The effect of non-financial performance on financial performance moderated by information disclosure

Veranda Aga Refmasari, R A Supriyono

Abstract


This research aimed to test the effect of non-financial performance on financial performance moderated by information disclosure. Balance scorecard was used to  measure performance values in a comprehensive, coherent, measurable, and balanced. The research result showed that non-financial performance measures consisting of consumer, learning and growth perspectives affected financial performance, but internal business process did not affect financial performance. With cause-effect, learning and growth affect internal  busines process, and the internal business process affects customers Information openess does not has efffec of non-financial erformance relatonship towrds financial performance. This research suggests that companies need to increase customer satisfaction and employee-based and strategic alignment growth to improve the company's financial performance.


Keywords


Performance measurement (PM), Balanced Scorecard (BSC), Consumer Performance (KKN), Internal business process performance (KPBI), Learning and growth performance (KPP), Information Openness, and Communication (KM).

References


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Atkinson, Anthony A et al. 2012. Management Accountung: Information for Decision Making and Strategy Execution. Upper Saddle River, New Jersey: Pearson Education, Inc.

Banker, R. D., Potter, G., & Srinivasan, D. 2000. An Empirical Investigation of an Incentive Plan Based on Nonfinancial Performance Measures. The Accounting Review, 75(1), 65–92.

Barker, R. T., & Camarata, M. R. 1998. The Role of Communication in Creating and Maintaining a Learning Organization: Preconditions, Indicators, and Disciplines, (1992), 443–467.

Behn, B. K., & Riley, J. R. A. 1999. Using Nonfinancial Information to Predict Financial Performance : The Case of The U.S. Airline Industry. Journal of Accounting, Auditing & Finance, 29-56.

Bryant, L., Jones, D. A., & Widener, S. K. 2004. Managing Value Creation within the Firm: An Examination of Multiple Performance Measures. Journal of Management Accounting Research, 16(1), 107–131.

Burney, L. L. ., & Swanson, N. J. . 2010. The relationship between balanced scorecard characteristics and managers’ job satisfaction. Journal of Managerial Issues, 22(2), 166–181.

Finn, A. 2001. Mystery Shopper Benchmarking of Durable-Goods Chains and Stores. Journal of Service Research, 3(4), 310–320.

Finney, S., & Corbett, M. 2007. ERP implementation: A compilation and analysis of critical success factors. Business Process Management Journal, 13(3), 329–347.

Goris, J. R., Vaught, B. C., & Pettit, Jr., J. D. 2000. Effects of Communication Direction on Job Performance and Satisfaction: A Moderated Regression Analysis, Volume 37, Number 4: 348–368.

Hair. Jr., Joseph F., et al. 2010. Multivariate Data Analysis.Seventh Edition, Pearson Education, Inc.

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Hartono, Jogiyanto M. 2011. Konsep dan Aplikasi Structural Equation Modeling Berbasis Varian da-lam Penelitian Bisnis. Cetakan Pertama. Yogya-karta: UPP STIM YKPN.

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Atkinson, Anthony A et al. 2012. Management Accountung: Information for Decision Making and Strategy Execution. Upper Saddle River, New Jersey: Pearson Education, Inc.

Banker, R. D., Potter, G., & Srinivasan, D. 2000. An Empirical Investigation of an Incentive Plan Based on Nonfinancial Performance Measures. The Accounting Review, 75(1), 65–92.

Barker, R. T., & Camarata, M. R. 1998. The Role of Communication in Creating and Maintaining a Learning Organization: Preconditions, Indicators, and Disciplines, (1992), 443–467.

Behn, B. K., & Riley, J. R. A. 1999. Using Nonfinancial Information to Predict Financial Performance : The Case of The U.S. Airline Industry. Journal of Accounting, Auditing & Finance, 29-56.

Bryant, L., Jones, D. A., & Widener, S. K. 2004. Managing Value Creation within the Firm: An Examination of Multiple Performance Measures. Journal of Management Accounting Research, 16(1), 107–131.

Burney, L. L. ., & Swanson, N. J. . 2010. The relationship between balanced scorecard characteristics and managers’ job satisfaction. Journal of Managerial Issues, 22(2), 166–181.

Finn, A. 2001. Mystery Shopper Benchmarking of Durable-Goods Chains and Stores. Journal of Service Research, 3(4), 310–320.

