Performance Measurement and CG: New Perspective in Management Accounting

Abstract

This study manages the required changes in PMSs to apply CG using Institutional Theory. The present study extends the scope of Institutional Theory by explaining how the change mechanisms impact to create and modify existing PMS. Therefore, a better understanding of the relationships between performance dimensions and CG factors in manufacturing companies is a key issue in this paper.Using Institutional Theory, this paper provides three change mechanisms result from CG; fairness, transparency, and responsibility. As well, a three factor model; Input-Process-Output is posited that comprises 15 measures of inputs, 13 measures of process and 12 measures of outputs. A questionnaire survey of 128 individuals was analyzed using statistical techniques. Furthermore, a case study is performed in an Egyptian company.The results show that there is a strong positive relationship between PMS and CG factors. Most of the individual measures in the proposed PMS have high importance. Further, there are significant differences between the degree of importance of input and output measures according to CG applying. Finally, the results of the case study prove the ability of the proposed model to shed light on the strength and weakness of organizational performance.This paper contributes to the performance measurement debate in manufacturing companies that implement CG practices. This study contributes to theory and practice by introducing a new perspective of PMS that explains the relationships between CG practices and the main dimensions of performance.

Keywords: PMS, CG factors, institutional theory, Input-process-output approach, Quality-Will, Egypt