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1 – 10 of over 10000Ewelina Zarzycka and Joanna Krasodomska
The paper aims to examine if corporate characteristics, general contextual factors and the internal context differentiate the quality and quantity of the disclosed non-financial…
Abstract
Purpose
The paper aims to examine if corporate characteristics, general contextual factors and the internal context differentiate the quality and quantity of the disclosed non-financial Key Performance Indicators (KPIs).
Design/methodology/approach
The study is based on content analysis of the disclosures provided by large public interest entities operating in Poland after the introduction of the Directive 2014/95/EU. The quality of the KPIs disclosures is measured with the disclosure index. Regression analysis and selected statistical tests are used to examine the influence of the selected factors on the differences in the index value and corporate disclosure choices as regards the KPIs.
Findings
The study findings indicate that the sample companies provide a variety of non-financial KPIs in a manner that makes their effective comparison difficult. The research confirms that mainly industry, ecologists and the reporting standard determine the significant differences in the quality of the KPIs disclosures and the quantity of presented KPIs.
Research limitations/implications
The paper adds to the understanding of the differences in the quality of KPIs presentation and the choice of disclosed KPIs.
Practical implications
The paper includes suggestions on how to change corporate practice with regard to the non-financial KPIs disclosures.
Originality/value
We shed additional light on the importance of internal contextual factors such as the reporting standard and the reporters' experience in providing non-financial KPIs disclosures.
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This paper aims to examine how modern small-medium enterprises (SMEs) operating in the tourism industry perceive and define corporate performance, and how they measure and monitor…
Abstract
Purpose
This paper aims to examine how modern small-medium enterprises (SMEs) operating in the tourism industry perceive and define corporate performance, and how they measure and monitor businesses’ achievements. Actual performance measurement activities are expected to show how (and if) companies manage the key factors that drive value creation and value erosion processes. Are effective performance measurement activities aligned with main theoretical prescriptions?
Design/methodology/approach
Theory and previous empirical research on SMEs’ performance is instrumentally used to identify those key factors that are supposed to drive small/medium hotels’ business performance; building on a resource-based view (RBV) framework, which provides the theoretical perspective to link resources, capabilities and actions to firm performance, a model based on the financial, the operational and the organisational dimension of firm’s success is developed through the selection of a set of consistent financial and non-financial indicators. The balanced performance measurement model is then tested via a field research study based on a semi-structured questionnaire sent to 540 selected SMEs active in the tourism sector.
Findings
The results suggest that small-medium Italian hotels, typically family firms managed by owners, tend to adopt a balanced system of performance measurement that keeps track of the financial and non-financial dimensions of hotel’s performance; customer orientation proves to be an extremely important leading indicator of non-financial corporate performance. Amongst traditional financial indicators, net profits, profitability ratios such as return on investment and return on sales, revenues for available room, occupancy rate and some cost efficiency ratios are found to be relevant, whereas extensive use is made of non-financial metrics such as customer satisfaction, number of complaints, number of new and repeat customers, employee competencies and staff abilities. Furthermore, some interesting results about frequency of measurement and purpose of measurement are also presented.
Research limitations/implications
Data used in this study do not allow for a comprehensive analysis of the correlation between hotel performance and a specific measurement model implemented. Further future research that is meant to be developed will focus on the issue of addressing the nexus between firm performance and resource and capability used as strategic factors and monitored with an effective performance measurement system. The sample can also be expanded to carry out comparative analysis.
Practical implications
The results shed some further light on performance measurement activities actually implemented by Italian hotels. The evidence gives a contribution to understanding the relationship between critical resources and capabilities that need to be developed and effectively managed to reach superior business performance. Furthermore, the study highlights the need to design and implement a customised performance measurement model, which accounts for firm-specific resources and capabilities and sector-specific features for the hotel to properly manage those strategical success factors that can deliver sustained competitive advantage to the firm.
Originality/value
This research paper contributes to performance measurement literature, by suggesting that the development and the implementation of a simplified but structured and complete performance measurement system, designed on the specific needs and features of SMEs, seems to be a sensible way to improve resources and capabilities utilisation and to obtain a holistic understanding of the achievements of these organisations.