Finney, S., & Corbett, M. 2007. ERP implementation: A compilation and analysis of critical success factors. Business Process Management Journal, 13(3), 329–347.

Goris, J. R., Vaught, B. C., & Pettit, Jr., J. D. 2000. Effects of Communication Direction on Job Performance and Satisfaction: A Moderated Regression Analysis, Volume 37, Number 4: 348–368.

Hair. Jr., Joseph F., et al. 2010. Multivariate Data Analysis.Seventh Edition, Pearson Education, Inc.

Hall, M. 2008. The effect of comprehensive performance measurement systems on role clarity, psychological empowerment and managerial performance. Accounting, Organizations and Society, 33(2–3), 141–163.

Hartono, Jogiyanto M. dan Abdillah W. 2014. Kon-sep Aplikasi PLS (Partial Least Square) untuk Penelitian Empiris. Edisi Pertama. Cetakan Ke-dua. Yogyakarta: BPFE UGM.

Hartono, Jogiyanto M. 2008. Sistem Informasi Keperilakuan (edisi revisi). Yogyakarta: ANDI.

Hartono, Jogiyanto M. 2011. Konsep dan Aplikasi Structural Equation Modeling Berbasis Varian da-lam Penelitian Bisnis. Cetakan Pertama. Yogya-karta: UPP STIM YKPN.

Hartono, Jogiyanto M. 2013. Metodologi Penelitian Bisnis: Salah Kaprah dan Pengalaman-Pengalaman. Edisi 6. Yogyakarta: BPFE UGM.

Ittner, C. D., & Larcker, D. F. 1998a. Are Nonfinancial Measures Leading Indicators of Financial Performance? An Analysis of Customer Satisfaction. Journal of Accounting Research, 36(Supplement), 1–35.

Ittner, C. D., & Larcker, D. F. 1998b. Innovations in performance measurement: Trends and research implications. Journal of Management Accounting Research, (10), 205–238.

Ittner, C. D., & Larcker, D. F. 2001. Assessing empirical research in managerial accounting a value-based management perspective. Journal of Accounting and Economics, 32, 349–410.

Ittner, C. D., & Larcker, D. F. 2003a. Coming Up Short on Nonfinancial Performance Measurement. Hardvard Business Review (November): 1-10.

Ittner, C. D., Larcker, D. F., & Meyer, M. W. 2003b. Subjectivity and the weighting of performance measures: Evidence from a balanced scorecard. The Accounting Review, 78(3), 725–758.

Jensen, M. C., & Meckling, W. H. 1976. Theory of Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, V. 3, No. 4, pp. 305-360.

Johnson, E. N., Reckers, P. M. J., & Bartlett, G. D. 2014. Influences of Timeline and Perceived Strategy Effectiveness on Balanced Scorecard Performance Evaluation Judgments. Journal of Management Accounting Research, 26(1), 165–184.

Kaplan, R. S., & Norton, D. P. 1992. The Balanced Scorecard: Measures that Drive Performance [Electronic version]. Harvard Business Review, (January-February), 71–79.

Kaplan, R. S., & Norton, D. P. 1996a. Linking the Balanced Scorecard to strategy”, California Management Review. 39, 1(1), 53–79.

Kaplan, R. S., & Norton, D. P. 1996b. The Balanced Scorecard Translating Strategy In Action. Boston, Massachusetts: Harvard Business School Press.

Kaplan, R. S., & Norton, D. P. 1996c. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive In The New Business Environmental. Boston, Massachusetts: Harvard Business School Press.

Libby, T., Salterio, S. E., & Webb, A. 2004. The Balanced Scorecard: The Effects of asurance and Process Accountability on Managerial Judgment. The Accounting Review, 79(4), 1075–1094.

Lipe, M. G., & Salterio, S. E. 2000. The Balanced Effects Scorecard : of Common Judgmental and Unique Performance Measures. The Accounting Review, 75(3), 283–298.

Malina, M. A., & Selto, F. H. 2001. Communicating and Controlling Strategy: An Empirical Study of the Effectiveness of the Balanced Scorecard. Journal of Management Accounting Research, Vol. 13, No. 1, pp. 47-90.

Mulyadi. 2014. Sistem Terpadu Pengelolaan Kinerja Personel Berbasis Balanced Scorecard. Yogyakar-ta: UPP STIM YKPN.

