Strategy Archetypes Adopted by Icelandic Companies, Their Fit with Performance Measures and Effects on Financial Performance

Pall Rikhardsson, Olaf Sigurjonsson, Audur Arna Arnardottir

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    Abstract

    Past research seems to suggest that companies adopting certain strategies favor certain sets of performance measures. That is to say companies using entrepreneurial focused strategies favor non-financial measures or a balanced mix of financial and non-financial measures. Companies adopting reactive or operational strategies seem to favor financial measures and are less likely to use non-financial measures.
    We take this research further by focusing not only on the link between strategy types and performance measures but also on what specific performance measures are used in connection to which strategies. Furthermore, we examine the link between the strategies adopted, the
    performance measures favored and the financial performance of the companies.
    The empirical data collection was carried out in winter 2013 with a population of the 300 largest companies in Iceland. The survey was sent to the CFO of the company. The rationale is that the CFO as a member of the management team would have knowledge of both the
    strategic stance adopted by the company as well as the performance measures in use.
    Initial results seem to support the notion that companies adopting certain strategic archetypes seem to favor certain performance measures. It seems however, that many Icelandic companies have a diffuse strategic profile and only focus on financial performance measures. Even when using a mix of performance measures Icelandic managers seem to place most importance on financial performance measures.
    Original languageEnglish
    Publication date2013
    Number of pages16
    Publication statusPublished - 2013
    EventThe 22nd Nordic Academy of Management Conference. 2013: On Practice and Knowledge Eruptions - University of Iceland, Reykjavík, Iceland
    Duration: 21 Aug 201323 Aug 2013
    Conference number: 22
    https://nff2013.hi.is/

    Conference

    ConferenceThe 22nd Nordic Academy of Management Conference. 2013
    Number22
    LocationUniversity of Iceland
    Country/TerritoryIceland
    CityReykjavík
    Period21/08/201323/08/2013
    Internet address

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