
does not consider the
need for flexibility and
the customer point of
view.
Maskell Model
(This reference is used
for the method:
Maskell, 1991)
Maskell, 1989
It’s a useful model which
is developed for American
companies with the slogan
performance measurement
for world class
manufacturing.
Delivery success and
customer service, process
time, production
flexibility, quality,
financial-based measures,
social issues
The model provides a
balanced measurement
that financial and non-
financial performance
metrics coexist.
The model is more
inter-oriented and
some stakeholders are
not included in the
model.
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Table
6:
Performance measurement frameworks/models at the 1945-1990 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Performance
Measurement Matrix
(This reference is used
for the method: Neely
et al., 1995)
Keegan, Eiler and
Jones, 1989
The method’s power lies
at the way that it seeks to
integrate different
dimensions of
performance and at the
fact that it uses extensive
terms such as “internal”,
“external”, “cost” and
“non-cost” which
develops its flexibility.
Internal, external, cost
and non-cost
The inherent flexibility of
the method provides that it
can adapt to every
performance dimension
which fits its frame.
Due to the fact that the
inherent flexibility of the
method will bring
subjectivity about the
addition of new
measures, the success of
the measurements will
be affected from this.
Success Dimensions
(This reference is used
for the method: Maltz
et al., 2003)
Shenhar and Dvir,
1990
The model is a
multidimensional
approach which defines
effectiveness against
three organizational
levels (project, business
unit and company) and
four time preferences
(very short, short, long,
very long time
preferences).
-
-
The main constraint of
the method is that it
does not provide
specific operational
measures for each
dimension, the model is
not tested at the
enterprise level while it
is experimentally tested
at the strategic business
unit and project levels
and there is lack of focus
on a company's human
resources dimension.
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Table 7:
Performance measurement frameworks/models at the 1945-1990 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Performance
Measurement
Questionnaire
(These references are
used for the method:
Ghalayini and Noble,
1996; Ghalayini et al.,
1997; Dixon et al.,
1990)
Dixon, Nanni and
Wollmann, 1990
The model was
developed to assist
managers in identifying
the improvement needs
of the organization, to
determine supporting
degree of current
performance measures to
improvements and to
create an agenda for
performance
measurement
improvements.
Quality, labor
productivity, machine
productivity
The method provides a
mechanism to describe the
company's improvement
areas and their associated
performance measures and
tries to determine the
supporting degree of
current measurement
system to such
improvement areas.
The method cannot be
considered as a
comprehensive
integrated measurement
system and does not
consider continuous
improvement.
Customer Value
Analysis
(This reference is used
for the method:
Taticchi and
Balachandran, 2008)
Customer Value,
Inc., 1990
It is aimed that the
method is a performance
measurement system
which is especially
directed by the market,
by detecting all
performance measures
around market
parameters.
-
The model works with the
tools such as value pricing
charts, benchmarking
analysis, product features-
score comparison, priorities
chart.
Excessive focusing on
the market, which is the
main feature of the
model, is also a limiting
factor.
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Table 8:
Performance measurement frameworks/models at the 1945-1990 period taking into consideration the Industry
3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Strategic
Measurement Analysis
and Reporting
Technique
(These references are
used for the method:
Cross and Lynch, 1988-
1989; Ghalayini and
Noble, 1996; Lynch
and Cross, 1991;
Ghalayini et al., 1997)
Wang laboratories,
1988-1989
The aim is to establish a
management control
system with
performance indicators
which are defined in
order to define and
maintain success.
Market, financial,
customer satisfaction,
flexibility, productivity,
quality, delivery, cycle
time, waste
The main strength of the
method is its attempt to
integrate operational
performance indicators
with company goals.
The system neither
provide any mechanism
to identify key
performance indicators,
nor it explicitly combine
the idea of continuous
improvement.
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Table 9:
Performance measurement frameworks/models at the 1991-2000 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Results and
Determinants
Framework
(These references are
used for the method:
Fitzgerald et al., 1991;
Neely et al., 2007)
Fitzgerald et al.,
1991
Reflecting the concept of
causality which
emphasizes that the
results obtained today
are a function of past
enterprise performance
Competitiveness,
financial performance,
quality, flexibility,
resource utilization,
innovation
The results are defined as
lagging indicators and the
determinants are defined as
leading indicators.
Non-financial measures,
stakeholders and the
importance of their
behavioral aspects
related to performance
have been neglected.
