Measuring Sustained Superior Performance at the Firm Level

Emili Grifell-Tatje and Pilar Marquès-Gou ()
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Pilar Marquès-Gou: Departament d'Organització i gestió d'Empreses, Universitat de Girona.

No 208, Working Papers from Departament Empresa, Universitat Autònoma de Barcelona

Abstract: This paper proposes a two-dimensional Strategic Performance Measure (SPM) to evaluate the achievement of sustained superior performance. This proposal builds pr imarily on the fact that, under the strategic management perspective, a firm's prevalent objec tive is the pursuit of sustained superior performance. Three basic conceptual dimensions stem from this objective: relativity, sign dependence, and dynamism. These are the foundations of the SPM, which carries out a separate evaluation of the attained superior performance and of its sustainability over time. In contrast to existing meas ures of performance, the SPM provides: (i) a dynamic approach by considering the progress or regress in performance over time, and (ii) a cardinal measurement of performance differences and its changes over time. The paper also proposes an axiomatic framework that a measure of strategic performance should comply with to be theoretically and managerially sound. Finally, an empirical illustration of the Spanish banking sector during 1987-1999 is he rein provided by discussing some relevant cases.

Keywords: Sustained superior performance; persistent performance; profit differences; sustainable competitive advantage. (search for similar items in EconPapers)
Pages: 40 pages
Date: 2002-07, Revised 2002-07
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Published in Working Papers at the Department of Business, July 2002 pages 1-40

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