The Relationship between Performance Measurement and management Systems Maturity, Group Culture, and Performance: Evidence from Saudi Private Companies

Abstract

The overall objectives of this study were to examine the maturity levels of performance measurement and management systems (PMMS) in Saudi Arabian private companies and to investigate how organisational characteristics and group culture influence both system development and performance outcomes. Although PMMS has been widely researched in large Western organisations, there is still limited understanding of how these systems operate in non-Western and rapidly changing economies. A quantitative approach was used, drawing primarily on contingency theory, complemented by institutional theory to interpret findings shaped by external regulatory and normative pressures, and supported by Ouchi's (1979) technical/social control theory as an analytical lens. Data were collected through a cross-sectional survey of 227 senior managers from different industries. PMMS maturity was assessed through five key dimensions: strategic adaptability, employee involvement, technology integration, measurement diversity (based on balanced scorecard), and data characteristics. These dimensions were examined alongside organisational size and industry type to understand their influence on PMMS maturity patterns. Additionally, the study investigated how group culture facilitates PMMS development and moderates the relationship between system maturity and organisational outcomes, specifically perceived financial performance and system satisfaction. The results showed that PMMS maturity in Saudi organisations is strongly influenced by contextual factors. Employee involvement was the strongest predictor of financial performance, followed by technology integration and data characteristics. Group culture significantly affected financial performance but not system satisfaction, suggesting culture influences behaviour more than perception. However, group culture's moderating effects revealed nuances: it weakened technology integration's positive impact on system satisfaction, suggesting that in collaborative cultures, technology-driven measurement may seem impersonal. Strategic adaptability and measurement diversity showed no significant effects on financial performance, while measurement diversity negatively affected PMMS satisfaction. Maturity levels varied across organisations, with strategic adaptability most clearly distinguishing between clusters. Financial and holding companies achieved the highest maturity (92% in the high-maturity group), consistent with institutional theory's account of coercive isomorphism arising from regulatory oversight. Service firms showed greater maturity (69.7%) than manufacturing firms (48%), while small organisations were absent from the high-maturity cluster, indicating resource constraints limit PMMS development. Group culture influenced all PMMS dimensions, with stronger effects on social aspects like employee involvement than technical features like technology integration. Overall, the study provides insight into how PMMS maturity develops in transforming economies. The findings highlight employee involvement and technology integration as key drivers of financial performance, with system development depending on company size, industry, and culture. The research suggests that organisations in transforming economies should prioritise employee participation and technological capabilities over expanding measurement diversity, ensuring systems align with organisational characteristics, cultural values, and available resources.