A Framework for a Grounded Theory of Corporate Policy

Author(s): Eli Segev

Source: Interfaces, Vol. 18, No. 5 (Sep. - Oct., 1988), pp. 42-54
Published by: INFORMS
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A Framework
Corporate

for a Grounded

Theory of

Policy

Eli Segev

Faculty ofManagement
Tel Aviv University
Tel Aviv 69978
Israel

A framework
rate

policy,

used
credited

is presented

for developing

on

exhaustive

based

in capstone
master's

fairly

courses

in strategy
in schools

programs

a theory of corpo
of case

survey

studies

ac

in AACSB

and policy
of business

administra

tion in the US.

The main

variables

fied and grouped

to corporate

relevant

into eight meta-variables:

actions,

organizational
process,
organizational
tional performance.

characteristics,
design,
I propose

policy

were

strategy,

identi

strategic

environment,

strategic
and
actors,
organiza
strategic
a framework
the
for strategic

ory: A strategy is the actions taken to match an organization

The strategy is formulated and imple
with its environment.
mented by a process and an organizational
design in which
various actors take part. Strategic match results in high
performance.

This is the first step in generating

followed by generating propositions.
The

set of cases used

in capstone
courses
in the

policy and strategy

accredited
AACSB
graduate

schools

1988, The Institute of Management Sciences

Copyright
0091-2102/88/1805/0042$01.25 PLANNING CORPORATE
This paper was refereed.

of

business

a theory

from data,

administration

can serve

to be

as the

a grounded
basis for developing
theory
term
The
corporate policy.
grounded is

STRATEGY

INTERFACES18: 5 September-October 1988 (pp. 42-54)

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in

A GROUNDED THEORY
used

on a higher but still limited num

Even in this type of re
ber of variables.

is a
employed
of theory from data

because

based

the method

systematic
discovery
use
of
[Glaser
by
analysis
comparative
and Strauss 1967]. The framework
for de
veloping
Business

the theory does not yet exist.

the com
school texts emphasize

plex nature of corporate policy,

the network
plicity of variables,

the multi
of
na

and

its contingent
et al. 1982; Glueck

search,

a most

exactly

should

1984]. Though
used in most

is what
important question
be classified
[Hambrick
some meta-variables
are

each research effort

studies,
set of variables
is initiated with a unique
or
and results in different
archetypes

Jauch 1984; Hofer et al. 1984], but provide

no directions
for research. At the same

strategies.
in the strategy
research
empirical
since
and policy area has been conducted
in
The current empirical
the mid-1970s.

literature is partial,
the empirical
and segmented;
and
concepts
pragmatic

suffer
vestigations
cepted framework

interrelationships,
ture [Christensen

and

time,

are not used

measures

can conflict.

consistently
em
the most
complex
num
a
investigating
large

pirical
ber of variables

are narrow

and Schendel

[Galbraith
Friesen
1980; Zeithaml
make

with

in focus

1983; Miller

and

and Fry 1984]. To

a good
contribution,

meaningful

a limited
empirical
study should define
data
for which
topic, feasible to research,
are available.

For this reason,

from

the lack of an ac
in the

for research

area.
policy and strategy
Both traditional hypotheses
studies
studies and classification

and

Even

studies

generic
Most

most

empir
on a small number of

partial

lists of variables

among
tionships
make a meaningful
are based
they
that delineates
area and
The

and

Such

them.

testing
deal
the rela

studies

can

only if
framework

contribution

on a defined

the strategy and policy

the relevant variables.

identifies

framework

then be used

could

to file

to facilitate

and

at the heart of
not necessarily
variables,
the strategic process.
The variables often

research findings
existing
the orderly and systematic
accumulation
new
It
could also be used as
of
findings.

seem

to have been

bility

rather

ical studies

focus

chosen

for their availa

to
than their importance
the strategic process.

understanding
The fragmented,

sometimes
marginal
or conflicting
and
the
lack of sig
findings
in strategy research
nificant progress

prompted
itiate a holistic

and in
[1981] to propose
of
classification
approach:

organizational

strategies

Miller

(such as those

of

Galbraith and Schendel [1983];Hambrick

[1983a];Miles and Snow [1978];Miller
[1978]; and Porter [1980]).
or taxonomies
gestalts, typologies,
clusters of organizations
suggest different

and Friesen
These

September-October

to
scheme for researchers
conceptual
on the
assure that research
focuses
help
most
important
topics, and that the most
[Kuhn
important
findings are highlighted
1972].
Theoretical

Background

for stra
schemes
conceptual
to catego
have
been
used
research
tegic
rize strategy and policy studies
[Beard
and Dess
1980; Camillus
1981; Bourgeois
Several

