Hostname: page-component-cd9895bd7-jkksz Total loading time: 0 Render date: 2024-12-23T04:23:26.704Z Has data issue: false hasContentIssue false
  • English
  • Français

Untangling the relationship between strategic consistency and organizational performance: An empirical analysis of moderator variables

Published online by Cambridge University Press:  29 November 2016

Chin-Shien Lin  and
Van Thac Dang
Chin-Shien Lin
Affiliation:
Department of Business Administration, College of Management, National Chung Hsing University, Taichung, Taiwan, ROC
Van Thac Dang*
Affiliation:
Business School, Shantou University, Shantou City, Guangdong, China
*
Corresponding author: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Researchers have advocated various perspectives on the relationship between strategic consistency and organizational performance. This inconclusive debate has created an inadequate theoretical foundation in strategic consistency literature. Therefore, the present study uses strategic planning, strategic change, upper echelons theory, and other literature as the theoretical foundation to empirically examine the moderating roles of organizational slack, environmental dynamism, and top management team attributes in the relationship between strategic consistency and organizational performance. Using 439 electronics companies in the Taiwanese stock market as sample data, the empirical results show that organizational slack, environmental dynamism, top management team tenure, and top management team tenure heterogeneity moderate the relationship between strategic consistency and organizational performance.

Keywords

strategic consistencyorganizational slackenvironmental dynamismupper echelons theoryorganizational performance
Type
Research Article
Information
Journal of Management & Organization , Volume 23 , Issue 4 , July 2017 , pp. 483 - 503
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adams, G. L., & Lamont, B. T. (2003). Knowledge management systems and developing sustainable competitive advantage. Journal of Knowledge Management, 7(2), 142–154.Google Scholar
Ancona, D.G., & Caldwell, D.F. (1992). Demography and design: Predictors of new product team performance. Organizational Science, 3, 321–341.Google Scholar
Arnold, H. (1982). Moderator variables: A clarification on conceptual, analytic and psychometric issues. Organizational Behavior and Human Performance, 29, 143–174.Google Scholar
Barnett, W.P., & Hansen, M.T. (1996). The Red Queen in organizational evolution. Strategic Management Journal, 17, 139–157.Google Scholar
Baron, R.M., & Kenny, D.A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182.Google Scholar
Bergh, D. D. (2001). Executive retention and acquisition outcomes: A test of opposing views on the influence of organizational tenure. Journal of Management, 27, 603–622.Google Scholar
Boeker, W. (1997). Executive migration and strategic change: The effect of top management movement on product-market entry. Administrative Science Quarterly, 42, 213–236.Google Scholar
Bourgeois, L. (1981). On the measurement of organizational slack. Academy of Management Review, 6, 29–39.Google Scholar
Brunning, J. L., & Kintz, B. L. (1987). Computational handbook of statistics. Glenview, IL: Scott, Foresman.Google Scholar
Burt, R. S. (1997). The contingency value of social capital. Administrative Science Quarterly, 42(2), 339–365.Google Scholar
Carpenter, M. A., & Fredrickson, J. W. (2001). Top management teams, global strategic posture, and the moderating role of uncertainty. Academy of Management Journal, 44, 533–546.Google Scholar
Cheng, J. L. C., & Kesner, I. F. (1997). Organizational slack and response to environmental shifts: The impact of resource allocation patterns. Journal of Management, 23(1), 1–18.Google Scholar
Cohen, W., & Levinthal, D. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35, 128–152.Google Scholar
Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Engelwood Cliffs, NJ: Prentice-Hall.Google Scholar
David, P. A. (1998). Understanding the economics of QWERTY: The necessity of history. In W. N. Parker (ed.), Economic History and the Modern Economist (pp. 30–49). Oxford: Blackwell, 1986.Google Scholar
Deephouse, D .L. (1999). To be different, or to be the same? It’s a question (and theory) of strategic balance. Strategic Management Journal, 20, 147–166.Google Scholar
Dehning, B., Dow, K. E., & Stratopoulos, T. (2004). Information technology and organizational slack. International Journal of Accounting Information Systems, 5(1), 51–63.Google Scholar
