How Organizational Characteristics Influence the Choice of Performance Measures: A Large-Scale Empirical Study

Despite the growing emphasis on performance measurement, empirical evidence linking the selection of performance measures to distinct organizational characteristics remains limited. Moreover, practical guidance on selecting appropriate performance measures for different organizational contexts is often ambiguous or absent. This study addresses these gaps through a large-scale empirical analysis of 372 organizations across diverse industry sectors. It provides validation for the hypothesized contingency effects of various organizational characteristics—such as size, structure, and global exposure—on performance measurement choices. The findings support our contention that no single performance measure is universally optimal; rather, the suitability of specific measures depends on the organization’s contextual attributes. By integrating both operational and relational performance dimensions, the study offers a comprehensive framework for understanding how organizational contingencies shape measurement practices. The results yield actionable implications for managers, enabling them to align their performance measurement systems with organizational characteristics, thereby enhancing resource allocation, strategic decision-making, and their ability to compete.