| The fourth article in the series discuss the need for | | | | means that even if we’re focusing on financial |
| constructing a multidimensional structure of business | | | | performance measurement a uni-dimensional |
| performance in order to achieve the best possible | | | | measurement approach could be inadequate and |
| results when conducting performance | | | | cause for inconclusive findings. As for Venkatraman |
| measurement. | | | | and Ramanujam (1986) such arguments reinforced the |
| Business performance is a complex multidimensional | | | | notion that financial performance measurement is |
| variable what makes its measurement a difficult task | | | | insufficient and operational performance measurement |
| (Brush and Vanderwerf, 1992). Venkatraman and | | | | is an important supplemental ingredient for business |
| Ramanujam (1985) suggest that measures such as | | | | performance measurement. |
| sales growth, net income growth and return on | | | | Two empirical studies support the need for |
| investment indicate for different dimensions. In order to | | | | multidimensional measurement approach. Woo and |
| overcome that hurdle scholars used several different | | | | Willard (1983) statistical analysis indicates that fourteen |
| measures in order to achieve more accurate | | | | financial and operational measures grouped into four |
| estimation of the differences between key dimensions | | | | dimensions – profitability/cash flow, relative market |
| of business performance (Zahra, 1996). Later studies | | | | position, change in profitability/cash flow, and revenue |
| supported such arguments, Brush and Vanderwerf | | | | growth. A statistical analysis of nineteen financial |
| (1992) and Tsai, Macmillan and low (1991) discuss the | | | | performance measures conducted by Murphy, Trailer |
| need for using both profitability and growth dimensions | | | | and Hill (1996) results in nine different dimensions, none |
| – both dimensions can be defined as financial | | | | of these dimensions explain more then fourteen |
| performance - because it is possible that these two | | | | percent of the variance of business performance. |
| dimensions are polling in opposite directions, it’s | | | | |