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1 – 2 of 2Pall Rikhardsson, Stefan Wendt, Auður Arna Arnardóttir and Throstur Olaf Sigurjónsson
This paper asks the question of whether more environmental uncertainty affects the design of performance measurement systems in terms of a greater variety of performance measures…
Abstract
Purpose
This paper asks the question of whether more environmental uncertainty affects the design of performance measurement systems in terms of a greater variety of performance measures and whether this leads to more management satisfaction with the performance measurement system and improved firm performance.
Design/methodology/approach
Information processing theory is used to frame the hypotheses and findings. A questionnaire was sent to the 300 largest companies in Iceland, where environmental uncertainty has been prevalent.
Findings
The results indicate that increased uncertainty leads to a larger variety of non-financial performance measures, such as customer measures. A positive relationship is found between management satisfaction with the performance measurement system and firm performance. However, the variety of performance measures was not linked to management satisfaction or firm performance.
Research limitations/implications
The results suggest that managers increase the variety of performance measures when uncertainty increases. However, it is not the variety itself that increases management satisfaction or improves firm performance.
Practical implications
Performance measurement design is affected by environmental uncertainty. Managers focus on important stakeholder groups such as customers under such conditions and can consult research and practice for the purpose of customer relationship management and customer profitability measurement to improve measurement selection.
Originality/value
This work focusses on performance measurement system design, examining the use of more than 50 different performance measures, and differentiates between small and medium-sized firms and between service and non-service firms.
Details
Keywords
The purpose of this paper is to examine the extreme case of the Icelandic banking crisis in relation to critical governance issues at governmental, industry and civil society…
Abstract
Purpose
The purpose of this paper is to examine the extreme case of the Icelandic banking crisis in relation to critical governance issues at governmental, industry and civil society levels.
Design/methodology/approach
This is a case study of the Icelandic banking collapse in 2008.
Findings
The examination of governance failures within the Icelandic banking system reveals that government institutions need to find a balance between entrepreneurial growth, risk exposure and sustainable societal development. A euphoric attitude of laissez‐faire, where risk issues and issues of balanced development are largely ignored, creates challenges for sustainable banking. The findings suggest that achieving the necessary balance requires stressing governance issues on three levels; at the government level; at the industry level; and at the civil society level.
Practical implications
The paper illustrates why some of the corporate governance challenges facing sustainable banking should be addressed at multiple levels. Government should strive for realistic information and evaluation of societal risks; government should implement adequate regulatory frameworks; the finance industry itself should have effective self‐regulatory procedures and mechanisms; and, from a civil society point of view, the public at large should have realistic expectations and be adequately alerted as to the potential risks of governance failure.
Originality/value
The paper examines interactions between governance failures at different levels and has important implications for governance and policy makers, particularly those faced with re‐structuring national financial industries.
Details