The introduction of innovative performance measurement and management control systems: the role of financial investors and their acquired companies

During the last decade the Italian private equity and venture capital (pe/vc) market has been characterized by an intense activity, having small to medium enterprises as the main targets (Italian Private Equity Monitor). At the same time, funds and venture capitalists have began to get more involved with their companies, confuting their reputation of being “hands-off” (conservative and non-interfering) compared with their US colleagues (SEVeCa, 2003; McKinsey&Company, 2006). Among the various reasons that can explain this change in behavior (e.g. the necessity to overcome higher information asymmetries and risk of moral hazard when dealing with smaller enterprises), we believe that pe/vc operators are increasing their presence in the Board of Directors and introducing control systems also to actively sustain the development of invested companies. In recent years, firms are facing new competitive challenges derived by playing in a globalized word and in a knowledge-based economy. Thus, firms willing to successfully compete and grow significantly have to understand what are the actual key value drivers, define a coherent strategy, translate it into action and monitor results involving the entire organization. Considering that small enterprises do usually lack in strategy formulation, delegation and information systems (Scase, Goffee, 1980), pe/vc operators can contribute to change the company culture and provide planning and control systems more suitable to support firms’ growth. Consequently, in this paper we aim to investigate if pe/vc operators are introducing innovative and more sophisticated performance measurement and control systems in their invested companies in coherence with the new competitive environment. We have identified and chosen to analyze a single case-study regarding the implementation of the Tableau de Bord in an Italian shipyard. Despite its limitations (Mintzberg, 1979; Yin, 1981), we found the case-study approach very useful, since it allowed us to understand the reasons for adoption of this management tool, its effectiveness and the real contribution of pe/vc in the enterprise transformation process.