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Strategy, choice of performance measures, and performance

By Wim A Van der Stede, Chee W. Chow and Thomas W. Lin


We examine the relationship between quality‐based manufacturing strategy and the use of different types of performance measures, as well as their separate and joint effects on performance. A key part of our investigation is the distinction between financial and both objective and subjective nonfinancial measures. Our results support the view that performance measurement diversity benefits performance as we find that, regardless of strategy, firms with more extensive performance measurement systems—especially those that include objective and subjective nonfinancial measures—have higher performance. But our findings also partly support the view that the strategy‐measurement “fit” affects performance. We find that firms that emphasize quality in manufacturing use more of both objective and subjective nonfinancial measures. However, there is only a positive effect on performance from pairing a qualitybased manufacturing strategy with extensive use of subjective measures, but not with objective nonfinancial measures

Topics: HD Industries. Land use. Labor, HF5601 Accounting
Publisher: American Accounting Association
Year: 2006
DOI identifier: 10.2308/bria.2006.18.1.185
OAI identifier: oai:eprints.lse.ac.uk:15319
Provided by: LSE Research Online
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