Environment--strategy coalignment: an empirical test of its performance implications

By N. Venkatraman, J. Prescott. 2011

720 citations recorded by the source corpus.

The positive performance impact of a coalignment between the environment and strategy of a business is an important theoretical proposition in strategic management. In spite of its importance and intuitive appeal, the extent of empirical support is equivocal and riddled with problems of conceptualizing and testing for coalignment. This paper evaluates alternate approaches to testing such a proposition and argues in favor of specifying coalignment as ‘profile deviation’, which states that coalignment is the degree to which strategic resource deployments adhere to an ‘ideal profile’ for a given environment. Subsequently, this proposition is tested across two time periods, and eight distinct environments in two different samples drawn from the PIMS data base. Results, which were generally robust across the two periods, strongly support the proposition of a positive performance impact of environment‐strategy coalignment. Implications and research directions are developed.

Subfields: Management Science and Operations Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/b4c1303466e00a149e418e6471d4db61a005be18

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In Management Science and Operations Research

In Strategy and Management

Citations in the corpus

Competitive dynamics, strategic consistency, and organizational survival (2009, methodology): “Our research elaborates current understanding on competitive dynamics both theoretically, by presenting a higher-order approach to the construct, and through a longitudinal approach called upon in previous research (Miller and Chen, 1994; Porter, 1991; Venkatraman and Prescott, 1990 ).”
Corporate social responsibility and firm performance: The mediating role of marketing competence and the moderating role of market environment (2015, methodology): “The effectiveness of CSR toward different stakeholders is determined not only by institutional context but also by the turbulence and competitive intensity embedded in the surrounding environment (Venkatraman & Prescott, 1990).”
A Structure–Conduct–Performance Perspective of How Strategic Supply Chain Integration Affects Firm Performance (2015, background): “Strategic alignment between firm and operational strategies can lead to efficiencies throughout the firm and improve overall organizational effectiveness (Venkatraman & Prescott, 1990; Chan, Huff, Barclay, & Copeland, 1997).”
High-performance work systems and performance of French small- and medium-sized enterprises: examining causal order (2011, background): “This approach focuses to a whole of independent variables related to a dependent variable, rather than individual independent variables (Miller 1987 ; Venkatraman and Prescott 1990 ; Meyer, Tsui, and Hinings 1993 ).”
Strategic alignment: A missing link in the relationship between strategic consensus and organizational performance (2013, background): “In addition to the implications for research on strategic consensus, the results of our study also contribute to the literature on strategic fit (e.g. Venkatraman and Prescott, 1990; Zajac et al., 2000).”
The impact of supply chain integration on performance: A contingency and configuration approach (2010, background): “This alignment between strategy and performance is described as ‘‘fit’’ in the strategic management literature (Drazin et al., 1985; Venkatraman and Prescott, 1990; Milgrom and Roberts, 1995).”
Effects of Innovation Types on Firm Performance (2011, positive): “…contribute to the financial goals thanks to the increasing amount of price premiums and sales revenues and decreasing amount of marginal unit costs leading to a significant increase in the overall profitability (e.g., Buzzel and Gale, 1987; Venkatraman and Prescott, 1990, Wang and Wei, 2005).”
Performance Impact of Middle Managers' Adaptive Strategy Implementation: the Role of Social Capital (2014, background): “Alternatively, a second prediction is based on larger units’ need to adapt to achieve environment–strategy fit (e.g., Hrebiniak and Joyce, 1985; Venkatraman and Prescott, 1990).”
Service-based differentiation strategies for business incubators: Exploring external and internal alignment (2012, background): “(Venkatraman, 1989; Venkatraman and Prescott, 1990) as a means to attain performance benefits (Naman and Slevin, 1993; Yamakawa et al.”
An analysis of the relationship between total quality management-based human resource management practices and innovation (2009, background): “…innovation (SOI) X*Z: Interaction of X and Z: moderating effect However, if strategy is understood as a pattern of deployment of strategic resources (Venkatraman and Prescott 1990), then the ‘level’ of SOI can be captured by the definition of a set of attitudes towards innovation that denote a…”
Export Product Strategy Fit and Performance: An Empirical Investigation (2009, methodology): “We regressed the absolute standardized residuals that resulted from the estimation of a regression model onto performance (Venkatraman and Prescott 1990).”