Integrated Performance Measurement System Strategy and Firm Success: An Empirical Investigation of Thai-Listed Firms
Keywords:
Integrated Performance Measurement System Strategy, Organizational Competitiveness, Firm SuccessAbstract
The key issue in this research is “How does integrated performance measurement system strategy (IPMSS) affect firm success?” The key research objective was to investigate the effects of integrated performance measurement system strategy on firm success. IPMSS has been recognized as the firm’s key capability to measure and track overall performance, input outcomes to control operational process, and compare the performance of other competitors in the same industry, departments, teams, and individuals within the firm. Likewise, it directly influences organizational competitiveness and firm success. IPMSS consists of five dimensions: market value-based appraisal orientation, accounting-oriented measurement capability, indicator-based assessment focus, value-added evaluation emphasis, and revenue-oriented criterion implementation. The data was collected from a survey of 153 Thai-listed firms of which the accounting executive is the key informant of each firm. The results of regression analysis indicated that integrated performance measurement system strategy regarding market value-based appraisal orientation, indicator-based assessment focus, and revenue-oriented criterion implementation positively influence organizational competitiveness. In addition, organizational competitiveness has a strong and positive effect on firm success. Finally, theoretical and managerial contributions, conclusion, and suggestions for future research are discussed.
References
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Álvarez, I., Marin, R., & Fonfría, A. (2009). The role of networking in the competitiveness of firms. Technological
Forecasting & Social Change, 76, 410-421.
Ambler, T., Kokkinaki, F., & Puntoni, S. (2004). Assessing marketing performance: Reasons for metrics selection.
Journal of Marketing Management, 20(3/4), 475-498.
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Aracıoğlu, B., Zalluhoğlu, A. E., & Candemir, C. (2013). Measuring and evaluating performance within the
strategic management perspective: a study on performance measurement of Seafood Company.
Procedia -Social and Behavioral Sciences, 99, 1026–1034.
Armstrong, J. S., & Overton, T. S. (1977). Estimating non-response bias in mail surveys. Journal of Marketing
Research, 14(3), 396-402.
Berry, A. J., Broadbent, J., & Otley, D. (2005). Management control: Theories, issues and performance.
New York: Palgrave Macmillan.
Bharadwaj, A. S., & Menon, A. (2000). Making innovation happen in organizations: Individual creativity
mechanisms, organizational creativity mechanisms of both?. Journal of Product Innovation
Management, 17(6), 424-434.
Bhatti, M. I., Awan, H. M., & Razaq, Z. (2014). The key performance indicators (KPIs) and their impact on
overall organizational performance. Quality and Quantity, 48(6), 3127-3143.
Bisbe, J., & Malaguen ̂o, R. (2012). Using strategic performance measurement systems for strategy formulation:
Does it work in dynamic environments?. Management Accounting Research, 23, 296–311.
Bititci, U., Garengo, P., Dörfler, V., & Mendibil, K. (2009). Performance measurement: Questions for tomorrow.
Strathprints Institutional Repository (October), 1-8. https://strathprints.strath.ac.uk/13954/
Bourne, M., Neely, A., Mills, J., & Platts, K. (2003). Implementing performance measurement systems:
A literature review. International Journal of Business Performance Management, 5(1), 1-24.
Burney, L., & Swanson, N. (2010). The relationship between balanced scorecard characteristics and
managers’ job satisfaction. Journal of Managerial Issues, 22(2), 166-81.
Burney, L., & Widener, S. K. (2007). Strategic performance measurement systems, job relevant information and
managerial behavioral responses-role stress and performance. Behavioral Research in Accounting, 19, 43-69.
Chen, M.C., Cheng, S. J., & Hwang, Y. (2005). An empirical investigation of the relationship between
intellectual capital and firm’s market value and financial performance. Journal of Intellectual Capital, 6, 159-176.
Clark, B. H. (2001). A summary of thinking on measuring the value of marketing. Journal of Targeting,
Measurement and Analysis for Marketing, 9(4), 357-369.
Clark, B. H., Abela, A. V., & Ambler, T. (2006). An information processing model of marketing performance
measurement. Journal of Marketing Theory and Practice, 14(3), 191-208.
De Toni, A., & Tonchia, S. (2001). Performance measurement systems-models, characteristics and measures.
International Journal of Operations & Production Management, 21(1/2), 46–71.
Flak, L. S., & Dertz, W. (2004). Stakeholder theory and balanced scorecard to improve is strategy
development in public sector. Agder University College, Norway.
