The role of senior managers’ use of performance measures in the relationship between decentralization and organizational performance

2016 ◽  
Vol 12 (2) ◽  
pp. 129-151 ◽  
Author(s):  
Sirilak Bangchokdee ◽  
Lokman Mia
Keyword(s):  
Decision Making ◽  
Financial Performance ◽  
Organizational Performance ◽  
Performance Measures ◽  
Senior Managers ◽  
Content Type ◽  
General Managers ◽  
Hotel Performance ◽  
Financial Performance Measures ◽  
The Relationship

Purpose This paper aims to examine the role of senior managers’ use of financial and non-financial performance measures in the relationship between decentralization and organizational performance in the hotel industry. Design/methodology/approach Data were collected using a mailed questionnaire. General Managers in charge of medium-to-large hotels in Thailand completed the questionnaire. In total, 131 general managers, one from each hotel, participated in the study. Path analysis technique was used to test the hypotheses. Findings The results indicate that the general managers’ use of financial and non-financial performance measures fully mediates the relationship between the extent of decentralization of decision-making and hotel performance. The results reveal that the decentralization of decision-making alone is not enough to help a hotel improve its performance. Indeed, the relationship between decentralization of decision-making and hotel performance exists only via the general manager’s use of the performance measures. It is contended that a general manager’s use of the performance measures in a hotel encourages department managers to make appropriate decisions to successfully improve their department’s performance which, in turn, leads to increased performance of the hotel. Originality/value This study provides empirical evidence indicating how senior managers in hotels with decentralized decision-making could use performance measures to better manage their hotels, thereby improving the hotel’s performance. An in-depth analysis of the data reveals that the senior manager’s use of the non-financial, and not the financial, performance measures is a mediator of the relationship between decentralization of decision-making and hotel performance.

Do performance measures matter in the relationship between high-performance work system and organizational performance?

2019 ◽  
Vol 41 (3) ◽  
pp. 241-257
Author(s):  
Xiaoxuan Zhai ◽  
Xiaowen Tian
Keyword(s):  
Financial Performance ◽  
Organizational Performance ◽  
Performance Measures ◽  
High Performance ◽  
Country Of Origin ◽  
Content Type ◽  
Work System ◽  
Hrm Practices ◽  
High Performance Work System ◽  
The Relationship

Purpose The purpose of this paper is to develop a resource-based framework to explain the relationship between high-performance work system (HPWS) and organizational performance (OP) and the moderating role of performance measures. Design/methodology/approach The paper takes a meta-analysis approach, and tests hypotheses against data of 47,741 firms and establishments in 192 studies published by June 2016. Findings The paper finds that HPWS has a greater positive effect on operational than financial performance. Moreover, HPWS influences operational performance more strongly in developing than advanced countries and at the firm level than the establishment level, but such variations are not evident in the effect of HPWS on financial performance. Practical implications The paper suggests that managers should treat human resource management (HRM) practices as a system, and develop HPWS for operational gains which in turn lead to financial gains. Managers need to take different approaches to develop HPWS for high performance depending on the country of origin and the level of organization. Originality/value Based on studies of individual HRM practices, previous meta-analytical studies suggested that the HPWS-OP relationship is invariant across performance measures. Taking HRM practices as integral components of HPWS, this paper extends the resource-based theory to demonstrate that performance measures interact with country of origin and level of analysis to moderate the HPWS-OP relationship.

scholarly journals Organisational performance and the use of multiple performance measures in an emerging market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdallah Amhalhal ◽  
John Anchor ◽  
Marina Papalexi ◽  
Shabbir Dastgir
Keyword(s):  
Emerging Markets ◽  
Financial Performance ◽  
Performance Measures ◽  
Emerging Market ◽  
Manufacturing Companies ◽  
Organisational Performance ◽  
Cross Sectional ◽  
Content Type ◽  
Financial Performance Measures ◽  
The Relationship

