Measuring Long Term Superior Performance: Or How to Compare Apples with Oranges

Advanced Institute of Management Research Paper No. 063

38 Pages Posted: 3 Dec 2008

See all articles by George S. Yip

George S. Yip

Imperial College London

Timothy M. Devinney

University of Manchester - Alliance Manchester Business School

Gerry Johnson

Lancaster University - Management School

Date Written: January 1, 2008

Abstract

The measurement of company performance poses several challenges. Three critical ones are: balancing short-term and long-term performance, the need to use multiple measures to capture the broad meaning of performance, and finding the right peer comparators. We argue that truly sustainable long term superior performance should be observed over an extended period, and in comparison with industry peers from around the world. We describe how a technique, frontier analysis, can be applied to the issue of measuring performance. We apply frontier analysis to several companies in the oil industry to demonstrate how their performance can be ranked even when using eight divergent measures. We also apply the technique to identify which of 215 of the largest UK publicly-listed companies in 38 industries can qualify as long term superior performers. We find and name 28 qualifying companies in 19 industries.

Suggested Citation

Yip, George S. and Devinney, Timothy M. and Johnson, Gerry, Measuring Long Term Superior Performance: Or How to Compare Apples with Oranges (January 1, 2008). Advanced Institute of Management Research Paper No. 063, Available at SSRN: https://ssrn.com/abstract=1309600 or http://dx.doi.org/10.2139/ssrn.1309600

George S. Yip (Contact Author)

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Timothy M. Devinney

University of Manchester - Alliance Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Gerry Johnson

Lancaster University - Management School ( email )

Bailrigg
Lancaster, LA1 4YX
United Kingdom

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