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Managing
A measurement system for performance of
managing performance of clusters
industrial clusters
405
A conceptual model and research cases
Received August 2007
Luiz Cesar Ribeiro Carpinetti, EdwinVladimir Cardoza Galdámez Revised March 2008
and Mateus Cecilio Gerolamo Accepted March 2008
Department of Production Engineering, School of Engineering of Sao Carlos,
University of São Paulo, São Paulo, Brazil
Abstract
Purpose – The purpose of this article is to present and discuss a conceptual model for performance
measurement and management of a cluster based on the concepts of the Balanced Scorecard and other
models.
Design/methodology/approach – This paper was based on a case research as the field research
methodology for theory testing and refinement.
Findings – The proposed model adequately captures the perspectives of performance management
of a cluster, emphasizing the importance of measuring leading and lagging dimensions of performance
such as collective efficiency and economic/social results.
Research limitations/implications – Research is still at an early stage and applications of the
model need to be carry on further so as to review and validate it.
Practical limitations – Absence of a culture of decision making based on analysis of information
and lack of resources may create some difficulty in using metrics for a cluster of SMEs.
Originality/value – The paper proposes applying the concepts and techniques of business
performance management and measurement to manage performance of clusters of companies, offering
a new approach on how to improve the collective efficiency of a cluster.
Keywords Performance measures, Performance management, Supply chain management,
Statistical analysis, Small to medium-sized enterprises
Paper type Research paper

Introduction
Growing recognition of the fundamental importance of management systems has led,
in recent decades, to considerable attention regarding design, implementation, and use
of measurement systems (Radnor and Barnes, 2006; Neely, 1999; Kaplan and Norton,
1996). These provide needed information for decision makers who are then able to
carry out regulatory actions upon the core system being managed. The purpose is to
drive performance over time towards desired goals. Various performance
measurement paradigms have been proposed over the last decades. Among the
most widely recognized are the Balanced Scorecard (Kaplan and Norton, 1996) and the International Journal of Productivity
Performance Prism (Neely and Adams, 2000). Performance measurement has also been and Performance Management
Vol. 57 No. 5, 2008
pp. 405-419
q Emerald Group Publishing Limited
The authors would like to thank FAPESP (Sao Paulo State Research Foundation) and CNPq 1741-0401
(National Council for Science and Technology Development) for supporting this research project. DOI 10.1108/17410400810881854
IJPPM seen as an important issue for managing performance of SMEs, despite some
57,5 limitations and a gap between theory and practices, (Hudson et al., 2001).
Parallel to the evolving theory and practice on improvement and performance
management, clustering has also been receiving growing attention as a means to boost
growth and competitiveness of enterprises, especially SMEs (Krugman, 1991; Schmitz,
1995; Porter, 2000; Humphrey and Schmitz, 1998). Clusters are geographic
406 concentrations of interconnected companies, specialized suppliers, service providers,
firms in related industries, and associated institutions (e.g. universities, standard
agencies, trade associations) in a particular field that compete but also cooperate
(Porter, 2000). Schmitz and Nadvi (1999) point out that the agglomeration of enterprises
engaged in similar or related activities brings advantages such as a pool of specialized
workers, easy access to suppliers of specialized inputs and services and the quick
dissemination of new knowledge. Such advantages, called localized external
economies, can contribute to the reduction of costs for clustered enterprises. The
authors also ascertain that external economies alone are not sufficient to explain
cluster development and that in addition to incidental external economies, there is often
a deliberate joint action. They then propose the concept of collective efficiency defined
as the competitive advantage derived from external economies and joint actions.
In this context, the concepts and techniques of performance management and
measurement can be of great value in managing collective efficiency and performance
improvement of the companies of the cluster. Therefore, the main objective of this
paper is to present and discuss a conceptual model for measuring and managing the
performance of a cluster. The following sections first present a brief review of the
performance measurement theory and practice, as well as clustering of SMEs. Next, the
proposed conceptual model is presented and discussed. Two research cases are
presented, for which the model is applied to deploy metrics and manage performance.
Last, the paper discusses partial results and additional expected outcomes.