Delgado-Garcia, J. B., & Fuente-Sabate, J. M. D. L. (2010). How do CEO emotions matter? Impact of CEO affective traits on strategic and performance conformity in the Spanish banking industry. Strategic Management Journal, 31, 562–574.Google Scholar
Dess, D. D., & Shaw, J. D. (2001). Voluntary turnover, social capital, and organizational performance. Academy of Management Review, 26, 446–456.Google Scholar
Dess, G., & Beard, D. (1984). Dimensions of organizational task environments. Administrative Science Quarterly, 29, 52–73.CrossRefGoogle Scholar
Drazin, R., & Van de Ven, A. H. (1985). Alternative forms of fit in contingency theory. Administrative Science Quarterly, 30, 514–539.Google Scholar
Dutton, J. E., & Duncan, R. B. (1987). The influence of strategic planning process on strategic change. Strategic Management Journal, 8(2), 103–116.Google Scholar
Eisenhardt, K. M. (1989). Making fast strategic decisions in high-velocity environments. Academy of Management Journal, 32, 543–576.Google Scholar
Eisenhardt, K. M., & Brown, S. L. (1998). Time pacing: Competing in markets that won’t stand still. Harvard Business Review, 76(2), 59–69.Google Scholar
Eisenhardt, K. M., & Schoonhoven, C. B. (1990). Organizational growth: Linking founding team, strategy, environment, and growth among us semiconductor ventures. Administrative Science Quarterly, 35(3), 504–529.CrossRefGoogle Scholar
Finkelstein, S., & Hambrick, D. C. (1990). Top management team tenure and organizational outcomes: The moderating role of managerial discretion. Administrative Science Quarterly, 35, 484–503.Google Scholar
Finkelstein, S., & Hambrick, D. C. (1996). Strategic leadership: top executives and their effects on organizations. Academy of Management Review, 223, 802–805.Google Scholar
Galbraith, C., & Schendel, D. (1983). An empirical analysis of strategy types. Strategic Management Journal, 4(2), 153–173.Google Scholar
Geiger, W. S., & Makri, M. (2006). Exploration and exploitation innovation processes: The role of organizational slack in R&D intensive firms. The Journal of High Technology Management Research, 17(1), 97–108.Google Scholar
Geletkanycz, M. A., & Hambrick, D. C. (1997). The external ties of top executives: Implications for strategic choice and performance. Administrative Science Quarterly, 42, 654–681.Google Scholar
George, G. (2005). Slack resources and the performance of privately held firms. Academy of Management Journal, 48(4), 661–676.Google Scholar
Ghemawat, P. (1991). Commitment: the dynamic of strategy. New York: Free Press.Google Scholar
Granovetter, M. (2005). The impact of social structure on economic outcomes. Journal of Economic Perspectives, 19(1), 33–55.Google Scholar
Grant, R. M. (2003). Strategic planning in a turbulent environment: Evidence from the oil majors. Strategic Management Journal, 24(6), 491–517.Google Scholar
Haleblian, J., & Finkelstein, S. (1993). Top management team size, CEO dominance, and firm performance: The moderating roles of environmental turbulence and discretion. Academy of Management Journal, 36, 844–863.Google Scholar
Hambrick, D. C. (1983). High profit strategies in mature capital goods industries. Academy of Management Journal, 28, 687–707.Google Scholar
Hambrick, D. C. (2007). Upper echelons theory: An update. Academy of Management Review, 32(2), 334–343.Google Scholar
Hambrick, D. C., Cho, T. S., & Chen, J. M. (1996). The influence of top management team heterogeneity on firm’s competitive moves. Administrative Science Quarterly, 41, 659–979.CrossRefGoogle Scholar
Hambrick, D. C., & Finkelstein, S. (1987). Managerial discretion: A bridge between polar views of organizations. Research in Organizational Behavior, 9, 369–406.Google Scholar
Hambrick, D. C., Finkelstein, S., & Mooney, A. C. (2005). Executive job demands: New insights for explaining strategic decisions and leader behaviors. Academy of Management Review, 30(3), 472–491.Google Scholar
Hambrick, D. C., Geletkanycz, M., & Fredrickson, J. (1993). Top executive commitment to the status quo: Some tests of its determinants. Strategic Management Journal, 14, 401–418.Google Scholar
Hambrick, D. C., Humphrey, S. E., & Gupta, A. (2014). Structural interdependence within top management teams: A key moderator of upper-echelons predictions. Strategic Management Journal, 36(3), 449–461.Google Scholar
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206.Google Scholar
