Strategic performance measurement system,firm capabilities andcustomer-focused strategy

Yuliansyah Yuliansyah, Ashfaq Ahmad Khan and Arief Fadhilah

Pacific Accounting Review, 2019, vol. 31, issue 2, 288-307

Abstract: Purpose - The impact of a firm’s strategic performance measurement system (SPMS) on its customer-focused strategy, under varying contexts, has largely been documented in the literature. However, the system’s capacity to positively influence the firm strategy through its impact on the firm’s peculiar internal and external capabilities, in the peculiar context of the developing countries’ financial services sector, has so far skipped a thorough academic enquiry. This study, using Indonesia’ financial services sector as its ‘site’, aims to fill this void in the literature. Design/methodology/approach - The authors gleaned the study’s empirical data from financial services sector firms using survey questionnaire and analyzed it using SmartPLS. A total of 107 valid responses from management members of different financial services sector firms in Indonesia were deemed useable. Findings - The study findings support the paper’s main thesis. The findings revealed that the strategic PMS contributes to enhancing firms’ market orientation and robustness by positively contributing to their customer-focused strategy from three distinct dimensions – competitors, customers and organizational learning. Research limitations/implications - The authors posit that an effective customer-focused strategy can be accomplished by purposefully adapting the focus of the firm’s strategic PMS to positively influence the organizational learning, which subsequently translates into the firm’s high competitiveness in the marketplace. Originality/value - The unexplored link between the SPMS, firm’s internal and external capabilities and customer-focused strategy in the particular context of a developing country’s financial services sector will not only fill the current void in the literature but also instigate a new academic debate. The study will also contribute to the management accounting practice in service firms in the developing countries context.

Keywords: Service sector; Business strategy; Developing economies; Firm capabilites; Strategic performance measurement system (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eme:parpps:par-09-2018-0068

DOI: 10.1108/PAR-09-2018-0068

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