Performance Measurement Literature Research Articles

Decentralized Decision Authority, Balanced Scorecard and Managerial Satisfaction: PLS-SEM Analysis

Organisations has recently experienced many operational difficulties hence the performance measurement systems (PMSs) have a great deal of importance in understanding organisational effectiveness in the wake of pandemic. Organisations use different types of PMSs according to their specific conditions. This situation is explained by contingency theory that the environmental and/or firm-specific factors cause organisations to use different types of PMSs. One of the organisational factors is the management's structure; particularly decentralised decision authority, is described as the delegation of decision rights throughout the organisation. In this type of an organisational structure, innovative PMS such as the balanced scorecard (BSC) is more effective to meet the information needs of organisations. Numerous studies investigated the relationship between the decentralised decision authority, different PMSs and organisational effectiveness. Nevertheless, researchers emphasise the need for a better understanding of factors influencing the use of innovative PMSs. Furthermore, previous studies only investigated organisational performance but, managerial satisfaction is another outcome of performance measurement implementation and given the received scant attention, it is needed to advance our understanding on this topic. Reviewed literature also indicates the need for more research on the firm’s contingent factors, PMS, and managerial satisfaction relationship. In light of methodological developments in PLS-SEM domain, the current study answers this call by conducting research in the hotel industry. Hotel industry is a dynamic industry hence, decentralised decision authority enables to provide effective and timely decisions for arising conditions. Therefore, using the contingency theory, this study proposes and tests a research model which investigates the BSC as a mediator between decentralised decision authority and managerial satisfaction. Data was collected from hotel managers in Turkey and analysed using PLS-SEM. The findings demonstrate that decentralised decision authority has a positive effect on the BSC use which gives rise to increase managerial satisfaction. The results thus reveal that decentralised decision authority is related with the managerial satisfaction only through the BSC. This study makes a significant contribution to the largely neglected area in the hospitality performance measurement literature by investigating the aforementioned relationships. It also provides managerial practical implications of the findings.

Expectation based types of voluntary sports clubs in regional sports federations and the perspectives for professionalisation

Sports clubs in different levels of professionalisation show different organisational problems (Lang et al., 2022). At the same time, one part of the key responsibilities of sports federations as umbrella organisations is the needs-based support of voluntary sports clubs (VSC) as their members. However, different professionalisation levels and heterogeneous organisational problems of member clubs are increasingly challenging the design of appropriate service offerings by sports federations. Thus, services provided by sports federations should be adapted in relation to the expectations and needs of its member clubs. In this way sports clubs also effects with their expectations developments within sports federations to optimise their supporting services in a more targeted manner. This study addresses these challenges by analysing VSCs’ expectations and identify distinct expectation types. The empirical study was carried out in a regional sports federation in tennis, the Bavarian Tennis Federation (BTV). This leads to the research questions: What expectations do VSCs as members generally address to the BTV? To what extent can VSCs be classified in terms of their expectations regarding BTV services? To address these expectations, the performance measurement literature provides a fruitful theoretical frame. In order to base appropriate performance parameters, stakeholders’ expectations need to be identified ex ante (Bayle & Madella, 2002). In the literature it is consensus that measuring the performance of sports federations requires a multidimensional approach (e.g., Winand et al., 2010). To analyse expectations of VSCs an online survey was conducted. Access to the survey was given to BTV member club representatives in a leadership position. For operationalisation, an exploratory factor analysis was performed, which shows the best solution with six reliable factors. The identified factors were used for Ward’s hierarchy cluster analysis with squared Euclidean distances. The analysis showed that an optimal cluster solution can be determined with four clusters. Based on the z-standardised factor values the identified clusters were labelled as follows: (1) “People developer” (n = 57, 32%); (2) “Mass sports clubs” (n = 39, 22%); (3) “Self-governmenters” (n = 40, 23%) and (4) “High expecting communicators” (n = 41, 23%). For validation, the extracted clusters are also reflected by other characteristics of the organisations. The findings reveal that there are heterogeneous expectations of VSCs that need to be addressed more individually by sport federations. The extracted types provide a first empirical step to identify different expectation schemes. These schemes enable managers of sports federations to professionalise their service offer portfolio and at the same time, to design targeted services to contribute to the development and professionalisation of sports clubs.