Nah, F. F.-H., & Delgado, S. 2006. Critical Success Factors for Enterprise Resource Planning Implementation and Upgrade. Journal of Computer Information System. Special Issues, 99-113.

Näslund, D., & Williamson, S. 2010. What is Management in Supply Chain Management?-A Critical Review of Definitions, Frameworks and Terminology. Journal of Management Policy and Practice, 11(4), 11–28.

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Otley, D. 1999. Performance management: A framework for management control systems research. Management Accounting Research, 10(4), 363–382.

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Banker, R. D., Potter, G., & Srinivasan, D. 2000. An Empirical Investigation of an Incentive Plan Based on Nonfinancial Performance Measures. The Accounting Review, 75(1), 65–92.

Barker, R. T., & Camarata, M. R. 1998. The Role of Communication in Creating and Maintaining a Learning Organization: Preconditions, Indicators, and Disciplines, (1992), 443–467.

Behn, B. K., & Riley, J. R. A. 1999. Using Nonfinancial Information to Predict Financial Performance : The Case of The U.S. Airline Industry. Journal of Accounting, Auditing & Finance, 29-56.

Bryant, L., Jones, D. A., & Widener, S. K. 2004. Managing Value Creation within the Firm: An Examination of Multiple Performance Measures. Journal of Management Accounting Research, 16(1), 107–131.

Burney, L. L. ., & Swanson, N. J. . 2010. The relationship between balanced scorecard characteristics and managers’ job satisfaction. Journal of Managerial Issues, 22(2), 166–181.

Finn, A. 2001. Mystery Shopper Benchmarking of Durable-Goods Chains and Stores. Journal of Service Research, 3(4), 310–320.

Finney, S., & Corbett, M. 2007. ERP implementation: A compilation and analysis of critical success factors. Business Process Management Journal, 13(3), 329–347.

Goris, J. R., Vaught, B. C., & Pettit, Jr., J. D. 2000. Effects of Communication Direction on Job Performance and Satisfaction: A Moderated Regression Analysis, Volume 37, Number 4: 348–368.

Hair. Jr., Joseph F., et al. 2010. Multivariate Data Analysis.Seventh Edition, Pearson Education, Inc.

Hall, M. 2008. The effect of comprehensive performance measurement systems on role clarity, psychological empowerment and managerial performance. Accounting, Organizations and Society, 33(2–3), 141–163.

Hartono, Jogiyanto M. dan Abdillah W. 2014. Kon-sep Aplikasi PLS (Partial Least Square) untuk Penelitian Empiris. Edisi Pertama. Cetakan Ke-dua. Yogyakarta: BPFE UGM.

Hartono, Jogiyanto M. 2008. Sistem Informasi Keperilakuan (edisi revisi). Yogyakarta: ANDI.

Hartono, Jogiyanto M. 2011. Konsep dan Aplikasi Structural Equation Modeling Berbasis Varian da-lam Penelitian Bisnis. Cetakan Pertama. Yogya-karta: UPP STIM YKPN.

Hartono, Jogiyanto M. 2013. Metodologi Penelitian Bisnis: Salah Kaprah dan Pengalaman-Pengalaman. Edisi 6. Yogyakarta: BPFE UGM.

Ittner, C. D., & Larcker, D. F. 1998a. Are Nonfinancial Measures Leading Indicators of Financial Performance? An Analysis of Customer Satisfaction. Journal of Accounting Research, 36(Supplement), 1–35.

Ittner, C. D., & Larcker, D. F. (1998b). Innovations in performance measurement: Trends and research implications. Journal of Management Accounting Research, (10), 205–238.

Ittner, C. D., & Larcker, D. F. 2001. (2001) Assessing empirical research in managerial accounting a value-based management perspective. Journal of Accounting and Economics, 32, 349–410.

Ittner, C. D., & Larcker, D. F. 2003a. Coming Up Short on Nonfinancial Performance Measurement. Hardvard Business Review (November): 1-10.

Ittner, C. D., Larcker, D. F., & Meyer, M. W. 2003b. Subjectivity and the weighting of performance measures: Evidence from a balanced scorecard. The Accounting Review, 78(3), 725–758.

Jensen, M. C., & Meckling, W. H. 1976. Theory of Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, V. 3, No. 4, pp. 305-360.

