Background: Performance measurement as a management control tool has received considerable academic attention. As the number of inter-organisational relationships, such as customer-supplier relationships, increases, there is a new scope for performance measurement as a management control tool. In order for a company to assess the effectiveness of its supplier relationships it has to define, measure and evaluate variables that are critical for the success of the relationship. The role of management control, and thereby of performance measurement, has increasingly been discussed in theory. However, empirical research in this area is still somewhat limited. Purpose: The purpose of the thesis is to analyse how performance measurement in inter-organisational relationships should be designed in order to be effective. Results: Theory which is applicable on performance measurement as a control tool in general also appears to be applicable on performance measurement as a control tool in inter-organisational relationships. Exactly which requirements performance measurement should meet, in order to be effective, is difficult to establish since they often imply a trade-off between different factors. In order to be effective, performance measurement partly needs to be adjusted to the situation, which adds yet a dimension to, and difficulty of, performance measurement in inter-organisational relationships.

<p>Background: Performance measurement as a management control tool has received considerable academic attention. As the number of inter-organisational relationships, such as customer-supplier relationships, increases, there is a new scope for performance measurement as a management control tool. In order for a company to assess the effectiveness of its supplier relationships it has to define, measure and evaluate variables that are critical for the success of the relationship. The role of management control, and thereby of performance measurement, has increasingly been discussed in theory. However, empirical research in this area is still somewhat limited. </p><p>Purpose: The purpose of the thesis is to analyse how performance measurement in inter-organisational relationships should be designed in order to be effective. </p><p>Results: Theory which is applicable on performance measurement as a control tool in general also appears to be applicable on performance measurement as a control tool in inter-organisational relationships. Exactly which requirements performance measurement should meet, in order to be effective, is difficult to establish since they often imply a trade-off between different factors. In order to be effective, performance measurement partly needs to be adjusted to the situation, which adds yet a dimension to, and difficulty of, performance measurement in inter-organisational relationships.</p>