Handbook of Management Scales/Profitability

Profitability (AVE = 0.742; CR = 0.896)

Description

The authors test the construct validity of indicators of three dimensions of organizational performance, a fundamental construct in strategic management. Based on an examination of reliability, convergent validity, discriminant validity and nomological validity, and on additional analyses, the authors find evidence of four rather than three dimensions of organizational performance: liquidity, profitability, growth, stock market performance.

Items

• Return per employee (0.791)
• Return on sales (0.687)
• Return on assets (0.748)

Source

• Hamann et al. (2013): Exploring the Dimensions of Organizational Performance: A Construct Validity Study. Organizational Research Methods, Vol. 16, No. 1, pp. 67-87

Comments

The authors did a lot to ensure reliability and validity of their scales. Richard et al. have conduct related research: Richard et al. (2009): Measuring Organizational Performance: Towards Methodological Best Practice. Journal of Management, Vol. 35, Nr. 5, pp. 718-804.

Related Scales

• Comparative organizational performance
• Cost performance, delivery performance, flexibility performance, and quality performance
• Firm's financial performance over the past 5 years
• Performance
• Organizational performance: liquidity, profitability, growth, stock market performance