Measures for Time-
Based Competition
(This reference is used
for the method: Neely
et al., 1995)
Azzone et al., 1991
The method tackles
employ time as a way of
competitive advantage.
R & D - engineering
time, operations –
throughput time, sales
and marketing -order
processing lead time
The measures of the
method reflect the
productivity and
effectiveness dimensions of
performance.
Quantitative measures
are not enough for
performance
management.
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95
Table 10:
Performance measurement frameworks/models at the 1991-2000 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Economic Value Added
(These references are
used for the method:
Sherman, 2015; Kapil,
2010; Mark and
Birkinshaw, 2015)
Stewart, 1991
Both debt and equity
capital are included in
the cost of capital.
Financial measures
It gives high-grade results,
reduces the problem of
agency by helping the
company to bring the
shareholder interest to the
same level with
administrative interest and
reduces the problem of
proxy and is closely related
with the marketing value of
the company.
The method is
unsuccessful at looking
to future, only financial
measures are not
sufficient to measure the
performance of the
enterprise.
Integrated
Performance
Measurement
(This reference is used
for the method: Yadav
et al., 2013)
Nanni et al., 1992
It is emphasized service-
focused approach rather
than the product-
focused approach of
traditional management
accounting.
Financial measures,
strategic measures ,
operational measures
The method integrates
management accounting
field with strategic and
operational perspectives
and has developed
management accounting
intellection.
The method is not
sufficient to measure
enterprise performance
because some
performance dimensions
are neglected.
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Table 11:
Performance measurement frameworks/models at the 1991-2000 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of
the Performance
Measures
Advantage(s) Disadvantage(s)
EFQM Excellence
Model
(These references are
used for the method:
Trompenaars and
Coebergh, 2014;
Lawson et al., 2007;
Neely et al., 2007;
Neely and Adams,
2001; EFQM, 2012).
European
Foundation for
Quality
Management,
1992
It’s a business excellence
model which assesses
organizations for the
European Quality Award
and is developed based
on the concepts of total
quality management and
sustainable excellence.
Leadership; people;
strategy;
partnerships and
resources; processes,
products and
services; people
results; customer
results; society
results; business
results
The model presents a
comprehensive performance
idea addressing many areas
of performance, emphasizes
clearly inputs of
performance improvement
and shows the areas of
results that need to be
measured.
The model is a self-
assessment rather than an
objective measurement
framework, the categories
for measurement are very
broad, while the results can
be measured easily some of
the inputs cannot be
measured.
Balanced Scorecard
(These references are
used for the method:
Neely et al., 2007;
Ghalayini et al., 1997;
Ghalayini and Noble,
1996; Kennerley and
Neely, 2004; Kaplan
and Norton, 1992)
Kaplan ve
Norton, 1992
The method provides a
balanced measurement
by combining financial
measures with non-
financial measures.
Customer, financial,
internal business,
innovation and
learning
The method more clearly
connects performance
measurement to the strategy
of enterprise, prevents
suboptimization, and
provides a balanced
measurement.
The method does not
address some
characteristics of the
previous performance
frameworks, does not
include perspectives such
as human resources and
employee satisfaction,
supplier performance,
product/service quality
and environmental/
community aspects to the
framework and is not
selected and applicable for
the level of factory
operations.
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Table 12:
Performance measurement frameworks/models at the 1991-2000 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Triple Bottom Line
(These references are
used for the method:
Polaine et al., 2013;
Parsons, 2008;
Christopher, 2010;
Hubbard, 2009)
Elkington and
SustainAbility
company, 1994
It is a useful
measurement framework
which is derived from
sustainability field, in
order to both provide
design instructions and
evaluate results.
Environmental,
economic, social
The method is useful while
working with public
institutions, but it is also
increasingly popular in the
private sector, the method
involves many performance
measures.
Measuring performance
by measures of the
method is not a simple
task, the method has not
succeeded in
penetrating to enterprise
performance systems
and is seen very
complex by some
managers.
Service-Profit Chain
(These references are
used for the method:
Mark and Birkinshaw,
2015; Heskett et al.,
1994; Ennew and
Waite, 2013; Wirtz et
al., 2012)
Heskett et al., 1994
The method establishes
relationships between
profitability, customer
loyalty and employee
satisfaction, loyalty and
productivity.
Internal service quality,
external service value
The method handles two of
the most important
stakeholders of an
enterprise, namely the
customers and the
employees, the causal links
in the method are well-
structured.
The method has been
developed for service
firms, does not explicitly
address issues related to
cost of quality, focuses
more on revenue than
profit, retention can be
behavioral rather than
attitudinal.
