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Are subjective business performance measures justified?

Author

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  • Sandeep Vij
  • Harpreet Singh Bedi

Abstract

Purpose - – The purpose of this paper is to operationalize the subjective measures of business performance and assessing their justification for use in place of objective measures of business performance. Design/methodology/approach - – The study is based on a sample survey of 171 companies listed on Bombay Stock Exchange, India. A cross-sectional descriptive research design has been used. Exploratory factor analysis was used to assess the factor structure and dimensionality of objective and subjective measures of business performance. The psychometric properties of these measures and their interrelationship have been assessed through confirmatory factor analysis. Findings - – The study finds a strong 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/implications - – 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. Second, the study focuses only on financial and operational indicators of performance. The future studies may widen the scope of business performance by incorporating the interests of other stakeholders like suppliers, government, environment and society in general. 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/value - – The study operationalizes and validates two measures of performance, namely, subjective business performance and objective business performance. The study contributes to the strategic management literature by providing evidence for association between objective and subjective measures of performance.

Suggested Citation

  • Sandeep Vij & Harpreet Singh Bedi, 2016. "Are subjective business performance measures justified?," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 65(5), pages 603-621, June.
    • Handle: RePEc:eme:ijppmp:v:65:y:2016:i:5:p:603-621
    DOI: 10.1108/IJPPM-12-2014-0196
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    Citations

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    Cited by:

    1. Abiodun B.ONAMUS & Grace O. MAKINDE & Babatunde H. AKINLABI, 2020. "Entry Mode Strategy, Firm-Level Capability, Environmental Turbulence, and Organisational Performance: A Moderated Analysis," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 5(2), pages 278-290, December.
    2. Di Foggia, Giacomo, 2021. "Energy-Efficient Products and Competitiveness in the Manufacturing Sector," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7(1).
    3. Rayees Farooq & Sandeep Vij, 2019. "Does Market Orientation Mediate between Knowledge Management Orientation and Business Performance?," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 18(04), pages 1-35, December.
    4. Prayag, Girish & Chowdhury, Mesbahuddin & Spector, Samuel & Orchiston, Caroline, 2018. "Organizational resilience and financial performance," Annals of Tourism Research, Elsevier, vol. 73(C), pages 193-196.
    5. Daisy Lily Moscare-Balanquit, 2021. "Examining the Contribution of Valuable and Rare Resources and Capabilities to Performance of Micro Enterprises," International Review of Management and Marketing, Econjournals, vol. 11(3), pages 22-29.
    6. André de Waal & Michael Weaver & Tammy Day & Beatrice van der Heijden, 2019. "Silo-Busting: Overcoming the Greatest Threat to Organizational Performance," Sustainability, MDPI, vol. 11(23), pages 1-21, December.
    7. Slobodan Marić & Nemanja Berber & Agneš Slavić & Marko Aleksić, 2021. "The Mediating Role of Employee Commitment in the Relationship Between Corporate Social Responsibility and Firm Performance in Serbia," SAGE Open, , vol. 11(3), pages 21582440211, August.
    8. Seemant Kumar Yadav & Vikas Tripathi & Geetika Goel, 2021. "Dis-Aggregated Effect of Market Orientation on Firms' Performance: A Study on Indian Small and Medium-Scale (SMEs) Manufacturers," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 12(3), pages 87-108, July.
    9. Thanh Tiep Le & Abhishek Behl, 2022. "Role of corporate governance in quick response to Covid-19 to improve SMEs’ performance: evidence from an emerging market," Operations Management Research, Springer, vol. 15(1), pages 528-550, June.
    10. Choonghyun Kim & Jaekang Lee, 2018. "The Effect of Network Structure on Performance in South Korea SMEs: The Moderating Effects of Absorptive Capacity," Sustainability, MDPI, vol. 10(9), pages 1-14, September.
    11. André de Waal, 2017. "Evaluating High Performance the Evidence-Based Way: The Case of the Swagelok Transformers," SAGE Open, , vol. 7(4), pages 21582440177, October.
    12. Neba Bhalla & Rakesh Kumar Sharma & Inderjit Kaur, 2022. "Effect of Tax Knowledge and Technological Shift in Tax System on Business Performance: A PLS-SEM Analysis," Sustainability, MDPI, vol. 14(16), pages 1-18, August.
    13. Yinghong Susan Wei & Hugh O’Neill & Nan Zhou, 2020. "How Does Perceived Integrity in Leadership Matter to Firms in a Transitional Economy?," Journal of Business Ethics, Springer, vol. 167(4), pages 623-641, December.
    14. Rasha A. A. ElNaggar & Mayar Farrag ElSayed, 2023. "Drivers of business model innovation in micro and small enterprises: evidence from Egypt as an emerging economy," Future Business Journal, Springer, vol. 9(1), pages 1-17, December.
    15. Neba Bhalla & Inderjit Kaur & Rakesh Kumar Sharma, 2022. "Examining the Effect of Tax Reform Determinants, Firms’ Characteristics and Demographic Factors on the Financial Performance of Small and Micro Enterprises," Sustainability, MDPI, vol. 14(14), pages 1-18, July.
    16. Danilo Gambelli & Francesco Solfanelli & Stefano Orsini & Raffaele Zanoli, 2021. "Measuring the Economic Performance of Small Ruminant Farms Using Balanced Scorecard and Importance-Performance Analysis: A European Case Study," Sustainability, MDPI, vol. 13(6), pages 1-13, March.
    17. Chiwei Chen & Kun-Shan Zhang & Chiu-Mei Chen & Lu-Sheng Pao, 2023. "The Impact Between Motivational Potential Characteristics of Job and Job Satisfaction: A Moderation Model of Personality Traits in a High-Tech Industry," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 14(1), pages 1-19, January.

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