A Strategy-Based Key Performance Indicators and Firm’s Performance: The Experience of Government-Linked Companies in Malaysia

By Noorhayati Mansor, Asniati Bahari and Jainurin Justine.

Published by The Organization Collection

Format Price
Article: Print $US10.00
Article: Electronic $US5.00

Organizations adopt performance measurement systems (PMS) to focus and monitor the outcome of value-driven indicators. For optimal results, these key performance indicators (KPIs) must be aligned to the mission and strategic goals of the company. Balanced Scorecard (BSC) is a strategy-based management accounting system that aims at integrating business strategy into comprehensive and inter-related operational activities. The BSC as originally developed by Kaplan and Norton (1992) was designed to complement the financial measures to balance short and long-term objectives, financial and non-financial measures, lagging and leading indicators, and internal and external performance perspectives. The recent interest in KPIs among Malaysian leaders is seen by most as the solution to strengthen the performance of the government-linked companies (GLCs). The emphasis on GLCs’ performance and the public outcry for transparency are not difficult to understand. The fact that the GLCs are awarded government contracts and given special privileges on the ground that they are government owned place the GLCs at the forefront of the national agenda. This paper is based on recent interviews of CEOs of seven Malaysian GLCs. It discusses the characteristics of strategy-based KPIs to promote balanced performance for long-term sustainability. The main motivation is to gather the views the CEOs regarding the design and performance effects of the KPIs. Overall, the findings support the effectiveness of adopting strategy-based KPIs to strengthen the Malaysian GLSs.

Keywords: Strategic Management Accounting, Key Performance Indicators, Balanced Scorecards, Government-linked Companies, Financial Performance, Non-financial Performance

International Journal of Knowledge, Culture and Change Management, Volume 8, Issue 2, pp.93-104. Article: Print (Spiral Bound). Article: Electronic (PDF File; 633.268KB).

Dr. Noorhayati Mansor

Director, Accounting Centre, University Malaysia Sabah, Kota Kinabalu, Sabah, Malaysia

In-charge of designing and improving the accounting curriculum to ensure compliance with the national and global standard practices. Also involve in various activities at the national level in promoting interests in the accounting education. A former Council member of the Malaysian Institute of Accountants having served the maximum period of 4 years. Currently serve as a Trustee of the Malaysian Accountancy Research and Education Foundation. Areas of interest include strategic management accounting, corporate finance and operations management.

Asniati Bahari

Accounting Centre, University Malaysia Sabah, Kota Kinabalu, Sabah, Malaysia

Currently pursuing a doctoral degree in Accounting Information System at Universiti Malaysia Sabah. Previous experience includes working in accounting firms in Andalas and Jakarta, Indonesia. Recently joined as a teaching staff in the accounting department at Universiti Malaysia Sabah after serving Universitas Andalas, Indonesia as a full-time lecturer. Very active in organizing seminar, workshops and conferences. Also involve in supervising students clubs and activities. Areas of research interest include Enterprise Resource Planning and Balanced Scorecards.

Jainurin Justine

Lecturer, Accounting, University Malaysia Sabah, Kota Kinabalu, Sabah, Malaysia

Jainurin Justine is a lecturer in the School of Business and Economics, Universiti Malaysia Sabah, Malaysia where he has taught courses in accounting, taxation and finance. His research interests are in the area of accounting, taxation, finance and strategic management.


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