Non-financial Performance Research Articles

Comparative study of management accounting system models on company performance in Indonesia and Malaysia financial institutions

This study compares the management accounting system (MAS) model used by financial institutions registered with Financial Services Authority in Malaysia and Indonesia to ascertain how each affects company performance and identify any differences. A comparative study was used to compare the MAS models in the two nations. A quantitative study of 313 accounting and finance managers in financial firms from 160 firms registered with the Financial Services Authority (OJK) in Indonesia was obtained using a simple random technique. The Covariance Base Structural Equation Model (CB-SEM) was used for data analysis using Lisrel. In addition, a literature review of model comparisons was conducted using prior research findings on the MAS model at financial institutions listed on the Central Bank of Malaysia website. The results of the research in Malaysia demonstrate the impact of the MAS model, which was developed through the three variables of market competition intensity, technological advancement, and innovation on the company's non-financial performance. The research results in Indonesia also demonstrate the impact of the MAS model, which was developed through the three variables of management strategy, support, and competence on the company's financial performance. This study demonstrates how the variables created by the two models are used differently.

The effect of nonfinancial performance measures, absorptive capacity, and organizational learning on innovation performance

The effect of nonfinancial performance measures, absorptive capacity, and organizational learning on innovation performance

The Impact of the Corona Pandemic (COVID-19) on the Liquidity and Profitability on Listed Companies in the Palestine Stock Exchange

The study deal with the subject of the profitability and liquidity of companies listed on the Palestine Stock Exchange in light of the crisis of the COVID-19 pandemic, as the study aimed to verify whether or not there is an impact of the pandemic on the profitability and liquidity of the companies under study by addressing the main problem about knowing the extent to which the various sectors listed in the market are affected by the pandemic. The descriptive approach was adopted for the theoretical aspect, while for the practical side, the earnings per share were adopted as an indicator of liquidity and profitability and were extracted from the financial statements of companies that have been published on the website of the Palestine Stock Exchange. The study was able to include (25) companies from different sectors for which data was available; after collecting and analyzing data and testing the two hypotheses of the study, the study reached a number of conclusions, the most important of which is that there is no statistically significant effect of the COVID-19 pandemic on the liquidity and profitability of companies listed on the Palestine Stock Exchange, and a set of proposals were presented, including Investors in financial markets should not generalize the reaction and indices of developed markets to emerging markets. The study also recommended the need to rely on other financial indicators other than profitability and liquidity to evaluate financial performance. It is also possible to study the impact of the Corona epidemic crisis on the financial and non-financial performance of organizations in general.

Strategy, flexibility and performance: how cost leaders’ lack of structural flexibility negatively impacts nonfinancial performance

Purpose This study analyzes strategic flexibility with a two-dimensional approach (structural and decisional flexibility). It also investigates the relationships among competitive strategy, structural flexibility, decisional flexibility, and financial and nonfinancial performance.Design/methodology/approach The authors collected data from members of 16 chambers of commerce in the United States and used PLS-SEM (partial least squares structural equation modeling) to test the hypotheses.Findings The findings suggest that strategic flexibility impacts financial and nonfinancial performance in different ways. While financial performance is influenced by both the structural and decisional dimensions of strategic flexibility, nonfinancial performance is impacted only by structural flexibility. In addition, the research indicates a negative relationship between cost leadership and structural flexibility and positions structural flexibility as a mediator between cost-leadership and nonfinancial performance.Originality/value The authors contribute to strategic flexibility research in the following ways: (1) analyzed the impact on nonfinancial performance; (2) examined structural and decisional elements and (3) identified cost leadership as a potential barrier.

