Product Quality, Cost Position, and Business Performance: A Test of Some Key Hypotheses

This study uses a causal modelling methodology to examine competing methodological and theo- retical hypotheses concerning the effects of prod- uct quality on direct costs and business unit re- turn on investment (ROI). Results show that the PIMS' measures under study exhibit high reliabil- ity...

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Bibliographic Details
Main Authors: Phillips, Lynn W., CHANG, Dae Ryun, Buzzell, Robert D.
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 1983
Subjects:
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/2922
https://www.jstor.org/stable/1251491
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Institution: Singapore Management University
Language: English
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Summary:This study uses a causal modelling methodology to examine competing methodological and theo- retical hypotheses concerning the effects of prod- uct quality on direct costs and business unit re- turn on investment (ROI). Results show that the PIMS' measures under study exhibit high reliabil- ity across all samples. The findings fail to support the widely held view that a high relative quality position is incompatible with achieving a low rel- ative cost position in an industry.