Business‐level strategy and performance The moderating effects of environment and structure

Business‐level strategy and performance The moderating effects of environment and structure Purpose – This study aims to examine the moderating effects of external environment and organisational structure in the relationship between business‐level strategy and organisational performance. Design/methodology/approach – The focus of the study is on manufacturing firms in the UK belonging to the electrical and mechanical engineering sectors, and respondents were CEOs. Both objective and subjective measures were used to assess performance. Non‐response bias was assessed statistically and appropriate measures taken to minimise the impact of common method variance (CMV). Findings – The results indicate that environmental dynamism and hostility act as moderators in the relationship between business‐level strategy and relative competitive performance. In low‐hostility environments a cost‐leadership strategy and in high‐hostility environments a differentiation strategy lead to better performance compared with competitors. In highly dynamic environments a cost‐leadership strategy and in low dynamism environments a differentiation strategy are more helpful in improving financial performance. Organisational structure moderates the relationship of both the strategic types with ROS. However, in the case of ROA, the moderating effect of structure was found only in its relationship with cost‐leadership strategy. A mechanistic structure is helpful in improving the financial performance of organisations adopting either a cost‐leadership or a differentiation strategy. Originality/value – Unlike many other empirical studies, the study makes an important contribution to the literature by examining the moderating effects of both environment and structure on the relationship between business‐level strategy and performance in a detailed manner, using moderated regression analysis. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Decision Emerald Publishing

Business‐level strategy and performance The moderating effects of environment and structure

Management Decision, Volume 48 (6): 33 – Jun 29, 2010

Loading next page...
 
/lp/emerald-publishing/business-level-strategy-and-performance-the-moderating-effects-of-wyUWv1AkDI
Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
0025-1747
D.O.I.
10.1108/00251741011053460
Publisher site
See Article on Publisher Site

Abstract

Purpose – This study aims to examine the moderating effects of external environment and organisational structure in the relationship between business‐level strategy and organisational performance. Design/methodology/approach – The focus of the study is on manufacturing firms in the UK belonging to the electrical and mechanical engineering sectors, and respondents were CEOs. Both objective and subjective measures were used to assess performance. Non‐response bias was assessed statistically and appropriate measures taken to minimise the impact of common method variance (CMV). Findings – The results indicate that environmental dynamism and hostility act as moderators in the relationship between business‐level strategy and relative competitive performance. In low‐hostility environments a cost‐leadership strategy and in high‐hostility environments a differentiation strategy lead to better performance compared with competitors. In highly dynamic environments a cost‐leadership strategy and in low dynamism environments a differentiation strategy are more helpful in improving financial performance. Organisational structure moderates the relationship of both the strategic types with ROS. However, in the case of ROA, the moderating effect of structure was found only in its relationship with cost‐leadership strategy. A mechanistic structure is helpful in improving the financial performance of organisations adopting either a cost‐leadership or a differentiation strategy. Originality/value – Unlike many other empirical studies, the study makes an important contribution to the literature by examining the moderating effects of both environment and structure on the relationship between business‐level strategy and performance in a detailed manner, using moderated regression analysis.

Journal

Management DecisionEmerald Publishing

Published: Jun 29, 2010

Keywords: Manufacturing industries; Performance management

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off