Performance Management Systems in a Mutual Company - A Case Study of Länsförsäkringar Gotland

Abstract: The thesis explores the performance management system (PMS) in place at the mutual company Länsförsäkringar Gotland (LFG) and how and why the measures, standards and rewards they use to construct this PMS differs when compared to companies acting on the capital market. The data collection was conducted as a qualitative single case-study where seven (7) of LFG's top managers, including the CEO, were interviewed. Through the analysis of the theory, existing research on conventional companies and our case-study on the mutual company LFG, we identified three factors that contributed to the mutual company constructing its PMS differently: The absence of capital market pressure, the customer ownership (stakeholder perspective) and the organizational structure of the company. These factors lead LFG to align themselves more closely with the theoretical framework, namely The Balanced Scorecard (BSC) and the motivation crowding theory. The focus becomes long-term goal congruence and value creation for the customer through non-financial excellence rather than short-term and superficial enhancement in financial performance that could be observed within the conventional companies.