TY - JOUR
T1 - Non-financial performance measures disclosure, quality strategy, and organizational financial performance
T2 - a mediating model
AU - Omran, Mohamed
AU - Khallaf, Ashraf
AU - Gleason, Kimberly
AU - Tahat, Yasean
N1 - Funding Information:
The authors are very thankful to all the associated personnel in any reference that contributed in/for the purpose of this research. We also acknowledge the constructive comments provided by discussant and participants at the 4th Biennial International Conference of the Global Accounting and Organizational Change (GAOC) held in November 17–20, 2014, AUS, Sharjah, UAE.
Publisher Copyright:
© 2019 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2021
Y1 - 2021
N2 - We investigate the relationship between internal performance evaluation and the ability of external market participants to assess the effectiveness of management’s quality strategy for a sample of 156 Australian manufacturing firms that link executive compensation to non-financial performance measures (NFPM). We find that for firms where management compensation is tied to non-financial performance measures, organisational financial performance, as measured by return on investment, has no significant direct association with the extent of disclosure of non-financial performance measures in the financial statements by Australian manufacturing firms. However, we find that the origination of a firm’s non-financial performance measures indirectly and significantly affects the financial performance of an organisation through the implementation of quality based strategy. Further, we find that manufacturing firms that place greater emphasis on quality strategy disclose more information regarding non-financial performance measures in their annual reports, and that only for firms following a quality strategy, the disclosure of non-financial performance measures positively impacts operating financial performance.
AB - We investigate the relationship between internal performance evaluation and the ability of external market participants to assess the effectiveness of management’s quality strategy for a sample of 156 Australian manufacturing firms that link executive compensation to non-financial performance measures (NFPM). We find that for firms where management compensation is tied to non-financial performance measures, organisational financial performance, as measured by return on investment, has no significant direct association with the extent of disclosure of non-financial performance measures in the financial statements by Australian manufacturing firms. However, we find that the origination of a firm’s non-financial performance measures indirectly and significantly affects the financial performance of an organisation through the implementation of quality based strategy. Further, we find that manufacturing firms that place greater emphasis on quality strategy disclose more information regarding non-financial performance measures in their annual reports, and that only for firms following a quality strategy, the disclosure of non-financial performance measures positively impacts operating financial performance.
KW - Australia
KW - disclosure
KW - non-financial performance measures
KW - organisational performance
KW - performance measures
KW - quality strategy
UR - http://www.scopus.com/inward/record.url?scp=85068074496&partnerID=8YFLogxK
U2 - 10.1080/14783363.2019.1625708
DO - 10.1080/14783363.2019.1625708
M3 - Article
AN - SCOPUS:85068074496
SN - 1478-3363
VL - 32
SP - 652
EP - 675
JO - Total Quality Management and Business Excellence
JF - Total Quality Management and Business Excellence
IS - 5-6
ER -