A contingency model of the association between strategy, environmental uncertainty and performance measurement: Impact on organizational performance

Zahirul Hoque

    Research output: Contribution to journalComment/debate

    Abstract

    From a contingency framework, this paper attempts to contribute to a stream of literature that investigates determinants and consequences of performance measures. In general, it investigates the role of the choice of performance measures on the relationship between (a) strategic priorities and performance and (b) environmental uncertainty and performance. Two hypotheses are developed concerning this general relationship, predicting, respectively, a positive relationship between business unit strategy and performance through management's choice of non-financial measures of performance (H1) and a positive relationship between environmental uncertainty and performance through management's choice of non-financial measures of performance (H2). To test these hypotheses, a path analytical model is applied to questionnaire survey data from 52 manufacturing companies. As hypothesized, the results revealed the existence of a significant and positive association between management's strategic choice and performance acting through management's high use of non-financial measures for performance evaluation. On the other hand, the study found no evidence of a significant relationship between environmental uncertainty and performance through management's use of non-financial performance measures.
    Original languageEnglish
    Pages (from-to)485-502
    Number of pages18
    JournalInternational Business Review
    Volume13
    Issue number4
    DOIs
    Publication statusPublished - 2004

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