Gimbert, X., Bisbe, J., & Mendoza, X. (2010). The role of performance measurement systems in strategy
formulation processes. Long Range Planning, 43, 477-497.
Gladen, W. (2011). Performance Measurement: Controlling Mit kennzahlen. Auflage: Wiesbaden.
Gomes, C. F., Yasin, M. M., & Lisboa, J. V. (2004). A literature review of manufacturing performance measures
and measurement in an organizational context: A framework and direction for future research.
Journal of Manufacturing Technology Management, 15(6), 511-530.
Gosselin, M. (2005). An empirical study of performance measurement in manufacturing organizations.
International Journal of Productivity and Performance Management, 54(5/6), 419–437.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate Data Analysis (6th ed.). New
Jersey: Pearson Education International.
Heckl, D., & Moormann, J. (2010). Process performance management, In Handbook on Business Process
Management, 2, 115–135.
Ittner, C. D., Larcker, D. F., & Randall, T. (2003). Performance implications of strategic performance
measurement in financial service firms. Accounting, Organizations and Society, 28(7–8), 715-741.
Johnson, H. T., & Kaplan, R. S. (1987). Relevance lost: the rise and fall of management accounting. Boston,
Harvard Business School Press.
Kaplan, R. S., & Norton, D. P. (1992). Balanced scorecard - measures that drive performance. Harvard
Business Review, 70(1), 71-79.
Kaplan, R. S., & Norton, D. P. (1996). Using the balanced scorecard as a strategic management system.
Harvard Business School Press, 74(1), 75-85.
Kasie, F. M., & Belay, A. M. (2013). The impact of multi-criteria performance measurement on business
performance improvement. Journal of Industrial Engineering and Management, 6(2), 595-625.
Khan, K., & Shah, A. (2011). Understanding performance measurement through the literature. African Journal
of Business Management, 5(35), 13410-13418.
Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research activities. Educational and
Psychological Measurement, 30, 607-610.
Kumar, A., & Shafabi. (2011). Strategic cost management-suggested framework for 21st Century. Journal of
Business and Retail Management Research, 5(2), 118-130.
Kurien, G. P., & Qureshi, M. N. (2011). Study of performance measurement practices in supply chain
management. International Journal of Business, Management and Social Sciences, 2(4), 19-34.
Lamberti, L., & Noci, G. (2010). Marketing strategy and marketing performance measurement system:
Exploring the relationship. European Management Journal, 28, 139-152.
Lee, C. L., & Yang, H. J. (2011). Organization structure, competition and performance measurement systems
and their joint effects on performance. Management Accounting Research, 22, 84–104.
Levius, S. (2016). Information and communication technology strategies to improve international competitiveness
in a Barbados organization. Walden University, ProQuest Dissertations Publishing, 1-140.
Marc, M., Peljhan, D., Ponikvar, N., Sobota, A., & Tekavcic, M. (2010). Determinants of integrated performance
measurement systems usage: An empirical study. The Journal of Applied Business Research, 26(5), 63-75.
Medori, D., & Steeple, D. (2000). A framework for auditing and enhancing performance measurement systems.
International Journal of Operations & Production Management, 20(5), 520-533.
Merchant, K. A., & Van der Stede, W. A. (2007). Management control systems: Performance measurement,
evaluation and incentives (2nd ed.). New York: Financial Times/Prentice Hall.
Mohrman, S. A., Finegold, D., & Mohrman, A. M. (2003). An empirical model of the organizational knowledge
system in new product development firms. Journal of Engineering and Technology Management,
20(1-2), 7-38.
Morgan, N. A., Clark, B. H. & Gooner, R. (2002). Marketing productivity, marketing audits, and systems for
marketing performance assessment: Integrating multiple perspectives. Journal of Business Research,
55(5), 363-375.
Neely, A., Adams, C. & Crowe, P. (2001). The performance prism in practice. Measuring Business Excellence,
5(2), 6-12.
Neely, A., Gregory, M., & Platts, K. (2005). Performance measurement system design: A literature review and
research agenda. International Journal of Operations & Production Management, 25(12), 1228–1263.
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory. New York: McGraw-Hill.
O’Sullivan, D., Abela, A. V., & Hutchinson, M. (2009). Marketing performance measurement and firm
performance: Evidence from the European high-technology sector. European Journal of Marketing,
43(5/6), 843-62.
Parmenter, D. (2009). Key performance indicators: Developing, implementing, and using winning KPIs. New
Jersey, USA: Wiley.
