The Dimensionality of Organizational Performance and its Implications for Strategic Management Research

Organizational performance is widely recognized as an important – if not the most important – construct in strategic management research. Researchers also agree that organizational performance is a multidimensional construct. However, the research implications of the construct’s multidimensionality are less understood. In this chapter, we use a synthesis of previous attempts to describe the dimensions of performance and our own analysis of performance measurement in the Strategic Management Journal to build a conceptual model of organizational performance and its dimensions. Our model suggests that operational performance and organizational performance are distinct, and that organizational performance can be further dimensionalized into accounting returns, stock market, and growth measures. The model has implications for how future research might advance understanding about performance and how empirical studies should conceptualize and measure performance.