Abstract
In this paper we empirically investigate the temporal development of a firm’s strategy implementation consistency (SIC), i.e. the alignment between firms’ resource allocation decisions (RAD) and their articulated corporate concept (Noda and Bower, 1996; Burgelman and Grove, 1996; Love et al., 2002; Mintzberg, 1978). Doing so, we test whether (1) SIC is more likely to increase or decline over time, (2) whether firms competing in (low) high-velocity environments in fact show different temporal patterns in SIC, and (3) whether overperforming firms succeed in conserving their level of SIC. For our analysis we draw on 6238 RAD of 20 publicly listed firms with European origin over a period of 4–6 years. Applying maximum likelihood ordered logit estimation, our results indicate that the likelihood of an alignment of RAD and a firm’s corporate concept decreases over time. In line with scholars’ perception of high-velocity environments, we find that the firms in our sample competing under such conditions show no clear trend in SIC. These firms tend to “zig-zag” over time – swaying off and pulling back to their strategic course independent of the timing of the announcement of a corporate concept. We also find that overperforming firms are unsuccessful in preserving their SIC at the same level over time. Based on the empirical findings the paper discusses implications for theory and derives suggestions for corporate level managers on how to balance SIC and strategic flexibility.
Similar content being viewed by others
References
A. Agresti (2002) Categorical Data Analysis John Wiley and Sons Hoboken
J. Barney M. Wright D.J. Ketchen (2001) ArticleTitle“The Resource-based View of the Firm: Ten Years After 1991” Journal of Management 27 IssueID6 625–641
M.J. Benner M.L. Tushman (2003) ArticleTitle“Exploitation, Exploration and Process Management: The Productivity Dilemma Revisited” Academy of Management Review 28 IssueID2 238–256
W. Bogner P. Barr (2000) ArticleTitle“Making Sense in Hypercompetitive Environments: A Cognitive Explanation of the Persistence of High-Velocity Competition” Organization Science 11 IssueID2 212–226 Occurrence Handle10.1287/orsc.11.2.212.12511
L.J. Bourgeois K.M. Eisenhardt (1988) ArticleTitle“Strategic Decision Processes in High Velocity Environments: Four cases in the Microcomputer Industry” Management Science 34 IssueID7 816–835
J.L. Bower (1970) Managing the Resource Allocation Process Harvard Business School Press Boston, MA
R.A. Burgelman (1983a) ArticleTitle“A Model of the Interaction of Strategic Behavior, Corporate Context, and the Context of Strategy” Academy of Management Review 8 IssueID1 61–70
R.A. Burgelman (1983b) ArticleTitle“A Process Model of Internal Corporate Venturing in the Diversified Major Firm” Administrative Science Quarterly 28 IssueID2 223–244
R.A. Burgelman (1983c) ArticleTitle“Corporate Entrepreneurship and Strategic Management: Insights from a Process Study” Management Science 19 1349–1364
R.A. Burgelman (1991) ArticleTitle“Intraorganizational Ecology of Strategy Making and Organizational Adaptation: Theory and Field Research” Organization Science 2 239–262
R.A. Burgelman (1994) ArticleTitle“Fading Memories: A process Theory of Strategic Business Exit in Dynamic Environments” Administrative Science Quarterly 39 IssueID1 24–56
R.A. Burgelman (1996) ArticleTitle“A Process Model of Strategic Business Exit in Dynamic Environments” Strategic Management Journal 17 193–214
R.A. Burgelman A.S. Grove (1996) ArticleTitle“Strategic Dissonance” California Management Review 38 IssueID2 8–28
Butler, J.K.: 1995, “Behavior, Trust and Goal Achievement in a Win-win negotiating Role Play”, Group & Organization Management 20(4): 486–501
B.S. Chakravarthy (1982) ArticleTitle“Adaption: A Promising Metaphor for Strategic Management” Academy of Management Review 7 IssueID1 35–44
B.S. Chakravarthy R.E. White (2001) Strategy Process: Forming, Implementing and Changing strategies A. Pettigrew H. Thomas R. Whittington (Eds) Handbook of Strategy and Management Sage Publications London 182–205
J. Covin D. Slevin R. Schultz (1997) ArticleTitle“Top Management Decision Sharing and Adherence to Plans” Journal of Business Research 40 21–36 Occurrence Handle10.1016/S0148-2963(96)00207-X