Prasertsang, S., Ussahawanitchakit, P., & Jhundra-indra, P. (2012). Corporate social responsibility
effectiveness, firm competitiveness, business successes and corporate sustainability: An empirical
investigation of ISO 14000 businesses in Thailand. International Journal of Business Strategy, 12(4).
Rao, P., & Holt, D. (2005). Do green supply chains lead to competitiveness and economic performance?.
International Journal of Operations and Production Management, 25(9), 898–916.
Rouzies, D., Anderson, E., Kohli, A. K., Michaels, R. E., Weitz, B. A., & Zoltners, A. (2005). Sales and
marketing integration: a proposed framework. Journal of Personal Selling & Sales Management,
25(2), 113-122.
Sadler-Smith, E., Spicer, D. P., & Chaston, I. (2001). Learning orientations and growth in smaller organizations.
Long Range Plan, 34(2), 139–158.
Sandt, J. (2005). Performance measurement, Übersicht über Forschungsentwicklung und-stand, Controlling &
Management, Heft, 6(49), 429-447.
Simons, R. (2000). Performance measurement & control systems for implementing strategy. New Jersey, N.J:
Prentice-Hall.
Ta ̈tila ̈, J., Helkio ̈, P., & Holmstro ̈m, J. (2014). Exploring the performance effects of performance measurement
system use in maintenance process. Journal of Quality in Maintenance Engineering, 20(4), 377-401.
Tangen, S. (2004). Performance measurement: From philosophy to practice. International Journal of
Productivity and Performance Management, 53(8) 726-737.
Taticchi, P., Tonelli, F., & Cagnazzo L. (2010). Performance measurement and management: a literature review
and a research agenda. Measuring Business Excellence, 14(1), 4-18.
Taylor, J., & Baines, C. (2012). Performance management in UK universities: implementing the balanced
scorecard. Journal of Higher Education Policy and Management, 34(2), 111-124.
Testa, F., Iraldo, F., & Frey, M. (2011). The effect of environmental regulation on firms’ competitive
performance: The case of the building & construction sector in some EU regions. Journal of
Environmental Management, 92, 2136-2144.
Van der Stede, W. A., Chow, C. W., & Lin, T. W. (2006). Strategy, choice of performance measures, and
performance. Behavioral Research in Accounting, 18, 185-205.
Williams, J. J., & Seaman, A. E. (2002). Management accounting systems change and departmental
performance: The influence of managerial information and task uncertainty. Management
Accounting Research, 13, 419-445.
Yitmen, T. (2011). Intellectual capital: A competitive asset for driving innovation in engineering design firms.
Engineering Management Journal, 23(2), 1-16.
Ahmed, Z., Nawaz, M., Dost, K., & Khan, M. (2011). Comparative significance of the four perspectives of
Balanced Scorecard. Interdisciplinary Journal of Contemporary Research in Business, 3(1), 981-993.
Álvarez, I., Marin, R., & Fonfría, A. (2009). The role of networking in the competitiveness of firms. Technological
Forecasting & Social Change, 76, 410-421.
Ambler, T., Kokkinaki, F., & Puntoni, S. (2004). Assessing marketing performance: Reasons for metrics selection.
Journal of Marketing Management, 20(3/4), 475-498.
Anthony, R. N., & Govindarajan, V. (2001). Management control systems. Boston, McGraw-Hill Irwin.
Aracıoğlu, B., Zalluhoğlu, A. E., & Candemir, C. (2013). Measuring and evaluating performance within the
strategic management perspective: a study on performance measurement of Seafood Company.
Procedia -Social and Behavioral Sciences, 99, 1026–1034.
Armstrong, J. S., & Overton, T. S. (1977). Estimating non-response bias in mail surveys. Journal of Marketing
Research, 14(3), 396-402.
Berry, A. J., Broadbent, J., & Otley, D. (2005). Management control: Theories, issues and performance.
New York: Palgrave Macmillan.
Bharadwaj, A. S., & Menon, A. (2000). Making innovation happen in organizations: Individual creativity
mechanisms, organizational creativity mechanisms of both?. Journal of Product Innovation
Management, 17(6), 424-434.
Bhatti, M. I., Awan, H. M., & Razaq, Z. (2014). The key performance indicators (KPIs) and their impact on
overall organizational performance. Quality and Quantity, 48(6), 3127-3143.
Bisbe, J., & Malaguen ̂o, R. (2012). Using strategic performance measurement systems for strategy formulation:
Does it work in dynamic environments?. Management Accounting Research, 23, 296–311.
Bititci, U., Garengo, P., Dörfler, V., & Mendibil, K. (2009). Performance measurement: Questions for tomorrow.
