A configurational explanation for performance management systems' design in project-based organizations

This paper investigates what configurations of organization-level contingencies explain different performance management system (PMS) designs in project-based organizations (PBOs). By studying organization-level contingency factors – perceived environmental uncertainty, organizational size, innovation strategy, and opportunity strategy – this paper extends prior literature on PMSs in PBOs, which predominantly focused on project and portfolio level contingencies. In addition, while prior literature studied the contingency factors separately, this paper argues that it is the configuration of contingencies that matter for PMS design choices. Data on 15 PBOs in the management consulting industry reveal that PBOs combine various controls into performance management systems that are either predominantly mechanistic or organic in nature. Qualitative Comparative Analysis (QCA) points to four configurations of organization-level characteristics, two of which are associated with the PBO's choice for mechanistic performance management system, and two that are related to organic performance management system.