‘Organizational Linkages: Understanding tho Productivity Paradox (1984) iptv np edioperoneDO09049042hra 14 Hl copy 1884, 2050 The Raa] Acadeny of Seles al ihis ese 154+. scorn sinx anp oronas L. swine, sm. ever. The mothod commonly used by organizations is analogous to buying a tool off the shelf and simply installing it. Tt is not uncommon, for example, for a data center to buy a software package, install it, gener- ate the reports the package provides, and simply expect the user to figure out how to use the reports. ‘This is the "hammer looking for a nail to pound” approach to measurement. Tinkering with the existiog ‘measurement system is another common approach. Systems approaches ‘to designing a performance measurement system are rare, It will take a systems approach to develop the measurement sys- tems that onganizations need. Key design variables, such as the vnit of analysis, user purpose, and operational definitions of measures, must, bbe addressed and specified if the measurement system is to be success- fal. Specifying the unit of analysis entails defining the organizational system for which the performance measurement system is being estab- lished. What are the organizational system's boundaries? What are the outputs? What are the inputs? Who are the providers and the customers? What are the value-adding processes? Input-output analy- sis is a tool designed to provide answers to these questions. Once the questions are answered, the unit of analysis will have been adequately defined. One of the most common mistakes made when developing a performance measurement system is failing to define the system of in- terest. This is a key element of the linkage issue. For a given unit of analysis, measures are frequently developed outside the context of the larger system. An example would be evaluating the payoff of an IT intervention at the individual or group level without considering link- ages to higher organizational levels. In other words, measures should be specific to a given unit of analysis, but the data should be inter- preted in the light of other unit-of-analysis perspectives The users of the measurement system and their purposes also must, be defined clearly. Who are the end users of the measurement system? ‘What do they need from measurement to help them improve how they solve problems and make decisions? These questions may seem simple and obvious, yet it is quite common for measures to be specified with- out these questions ever being addressed. Again, the implication for the linkage issue is significant, Who is trying to confirm that improve- ment has taken place—the IT vendor, the manager who purchased the IT product, the critie who is against IT and therefore has a hidden agenda, the IT user who is skeptical of the benefits and is resistant to some- thing new, or the analyst who is attempting to understand organiza- tional performance over time? At the heart of the linkage issue and the productivity paradox is this question of user and purpose. Operational definition of the aspects of performance to be measured is another important design variable. The seven performance criteria