Lean Manufacturing, Non-Financial Performance Measures, and Financial Performance
Utah State University - School of Accountancy
William F. Wempe
Texas Christian University - M.J. Neeley School of Business
December 19, 2008
International Journal of Operations and Production Management, Forthcoming
In the last 30 years, many U.S. firms have adopted lean manufacturing strategies. Despite evidence of variation in firms' success with lean strategies, few studies have examined firms' management accounting systems (MAS) as a potential source of the variation. This study uses structural equation modeling to examine whether one MAS component - the use of non-financial manufacturing performance (NFMP) measures - mediates the relationship between lean manufacturing and financial performance. Consistent with the view that firms' MAS must fit their operational strategies, the results indicate that lean strategies' financial performance effects are indeed mediated through the utilization of NFMP measures. The study also reports confirming results from regression-based tests examining the mediating role of the use of NFMP measures in the lean manufacturing/financial performance relationship.
Number of Pages in PDF File: 51
Keywords: accounting/operations interface, lean manufacturing, financial performance, structural equation modeling
JEL Classification: M40Accepted Paper Series
Date posted: December 22, 2008
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