Multidimensional performance measures and factors and their linkage with performance

Abstract

PurposeThis study investigates the extent to which performance measures (PMs) are used, the relationship between multidimensional PMs and firm performance and the factors related to firms' PM use.Design/methodology/approachThe authors surveyed a sample of Malaysian manufacturing firms. Participants responded to a questionnaire indicating their use of PMs, firm performance, level of managerial commitment, degree of environmental uncertainty and firm's use of technology.FindingsThe results indicate a high degree of PM use related to financial indicators, internal efficiency and customer-related metrics. The results also demonstrate that firm performance has significant positive relationships with use of PMs related to quality and customers, efficiency, innovativeness and social responsibility, as well as comprehensive PM use. Industry variation, firm size, technology use and environmental uncertainty are also significantly related to PM use.Practical implicationsPerformance measurement systems (PMSs) are an important tool for improving organisational strategy in rapidly changing markets. These findings underscore the significant role of PMSs in manufacturing firms' performance, including emerging economies. The results suggest that individual PMS approaches should align with each firm's evolving needs and the characteristics of the sector and environment in which each firm operates.Originality/valueThis study advances understandings of the contingency approach to PMSs in manufacturing environments.