1981; Jemison
1981; Jauch and Osborn
White
and
Lenz
1981a, 1981b;
1981;
Hamermesh
only

1981]. These

four important

concepts

1988 43

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point to
in strategic

studies

SEGEV
on task environment

1971;
management:
strategy [Andrews
Boston Consulting
Chandler
1968;
Group
1962; Glueck

1976; Rumelt

Bourgeois

1974], strategy

Ansoff
March

1965; Bower
1963; Mintzberg

1973],

structure

Lawrence

[Anderson

1970;

1972;

Jemison

tion of administrative

and

1965; Lawrence

1967]. Iwill review the conceptual

and their treatment of these four
schemes

concepts.

Camillus

[1981] focused

on

strategy on each level.

the contribu
[1981b] discussed

tion versus

1965], and environment

and Paine 1975; Duncan

and Trist

and methodological

In their empirical
study of corporate
and business-level
Beard and
strategies,
Dess
formula
[1981] discussed
strategy

1978;

1967; Perrow

and Lorsch

Woodward

Emery
Lorsch

and Nathanson

the strategy-making
he saw this distinction

artifact."

[Chandler 1962;Channon 1973;Child

1972; Galbraith

between

and

process,
although
as a
"disciplinary

and

1970; Cyert

content

strategy

making [Aharoni 1966;Allison 1971;

characteristics.

also differentiated

the transla

to strategic
in the follow

behavior

management,
citing works
areas:
and environ
organizations
ing
in
and
ments,
process
organizations,

tion

Jemison
[1981a]
organizational
design.
the
industrial
compared
organization,
and administrative
behavior
marketing,

be
he distinguished
previous works,
tween corporate
and business
strategy
and posed
three dimensions
linking strat
and
egies and actions: structure, process,

To make

of corporate
into operating
strategy
a
In matrix
of
decisions.
categorization

content.

on the in
[1981] focused mainly
of
environment,
strategy,
terdependencies
and structure over time and included
Lenz

which

an administration
process by introducing
factor encompassing
the quality of man
agement,

discretion,
managerial
and coalignment

group structure,
decisions.

strategic
of

among

them.
refers

of

or
Secondary
to the competitive

strategy
used to give an organization
weapons
and depends
"distinctive
competence/'

are

available.

its

in strategy

and usefulness

terns,

tion and

secondary
strategies.
Primary or corpo
rate strategy
is the selection of product
or industries
markets
and the allocation
resources

data

in rela
of strategic management
concepts
tion to unit of analysis,
type of problem
inference pat
addressed,
predominant

[1980] integrated business

Bourgeois
and
policy
organizational
theory literature
and distinguished
between
primary and

business

a meaningful
a good empirical
contribution,
study should define a limited
topic, feasible to research, for

White
grated

implementation.
and Hamermesh
industrial

formula

[1981] also

inte

economics,

organization
theory, and business
pol
a
en
model
of
icy, suggesting
composed
vironment,
strategy, and structure and
organizational

or position
of the firm
strat
(its strategy
type). A more elaborate
framework
is
egy
suggested
by Jauch and
to environment
Osborn
[1981]. In addition
the characteristics

and

structure,

they

included

INTERFACES18:5 44

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context

(size

A GROUNDED THEORY
and

technology)
out
and pointed
Thus

for a research

important

being

framework,

the concepts
structure,

strategy making,

small number

building
the most

to it. The inventory of existing

contributing
written
cases, in general, and the specific
cases included in the syllabus of a business
indicate a cer
policy course, in particular,

of strategy,
and

a Grounded

Theory
for corporate policy is embod
ied in the set of cases used in the inte

tain perception
of the existing
in the field.
knowledge

A model

grating course of policy usually given

in graduate
the end of MBA programs
schools

of business

courses

are referred

at

Thus

These

administration.

to as the capstone pol

Case studies

courses.

icy and

strategy
capture, albeit in a very unstructured
way, all the factors affecting or affected
a specific

situation.

business

by

Written

by
a wide array
they encompass
and organizations.
situations
of business
Unlike
the pragmatic,
partial, and seg
researchers,

mented

literature,
empirical
all the variables
encompass

egy and give examples

of how these variables
produce
"good"
to using
In addition
and

articles,

lectures,

case

studies
strat

affecting

and descriptions
and
interrelate,

and "bad"

and

proj

policy
be

skills and the

analytical
ability to apply them.
Several thousand cases have been written

September-October

case questions)
indicate the underlying
theory of corporate policy today. Al
and instructors proba
though universities
of the core
bly differ in their perceptions
of corporate policy, the set of cases cur
rently taught in the capstone policy and
in the graduate
schools
strategy courses
of business
administration
the
defines
area. A comparative
analysis
cases and the
theory covered
will map

of these
in these

the area and

and variables.