Performance of urban rail transit: a review of measures and interdependencies

ABSTRACT Recent years saw immense growth in performance measurement literature related to public transit systems, with a clear segmentation between financial and quality-of-service performance frameworks. Recently, there has been a shift away from considering cost efficiency alone as a performance measure, and quality-of-service – which influences ridership attraction and retention – has been receiving more interest. The segmentation of these two performance aspects poses a gap in the literature, as there are interdependencies between them. This study provides a systematic review of the methodologies and empirical findings of studies on both performance measurement aspects of urban rail transit systems; specifically, we demonstrate the importance of linking cost efficiency analyses to the level of service quality. To our knowledge, this is the first review of urban rail transit research that links the two performance aspects. We begin by reviewing the methodological limitations of cost performance measures and summarising the drivers of cost performance in the existing literature. We then review studies on the definitions and measurements of quality-of-service in urban rail performance. Lastly, we summarise the scant literature linking the two performance aspects and highlight future study directions, mainly, the importance of a structural framework to provide a holistic view of transit operators’ performance.

Performance measurement system in local governments: A critical analysis and advancements

The literature highlights the need to develop and utilise a balanced, dynamic, and multi-perspective performance measurement system (PMS) for managing organisations. The system should report the key performance indicators (KPIs) to support decision-making processes. Although the useful approaches for the development of this system are described in the literature, they are not sufficiently applied to public organisations. Hence, this paper aims to identify and apply a useful approach for PMS design in a local government according to national legislation. A qualitative case study method is adopted in this research. It is recognised as the most effective method for obtaining an in-depth understanding of complex environments. To define the steps for developing a PMS, the context and regulation of an Italian municipality are investigated in this research. The result highlights the steps of PMS development suggested by national legislation. It illustrates a local government context, highlighting the considerable complexity of the organisational perspective and numerous controls to carry out to be compliant with the legislation background. The contribution of this study is twofold. First, the study contributes to the performance measurement literature through the approach definition of PMS development in local governments. Second, it contributes to practice by providing a useful case study of PMS development of local governments according to a national legislation background. The research describes a useful approach for designing a PMS in a complex and bureaucratic environment. Moreover, it highlights the main steps to develop a performance measurement system in a local government.

Supply chain performance measurement on small medium enterprise garment industry: application of supply chain operation reference

In 2020, the textile industry contributed nearly 7% of Indonesia's gross domestic product. The garment industry is still dominated by small and medium enterprises (SMEs) among the textile products. Although these SMEs are considered one of the economic pillars in Indonesia, many challenges require strategical scale-up to improve their competitiveness. One of the aspects to be improved is supply chain performance, as the supply chain controls material, information, and financial flow from both supply and demand sides. This study seeks to measure and evaluate supply chain performance in the garment industry, focusing the case on small and medium-scale enterprises. The Supply Chain Operation Reference (SCOR) is used for Key Performance Index (KPI) determinants. Performance measurement starts by determining the criteria based on the performance measurement literature and expert opinion. Then, the weight of each criterion on the performance score is determined using the Analytical Hierarchy Process (AHP). Paired comparison questionnaires for the criteria weighting were distributed to experts, and the answers were analyzed. The final performance value is obtained by multiplying the weight with the normalized performance value using the Snorm-De Boer formula. This study obtained 23 indicators from five processes: plan, make, source, deliver, and return, with the final value of SCM performance classified as good. The result can evaluate the company's current condition and propose a strategy to improve its performance.

