Performance Measurement System Design in Joint Strategy Settings
AuthorLillis, AM; van Veen-Dirks, PMG
Source TitleJournal of Management Accounting Research
PublisherAmerican Accounting Association
University of Melbourne Author/sLillis, Anne
AffiliationAccounting and Business Information Systems
Document TypeJournal Article
CitationsLillis, A. M. & van Veen-Dirks, P. M. G. (2008). Performance Measurement System Design in Joint Strategy Settings. Journal of Management Accounting Research, 20 (1), pp.25-57. https://doi.org/10.2308/jmar.2008.20.1.25.
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C1 - Refereed Journal Article
<jats:p>ABSTRACT: This study examines empirically the association between joint strategies and the design of manufacturing performance measurement systems. Drawing on data collected from production managers in 84 industrial firms, the study seeks evidence of links between the implementation of differentiation, low-cost and joint strategies in production, and reliance on efficiency, financial, and customer-focused performance measures. The results indicate the paradoxical situation where virtually all units in the sample pursue competitive advantage in differentiation yet many rely intensely on efficiency and financial measures to measure manufacturing performance. Reliance on efficiency measures is observed to be associated with the pursuit of low-cost and differentiation strategies jointly. Reliance on financial measures, on the other hand, appears to be related to differentiation and not related to the strategic importance of low cost. The findings suggest that financial measures may have a role in monitoring the financial impact of differentiation and curbing excessive differentiation. However, efficiency measures are primarily related to the extent of strategic focus on low cost and may be observed in differentiating units when differentiation is pursued jointly with low cost.</jats:p>
KeywordsAccounting; Auditing and Accountability
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