MILLENNIAL HUMAN CAPITAL DEVELOPMENT STRATEGY MODEL IN IMPROVING BUSINESS PERFORMANCE

Trends in achieving national banking performance in the 2017-2022 period tend to fluctuate. This is evidenced by financial report data that contains performance and financial ratios of national banking with indicators with unstable trends. Creativity, technological advances, superior com-petence and business attitudes to add value proposition to compete in the banking industry are not only related to products and processes, but also related to the company's human capital man-agement and have a positive influence on improving business performance. The research method uses quantitative research with descriptive and verification research types. The research instru-ment used a questionnaire and data analysis techniques to determine the correlative relationship in this study using Partial Least Square. The results of the study show that Business Performance with a dominant dimension, namely Non-Financial Performance, is strongly influenced by the Work Engagement Program with a dominant dimension, namely Organization Commitment and Digital Transformation Implementation with a dominant dimension, namely Value Proposition. The Work Engagement Program is influenced by Millennial Human Capital Development with the dominant dimension namely Internal Integration, which is influenced by the External Environ-ment with the dominant dimension namely Covid-19 Pandemic and the Internal Environment with the dominant dimension namely Human Capital. namely Organization Commitment and Digital Transformation Implementation with a dominant dimension, namely Value Proposition. The Work Engagement Program is influenced by Millennial Human Capital Development with the dominant dimension namely Internal Integration, which is influenced by the External Environ-ment with the dominant dimension namely Covid-19 Pandemic and the Internal Environment with the dominant dimension namely Human Capital. namely Organization Commitment and Digital Transformation Implementation with a dominant dimension, namely Value Proposition. The Work Engagement Program is influenced by Millennial Human Capital Development with the dominant dimension namely Internal Integration, which is influenced by the External Environ-ment with the dominant dimension namely Covid-19 Pandemic and the Internal Environment with the dominant dimension namely Human Capital.

Do firms that perform well report differently compared to those that perform badly? Impression management in integrated reporting

Purpose This paper aims to investigate whether managers use impression management through the presentation of non-financial information in an integrated reporting setting. Design/methodology/approach The authors performed an experiment with experienced professional controllers and part-time students enrolled in the executive master’s degree in finance and control at universities in the Netherlands. In this experiment, we manipulated the financial performance to test if managers present non-financial information differently based on the firm’s financial performance. Findings This study found that impression management is not applied by including or excluding non-financial key performance indicators (KPIs) in the integrated report, but by using more prominent presentation forms for positive non-financial performance and non-prominent ones for negative non-financial performance. However, the use of impression management through the presentation form decreased when the firms’ financial performance was positive. In that instance, this study noted that managers statistically significantly more often decided to present poor non-financial performance in a prominent presentation format in comparison to managers who were not aware of the financial performance. Research limitations/implications A limitation of this paper is that the authors focused on only two impression management strategies: opportunistic/under-reporting and the presentation form. This analysis shows that the use of impression management mainly seems to occur through the presentation format. Future research could investigate other impression management strategies in an integrated reporting setting. Practical implications The results of this study are of importance for users of integrated reports, because it will provide more insight into whether firms are truly transparent in their integrated reports. Furthermore, the theoretical implication of this study is relevant to regulatory authorities, because it sheds light on the different forms of impression management used in integrated reporting and the influence of positively or negatively performing KPIs on the decisions of preparers of integrated reports. Originality/value Therefore, in this study, the authors add to prior literature by investigating the concept of impression management in an integrated reporting setting. More specifically, the authors perform an experiment and focus on different forms of impression management (the presentation format and under-reporting) through non-financial KPIs in an integrated reporting setting and link it to firm financial performance.

PREDICTIVE ROLE OF KNOWLEDGE CULTURE AND INNOVATION CULTURE ON NON-FINANCIAL PERFORMANCE INDICATORS

The aim of the research presented in this study was testing the correlation of knowledge and innovation culture and non-financial performance indicators (NFPIs), the predictive role of independent variables knowledge and innovation culture in NFPIs and differences between dependent and independent variables between micro, small and medium size companies. The study included 124 Serbian MSMEs, that voluntarily responded to 40 questions, presenting the research instrument. Statistical data analysis showed that a significant correlation exists between dependent and independent variables, that knowledge and innovation culture predict NFPIs with 33.4% and that there are differences in innovation culture and NFPIs, but not knowledge culture between companies grouped according to size. The conclusion of the study is that innovation and knowledge culture are of high importance for MSMEs, due to their predictive role in NFPIs, which are most often used, according to literature findings, for the assessment of their long-term success and sustainability. This study also revealed that the highest level of innovation culture and NFPIs is in micro companies in Serbia.

