A Balancing Act? The Implications of Mixed Strategies for Performance Measurement System Design

Dekker, H.C., Groot, T.L.C.M. & Schoute, M. (2013). A balancing act? The implications of mixed strategies for performance measurement system design. Journal of Management Accounting Research, 25, 71-98.

45 Pages Posted: 15 Feb 2007 Last revised: 3 Aug 2015

See all articles by Henri C. Dekker

Henri C. Dekker

Vrije Universiteit Amsterdam

Tom Groot

VU University Amsterdam - Amsterdam Research Center in Accounting

Martijn Schoute

VU University Amsterdam - Department of Accounting

Date Written: November 5, 2012

Abstract

This paper examines how firms design performance measurement systems (PMSs) to support the pursuit of mixed strategies. In particular, we examine the implications of firms’ joint strategic emphasis on both low cost and differentiation for their use of performance measurement and incentive compensation. Analysis of survey data of 387 firms shows that more than half of the sample to some extent or fully mixes strategic priorities, while strategic priorities resembling strategic archetypes (primarily low cost or differentiation) populate only 36% of the sample. Our analyses support that as compared to archetypal strategies, pursuing mixed strategies elicits design of more comprehensive and complex PMSs that are aimed at balancing effort and decisions toward the multiple strategies pursued.

Keywords: mixed strategies, performance measurement, incentives, survey, cluster analysis

JEL Classification: M20, M40

Suggested Citation

Dekker, Henri C. and Groot, Tom and Schoute, Martijn, A Balancing Act? The Implications of Mixed Strategies for Performance Measurement System Design (November 5, 2012). Dekker, H.C., Groot, T.L.C.M. & Schoute, M. (2013). A balancing act? The implications of mixed strategies for performance measurement system design. Journal of Management Accounting Research, 25, 71-98., Available at SSRN: https://ssrn.com/abstract=962766 or http://dx.doi.org/10.2139/ssrn.962766

Henri C. Dekker (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands

Tom Groot

VU University Amsterdam - Amsterdam Research Center in Accounting ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands

Martijn Schoute

VU University Amsterdam - Department of Accounting ( email )

De Boelelaan 1105, room 7A-75
Amsterdam, 1081 HV
Netherlands
+31 20 598 2328 (Phone)
+31 20 598 9870 (Fax)

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