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Table 13:
Performance measurement frameworks/models at the 1991-2000 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Return on Quality
Rust et al., 1995
The method is developed
to make quality
expenditures financially
understandable.
Financial measures
The method does not
necessitate any specific
measurement approach and
promotes quality in
enterprises.
The method focuses on
service quality, it must
be verified that the
model is generalizable
to various industries.
Cambridge
Performance
Measurement Design
Process
(This reference is used
for the method:
Bourne et al., 2000)
Neely et al., 1996
The method was
developed to design the
performance
measurement system.
-
The method guides each
enterprise in designing its
own performance
measurement system.
In order to be able to
determine the validity of
the method, it has to be
applied in different
industries.
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99
Table 14:
Performance measurement frameworks/models at the 1991-2000 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Input-Process-Output-
Outcome Framework
(These references are
used for the method:
Brown, 1996; Neely et
al., 2007)
Brown, 1996
The method sees the
performance
management as a
process.
Input measures,
process measures,
output measures,
outcome measures
The model is useful in
seeing the difference
between the different
measurement categories,
and separating the output
and the outcome measures
has made it popular
especially in the public
sector.
The model assumption
that there is a linear
relationship set between
inputs, processes,
outputs, outcomes, and
targets by determining
each previous factor the
next one, is much
simplifying of the fact,
the method does not
consider external
dynamics.
Consistent
Performance
Management System
Flapper et al., 1996
The system which
encompasses all
performance dimensions
associated with the
existence of the
organization as a whole,
is meant by the method.
-
Relationships between
performances indicators are
defined, target values or
value ranges for
performance indicators are
determined, and
performance indicators are
classified according to three
specified characteristics.
The framework is
required to be applied in
different types of
organizations in order to
examine the general
usefulness of it.
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100
Table 15:
Performance measurement frameworks/models at the 1991-2000 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s)
and Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Integrated Dynamic
Performance
Measurement System
Ghalayini et al.,
1997
The system focuses on
improving the
competitiveness of
manufacturing by
overcoming limitations of
existing performance
measurement systems
and motivating
continuous improvement.
Customer satisfaction,
compliance with
customers, quality,
delivery, manufacturing
cycle time, cost of non-
value added activities,
process technology,
education and training
The method takes
precaution against sub-
optimization, combines
financial measures with
operational performance
measures by determining
specific success areas,
provides some critical
performance measures
which provide savings in
terms of time, money and
labor to three main areas of
the company, success
areas, performance
measures and performance
standards are dynamically
updated by means of the
method.
The method is
extensively for
manufacturing-based
companies and the
generalized application
of the method is not
discussed.
Shareholder Value
(These references are
used for the method:
Rappaport, 1998;
Bishop, 2009)
Rappaport, 1998
The method tries to
maximize shareholder
value.
Sales growth, cash profit
margin, cash tax rate,
working capital, capital
expenditure, the risk-
adjusted inflation,
weighted average cost of
capital and the time
scale in which
competitive advantage
period is assessed.
The method provides
principles to enterprises
for creating value to their
shareholders.
The method ignores
other stakeholders of an
enterprise such as
employees, suppliers
and customers.
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101
Table 16:
Performance measurement frameworks/models at the 1991-2000 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Dynamic Performance
Measurement Systems
Model
Bititci et al., 2000
A self-auditing dynamic
performance
measurement system is
developed with the use of
information technologies-
based management tools
-
Different from the full
life cycle of
performance
measurement, it
tackles the review
mechanism, extends
the model control cycle
and is dynamic.
In the literature, the more
common application of this
framework is not emphasized,
while the logic behind the
review mechanism used in the
model is shown with a simple
scenario there is an important
information gap to deal with
more complex scenarios.
Integrated
Performance
Measurement
Framework
Medori and
Steeple, 2000
The method is developed
to control and improve
performance
measurement systems.
Quality, cost, flexibility,
time, delivery, future
growth
The framework can be
used without any
external consultation,
it’s proved that the
method develops
existing measurement
systems to improve
competitive advantage.
In the second phase of the
method the difficulties are
found in correlating a
company's strategy and the
six competitive priorities of
the performance
measurement grid; because
performance measurement is
a dynamic process, document
B may require to be updated
as it may go out of fashion in
time; the dimension which is
based on too little competition
for designing the performance
measurement system is
considered.
