The role of senior managers’ use of performance measures in the relationship between decentralization and organizational performance. Evidence from hotels in Thailand

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Bangchokdee, Sirilak
Mia, Lokman
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2016
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Abstract

Purpose – This paper aims to examine the role of senior managers’ use of financial and non-financial performance measures in the relationship between decentralization and organizational performance in the hotel industry. Design/methodology/approach – Data were collected using a mailed questionnaire. General Managers in charge of medium-to-large hotels in Thailand completed the questionnaire. In total, 131 general managers, one from each hotel, participated in the study. Path analysis technique was used to test the hypotheses. Findings – The results indicate that the general managers’ use of financial and non-financial performance measures fully mediates the relationship between the extent of decentralization of decision-making and hotel performance. The results reveal that the decentralization of decision-making alone is not enough to help a hotel improve its performance. Indeed, the relationship between decentralization of decision-making and hotel performance exists only via the general manager’s use of the performance measures. It is contended that a general manager’s use of the performance measures in a hotel encourages department managers to make appropriate decisions to successfully improve their department’s performance which, in turn, leads to increased performance of the hotel. Originality/value – This study provides empirical evidence indicating how senior managers in hotels with decentralized decision-making could use performance measures to better manage their hotels, thereby improving the hotel’s performance. An in-depth analysis of the data reveals that the senior manager’s use of the non-financial, and not the financial, performance measures is a mediator of the relationship between decentralization of decision-making and hotel performance.

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Journal of Accounting & Organizational Change

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12

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2

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Commercial services

Accounting, auditing and accountability

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