Balancing perspectives on performance: “Measurement from the inside” and “measurement from the outside”

Abstract

This article investigates the nature of tensions “on the ground” between the internal and external stakeholders of arts organizations in terms of performance measurement. Based on the qualitative analysis of 19 interviews, the performance measurement practices of two different-sized arts organizations highlight internal and external stakeholders' contrasting perspectives on a number of measurement dimensions. In endeavoring to understand tensions between internal and external stakeholders, the article highlights the main differences which result from seemingly opposed ways of knowing. Internal stakeholders tend more to reflect “phronesis,” based on value-rationality, while external stakeholders are more inclined to technical (“techne”), or analytical (“episteme”) knowledge based on instrumental rationality. Nevertheless, there is some evidence of positive engagement between internal and external stakeholders. The article argues that in order to mitigate tensions, internal and external stakeholders should aim for culturally embedded understanding through evaluation-focused dialogue. In providing both theoretical contributions to nonprofit literature and managerial implications, the article offers an original perspective that challenges existing practice and calls for greater understanding of conflicting interests when different stakeholders are involved in performance measurement.