This study analyzes whether a diversification strategy facilitates subsequent divisionalization (and hence that ‘structure follows strategy’), and/or whether the multidivisional structure leads to a diversification strategy (and hence that ‘strategy follows structure’). In theoretical terms, this study is original in that it institutes a debate between the Chandler thesis and other perspectives that challenge the generalizability of the strategy‐structure nexus. Interestingly, this new study with contemporaneous data for the period 1993–2003 sheds light on this contested issue and postulates that despite the criticism of Chandler's contribution, it still works. Our results show that strategic diversification affects structural divisionalization, and in turn, structural divisionalization affects strategic diversification. Copyright © 2009 John Wiley & Sons, Ltd.

This study seeks to investigate whether family firms are more likely to downsize their workforce than their non‐family counterparts. Drawing on socioemotional wealth approach, we first explore the effect of family presence on workforce downsizing. Furthermore, we examine the moderating role of R&D activity on the family presence–downsizing relationship. Our sample covers a panel of manufacturing SMEs in Spain over the 1993–2014 period. We find that family firms are less likely to downsize than non‐family firms. Our results also reveal a negative association between R&D activity and workforce downsizing. Finally, the relationship between family presence and downsizing is contingent upon R&D activity, that is, family firms engaged in R&D activities are less likely to downsize than non‐innovative family firms.

This study analyses the evolution in large firms' strategy and structure in a new spatial and temporal context (Spain 1993—2003). The central question of this work is to determine whether transformations undergone in this country have led Spanish companies' strategies and structures to converge with those of other European countries, following the predictions of `universalistic' theories of strategy and organization; or whether cultural/institutional effects have remained strong, following a path-dependence/cultural-lag type logic. The Spanish experience is particularly significant for theory in general because its late development and very distinctive institutional origins allow us to test theories applied before in a new country and more recent time period. Our findings show that a changing context (e.g. liberalization) has led Spanish firms to converge with those of other European economies in the pattern of strategy and structure (increasing levels of diversification and divisionalization). Thus, the findings of this study in a new context are consistent with universalistic predictions that strategies and structures will evolve towards a common model of corporate development, as Chandler postulated initially.

In the present study we explore the relationship between downsizing decisions and corporate financial performance after top management has decided to downsize. Our focus is on the financial consequences arising from the amount of downsizing and the use of disengagement incentives. For this purpose, we use a sample of downsizing announcements in the Spanish press from 1995 up to 2001. Although the results show that the amount of downsizing is not significantly related to post-downsizing profitability, the evidence provided supports the finding that the use of disengagement incentives (which motivate workers to leave the organization) is negatively related to firm performance. Our analysis helps to understand the role that strategic downsizing decisions play in explaining observed variance in the performance of downsized firms. Thus, it advances scholarly organizational research by reinforcing the concept that corporate performance is not only contingent on strategies, but also influenced by the means through which these strategies are implemented.

This study analyses the institutional determinants of downsizing in an economy with a highly rigid labour market: Spain. Our focus is first placed on the impact that the system of severance payment has on downsizing adoption. In particular, we analyse whether the regulatory environment can explain variations in employers' downsizing use. In addition, we analyse how organisations imitate one another in implementing downsizing, presumably in a quest for legitimacy. The evidence provided indicates that low levels of severance payments incurred by downsizers in the past promotes downsizing in the present, but too high severance payments discourages downsizing. Therefore, firms in Spain are constrained by regulatory forces stemming from labour law. Our results also reflect the importance of rational myths in downsizing because companies imitate the decisions on downsizing widely used in their industry and, particularly, those adopted by industry leaders.