Management by Indicators and Financial Performance of Industrial Companies in Jordan

Purpose: This research paper attempts to propose a new management approach for top management on how to lead companies. It examines the actual application level of the proposed management approach “management by indicators” in industrial companies in Jordan. It also investigates the relationship between the application of management by indicators of net income and return on investments of these companies. Design/Approach/Methodology: The application of management by indicators has been measured through distributing a questionnaire to the members of Securities Depository Center SDC - Public Shareholding Companies - Industry Sector, the number of which is 56 companies. Net income, total assets and return on investment of these companies for 2019 are published in the SDC website. Findings: The findings reveal that the application of management by indicators exists within the implementation level 40% - 59%. The results show that there is a statistically significant correlation between management by indicators and each of net income and return on investment at the 0.01 level (2-tailed). The findings also indicate that the correlation between management by indicators and return on investment is more statistically significant than the correlation between management by indicators and net income. Practical Implications: The paper concludes that performance indicators should orient the mentality of top management in running business. This sort of logical thought highlights the importance of performance management in business continuity and explores the causal linkages between measuring results and planning as a dynamic system. Originality/Value: The research paper is pure and contributes to literature. Management by indicators facilitates performance appraisal and accountability, contributes to transparency and integrity. Thereby, it makes the work environment an enabling place for productivity and achievement.