Hannan, M. T., & Freeman, J. (1984). Structural inertia and organizational change. American Sociological Review, 49(2), 149–164.Google Scholar
Heeley, M. B., King, D. R., & Covin, J. G. (2006). Effects of firm R&D investment and environment on acquisition likelihood. Journal of Management Studies, 43(7), 1513–1535.Google Scholar
Henderson, A. D., Miller, D., & Hambrick, D. C. (2006). How quickly do CEOs become obsolete? Industry dynamism, CEO tenure, and company performance. Strategic Management Journal, 27, 447–460.Google Scholar
Herrmann, P., & Nadkarni, S. (2014). Managing strategic change: The duality of CEO personality. Strategic Management Journal, 35(9), 1318–1342.Google Scholar
Ho, J. L. Y., Wu, A., & Xu, S. X. (2011). Corporate government and return on information technology investment: Evidence from an emerging market. Strategic Management Journal, 32, 595–623.Google Scholar
Huang, S. Y., Chiu, A. A., & Wang, B. C. (2012). Applying intellectual capital on financial distress prediction model in Taiwan information technology and electronic industry. International Journal of Advancements in Computing Technology, 4(8), 270–280.Google Scholar
Hutzschenreuter, T., & Horstkotte, J. (2013). Performance effects of top management team demographic faultlines in the process of product diversification. Strategic Management Journal, 34, 704–726.Google Scholar
Huy, Q. N. (2011). How middle managers’ group-focus emotions and social identities influence strategy implementation. Strategic Management Journal, 32(13), 1387–1410.Google Scholar
Jalilvand, A., & Kim, S. M. (2013). Matching slack resources and investment strategies to achieve long-term performance: New perspectives on corporate adaptability. The Journal of Economic Asymmetries, 10, 38–52.Google Scholar
Johnson, G. (1988). Rethinking incrementalism. Strategic Management Journal, 9(1), 75–91.Google Scholar
Jones, C., Hesterly, W. S., & Borgatti, S. P. (1997). A general theory of network governance: Exchange conditions and social mechanisms. Academy of Management Review, 22, 911–945.Google Scholar
Katz, R. (1982). The effects of group longevity on project communication and performance. Administrative Science Quarterly, 27, 81–104.Google Scholar
Keats, B. W., & Hitt, M. A. (1998). A causal model of linkages among environmental dimensions, macro organizational characteristics, and performance. Academy of Management Journal, 31(3), 570–598.Google Scholar
Kraatz, M. S., & Zajac, E. J. (2001). How organizational resources affect strategic change and performance in turbulent environments: Theory and evidence. Organization Science, 12(5), 632–657.Google Scholar
Kutner, M. H., Nachtsheim, C. J., & Neter, J. (2008). Applied linear regression models (4th ed., New York: McGraw Hill.Google Scholar
Lamberg, J., & Tikkanen, H. (2006). Changing sources of competitive advantage: Cognition and path dependence in the Finnish retail industry 1945-1995. Industrial and Corporate Change, 15(5), 811–856.Google Scholar
Lamberg, J., Tikkanen, H., Nokelainen, T., & Suur-Inkeroinen, H. (2009). Competitive dynamics, strategic consistency, and organizational survival. Strategic Management Journal, 30, 45–60.Google Scholar
Lawrence, B. S. (1997). Opening the black box of organizational demography. Organization Science, 8, 1–22.Google Scholar
Lin, W. T. (2014). How do managers decide on internationalization process? The role of organizational slack and performance feedback. Journal of World Business, 49(3), 396–408.Google Scholar
Lin, W. T., Cheng, K. Y., & Liu, Y. (2009). Organizational slack and firm’s internationalization: A longitudinal study of high-technology firms. Journal of World Business, 44(4), 397–406.Google Scholar
Mackey, A. (2008). The effect of CEOs on firm performance. Strategic Management Journal, 29(12), 1357–1367.Google Scholar
Marcel, J. J. (2009). Why top management team characteristics matter when employing a chief operating officer: A strategic contingency perspective. Strategic Management Journal, 30, 647–658.Google Scholar
Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2), 340–363.Google Scholar
Michel, J. G., & Hambrick, D. C. (1992). Diversification posture and top management team characteristics. Academy of Management Journal, 35, 9–37.Google Scholar
Miles, R. E., & Snow, C. C. (1978). Organizational strategy, structure, and process. New York: McGraw-Hill.Google Scholar
Miles, R. E., & Snow, C. C. (1992). Causes of failure in network organizations. California Management Review, 34(4), 53–72.Google Scholar
