Design and Use of Performance Measurement Systems Under Uncertainty

Sammanfattning

Seminar date: 2026-06-02 Course: BUSN79 Degree Project in Accounting & Finance, 15 credits Authors: Melker Olsson and Mattias Selde Advisor/Examiner: Anders Anell / Elin Funck Five key words: Uncertainty, Ambiguity, Performance Measurement Systems, Swedish Municipalities, Simons’ Levers of Control Purpose: The purpose of this study is to develop an understanding of how performance measurement systems function as governance tools in Swedish municipalities under conditions of uncertainty and ambiguity, with a focus on how PMSs are designed and used to support control, accountability, learning, and adaptation. Methodology: The study adopts a qualitative multiple case study design based on three Swedish municipalities. Empirical material was collected through semi-structured interviews with strategic, operational, and specialist-level respondents. The material was analyzed thematically, both within and across cases. Theoretical perspectives: Uncertainty, Ambiguity, Performance Measurement Systems, Simons’ LOC Framework, Institutional Theory Empirical foundation: The empirical foundation consists of interviews with municipal respondents. The cases provide insight into how municipalities with differing local conditions and size perceive and manage uncertainty. Conclusions: The study shows that uncertainty in Swedish municipalities is both external and internal, involving changing external conditions as well as ambiguity in goals and priorities. PMSs are designed as hybrid systems that combine indicators, targets, qualitative assessments, and contextual judgment. They are used diagnostically for control, accountability, and follow-up, but also learning, dialogue, and adaptation. The findings also show that institutional pressure influences PMS design and use through comparison, legal requirements, networks, and expectations of legitimacy