Effects Of Strategic Performance Measurement System And Islamic Work Ethics On Firm Performance: (Evidence From Malaysian Islamic Banks)

Abstract

The strategic performance measurement system (SPMS) is part of the performance measurement system. SPMS is a performance measurement system that combines strategy, business operations, and finance to measure how well a company achieves its targets/vision and mission. The implementation of a successful strategy in a company should be guided by two important things, first an understanding of the company cycle that connects strategy and operations, and second, knowing what strategies are used in each phase of the company. The performance measurement system encourages managers to think strategically about how the company's activities fit into other parts of the company and to assist the company in managing its operational activities. Inadequate management supervision on the performance measurement system puts the company at risk of failure. A suitable performance measurement system can protect the organization from potential losses and increase organizational effectiveness. Work ethics is interesting to study because it presumed to be greatly affects company performance. The company's values are influenced by the ethics that the company operates. The company's values are influenced by the ethics that the company operates. Islamic Work Ethics comes from the Qur’an and Hadiths. This study aims to examine the effect of SPMS and Islamic work ethics on company performance and to see the  oderating effect of Islamic work ethics on the relationship between SPMS and firm performance and to investigate the moderating effect of Islamic work ethics on the relationship between competitive strategy and company performance (Malaysian Islamic banking). The research design is explanatory research with a quantitative approach using a survey method in the Islamic banking industry. The population of this research is Islamic commercial banks, the sampling technique is based on purposive sampling method, the data used are primary. The research data processing using structural equation modeling. The difference between this study and previous research is that this study uses the Islamic work ethic variable and then investigates the effect of the strategic performance measurement system on company performance in Malaysian Islamic banks. The results show that there is sufficient evidence that Islamic work ethics has positive effects on firm performance. While the effects of strategic performance measurement system on firm performance shows not supported. The role of moderating effects of Islamic work ethics on the strategic performance measurement system variable against firm performance which is moderated by Islamic work ethics shows supported results and a positive slope. This means that when Islamic work ethics is stronger, the effect of the strategic performance measurement system on firm performance is higher.