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The role of senior managers’ use of performance measures in the relationship between decentralization and organizational performance: Evidence from hotels in Thailand

Sirilak Bangchokdee (Department of Accounting, Faculty of Management Sciences, Prince of Songkla University, Hat Yai, Thailand)
Lokman Mia (Department of Accounting, Finance and Economics, Griffith Business School, Griffith University, Brisbane, Australia)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 6 June 2016

1536

Abstract

Purpose

This paper aims to examine the role of senior managers’ use of financial and non-financial performance measures in the relationship between decentralization and organizational performance in the hotel industry.

Design/methodology/approach

Data were collected using a mailed questionnaire. General Managers in charge of medium-to-large hotels in Thailand completed the questionnaire. In total, 131 general managers, one from each hotel, participated in the study. Path analysis technique was used to test the hypotheses.

Findings

The results indicate that the general managers’ use of financial and non-financial performance measures fully mediates the relationship between the extent of decentralization of decision-making and hotel performance. The results reveal that the decentralization of decision-making alone is not enough to help a hotel improve its performance. Indeed, the relationship between decentralization of decision-making and hotel performance exists only via the general manager’s use of the performance measures. It is contended that a general manager’s use of the performance measures in a hotel encourages department managers to make appropriate decisions to successfully improve their department’s performance which, in turn, leads to increased performance of the hotel.

Originality/value

This study provides empirical evidence indicating how senior managers in hotels with decentralized decision-making could use performance measures to better manage their hotels, thereby improving the hotel’s performance. An in-depth analysis of the data reveals that the senior manager’s use of the non-financial, and not the financial, performance measures is a mediator of the relationship between decentralization of decision-making and hotel performance.

Keywords

Acknowledgements

This study was funded by the Thailand Research Fund (MRG5380191) and Prince of Songkla University.

Citation

Bangchokdee, S. and Mia, L. (2016), "The role of senior managers’ use of performance measures in the relationship between decentralization and organizational performance: Evidence from hotels in Thailand", Journal of Accounting & Organizational Change, Vol. 12 No. 2, pp. 129-151. https://doi.org/10.1108/JAOC-11-2012-0110

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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