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102
Table 17:
Performance measurement frameworks/models at the 1991-2000 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Quantitative Model
for Performance
Measurement System
Suwignjo et al.,
2000
Identification of factors
affecting performance
and their relationships,
hierarchical structuring of
factors, use of quantitative
models to measure the
effects of factors on
performance.
Cost per production unit
(overhead, operating,
total)
The effects of multi-
dimensional factors on
performance can be
gathered in a single
dimensionless unit.
As the method uses
subjective measurement, the
results may not be very
accurate, the model has a
period of use and it’s valid
only if the internal and
external environment
remains steady.
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103
Table 18:
Performance measurement frameworks/models at the 2001-2010 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Action-Profit Linkage
Model
(These references are
used for the method:
Westbrook, 2000;
Epstein and
Westbrook, 2001;
Taticchi and
Balachandran, 2008;
Epstein et al., 2000)
Epstein and
Westbrook, 2001
The model defines
measures and comments
causal relationships
between firm activities
and corporate
profitability.
Company actions,
delivered
product/service,
customer actions,
economic impact
The model concentrates on
the specific actions of the
company and their impact on
employees, customers and
finally on the corporate
profitability, encourages the
investment-based approach to
manage trade-offs in
decision-making, companies
can adapt the model to many
business situations and the
model doesn’t depend any
specific data-collection or
forecast procedure.
The proposed
framework is only a
starting point for
exploring the
relationships between
key performance
measures and therefore
it’s needed to arrange
according to the job
specifications of the
company.
Performance Prism
(These references are
used for the method:
Neely et al., 2007;
Bourne et al., 2003)
Neely et al., 2001
The method adopts the
stakeholder-focused view
of performance
measurement.
Stakeholder
satisfaction, stakeholder
contribution, strategies,
processes, capabilities
As regards stakeholders, the
method makes an important
distinction between
stakeholder satisfaction and
stakeholder contribution; the
method considers other
stakeholder groups such as
regulators, legislators and
interest groups in addition to
traditional stakeholders; the
framework is so
comprehensive and multi-
dimensional which enables all
measures to be planned over
it.
There is little guidance
as to how performance
measures will be
implemented and
almost never
assessment relating to
the use of the frame for
the existing
performance
measurement system
has been made.
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104
Table 19:
Performance measurement frameworks/models at the 2001-2010 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Kanji’s Business
Scorecard
Kanji and Sá,
2002
The method was
developed taking into
account the possibilities
and limitations of the
traditional Balanced
Scorecard.
Organizational values,
process excellence,
organizational learning
and delight the
stakeholders
The method is not only a
conceptual model but also a
measurement, it determines
the mutual relations between
performance measures
through structural equation
modeling, the method takes
into account more
stakeholders compared to the
Balanced Scorecard.
The method mostly
focuses on external
stakeholders.
Beyond Budgeting
Hope and Fraser,
2003
The method provides
companies an alternative,
compatible management
model which enables to
manage performance via
especially adapted
processes to present-day
unstable market.
-
The method principles can
create a set of adaptive
management process as well
as proposing a new, easy-to-
understand management
model and transfers power
and decision-making
authority from the center of
the organization to
employees.
The main emphasis in
the model is on
shareholders, other
stakeholders are not
adequately addressed.
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105
Table 20:
Performance measurement frameworks/models at the 2001-2010 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Dynamic Multi-
Dimensional
Performance
Framework
Maltz et al., 2003
Balanced Scorecard and
Success Dimensions
models provide a basis
for the proposed model
and to be added People
Development as a
separate performance
dimension, is the main
differentiator of the
model.
Financial, market,
process, people and
future
The model is
multidimensional inherently,
it sees success as a dynamic,
ongoing concept which is
assessed at various time
periods, represents many
stakeholders, and the People
Development dimension
differentiates the model.
The application of the
framework is not
addressed adequately.
Performance Planning
Value Chain
Neely and Jarrar,
2004
The method provides a
systematic process for
collecting a wide range of
tools to use data to
improve decision-making
and derive value from it,
and focuses on the effort
to add real value to the
organization.
-
The method provides a
process for converting data to
high-quality, value-added
information which enables
users to make more effective
decisions.
The method is given
only as a concept and
experimental validation
of it isn’t shown.
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106
Table 21:
Performance measurement frameworks/models at the 2001-2010 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Holistic Scorecard
Sureshchandar
and Leisten, 2005
The method is a
conceptual, theoretical
framework developed for
performance
management in the
software industry.
