Handbook of Management Scales/Profitability

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Profitability (AVE = 0.742; CR = 0.896)[edit]


The authors test the construct validity of indicators of three dimensions of organizational performance, a fundamental construct in strategic management. Based on an examination of reliability, convergent validity, discriminant validity and nomological validity, and on additional analyses, the authors find evidence of four rather than three dimensions of organizational performance: liquidity, profitability, growth, stock market performance.


  • Return per employee (0.791)
  • Return on sales (0.687)
  • Return on assets (0.748)



The authors did a lot to ensure reliability and validity of their scales. Richard et al. have conduct related research: Richard et al. (2009): Measuring Organizational Performance: Towards Methodological Best Practice. Journal of Management, Vol. 35, Nr. 5, pp. 718-804.

Related Scales[edit]