The Impacts of Lean Production and Non-financial Performance Measures on Organizational Performance
Date Issued
2008
Date
2008
Author(s)
Kuo, Yi-Wen
Abstract
This study attempts to examine the impact of lean production and the use of non-financial performance measures on non-financial and financial performance. Over recent years, there has been an increase in global competition and rapid change in market. Many firms have sought to enhance their competitiveness by adopting lean production. An important concern in the implementation of lean production is the extent to which lean production should be developed together with proper management accounting system（MAS）. This study focus MAS on the use of non-financial performance measures, and it is examined that the potential for lean production to enhanced the profitability of firms when employees are evaluated by using linked performance measures. Lean production consists of quality management, demand management, extensive communication, and decentralization. Non-financial performance measures consist of bottom-up data and benchmarking, customer survey and vendor performance, and the extent of understanding the strategic plan. The survey of 207 Taiwan listed companies are conducted, and this study examines the impact of lean production and the use of non-financial performance measures on non-financial and financial performance. The result shows that firms implementing a higher degree of lean production are more likely to use more non-financial performance measures. Also, the result supports that firms implementing a higher degree of lean production are more likely to have better non-financial performance, and firms having better non-financial performance will have enhanced financial performance. The study reveals that firms implementing lean production will first improved non-financial performance, and then enhanced profitability of firms.
Subjects
lean production
management accounting system
non-financial performance measures
non-financial performance
financial performance
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ntu-97-R95722041-1.pdf
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