Collaborative development of composite indices from qualitative value judgements: The EURO-HEALTHY Population Health Index model

Promoting participation and combining evidence with expert knowledge in constructing composite indices that can be meaningfully interpreted are key open challenges identified in performance measurement literature. To address them, this article proposes a sociotechnical decision-aid process, under a collaborative value-modelling framework, rooted in both process consultation and multicriteria value measurement principles. It consists of two phases (structuring and model building), each one developed in a sequence of non-face-to-face (Web-Delphi) and face-to-face (decision conferencing) group processes, designed to allow for increased participation. Performance indicators are selected and structured in a value-tree (phase one), upon which a group hierarchical additive value-function model is built (phase two), supported by the MACBETH multicriteria decision-support system. Collaborative questioning protocols allow to elicit and reconcile individual qualitative value judgements, in a Web-Delphi platform. The collective knowledge thus acquired is used in decision conferencing with a core group to define value functions and weights. Extensive sensitivity and robustness analyses serve to test the requisiteness of the model, giving rise to a shared structure of composite indices. The proposed approach was shaped within the EURO-HEALTHY project, to create a Population Health Index intended to be a tool enabling policymakers to analyse population health and related inequalities at the regional level across the European Union, and design improvement policies. Many stakeholders and experts from different intervention and knowledge areas, and located across Europe, participated in the different modelling activities, as detailed in this article. Research paths derived from learnings acquired are suggested to further improve process effectiveness and flexibility.

Balanced Scorecard-Based Hospital Performance Measurement Framework: A Performance Construct Development Approach.

IntroductionDespite the critical importance of hospital performance measurement, empirically validated hospital performance frameworks lack. The balanced scorecard is considered one of the most influential contributions in the performance measurement literature. Since the introduction of the balanced scorecard in the early 90s, many scholars have used a balanced scorecard to enable hospital performance measurement and improvement. Therefore, this study aimed to construct and validate a balanced scorecard-based hospital performance framework. Additional to the original four perspectives, the quality of care is added as a perspective for the balanced hospital scorecard. It reflects one of the key strategic objectives in any healthcare organization.MethodsThe study adopted a two-phase model to validate the framework empirically. The first is the exploratory phase, where feedback from academicians and professionals helped finalize the framework in the form of scale. In the second phase, the scale was tested for dimensionality, reliability, and validity.ResultsA total of 200 (81 responded, RR= 40%) senior managers working in Hamad Medical Corporation (HMC), the largest healthcare provider in Qatar, were surveyed. The content, convergent, and discriminant validities were established. The study conducted composite reliability and Cronbach's alpha tests for the reliability, and all variables were found to have alpha and composite reliability higher than 0.7.ConclusionThe findings suggest that senior managers in HMC make a meaningful distinction between the five attributes of hospital performance. Findings, contributions, limitations, directions for future research, and managerial implications are all discussed.

Determinants of financial performance in Albanian economic entities, case of construction industry in Albania

Financial performance mainly reflects the overall financial health of the business sector over a period of time. It shows how well an entity is using its resources to maximize shareholder’s wealth. Although a thorough assessment of a firm's financial performance takes into account many other measures, the most common performance measurement used in the area of finance are financial ratios. This paper provides a comprehensive study of the financial performance measurement literature related to the construction sector in Albania. The literature covers studies from Albania, Iran, India and Pakistan, but some international evidence has also been presented. The construction sector is chosen because of its impact on economic growth in Albania, it represents the second main sector according to its share effect on Albanian GDP. The financial ratios used to measure the financial performance of the construction sector are the debt ratio, the liquidity ratio and the profitability ratio from the period 2018-2020 for 100 construction companies in Albania. Return on Assets (ROA) is taken as the predictor variable and three financial ratios are taken as the predictive variables. This research reveals that the financial ratios have positive correlation with the dependent variable whereas the leverage ratio has negative correlation. To overcome the limitations of the forthcoming studies, the considered number of years need to be increased and other models such as Market Value Added, Capital Asset Pricing Model and Economic Value Added can be used to be tested for research to analyze other factors that may affect financial performance.

