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The use of non-financial performance indicators and organisational performance: an empirical analysis of Italian firms

Author

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  • Ahmed Abdel-Maksoud
  • Fabrizio Cerbioni
  • Mohamed F. Omran
  • Federica Ricceri

Abstract

This study investigates the relationships between the use of non-financial performance indicators (NFPIs) and firms' reported financial performance. We question whether using NFPIs has an impact on firms' future financial performance. This study uses a panel of three years of data (t, t + 1, t + 2) collected from different sources. Cross-sectional data were collected from 106 medium-sized to large Italian manufacturing firms. The results indicate that Italian companies are found to distinguish between 'hard' and 'soft' NFPIs of employee morale, where hard measures are those more directly related to the production process, while soft measures are those more focused on the intangible aspects of employees. Our findings, interestingly, report significant positive associations between the use of only one category of NFPIs in year t, namely soft employee morale NFPIs, and firms' reported financial performance measured by return on assets in year t + 2. Practical implications, in particular, for Italian economy are discussed.

Suggested Citation

  • Ahmed Abdel-Maksoud & Fabrizio Cerbioni & Mohamed F. Omran & Federica Ricceri, 2015. "The use of non-financial performance indicators and organisational performance: an empirical analysis of Italian firms," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 16(4), pages 421-441.
    • Handle: RePEc:ids:ijbpma:v:16:y:2015:i:4:p:421-441
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    Cited by:

    1. Helgesen, Øyvind, 2021. "Do Customer Profitability Accounting and Analyses Provide Managers with new Decision Support? Evidence from Norwegian Fish Exporters," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 12(02), June.

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