Performance measurement
One of the most widely recognized performance measurement frameworks is the
Balanced Scorecard (Kaplan and Norton, 1996), which proposes four interconnected
perspectives of performance measurement in which measures of internal business
process performance and learning and growth are derived from shareholders’ and
customers’ views of performance. It is fundamentally based on recommendations such
as deriving measures from strategic positioning and planning, and balancing financial
and non-financial measures derived from different perspectives of measurement and
interconnected by a causal relationship among results and determinants.
The Performance Prism proposed by Neely and Adams (2000) is also based on
interconnected perspectives of measurement, illustrated by the facets of a prism.
However, it emphasizes that the PM should be derived not only from customers’ and
shareholders’ perspectives but also from other stakeholders such as employees,
suppliers, regulators and communities. Identifying stakeholders’ requirements leads to
strategic direction, which in turn leads to development of solutions that satisfy
stakeholders. Delivering satisfaction depends upon capabilities, which in turn depend
on stakeholders’ contributions.
Other contributions to performance measurement system design include the
dynamic performance measurement system proposed by Bititci et al. (2000), the
SMART performance pyramid (Lynch and Cross, 1991) and the performance Managing
measurement questionnaire proposed by Dixon et al. (1990), which audits existing performance of
measures based on their effect on improvement and the importance of improvement on
different areas and factors. Souza et al. (2005) propose a conceptual design of clusters
performance measurement and management system using a structured engineering
approach. Again, they are based on the idea of aligning measures with improvement
priorities. Maskell (1989) and Brown (1996) also present recommendations for 407
performance measurement systems and metrics such as: derived from strategic
objectives and key performance factors; focused on the vital few; leading and lagging
metrics related to financial and non-financial dimensions of performance; clearly
defined metrics; and stimulating action and improvement.
Most of the literature on performance measurement system design treats the subject
regardless of the size of the business. Few are the publications focusing specifically on
performance measurement in small and medium size enterprises (SMEs). Hudson et al.
(2001) present a study based on a survey and case study in which performance
measurement practices in SMEs are evaluated against a typology developed by the
authors that comprise recommendations on development process requirements,
performance measurement characteristics and dimensions of performance. In this
paper, results from gap analysis in some English surveyed firms indicated that several
of the characteristics listed in the typology were not present in the performance
measurement systems of the firms such as: metrics derived from strategy; with a
clearly defined, explicit purpose; which provide fast, accurate feedback; which link
operations to strategic goals; and stimulate continuous improvement. In a similar
study, Sousa et al. (2006) also conclude that there is a gap between theory and practice
in English SMEs. Following basically the same assumptions, Wu (2006) proposes a
framework for performance measurement in SMEs.
Analyzing the results of a implementation process, Hudson et al. (2001) suggest that
it may be required that the implementation process of a measurement system in SMEs
be more resource effective, dynamic and flexible so as to make it compatible with
resource limitations and the informal, emergent, strategy definition process of SMEs.
In this context, choosing to use only a few vital metrics is a particularly wise
recommendation (Brown, 1996).
Despite all the constraints and pitfalls, it seems common sense that implementing
and maintaining a measurement system helps focusing on key performance factors
and stimulate decision-making based on information analysis which benefits
performance management of any business including SMEs. It is also plausible that
a performance measurement system with metrics focusing on the key performance
factors of an industrial cluster can help to manage performance so as to strengthen the
competitive position of a cluster as a whole.
The main concepts of industrial clustering are briefly reviewed in the next section in
order to present a theoretical background and to support the model proposed by this
paper.