Supply chain roles and performance measurement procedures: evidence from Brazilian agribusiness companies

ABSTRACT The purpose of this paper is to analyse the extent to which companies’ roles in supply chain coordination mechanisms affect supply chain (S.C.) performance measurement processes. It addresses the gap in the S.C. performance measurement literature for empirical studies of participant roles across whole supply chains. A survey of 114 individual agribusiness companies was undertaken in Brazil, and it was found that both performance measurement process and performance indicators selection were statistically related to the role played by companies in supply chain coordination mechanisms. Usage of performance indicators regarding new customers and quality was also statistically related to the role played by companies in supply chain mechanisms, as was the overall usage of internal processes performance indicators. The findings also suggest that the specificities of an S.C. coordination mechanism could be related to the design and implementation of S.C. management control practices, rather than being based only on contracts and formal long term agreements.

A practical framework for performance measurement of facilities management services in developing countries’ public hospitals

PurposeFacilities management (FM) plays a vital role toward creating the hospitable environment that supports the core clinical business of rendering quality health care. To ensure optimal performance of FM, public hospitals require a performance measurement (PM) framework that could guide and assist facilities managers in their operations. This paper aims to respond to this need by developing a performance measurement framework useful to improve FM performance within the context of developing countries hospital FM services delivery.Design/methodology/approachThe paper synthesizes knowledge from a comprehensive review of FM performance measurement literature and the results of an earlier PhD research on FM performance measurement in Ghana’s public hospitals.FindingsThe paper presents a simplified performance measurement framework which demonstrates four key performance measurement tasks: establishing performance goals; measuring the FM service delivery; evaluating FM outcomes; and performance review and reporting. The study suggests the establishment of a central coordination point to enhance performance measurement activities of public hospitals’ FM practices.Research limitations/implicationsAlthough reference is made to research on key performance indicators (KPIs), future study is recommended to develop appropriate methodology for selecting relevant KPIs. The author also intends to pilot the framework to a health facility in Ghana to leverage its usefulness, given the fact that it has not been tested empirically.Practical implicationsThe application of the framework is expected to lead to the identification of performance gaps and weakness which when acted upon could lead to operational effectiveness and efficiency of the FM process, ultimately leading to improved FM performance.Originality/valueThe paper develops a novel performance measurement framework useful within the context of the nascent FM industry in the developing world.

The characteristics of nonprofit performance measurement systems

The last ten years have seen a plethora of organisational studies related to nonprofit organisations (NPOs). Regarding performance measures, the initial approach of NPOs is to adapt models and processes developed in a for-profit context. The NPO performance measurement literature suggests that these models fail in addressing the unique characteristics of NPOs relating to their dynamic and complex environments. The research presented in this paper focus is on organisational performance related studies, and it covers private companies’ foundations, technological and professional institutes, and public or government agencies and departments. Ten cases were studied, and the results could not be generalised for NPOs but could be understood in the three different contexts and organisations studied. Foundations are strongly connected to their private supporter, and they are responsible for actions in terms of social responsibility and accountability. Independent institutes are project-oriented organisations that serve specific purposes that are defined by multiple stakeholders, and strongly influenced by the context in which they operate. Public service and government institutions have their operations ruled by an office term period institutional planning framework that deploys government programs and produces performance reports as they have high demands for transparency and accountability.

Evaluating Correlations of External Factors and Performance Measures of the Multimodal Transportation System in Florida

The objective of this study is to quantify the correlation between nearly 100 external factors and over 70 performance measures of the Florida multimodal transportation system, based on the empirical data covering a 10 year period (2009–2018). We first use time-lagged cross-correlation to quantify the correlation between each pair of external factors and performance measures. We then identify the highly correlated external factors with all performance measures or a subset of them. We find that Percentage of Population in Poverty (Florida), Number of Housing Units (Florida), House Price Index (National), Consumer Price Index–Rent Price Index (Florida), and Percentage of Population in Poverty (National) are the external factors highly correlated with the whole system, while the external factors highly correlated with different modes vary. This paper thus contributes to the transportation performance measurement literature by proposing a practical procedure based on time series analysis to help transportation agencies identify important external factors for tracking and monitoring.

