Journal of the Korean Operations Research and Management Science Society (한국경영과학회지)

The Korean Operations Research and Management Science Society (한국경영과학회)
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An Empirical Analysis of the Effect of Operations Performance on Financial Performance

오퍼레이션스 성과와 재무성과 간의 인과관계에 대한 실증분석

  • Kim, Younghoon (Office of Planning and Coordination, Green Cross Corp.) ;
  • Pyun, Jebum (Division of Business Administration, Sookmyung Women's University) ;
  • Kim, DaeSoo (Korea University Business School)
  • Received : 2015.01.22
  • Accepted : 2015.02.23
  • Published : 2015.02.28
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Abstract

While many previous studies investigated the effect of operations performance on financial performance, most studies considered only a few performance indicators and ignored the characteristics of industries. Therefore, this study intends to analyze the effect of operations performance on financial performance, by selecting a rather comprehensive operations performance indicators from firms' financial data. In doing so, we used operating efficiency and supply chain performance indicators for operations performance and a firm's profitability and future value indicators for financial performance. For the analysis, we collected 544 firms' operations and financial performance data belonging to eight key industries from the 'Forbes Global 2000'. We first analysed the differences in operations and financial performance among high, medium and low supply chain performance groups based on the quantitative criteria of Gartner's 'Supply Chain Top 25' ranking procedure. Then we analysed the effect of operations performance indicators on financial performance for both entire industry and individual industries, using multiple regression. Based on the results, we provided practical insights into key operations performance indicators to focus on and manage in order to improve financial performance.

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References

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