Singla, H K and Chammanam, S S (2024) Development of a financial performance measurement model for real estate business: An exploratory study in India. Journal of Financial Management of Property and Construction, 29(2), pp. 295-313. ISSN 1366-4387
Abstract
Purpose: The purpose of this study is to develop a financial performance measurement model for real estate business. Design/methodology/approach: The study uses balanced scorecard (BSC) proposed by Kaplan and Norton (1996) as a theoretical support. The study, being exploratory in nature, uses survey method to collect data on several dimensions of BSC as well as on other performance measures used by real estate businesses in India. The survey data collected is analyzed using exploratory factor analysis (EFA) to explore the model constructs. This is followed by building an integrated conceptual model for measuring the financial performance of a real estate business. The model is tested using partial least squares structural equation modeling (PLS-SEM). Findings: The study finds that the financial performance of the real estate business revolves around customer satisfaction, employee satisfaction and external networks. The right alignment of these components lead to superior financial performance. It also provides a competitive advantage to the real estate business. These three components (customer satisfaction, employee satisfaction and external networks) have direct and indirect influences on the financial performance of real estate business. Research limitations/implications: A small sample size (78 respondents), as well as the respondent’s geographical concentration in India, are the limitations of the study. Hence, generalization of findings may be difficult until the findings are validated across the globe. Practical implications: The conceptual performance measurement model suggested in this research provides an effective tool to plan and strategize to achieve superior financial performance, particularly for stakeholders in the real estate business. Originality/value: To the best of the authors' knowledge and belief, this is the first attempt to develop a comprehensive financial performance measurement model for real estate business and test it using EFA and PLS-SEM.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | balanced scorecard; financial performance; measurement; real estate |
| Index terms: | partial least square, methodology, financial performance, performance measure, structural equation modelling, survey, exploratory study, exploratory factor analysis, dimension, India, real estate, customer satisfaction, sample size, integrated conceptual model, performance measurement, competitive advantage, balanced scorecard, satisfaction |
| Subjects: | statistical analysis, market analysis, professional development, service delivery, Geography, research methods, business analysis, performance measurement, project delivery, health monitoring assessment and metrics, real estate economics, research design and methodology, data collection methods |
| Topics: | Quality Management, Urban Studies, Stakeholder Management, Information Management, Geographical Context, Project Management, Research Practice, Health and Safety, Business Strategy |
| Descriptive scope: | 5 PCTEA |
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