Factors Contributing to Non-financial Performance of Companies

The objective of this chapter is to evaluate and compile the diverse studies on how “non-financial performance metrics” might affect the companies’ achievement. The three main drivers for performance change subject to our study are the “Balanced Scorecard” technique, “leading financial performance forecast,” and “strategic fit.” There is general agreement about the risks associated with using only financial metrics and the necessity of balancing them with non-financial success indicators. The most frequent way to classify these intangible metrics is through dichotomies related to ownership, provenance, participation of individuals, and objectivity versus subjectivity. It was not discovered that improved performance was positively correlated with strategic fit or alignment of performance metrics. Nonetheless, because of its strategic consideration, the use of a balanced scorecard is linked to improved performance. It has been discovered that non-financial metrics are predictive of financial performance. Furthermore, it appears that many indicators are interacting with one another and predict different elements of financial success. Lastly, rather than using demonstrated economic success, caution should be exercised when assessing perceived performance.