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Measuring strategic performance
Author(s) -
Chakravarthy Balaji S.
Publication year - 1986
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250070505
Subject(s) - profitability index , shareholder , strategic management , industrial organization , quality (philosophy) , business , marketing , measure (data warehouse) , strategic fit , performance measurement , process management , computer science , corporate governance , finance , philosophy , epistemology , database
This paper demonstrates the inadequacy of traditional measures, that are based on a firm's profitability, for evaluating its strategic performance. Two other measures, one that attempts to assess the quality of a firm's transformations (and not merely its outcomes) and the other that attempts to measure the satisfaction of all of the firm's stakeholders (and not merely its stockholders), are shown here to be important discriminators of strategic performance. The performances of seven ‘excellent’ firms from the computer industry, featured in the recent book by Peters and Waterman, are contrasted with that of seven ‘non‐excellent’ firms from the same industry, to develop a framework for measuring strategic performance.