The Effect of Financial and Non-Financial Performance on Islamic Social Reporting

The development of sharia banking is the reason for the need for disclosure of social responsibility in accordance with sharia principles. This study aims to empirically examine the influence of Profitability, Liquidity, Leverage and Sharia Supervisory Board Size on Islamic Social Reporting in Islamic Commercial Banks in Indonesia registered with the Financial Services Authority (OJK). The theoretical basis used in this research is Legitimacy Theory and Shari'ah Enterprise Theory. This study used a purposive sampling method so that a sample of 11 banks was obtained during the 2017-2021 period. In this study using secondary data and data analysis method used is multiple linear analysis. The research results show that Profitability has a negative and significant effect on Islamic Social Reporting and Liquidity has a positive and significant effect on Islamic Social Reporting . Meanwhile, Leverage and Size of the Sharia Supervisory Board each do not have a significant effect on Islamic Social Reporting.

Does the market value “green” companies? Evidence from Indonesia

Financial reporting is important for disclosing crucial information that shows the financial activities and performance of a business. Environmental disclosure in the annual report will enable investors and other interested parties to make informed judgments about the efficiency and impact of managers' sustainability decisions and actions. The aim of this study is to knowledge whether the stock market value the company that are of environmental, by performance and self-disclosure. This study makes significant contributions to the literature in several aspects. First, this is the first study to empirically examine the value relevance of 2 types of non-financial performance that use evidence from Indonesia Stock Market, to the best of our knowledge prior study only use one types of environmental reputation, performance or disclosure itself. This study uses the Ohlson modification model, however, the price model developed by Ohlson in this study modified by adding environmental information as other information that is expected to affect share prices. The results of this study are that environmental performance is value relevant to share prices, which shows that environmental performance influence investors in positive side. Whereas sustainability report disclosure shows different results, the effect is negative towards share prices, these results indicate that companies with high levels of sustainability report disclosure are not highly valued by investors. This can be caused by investors lack of understanding the importance of sustainable companies.

ORGANIZATIONAL CULTURE AND BUSINESS PROCESS

Organizational processes and business processes are key components of successful enterprises. Organizational processes encompass the overall activities and workflows within an organization, involving the coordination of resources and people to achieve organizational objectives. Business processes, on the other hand, focus on specific activities that deliver products, services, or outcomes to customers and stakeholders. They cut across different departments and units, creating value and generating revenue. Organizational processes provide the framework for how an organization operates, including strategic planning, decision-making, and performance management. Business processes, on the other hand, are the operational building blocks that drive day-to-day activities, such as product development, marketing, and supply chain management.Efficient and effective organizational and business processes are crucial for achieving organizational goals and satisfying customer needs. Process improvement methodologies, such as Six Sigma and Lean, are commonly employed to optimize these processes.Overall, organizational processes and business processes work together to ensure the smooth operation of an organization, while driving value creation and customer satisfaction. Understanding the distinction between the two is essential for successful business management and process optimization Keywords: organizational culture, process performance, business process management, business process orientation, organizational performance, non-financial performance,

Predictive Ability of Financial and Non-Financial Performance for Financial Statement Publication Time Frame: Moderating Role of COVID-19 Pandemic

Purpose: This study examined the ability of financial and non-financial performance in predicting financial reports publication time frame as moderated by the COVID-19 pandemic. Theoretical framework: Signal theory postulates that management serves a crucial role in providing information to stakeholders regarding the condition of the company (Brigham & Houston, 2001). According to Spence (1973), companies are motivated to provide relevant information to stakeholders. If the performance conditions are good, the company tend to speed up the process of presenting financial statements. Conversely, if performance is poor, there is a tendency to delay the financial reports publication. The long span of time for the publication of financial reports can indicate bad news that the company has so that it has yet to publish the news to the public. Scott (2015) suggests that when managers know there is unfavorable news about the condition of the company in the future, they will avoid publishing this information or at least delay the presentation of financial statements. Method/design/approach: Financial performance was measured by four indicators: profitability, liquidity and solvency. Meanwhile, variable non-financial performance was measured by the index of good corporate governance (GCG) and auditor reputation. The proposed model was tested based on the quantitative data collected from 156 manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2018 and 2020. The multiple regression analysis was performed to analyze and interpret the data. Results and conclusion: Result indicates that solvency, good corporate governance, and auditor reputation were significant predictors of the time span of financial report publication. However, the predictive ability of profitability and liquidity on the publication timeframe was found to be not significant. Furthermore, the results show that the COVID-19 pandemic moderates the ability of profitability and good corporate governance in predicting the publication timeframe. Research implications: Financial and non-financial performance indicator gives different results in predicting the RWPLK of manufacturing companies in Indonesia. ROA and CR are not able to predict RWPLK, but DER, GCG, KAP are able to predict RWPLK. The role of the COVID-19 pandemic was able to moderate the ability of ROA and GCG in predicting the timeframe for publication of financial reports, but was unable to moderate the ability of CR, DER and KAP in predicting RWPLK. Originality/value: The present study provides the first empirical evidence on the moderating role of the COVID-19 pandemic on the predictive ability of financial and non-financial performance for financial statement publication time frame.