Miller, D. (1991). Stale in the saddle: CEO tenure and the match between organization and environment. Management Science, 37(1), 34–52.Google Scholar
Miller, D. (1992). Environmental fit versus internal fit. Organization Science, 3(2), 159–178.Google Scholar
Miller, D., & Chen, M. J. (1994). Sources and consequences of competitive inertia: A study of the U.S. airline industry. Administrative Science Quarterly, 39, 1–23.Google Scholar
Miller, D., & Chen, M. J. (1996). The simplicity of competitive repertoires: An empirical analysis. Strategic Management Journal, 17(6), 419–439.Google Scholar
Miller, D., & Friesen, P. H. (1982). Structural change and performance: Quantum versus piecemeal-incremental approaches. Academy of Management Journal, 25(4), 867–892.Google Scholar
Mintzberg, H. (1994, January–February). The fall and rise of strategic planning. Harvard Business Review, 1994 (January-February issue), 107–114.Google Scholar
Mintzberg, H., & Lampel, J. (1999). Reflecting on the strategy process. Sloan Management Review, 40(3), 21–30.Google Scholar
Moses, O. D. (1992). Organizational slack and risk-taking behavior: Tests of product pricing strategy. Journal of Organizational Change Management, 5(3), 38–54.Google Scholar
Moss, T. W., Payne, G. T., & Moore, C. B. (2013). Strategic consistency of exploration and exploitation in family business. Family Business Review, 27(1), 51–74.Google Scholar
Nadolska, A., & Barkema, H. G. (2013). Good learners: How top management teams affect the success and frequency of acquisitions. Strategic Management Journal, 35(10), 1483–1507.Google Scholar
Nath, D., & Sudharshan, D. (1994). Measuring strategy coherence through patterns of strategic choices. Strategic Management Journal, 15(1), 43–61.Google Scholar
Nelson, R. R., & Winter, S. G. (1982). An evolutionary theory of economic change. Cambridge: Harvard University Press.Google Scholar
O’Reilly, C. A, Snyder, R., & Boothe, J. (1993). Effects of executive team demography on organizational change. Organizational Change and Redesign, 147–175.Google Scholar
Ozcan, P., & Eisenhardt, K. M. (2009). Origin of alliance portfolios: Entrepreneurs, network strategies, and firm performance. Academy of Management Journal, 52(2), 246–279.Google Scholar
Papadakis, V. M., & Barwise, P. (2002). How much do CEOs and top managers matter in Strategic Decision-Making? British Journal of Management, 13(1), 83–95.Google Scholar
Park, K. M. (2007). Antecedents of convergence and divergence in strategic positioning: The effects of performance and aspiration on the direction of strategic change. Organization Science, 18(3), 386–402.Google Scholar
Peli, G. (2009). Fit by founding, fit by adaptation: Reconciling conflicting organization theories with logical formalization. Academy of Management Review, 34(2), 343–360.Google Scholar
Penrose, E. T. (1959). The theory of the growth of the firm. New York: Wiley.Google Scholar
Pfeffer, J. (1983). Organizational demography. Research in Organizational Behavior, 5, 299–357.Google Scholar
Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations. New York: Harper and Row.Google Scholar
Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.Google Scholar
Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.Google Scholar
Powell, W. W. (1990). Neither market nor hierarchy: Network forms of organization. Research in Organizational Behavior, 12, 295–336.Google Scholar
Prescott, J. E. (1986). Environment as a moderator of strategy-performance relationship. Academy of Management Journal, 29, 329–346.Google Scholar
Quigley, T. J., & Hambrick, D. C. (2012). When the former CEO stays on as board chair: Effects on successor discretion, strategic change, and performance. Strategic Management Journal, 33(7), 834–859.Google Scholar
Quigley, T. J., & Hambrick, D. C. (2014). Has the CEO effect increased in recent decades? a new explanation for the great rise in America’s attention to corporate leaders. Strategic Management Journal, 36(6), 821–830.Google Scholar
Quinn, J. B. (1980). Managing strategic change. MIT Sloan Management Review, 21(4), 3–20.Google Scholar
Rajagopalan, N., & Spreitzer, G. M. (1996). Toward a theory of strategic change: A multi-lens perspective and integrative framework. Academy of Management Review, 22(1), 48–79.Google Scholar
Raymond, L., & Bergeron, F. (2008). ‘Enabling the business strategy of SMEs through E-business capabilities: A strategic alignment perspective’. Industrial Management & Data Systems, 108(5), 577–595.Google Scholar