Performance measurement and NPOs' effectiveness: does internal stakeholders' trust matter? Evidence from Palestine

PurposeThis study proposes a model of the effect of financial and non-financial performance measures on nonprofit organizations’ (NPOs’) effectiveness where internal stakeholders' trust play an intervening role in the aforementioned relationships.Design/methodology/approachData were collected from 218 employees working at the largest Palestinian NPOs. The perceptions of these employees were used to measure the variables, and structural equation modeling was used to examine the hypotheses.FindingsResults suggest that the use of financial and non-financial performance measures was positively related to NPOs' effectiveness. Internal stakeholders' trust showed a significant mediating effect between the use of performance measures and NPOs' effectiveness.Practical implicationsThis study may be of value for NPOs' managers due to the positive effects performance measurement (PM) can have on NPO effectiveness. Managers and boards should seek to enhance their internal stakeholders' trust to achieve higher levels of effectiveness.Originality/valueThis study has three main contributions. First, it is one of the very few papers which empirically examines the links between PM and NPOs' effectiveness, rather than providing conceptual lens. Second, the paper investigates the role of stakeholders' trust as a mediating mechanism in the proposed model, a topic that has been neglected by NPOs governance researchers. Finally, the study uses data from the Palestinian context, contributing to the PM literature by providing evidence on the relationship between performance measures and NPOs' effectiveness from a non-Western context.

Big data and performance measurement research: trends, evolution and future opportunities

PurposeCurrent literature recognised big data as a digital revolution affecting all organisational processes. To obtain a competitive advantage from the use of big data, an efficient integration in a performance measurement system (PMS) is needed, but it is still a “great challenge” in performance measurement research. This paper aims to review the big data and performance measurement studies to identify the publications’ trends and future research opportunities.Design/methodology/approachThe authors reviewed 873 documents on big data and performance carrying out an extensive bibliometric analysis using two main techniques, i.e. performance analysis and science mapping.FindingsResults point to a significant increase in the number of publications on big data and performance, highlighting a shortage of studies on business, management and accounting areas, and on how big data can improve performance measurement. Future research opportunities are identified. They regard the development of further research to explain how performance measurement field can effectively integrate big data into a PMS and describe the main themes related to big data in performance measurement literature.Originality/valueThis paper gives a holistic view of big data and performance measurement research through the inclusion of numerous contributions on different research streams. It also encourages further study for developing concrete tools.

Factors for performance measurement systems design in nonprofit organizations and public administration

Purpose The purpose of this research is to examine the factors that influence the design of performance measurement systems (PMSs) in nonprofit organizations (NPOs) and public administration and explore inter-relationships among these factors. Design/methodology/approach Findings resulted through the identification of design factors from the paper portfolio of a previous systematic literature review on this topic and the construction of a factor co-occurrence network for the identified factors. Findings The methodology helped to determine the relationships among factors and show how these factors influence PMSs in NPOs and public administration. It also helped to demonstrate how PMSs in these organizations are different from PMSs in traditional companies because of the impact of the factors on the complexity and dynamics of NPOs and public administration. The findings and discussion contribute to the performance measurement literature on NPOs and public administration by presenting a set of design factors related to purpose, stakeholders and management. Practical implications This paper presents practical implications for managers regarding the PMS design process and shows how some design factors can be particularly related to these organizations Originality/value The design factors are particular to the organizational dynamic and should be considered by managers involved with the design (or redesign) process of performance measurement systems.

