An Entropy-based Evaluation Model of Business Strategic Performance

With the rapid development of science and technology, product life cycle is shortening, and market competition is fiercer than before. To achieve continuous development, a company has to develop and implement right strategies to obtain and maintain its sustainable competitiveness. In the strategic management process, the company needs to evaluate the performance of its strategies so that corrective actions could be taken and new strategies be generated. This paper first reviews the development of researches on strategic performance evaluation. It then constructs a conceptual model of business strategic performance evaluation. A performance evaluation parameter system is established, which includes financial and non-financial factors, to construct an entropy-based model for evaluating strategic performance of companies. Finally, the paper does an empirical research on using the model to comprehensively evaluate strategic performance of 30 corporations listed in Shanghai Stock Exchange and Shenzhen Stock Exchange in appliance and electronics industry. The implications generated from the research are concluded that non-financial performances in market, technology, and governance, play an important role for a corporation to gain long-term competitive advantage.