Industrial clustering
Although the term cluster is indiscriminately used for quite a wide range of business
arrangements, in its broad sense it refers to a geographical concentration of certain
economic activities. However, what makes clusters potentially beneficial to the
IJPPM competitiveness of small firms are the opportunities for collective efficiency, derived
57,5 from external economies and joint actions (Schmitz and Nadvi, 1999). The concept of
external economies, used by Krugman (1991) to explain why agglomeration can bring
the benefit of efficiency and competitiveness, was first developed by Marshall
(Schmitz, 1999), in his nearly centenary book Principles of Economics. He noted that the
agglomeration of firms working in similar or related activities generates advantages
408 such as a pool of suppliers of raw material, equipment and specialized services, a pool
of specialized workers and the dissemination of new knowledge.
Adding to the theory on industrial clustering, Schmitz and Nadvi (1999) argue that
the results of external economies are not a sufficient explanation for the growth of
companies in a cluster. While it is true that the concept of external economies remain
valid to explain the growth of clustering today, Schmitz (1999) and Schmitz and
Nadvi(1999) propose that deliberate cooperation in joint actions is an essential second
component to explain the benefits of clustering. They then define the concept of
collective efficiency as the competitive advantage derived from the combination of
local external economies and cooperative joint actions (Schmitz and Nadvi, 1999). They
also differentiate the concept of passive and active collective efficiency, to express the
fact that some benefits require joint action to occur while others come from external
economies. Such active collective efficiency can be derived from horizontal cooperation
(between competitors) or vertical cooperation (for instance between producer and
supplier) either bilateral or multilateral (for instance groups of firms joining forces in
business association or producer consortia). Examples of active collective efficiency
include: organization of trade fairs, development of suppliers, human resources or other
resources required for production; and the development of actions aiming at mitigating
social or environmental problems.
Considering this theoretical frame, a more appropriate definition of cluster should
take into account external effects and interaction. Porter (2000) presents a definition of
cluster as a geographic concentration of interconnected companies, specialized
suppliers, service providers, firms in related industries, and associated institutions (e.g.
universities, standard agencies, trade associations) in a particular field that compete
but also cooperate. Altenburg and Meyer-Stamer (1999) list some characteristics that,
besides external economies and joint actions, are said to be present in most definitions
of cluster, which basically comprise the following points:
.
forward and backward linkages between firms inside the cluster;
.
information exchange between firms and institutions;
.
the existence of diversified institutional infrastructure supporting the activities
of the cluster; and
.
a social and cultural identity made up of common values.

The adoption of the concepts and practices of performance management and


measurement to carry out joint actions among companies of a cluster can aid to
consolidate cooperation, linkages and information exchange among companies as well
as develop a culture of continuous innovation, thus contributing to the development of
the collective efficiency of the cluster. Therefore, this gives rise to the need of managing
the collective efficiency of a cluster focusing on the concepts and practice of
performance management, as discussed in the next section.
Measuring and managing the collective efficiency of a cluster Managing
Measuring performance of a cluster, in theory, is similar to measuring performance of performance of
an enterprise, in which metrics are focused on key performance areas derived from
objectives of performance and stakeholders’ needs and expectations, establishing a clusters
causal relationship among results and determinants. In the case of a cluster, apart from
the usual stakeholders (customers, shareholders, suppliers and employees) a very
important category of stakeholder is the institution (or institutions) governing the 409
cluster. For this stakeholder, expectations are related to growth and competitiveness of
the cluster as a whole, and he or she has a very important contribution to make: to
promote cooperation among the other stakeholders, especially among the
entrepreneurs (whether competitors or not) of the cluster. Therefore, it can be
envisaged that a conceptual performance measurement system model for a cluster
based on the concept of balanced perspectives of performance proposed by Kaplan and
Norton (1996) should take into account measures of performance related to the concept
of collective efficiency and its drivers. Considering that, the conceptual framework
proposed here is based on four perspectives of performance, as follows (Figure 1):
(1) Economic and social results. Measures related to local gross product, workforce
occupation and any result that brings economic and social benefits;
(2) Firms’ performance. Measures related to the results in terms of growth and
competitiveness of the firms and measured by financial and non-financial
performance of the firms in the cluster;
(3) Collective efficiency. Measures related to external economies and actions of
cooperation among companies in the cluster; and
(4) Social capital. Measures related to cultural values such as trust and cooperation.

