Nonfinancial Performance Measures and BSC in MNCs with Multicultural Environment in the Middle East: An Empirical Investigation

• In Event: International Accounting 1

Abstract

The purpose of this paper is fourfold: (1) to investigate the use of both financial and nonfinancial performance measurement practices in Saudi companies , and to what extent they use the balanced scorecard (BSC) in their performance measurement systems (PMS); (2) to explore the challenges and the reasons of adapting the BSC; (3) to know the problems involved in adapting an objective, realistic and practical PMS; and (4) to explore the effect of cultural values on the use of the PMS. The data were collected from 120 valid responses of Saudi manufacturing companies. This study provides systemic new evidence on the extent to which the companies use an integrated performance measurement systems and the use of the BSC concept in an emerging market associated with different cultural values than other industrial countries. The results show that financial measures are more widely used than nonfinancial measures by most of the companies included in the sample. The reason behind the wide use of the financial measures of performance due to the fact they are common and well known in the business practice and they are more standardized measures which can be easily implemented and quantified.

Authors

• Wagdy M Abdallah, Seton Hall University

• Majbour Alnamri, King Abdulaziz University