PurposeThis study is an empirical investigation of the relationship between the use of 41 multiple performance measures (MPMs), including financial performance measures (FPM), non-financial performance measures (NFPMs) and organisational performance (OP) in Libya.Design/methodology/approachThe results are based on cross-sectional questionnaire survey data from 132 Libyan companies (response rate 61%), which were obtained just before the so-called Arab Spring.FindingsMPMs are used by both manufacturing and non-manufacturing companies. Libyan business organisations are more likely to use FPMs than NFPMs. However, these companies still rely more heavily on FPMs. The relationships between the use of NFPMs and OP and the use of MPMs and OP are positive and highly significant. The relationship between the use of FPMs and OP is positive but not significant.Research limitations/implicationsThe high power distance associated with the conservative, Libyan, Arab context will reinforce the tendency to use FPMs more than NFPMs. This may provide a performance advantage to those organisations which do adopt NFPMs.Practical implicationsAlthough there may be institutional barriers to the use of NFPMs in Libya, and other emerging markets, these are not insuperable and there is a payoff to their use.Originality/valueNo previous studies of emerging markets, such as the Middle East or North Africa, have looked at the relationship between OP and the adoption of such a large array of MPMs.

Doing well by doing good: can voluntary CSR reporting enhance financial performance?

2019 ◽  
Vol 11 (2) ◽  
pp. 100-119 ◽  
Author(s):  
Avinandan Mukherjee ◽  
Rosita Nuñez
Keyword(s):  
Financial Performance ◽  
Performance Measures ◽  
Environmental Risk ◽  
Significant Relationship ◽  
Content Type ◽  
Csr Reporting ◽  
Financial Performance Measures ◽  
The Relationship ◽  
Risk Ratios ◽  
Do So

Purpose Management is sometimes challenged by investors to justify the financial benefits of voluntary disclosure and transparency related to corporate social responsibility (CSR). Researchers have found inconsistent results when examining the relationship between CSR reporting and financial performance. The purpose of this paper is to explore the relationship between voluntary CSR reporting and financial performance. Specifically, this paper addresses three questions. First, is there a significant difference in Global Reporting Initiative (GRI) reporting level for firms in a high environmental risk sector compared to those in a low environmental risk sector? Second, does GRI reporting level significantly influence financial performance measures, such as the risk ratios and information ratio? And third, does the relationship between GRI reporting level and financial performance measures differ significantly based on sector environmental risk? These questions are particularly relevant to the Indian business environment, where CSR is not just voluntary but mandated by regulation since 2013. The Indian Government is the first to do so and is ahead of many nations in collaborating with businesses to address not just environmental impacts but also social effects of industry on the community. Design/methodology/approach This study examined the relationship between GRI reporting level and financial performance for 173 firms with different levels of environmental risk. ANOVA and MANOVA were used to examine for differences in GRI reporting level and financial performance for firms from the various sectors and also to determine if there were significant relationships between GRI level and certain financial risk ratios. Findings Results indicate that firms in sectors with high environmental risk adopt GRI framework at a higher level than firms with low environmental risk. There is no significant relationship found between GRI reporting and financial performance at an aggregate level. However, environmental risk is found to moderate the relationship between GRI reporting and financial reporting, such that firms with high risk experience a more significant relationship between the GRI level that is adopted and financial performance. Originality/value CSR is quickly becoming a pathway to sustainable competitive advantage for businesses today. Such CSR efforts can lead to both reputational and financial performance implications. Organizations not only adopt CSR in response to regulatory requirements, but also frequently do so voluntarily to address stakeholder concerns. This study sheds valuable insight on the positive effects of CSR reporting, which provides important implications for Indian organizations.

The effectiveness of flexible manufacturing strategies

2009 ◽  
Vol 58 (2) ◽  
pp. 119-135 ◽  
Author(s):  
Therese A. Joiner ◽  
X. Sarah Yang Spencer ◽  
Suzanne Salmon
Keyword(s):  
Financial Performance ◽  
Performance Measures ◽  
Flexible Manufacturing ◽  
Positive Association ◽  
Manufacturing Firms ◽  
Manufacturing Strategy ◽  
Organisational Performance ◽  
Content Type ◽  
Financial Performance Measures