Romanelli, E., & Tushman, M. (1994). Organizational transformation as punctuated equilibrium: An empirical test. Academy of Management Journal, 37(5), 1141–1166.Google Scholar
Rumelt, R. P. (1995). Precis of inertia and transformation in Resources in an Evolutionary Perspective , C. A. Montgomery (Ed.), Towards a synthesis of evolutionary and resource-based approaches to strategy (pp. 101–132). Norwell, MA: Kluwer Academic Publishers.Google Scholar
Schein, E. H. (2004). Organizational and leadership (3rd ed., San Francisco, CA: Jossey-Bass.Google Scholar
Sheth, J., & Sisodia, R. (2002). The rule of three: Surviving and thriving in competitive markets. New York: Free Press.Google Scholar
Siggelkow, N. (2002). Evolution toward fit. Administrative Science Quarterly, 47(1), 125–159.Google Scholar
Siggelkow, N., & Levinthal, D. A. (2003). Temporarily divide to conquer: Centralized, decentralized, and reintegrated organizational approaches to exploration and adaptation. Organizational Science, 14(6), 650–669.Google Scholar
Singh, J. V. (1986). Performance, slack, and risk-taking in organizational decision making. Academy of Management Journal, 29, 562–585.Google Scholar
Smart, C., & Vertinsky, I. (1984). Strategy and the environment: A study of corporate responses to crises. Strategic Management Journal, 5(3), 199–213.Google Scholar
Smith, K. G., Smith, K. A., Olian, J., Sims, H., O’Bannon, D., & Scully, J. (1994). Top management team demography and process: The role of social integration and communication. Administrative Science Quarterly, 39, 412–438.Google Scholar
Spanos, Y. E., Zaralis, G., & Lioukas, S. (2004). Strategy and industry effects on profitability: Evidence from Greece. Strategic Management Journal, 25, 139–165.Google Scholar
Tihanyi, L., Ellstrand, A. E., Daily, C. M., & Dalton, D. R. (2000). Composition of the top management team and firm international diversification. Journal of Management, 26(6), 1157–1177.Google Scholar
Timothy, P. L., & Wolff, J. A. (2007). SME performance: A case for internal consistency. Journal of Small Business Strategy, 18(1), 1–16.Google Scholar
Tsai, W., & Ghoshal, S. (1998). Social capital and value creation: The role of intrafirm networks. Academy of Management Journal, 41(4), 464–476.Google Scholar
Uzzi, B. (1997). The sources and consequences of embeddedness for economic performance of organizations: The Network Effect. American Sociological Review, 61, 674–698.Google Scholar
Venkatraman, N. (1989). The concept of fit in strategy research: Toward verbal and statistical correspondence. Academy of Management Review, 14(3), 423–444.Google Scholar
Venkatraman, N., & Prescott, J. E. (1990). Environment-strategy coalignment: An empirical test of its performance implications. Strategic Management Journal, 11, 1–23.Google Scholar
Voss, G. B., Sirdeshmukh, D., & Voss, Z. G. (2008). The effects of slack resources and environmental threat on product exploration and exploitation. Academy of Management Journal, 51(1), 147–164.Google Scholar
Wagner, W. G., Peffer, J., & O’Reilly, C. A. (1984). Organizational demography and turnover in top-management groups. Administrative Science Quarterly, 29, 74–92.Google Scholar
Wiersema, M. F., & Bantel, K. A. (1992). Top management team demography and corporate strategic change. Academy of Management Journal, 35(1), 91–121.Google Scholar
Wowak, A. J., Hambrick, D. C., & Henderson, A. D. (2011). Do CEOs encounter within-tenure ‘Settling Up’? A multiperiod perspective on executive pay and dismissal. Academy of Management Journal, 54(4), 719–739.Google Scholar
Zajac, E. J., & Kraatz, M. S. (2000). How organizational resources affect strategic change and performance in turbulent environments: Theory and evidence. Organization Science, 12(5), 632–657.Google Scholar
Zajac, E. J., Kraatz, M. S., & Bresser, R. K. F. (2000). Modeling the dynamics of strategic fit: A normative approach to strategic change. Strategic Management Journal, 21, 429–453.Google Scholar
Zajac, E. J., & Shortell, S. M. (1989). Changing generic strategies: Likelihood, direction, and performance implications. Strategic Management Journal, 10, 513–530.Google Scholar
Zhang, C. J., Tan, J., & Tan, D. (2015). Fit by adaptation or fit by founding? A comparative study of existing and new entrepreneurial cohorts in China, Strategic Management Journal, forthcoming.Google Scholar
Zhang, Y., & Rajagopalan, N. (2010). Once an outsider, always an outsider? CEO origin, strategic change, and firm performance. Strategic Management Journal, 31(3), 334–346.Google Scholar