The paper identifies three major factors that prevented Growth Spurt from transitioning its customer profitability analysis (CPA) reporting package through Kaplan and Cooper’s four-stage model of PMS design: executives exerting their power and spending political capital to prevent implementation without providing rationale, executives believing that the allocation methods were too subjective and executives relying on their own intuition in analyzing customer profitability rather than relying on data. Data were collected over a two-year period through interviews with accounting staff, internal company documents and recording observational notes. This is a single-site phenomenological case study, at Growth Spurt Marine Accessories (Growth Spurt), a manufacturing organization headquartered in the USA.

The purpose of this paper is to examine the role of organizational culture as a company migrates through a four-stage model for designing a performance measurement system (PMS) focused on customer profitability.

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