PurposeAgainst a background of a customization imperative embraced by manufacturing firms in industrialised nations and the concomitant call for more balanced performance measurement systems (PMS), this study seeks to examine the mediating role of both non‐financial and financial performance measures in the relationship between a firm's strategic orientation of flexible manufacturing and organisational performance.Design/methodology/approachA path‐analytical model is adopted using questionnaire data from 84 Australian manufacturing firms.FindingsThe results indicate that, first, firms emphasising a flexible manufacturing strategy utilise non‐financial as well as financial performance measures; second, these performance measures are associated with higher organisational performance; and third, there is a positive association between a firm's strategic emphasis on flexible manufacturing and organisation performance via non‐financial and financial performance measures.Practical implicationsWhile there is agreement on the beneficial role of non‐financial performance measures in supporting strategic priorities associated with customization strategies, equivocal research results have emerged on the role of financial performance measures in this context. The study underscores the importance of both non‐financial and financial performance measures in this context.Originality/valueThe paper reinstates the value of financial performance measures for firms pursuing customization type strategies and adds to one's knowledge of PMSs by exploring the intervening role of such systems in linking flexible manufacturing strategy to organisation performance.

Performance Measure Properties and Delegation

2006 ◽  
Vol 81 (4) ◽  
pp. 897-924 ◽  
Author(s):  
Frank Moers
Keyword(s):  
Decision Making ◽  
Financial Performance ◽  
Performance Measures ◽  
Organizational Design ◽  
Performance Measure ◽  
Decision Making Process ◽  
Nonfinancial Performance ◽  
Incentive Problem ◽  
Financial Performance Measures

In this paper, I extend the organizational design literature by examining how the delegation choice is affected by the ability to resolve the incentive problem caused by this delegation. Based on the seminal papers by Grossman and Hart (1986) and Holmstrom and Milgrom (1994), I argue that the ability to resolve the incentive problem depends on the contractibility of financial performance measures versus nonfinancial performance measures, where the contractibility depends on the performance measure properties sensitivity, precision, and verifiability. The empirical results show that, if financial performance measures are “good” (“poor”) incentive measures, i.e., high (low) on sensitivity, precision, and verifiability, then using these measures for incentive purposes increases (decreases) delegation. Overall, the results are consistent with the argument that firms design their decision-making process around the quality of contractible performance measures.

The impact of a learning organization on performance

2017 ◽  
Vol 41 (2) ◽  
pp. 177-193 ◽  
Author(s):  
Kyoungshin Kim ◽  
Karen E. Watkins ◽  
Zhenqiu (Laura) Lu
Keyword(s):  
Financial Performance ◽  
Organizational Performance ◽  
Human Resource Development ◽  
Human Resource ◽  
Learning Organization ◽  
Resource Development ◽  
Equation Modeling ◽  
Content Type ◽  
The Relationship ◽  
Positive Effect

Purpose The purpose of this study is to examine the relationships among a learning organization, knowledge and financial performance using the Dimensions of the Learning Organization Questionnaire and its abbreviated version. Design/methodology/approach This study used a secondary data set and performed second-order factor analysis and structural equation modeling for testing the proposed relationships. Findings The study found that a learning organization has a positive effect on knowledge performance; knowledge performance has a positive effect on financial performance; and knowledge performance fully mediates the relationship between a learning organization and financial performance. Research limitations/implications This study contributes to validating the current dimensionality of the theoretical framework of a learning organization proposed by Watkins and Marsick (1993, 1996) and offers a valid conceptual framework of the relationship among the learning culture and organizational performance dimensions. Practical implications This study re-stresses the significance of the learning and knowledge generated by the human resources of an organization and developed by human resource development practitioners. Originality/value This study is valuable to human resource development scholars and practitioners interested in improving and measuring organizational performance.

Consequences of intensive use of non-financial performance measures in Danish family farm holdings

2017 ◽  
Vol 14 (2) ◽  
pp. 137-156 ◽  
Author(s):  
Morten Jakobsen
Keyword(s):  
Financial Performance ◽  
Performance Measures ◽  
Family Business ◽  
Family Businesses ◽  
Production Volume ◽  
Business Managers ◽  
Content Type ◽  
Intensive Use ◽  
Economic Reality ◽  
Financial Performance Measures

