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An empirical study of performance measurement in manufacturing ﬁrms Maurice Gosselin
´ ´ School of Accountancy, Universite Laval, Quebec City, Canada Abstract
Purpose – The recent performance measurement literature suggests that organizations should put more emphasis on non-ﬁnancial measures in their performance measurement systems, that organizations must use new performance measurement approaches such as the balanced scorecard and that measures should be aligned with contextual factors such as strategy and organizational structure. The purpose of this paper is to assess the extent to which organizations are following these prescriptions. Design/methodology/approach – A survey of a sample of Canadian manufacturing ﬁrms was conducted. In the questionnaire, organizations had to indicate the extent to which they use 73 performance measures. They also had to respond to questions about determinants such as strategy, organizational structure and environmental uncertainty. More than 100 organizations responded to the survey. The response rate was 50.5 percent. Findings – The results show that manufacturing ﬁrms continue to use ﬁnancial performance measures. Despite the recommendations from experts and academics, the proportion of ﬁrms that implement a balanced scorecard or integrated performance measurement systems is low. Furthermore, organizations that use these approaches are not employing more extensively non-ﬁnancial measures than those which are applying traditional performance measurement approaches. This research project also shows that there are some signiﬁcant relationships between the types of measures and contextual factors like strategy, decentralization and environmental uncertainty. This research ﬁnally demonstrates clearly that there is a need to develop a theory that explains how ﬁrms can use their performance measurement system to enhance their performance. Originality/value – This paper provides information on performance measures used by organizations and their association with organizational determinants. Keywords Performance measures, Performance management, Balanced scorecard Paper type Research paper
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1. Introduction Since the beginning of the 1990s, performance measurement has become an important issue for academics and practitioners. The professional literature has suggested that managers should design new performance measurement systems that include ﬁnancial and non-ﬁnancial measures. Kaplan and Norton (1992, 1993, 1996) advocated in favor of the design of balanced scorecards. Dixon et al. (1990) and Nanni et al. (1992) proposed the use of integrated performance measurement systems. All these systems would put more emphasis on non-ﬁnancial measures and would enable organizations to give more weight to customers and internal processes in their performance The author acknowledges the ﬁnancial assistance provided by the FQRSC of the Gouvernement ´ du Quebec.
International Journal of Productivity and Performance Management Vol. 54 No. 5/6, 2005 pp. 419-437 q Emerald Group Publishing Limited 1741-0401 DOI 10.1108/17410400510604566
measurement systems. Overall, this change would help ﬁrms to improve ultimately their performance. These suggestions have been in general well received in the accounting community according to the large number of books, seminars and professional articles on performance measurement. However, there is not much information on the extent to which ﬁrms actually use these performance measurement “innovations”. A few studies have been conducted recently and have revealed that organizations are implementing to some extent performance measurement innovations such as the balanced scorecard (Ax and...
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