AUTOMOTIVE INDUSTRY IN MALAYSIA: SUSTAINABLE PERFORMANCE (SP)

SUSTAINABLE PERFORMANCE

Existing performance measurement is used to improve organizational performance. Performance measurement can help an organization measure progress towards its goals, understand its current situation, address the key issues, and the options available (Searcy et al., 2008). This statement is also supported by Amaratunga et al. (2000) who proved that performance measurement as the process of quantifying the efficiency and effectiveness of an action. Effective performance measurement can let us know about a way of doing something, achieve the goals, customers’ satisfaction, work under control, and improvements are necessary (Isik, 2009). Therefore, performance measurement is the process to identify how successful organizations or individuals have been in attaining their objectives and strategies.

According to previous authors (Mayyas et al, 2012; Moldan et al, 2012; Schoenherr, 2011; Bartelmus, 2010; Singh et al, 2009; Labuschagne et al. 2005; Veleva and Ellenbecker, 2001), sustainable developments could improve three dimensions of SP namely: (i) environmental sustainability; (ii) economic sustainability; and (iii) corporate social responsibility (CSR) sustainability.

Environmental sustainability refers to the use of energy and other resources and the footprint companies leave behind as a result of their operations. It is often related to waste reduction, pollution reduction, energy efficiency, emissions reduction, decrease in the consumption of hazardous materials, and decrease in the frequency of environmental accidents. Social sustainability shifts the focus to both internal communities and external ones (Pullman et al, 2009). Indeed, firms engage in CSR activities as a way to enhance their social reputation (Fombrun, 2005). Whereas, economic sustainability is the criteria by how a pound of profit is made is a building block in the creation of a just capitalism; progressive profitability must replace simple financial profitability as the sole yardstick of business success (Doane and MacGilivray, 2001 cited in Hutton, 2001). Based on the current literature, there have been various dimensions of the sustainable performance that were used by previous studies. A summary of SP measurements is given in Table 1.

Table 1. The summary research finding on sustainable performance
Table1The Relationship between Sustaining-1
Table2The Relationship between Sustaining-2