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Alignment of performance metrics in a multi-enterprise agribusiness: Achieving integrated autonomy?

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Abstract:

Purpose ‐ The purpose of this paper is to examine the disconnect that can develop between corporate goals and those of individual intra-organisational business units arranged as an internal supply chain within a large vertically integrated agribusiness. It also aims to explore and discuss the development of a holistic performance metrics system that facilitates internal supply chain coordination and cohesion, while allowing synergies to develop across the company. Design/methodology/approach ‐ A case study approach involving a participative action research component was used to examine the disconnect between internal business unit (operational) goals and overall corporate (strategic) goals and to develop a conceptual performance assessment model addressing both operational and strategic contexts. Findings ‐ The findings show that appropriate performance indicators and measures can be created that relate directly to logical operational outcomes, thus encouraging a more tightly integrated internal supply chain, a stronger coherence among the components and a better aligned set of operational and corporate goals. Research limitations/implications ‐ Only financial information and data obtained from a participative managerial decision-making simulation were used to explore performance goal incongruence between operational and corporate managers, compared with the need for multiple contextual performance measurement metrics that the literature suggests provides a best practice system. Originality/value ‐ The rapidly developing corporate agribusiness sector provides a unique operating environment in that these companies deal primarily in self-regenerating assets such as livestock. Additionally the development of performance metrics for improving the coordinated integration of autonomous business units is explored for the first time and the concept of "Integrated Autonomy" is suggested as a way to describe the resulting situation.

Keywords: Agricultural products; Performance measures; Supply chain management

Document Type: Research Article

DOI: https://doi.org/10.1108/17410401011038892

Publication date: 2010-01-01

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