The adoption of this model can help the institutions governing the cluster to develop
leading indicators focused on the factors of firms’ performance, social capital and
collective efficiency that can bring about economic and social growth, measured by
lagging indicators related to the perspective of economic and social results. Adoption
of this model should be part of a process in which indicators are developed to monitor
performance on objectives related to some key performance areas and stakeholders’
needs. Evaluating the results of implementation of improvement actions by means of
performance indicators gives feedback information upon which managers are able to

Figure 1.
Conceptual model of a
performance measurement
system of a cluster
IJPPM act, closing a positive control loop (Souza et al., 2005). The model presented in Figure 1
57,5 was applied in two clusters as described in the next section.

Case research
In Brazil, there has been a growing interest in studying and supporting industrial
410 clustering, especially of small firms, mainly motivated by several successful cases
reported in the specialized literature as well as in the press (e.g. Schmitz, 1999;
Altenburg and Meyer-Stamer, 1999). Puga (2003), using a methodology based on
location quotient (relative significance of employment in a particular industrial sector
in a region compared to its significance in Brazil, greater than five) and the location
Gini coefficient (equal or greater than 0.5), could identify 193 agglomerations in Brazil,
made up of nearly 77, 000 companies responsible for over 680,00 jobs and exports of
over 3,700 million US dollars. Of these, 42 clusters are in the State of Sao Paulo, mainly
in the sectors of footwear, textile, furniture and ceramics.
Realizing the importance of industrial clusters for economic and social development,
the Federation of Industries of the State of Sao Paulo (FIESP) and the “SEBRAE” (a
government agency for supporting small enterprises) have launched a project to
promote cooperation among companies in several industrial clusters in Sao Paulo
State.
In order to test and analyze the applicability of the performance measurement
system model proposed in Figure 1, pilot applications were carried out in two
industrial clusters of SMEs, in Sao Paulo State, which were going through a project
funded by government agencies to improve productivity and results. Case research
was the general research methodology adopted for field research (Voss et al., 2002).
Before conducting the applications, the clusters were studied so as to explore and
better understand the process of performance management in a cluster and to refine the
theoretical background for performance measurement. For this first part of the field
research, case study was adopted as the case research procedure. Two cases were
selected, as described bellow. Criteria for choosing the clusters were: the involvement
of a governing body that promotes joint actions among the companies of the cluster.
Participation in the project promoted by FIESP/SEBRAE was used as an indicator of
such an involvement.
The first cluster under study includes 586 SMEs firms whose activities are
classified, according to the Brazilian National Classification of Economic Activities, as
production of textiles, specifically bed linen (code 17.61-2). It is located in Ibitinga, a
city in the State of Sao Paulo with a population of around 50,000 people. Most of the
companies were established in the 1980s and nineties but agglomeration started in the
early 1960s. Over the years, agglomeration has led to the development of some
advantages (external economies) such as: specialized labor force; suppliers of materials
and specialized services; as well as a local infrastructure for retailing.
Interviews were carried out during 2006 with the chair of the local association of
entrepreneurs and other important stakeholders. The local association of
entrepreneurs, perceiving that the benefits of agglomeration could be increased by
means of cooperation, have decided to participate in the project supported by
FIESP/SEBRAE. The project started in March 2004, with the following main
stakeholders (see Figure 2):
Managing
performance of
clusters

411

Figure 2.
Stakeholders and
organization for project
coordination, first case

.
the companies of the cluster participating in the project (19 companies when the
project started, number which increased to 35 companies at the time this study
was carried out);
.
the “SINDICOBI”, the local association of entrepreneurs, which congregates 88
companies, provides the local infrastructure for developing the activities of the
project and manages the cluster jointly with the local representatives of FIESP
and SEBRAE.
.
the “FIESP”, and the “SEBRAE”, which coordinate the development of the
project and provide financial resources to support the initiative;
.
the “SENAI” – National Service for Training Industry Labor Force, which
provides technical courses to prepare the local labor force;
.
the local government, which provides infrastructure;
.
the university researchers, who study the development of the project as well as
provide some guidance regarding the methodology adopted; and
.
local consultants, such as accountants and IT professionals, who benefit from
service demands.

