This paper discusses the degree to which financial and non-financial measures of performance are used within the Malaysian manufacturing companies. A questionnaire survey was conducted and information on 77 companies was obtained. The paper investigates the generation and use of the measures as well as assesses the commonality between management theory and reported practice. The findings indicate that although the best practice (in academic terms) is apparent in some companies, the use of these measures in the determination of business strategy has not yet become a standard practice.

In recent years, a revolution in performance measurement has emerged (Eccles, 1991), urging organizations to place emphasis on non-financial performance measures. For a number of years now, commentators have exhorted organizations to use more `balanced' measurement practice in an attempt to complement the traditional financial performance measurement. As organizations attempted to measure and manage the demands for value creation, attention began to shift away from the sole use of financial measures (Hayes and Abernathy, 1980). Despite the abundance of new researches describing these issues and conferences extolling the virtues of these measures, a universally accepted approach to the use of financial and non-financial performance measures has not yet been demonstrated clearly. This survey, therefore, evaluates where companies are amidst this revolution, paying particular attention to the uptake of both financial and non-financial measures.

Due to globalization and liberalization of world markets, competition faced by the organizations have become more and more intense, and the pressure to perform better is unavoidable. The findings of this study will not only enrich the field of research pertaining to the use of financial and non-financial performance measures, but more importantly, it also raises public awareness of the performance measurement issue in Malaysia. In addition, these findings form the basis of an in depth investigation into these practices at Malaysian manufacturing industry.

Financial and Non-Financial Performance Measures, Malaysian Manufacturing Companies, management theory and reported practice, General Accepted Accounting Principles (GAAP), managerial accounting practices, value-added financial measures, customer satisfaction, employee satisfaction, quality and innovation.