Financial, customer,
business process,
intellectual capital,
employee and social
perspectives
The proposed framework
adds new perspectives to
more holistically describe all
dimensions of enterprise
performance, also
restructures existing
perspectives to add more
clarity to the topics
addressed.
Causal relationships
between different
perspectives in the
framework have not
been explained, more
experimental works
have to be done to
ensure the reliability
and validity of the
proposed measures, the
generality of the
framework has not been
discussed.
Total Performance
Scorecard
Rampersad, 2005
The model emphasizes
the need and importance
of combining the
company’s goals and
desires with goals and
desires of the individual
to develop an
organizational structure
and philosophy.
Financial, customer,
internal processes,
knowledge & learning
perspectives, process
improvement, personal
improvement
The method combines PDCA
cycle, talent development
cycle and Kolb’s learning
cycle with personal and
organizational Balanced
Scorecard.
The insights are
established from
experience and
experimental validation
isn’t presented.
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107
Table 22:
Performance measurement frameworks/models at the 2001-2010 period taking into consideration the
Industry 3.0.
Name of the
Model/Framework
Author(s) and
Year
Feature(s) of the
Model/Framework
Dimensions of the
Performance
Measures
Advantage(s) Disadvantage(s)
Holistic Performance
Management
Framework
Andersen
et al., 2006
The model is an
integrated framework for
holistic performance
management.
Stakeholders, market,
supply chain
management, value
creation
The framework contains the
different areas which be
needed to act in unison and
supports each other in order
to completely bring into force
an organization.
The framework is
developed on a pilot
study basis but should
be seen as a test that
should be further tested
in other types of
industries /
organizations in order
to verify its validity on a
wider basis.
Flexible Strategy
Game-Card
(These references are
used for the method:
Yadav and Sagar, 2011;
Yadav, 2014)
Sushil, 2010
It is an integrated and
holistic framework for
strategic performance
management and
considers performance
from two perspectives
which are the corporate
point of view and the
customer point of view.
Situation, actors,
process,
performance, value in
offerings and
relationships
The dynamic nature of the
framework, the holistic
viewpoint and duality
viewpoint help it to be
considered as a holistic
framework in performance
management for the
enterprise.
Both experimental and
case study are necessary
to confirm and interpret
this new performance
management
framework for a variety
of conditions.
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108
As can be seen from the methods described above, enterprise performance
evaluation methods gained momentum in the Industry 3.0 period and the methods have
adopted in practice were developed in this period.
Analysis between Revolutions
Associated with the industrial revolutions, transformations have been
experienced in the energy regime, transportation and communication tools as well as
production processes have also progressed. All these developments have deeply
affected the social, cultural and economic lives of the societies in which the
revolutions took place. The developments brought by the industrial revolutions have
enabled mankind to make great progresses, but the troubles that these developments
brought with them later, have directed humanity to new quests and have provided
to take place the subsequent revolutions. In other words, all events in the industrial
revolutions have triggered each other.
In the middle of the 15th century with the invention of the most primitive
printing machine by Johannas Gutenberg and his colleagues, the bible was began to
publish. In the Europe with the spread of published bibles and other books, the
Europe began to experience the Age of Enlightenment (Clark and Cooke, 2015). The
Industry 1.0, whose infrastructure was formed in the Age of Enlightenment, began
in 1788 with the invention of steam engine. The main energy source used in this
revolution was coal. Due to the invention of steam engines and the intensive use of
coal and iron, great progresses have been made in maritime and rail transports.
Factories which could be called as the first modern commercial enterprises of that
period were established and for this reason a lot of people migrated from the villages
to the cities due to employment opportunities. Therefore, labor costs remained at a
low level for many years. The increase in the sales of British products led to capital
stock. The telegraph, which was invented and continued its development in this
period, was the means for communicating in this revolution.
The production problems arising from iron which were used extensively in the
Industry 1.0, caused the invention of steel and this event led to the start of the
Industry 2.0. Although many studies have been done on it before, lighting up the
dark nights of electricity that the discovery and use of it fall on this period, has
affected the social life deeply. Because oil was discovered in this period, oil was also
used extensively in addition to coal as an energy source. Factories continued to grow
and the population of cities increased gradually. One of the greatest inventions of
this period was the development of cars working with petroleum derivatives with
the discovery of oil. Due to the invention of steel, railroad transportation continued
to progress also in this period. As a result of these, highways have been used very
extensively and have shown great improvement. Communication tools such as
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109
telephone and radio are also the innovations of this period. Thanks to the advances
in transportation the relocation of people has become easier and information
exchange between people with the developments in the communication tools, has
increased. In this way, people's ability about questioning has increased and this has
led to new discoveries.
