Measurement of Business Economic Performance: An Examination of Method Convergence

Abstract

Strategic management researchers have measured business economic performance (BEP) through either perceptual assessments of senior executives or secondary data sources, but few explicitly evaluate the degree of convergence across methods. In an effort to examine method convergence, we collected data on three dimensions-sales growth, net income growth, and profitability (ROI) using both methods. Although convergent and discriminant validity were achieved using Campbell and Fiske's Multi Trait, Multi Method (MTMM) and Confiratory Factor Analysis (CFA), the approaches yielded different insights. The advantages of CFA over MTMM is demonstrated with implications for strategy research.