Multidimensional components of quality and strategic business unit performance: a PIMS test

This articles presents an empirical test of the differential impact of the separate facets of quality on profitability of businesses in industrial capital goods. Citing evidence from three decades of theoretical work in the domain of product quality, the authors propose that quality should be construed not as an unidimensional concept as has generally been done in the literature, but as a multidimensional construct. Drawing from past theoretical work, the authors adopt and advance a perspective of quality that is managerially actionable and propose a set of hypotheses relating the different dimensions of quality to company profitability. The contingent nature of the various facets of quality and company profitability are discussed and the results of empirical tests of hypotheses on data from the PIMS data base are described. Finally, the research and managerial implications of the findings are discussed. The product dimension of quality was found to be the most important for pioneering strategic business units and those in the early stages of the product life cycle (PLC), while image quality was most important for pioneers and those in the late stages of the PLC. The service dimension of quality was most important for nonpioneers and late PLC stages.
In recent years, concerns related to quality of products and services have received urgent and prolific attention in the business press (e.g., Byrne, 1994; Calonius, 1991; Jacob, 1993; Port, 1991, [...]