Measuring and Managing Performance in Organizations

Chapter Twelve. When Neither Management Method Seems Recommended

In each of the just-discussed scenarios, the model seems to make clear recommendations. Not all situations are so simple. For example:

1. Defense acquisition of a missile guidance system. Suppose the Department of Defense hires a firm to build a missile guidance system. The product is highly complex and of unprecedented technological sophistication. Development activities are neither repetitive nor well-established. Measurement difficulties are therefore likely. Delegation costs are also high because the contract spans organizational boundaries and because the principal is a government bureaucracy. Neither management approach seems likely to work very well.

2. Large software development ...