Development and validation of a multidimensional business capabilities measurement instrument

Abstract

According to the theory of resource-based view, a firm's special capabilities are the main sources of its superior performance and competitive advantage. The effects of business capabilities on performance and competitive advantage have been tested by myriad research studies, but the various studies have lacked a commonly accepted measurement instrument that comprises all components of business capabilities. This study aims to fill this gap through conceptualizing and developing a multidimensional business capabilities measurement instrument. We established a scale incorporating seven dimensions of business capabilities that are compatible with operational functions. Data were then collected from 445 owners/executives of the manufacturing firms and analyzed through confirmatory factor analysis to assess validity and reliability. As a result, we have attempted to contribute to business executives and academics by providing a multidimensional business capabilities scale.