Performance measures and short-termism: an exploratory study

Marginson, David Evan Winston, McAulay, Laurie, Roush, Melvin and Van Zijl, Tony 2010. Performance measures and short-termism: an exploratory study. Accounting and Business Research 40 (4) , pp. 353-370. 10.1080/00014788.2010.9995317

Full text not available from this repository.

Abstract

We examine the relationship between performance measurement systems and short‐termism. Hypotheses are tested on a sample of senior managers drawn from a major telecommunications company to determine the extent to which the diagnostic and interactive uses of financial and non‐financial measures give rise to short‐termism. We find no evidence to suggest that the use of financial measures, either diagnostically or interactively, leads to short‐term behaviour. In contrast, we find a significant association between the use of non‐financial measures and short‐termism. Results suggest that the diagnostic use of non‐financial measures leads managers to make inter‐temporal trade‐off choices that prioritise the short term to the detriment of the long term, while we find interactive use is negatively associated with short‐termism. We find an imbalance in favour of the diagnostic use over the interactive use of non‐financial performance measures is associated with short‐termism. Overall, findings highlight the importance of considering the specific use of performance measures in determining the causes of short‐termism.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HG Finance
Uncontrolled Keywords:	Financial measures; Non‐financial measures; Diagnostic control; Interactive control; Short‐termism
Publisher:	Routledge
ISSN:	0001-4788
Last Modified:	19 Mar 2016 22:32
URI:	https://orca.cardiff.ac.uk/id/eprint/19742

Citation Data

Cited 18 times in Scopus. View in Scopus. Powered By Scopus® Data

Actions (repository staff only)

Edit Item