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.
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The 22nd Nordic Academy of Management Conference. 2013