Strathprints Institutional Repository (October), 1-8. https://strathprints.strath.ac.uk/13954/
Bourne, M., Neely, A., Mills, J., & Platts, K. (2003). Implementing performance measurement systems:
A literature review. International Journal of Business Performance Management, 5(1), 1-24.
Burney, L., & Swanson, N. (2010). The relationship between balanced scorecard characteristics and
managers’ job satisfaction. Journal of Managerial Issues, 22(2), 166-81.
Burney, L., & Widener, S. K. (2007). Strategic performance measurement systems, job relevant information and
managerial behavioral responses-role stress and performance. Behavioral Research in Accounting, 19, 43-69.
Chen, M.C., Cheng, S. J., & Hwang, Y. (2005). An empirical investigation of the relationship between
intellectual capital and firm’s market value and financial performance. Journal of Intellectual Capital, 6, 159-176.
Clark, B. H. (2001). A summary of thinking on measuring the value of marketing. Journal of Targeting,
Measurement and Analysis for Marketing, 9(4), 357-369.
Clark, B. H., Abela, A. V., & Ambler, T. (2006). An information processing model of marketing performance
measurement. Journal of Marketing Theory and Practice, 14(3), 191-208.
De Toni, A., & Tonchia, S. (2001). Performance measurement systems-models, characteristics and measures.
International Journal of Operations & Production Management, 21(1/2), 46–71.
Flak, L. S., & Dertz, W. (2004). Stakeholder theory and balanced scorecard to improve is strategy
development in public sector. Agder University College, Norway.
Gimbert, X., Bisbe, J., & Mendoza, X. (2010). The role of performance measurement systems in strategy
formulation processes. Long Range Planning, 43, 477-497.
Gladen, W. (2011). Performance Measurement: Controlling Mit kennzahlen. Auflage: Wiesbaden.
Gomes, C. F., Yasin, M. M., & Lisboa, J. V. (2004). A literature review of manufacturing performance measures
and measurement in an organizational context: A framework and direction for future research.
Journal of Manufacturing Technology Management, 15(6), 511-530.
Gosselin, M. (2005). An empirical study of performance measurement in manufacturing organizations.
International Journal of Productivity and Performance Management, 54(5/6), 419–437.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate Data Analysis (6th ed.). New
Jersey: Pearson Education International.
Heckl, D., & Moormann, J. (2010). Process performance management, In Handbook on Business Process
Management, 2, 115–135.
Ittner, C. D., Larcker, D. F., & Randall, T. (2003). Performance implications of strategic performance
measurement in financial service firms. Accounting, Organizations and Society, 28(7–8), 715-741.
Johnson, H. T., & Kaplan, R. S. (1987). Relevance lost: the rise and fall of management accounting. Boston,
Harvard Business School Press.
Kaplan, R. S., & Norton, D. P. (1992). Balanced scorecard - measures that drive performance. Harvard
Business Review, 70(1), 71-79.
Kaplan, R. S., & Norton, D. P. (1996). Using the balanced scorecard as a strategic management system.
Harvard Business School Press, 74(1), 75-85.
Kasie, F. M., & Belay, A. M. (2013). The impact of multi-criteria performance measurement on business
performance improvement. Journal of Industrial Engineering and Management, 6(2), 595-625.
Khan, K., & Shah, A. (2011). Understanding performance measurement through the literature. African Journal
of Business Management, 5(35), 13410-13418.
Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research activities. Educational and
Psychological Measurement, 30, 607-610.
Kumar, A., & Shafabi. (2011). Strategic cost management-suggested framework for 21st Century. Journal of
Business and Retail Management Research, 5(2), 118-130.
Kurien, G. P., & Qureshi, M. N. (2011). Study of performance measurement practices in supply chain
management. International Journal of Business, Management and Social Sciences, 2(4), 19-34.
Lamberti, L., & Noci, G. (2010). Marketing strategy and marketing performance measurement system:
Exploring the relationship. European Management Journal, 28, 139-152.
Lee, C. L., & Yang, H. J. (2011). Organization structure, competition and performance measurement systems
and their joint effects on performance. Management Accounting Research, 22, 84–104.
Levius, S. (2016). Information and communication technology strategies to improve international competitiveness
in a Barbados organization. Walden University, ProQuest Dissertations Publishing, 1-140.
Marc, M., Peljhan, D., Ponikvar, N., Sobota, A., & Tekavcic, M. (2010). Determinants of integrated performance
measurement systems usage: An empirical study. The Journal of Applied Business Research, 26(5), 63-75.
