Performance measurement systems in Fijian small and medium enterprises in the tourism industry

This research examined how performance measurement systems (PMSs) are used by Fijian small and medium enterprises (SMEs) in the tourism industry, specifically in the accommodation sub-sector. The study has three main research objectives: 1) to determine the influence of a number of factors (environmental uncertainty, ownership (by ethnicity), size and strategy) on the use of PMSs by Fijian SME tourism firms; 2) to examine how Fijian small and medium enterprise (SME) tourism firms use PMSs; and 3) to investigate the influence of the use of PMSs on four organisational capabilities (i.e. teaming of resources, organisational routines, entrepreneurship and innovativeness) and overall organisational performance. A new comprehensive theoretical framework was developed for this study, by drawing on three existing frameworks and/or theories, namely contingency theory, Simons’ levers of control (LOC) framework and resource-based theory (RBT). This study adopted a mixed-methods approach using semi-structured interviews and online and postal surveys. Interview data was analysed using NVivo (version 10), whilst survey data was analysed using Structural Equation Modeling with Partial Least Squares (PLS) method. The results showed that the four contextual factors examined (perceived environmental uncertainty, ownership (by ethnicity), size and strategy), all influenced the use of PMSs, diagnostically and interactively and either directly or indirectly. This study found that the use of PMSs had influenced organisational performance indirectly, by way of organisational capabilities, namely the teaming of resources and planning and control routines. This research contributes to the advancement of the management accounting literature on PMSs in SME tourism ventures, in a developing nation context, using a novel theoretical framework. Practically, this research provides SMEs with an enhanced understanding of the circumstances in which different uses of PMSs are appropriate, to support effective business management. The study’s findings also have implications for policy-makers related to SME development and growth in the tourism industry.