PIMS
2.
- In over 100 published studies, the PIMS database has been used to establish relationships between a variety of strategic and market environment dimensions that might influence various measures of performance, e.g., ROI and cash flow.
- By means of a multi-industry, multiple regression model, SPI has related profitability to 28 associative variables or "profit-influencing" factors and explained over 70 percent of the cross-sectional variance in ROI.
- "Universal laws of the marketplace" are used to explain why a business is underperforming its "expected" ROI. A similar model has been developed that explains 70 percent of the variation in cash flow among these businesses in the terms of 19 "cash-flow-influencing" factors.
- After the first PIMS research results were reported publicly in the mid-1970s, some writers and managers reacted by acting as if universal laws of strategy had been discovered.
- Those closely associated with PIMS warn against over simplification, they did stress that there were principles that could help managers understand and predict how strategic choices and market conditions would affect business performance.
- Although they believe that some of these principles apply to virtually all kinds of businesses, others apply only to specific types of businesses or under certain conditions.
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