The oil crisis in 1973, which is seen by some as the beginning of the Industry
3.0, increased the search for new energy sources of the industrialized countries and
natural gas became the most important energy source of this revolution. However,
since coal, oil and natural gas are non-renewable energy sources, scientists continued
to search for energy sources and nuclear energy was discovered in this period. The
first computer which is called as ENIAC, was developed to meet the automation
needs of the army during the Second World War. Fighter aircrafts used during the
Second World War also enabled the development of aircraft technologies. In this way,
humanity met with the airline transport for the first time. As a result of the researches
carried out in order to provide the communication between long distances frequently
and easily, the internet which can be considered as the most important
communication tool of all-time, was found. With the invention of Internet,
information has spread more than ever, and the borders between countries have
completely disappeared. In this period, new production philosophies were
developed to increase productivity in production. In addition, the depletion of fossil
fuels and their damages to the environment have directed humanity to renewable
energy sources and the concept of sustainability has appeared for the first time.
As a result, the social and economic events which took place before the
revolutions have triggered the revolutions and the revolutions realized have affected
the economic and social events of the period that they took place. In other words,
there is a mutual interaction.
Conclusions
The industrial revolutions that emerged from the needs of human beings have
influenced/changed/transformed the market dynamics, social dynamics etc. in the
period when they occurred, or from a different point of view, market dynamics,
social dynamics, etc. required the realization of industrial revolutions. As a result,
many factors have been influenced by industrial revolutions in business and social
life.
Therefore, the development of enterprise performance evaluation in this study
has been examined in relation to the revolutions up to the Industry 4.0. The
development of enterprise performance evaluation has been studied from the
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110
beginning to the 2010 by the literature review method and has been historically
divided according to the industrial revolutions. The trend of change in industry has
also been sought in enterprise performance evaluation methods.
When the results are evaluated, the developments have taken place in the
enterprise performance evaluation methods along with the Industry 1.0, Industry 2.0
and Industry 3.0. These developments have gained momentum especially in the
Industry 3.0 and the most known and the most used methods in the field of enterprise
performance evaluation have emerged in this period. Prior to the Industry 1.0,
records were sufficient to monitor market prices, stocks, and record historical
exchanges. With the Industry 1.0 which started with the invention of the steam
engine, the enterprises that could be defined as the first modern enterprises of that
time emerged and the production was mechanized. The factories in this period used
double-sided cost calculations. After the discovery of electricity, which is one of the
most important developments of the Industry 2.0, mass production started. Thus, the
existing methods for developing and growing enterprises were insufficient and
almost all techniques of modern accounting, DuPont and Tableau De Bord were
developed during this period. With the invention of the computers, one of the most
important developments of the Industry 3.0, the period of automation at the
production began. Because the structure of the enterprises changed significantly, the
most important developments in the field of enterprise performance management
were experienced in this period.
Enterprise performance evaluation is the real-life problem which is multi-
criteria, complex and has uncertainties. Optimal results may be obtained by using
artificial intelligence techniques in real-life problems. In this context, it is excepted to
be used the artificial intelligence techniques which form basis of the Industry 4.0, in
the future studies at the field of enterprise performance management.
Managerial Implications
Enterprise performance has always a significant impact on the activities of
companies. Ways and tools to accurately measure performance have become an
increasingly important field of research for both organizations and academics (Folan
and Browne, 2005). However, in practice, we know that there are many companies
that see enterprise performance equivalent to human resources performance and do
not carry enterprise performance one step further. In fact, enterprise performance
management is such a critical issue for businesses; development tool, mathematics of
strategy determination… In this context, the concept of enterprise performance
management should be comprehended very well not only by academicians but also
Taşkan, Karatop, Kubat / Journal of Business and Management, 26 (1), March 2020, 79-119.
111
by business executives who are implementer of it and the development process of
enterprise performance management should be examined. Providing a conceptual
recognition of managerial impacts of enterprise performance management and
examining the relationship between industrial revolutions and enterprise
performance management are targeted in this article.
With the start of industrialization and mass production, the need to manage
the performance of the institutions emerged. At the same time, industrial revolutions
created profound effects and changes in the productions and managements of
enterprises. We can say that the maximum developments in enterprise performance
evaluation methods were experienced with the 3rd Industrial Revolution and the
managerial effects peaked in this period. Artificial intelligence has entered into all
areas of life in the present period. With these developments, efforts to establish
enterprise performance calculation and forecasting models continue. More realistic
performance results can be obtained by including tools such as big data and internet
of things in enterprise performance calculations. With these models, proactive
managerial effect will occur in the enterprises.
