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Managers' Commitment to the Goals Contained in a Strategic Performance Measurement System

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  • R. ALAN WEBB

Abstract

A strategic performance measurement system (SPMS) is a set of causally linked nonfinancial and financial objectives, performance measures, and goals designed to align managers' actions with an organization's strategy. This study identifies and tests features unique to the cause†effect structure of an SPMS likely to affect an important antecedent to managerial performance: goal commitment. Companies often set difficult goals for the multiple performance measures contained in an SPMS, but research shows difficult goals are significantly more likely to lead to performance gains if individuals are committed to achieving them. Two features central to the SPMS approach are predicted to affect goal commitment: (1) the strength of the cause†effect links among the nonfinancial and financial performance measures contained in an SPMS and (2) managers' beliefs in their ability to achieve the SPMS nonfinancial goals. Results from an experiment conducted with experienced managers show both SPMS features have a positive effect on goal commitment.

Suggested Citation

  • R. Alan Webb, 2004. "Managers' Commitment to the Goals Contained in a Strategic Performance Measurement System," Contemporary Accounting Research, John Wiley & Sons, vol. 21(4), pages 925-958, December.
    • Handle: RePEc:wly:coacre:v:21:y:2004:i:4:p:925-958
    DOI: 10.1506/KHW0-G7PY-AQEA-718J
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    Cited by:

    1. Cheng, Mandy M. & Humphreys, Kerry A. & Zhang, Yichelle Y., 2018. "The interplay between strategic risk profiles and presentation format on managers' strategic judgments using the balanced scorecard," Accounting, Organizations and Society, Elsevier, vol. 70(C), pages 92-105.
    2. Jongwoon (Willie) Choi & Gary W. Hecht & William B. Tayler, 2013. "Strategy Selection, Surrogation, and Strategic Performance Measurement Systems," Journal of Accounting Research, Wiley Blackwell, vol. 51(1), pages 105-133, March.
    3. Banker, Rajiv D. & Chang, Hsihui & Pizzini, Mina, 2011. "The judgmental effects of strategy maps in balanced scorecard performance evaluations," International Journal of Accounting Information Systems, Elsevier, vol. 12(4), pages 259-279.
    4. Shana Clor-Proell & Steven Kaplan & Chad Proell, 2015. "The Impact of Budget Goal Difficulty and Promotion Availability on Employee Fraud," Journal of Business Ethics, Springer, vol. 131(4), pages 773-790, November.
    5. Gopalakrishnan, Mohan & Libby, Theresa & Samuels, Janet A. & Swenson, Dan, 2015. "The effect of cost goal specificity and new product development process on cost reduction performance," Accounting, Organizations and Society, Elsevier, vol. 42(C), pages 1-11.
    6. Abdel-Maksoud, Ahmed & Cheffi, Walid & Ghoudi, Kilani, 2016. "The mediating effect of shop-floor involvement on relations between advanced management accounting practices and operational non-financial performance indicators," The British Accounting Review, Elsevier, vol. 48(2), pages 169-184.
    7. Lisa-Marie Wibbeke & Maik Lachmann, 2020. "Psychology in management accounting and control research: an overview of the recent literature," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(3), pages 275-328, September.
    8. Brian D. Knox, 2021. "A replication about cause–effect linkage benefits and managers’ strategic judgments," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 32(2), pages 225-251, June.
    9. Hall, Matthew, 2008. "The effect of comprehensive performance measurement systems on role clarity, psychological empowerment and managerial performance," Accounting, Organizations and Society, Elsevier, vol. 33(2-3), pages 141-163.
    10. Carl Deschamps, 2019. "Stages of management control in a large public organization: from top to frontline managers," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 30(2), pages 153-184, July.
    11. Burney, Laurie L. & Henle, Christine A. & Widener, Sally K., 2009. "A path model examining the relations among strategic performance measurement system characteristics, organizational justice, and extra- and in-role performance," Accounting, Organizations and Society, Elsevier, vol. 34(3-4), pages 305-321, April.
    12. Ralph Kober & Deryl Northcott, 2021. "Testing cause‐and‐effect relationships within a balanced scorecard," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 1815-1849, April.
    13. Zarinah Abdul Rasit & Che Ruhana Isa Mohamed Isa & Nadiah Abdul Hamid & Siti Nurhazwani Kamarudin, 2023. "Cognitive Motivational Perspectives of Performance Measurement System and Organisational Commitment: Role Ambiguity as a Mediator," Accounting and Finance Research, Sciedu Press, vol. 12(2), pages 1-64, May.
    14. Jacobo Gomez‐Conde & Ernesto Lopez‐Valeiras & Ricardo Malagueño & José Carlos Tiomatsu Oyadomari, 2022. "Quality of performance metrics, informal peer monitoring and goal commitment," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(3), pages 4041-4077, September.

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