identify the
In this

course outlines,
and case writ
developing
ers use
vocabulary
guided by these
to frame the cen
frameworks
and attempt

keener

only

in

to a
egy teachers
implicitly subscribe
or a set of frameworks when
framework

the student
real-life situations
ing many
of busi
will gain a basic understanding
ness policy and its concepts
and will

In any one university,

of the cases used

concepts
can
a
theory in
identify
grounded
a
Such
of
corpo
corporate policy.
theory
rate policy already exists implicitly: strat

that the study of cases is the best

can acquire
students
method
by which
after analyz
that
think
They
knowledge.

and collected.

of

way we

lieve

acquire

body

the topics they con

policy
cern (based on the instructors'
the
notes,
in the courses,
and the
topics studied

relevant

papers

ects, teachers in capstone business

courses use cases extensively.
Most

an

analysis
courses and

courses

outcomes.

textbooks,
seminars,

and one can compile a set of the

Instructors include particular
as compatible
cases because
they view them
course and
the
basis
of
with the theoretical

mester,

environment.

Toward

each se

of cases are used

cases used.

in strategy making.
the literature suggests

actions

blocks

in their strategic profiles

the role of strategic

tral problem
around an implicit over
Since this implicit
arching framework.
is
I am attempting
theory
precisely what
to develop
in the present
the
data
lyzing
generated,
grounded

theory.

1988 45

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research
I use

ana
by
term
the

SEGEV
and
theory building
Discussing
Duncan
in strategic management,
out
that
pointed

testing
[1979]

process,
business

A particularly useful approach to theory build

ing for policy is the grounded theory approach
of Glaser and Strauss [1967]. This approach is
particularly relevant to policy because it starts
with the data. In the grounded theory ap
are developed
proach, conceptual categories
from the data, then developed into hy
potheses, and tested through comparative
analysis to see if they are empirically verifiable
in different settings (p. 432).
a theory from data means
Generating
and concepts
the
that most of
hypotheses
not only come from the data but are sys
out in relation to the
tematically worked
the course of the research.
data during
"In discovering
theory, one generates
or their properties
categories
conceptual
from
then the evidence
from evidence;

fifth, and usu

The

variable

ally dependent

and

structure,

organizational
environment.

was

taken

to be

Each of the
organizational
performance.
sub
first four meta-variables
is a defined
affects and is affected by
system which
the others, and the performance
of an
a specific policy
is
organization
pursuing
affected by the interrelationships
among
each
them. I also assumed
that within
a clear hierarchy
of variables
the
and operatively
defines

subsystem
elaborates
main

concepts.

In February and March

for syllabi of their courses

1984, requests
were
sent to

at 189 US
policy and strategy professors
master's
universities
accredited
with
pro
In
uni
in
administration.
business
grams
versities

with

large policy faculties,

were approached.
professors

I re

is used to il
the category emerged
lustrate the concept"
[Glaser and Strauss

ceived 147 syllabi, of which 142 from 107

1967,p. 23]. Lyles and Mitroff [1980]

different

which

stress

the data but

and

on
theory is grounded
to it,
is not rigidly bound

that "the

the researcher

original

research

can go beyond
plan and original

the
the

[1983] com
ory" (p. 104). Burgelman
"Data must be collected until
ments,
and addi
patterns have clearly emerged
tional data no longer add to the refine
ment of the concept"
(pp. 224-225). The
initial and critical steps in theory building
are concept
identifi
using this approach
of a framework.
cation and suggestion
of the Framework
Development
at the outset of
main
assumption
My
be possible
this study was that it would
to classify
number of
the tremendous
concepts

discussed

strategy
variables:

literature
strategy

in the policy
into four meta
content,

and

strategy

several

were

were

universities

either

relevant

for an undergraduate

or a noncapstone
policy course).
cases
Most of the 670 different
ing in the syllabi were
notes
with
instructors'

collected
when

For a few widely

than one set of notes

available.
more

(five
course

appear
along

they were
used cases,
existed.

was
classification
multi-step
procedure
to
match
between
used
the
determine
cases

and course

topics. An

initial

list of

con
key words
(strategic variables)
structed
from 889 course topics extracted
from the syllabi. Additional
key words
was

emerged
structors'

of the in
analysis
was
special effort

from content
notes.

