Timothy M. Devinney

Measuring Organizational Performance: Towards Methodological Best Practice

Organizational performance is one of the most important constructs in management research. Reviewing past studies reveals a multidimensional conceptualization of organizational performance related predominately to stakeholders, heterogeneous product market circumstances, and time. A review of the operationalization of performance highlights the limited effectiveness of commonly accepted measurement practices in tapping this multidimensionality. Addressing these findings requires researchers to (a) possess a strong theoretical rationale on the nature of performance (i.e., theory establishing which measures are appropriate to the research context) and (b) rely on strong theory as to the nature of measures (i.e., theory establishing which measures should be combined and the method for doing so). All management research on performance should explicitly address these two requirements. The authors conclude with a call for research that examines triangulation using multiple measures, longitudinal data and alternative methodological formulations as methods of appropriately aligning research contexts with the measurement of organizational performance.

The Impact of New Product Introductions on the Market Value of Firms

Although many mechanisms exist for the evaluation of new products, none have specifically examined the role that financial markets can play in measuring the impact of new products on firms. Using traditional event-study methodology, the present research provides a financial market-based analysis of the impact of new product introductions on the market value of firms. Copyright 1991 by University of Chicago Press.

What Will Consumers Pay for Social Product Features

The importance of ethical consumerism to many companies worldwide has increased dramatically in recent years. Ethical consumerism encompasses the importance of non-traditional and social components of a companys products and business process to strategic success – such as environmental protectionism, child labor practices and so on. The present paper utilizes a random utility theoretic experimental design to provide estimates of the relative value selected consumers place on the social features of products.

Do What Consumers Say Matter? The Misalignment of Preferences with Unconstrained Ethical Intentions

Nearly all studies of consumers willingness to engage in ethical or socially responsible purchasing behavior is based on unconstrained survey response methods. In the present paper we ask the question of how well does asking consumers the extent to which they care about a specific social or ethical issue relate to how they would behave in a more constrained environment where there is no socially acceptable response. The results of a comparison between traditional survey questions of intention to purchase and estimates of individuals willingness-to-pay for social attributes in products reveal that simple survey questions are too noisy to provide operationally meaningful information and overstate intentions to a considerable extent.

Knowledge Management: Philosophy, Processes, and Pitfalls

Based on a survey of 317 firms and in-depth cases on six firms, this article examines the management of the most intangible asset of the firm—its knowledge. This article examines the sources, uses, and outcomes of knowledge and shows how successful firms acquire and absorb more information and know-how. More importantly, these firms have more effective decision-making processes that enable them both to create new knowledge and to apply this knowledge to generating more innovation in products and processes. Greater levels of innovation in turn lead to improved market and financial performance. This article identifies eight key lessons for knowledge managers and demonstrates how rather than attempting to manage knowledge, firms should measure the change in the innovative outputs that arise from their knowledge management strategies and practices.

Consumer Ethics Across Cultures

Consumer ethics are an understudied but important counterpart of business ethics. In this study we use qualitative methods and video ethnography to examine consumer beliefs and behaviors in eight countries, including both affluent and poor nations in Europe, North America and Australasia. Using depth interviews and projective methods, informants address three different ethical choices of products involving harm to the environment, poor labor conditions, and counterfeit goods. As the accompanying video reveals, there is a general lack of consumer concern for such issues across cultures. We examine the justifications offered for these views and consider implications for altering consumer behavior.

E-Business: Revolution, Evolution, or Hype?

Will e-business ultimately represent a revolution in the way firms operate or rather does it represent a more normal evolution in the operations of some firms? Despite the bursting of the Internet stock bubble, it is important to answer this question. As the Internet continues to grow in size and capability, many firms are implementing Web-based applications and Internet-derived economic change continues to occur. If this change is revolutionary, now or in the near future, then many managers will be required to rethink their firm strategies and managerial responses in a profound way. On the other hand, if the change is simply evolutionary, it will apply more to some firms than to others, and pre-Internet strategies and managerial responses will still be appropriate in many circumstances. While it is premature to categorize e-business as revolutionary, e-business is not a silver bullet, rather it will be a useful tool for some firms and some tasks. There are a number of key questions firms should ask in order to make sense of e-business.

Understanding institutional designs within marketing value systems

The authors show how institutional arrangements, which consist of contracting, ownership, and social elements, tie together the joint profits, or efficiency, of the marketing system. They use a cri...

Customer Relationship Management and Firm Performance

In this paper, we examine the impact of customer relationship management (CRM) on firm performance using a hierarchical construct model. Following the resource-based view of the firm, strategic CRM is conceptualized as an endogenously determined function of the organizations ability to harness and orchestrate lower-order capabilities that comprise physical assets, such as IT infrastructure, and organizational capabilities, such as human analytics (HA) and business architecture (BA). Our results reveal a positive and significant path between a superior CRM capability and firm performance. In turn, superior CRM capability is positively associated with HA and BA. However, our results suggest that the impact of IT infrastructure on superior CRM capability is indirect and fully mediated by HA and BA. We also find that CRM initiatives jointly emphasizing customer intimacy and cost reduction outperform those taking a less balanced approach. Overall, this paper helps explain why some CRM programs are more successful than others and what capabilities are required to support success.

A New Perspective on the Integration-Responsiveness Pressures Confronting Multinational Firms

The Integration-Responsiveness framework of Prahalad and Doz (1987) has been used extensively in the international business literature to typify the diverse and often-conflicting environmental pressures confronting firms as they expand worldwide. Although the IR framework has been successfully applied for over a decade, many theoretical and empirical studies have focused on the consequences of these pressures rather than the pressures themselves. Prahalad and Doz identified the economic, technological, political, customer and competitive factors that create the global integration and local responsiveness pressures on the diverse businesses and functions in MNEs. This article explains the methodology, including the procedure for data collection and analysis. The researchers conclude with a discussion of their findings and directions for future research, speculating as to the appropriate definition of the domain of IR pressures and the criteria they might use to validate measures of these.