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Alan Simon, Chloe Bartle, Gary Stockport, Brett Smith, Jane E. Klobas and Amrik Sohal
The purpose of this paper is to report on research that identifies the relationships that senior managers believe exist between capabilities and business success. In doing so, it…
Abstract
Purpose
The purpose of this paper is to report on research that identifies the relationships that senior managers believe exist between capabilities and business success. In doing so, it addresses the need for more empirical research about the role of strategic and dynamic capabilities in organisational performance. It also highlights the critical strategic and dynamic capabilities that are most valuable for practising managers.
Design/methodology/approach
A multi-method study was conducted. Eight types of strategic capability and ten types of dynamic capability commonly found in organisations were identified through consecutive literature review, web site content analysis and interviews with senior executives. A questionnaire survey was then used to ask senior officers of publicly listed Australian firms about the importance of each capability and financial and non-financial performance indicators. The relationship between capabilities and performance was measured by regression modelling.
Findings
Good leadership with an innovative vision and selection and retention of good staff and developing their skills and capabilities were the stand out strategic capabilities. Strategic thinking about the big picture and the long-term and flexible leaders who can lead and manage adaptation to change were considered to be the most important dynamic capabilities. Strategic capabilities were more often associated with indicators of financial success, and dynamic capabilities were more often associated with non-financial measures of organisational performance.
Originality/value
This is the first study to make a distinction between strategic and dynamic capabilities in examining the relationship between capabilities and business success. The results demonstrate that the distinction has both theoretical and practical value.
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Michael L. Roberts, Bruce R. Neumann and Eric Cauvin
Prior research identified conflicts in implementing performance measurement systems that include both financial and non-financial measures. Attempts to incorporate non-financial…
Abstract
Purpose
Prior research identified conflicts in implementing performance measurement systems that include both financial and non-financial measures. Attempts to incorporate non-financial measures, for example, balanced scorecards (BSCs), have shown short-term success, only to be replaced with systems that rely on financial measures. We develop a theoretical model to explore evaluators’ choice and use of the most important performance measurement criterion among financial and non-financial measures.
Methodology/approach
Our model links participants’ prior evaluation experiences with their attitudes about relative accounting qualities and with their choice of the most important performance measure. This choice subsequently affects their evaluation judgments of managers who perform differentially on financial versus non-financial measures.
Findings
Experimental testing of our structural equation model indicates that it meets the accepted goodness of fit criteria. We conclude that experience has an influence on choice of performance measures and on decision heuristics in making such evaluations. We suggest that an “experience gap” must be considered when deciding which performance metrics to emphasize in scorecards or similar performance reports. We analyzed four accounting qualities, importance, relevance, reliability, and comparability and found that importance, relevance, and reliability have strong effects on how managers prioritize and use accounting measures.
Originality/value
We conducted our study in a controlled, experimental setting, including participants with diverse experiences. We provide direct evidence of participants’ experience and attitudes about the relative accounting qualities of financial and non-financial measures which we link to their choice of the most important performance measure. We link this choice to their performance evaluations.
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Joanna Krasodomska and Ewelina Zarzycka
The paper aims to explore the effect of stakeholder pressure on the disclosure of key performance indicators (KPIs) and the patterns of this disclosure in large public interest…
Abstract
Purpose
The paper aims to explore the effect of stakeholder pressure on the disclosure of key performance indicators (KPIs) and the patterns of this disclosure in large public interest entities (PIEs).
Design/methodology/approach
The study is based on the content analysis of the disclosures provided by 169 large (PIEs) operating in Poland in 2019. The data was hand-collected from the companies’ non-financial statements. The research hypotheses were empirically tested with the use of linear regression.
Findings
The explanation for the disclosure of KPIs can be found in stakeholder theory, operationalized by stakeholder pressure linked to industry. In line with the expectations, business-related KPIs are disclosed by companies operating in industries with high pressure from investors, environment-related KPIs are presented by companies operating in environmentally sensitive industries and companies operating in industries with high pressure from employees disclose society-related KPIs. According to the results of the study, reporting on employee-related KPIs is accompanied by environmental and social KPI disclosures.
