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