Performance Measurement System Design in Joint Strategy Settings

40 Pages Posted: 8 May 2008

See all articles by Anne M. Lillis

Anne M. Lillis

University of Melbourne

Paula van Veen-Dirks

University of Groningen - Faculty of Economics and Business


This study examines empirically the association between joint strategies and the design of manufacturing performance measurement systems. Drawing on data collected from production managers in 84 industrial firms, the study seeks evidence of links between the implementation of differentiation, low cost and joint strategies in production, and reliance on efficiency, financial and customer-focused performance measures. The results indicate the paradoxical situation where virtually all units in the sample pursue competitive advantage in differentiation yet many rely intensely on efficiency and financial measures to measure manufacturing performance. Reliance on efficiency measures is observed to be associated with the pursuit of low cost and differentiation strategies jointly. Reliance on financial measures on the other hand appears to be related to differentiation and not related to the strategic importance of low cost. The findings suggest that financial measures may have a role in monitoring the financial impact of differentiation and curbing excessive differentiation. However, efficiency measures are primarily related to the extent of strategic focus on low cost and may be observed in differentiating units when differentiation is pursued jointly with low cost.

Keywords: strategy, joint strategy, performance measurement systems

JEL Classification: M11, M40, M46

Suggested Citation

Lillis, Anne and van Veen-Dirks, Paula, Performance Measurement System Design in Joint Strategy Settings. Journal of Management Accounting Research, Forthcoming, Available at SSRN:

Anne Lillis (Contact Author)

University of Melbourne ( email )

Parkville, Victoria 3010

Paula Van Veen-Dirks

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen

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