| Investors and academicians have long been in search of performance measurements that directly correlate to stock price. Over the years, studies have been conducted attempting to understand the relationship of numerous variables in the areas of marketing, operations, engineering, and finance to stock price performance. General conclusions have been drawn that as firms reach mature stages on the firm life cycle continuum, performance measurement variables are more likely to correlate to stock price than at times of extreme growth.; High technology, communications firms and Internet firms have realized incredible growth in the 1990s. The purpose of this dissertation is to establish a framework to identify excellent firms in the high technology, communications sector, as well as the extremely speculative Internet sector. Just as Peters and Waterman (1982) attempted to identify "excellent" firms, this study attempts to identify excellent, high technology, communications firms, especially with regard to shareholder return. Performance measurements will be applied in this sector and return to shareholders will serve as the critical dependent variable of the study.; Warren Buffett, arguably the most successful investor of modern time, says he does not understand high technology firms and therefore he does not invest in them. He bases his investment decisions on several tenets. For this analysis, Buffett's financial tenets are the basis for arriving at performance measurements for the functional areas. This study will help address the relationship between functional excellence and stock price in high technology, communications firms. Interest lies in understanding this relationship.; The Internet sector is very much still in the infancy stage, yet it will be studied and attempts made to identify criteria for determining excellence, with return to shareholders the crucial measurement. The Internet sector arguably is the most volatile sector in the stock market today. To avoid examination of this sector would not provide a thorough investigation of the high technology sector. These very unusual firms are at the fringe of current firms in their almost irrational stock price behavior, but are also the gateway to the high technology firms of the future. |
