Developing measures to assess the extent of sustainable competitive advantage provided by business process reengineering

Journal of the Academy of Business and Economics, April, 2003 by R. Srinivasan

Profitability: This is first amongst the output dimensions. This primarily indicates the efficiency of business processes in practice. Thus profitability refers to whether an organization is implementing the business in a proper manner that will impact the bottom line of the company. The individual measures in this dimension are Net Profit, Return on Sales, ROI and Financial Liquidity.

Growth: This is the second output dimension that basically refers to the effectiveness of the business processes in practice. The individual measures in this are Sales Growth, Market Share, Net Income and EPS. It is generally accepted at if a business enterprise achieves good results in these, it can be said that the right processes are in place.

3. OPERATIONALIZING THE CONSTRUCT

3.1 Overview

Figure 1 is the schematic representations of the research study that links conceptual development part with measure development and its validation. As shown in the figure, the conceptualization is based on specific positions taken in relation to the theoretical question and articulation in terms of mutually exclusive variables.

[FIGURE 1 OMITTED]

There 14 are different dimensions that have been listed in Table 1 along with their individual item measures. Of these, 12 are input dimensions and 2 are output dimensions which have been specifically defined for the construct in question. The empirical component of this study has eighth major steps that have been lineated earlier beginning with the selection of individual items and ending with the assessment of measurement properties.

The content validity of the proposed SCORE variables may be justified with other competitive advantage (CA) models available in the literature. For instance, according to (Portor1985), three themes characteristic CA: low cost, differentiation and sustainability. The SCORE dimension efficiency taps low cost, system flexibility & exception handling captures differentiation, threat enables both low cost and differentiation, while proactiveness and comprehensiveness enable sustainability.

3.2 Item Selection

An initial list of items related to the 14 SCORE dimensions was generated through an exhaustive review of research literature. The purpose was to ensure adequate coverage of the domain of each of these 14 dimensions. This list served to generate 56 items. Each of these items was converted to a question in the questionnaire. The preference for perceptual data reflects the choice to operationalize the SCORE construct in terms of managerial perceptions.

3.3 Data Collection Procedure

Empirical verification of the SCORE construct was undertaken using a structured questionnaire. The perceptions were collected both through personal interview and mail responses. Measures of each dimension were phrased as questions on five-point Likert scale. They were anchored at the ends either with "strongly agree" and "strongly disagree" or with "greatly increased" and "greatly decreased".

The questionnaire asked respondents to describe the most direct impact of BPR in the competitiveness of the company. However, the danger with this approach was that such a solicitation could have invoked negative responses because many programs are not implemented with the intention of primarily achieving CA.