C. Chet Miller

PERSPECTIVE: The Myth of Firm Performance

Firm performance is one of the most prominent concepts in organizational research. Despite its importance, and despite the many developmental critiques that have appeared over the years, performance continues to be a difficult concept to apply in a scientifically rigorous way. After surfacing three potentially viable approaches for conceptualizing performance, we find that most studies are internally inconsistent in their use of these approaches, a situation that creates substantial difficulty in effectively interpreting research. The primary source of inconsistency lies in the use of a generalized abstract conceptualization of performance in theory building the latent multidimensional approach coupled with the adoption of one or two narrow aspects of performance in the empirical work the separate constructs approach. Follow-up analyses designed to determine the best path for resolving these mismatches indicate that our field’s heavy use of abstract performance in theorizing is not scientifically grounded and should be replaced with more specific aspects of performance to match existing practices in empirical work. Although this change would profoundly affect the field and would be resisted by many, it offers a concrete path away from indefensible practices. We offer several explanations for current practices but emphasize forces related to institutional theory. From an institutional perspective, it appears that firm performance is treated in a general fashion in many areas of our academic lives because it has been embraced as an instrument of legitimacy rather than as a scientific tool that facilitates dialogue and the accumulation of knowledge. We recommend and begin a conversation designed to highlight the long-run dangers of focusing our attention on an abstract concept of performance and suggest a set of specific steps that could help to move all of us in a new direction as we attempt to enhance the scientific rigor of our field.

Institutionalizing Bayesianism Within the Organizational Sciences A Practical Guide Featuring Comments From Eminent Scholars

Bayesian estimation and inference remain infrequently used in organizational science research. Despite innumerable warnings regarding the entrenched frequentist paradigm, our field has yet to embrace the Bayesian “revolution” that seems to be sweeping through so many other disciplines. With this context as a backdrop, we address a simple yet difficult question: What is the likelihood that Bayesian methodologies eventually will supplement or even supplant traditional frequentist methodologies in the organizational science community? We draw on institutional theory to address this question, highlighting the cultural-cognitive, normative, and regulative forces that play important roles. As novel contributions to the discussion, we go beyond our own ideas and previously published opinions on the subject to report the opinions of 26 institutional elites (current and former officers of academic associations, editors, and editorial board members). These leading scholars help us shed light not only on the likelihood that Bayesianism will take root in the field but also on practical steps that could be taken to assist in this process. In some ways, we build Bayesian priors about Bayesian analysis, where those priors will be qualified on the basis of future events and outcomes.