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The effect of compensation program and structure on sbu competitive strategy: A study of technology‐intensive firms

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  • Craig S. Galbraith
  • Gregory B. Merrill

Abstract

In this paper we examine the impact various compensation programs have upon business‐level strategy for technology‐intensive firms. Similarly, we examine the effect of centralization of R&D and non‐R&D decision‐making, formality of procedures, and SBU size on competitive strategy. Analysis of data from 79 SBUs suggest that there is a resource trade‐off between marketing‐oriented strategies and R&D‐oriented strategies, and that managers who operate under certain types of compensation programs will tend to favor R&D/innovation strategies and capital investment over other alternatives. Structure and competitive position also appear to play a significant role in determining technology and investment strategy.

Suggested Citation

  • Craig S. Galbraith & Gregory B. Merrill, 1991. "The effect of compensation program and structure on sbu competitive strategy: A study of technology‐intensive firms," Strategic Management Journal, Wiley Blackwell, vol. 12(5), pages 353-370, July.
  • Handle: RePEc:bla:stratm:v:12:y:1991:i:5:p:353-370
    DOI: 10.1002/smj.4250120503
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    Cited by:

    1. Metin Sengul, 2019. "Organization design as a competitive choice: an application to the study of innovation," Journal of Organization Design, Springer;Organizational Design Community, vol. 8(1), pages 1-9, December.
    2. Chih‐Wei Peng, 2020. "The role of business strategy and CEO compensation structure in driving corporate social responsibility: Linkage towards a sustainable development perspective," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 1028-1039, March.
    3. Effelsberg, Martin, 2011. "Wissenstransfer in Innovationskooperationen: Ergebnisse einer Literaturstudie zur "Absorptive Capacity"," Arbeitspapiere 107, University of Münster, Institute for Cooperatives.
    4. Ma, Li & Zhai, Xin & Zhong, Weiguo & Zhang, Zhi-Xue, 2019. "Deploying human capital for innovation: A study of multi-country manufacturing firms," International Journal of Production Economics, Elsevier, vol. 208(C), pages 241-253.
    5. Esteban Fernández & Beatriz Junquera & Mónica Ordiz, 2006. "Managers' profile in environmental strategy: a review of the literature," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 13(5), pages 261-274, December.
    6. Yuan Yuan & Louise Yi Lu & Gaoliang Tian & Yangxin Yu, 2020. "Business Strategy and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 162(2), pages 359-377, March.

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