Figure 2 shows the stakeholders and the organizational structure involved in


coordinating the project in this cluster. The 35 companies participating in the project
are classified as small enterprises. At the time of the project they had 1,354 employees
(which amounts to an average of 38,7 employees per company). As one of the main
IJPPM stakeholders of the project, the companies had a very important role, which was to help
57,5 define the objectives and actions and commit themselves to contributing to the project,
not only by implementing or helping to implement the actions defined by the project
team but also by promoting the culture of cooperation among them.
The main objectives defined for the project were to increase productivity and
market share and to reduce costs. Another important objective was to change the
412 reputation for “poor quality” related to the products of the cluster. Interaction between
the research team and the institutions governing the cluster started in January of 2005.
Following the definition of objectives, some improvement actions were defined,
planned and implemented. The main actions carried out by the governing institutions
aiming at improving cooperation were:
.
hiring consultancy services on finance, operations management, marketing and
design;
.
registering a trade mark of the cluster;
.
establishing a cooperation program with a public technical school to offer
technical courses focused on the needs of the cluster;
.
equipping the association with a workshop for training the labor force;
.
collective purchasing of raw material; and
.
organizing trade shows.

Analysis of the process of carrying on this project for performance improvement in this
cluster reveals that there were indeed key stakeholders (such as the firms and institutional
bodies) involved with defining objectives of performance based on their needs and
expectations and deploying actions to achieve their objectives. However, it could be seen
that despite their contribution to support the activities of the cluster and the effort to
implement the actions, evaluation of results did not rely on objective measures.
In the interviews with the people in charge of managing the project and with the
governing institutions of the cluster it was consensus that performance measurement
was an essential step in order to evaluate the benefits of the actions. Therefore, the
research team proposed to provide some guidance in the process of implementing a
performance measurement system. The program started in December 2005 with the
organization of a workshop to present some characteristics that performance
measurement should have and to gain commitment from participants. During the
workshops, which involved 23 companies, some metrics were defined based on the
objectives of the project. Considering that performance measurement was something
unknown by the companies in the cluster, it was decided that only a few metrics would
be adopted. Also, the metrics chosen were some how influenced by the degree of
difficulty in collecting data. That is, the metrics chosen are the ones whose data have
already been collected and thus are easily calculated. For this pilot application, one of
the researchers, hired by FIESP, helped the project team and the companies’ employees
to collect and display the metrics. Table I presents the metrics and associated
objectives and perspectives.
Also, for each metric, the following points were defined (as presented in Table II):
.
formula of calculus, units of measure and form of display;
.
frequency of measurement;
.
target for the metric; and Managing
.
responsibility for collecting data and calculating metrics. performance of
For this pilot application, data collection started in January 2006. However, data had clusters
been retrieved since March 2004, the date the project started. Following this pilot
application, the companies involved in it and the governing institutions realized the
usefulness of having metrics to analyze results of actions and support decisions for 413
further actions. For instance, by using metrics they were able to compare performance
among the companies in a very objective way, which led to a further action: the
development and pilot application of a benchmarking database as described in another
paper.
The second case under study is a cluster of women’s footwear manufacturers that
includes 250 SMEs firms whose activities are classified, according to the Brazilian
National Classification of Economic Activities, as manufacturing of leather shoes (code
19.31-3). It is located in the State of Sao Paulo, in a city with a population of around
90,000 people. The companies in the cluster employ around 8000 people and produce
100,000 pairs of shoes a day, which correspond to 2 percent of the demand for women’s
shoes in Brazil. The governance of the cluster is led by the local association of shoe
makers (“Sindicalçados”) in cooperation with “SEBRAE” (the government agency for
supporting small enterprises). Since April 2005 they coordinate the development of a
cooperation project very similar to the one presented in the first case, involving 50
small companies of the cluster.
Apart from “Sindicalçados” and “SEBRAE”, two other educational institutions got
involved in this project: “SENAI” (National Service for Training Industry Labor Force,
which provides technical courses to prepare the local labor force and “Fatec” (a state
faculty of technology). The main objectives of this project are to increase productivity
and income by increasing sales volume and market value. The main cooperating
actions carried out by the governing institutions were:
.
training the workforce, especially managers and shop floor workers;
.
hiring consultancy services on product development, marketing, production
management and financing;
.
collecting industrial residue;

