Please use this identifier to cite or link to this item: https://doi.org/10.1504/IJAAPE.2007.017457
Title: Profit as a signal of product quality and customer service: Performance evaluation for plant managers
Authors: Shih, M.S.H. 
Keywords: Compensation
Cost centre
Performance evaluation
Plant managers
Profit centre
Issue Date: 2007
Source: Shih, M.S.H. (2007). Profit as a signal of product quality and customer service: Performance evaluation for plant managers. International Journal of Accounting, Auditing and Performance Evaluation 4 (6) : 608-632. ScholarBank@NUS Repository. https://doi.org/10.1504/IJAAPE.2007.017457
Abstract: Plant managers generally have no direct marketing responsibilities but they have control over product quality and customer service. This paper hypothesises that many firms evaluate these managers on profit because sales, a component of profit, convey information on a plant manager's performance on product quality and customer service. Several predictions are developed from the hypothesis and tested in this study. The chance that a plant manager is evaluated on cost vs profit is predicted to decrease with the sensitivity and precision of sales as an indicator of product quality and customer service. In addition, the chance that a plant manager is evaluated on cost vs profit may be associated with the extent to which the manager is also evaluated on specific measures of product quality and customer service. Empirical results are generaly consistent with these predictions. Copyright © 2007, Inderscience Publishers.
Source Title: International Journal of Accounting, Auditing and Performance Evaluation
URI: http://scholarbank.nus.edu.sg/handle/10635/44497
ISSN: 17408008
DOI: 10.1504/IJAAPE.2007.017457
Appears in Collections:Staff Publications

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