Rahat Munir - Performance Measurement Systems in Banks

Given the significant changes in the banking environment and the resultant pressures on banks to change their systems and procedures, this book is a timely reference that provides a comprehensive analytical overview of changes in the performance measurement system (PMS) of banks in the post-financial crisis era. It explores the factors that influence such changes and examines banks consequential responses to institutional pressures. It is an invaluable resource for researchers and practitioners to gain insights into the concept of PMS change in both developed and developing economies.

Rahat Munir is Professor and Head of Department in the Department of Accounting and Corporate Governance at Macquarie University, Australia.

Kevin Baird is Professor in Accounting at the Department of Accounting and Corporate Governance of Macquarie University, Australia.

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Performance Measurement Systems in Banks

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First published 2019
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2019 Rahat Munir and Kevin Baird

The right of Rahat Munir and Kevin Baird to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

Names: Munir, Rahat, author | Baird, Kevin, author.

Title: Performance measurement systems in banks / by Rahat Munir and Kevin Baird.

Description: Abingdon, Oxon ; New York, NY : Routledge, 2019. | Series: Routledge international studies in money and banking ; 99 | Includes bibliographical references and index.

Identifiers: LCCN 2018038041 | ISBN 9781138556713 (hardback) | ISBN 9781315150277 (ebook)

Subjects: LCSH: Bank management. | Banks and banking. | PerformanceMeasurement.

Classification: LCC HG1615 .M86 2019 | DDC 332.1068dc23

LC record available at https://lccn.loc.gov/2018038041

ISBN: 978-1-138-55671-3 (hbk)
ISBN: 978-1-315-15027-7 (ebk)

Typeset in Galliard
by Apex CoVantage, LLC

I would like to acknowledge all the support I received from academic and administrative staff from both the Department of Accounting and Corporate Governance, and the Faculty of Business and Economics, Macquarie University. Many thanks are also due to those respondents from the case organisation in Pakistan who took the time to respond to the questionnaire, participated in the interviews, and provided relevant documents. I would also like to express my sincere gratitude to the participants of the research, including the Executives of FUB and State Bank of Pakistan for providing documents concerning the banking sector in Pakistan.

Finally, I am thankful and indebted to my family (my wife Meena and children Danyal, Talha, Shahrukh, and Laiba) and parents for their continuous support and encouragement throughout this book.

Performance measurement systems (PMS), as a fundamental element of management control, are used for the efficient and effective management of organisations (Langfield-Smith et al., 2009). These systems are mainly designed to provide useful information to support strategic decision making, planning, and the control of activities in order to accomplish organisational goals (Merchant and Van der Stede, 2007; Neely et al., 2002; Kaplan and Norton, 1996). Traditionally these systems have been dominated by financial measures, such as Earnings per Share, Return on Investment, and Return on Equity. The aim of such systems was to ensure that, from a shareholders point of view, the organisations performance was financially successful and that progress was in accordance with the business plan (Bititci et al., 2000; Neely, 1998; Dixon et al., 1990). While such traditional PMSs were developed in the early 20th century, their usefulness has become limited over the years due to the rapid change in the organisational environment. For instance, Burns and Scapens (2000) state that: