Toward a subjective measurement model for firm performance



Título del documento: Toward a subjective measurement model for firm performance
Revista: BAR - Brazilian Administration Review
Base de datos:
Número de sistema: 000552872
ISSN: 1807-7692
Autores: 1
2
Instituciones: 1Lancaster University Management School, Lancaster. UK
2Fundação Getúlio Vargas, EAESP, São Paulo, SP. Brasil
Año:
Periodo: May
Volumen: 9
Número: Nspe
Paginación: 95-117
País: Brasil
Idioma: Inglés
Resumen en inglés 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 first-order 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.
Keyword: Firm performance,
Confirmatory factor analysis,
Measurement model,
Subjective indicators
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