Purpose The purpose of the paper is to analyse how the intensive use of non-financial performance measures and the lack of an economic reality among Danish farmers have contributed to a low economic performance despite high productivity. The research ambition of the paper is to contribute to a better understanding of the managerial decision-making made by family business managers, in this case farmers, and how these decisions may impact financial performance. Design/methodology/approach The study is based on a case study including farmers, agricultural consultants and bankers. The analysis uses pragmatic constructivism to analyse the economic reality of the farmers included and the business topos among Danish farmers. Findings The main finding of the paper is that the dominating non-financial performance management techniques and a historically based strong emotional emphasis on size and production volume as the main success criteria for being a good farmer have led to a neglect of economic rationality. In addition, this practice has made the farmers blind to alternative possibilities for taking advantage of the resources available. The result has been an un-economic utopian reality. Originality/value The paper shows how the use of non-financial performance measures can lead to prolonging of a certain reality perception that may not be economically sustainable. Small family businesses such as family farms are likely to be more exposed to such risk because such businesses are run by a set of values that include more objectives that are more dominating than the profit objective. The paper concludes that family business managers must be open towards inputs from the society around the business, because family businesses may have a tendency to create their own reality that at some point may come in conflict with society of which the family business has to co-exist within.

The relationship between innovation and total quality management and the innovation effects on organizational performance

2017 ◽  
Vol 34 (9) ◽  
pp. 1474-1492 ◽  
Author(s):  
Marina Godinho Antunes ◽  
Joaquín Texeira Quirós ◽  
Maria do Rosário Fernandes Justino
Keyword(s):  
Quality Management ◽  
Total Quality Management ◽  
Financial Performance ◽  
Organizational Performance ◽  
Product Innovation ◽  
Process Innovation ◽  
Total Quality ◽  
Content Type ◽  
Innovation Strategies ◽  
The Relationship

Purpose The purpose of this paper is to analyze the relationship between innovation and total quality management (TQM), and also to identify the effects of innovation on organizational performance. This research proposes a conceptual model that intends to study several research hypotheses. Design/methodology/approach The data were obtained through an online questionnaire, sent to small- and medium-sized Portuguese companies, having being conducted the study based on responses received from 287 valid questionnaires, and using a multivariate statistical analysis for statistical development. Findings The findings indicate that companies that adopt strategies of process innovation get improvements in their performance, both operationally and financially, while product innovation only provides improvements in the financial performance of organizations. It was also found that TQM practices encourage the definition of innovation strategies of products and processes. On the other hand, it was found that only companies that adopt innovation strategies of their processes promote the adoption of TQM practices, and there is a statistically significant relationship between product innovation and the implementation of TQM practices. Originality/value This research analyzed the dimensions studied in different aspects. It considered product innovation and process innovation, and with respect to performance, this dimension was analyzed through two different perspectives, namely, financial performance and operational performance. This research also provides a particular contribution to the literature with the analysis of the interdependencies between innovation and TQM in small- and medium-sized Portuguese companies.

Analysis of the Relationship between Economic Measures and Salmonella Testing Results in Young Chicken Slaughter Establishments

2012 ◽  
Vol 75 (3) ◽  
pp. 449-455 ◽  
Author(s):  
MARY K. MUTH ◽  
DARRYL V. CREEL ◽  
SHAWN A. KARNS ◽  
JAMES WILKUS
Keyword(s):  
Food Safety ◽  
Financial Performance ◽  
Performance Measures ◽  
Winter Season ◽  
Economic Recession ◽  
Positive Test ◽  
Test Results ◽  
Financial Performance Measures ◽  
Young Chicken ◽  
The Relationship

Food processing establishments incur costs to install, maintain, and operate equipment and implement specific food safety practices. During times of economic recession, establishments might reduce their food safety efforts to conserve resources and reduce costs of operation. This study was conducted to determine whether financial performance measures are systematically associated with Salmonella test results. The association between Salmonella test results from 182 federally inspected young chicken slaughter establishments from 2007 to 2009 and financial performance was examined while controlling for other establishment characteristics. Results indicated that the smallest establishments, which slaughtered fewer than 0.2 million chickens per year, had three times as many positive test results as did the largest establishments, which slaughtered more than 86.0 million chickens per year (P < 0.01). Establishments that slaughtered more than 0.2 million but fewer than 18.5 million chickens had 1.5 times as many positive test results (P = 0.02). Two statistically significant financial performance measures were identified, but the effects were limited. Establishments in bankruptcy had 1.4 times as many positive test results as did those not in bankruptcy (P = 0.02); however, only five establishments were in bankruptcy. Establishments with better payment performance generally had better Salmonella test results, but the effect was significant only in the winter season.

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