Non-financial performance measures and the BSC of multinational companies with multi-cultural environment: An empirical investigation
Cross Cultural Management: An International Journal
ISSN: 1352-7606
Article publication date: 5 October 2015
Abstract
Purpose
The purpose of this paper is to investigate the use of financial and non-financial performance measurement practices, including the use of the balanced scorecard (BSC) and the impact of the cultural values on the use of performance measurement systems (PMSs), in multinational companies (MNCs) operating in the Middle East with a special attention to the Saudi Arabian subsidiaries.
Design/methodology/approach
Data were collected using a survey mailed to 180 randomly selected Saudi manufacturing subsidiaries in different industrial cities to collect data on their PMSs including the use of the BSC.
Findings
Financial measures are more widely used by most of the companies included in the sample due to the fact they are common, well known, and the most familiar performance measures in the business practice and they are more standardized measures which can be easily understood, implemented, and quantified. Moreover, the use of the non-financial measures was at a very low rate compared with the use of financial measures. The reasons were the difficulty in finding objective measures of the effect of social factors and the avoidance of any disclosure of social problems that are existed in the society.
Research limitations/implications
Several variables were not included in this study such as corporate culture, use of information technology, the use of mass number of expatriates in the KSA with completely different cultural values, and several other environmental factors, which might have a significant impact on the choice of multiple performance measures.
Practical implications
From a practical standpoint, this study demonstrates that increasing levels of external environmental factors and exposure to American best practices could act as forces to adapt more updated and sophisticated PMSs in the Middle East. Moreover, it will contribute to the knowledge of PMSs in the emerging countries, particularly in Middle East countries.
Social implications
Social variables have significant impact on the productivity of employees and they should be incorporated into the performance indictors in objective and practical models.
Originality/value
This study illustrates how MNCs in the Middle East are adapting and applying the PMS and the effect of culture on the use of non-financial measures.
Keywords
Citation
Abdallah, W.M. and Alnamri, M. (2015), "Non-financial performance measures and the BSC of multinational companies with multi-cultural environment: An empirical investigation", Cross Cultural Management: An International Journal, Vol. 22 No. 4, pp. 594-607. https://doi.org/10.1108/CCM-12-2013-0195
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited