Title: Performance measurement systems and environmental uncertainty effect on profitability

Authors: Aapo Länsiluoto; Adebayo Agbejule; Noora Kataja

Addresses: Seinäjoki University of Applied Sciences, Koulukatu 41, 60100 Seinäjoki, Finland; University of Vaasa, Wolffintie 34, 65200 Vaasa, Finland ' Vaasa University of Applied Sciences, Wolffintie 30, 65200 Vaasa, Finland ' Tamro Corporation, Rajatorpantie 41 B, 01640 Vantaa, Finland

Abstract: This study analyses how the changes in financial and non-financial measures, the scope of PMS and environmental uncertainty are associated with financial performance in accounting information system (AIS). The empirical data was collected by a survey which was sent to 464 manufacturing companies with over 50 employees. We received 98 (response rate 21.1%) utilisable responses from the respondents with financial responsibility (i.e., CEOs and CFO). According to statistical analysis, environmental uncertainty, PMS change and scope of PMS have an interactive association with performance. This association was found only after classifying aggregate PMS into three perspectives, i.e., customer, internal business process and employee. The highest performance occurred during changes in financial PMS, the emphasis on the customer or employee (internal business process) perspectives under low (high) environmental uncertainty.

Keywords: environmental uncertainty; financial performance; performance measurement systems; PMS changes; profitability; accounting information systems; manufacturing industry.

DOI: 10.1504/IJBIS.2013.052451

International Journal of Business Information Systems, 2013 Vol.12 No.3, pp.271 - 295

Published online: 05 Mar 2013 *

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