Johnson, E. N., Reckers, P. M. J., & Bartlett, G. D. 2014. Influences of Timeline and Perceived Strategy Effectiveness on Balanced Scorecard Performance Evaluation Judgments. Journal of Management Accounting Research, 26(1), 165–184.

Kaplan, R. S., & Norton, D. P. 1992. The Balanced Scorecard: Measures that Drive Performance [Electronic version]. Harvard Business Review, (January-February), 71–79.

Kaplan, R. S., & Norton, D. P. 1996a. Linking the Balanced Scorecard to strategy”, California Management Review. 39, 1(1), 53–79.

Kaplan, R. S., & Norton, D. P. 1996b. The Balanced Scorecard Translating Strategy In Action. Boston, Massachusetts: Harvard Business School Press.

Kaplan, R. S., & Norton, D. P. 1996c. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive In The New Business Environmental. Boston, Massachusetts: Harvard Business School Press.

Libby, T., Salterio, S. E., & Webb, A. 2004. The Balanced Scorecard: The Effects of asurance and Process Accountability on Managerial Judgment. The Accounting Review, 79(4), 1075–1094.

Lipe, M. G., & Salterio, S. E. 2000. The Balanced Effects Scorecard : of Common Judgmental and Unique Performance Measures. The Accounting Review, 75(3), 283–298.

Malina, M. A., & Selto, F. H. 2001. Communicating and Controlling Strategy: An Empirical Study of the Effectiveness of the Balanced Scorecard. Journal of Management Accounting Research, Vol. 13, No. 1, pp. 47-90.

Mulyadi. 2014. Sistem Terpadu Pengelolaan Kinerja Personel Berbasis Balanced Scorecard. Yogyakar-ta: UPP STIM YKPN.

Nah, F. F.-H., & Delgado, S. 2006. Critical Success Factors for Enterprise Resource Planning Implementation and Upgrade. Journal of Computer Information System. Special Issues, 99-113.

Näslund, D., & Williamson, S. 2010. What is Management in Supply Chain Management?-A Critical Review of Definitions, Frameworks and Terminology. Journal of Management Policy and Practice, 11(4), 11–28.

Nitzl, C. 2016. The Use of Partial Least Squares Structural Equation Modelling (PLS-SEM) in Management Accounting Research: Direction for Future Theory Development. Journal of Accounting Literature, No. 37: 19-35.

Niven, P. R. 2002. Balanced scorecard Step By Step: Maximining Performance and Maintaining Results. New York: John Wiley and Sons, Inc.

Otley, D. 1999. Performance management: A framework for management control systems research. Management Accounting Research, 10(4), 363–382.

Pettit, Jr., J. D., Goris, J. R., & Vaught, B. C. 1997. An Examination of Organizational Communication as a Moderator of the Relationship Between Job Performance and Job Satisfaction. The Journal of Business Communication, Volume 34, Number 1: 81–98.

Riani, Lilia Pasca. 2010. “Pengaruh Orientasi Proses Bisnis Terhadap Kinerja Keuangan dengan Peran Mediasi Kinerja Nonkeuangan pada Perusahaan Manufaktur Berskala Mikro, Kecil, dan Menengah di Jawa Timur.” Tesis. Universitas Gadjah Mada.

Sholihin, Mahfud dan Ratmono, Dwi. 2013. Ana-lisis SEM-PLS dengan WarpPLS 3.0 untuk Hub-ungan Nonlinier dalam Penelitian Sosial dan Bisnis. Yogyakarta: ANDI.

Škrinjar, R., Bosilj-Vukšić, V., & Indihar-Štemberger, M. 2008. The impact of business process orientation on financial and non-financial performance. Business Process Management Journal, 14(5), 738–754.

Sumner, M. 1999. Critical Success Factors in Enterprise Wide Information Management Systems Projects. 297-303.

Treacy, M., & Wiersema, F. 1993. Customer intimacy and other value disciplines. Harvard Business Review VO - 71, (1), 84.

Tucker, M. L., Meyer, G. D., Westerman, J. W., Meyer, G. D., & Westerman, J. W. 1996. Or-ganizational Communication: Development of Internal Strategic Competitive Advantage. Journal of Business Communication, Volume 33, No. 1: 51–69.

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DOI: http://dx.doi.org/10.14414/jebav.v22i2.1694

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