Perspective Objective Metric definition

Company’s performance Market increase Average unit sale price


Improve productivity Value added per employee
Reduce costs Total cost
Increase profit Profit
Social/economic results Improve employment opportunities Total labor force
Improve availability of specialized Total number of trained people
labor force Table I.
Collective efficiency Reduce costs, improve cooperation Total amount of Collective Metrics and associated
acquisition of raw material objectives and
Social capital Increase number of participants Percentage of companies involved perspectives of
with cooperation performance, first case
57,5

414

first case
IJPPM

Table II.
Details of the metrics,
Metric definition Formulaa Unity Frequency Target Responsible stakeholder

Average unit sale price Growth income over number of sold $/unit Semester 10 percent Companies and local
units increase coordinator
Value added per employee Growth income minus total costs, $/employee Semester 15 percent
administrative expenses, taxes and increase
investments over production employees
Total cost Total cost over growth income % Semester 3 percent
reduction
Profit Net profit over growth income % Semester 8 percent
increase
Total labor force Number of people hired Person Semester 7 percent
increase
Total number of trained people Number of trained persons Person Year 300 people
trained
Total amount of collective acquisition of Acquisitions of raw material Ton Quarterly 30 ton
raw material
Percentage of companies involved with Number of SMEs engaged in % Year 50 percent
cooperation cooperation over total SMEs increase
participating in the project
Note: aPer company and average
.
providing social assistant to the workers and their families; and Managing
.
organizing visits to national and international trade shows. performance of
Analysis of this case also reveals that there were key stakeholders, the firms and clusters
institutional bodies, involved with defining performance objectives based on their
needs and expectations and deploying actions to achieve their objectives. Again, it was
consensus that measuring the results of their actions was the missing part in the 415
improvement management process. The governance bodies of the cluster also realized
the importance of having metrics to follow up performance. Also in this case, the
research team proposed to provide some guidance in the process of implementing a
performance measurement system. The program started in August 2006 with a
workshop in which performance measurement characteristics were presented to the
entrepreneurs and governing institutions. After that, there were eight meetings from
August to December 2006, with the participation of the governance institutions,
entrepreneurs and researchers to define perspectives of performance, metrics, formula
of calculus, targets and responsibility for collecting data. Table III presents the metrics
and associated objectives and perspectives. In this case, environmental impact was
included as a fifth perspective of performance.
For each metric, as in the first case, it was defined, as presented in Table IV: formula
of calculus, units of measure and form of display; frequency of measurement;
responsibility for collecting data and calculating metrics; target for the metric and
deadline for meeting the targets. Data collection for this case started in February 2007.
For this, a web based database was used to store the metrics so as to make it available
for the project coordinators (“Sindicalçados” and “SEBRAE” as well as for
benchmarking among the companies in the cluster.

