CONFIRMATORY FACTOR ANALYSISOF STRATEGIC CONTROL SYSTEM IN MALAYSIA AUTOMOTIVE INDUSTRY
Keywords:Balanced scorecard, strategic control system, structural equation model, confirmatory factor analysis, automotive
In the globalization era, Malaysian automotive industry is facing greater challenges due to the general quest for high quality, the local and international requirement and regulation and the increasing competition between local car and foreign car manufactures. Therefore, to increase the competitiveness, companies must implement and maintain quality initiatives such as Balanced Scorecard (BSC) in order to compete between local, regional, and global market. The Balanced scorecard strategy helps managers to manage strategic plan, monitor and control the performance result, encourages effective communication and discussion, provides reward based system, and feedback with quick action approach that align with organization goal. Managers need to focus on both, not only for multiple performance measurement, but also Strategic Control Systems (SCS) to achieve organizational goals. This research reviews the SCS literature and proposed four con-structs with the underlying items of clarifying and translating vision and strategy, communicating and linking, planning and target setting and strategic feedback. Data were obtained from 252 top management of Malaysian automotive industry. This paper presents finding of Exploratory Factor Analyses (EFA), Confirmatory Factor Analysis (CFA), and reliability analysis empirically verified and validated. The results indicate that four SCS constructs are acceptable for further analysis. The paper with a proposed future direction ends of this research.