J. Covin D. Slevin (1998) ArticleTitle“Adherence to Plans, Risk Taking, and Environment as Predictors of Firm Growth” Journal of High Technology Management Research 9 IssueID2 207–237 Occurrence Handle10.1016/S1047-8310(98)90005-0
R. D’Aveni (1995) ArticleTitle“Coping with Hypercompetition” Academy of Management Executive 9 IssueID3 45–60
R. Drazin A.H. Ven ParticleVan de (1985) ArticleTitle“An Examination of Alternative Forms of Fit in Contingency Theory” Administrative Science Quarterly 30 514–539
E.S. Dunn (1971) Economic and Social Development: A Process of Social Learning John Hopkins University Press Baltimore
K. Eisenhardt (1989) ArticleTitle“Building Theories from Case Study Research” Academy of Management Review 14 IssueID4 532–550
Eisenhardt, K.M. and S.L. Brown: 1999, “Patching – Restitching Business Portfolios in Dynamic Markets”, Harvard Business Review, May–June: 72–82
D.A. Gioia K. Chittipeddi (1991) ArticleTitle“Sensemaking and Sensegiving in Strategic Change Initiation” Strategic Management Journal 12 IssueID3 433–448
D. Hambrick M. Geletkanycz J. Fredrickson (1993) ArticleTitle“Top Management Commitment to the Status Quo: Some Tests of its Determinants” Strategic Management Journal 14 401–418
G. Hamel C.K Prahalad T. Howard D. O’Neal (1999) Strategic Flexibility: Managing in a Turbulent Environment John Wiley and Sons New York
S. Hart C. Banbury (1994) ArticleTitle“How Strategy-Making Processes can make a Difference” Strategic Management Journal 15 251–269
M.A. Hitt B.W. Keats S.M. DeMarie (1998) ArticleTitle“Navigating in the New Competitive Landscape: Building Strategic Flexibility and Competitive Advantage in the 21st Century” Academy of Management Executive 12 IssueID4 22–42
M.A. Hitt J.E. Ricart I. Costa R.D. Nixon (Eds) (1999) New Managerial Mindsets: Organizational Transformation and Strategy Implementation John Wiley and Sons New York
P. Jörg C. Loderer L. Roth (2004) ArticleTitle“Shareholder Value Maximization: What Managers Say and What They Do” Die Betriebswirtschaft 64 IssueID3 357–377
Khandwalla, P.N.: 1977, The Structuring of Organizations. Design of Organizations (New York)
J.S. Long (1997) Regression Models for Categorical and Limited Dependent Variables Sage Publications Thousand Oaks
B. Lovas S. Ghoshal (2000) ArticleTitle“Strategy as Guided Evolution” Strategic Management Journal 21 875–896 Occurrence Handle10.1002/1097-0266(200009)21:9<875::AID-SMJ126>3.0.CO;2-P
L. Love R. Priem G. Lumpkin (2002) ArticleTitle“Explicitly Articulated Strategy and Firm Performance Under Alternative Levels of Centralization” Journal of Managfement 28 IssueID5 611–627
D. McGregor (1967) The professional manager McGraw-Hill New York
H. Mintzberg (1977) ArticleTitle“Strategy Formulation as an Historical Process” International Studies of Management and Organization 7 IssueID2 28–42
H. Mintzberg (1978) ArticleTitle“Patterns in Strategy Formation” Management Science 24 IssueID9 934–948
H. Mintzberg (1987) ArticleTitle“Strategy Concept I: Five P’s for Strategy” California Management Review 30 IssueID1 11–24
Mintzberg, H.: 1993, Structure in Five Designing Effective Organizations (Englewood Cliffs: Prentice Hall)
Mintzberg, H. and J.A. Waters: 1982, “Tracking Strategy in an Entrepreneurial Firm”, Academy of Management Journal, 466–499
H. Mintzberg J.A. Waters (1984) Researching the Formation of Strategies: The History of Canadian Lady R. Lamb (Eds) Competitive Strategic Management Prentice-Hall Englewood Cliffs
H. Mintzberg J.A. Waters (1985) ArticleTitle“Of strategies, deliberate and emergent” Strategic Management Journal 6 257–272
H. Mintzberg K. McHugh (1985) ArticleTitle“Strategy formulation in an adhocracy” Administrative Science Quarterly 30 257–272
H. Mintzberg (1990a) Strategy formation: Schools of thought J.W. Fredrickson (Eds) Perspectives on Strategic Management Harper Business New York 105–236
H. Mintzberg (1990b) ArticleTitle“The Design School: Reconsidering the Basic Premises of Strategic Management” Strategic Management Journal 11 171–195
