Practice Determinants and Outcomes of Multiple Performance Measures - Essay Example

Business performance measurement systems play an important role in developing strategic plans, monitoring and evaluating the achievement of organizational strategic goals and compensating managers. In today’s dynamic business environment with extreme competition, there has been considerable discussion on the importance of performance measurement innovations (Kaplan & Norton, 1996, Atkinson et al., 1997, Ittner & Larcker, 1998a). New financial metrics such as Economic Value Added (EVA®) and Shareholder Value Approach (SVA) have been introduced and used by some organizations.

Non-financial measures have been recommended to complement the financial measures and organizations are being advised to erect multi-dimensional measurement systems. Multiple performance measurements and integration of financial and non-financial measures are some of the key innovations in management control systems that will provide managers critical information on monitoring key business activities and organizational goals. As no comprehensive corporate performance measurement study has been conducted in Hong Kong and Shanghai, the first objective of this study is to explore the current practices of multiple performance measures by both Hong Kong and Shanghai organizations and compare any differences between them.

As Hong Kong is one of the international cities long influenced by modern western managerial practices, it is preferable to study the performance measurement practices in Hong Kong.