Measuring Organizational Performance as a Dependent Variable: Towards Methodological Best Practice

Journal of Management, Vol. 35, No. 3, pp. 718-804.

Leeds University Business School Working Paper No. 15-05

47 Pages Posted: 13 Oct 2005 Last revised: 28 Nov 2015

See all articles by Pierre J. Richard

Pierre J. Richard

University of New South Wales (UNSW) - Management; UNSW Australia Business School, School of Economics

Timothy M. Devinney

University of Manchester - Alliance Manchester Business School

George S. Yip

Imperial College London

Gerry Johnson

University of Strathclyde in Glasgow

Date Written: September 26, 2008

Abstract

Organizational performance is one of the most important constructs in management research. We review the contexts that frame organizational performance as a dependent variable with specific emphasis on how it is operationalized and measured. The research contexts of past studies are firmly anchored around a multidimensional conceptualization of organizational performance related predominately to stakeholders, heterogeneous market circumstances, and time. The review of the operationalization and measurement of performance highlights the limited effectiveness of commonly accepted measurement practices in tapping this multidimensionality. By synthesizing the literature, the foundations are laid for the improved measurement of performance in management research. We conclude with a call for research that examines the effectiveness of triangulation utilizing multiple measures, applies longitudinal data and brings to bear alternative methodological formulations as means of appropriately aligning research contexts with the measurement of organizational performance. Validating these measurement approaches is an important agenda for further research.

Previous Title: Measuring Organizational Performance in Management Research: A Synthesis of Measurement Challenges and Approaches

Keywords: Organizational Performance, Measurement, Management

JEL Classification: M1, M10, L10, L20

Suggested Citation

Richard, Pierre J. and Devinney, Timothy M. and Yip, George S. and Johnson, Gerry, Measuring Organizational Performance as a Dependent Variable: Towards Methodological Best Practice (September 26, 2008). Journal of Management, Vol. 35, No. 3, pp. 718-804., Leeds University Business School Working Paper No. 15-05, Available at SSRN: https://ssrn.com/abstract=814285 or http://dx.doi.org/10.2139/ssrn.814285

Pierre J. Richard

University of New South Wales (UNSW) - Management ( email )

Sydney, NSW 2052
Australia

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

Timothy M. Devinney (Contact Author)

University of Manchester - Alliance Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

George S. Yip

Imperial College London ( email )

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

Gerry Johnson

University of Strathclyde in Glasgow ( email )

16 Richmond Street
Glasgow 1XQ, Scotland G1 1XQ
United Kingdom

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