The significant of business strategy in improving organizational performance

Purpose - This research aims to investigate the extent to which business strategy mediates the relationship between reliance on integrative strategic performance measurement (RISPM) and organisational performance. Design/methodology/approach - A self-administered survey of 157 managers in Indonesian financial institutions was used to test direct and indirect effects among the hypothesised variables. Findings - The findings indicate that business strategy has a full mediating effect on the relationship between RISPM and organisational performance. Originality/value - This study indicates that performance measurement systems should be designed in conjunction with business strategies to obtain superior performance. More specifically, in the Indonesian financial institutions, applying a differentiation strategy is found to be most effective in gaining competitive advantage and superior performance.

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