Authors: David Otley
Addresses: University of Lancaster, The Management School, Bailrigg, Lancaster, LA1 4YX, UK
Abstract: Despite recent developments in reporting non-financial measures of performance such as the Balanced Scorecard, the mainstay of management control systems remains the reporting of accounting numbers. This paper reviews the different roles that accounting performance measures fulfil and points out the dangers in using measures designed for one role for another purpose. The three roles discussed are accounting numbers as a tool of financial management, as an overarching business objective and as a mechanism for motivation and control. It concludes by recognising the important but not exclusive role occupied by such measures and placing their use in a wider context.
Keywords: financial management; management control; motivation; budgetary control systems; financial ratios; shareholder value; EVA; performance drivers.
International Journal of Business Performance Management, 2001 Vol.3 No.2/3/4, pp.245-260
Published online: 13 Jul 2003 *Full-text access for editors Access for subscribers Purchase this article Comment on this article