How Does Strategy Process Influence Strategy Content? Antecedents Of Consistency Between Resource Allocation Decisions And Corporate Strategy
AbstractWe investigate the relative importance of organizational and decision-specific factors that shape decision-making processes as antecedents of consistency between corporate strategy concept and individual resource allocation decisions. Our empirical study examines the Swiss pharmaceutical companies Ciba and Sandoz from 1989 to 1996. We use a model from which we derive hypotheses on the influence of organizational and decision-specific factors on consistency. We test these hypotheses using data on 493 resource allocation decisions, and applying maximum likelihood ordered logit estimation. Our results indicate that factors specific to individual resource allocation decisions are far more important for their consistency with the prevailing corporate strategy concept than are organizational factors. In particular, we find that the longer the time lag between the announcement of a corporate strategy concept and individual resource allocation decisions, the lower the likelihood of high consistency levels. As to the role of organizational factors, lower decision-making levels tend to be associated with higher consistency levels.
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Bibliographic InfoArticle provided by LMU Munich School of Management in its journal Schmalenbach Business Review.
Volume (Year): 57 (2005)
Issue (Month): 4 (October)
Consistency; Corporate Strategy Concept; Resource Allocation Decisions;
Find related papers by JEL classification:
- M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General
- M19 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Other
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- Brauer, Matthias & Heitmann, Mark, 2013. "Antecedents and temporal dynamics of strategic divergence in multinational corporations: Evidence from Europe," Journal of World Business, Elsevier, vol. 48(1), pages 110-121.
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