Managers’ knowledge and financial performance in Iranian firms

Abstract

Increasingly competitive global product markets have rendered many traditional performance measurements and reward systems obsolete. The need for organizations to adapt to today's dynamic and complex business environment in order to remain competitive is clear. In addition, the investment community has increased the pressure on managers to deliver value, driving for more accurate and transparent performance measurement. As a result, many organizations have had to re-examine their traditional performance measures and the structure of the compensation schemes that were built around them in the past decade. This paper will discuss Activity-based costing (ABC), the Balanced Scorecard and Economic Value Added (EVA), three frameworks that are becoming increasingly popular with companies in a wide range of industries. In Iran many of the financial managers especially those who are involve in small business use traditional management methods and they are not familiar with EVA, BSC and ABC techniques. We believe that in companies whose financial managers are familiar with ABC, EVA and BSC concepts their financial performances are increased.