A Conceptual Model of Strategy Formation

Litschert, Robert J.; Bonham, T. W.

doi:10.5465/amr.1978.4294847

Cited by 71 publications

(27 citation statements)

References 21 publications

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“…In the volatile electronic computing equipment industry, environmental scanning and the ability to quickly adjust to contextual changes (features of the Prospector strategy) may be more critical in ensuring continued success. A competing explanation for the lack of significance could be that Defender firms which focus on interal operations might have built greater levels of slack resources which insulate them from the negative impact of misalignment (Litschert and Bonham, 1977). These factors could obscure the relationship between coalignment and performance.…”

Section: Hypothesismentioning

confidence: 99%

The performance impact of strategy ‐ manager coalignment: An empirical examination

Thomas

Litschert

Ramaswamy

1991

Strategic Management Journal

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373

275

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This paper develops a theoretical model that explains the impact of the fit between top executive characteristics and strategic orientation on organizational performance. Using the Miles and Snow typology as an integrative framework, the central propositions of the model were evaluated. The results of the empirical examination provided significant support for the administrative dimension, an aspect of the typology that has been largely overlooked thus far. Further, it was found that firms achieving a greater degree of alignment between their strategy and the profiles of top managers, generally realized superior performance outcomes.

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Section: Hypothesismentioning

confidence: 99%

The performance impact of strategy ‐ manager coalignment: An empirical examination

Thomas

Litschert

Ramaswamy

1991

Strategic Management Journal

Self Cite

373

275

View full text Add to dashboard Cite

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“…Because excess resources are difficult to identify, operationalizing measures of slack for empirical purposes has proved to be problematic and approaches have varied widely. Individual accounting-based measures, such as the level of expenditures (DePuy, 1983), operating expenses (Wolf, 1971), return on investment (Litschert, 1978, Odell, 1972, profit (Dimick and Murray, 1978), and sales (Litschert, 1978), have most frequently been employed. Each of these individual measures uses a rather narrow aspect of a firm's condition as a proxy for the broader excess resources concept implied by slack.…”

Section: The Measurement Of Organizational Slackmentioning

confidence: 99%

Organizational Slack and Risk‐taking Behaviour: Tests of Product Pricing Strategy

Moses

1992

Journal of Organizational Change Management

102

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Organizational change inevitably involves uncertainty and hence some risk taking. Tests the relationship between organizational slack and risk taking in organization decision making, and thus provides some evidence on the role or organizational variables in risk‐taking behaviour. Product pricing strategies are identified and characterized with respect to risk. Organizational slack is measured using various financial variables. Results indicate that firms which have increases in organizational slack prior to the introduction of new products are more likely to adopt a higher risk product pricing strategy. Also discusses implications regarding the measurement of slack using financial variables.

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“…In the case for a negative relationship between slack and innovation, it is argued that slack is an analogue for inefficiency -a buffer which shields the firm and, in some cases, blinds it from changes which are needed to meet external demands [25]; [41]; [45]. In line with this reasoning, [5] argue that the presence of slack may actually weaken a company's adaptive response to environmental shifts.…”

Section: A Negative Relation Between Slack Levels and Innovation Omentioning

confidence: 72%

“…Reference [25] and [45] propose that when slack is high, organizations can afford to adopt structures that do not match their environments, because the excess resources can be used to pay the price of the mismatch. When slack is low, however, organizations cannot afford to be unresponsive to external demands, and thus structures are more likely to be contingent on contextual requirements.…”

Section: A Negative Relation Between Slack Levels and Innovation Omentioning

confidence: 99%

On the relationship between organizational slack and the level of innovation of firms

Oerlemans

Pretorius

2008

PICMET '08 - 2008 Portland International Conference on Management of Engineering &Amp; Technology

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On the relationship between organizational slack and the level of innovation of firmsOerlemans, L.A.G.; Pretorius, M.W. Published in:Technology management for a sustainable economy Document version:Publisher's PDF, also known as Version of record General rightsCopyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.-Users may download and print one copy of any publication from the public portal for the purpose of private study or research -You may not further distribute the material or use it for any profit-making activity or commercial gain -You may freely distribute the URL identifying the publication in the public portal Take down policy If you believe that this document breaches copyright, please contact us providing details, and we will remove access to the work immediately and investigate your claim. Abstract--The concepts of organizational slack and innovation are central elements in the literature. Innovation is of central importance as it is vital for organizational renewal and survival. The literature stands divided on the effect of organizational slack, which can be defined as the pool of resources in organizations that is in excess of the minimum necessary to produce a given level of output, on innovation. Three conflicting views can be distinguished.Proponents of slack argue that slack allows organizations to experiment and that it is a necessary condition for fostering innovation. Agency theory turns this perspective upside down. In this view, slack may be a source of agency problems, which breeds inefficiency. Therefore, it considers slack to be negatively related to innovation. Besides these two views there is also a group that takes a middle position: too little slack and too much slack are both bad for innovation, which leads to the prediction that there is a curvilinear relationship between slack and innovation.The study uses an existing dataset, which contains information about 300 innovating South African organizations. Results show that higher levels of slack lead to higher levels of innovation. No evidence is found for either a negative or curvilinear relationship.

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A Conceptual Model of Strategy Formation

Cited by 71 publications

References 21 publications

The performance impact of strategy ‐ manager coalignment: An empirical examination

The performance impact of strategy ‐ manager coalignment: An empirical examination

Organizational Slack and Risk‐taking Behaviour: Tests of Product Pricing Strategy

On the relationship between organizational slack and the level of innovation of firms

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