Are Subjective Business Performance Measures Justified?
International Journal of Productivity and Performance Management, Vol.65, No.5, (2016) pp. 603–621
Posted: 2 Aug 2024
Date Written: January 1, 2016
Abstract
Purpose - The study aims at operationalising the subjective measures of business performance and assessing their justification for use in place of objective measures of business performance.
Design/ Methodology - The study is based on a sample survey of 171 companies listed on Bombay Stock Exchange (BSE), India. A cross sectional descriptive research design has been used. Exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were used to assess the factor structure of business performance measures.
Findings - The study finds a highly positive correlation between subjective business performance and objective business performance. The study finds it justified to use the subjective measures of business performance.
Research Limitations - Response bias may have crept in because of self reported measure used for the study. Future researchers may cross verify the subjective perception of respondents with data available from the records of the firms.
Practical Implications - The strategy researchers confronting the challenge of adopting appropriate measures of business performance can use either or both of subjective and objective performance measures, as suggested in this study. The study has suggestions for strategic decision makers regarding measurement of business performance in terms of financial as well as operational indicators.
Originality/Values - The study operationalises and validates two measures of performance viz. subjective business performance and objective business performance. It contributes to the strategic management literature by providing evidence for association between objective and subjective measures of performance.
Keywords: Business performance, Performance measurement, Objective performance, Subjective performance
JEL Classification: M1
Suggested Citation: Suggested Citation
Vij, Sandeep and Bedi, Harpreet Singh, Are Subjective Business Performance Measures Justified? (January 1, 2016). International Journal of Productivity and Performance Management, Vol.65, No.5, (2016) pp. 603–621, Available at SSRN: https://ssrn.com/abstract=3554667
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