Malete Journal of Accounting and Finance (Nov 2023)
ORGANISATIONAL STRATEGY AND MODERATING EFFECT OF PERFORMANCE MEASUREMENT SYSTEM ON PERFORMANCE OF NIGERIAN LISTED MANUFACTURING FIRMS
Abstract
Measuring performance of manufacturing firms is essential to enable stakeholders and interested/potential investors to evaluate the general and specific actions of firms and how they perform over time. Performance measurement is said to be critical for efficient business management and thus, when selecting measurement system, organisations seem to be mostly dependant on certain designs for effective and efficient organisational operations. This study examined the influence of organisational strategy on organisational performance, as well as the moderating effect of performance measurement system between strategy and organisational performance. Organisation performance was proxy with financial and non-financial performance. This study was premised on the assumption that proper strategies by organisations enhance performance (financial and non-financial) and that the performance measurement system of organisations significantly moderates the relationships between organisational strategy and organisation performance. Based on these assumptions, this study employed the contingency theory and formulated 4 study objectives:(i) examine the impact of organisational strategy on Performance Measurement System; (ii)determine the relationship between organisational strategy and financial performance (iii) evaluate how organisational strategy influences non-financial performance and; (iv) investigate the moderating effect of Performance Measurement System on financial and non-financial performance. Data was collected through a self-administered survey of 168 respondents purposefully selected from thirty-seven listed manufacturing firms in Lagos, Nigeria, and analysis was done using PLS-SEM. The target respondents were accountants, auditors and managers of respective organisations. The main finding of this study showed that organisational strategy significantly influenced performance measurement system, financial and non-financial performance. Moreover, performance measurement system significantly moderates the relationship between organisational strategy and financial performance. Based on the empirical findings and the results of this study, it is recommended that management of manufacturing firms should maintain a good strategic position in order to achieve organisational objectives and stakeholders’ expectations.