Originality/value
The study contributes to the literature on corporate non-financial disclosures as it provides new insights into non-financial KPI disclosures in a new and relatively unexplored institutional setting established by the Directive 2014/95/EU. While researchers recognize the stakeholders’ environmental and social concerns, there is nevertheless a lack of understanding of their implications for KPIs in measuring social practice. The research fills that gap by addressing the specific impact of different stakeholder groups on the disclosure of KPIs.
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Kertu Lääts, Toomas Haldma and Klaus Moeller
The purpose of this paper is to explore the dynamics of the usage of performance measurement (PM) methods and indicators, and this usage's influencing factors in service companies.
Abstract
Purpose
The purpose of this paper is to explore the dynamics of the usage of performance measurement (PM) methods and indicators, and this usage's influencing factors in service companies.
Design/methodology/approach
The study is based on the contingency theory framework and focuses on PM patterns. The sector, company size, and market environment dynamics, which are these patterns' primary determinants, are analysed. The study uses empirical survey data gathered from the 61 largest companies in Estonia. The study has a dynamic focus, explaining the changes in PM practices as in 2004 and 2007.
Findings
The research shows the increasing use of more balanced PM tools combining financial and non‐financial, market‐related and internal process dimensions. Nevertheless, the findings demonstrate that the companies predominantly used traditional cost accounting and reporting methods, as well as financial indicators for their PM. The findings highlight the similarities and differences between the PM patterns in service companies and manufacturing companies.
Research limitations/implications
The general limitations of survey‐based research have to be considered. The findings on the PM indicators and methods explain the usage's intensity, but not the effects of this usage on the performance. The study also analyses only a limited number of drivers that influence PM practices.
Originality/value
The research findings have two main implications. First, the paper contributes to the scarce knowledge about PM practices in service companies. Second, the paper considers the changes in PM patterns, concentrating on the dynamics of PM practices.
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Billy Wadongo, Edwin Odhuno, Oscar Kambona and Lucas Othuon
The overall purpose of this study is to investigate impact of managerial characteristics on key performance indicators in the Kenyan hotel industry.
Abstract
Purpose
The overall purpose of this study is to investigate impact of managerial characteristics on key performance indicators in the Kenyan hotel industry.
Design/methodology/approach
A cross‐sectional survey research design was used to gather primary data using self‐administered questionnaires. A sample of 160 hospitality managers was selected proportionately by simple random sample method from six hotels in Nairobi and Mombasa. A custom factorial univariate analysis of variance was used to analyze the data.
Findings
Hospitality managers in Kenya are still focusing on financial and result measures of performance while ignoring non‐financial and determinant measures. Managerial demographic characteristics; age, education, current position, functional area, and performance appraisal influence managers' choice of key performance indicators.
Research limitations/implications
The model violated assumptions of homogeneity of variances. Literature review revealed a severe lack of Kenyan‐based research in tourism and hospitality industries on performance measurement practices hence the need for future research in this area.
Practical implications
The hotels need to invest in comprehensive performance management systems suitable for Kenyan hospitality industry that will incorporate both financial and non‐financial performance measures.
Originality/value
The study focuses on level of use of performance indicators and level of importance attached to performance indicators in the Kenyan hospitality industry. Managerial demographic characteristics influence on key performance indicators are examined in leading service industry in a growing economy thus contributing to a new body of knowledge in management literature in Africa.