Marketing performance measurement systems and firm performance

PurposeDriven by the growing pressure to justify the contributions of marketing activities, marketers have shown considerable interest in improving their marketing performance measurement systems (MPMSs). The purpose of this study is to examine the neglected mediating effect of marketing capabilities on the MPMS–firm performance relationship and to focus on specific aspects of MPMSs that have been largely omitted in the prior research, namely, the comprehensiveness and uses of MPMSs.Design/methodology/approachA survey was conducted with marketing and senior managers from 210 Irish-based companies. The proposed research model was tested by using the SPSS Process macro and structural equation modeling in AMOS 24.FindingsThe three characteristics of MPMSs influence firm performance in different manners: while the diagnostic use of MPMSs hinders the development of market-linking capability and thus negatively influences firm performance; the comprehensiveness of MPMSs positively influences firm performance through its impact on architectural marketing capability; and the interactive use of MPMSs via externally focused learning and market-linking capabilities.Research limitations/implicationsAlthough this study used objective firm performance data to validate subjective data, the use of single-informant and self-reported measures may still be a concern, as the strong relationships between variables may be because of single-informant bias.Practical implicationsThis study provides insights into how companies can use a comprehensive MPMS to cultivate specific crucial marketing capabilities and thereby enhance firm performance.Originality/valueThis study contributes to the marketing performance measurement literature by proposing and empirically validating the mediating effect of marketing capabilities on the MPMS–firm performance relationship.

Measuring the unknown

PurposeIn the current digital era where online content is riddled with fabricated metrics and rankings, this research aims to investigate the underpinning mechanisms of the calculative practices which actors engage with to evaluate digital platform content in the absence of well-defined performance measures.Design/methodology/approachThe paper focuses on the online, photo-sharing platform Instagram which is devoid of common performance measures such as rankings, ratings and reviews. The authors applied netnographic methods to capture users' actions and interactions at the Greek Instagram community. The authors adopt a practice lens as informed by Schatzki's ‘site ontology’ to capture actors' calculative practices as organised by rules, teleoaffective structures and general and practical understandings.FindingsPlatform actors engage in aesthetic and palpable evaluations of other user profiles and their posted content. They employ permissible (e.g., using third-party apps) and illicit (e.g., lobbying and procuring engagement) tactics to measure and manage digital platform performance, fabricate metrics and blur others' evaluations, in pursuit of prestige and material teleologies. Their calculative practices are conditioned by an implicit social etiquette, which permeates the platform both horizontally and vertically.Originality/valueFirst, the paper captures and theorises the mechanisms which underpin actors' calculative practices for performance measurement in the absence of robust judgement devices. Second, it demonstrates how ambiguous assemblages of material and prestige teleologies, aesthetic and palpable evaluative regimes and implicit rules and practical expertise collectively invoke platform actors' calculative practices and the construction of performance measures. In doing so, it contributes to performance measurement literature via demonstrating how management accounting is implicated in the evaluation of digital platform outputs.Practical implicationsThe paper provides insight on how platform actors fabricate performance metrics, what they perceive as ‘good’ online content and what constitutes an ‘impactful’ user account or a ‘successful’ social media campaign. Such findings are valuable to management accountants, entrepreneurs and practitioners who seek to evaluate digital platform performance.

Performance measurement and management in small companies of the service sector; evidence from a sample of Italian hotels