Kinerja Keuangan dan Kinerja Non Keuangan terhadap Daya Saing Daerah Kabupaten Bungo

This study aims first, to determine the effect of financial performance and non-financial performance on regional competitiveness in Bungo Regency. Second, to determine the effect of capital expenditure on regional competitiveness in Bungo Regency. Third, to determine the effect of budget management on regional competitiveness in Bungo Regency. Fourth, to determine the effect of financial performance and non-financial performance on regional competitiveness through capital expenditure in Bungo Regency. Fifth, to determine the effect of financial performance and non-financial performance on regional competitiveness through budget management in Bungo Regency. The data used in this study is primary data collected by direct interviews with respondents with predetermined criteria. This research uses Structural Equation Model (SEM) Analysis and uses Smart PLS tool. The results of the study are that first, financial performance and non-financial performance have a significant effect on regional competitiveness in Muaro Bungo Regency. Second, capital expenditure has no significant effect on regional competitiveness in Muaro Bungo Regency. Third, budget management has a significant effect on regional competitiveness in Muaro Bungo Regency. Fourth, financial performance and non-financial performance have no significant effect on regional competitiveness through capital expenditure in Muaro Bungo Regency. Fifth, financial performance and non-financial performance have a significant effect on regional competitiveness through budget management in Muaro Bungo Regency.

외식 소상공인의 경영컨설팅 서비스품질이 컨설팅 활용도와 경영성과에 미치는 영향

The purpose of this study was to analyze the effects of management consulting service quality on consulting utilization and management performance in small food service businesses and test for variation in consulting service quality by the demographic characteristics. A total of 247 Questionnaires were used for this study. The results are as follow: First, among the sub-areas of management consulting service quality in small food service businesses, outcome quality and physical environment quality significantly affected consulting utilization, and interactional quality had no significant effect on consulting utilization. Second, consulting utilization significantly affected non-financial performance among the sub-areas of consulting utilization but had no significant effect on financial performance. Third, interactional quality among the sub-areas of management consulting service quality significantly affected financial performance. Both interactional quality and physical environmental quality significantly affected non-financial performance.

Effect of Intangible Investment on Non-Financial Performance of the Food and Beverage Sector in Indonesia During the Covid-19 Pandemic

This study is created to know if intangible investment affect non-financial performance in food and beverage industry in Indonesia during Covid-19 pandemic from 2017 to 2021. The data used in this study were obtained from financial statements of manufacturing companies that move in food and beverage industry and consistently the annual report listed in Indonesia Stock Exchange from 2017 to 2021. This study used purposive sampling which is why the sample used in this study amounted to 100 samples. This study also use multiple linear regression models to test the hypothesis. The result of this study had proven that market capitalization and leverage have an influence on non-financial performance. While the other independent variables do not have an influence on non-financial performance.

Stakeholder Focus or Strategy Focus? An Eye-Tracker Study on the Effect of Presentation Format on Nonprofessional Investors’ Information Processing Patterns

Using eye-tracking technology, we examine whether the information processing patterns of nonprofessional investors with a directional investment preference are affected by performance information presented based on either a focus on stakeholders (stakeholder format) or on strategic goals (strategic theme format). We find that when a company’s financial performance has declined but nonfinancial performance has improved, a strategic theme (stakeholder) format causes investors in a long investment position to focus on negative financial information to a lesser (greater) extent than those in a short investment position. These results indicate that a strategic theme format encourages biased investors to draw on favorable nonfinancial information to support their position, whereas a stakeholder format causes them to closely scrutinize unfavorable financial information. We also find that the level of bias in investors’ earnings forecasts is lower when information is presented in a strategic theme format than in a stakeholder format; however, a supplementary experiment finds that this result is reversed when a company’s financial performance has improved but its nonfinancial performance has declined. Our results have implications for external report preparers, standard setters, and analysts.

