Strategic Posture, Environmental Munificence, and Performance: An Empirical Study of Independent Restaurants

Abstract

Normative theory holds that strategy should favorably align organizations with their environments. The primary purpose of this study was to provide a test of the contingency effect that environmental munificence may have on the relationship between strategic posture and performance at the business-unit level. A nationwide sample of 311 independent restaurateurs, representing a 20.7% response rate, responded to a mail-out survey. Moderated regression analysis was used to assess the independent effects and the contingency relationships or interactions between the predictor (strategic posture) and the moderator (environmental munificence). The results suggest that both strategic posture and environmental munificence are significant independent predictors of performance. The moderating role of environmental munificence on the effect of strategic posture on performance was not established. However, the independent and additive effects of both strategic posture and environmental munificence were significant. Overall, munificence explains a greater proportion of the variance in performance than does strategic posture.

Transformational leadership style, market competition and departmental performance: Evidence from luxury hotels in Australia

“…In the context of hotels, the perception of the intensity of market competition is the result of globalisation, improved information technology and increased customers' awareness of quality Jogaratanam et al, 1999;Wall Street Journal, 2003;Wolff, 2004), and increased supply and decreased demand for hotel facilities (Buckhiester, 2003;Kim et al, 2004).…”

How Leadership Characteristics Affect Organizational Decline and Downsizing

“…Industry decline is a phenomenon addressed by various theoretical points of departure. A key factor is environmental munificence (Jogaratnam et al, 1999) which directly affects specific industries: whenever munificence decreases in a certain task environment, it negatively impacts those industries that have a critical reliance on these resources (Castergiovanni, 2002). When resources are plentiful, firms find it easier not only to survive, but also to pursue additional strategic goals as well (Brittain and Freeman, 1980;Castergiovani, 1991).…”

Environmental Uncertainty and Scanning Behavior: An Assessment of Top-Level Hotel Executives

“…Bluedorn's comprehensive review of the literature on organizational environments concludes that these three dimensions constitute the primary means to "describe and conceptualize the fundamental properties of organizational environments" (1993, p. 166). In this context, both dynamism and complexity typically reflect the level of informational uncertainty associated with the environment whilst munificence, which relates to resource uncertainty, is an indicator of the firms' dependence on the environment for critical resources (Freel, 2006;Jogaratnam, Tse, & Olsen 1999;Castrogiovanni, 1991;Lester et al, 2006). The following sections briefly delineate the three principal dimensions pertaining to organizational environments as discussed in the literature on organizations.…”

“…Studies of environmental influences on organizational behavior have generally focused on two conceptions of the environment (Freel, 2006;Jogaratnam, Tse & Olsen, 1999). One is environmental uncertainty, or the flow of information as perceived by managers (Sharfman & Dean, 1991;Gerloff, Muir, & Bodensteiner, 1991;Doty et al, 2006), and the other views environments as stocks of resources, the level and the terms on which they are available being the critical factor; more or less ignoring the process by which information about the environment is apprehended by decision makers (Sutcliffe, 1994;Castrogiovanni, 1991).…”