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Antecedents and temporal dynamics of strategic divergence in multinational corporations: Evidence from Europe

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  • Brauer, Matthias
  • Heitmann, Mark
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    Abstract

    Coordinating consistent strategy implementation has been identified a key challenge for multi-national corporations. Based on intraorganizational evolutionary models of strategy formation, this paper thus empirically investigates the antecedents and temporal dynamics of strategic divergence. Strategic divergence is the deviation of a firm's resource allocation decisions with its articulated concept of corporate strategy. Large-scale empirical analysis of 11,406 resource allocation decisions of twenty-five publicly listed, multi-national and multi-business European firms indicates that decision type, operational and divisional manager involvement in decision making and structural context changes exert a significant influence on strategic divergence. Importantly, results further suggest that firms’ levels of strategic divergence tend to increase over time and that the antecedents of strategic divergence have a differential impact as time passes.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of World Business.

    Volume (Year): 48 (2013)
    Issue (Month): 1 ()
    Pages: 110-121

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    Handle: RePEc:eee:worbus:v:48:y:2013:i:1:p:110-121

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    Related research

    Keywords: Strategic divergence; Intraorganizational evolutionary process of strategy formation; Strategic intent in multi-national corporations;

    References

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    1. Ansgar Richter & Sascha L. Schmidt, 2005. "How Does Strategy Process Influence Strategy Content? Antecedents Of Consistency Between Resource Allocation Decisions And Corporate Strategy," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 57(4), pages 332-350, October.
    2. Henry Mintzberg, 1978. "Patterns in Strategy Formation," Management Science, INFORMS, vol. 24(9), pages 934-948, May.
    3. Segal-Horn, Susan & Dean, Alison, 2009. "Delivering 'effortless experience' across borders: Managing internal consistency in professional service firms," Journal of World Business, Elsevier, vol. 44(1), pages 41-50, January.
    4. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
    5. Burgelman, Robert A., 2002. "Strategy as Vector and the Inertia of Co-evolutionary Lock-in," Research Papers 1745, Stanford University, Graduate School of Business.
    6. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
    7. Jon I Martinez & J Carlos Jarillo, 1991. "Coordination Demands of International Strategies," Journal of International Business Studies, Palgrave Macmillan, vol. 22(3), pages 429-444, September.
    8. Sascha L. Schmidt & Matthias Brauer, 2006. "Strategic Governance: how to assess board effectiveness in guiding strategy execution," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(1), pages 13-22, 01.
    9. Kendall Roth & Allen J Morrison, 1992. "Implementing Global Strategy: Characteristics of Global Subsidiary Mandates," Journal of International Business Studies, Palgrave Macmillan, vol. 23(4), pages 715-735, December.
    10. W Chang Kim & Ren�e A Mauborgne, 1993. "Effectively Conceiving and Executing Multinationals′ Worldwide Strategies," Journal of International Business Studies, Palgrave Macmillan, vol. 24(3), pages 419-448, September.
    11. Matthias Brauer & Sascha Schmidt, 2006. "Exploring Strategy Implementation Consistency Over Time: The Moderating Effects of Industry Velocity and Firm Performance," Journal of Management and Governance, Springer, vol. 10(2), pages 205-226, 05.
    12. Robert A. Burgelman, 1983. "Corporate Entrepreneurship and Strategic Management: Insights from a Process Study," Management Science, INFORMS, vol. 29(12), pages 1349-1364, December.
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