Organizational performance as a set of four dimensions: An empirical analysis

P. Maik Hamann and Frank Schiemann

Journal of Business Research, 2021, vol. 127, issue C, 45-65

Abstract: Organizational performance (OP) is a central construct in strategic management research. While previous studies established the multidimensionality of OP, relationships between OP and its dimensions remain unexplored. It is important to specify these relationships to determine how to measure OP and how to interpret empirical results. We apply confirmatory tetrad analysis and the framework of Edwards (2001) to test our hypotheses regarding the multidimensional construct type of OP based on a large sample of listed U.S. organizations. Our results suggest that OP is best modeled as a set of four related dimensions (i.e., profitability, liquidity, growth, and stock market performance). Our study has far-reaching implications for future research by showing that hypotheses concerning antecedents or consequences of OP should be developed at the dimensional level.

Keywords: Organizational performance; Construct validation; Multidimensional construct; Structural equation modeling; Confirmatory tetrad analysis (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:127:y:2021:i:c:p:45-65

DOI: 10.1016/j.jbusres.2021.01.012

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