Final discussion
Despite the fact that this research work is still in an early stage of development, some
conclusions can already be made. The cases have shown the applicability of the basic
continuous improvement cycle for managing actions for improving performance of a
cluster: defining objectives of performance, deploying actions and evaluating results so
as to give feedback to further actions. They have also shown the importance of an

Perspective Objective Metric definition

Company’s performance Increase market value Average unit sale price


Improve labor productivity Labor productivity
Increase sales Shoes sold
Social/economic results Improve employment opportunities Total labor force
Improve availability of specialized Total number of trained people
labor force
Collective efficiency Reduce costs, improve cooperation Total amount of collective
acquisition Table III.
Social capital Increase number of participants Percentage of companies involved Metrics and associated
with cooperation objectives and
Environmental impact Increase collection of industrial Collection of industrial residue perspectives of
residue performance, second case
57,5

416
IJPPM

Table IV.

second case
Details of the metrics,
Responsible
Metric definition Formula (per company and average) Unity Frequency Target stakeholder

Average unit sale price Growth income over number of sold units in the period $/unit Month 10% Companies and
local coordinator
Labor productivity Units in the period over in the period Unit/employee Month 15%
Shoes sold Sold units in a period Unit Month 15%
Total labor force Number of people hired in the period People Semester 5%
Total number of trained people Number of people trained in the period People Year 300
Total amount of collective Acquisitions of raw material in the period R$/unit of Month 10%
acquisition material
Percentage of companies Number of SMEs engaged in cooperation over total SMEs % Year 75%
involved with cooperation participating in the project in the period
Amount of industrial residue Amount industrial residue collected in the period Ton Month 250
collected
institutional infrastructure to support and promote cooperation and development of Managing
actions to improve the collective efficiency of the cluster. However, the key performance of
stakeholders should be actively involved, which in turn depends on the existence of
social capital (understood as “the stock of active connections among people” (Cohen clusters
and Prusak, 2001, p. 4), i.e. the existence of trust, mutual understanding and shared
values and behaviors that bind the members of human networks and communities and
make co-operative action among the stakeholders possible. The pilot implementations 417
of the metrics have also proven the adequacy of closing the improvement management
loop by reviewing performance by means of measurement. Based of these case studies,
a conceptual model as depicted in Figure 3 is thought to adequately capture the process
of planning, implementing and monitoring actions for improving collective efficiency
of a cluster.
Regarding the conceptual model proposed in Figure 1, it could be seen it helps to
draw attention to relevant perspectives of performance management of the companies
as well as the cluster itself, emphasizing the importance of measuring leading and
lagging dimensions of performance such as collective efficiency and economic/social
results. In both cases there metrics related to performance of the companies, such as
value added per employee and total cost, helping them to manage their performance,
and also metrics related to the performance of the cluster as a whole, such as total labor
force hired and collective acquisition, metrics of importance to the governance agents
of the cluster to evaluate performance on social/economic development and
cooperation. Also, additional perspectives of performance can be considered

Figure 3.
Deployment and
monitoring of
improvement actions
IJPPM depending on the application, such as the perspective related to environmental
57,5 sustainability used in the second case.
Limitations in the implementation of the measurement system similar to those
described by Hudson et al. (2001) could be seen in both applications: difficulty in
deploying metrics from key performance factors; tendency to measure cost and
financial results; absence of a culture of decision-making based on analysis of
418 information and finally a lack of resources. Despite that, in these pilot applications, the
managers and entrepreneurs have started to realize the importance of deploying
actions by analyzing objectives and different perspectives of performance and using
metrics in order to access performance and review improvement actions.
Therefore, even considering that there is a lack of maturity for performance
measurement and management to be overcome, participation in this project, both as an
observer and also by implementing the metrics and having the opportunity to
exchange experiences with the entrepreneurs, could lead to the conclusion that the
concepts shown in Figures 1 and 3 form a basic framework upon which performance of
a cluster can be managed.

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Further reading
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in Proceedings of the Performance Measurement Conference, Cambridge, 19-21 July.

Corresponding author
Luiz Cesar Ribeiro Carpinetti can be contacted at: carpinet@sc.usp.br

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