“Firm performance” measurement in strategic management: some notes on our performance

Abstract

Purpose Firm performance remains at the heart of strategic management. In the quest to refine the field’s contribution, Venkatraman and Ramanujam (1986) argued that reliance upon single measures of firm performance is risky and firm performance should be treated as a multidimensional construct. Subsequently, researchers have examined trends in firm performance measurement ever since. Over a decade since the last examination of this issue, this study aims to add to the ongoing conversation. Design/methodology/approach The authors investigated 1,972 research papers published in five premier management journals for the years 2015–2019 to determine if multidimensional measurement of firm performance has improved. Findings The findings suggest that approximately two-thirds of papers that measure firm performance are published using only a single measure of firm performance, and approximately three-fourths do not measure firm performance across multiple dimensions. Originality/value This study contributes to the literature by emphasizing the necessity to consider the dimensionality of firm performance, use multiple measures and consistently ground firm performance variables with theory – especially control variables – to keep firm performance as the focus of the strategy field. Evidence and implications are discussed and recommendations for researchers and reviewers are provided.