Title: Performance measurement link between the balanced scorecard dimensions: an empirical study of the manufacturing sector in Malaysia
Authors: Anbalagan Krishnan; R. Ravindran; Prem Lal Joshi
Addresses: Sarawak Campus, Curtin University, CDT 250, 98009, Miri, Sarawak, Malaysia ' RAZAK Campus, Capital Square, University Tun Abdul Razak, No. 8, JalanMunshi Abdullah, 50100, Kuala Lumpur, Malaysia ' Faculty of Management, Multimedia University, Cyberjaya Campus, Jalan Multimedia 63100, Selangor, Malaysia
Abstract: In today's competitive business environment, firms are emphasising the use of an integrated performance system consisting of both financial and non-financial measures. The emphasis on non-financial measures that drives the financial outcome adds value to the strategic goals of organisation. Literature highlights the causal relationship between the financial and non-financial performance and empirically examined in the Western context but seems to be still lacking in Malaysia. Therefore, this study explores the association between the financial and non-financial measures in the context of the Malaysian business environment. This study uses the structural equation modelling (SEM) which is a superior research tool to measure the causal relationship between the financial and non-financial performance measures in comparison to other multivariate techniques. Although in the Malaysian business environment, the financial motive is still prominent, as compared to the non-financial aspects, the study has proved statistically there is causal link between financial and non-financial measures.
Keywords: causal relationship; financial performance; performance measurement; non-financial performance measures; traditional measurement systems; Malaysia; balanced scorecard; BSC; manufacturing industry; structural equation modelling; SEM.
Afro-Asian Journal of Finance and Accounting, 2014 Vol.4 No.4, pp.426 - 442
Received: 25 Feb 2014
Accepted: 08 Jul 2014
Published online: 20 Jan 2015 *