Exploring Strategy Implementation Consistency Over Time: The Moderating Effects of Industry Velocity and Firm Performance

Matthias Brauer () and Sascha Schmidt ()

Journal of Management & Governance, 2006, vol. 10, issue 2, 205-226

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. Copyright Springer 2006

Keywords: corporate concept; resource allocation decisions; strategy formation; strategy implementation consistency (search for similar items in EconPapers)
Date: 2006
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10997-006-0002-2

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