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About the Authors
Buşra Taşkan*
Muş Alparslan University, Faculty of Engineering and Architecture, Department
of Industrial Engineering, Güzeltepe Village, Muş, Turkey
E-mail: b.taskan@alparslan.edu.tr
Buket Karatop
İstanbul University Cerrahpaşa, Vocational School of Technical Sciences, Motor
Vehicles and Transportation Technologies, Hadımköy, İstanbul, Turkey
E-mail: buket.karatop@istanbul.edu.tr
Cemalettin Kubat
Sakarya University, Faculty of Engineering, Department of Industrial
Engineering, Serdivan, Sakarya, Turkey
E-mail: kubat@sakarya.edu.tr
*Corresponding author
Buşra Taşkan graduated from Department of Industrial Engineering of the Kırıkkale
University in 2008. Subsequently, she got a master’s degree at the Department of
Industrial Engineering of the Gazi University in 2012. She still continues PhD program
that she makes at the Department of Industrial Engineering of the Sakarya University.
She is currently working as the research assistant at the Department of Industrial
Engineering of the Muş Alparslan University. She still continues her academic studies on
Enterprise Performance Management, Strategic Management, Optimization, Artificial
Intelligence, Multi-Criteria Decision Making, Automated Storage and Retrieval Systems.
Buket Karatop graduated from Department of Industrial Engineering of the İstanbul
Technical University in 1986. Subsequently, she got a master’s degree at Department of
Taşkan, Karatop, Kubat / Journal of Business and Management, 26 (1), March 2020, 79-119.
119
Industrial Engineering of the Yıldız Technical University. In 2015, she graduated from
PhD program that she made at the Department of Industrial Engineering of the Sakarya
University. She worked as an engineer at the various levels of the Alarko and Şişecam
companies and as an academist at the Erciyes University, Atatürk University and
Süleyman Demirel University. She did the duties of coordinatorship of Engineering
Education Accreditation and Quality Development at the mentioned universities. As the
Quality Development Director of Istanbul University Open and Distance Education
Faculty, she managed the institutionalization process of the faculty and obtained ISO:
9001: 2008 certificate in distance education. She received an award in distance education
through EFQM assessment. She did consultancy to the T. R. Ministry of Health about
“process design and institutionalization of distance health education system under ISO
9001 and EFQM”. She is currently working as the assistant professor at Istanbul
University Cerrahpaşa. She still continues her academic studies on Strategic Management,
Quality Management, Multi-Criteria Decision Making, Artificial Intelligence, Distance
Learning, Akhi Order.
Cemalettin Kubat graduated from Department of Mathematics of the Ankara University
in 1974. Subsequently, he got a master’s degree at Department of Mathematics of the Ege
University. In 1992, he graduated from PhD program that he made at the Department of
Business Administration of the İstanbul University. He retired in the past weeks as the
professor from Department of Industrial Engineering of the Sakarya University. He still
continues her academic studies on Operations Research, Supply Chain Management,
Manufacturing Systems, Artificial Intelligence, Strategic Planning and Multi-Criteria
Decision Making.
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... From the mechanization brought on by the first industrial revolution to the emergence of electricity, mass production, and methods of communication in the second industrial revolution, to the rise of electronics, telecommunication equipment, computers, and automation in the third industrial revolution. Finally, the fourth industrial revolution (Industry 4.0) brought the usage of cyber-physical systems and internet of things integrating physical objects with the processing of virtual data [1]. While these four industrial revolutions did affect industries differently, they all shaped the economies of the world and provided a foundation for developing future societies that utilized technology not only for economic development, but also for solving societal problems from a human-centric perspective (Society 5.0). ...
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RESUMEN: La transformación de las relaciones de trabajo derivada de la flexibilidad laboral ha sido una realidad desde hace ya varias décadas; por ello las normas de trabajo deben ser dinámicas y adaptarse a las circunstancias que se van presentando, como respuesta no sólo a una tendencia, sino a la permanente búsqueda del equilibrio entre los factores de la producción como una de las finalidades fundamentales del derecho del trabajo. La pandemia de COVID-19 ha servido de catalizador para hacer realidad la normativa en materia de teletrabajo en México, así como ha sucedido en algunos otros países del mundo, ya que la regulación era insuficiente, y dejaba al teletrabajo subsumido dentro del trabajo a domicilio. En el presente, se hace un análisis de la reforma llevada a cabo en fecha 11 de enero del año 2021, de su regulación, parte de su problemática y los retos o áreas de oportunidad que deben superarse para lograr el cumplimiento de las obligaciones especiales que implica la reforma; pues ésta debe responder ante una realidad compleja que indudablemente ha transformado las relaciones de trabajo y los procesos productivos.
