Posted: 2 Aug 2010 Last revised: 31 May 2011
Date Written: May 28, 2011
We examine the relationship between quality-based manufacturing strategy and the use of different types of performance measures, as well as their separate and joint effects on performance. A key part of our investigation is the distinction between financial and both objective and subjective nonfinancial measures. Our results support the view that performance measurement diversity benefits performance as we find that, regardless of strategy, firms with more extensive performance measurement systems, especially those that include objective and subjective nonfinancial measures, have higher performance. But our findings also partly support the view that the strategy-measurement fit affects performance. We find that firms that emphasize quality in manufacturing use more of both objective and subjective nonfinancial measures. However, there is only a positive effect on performance from pairing a quality-based manufacturing strategy with extensive use of subjective measures, but not with objective nonfinancial measures.
Keywords: performance measurement, nonfinancial performance, subjectivity, manufacturing strategy
Suggested Citation: Suggested Citation
Van der Stede, Wim A. and Chow, Chee W. and Lin, Thomas W., Strategy, Choice of Performance Measures, and Performance (May 28, 2011). Behavioral Research in Accounting, Vol. 18, pp. 185-205, 2006. Available at SSRN: https://ssrn.com/abstract=891888