Selection Approach to Assessing the Alignment between Business Strategy and Use of Multiple Performance Measures in Malaysian Manufacturing Firms

This paper reports the results of an empirical investigation into alignment, by way of the selection approach, combining Miles and Snow’s business strategies and use of multiple performance measures. The selection approach (Drazin Van de Ven, 1985) defines fit (or alignment in this paper) in terms of predictable correlations between Miles and Snow’s business strategies and the use of multiple performance measures. Utilizing the four balanced scorecard (BSC) perspectives of performance measures, the correlational analysis provides empirical evidence that the usage of three perspectives of the BSC measures, namely, customer, internal business process, and innovation and learning, are significantly correlated with the degree to which firms emphasize prospector strategy and analyzer strategy. However, the usage of financial measures is not significantly correlated with the degree to which firms emphasize prospector strategy and analyzer strategy. No evidence is found of an alignment between the usage of all perspectives of the BSC measures and the degree to which firms emphasize defender strategy.