Chapter
Just as Europe consists of countries with different languages, cultures, histories, wealth levels and systems of jurispridence, and exhibits a mosaic of different tastes and preferences, so do accounting's roles and functions differ widely across European countries. Differences in management accounting practices and control approaches abound. the question is no longer whether there is variety but its extent and explanation. In considering European variety in management accounting, it may be asked what trends if any are discernible in management accounting practices generally? What historical factors have conditioned management accounting wherever and in whatever form it exists? Are there links between management accounting research and practice? Are there competing theories within the field which are nation-specific? To what extent is the implementation of emergent cost-management approaches evident within companies? Such issues are explored in this book which also provides some basis for exploring national specifities in management accounting whilst offering room to ponder over its commonalities. Distinguished European commentators provide comprehensive analysis of past and existing management accounting practices and conceptual thinking. The contributors give a sense of whether modern management accounting approaches are evident in enterprises withing their nation and discuss findings of empirical investigations in constructing `country perspectives'. Each chapter successfully presents an informed overview of country features indicative of a rich and diverse European tapestry of management accounting thought and practice. Ultimately the book provides a useful starting point not only for making cross-national comparative observations but also for identifying opportunities and trends in management accounting systems changes.
Chapter
This chapter considers the relatively recent topic of Strategic Management Accounting (SMA). It is generally agreed that the term ‘Strategic Management Accounting’ was first coined by Simmonds (1981, p26), who defined it as ‘the provision and analysis of information about a business and its competitors for use in developing and monitoring the business strategy’. Thus, it lies at the interface between strategic management and accounting. Some have suggested that it implies accounting information which supports strategic management (SM-A) and others that it relates to all management accounting techniques which have a strategic perspective (S-MA). Whatever the exact interpretation (SMA) implies a greater contribution by accountants to strategy formulation and implementation, it suggests accountants move away from purely financial concerns to wider business issues thus maintaining the accountants role at the centre of business activity.
Chapter
This chapter gives an overview of industrial development with a discussion of the first, second, and third industrial revolutions, and related elements and technologies. It also discusses how nations around the world have moved into the GIR, while the United States is still trapped in the second industrial revolution of fossil fuels beholding to its financial and corporate groups.
Article
Executives know that a company's measurement systems strongly affect employee behaviors. But the traditional financial performance measures that worked for the industrial era are out of sync with the skills organizations are trying to master. Frustrated by these inadequacies, some managers have abandoned financial measures like return on equity and earnings per share. "Make operational improvements, and the numbers will follow,"the argument goes. But managers want a balanced presentation of measures that will allow them to view the company from several perspectives at once. In this classic article from 1992, authors Robert Kaplan and David Norton propose an innovative solution. During a yearlong research project with 12 companies at the leading edge of performance management, the authors developed a "balanced scorecard;" a new performance measurement system that gives top managers a fast but comprehensive view of their business. The balanced scorecard includes financial measures that tell the results of actions already taken. And it complements those financial measures with three sets of operational measures related to customer satisfaction, internal processes, and the organization's ability to learn and improve-the activities that drive future financial performance. The balanced scorecard helps managers look at their businesses from four essential perspectives and answer Some important questions. First, How do customers see us? Second, What must we excel at? Third, Can we continue to improve and create value? And fourth, How do we appear to shareholders? By looking at all of these parameters, managers can determine whether improvements in one area have come at the expense of another. Armed with that knowledge, the authors say, executives can glean a complete picture of where the company stands-and where it's headed.
Book
Drawing together contributions from leading thinkers around the world, this 2007 book reviews developments in the theory and practice of performance measurement and management. Significantly updated and modified from the first edition, the book includes ten additional chapters which review performance measurement from the perspectives of accounting, marketing, operations, public services and supply-chain management. In addition to these functional analyses the book explores performance measurement frameworks and methodologies, practicalities and challenges, and enduring questions and issues. Edited by one of the world's leading experts on performance measurement and management, Business Performance Measurement will be of interest to graduate students, managers and researchers who wish to understand more about the theory and practice of performance measurement and management.