Toward a subjective measurement model for firm performance

Santos, Juliana and Brito, Luis (2012) Toward a subjective measurement model for firm performance. BAR : Brazilian Administration Review, 9 (SI). pp. 95-117. ISSN 1807-7692

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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.

Item Type:
Journal Article
Journal or Publication Title:
BAR : Brazilian Administration Review
Uncontrolled Keywords:
?? firm performanceconfirmatory factor analysismeasurement modelsubjective indicatorsstrategy and management ??
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Deposited On:
01 Nov 2013 09:18
Last Modified:
15 Jul 2024 14:20