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

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 stru...

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Bibliographic Details
Published in:Contemporary accounting research 2004-12, Vol.21 (4), p.925-958
Main Author: WEBB, R. ALAN
Format: Article
Language:English
Subjects:
Accounting
Goal commitment
Goals
Managers
Measurement
Performance measurement
Strategic planning
Strategy
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Summary: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.
ISSN:0823-9150
1911-3846
DOI:10.1506/KHW0-G7PY-AQEA-718J