Competitive strategies and firm performance: the mediating role of performance measurement

Abstract

Purpose

The purpose of this paper is to examine the mediating role performance measurement plays in the relationship between competitive strategies and firm performance.

Design/methodology/approach

This study conducted a mail‐survey of Thai listed companies in 2009. A total of 101 Thai listed companies’ executives, each representing their company, participated in this study. The SPSS version 11.5, path‐analytical model is adopted to analyze the survey data obtained.

Findings

This study finds that generally, all competitive strategies positively and significantly enhance firm performance through performance measurement. Specifically, firms’ differentiation strategy not only has a direct and significant impact on firm performance but also it has indirect and significant impact on firm performance through financial measures. Cost leadership strategy that firms pursue does not directly affect firm performance. However, it does so indirectly and significantly through financial performance measures.

Research limitations/implications

Future research could consider the use of longitudinal data to ascertain more clearly these causal relationships.

Practical implications

The paper offers managerial implications that whether a firm chooses to pursue cost leadership or differentiation strategies, a strong emphasis on performance measurement will ensure the positive impact on firm performance in a fierce competitive environment.

Originality/value

This paper adds to the existing theoretical discussion and analyses the research and findings on the mediating role of performance measurement on the relationship between competitive strategy and firm performance.

Citation

Teeratansirikool, L., Siengthai, S., Badir, Y. and Charoenngam, C. (2013), "Competitive strategies and firm performance: the mediating role of performance measurement", International Journal of Productivity and Performance Management, Vol. 62 No. 2, pp. 168-184. https://doi.org/10.1108/17410401311295722