H. Mintzberg (1994a) ArticleTitle“The Fall and Rise of Strategic Planning” Harvard Business Review 72 IssueID1 107–115
H. Mintzberg (1994b) The Rise and Fall of Strategic Planning Prentice Hall New York
T.J. Moskowitz M. Grinblatt (1999) ArticleTitle“Do Industries Explain Momentum?” The Journal of Finance 54 IssueID4 1249–1290 Occurrence Handle10.1111/0022-1082.00146
T. Noda J.L. Bower (1996) ArticleTitle“Strategy Making as Iterated Processes of Resource Allocation” Strategic Management Journal 17 IssueIDSpecial Issue Summer 159–192
A. Pettigrew (1992) ArticleTitle“The Character and Significance of Strategy Process Research” Strategic Management Journal 13 5–16
A.M. Pettigrew R. Whipp (1991) Managing Change for Competitive Success Blackwell Basil
Pettigrew, A.M.:1998, “Success and Failure in Corporate Transformation Initiatives”, in R.D. Galliers and W.R. Baets (eds.), Information Technology and Organizational Transformation, (New York: John Wiley) 271–289
A. Richter S. Schmidt (2005) ArticleTitle“How does Strategy Process Influence Strategy Content? Antecedents of Consistency between Resource Allocation Decisions and Corporate Strategy” Schmalenbach Business Review 57 IssueID4 332–350
S.L. Schmidt M. Brauer (2005) ArticleTitleCorporate Governance: Möglichkeiten des Aufsichtsrats zur sachgerechten Kontrolle von Managerverhalten und Firmenpolitik” The German Journal of Industrial Relations 12 IssueID3 306–322
S.L. Schmidt M. Brauer (2006) ArticleTitle“Strategic Governance: How to Assess Board Effectiveness in Guiding Strategy Execution” Corporate Governance: An International Review 14 IssueID1 12–21 Occurrence Handle10.1111/j.1467-8683.2006.00480.x
K. Shimizu M. Hitt (2005) ArticleTitle“Strategic Flexibility: Organizational Preparedness to Reverse Ineffective Strategic Decisions” Academy of Management Executive 18 IssueID4 44–59
T.L. Simons (1999) ArticleTitle“Behavioral Integrity as a Critical Ingredient for Transformational Leadership” Journal of Organizational Change Management 12 IssueID2 89–110 Occurrence Handle10.1108/09534819910263640
T. Simons (2002a) ArticleTitle“Behavioral Integrity: The Perceived Alignment Between Managers’ Words and Deeds as a Research Focus” Organization Science 3 IssueID1 18–35
T. Simons (2002b) ArticleTitle“The High Cost of Lost Trust” Harvard Business Review 80 18–20
T. Simons Q. Roberson (2003) ArticleTitle“Why Managers Should Care about Fairness: The Effects of Aggregate Justice Perceptions on Organizational Outcomes” Journal of Applied Psychology 88 IssueID3 432–43 Occurrence Handle10.1037/0021-9010.88.3.432
M. Theisen (2003) ArticleTitle„Herausforderung Corporate Governance” Die Betriebswirtschaft 63 IssueID4 441–464
Thommen, J-P.: 2003, “Glaubwürdigkeit und Corporate Governance”, Zürich 2003
A.H. Ven ParticleVan de G.P. Huber (1990) ArticleTitle“Longitudinal Field Research Methods for Studying Processes of Organizational Change” Organization Science 1 IssueID3 213–219
A.H. Ven ParticleVan de M.S. Poole (1995) “Methods for Studying Innovation Development in the Minnesota Innovation Research Program” G.P. Huber A.H. Ven ParticleVan de (Eds) Longitudinal Field Research Methods. Studying Processes of Organizational Change Sage Publications Thousand Oaks 155–185
N. Venkatraman J. Prescott (1990) ArticleTitle“Environment-strategy coalignment: An empirical test of its performance implications” Strategic Management Journal 11 IssueID1 1–23
K.E. Weick (1995) Sensemaking in Organizations Sage Publications Thousand Oaks
S. Zahra (1991) ArticleTitle“Predictors and Financial Outcomes of Entrepreneurship: An Exploratory Study” Journal of Business Venturing 6 259–285 Occurrence Handle10.1016/0883-9026(91)90019-A
S. Zahra (1993) ArticleTitle“Environment, Corporate Entrepreneurship and Financial Performance: A Taxonomic Approach” Journal of Business Venturing 8 319–340 Occurrence Handle10.1016/0883-9026(93)90003-N
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Brauer, M., Schmidt, S.L. Exploring Strategy Implementation Consistency Over Time: The Moderating Effects of Industry Velocity and Firm Performance. J Manage Governance 10, 205–226 (2006). https://doi.org/10.1007/s10997-006-0002-2
Issue Date:
DOI: https://doi.org/10.1007/s10997-006-0002-2