A Study on the Role of Performance Measurement System in the Relation between Entrepreneurship and Organizational Performances

[Purpose]The aim of this study is to examine a role of performance measurement system (PMS) in relation between entrepreneurship and organizational performances. More specifically, the study focuses on diagnostic and interactive use of one important aspect of PMS, and qualitative and justice characteristics of PMS. [Methodology]Three research questions are investigated: (ⅰ) to what extent do entrepreneurship contribute to organizational performances? (ⅱ) to what extent do the diagnostic and the interactive use of PMS, (ⅲ) to what extent do the qualitative characteristics and the justice of PMS specifically contribute to the relation between entrepreneurship and organizational performances. [Findings]The results of the study are as follows: Firstly, no positive direct effect on entrepreneurship on improvement of organizational performances was found. Secondly, the PMS use and the PMS characteristics played a mediating role in the relation between entrepreneurship and organizational performances. Thirdly, we found that multiple mediating effects of the PMS use and the PMS characteristics in the relation between entrepreneurship and organizational performances. [Implications]This study suggests that efforts to manage characteristics such as PMS qualitative characteristics and justice along with PMS diagnostic and interactive use need to be carried out in order for entrepreneur to achieve the goal of maximizing firm value.