Effect of dark side leadership and leader-member exchange on corporate performance: Mediating role of employee engagement

Optimized corporate performance assumes that financial and non-financial performance can be achieved through effective collaboration between leaders and employees. This study analyzes the mediation of employee engagement on the connection between dark side leadership and leader-member exchange on corporate performance in Indonesia. This study used a mixed methods approach by distributing questionnaires to 1,013 respondents consisting of supervisors and managers and conducting intensive interviews with 20 respondents with more than 25 years of work experience to strengthen the perception of answers. The paper uses multiple linear regression analysis. The regression results show that dark side leadership (β = –0.228, ρ = 0.000) and leader-member exchange (β = 0.424, ρ = 0.000) affect employee engagement. Next, leader-member exchange (β = 0.176, ρ = 0.008) and employee engagement (β = 0.391, ρ = 0.000) affect corporate performance, while dark side leadership has no effect (β = 0.020, ρ = 0.400). Finally, employee engagement mediates the effect of dark side leadership and leader-member exchange on corporate performance. This finding indicates that the comfort level of employees at work will decrease if a leader demonstrates a dark side behavior that can affect his/her performance, which later impacts corporate performance. Furthermore, the novelty contribution of dark side leadership measurements on the cultural and emotional dimensions can impact employee turnover intention. This study offers implications for practitioners to conduct selective assessments at the beginning of leader recruitment and control internal leader assessments to create effective organizational behavior. AcknowledgmentThis paper is not supported by grants or scholarship and is free from conflict of interest.

Measuring Inequality in Sub-Saharan Africa Post-Pandemic: Correlation Results for Workplace Inequalities and Implication for Sustainable Development Goal ten

Purpose: This paper aims to investigate the relationship between workplace inequalities and business effectiveness in selected and listed businesses in Nigeria. It includes an analysis of four independent sub-variables (gender segregation, incentive disparity, ethnic factors and professional disparity) for the variable workplace inequalities and four dependent sub-variables (creativity, service quality,productivity and business growth)for the variable business effectiveness. Methodology: This study used a survey research approach to investigate the relationship between workplace inequalities and business effectiveness in selected and listed businesses in Nigeria. The survey research design was cross-sectional in this paper, and the technique was quantitative. The adoption of this design was influenced by the research problem and its related research questions. The unit of analysis for this study was the staff of consumer goods companies of Seven listed consumer goods companies in Nigeria that controlled 93.08% of the total market capitalization of the entire consumer goods sector as of October 31, 2022. The population comprised 491 employees of the selected consumer goods companies in Nigeria. A structured questionnaire with Cronbach’s alpha reliability coefficients for the constructs ranging from 0.77 to 0.88 was used for data collection. Findings: The findings of this study are in consonance with the view of Bandura (2012), who insists that entrepreneurial self-efficacy is the level of confidence shown by an individual towards the undertaking of a task or position which favourably influences small business performance. The findings of this study are consistent with those of Ngek (2015); Dessyana and Riyanti (2017); Adolfina and Lumintang (2018); Budiman and Pangestu (2018); Cumberland, Meek, & Germain, (2015): Yusuff et al. (2019); Oyeku et al. (2020); Islam et al. (2020); Kale, (2020); Khalil et al. (2021); McGee & Peterson, (2019); Torres and Watson, (2013) which demonstrate that entrepreneurial self-efficacy positively and significantly affects business performance Research limitation and implication: It recognized that the findings and implications of this paper are situated within Lagos, Nigeria, and primarily small businesses as the focus of its attention. The research can be expanded with similar studies conducted across large businesses in Nigeria or other climes. To achieve more generalizability and trustworthiness, the sample size can be raised by considering more respondents with innovative data gathering techniques. In this research, the absence of data in the majority of small businesses in Lagos was the most significant challenge to obtaining objective performance measurements, for this reason, the non-financial performance indicators were adopted. According to Khalil, et al. (2021), subjective measurements may be produced without objective measures. Practical implication: For every business to scale or survive there is a need to have a reliable configuration of strategies of which managerial capability is key, as such the findings of this study are expected to help create a reminder of the need to improve skill sets in the owner-managers of small businesses to beat the competition and remain viable Social implication: This research will help society comprehend the need for managerial capabilities and entrepreneurial self-efficacy for harmonious business growth and performance in operations. Consequently, generating employment and boosting firm income. Originality/value: The paper provides evidence of the performance of small business in Lagos State Nigeria. This paper extends understanding of entrepreneurial self-efficacy and managerial capabilities among owner-managers of small businesses, and should be of particular interest to entrepreneurs, policy-makers and academia. The paper provides a new interpretation of existing sources particularly the key indicators used for the purpose of determining managerial capabilities and performance of small businesses. This research contributes to the need for greater clarity and knowledge small business sector