PurposeThis paper aims to examine how modern small-medium enterprises (SMEs) operating in the tourism industry perceive and define corporate performance, and how they measure and monitor businesses’ achievements. Actual performance measurement activities are expected to show how (and if) companies manage the key factors that drive value creation and value erosion processes. Are effective performance measurement activities aligned with main theoretical prescriptions?Design/methodology/approachTheory and previous empirical research on SMEs’ performance is instrumentally used to identify those key factors that are supposed to drive small/medium hotels’ business performance; building on a resource-based view (RBV) framework, which provides the theoretical perspective to link resources, capabilities and actions to firm performance, a model based on the financial, the operational and the organisational dimension of firm’s success is developed through the selection of a set of consistent financial and non-financial indicators. The balanced performance measurement model is then tested via a field research study based on a semi-structured questionnaire sent to 540 selected SMEs active in the tourism sector.FindingsThe results suggest that small-medium Italian hotels, typically family firms managed by owners, tend to adopt a balanced system of performance measurement that keeps track of the financial and non-financial dimensions of hotel’s performance; customer orientation proves to be an extremely important leading indicator of non-financial corporate performance. Amongst traditional financial indicators, net profits, profitability ratios such as return on investment and return on sales, revenues for available room, occupancy rate and some cost efficiency ratios are found to be relevant, whereas extensive use is made of non-financial metrics such as customer satisfaction, number of complaints, number of new and repeat customers, employee competencies and staff abilities. Furthermore, some interesting results about frequency of measurement and purpose of measurement are also presented.Research limitations/implicationsData used in this study do not allow for a comprehensive analysis of the correlation between hotel performance and a specific measurement model implemented. Further future research that is meant to be developed will focus on the issue of addressing the nexus between firm performance and resource and capability used as strategic factors and monitored with an effective performance measurement system. The sample can also be expanded to carry out comparative analysis.Practical implicationsThe results shed some further light on performance measurement activities actually implemented by Italian hotels. The evidence gives a contribution to understanding the relationship between critical resources and capabilities that need to be developed and effectively managed to reach superior business performance. Furthermore, the study highlights the need to design and implement a customised performance measurement model, which accounts for firm-specific resources and capabilities and sector-specific features for the hotel to properly manage those strategical success factors that can deliver sustained competitive advantage to the firm.Originality/valueThis research paper contributes to performance measurement literature, by suggesting that the development and the implementation of a simplified but structured and complete performance measurement system, designed on the specific needs and features of SMEs, seems to be a sensible way to improve resources and capabilities utilisation and to obtain a holistic understanding of the achievements of these organisations.

The association between intellectual capital and financial performance in the Islamic banking industry

PurposeThe purpose of this study is to empirically investigate the impact of intellectual capital (IC) on the financial performance of Islamic banks operating in the Gulf Cooperation Council (GCC) countries.Design/methodology/approachThe study measures IC by the value added intellectual coefficient model. A regression analysis was used to assess the impact of IC on financial performance. The research sample consisted of Islamic banks operating in the GCC countries during the years 2011, 2012 and 2013. Data originated from the annual reports of Islamic banks.FindingsThe results support the thesis that IC has a positive impact on the financial performance of Islamic banks. Even though the average IC is lower than that reported in other studies, the positive effect on financial performance is obvious. The findings also show that human capital (HC) is higher than capital employed (CE) and structural capital (SC). The study reveals that SC has an insignificant impact on the financial performance of the Islamic banks compared to CE and HC.Practical implicationsThe findings provide empirical evidence that IC affects the Islamic banks’ financial performance. It helps Islamic banks in the GCC countries to understand how to use their IC efficiently, especially SC as it is yet to be used efficiently. Also, the findings benefit the relevant authorities (e.g. legislators and central banks) who could use them to emphasise strategic policy reforms whenever required.Originality/valueThe current research adds to the empirical studies in the GCC countries as it views the region as a collective as opposed to individual countries. It also extends the IC and performance measurement literature of Islamic banks in the GCC countries. Moreover, the current study enriches the limited literature on IC in the context of Islamic banking.

Development of performance measurement system in the context of Industry 4: a case study

To manage and cope with significant, radical changes of business processes and activities in the context of Industry 4, it is necessary for organizations to have a rapid reactive ability. This requirement may be fulfilled by performance measurement system (PMS) which should be aligned with and could reflect the current digitalization and innovative trends. According to this PMS should be developed due to changes in technology, business environment and organizational processes. But the main uncertainty here is to understand what are the main changes and development trends of PMS needed in the context of Industry 4?To solve this problem, the research presents how PMS can be developed facing industrial revolution using qualitative research method - case study with multiple sources of evidence from semi-structured interviews and documents analysis. According to research results a comprehensive framework for changes in PMS due to the alterations of Industry 4 was developed. Case study results show that technological developments and digitalization processes lead to a more intensive use of predictive methods in planning processes as well as faster control and decision making processes. The main contribution of this paper is to highlight the scientific literature of performance measurement by providing a comprehensive view of developments in PMS in the context of Industry 4. From a practical perspective, the study provides specific practical insights in order to support the reaction processes within organization.