Do firms located within an industry cluster outperform those that are not? Scholars of agglomeration economies have suggested that clustered firms stand to benefit from the positive externalities that stem from geographic proximity of industry. In this article, the relationship between agglomeration economies and financial performance is investigated. Thirty-one years of performance data for 194 firms from the semiconductor and pharmaceutical industries revealed no significant differences between clustered and nonclustered firms in the early stages of the industry life cycle. However, isolated (nonclustered) laggards outperformed clustered laggards in the late stages of the industry life cycle. Similarly, no significant differences in financial performance were found between the groups during periods of economic contraction at an early stage of the industry life cycle, but isolated firms outperformed clustered firms in the late stages of the industry life cycle. The reported results of this study, in combination with concerns raised by a few agglomeration scholars, suggest that the enthusiasm for cluster theory shown by scholars, practitioners, and policy makers may need to be tempered.

This study investigates the relationship among four design parameters of planning systems and five different firm and environmental characteristics. The impact of this multivariate relationship on organizational effectiveness is then examined using a sample of 115 large manufacturing firms. The findings show general support for the proposition that, in order to be effective, a strategic planning system should be designed in such a way that the specific situational setting of the firm is reflected in the design. The analysis also indicates that firms adopt a more flexible planning system -captured here by two key variables, planning horizon, and frequency of plan reviews -as the level of environmental complexity increases. Implications for future research are discussed.

This article investigates the relationships among severalfirm characteristics and some design parameters of strategic planning processes in 115 large U.S. corporations. The purpose is to increase our knowledge of the strategic planning process and to confirm several propositions developed in previous studies. The findings point out that firms tend to adopt a more flexible planning system as the level of environmental complexity increases. Other hypotheses relating the organization's size, structure, capital intensity, and market life cycle to strategic planning processes are tested, with mixed results.

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