The model also reports a positive correlation between product quality and profitability as also between employee productivity and profitability. As regards, capital intensive initiatives, it finds that capital intensive strategies are characterised by low return on investments (4). A normative implication of this finding is that labour productivity ought to be the focal point for strategic decisions as opposed to heavy investment in machinery or technology.
While the generalisation afforded by the vast database of the PIMS project is attractive and indeed useful, it must be taken with a pinch of salt. One general criticism of the PIMS model is that the model fails to make any clear distinction between causal relation and co-incidence. However, this criticism seems to disregard the essential nature of empirical analysis on which the model relies. However, there is some merit to the apprehension that confusion between causal relation and mere co-incidence can be misleading (5).
Another important criticism is the multi-colliniarity of the variables. It means that the variables used may affect each other and hence are not independent. This problem is widely acknowledged to be implicit in the model (6). However, notwithstanding the limitations, the robust database on which the model rests is certainly of great value in strategic decision-making. The model coupled with sharp awareness of market peculiarities is still a critical source of input for managers.