Determinants of firm performance: The relative importance of economic and organizational factors

Determinants of firm performance: The relative importance of economic and organizational factors We decompose the inter‐firm variance in profit rates into economic and organizational components. Using a representative model from each paradigm we find that both sets of factors are significant determinants of firm performance. Further findings are that the two effects are roughly independent and that organizational factors explain about twice as much variance in profit rates as economic factors. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

Determinants of firm performance: The relative importance of economic and organizational factors

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Publisher
Wiley
Copyright
Copyright © 1989 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
D.O.I.
10.1002/smj.4250100502
Publisher site
See Article on Publisher Site

Abstract

We decompose the inter‐firm variance in profit rates into economic and organizational components. Using a representative model from each paradigm we find that both sets of factors are significant determinants of firm performance. Further findings are that the two effects are roughly independent and that organizational factors explain about twice as much variance in profit rates as economic factors.

Journal

Strategic Management JournalWiley

Published: Sep 1, 1989

References

  • Corporate economic performance: diversification strategy versus market structure
    Christensen, Christensen; Montgomery, Montgomery
  • Determinants of organizational performance: an interdisciplinary review
    Lenz, Lenz
  • Configurations of strategy and structure: towards a synthesis
    Miller, Miller
  • Diversification strategy and profitability
    Rumelt, Rumelt
  • Organizational climates: an essay
    Schneider, Schneider
  • Generic business strategies, organizational context and performance: an empirical investigation
    White, White

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