Selection Approach to Assessing the Alignment between Business Strategy and Use of Multiple Performance Measures in Malaysian Manufacturing Firms

Abstract

This paper reports the results of an empirical investigation into
alignment, by way of the selection approach, combining Miles and
Snow’s business strategies and use of multiple performance measures.
The selection approach (Drazin & Van de Ven, 1985) defines fit (or
alignment in this paper) in terms of predictable correlations between
Miles and Snow’s business strategies and the use of multiple
performance measures. Utilizing the four balanced scorecard (BSC)
perspectives of performance measures, the correlational analysis
provides empirical evidence that the usage of three perspectives of
the BSC measures, namely, customer, internal business process, and
innovation and learning, are significantly correlated with the degree
to which firms emphasize prospector strategy and analyzer strategy.
However, the usage of financial measures is not significantly
correlated with the degree to which firms emphasize prospector
strategy and analyzer strategy. No evidence is found of an alignment
between the usage of all perspectives of the BSC measures and the
degree to which firms emphasize defender strategy.
Keywords: Balanced Scorecard; Performance Measures; Strategy;
Alignment
JEL classification: M41