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There is a a great deal of literature on performance measurement and accountability in government. Governments around the world have invested large amounts to develop performance…
Abstract
There is a a great deal of literature on performance measurement and accountability in government. Governments around the world have invested large amounts to develop performance measurement systems, the results of which are mediocre at best. There is also a growing recognition that financial performance measures alone measure only limited aspects of an organisation’s performance. To improve performance measurement systems and accountability to different stakeholders, non‐financial indicators have been developed for the for‐profit sector. Prior research in the local government sector in the state of Victoria, Australia, showed low levels of accountability and very little performance measurement taking place. However, significant changes have been imposed on the sector, enhancing local and central accountability, making it more business‐like, and focussing on the need to measure performance. This research studied the extent to which performance measurement systems are currently being used in practice in Victorian local government, the factors which lead to the use of performance measurement and the extent of non‐financial indicators. The results revealed a substantial increase in the level of use of performance measurement in the sector, related to increased emphasis on accountability and organisational changes imposed on the sector by the state government. The performance of both people and programs is now being measured. Although there is an emphasis on financial and budgetary measures for financial accountability, the use of non‐financial measures in determining outcome accountability is increasing. Customer service and quality are two of the areas in which non‐financial performance measures are being developed.
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Mohamed Bouamama, Sami Basly and Houda Zian
Notwithstanding a number of studies that led to the development of different performance measurement systems incorporating contingency factors, very scarce research on the variety…
Abstract
Purpose
Notwithstanding a number of studies that led to the development of different performance measurement systems incorporating contingency factors, very scarce research on the variety of balanced scorecards (BSCs) indicators used in performance management were carried out in France. Accordingly, the purpose of this paper is to investigate if there is a significant relationship between contingency factors and the content of balanced scorecards in terms of the degree of use and a variety of performance indicators.
Design/methodology/approach
In total, 2,580 French intermediate-sized enterprises (ISE) were identified through the Diane Database (Bureau Van Dijck) then contacted by the means of a survey questionnaire that was built online using LimeSurvey software. This study receives 156 complete and usable responses. The research model was tested through multiple regressions and multi-group analyses.
Findings
The results show that ISEs financial managers do not use, to the same extent, all the indicators constituting the four dimensions of BSCs. Therefore, BSCs implemented by French ISEs can be described as “unbalanced”. Furthermore, three contingency factors (computerization, decentralization and market listing) were found to be significantly associated with the variety and degree of use of performance indicators in balanced scorecards. The remaining contingency and control factors did not seem to influence the degree of use and variety of BSCs content.
Practical implications
The findings highlight the importance of developing tools that have the potential to evolve in line with organizational, environmental and technological changes. Furthermore, this paper provides food for thought for financial directors and management controllers as to how to better meet senior management, managers and operational staff information needs.
Originality/value
While there is scarce academic work on BSCs in ISEs, the present research is, to the best of the knowledge, one of the rarest to apply and test a contingency approach on a sample of ISEs.
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The purpose of this paper is to provide preliminary evidence on current practices in non-financial key performance indicator (KPI) reporting in annual reports by listed Australian…
Abstract
Purpose
The purpose of this paper is to provide preliminary evidence on current practices in non-financial key performance indicator (KPI) reporting in annual reports by listed Australian companies to inform Australian legislators and accounting standard setters contemplating regulations and guidance for non-financial performance disclosure, including input into the revision of IFRS Practice Statement 1: Management Commentary (2010).
Design/methodology/approach
Non-financial KPIs were hand-collected from the annual report narratives of 40 listed Australian companies from five sectors in 2016. Trends in the type, quantity, comparability and range of non-financial KPIs were analysed, and the association between company characteristics and non-financial disclosure was explored.
Findings
In total, 78 per cent of the sampled companies disclose non-financial KPIs in their annual reports, reporting 11 non-financial KPIs per company on average. The most common category is Employee, followed by Environment, accounting for 68 per cent of non-financial KPIs. Provision of comparators is low, with only 28 per cent of non-financial KPIs disclosed with prior year results and 24 per cent disclosed with a target. Companies disclose across a median of two out of seven categories. Company size is shown to be associated with non-financial measures.
Originality/value
The study contributes initial detailed empirical Australian evidence of non-financial KPI reporting practices. A framework is established for assessing non-financial KPI disclosure, adding to voluntary disclosure studies. A data collection method is developed for collecting KPIs from annual report narratives, contributing to the methodology used in voluntary reporting content analysis.
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