Contingent Factors and Sustainable Performance Measurement (SPM) Practices of Malaysian Electronics and Electrical Companies

Abstract

In the present world, there is a rapidly growing level of awareness of social and environmental activities. Consequently, a company’s profile is not substantiated purely in relation to financial issues, rather, a need for the inclusion of environmental and social perspectives arises. This is known as sustainable performance. Hence, there is a persistent need for the practice of sustainable performance measurements (SPMs). However, despite the implementation of sustainable performance in developed climes like Europe, the US and the UK, the relevance of sustainable performance is still at a low in developing societies such as Malaysia. The main purpose of this paper is to determine the critical success factors that are attributable to sustainable performance measurement practices for Malaysian electronics and electrical (E and E) companies, as their success is subject to intense scrutiny from their developed competitors, with respect to compliance with social and environmental regulations. A self-administered questionnaire survey was conducted on 217 E and E companies. The path analysis and test of the hypotheses were carried out through structural equation modelling. This study has successfully unveiled a comprehensive SPM model with unprecedented scope, stretching from factors to indicators of a SPM model for Malaysian E and E companies. The findings indicate that pressure from stakeholders and globalization are the driving forces for E and E companies to be more proactive in sustainable practices. In this context, stakeholders, especially policy makers, should play the leading political and social roles in encouraging the adoption of SPMs in developing nations. It must be noted that E and E companies are likely to transform their learning culture and technology in terms of working towards sustainable practices once they have realized the financial benefits of adopting SPMs. With these benefits, a compounding effect due to SPMs will be created among E and E companies, where excellent performance can be achieved continuously. A major limitation of this study is the adoption of the contingency theory, which is yet to have a wide application in this area of study. Meanwhile, future research can be longitudinal in nature in addition to focusing on non-profit organizations.

Financial and Non-Financial Practices Driving Sustainable Firm Performance: Evidence from Banking Sector of Developing Countries

“…The financial variables are the most dominant factors for accessing a firm's sustainable performance; alterations in these factors can transform the performance of companies [21,22].…”

“…The financial variables are the most dominant factors for accessing a firm's sustainable performance; alterations in these factors can transform the performance of companies [21,22]. Organizations select their own specific factors to estimate the quality of performance based on their financial statements [20].…”

Sustainable Strategy to Sustainable Business: An Empirical Analysis on Energy-Efficient Light Bulb

“…This satisfies the findings stated in their article that to be a sustainable business it is mandatory to have some measures which will prove the business sustainable. Similar studies are also found to investigate Sustainable Performance Measurement (SPM) in electrical and electronics companies [69] and mandatory measures to prove business sustainable [70].…”

A Systematic Literature Review on Performance Evaluation of Power System From the Perspective of Sustainability

“…For example, Si et al (2020) employ factor analysis to investigate the interactive endogeneity relationship between RandD investment and financial sustainability performance and the moderate effect of executive incentives. Ong et al (2019) conduct a selfadministered questionnaire survey of 217 electrical and electronics companies and a hypotheses test through structural equation modelling (SEM) to identify critical success factors for sustainable performance measurement in Malaysian electrical and electronics companies. Yang et al (2017) posit a new hybrid evaluation index system from sustainability and internal group management perspectives.…”