Toward a Subjective Measurement Model for Firm Performance
Journal Title: BAR: Brazilian Administration Review - Year 2012, Vol 9, Issue 5
Abstract
Firm performance is a relevant construct in strategic management research and frequently used as a dependent variable. Despite this relevance, there is hardly a consensus about its definition, dimensionality and measurement, what limits advances in research and understanding of the concept. This article proposes and tests a measurement model for firm performance, based on subjective indicators. The model is grounded in stakeholder theory and a review of empirical articles. Confirmatory Factor Analyses, using data from 116 Brazilian senior managers, were used to test its fit and psychometric properties. The final model had six firstorder dimensions: profitability, growth, customer satisfaction, employee satisfaction, social performance, and environmental performance. A second-order financial performance construct, influencing growth and profitability, correlated with the first-order intercorrelated, non-financial dimensions. Results suggest dimensions cannot be used interchangeably, since they represent different aspects of firm performance, and corroborate the idea that stakeholders have different demands that need to be managed independently. Researchers and practitioners may use the model to fully treat performance in empirical studies and to understand the impact of strategies on multiple performance facets.
Authors and Affiliations
Santos, Juliana Bonomi; Brito, Luiz Artur Ledur
Keywords
Related Articles
- EP ID EP40534
- DOI -
- Views 263
- Downloads 0
Brazilian Credit Union Member Groups: Borrower-dominated, Saver-dominated or Neutral Behavior?
Theoretical models concerning Credit Unions (CUs) suggest that the type of CU domination determines the way it allocates the monetary value it generates. A borrower- (saver-) dominated CU benefits borrower (saver) memb...
Organizational Decline Research Review: Challenges and Issues for a Future Research Agenda
Organizational decline is related to the deterioration of the resource base and performance of an organization for a sustained period of time. Although some studies have been conducted, it remains an understudied phenom...
Are Country and Size Risks Priced in the Brazilian Stock Market?
When estimating a firm’s cost of equity for valuation and other purposes in emerging markets without (or with only partial) capital market integration, many practitioners include a premium for country risk. In principle...
Cause Related Marketing: Consumers’ Perceptions and Benefits for Profit and Non-Profits Organisations
This study is an attempt to understand consumers’ perceptions regarding Cause Related Marketing [CRM]. The research findings were based on a survey of 200 consumers in the Brighton area and published data. The research...
Organizational Commitment, Psychological Contract Fulfillment and Job Performance: A Longitudinal Quanti-qualitative Study
The goals of this study are to contribute to the understanding of the development of organizational commitment and to explore the relations among psychological contract fulfillment, organizational commitment, and job p...