Corporate Sustainability by Combating Bribery: The Role of an Organisation Culture and Its Impact on the Organisation’s Performance

There is an increasing trend in bribery practices among employees (corporate bribery), especially from emerging economies, where developed countries, including the USA, have enormous interests in various aspects of local and international trade. Therefore, this study aims to examine the influence of organisations’ culture and outcome orientation, as well as the stability culture dimensions of Organisation Culture Profile (OCP), in order to combat corporate bribery practices, as an aspect of corporate sustainability practices, and their subsequent impact on both organisational financial and non-financial performance. The study surveyed mid-to-top level managers of a total of 201 organisations from Bangladesh. The survey data were used to develop a structural equation model (SEM) by utilising the AMOS (26th version) software, and thus tested the developed hypotheses on the study variables. The findings provide evidence of the positive influence of the two dimensions (outcome orientation and stability) of organisations’ culture in combating bribery practices within organisations. The findings highlight the positive impact of combating bribery practices on both organisations’ financial and non-financial performance. Our empirical findings contribute to the existing limited bribery-related corporate sustainability literature, with the goal of achieving suitable organisation culture in order to minimise unethical business practices, specifically bribery practices. The findings provide practical implications for practitioners and policymakers due to the discovery of the importance of having congenial corporate culture, in order to promote and enhance corporate sustainability practices by reducing the likelihood of poor practices by employees, i.e., taking or offering bribes to business partners.

Research on ESG performance in Chinese listed firms: Perspective of economic policy uncertainty

In the context of the rapid transformation of the global economy, the impact of economic policy uncertainty (EPU) has penetrated into all areas of production and life. As an important indicator system for measuring non-financial performance of firms, ESG has emerged in recent years. From the perspective of economic policy uncertainty, it is significant to understand the development and changes of ESG in Chinese listed firms correctly for realizing high-quality development. Using qualitative research method and combining with practical research experience, this paper discusses the impact of EPU on Chinese listed firms’ ESG performance through ownership. Specifically, we develop analysis from there aspects, including Relationship between social and economic benefits, Employee Benefits and Corporate Governance and ESG Reaction Mechanism in the Context of Uncertainty. We find that under the impact of uncertainty, it is necessary to deeply understand the actual performance of ESG in enterprises with different ownership and the internal motivation of ESG investment, which could be play a vital role in achieving China's “dual carbon” strategic goals and effectively promote sustainable and high-quality development.

Cross cultural adaptation on cooperative performance measurement

This research aims to develop a cooperative performance measurement for cross-cultural adaptation in Indonesian organization. It consists of adapted measurement, initial translation, translation synthesis, back-to-back translation, expert reviews, and pilot test. Organizational performance measurement was adapted in the current research. This research used three cooperative experts (academicians, cooperative boards, and government authorities) who duly reviewed the adaptation. A total of 35 cooperative boards participated in the pilot test to ensure measurement reliability. In the current research, the cooperative performance measurement consists of financial and non-financial performance. Financial performance focused on measuring performance in the sales context, return on sales, return on equity, and venture capital. While non-financial performance includes new product introductions, product quality, the total number of cooperative members, the efficiency of product or service marketing strategies , increased company value, and technical advancements. The finding indicates all items of this research were reliable and valid to measure performance of cooperative organization. A cooperative organization is pivotal for the social welfare of its members because it is the cornerstone of national economic progress. Therefore, financial and non-financial performance were appropriately assessed to evaluate cooperative organization performance. Moreover, practitioners and researchers are able to improve the performance of cooperative organization as a whole through financial and non-financial performance.