Medori, D., & Steeple, D. (2000). A framework for auditing and enhancing performance measurement systems.
International Journal of Operations & Production Management, 20(5), 520-533.
Merchant, K. A., & Van der Stede, W. A. (2007). Management control systems: Performance measurement,
evaluation and incentives (2nd ed.). New York: Financial Times/Prentice Hall.
Mohrman, S. A., Finegold, D., & Mohrman, A. M. (2003). An empirical model of the organizational knowledge
system in new product development firms. Journal of Engineering and Technology Management,
20(1-2), 7-38.
Morgan, N. A., Clark, B. H. & Gooner, R. (2002). Marketing productivity, marketing audits, and systems for
marketing performance assessment: Integrating multiple perspectives. Journal of Business Research,
55(5), 363-375.
Neely, A., Adams, C. & Crowe, P. (2001). The performance prism in practice. Measuring Business Excellence,
5(2), 6-12.
Neely, A., Gregory, M., & Platts, K. (2005). Performance measurement system design: A literature review and
research agenda. International Journal of Operations & Production Management, 25(12), 1228–1263.
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory. New York: McGraw-Hill.
O’Sullivan, D., Abela, A. V., & Hutchinson, M. (2009). Marketing performance measurement and firm
performance: Evidence from the European high-technology sector. European Journal of Marketing,
43(5/6), 843-62.
Parmenter, D. (2009). Key performance indicators: Developing, implementing, and using winning KPIs. New
Jersey, USA: Wiley.
Prasertsang, S., Ussahawanitchakit, P., & Jhundra-indra, P. (2012). Corporate social responsibility
effectiveness, firm competitiveness, business successes and corporate sustainability: An empirical
investigation of ISO 14000 businesses in Thailand. International Journal of Business Strategy, 12(4).
Rao, P., & Holt, D. (2005). Do green supply chains lead to competitiveness and economic performance?.
International Journal of Operations and Production Management, 25(9), 898–916.
Rouzies, D., Anderson, E., Kohli, A. K., Michaels, R. E., Weitz, B. A., & Zoltners, A. (2005). Sales and
marketing integration: a proposed framework. Journal of Personal Selling & Sales Management,
25(2), 113-122.
Sadler-Smith, E., Spicer, D. P., & Chaston, I. (2001). Learning orientations and growth in smaller organizations.
Long Range Plan, 34(2), 139–158.
Sandt, J. (2005). Performance measurement, Übersicht über Forschungsentwicklung und-stand, Controlling &
Management, Heft, 6(49), 429-447.
Simons, R. (2000). Performance measurement & control systems for implementing strategy. New Jersey, N.J:
Prentice-Hall.
Ta ̈tila ̈, J., Helkio ̈, P., & Holmstro ̈m, J. (2014). Exploring the performance effects of performance measurement
system use in maintenance process. Journal of Quality in Maintenance Engineering, 20(4), 377-401.
Tangen, S. (2004). Performance measurement: From philosophy to practice. International Journal of
Productivity and Performance Management, 53(8) 726-737.
Taticchi, P., Tonelli, F., & Cagnazzo L. (2010). Performance measurement and management: a literature review
and a research agenda. Measuring Business Excellence, 14(1), 4-18.
Taylor, J., & Baines, C. (2012). Performance management in UK universities: implementing the balanced
scorecard. Journal of Higher Education Policy and Management, 34(2), 111-124.
Testa, F., Iraldo, F., & Frey, M. (2011). The effect of environmental regulation on firms’ competitive
performance: The case of the building & construction sector in some EU regions. Journal of
Environmental Management, 92, 2136-2144.
Van der Stede, W. A., Chow, C. W., & Lin, T. W. (2006). Strategy, choice of performance measures, and
performance. Behavioral Research in Accounting, 18, 185-205.
Williams, J. J., & Seaman, A. E. (2002). Management accounting systems change and departmental
performance: The influence of managerial information and task uncertainty. Management
Accounting Research, 13, 419-445.
Yitmen, T. (2011). Intellectual capital: A competitive asset for driving innovation in engineering design firms.
Engineering Management Journal, 23(2), 1-16.
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Published
25-10-2019
How to Cite
Lata, P., Boonlua, S., & Raksong, S. (2019). Integrated Performance Measurement System Strategy and Firm Success: An Empirical Investigation of Thai-Listed Firms. Journal of Accountancy and Management, 10(3), 33–50. Retrieved from https://so02.tci-thaijo.org/index.php/mbs/article/view/223054
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