Does the Religious Nature of Organizations Affect Performance Measurement? A Case of GCC Banks

Management accounting performance measurement (PM) practices in manufacturing industry are well reported, but little is known about PM practices in financial services industry (FSI) and almost nothing is reported regarding Islamic FSI. This research attempts to study the multdimensional PM practices in Islamic FSI. Several Islamic financial institutions have been studied in the Gulf Cooperation Council (GCC) countries in order to explore the effect of the nature of organization in PM practices. Special emphasis is given on non-financial PM practices that conform the principles of Shariah in different type and size of Islamic FSI in different macroenvironment in GCC countries. As it is known that the objective of Islamic FSI is not only to maximize profit, but also to improve the socio economic condition of the community in order to conform the principles of Shariah, which actively advocates non-profit activites thay make a positive contribution toward the needy and poor, and promote welfare programs thay may or may not be financially viable. This study reveals that management accounting plays a moderate role in measuring both financial and non-financial performances in the Islamic FSI in GCC countries. However, research results indicate that the nature and characteristics of organization (Islamic FSI) do not have great impact on PM practices though it is generally held belief that Islamic FSI should conform the principles of Shariah. According to research findings, some research directions are given at the end of this chapter