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Measuring Sustained Superior Performance at the Firm Level

Author

Listed:
  • Emili Grifell-Tatjé

    (Departament d'Economia de l'Empresa, Universitat Autonoma de Barcelona)

  • Pilar Marquès-Gou

    (Departament d'Organització i Gestió d'Empreses, Universitat de Girona)

Abstract

This paper proposes a two-dimensional Strategic Performance Measure (SPM) to evaluate the achievement of sustained superior performance. This proposal builds primarily on the fact that, under the strategic management perspective, a firm's prevalent objective 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 measures 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 herein provided by discussing some relevant cases.

Suggested Citation

  • Emili Grifell-Tatjé & Pilar Marquès-Gou, 2002. "Measuring Sustained Superior Performance at the Firm Level," Working Papers 200208, Departament Empresa, Universitat Autònoma de Barcelona.
    • Handle: RePEc:bbe:wpaper:200208
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    File URL: http://selene.uab.es/dep-economia-empresa/documents/02-8.pdf
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