notes
to study as many
instructors'
as possible,
in order to ascertain
the use

made

of cases

to university,
topic,
according
and professor.
The flood of strategic

INTERFACES18:5 46

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A GROUNDED THEORY
Process

Strategie

Strategy
Mission,

Value

objectives

goals,

Ideology

portfolio

Business

Management
Ethics

Strategy
Product market

scope
innovation

change

Forecasting
Internal analysis

Finance

alternatives

Strategic

strategy
Information
strategy

tools

Analytical
Planning

strategy
strategy

Technology

Design

Organizational

strategy

structure
Organizational
structure
of
Type

strategy

Asset/capacity

strategy

Formalization

strategy
Inventory
Procurement
strategy
Manpower

Analysis
of strategy
Analysis
Environmental
analysis

strategy
Accounting
Environmental
strategy
Distribution
strategy

Operations
Location

style

Power

Type of
Pace of product market
Functional
Strategy

Marketing

system

Risk

Strategy

Corporate
Business

Hierarchy
Professionalization

strategy

Centralization
Actions

Strategic

of control

Span

Acquisition
Takeover

Authority
Integration
Units

Tender
Investment

allocation
Capital
Communication

Liquidation
Entry

Compensation
Motivation

Expansion
Joint Venture

Actors

Strategic

Licensing

of directors

Board

Merger
Organizational

systems

Organizational
Control

Foreign
Divestment

Chief

Characteristics

Middle

Ownership
Size

officer

executive
team

Executive

Corporate

level management
staff

Resources
Performance

Organizational

Type

Survival

Environment

Success

Environmental

Fit

General

Effectiveness

changes
Environment

Economic

environment

Growth

environment
Political/legal
Social environment

Profitability
Net return

environment
Technological
Task Environment

Stock

Industry
Industry

share

Market

per

Earning
life cycle

on

equity

price
share

Liquidity
Cash
Venture
Return

flow
performance
on investment

Productivity
Efficiency

Table 1: Delineation

of strategic meta-variables.

September-October

1988 47

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and processes

SEGEV
in the instructors'
identified
concepts
as we
notes decreased
exponentially

yielding
and always
concepts
I even included con

few additional
variables.

peripheral
cepts

pro

the last half of the notes

ceeded,
very

main

connected

only remotely
in the list.

egy
The

strat

with

and structure.
refine,

ables

further review
necessary
of strategy and the vari
areas: decision

in two related

mak

theory. This
ing and organizational
in the a
the
following
changes
suggested
priori variables:
strategy content into strategy

(1) Dividing
and strategic actions;

tional structure
processes;

lower-level

organizational characteristics
(Table
strategic variables

The

the inconsisten

resolved

changes
cies and made possible
variable framework: A
tions taken

to match
The

its environment.

an eight meta
strategy is the ac

an organization with
is formulated
strategy

a process and an or
by
actors
ganizational design in which various
take part. Strategic match
results in high
and

implemented

performance.
Eleven residual
oddities

were

framework.

variables

omitted
This

from

framework

INTERFACES18:5

that were

still

the new
covers

the

alter

the

of Meta-Variables
consists

framework

variables:

strategy,

strategic

characteristics,

ganizational
strategic

process,

strategic

actors,

of eight meta
actions, or
environment,

design,
organizational
and organizational

performance.

is the organization's
to achieve
the means

Strategy
goals and

follows

cal division:
and

strategy,
to long-term

long-term
them. The
hierarchi

the accepted

strategy,
corporate
functional
strategy.

business
All

goals
organizational
to achieve them. Corporate

focuses

product
sources

on the mix

markets

focuses
These

the

upon
but will not

variables

Definitions

egy

(4) Recognizing
as contingent

the

framework.

means

and systems and

and

identified

their major properties

Additional
variables may

to, or elaborate

add

framework

(2) Extracting
strategic actors from process;
(3) Introducing
organizational design and
to include organiza
it
down
breaking

I have
and

in

notes was categorized

according
to the five meta-variables
(for a "mental
see for example, Keys
factor analysis,"
and
and Miller
[1984]). Inconsistencies
leftovers made

tive. Nevertheless,

ex

structors'

of the definitions

I do not
among them as well.
tionships
claim that the raw variable
list is exhaus

meta-variables

raw list of strategic variables

from the course syllabi and

tracted

in the
included
strategic variables
cases used in strategy and
policy cap
stone courses and captures
the main
rela

business

and
them.

of industries
the allocation
Business

among
on the distinctive
unit within

functional

refer
the

and

strat
and
of re

strategy

of a
competence
its industry, and
im
is the consistent

strategy
areas of
in the functional
plementation
the upper-level
It is also possi
strategies.
ble to distinguish
stated
(official
among
written
tended
The

and oral communications),

and resultant
(pursued),

three may

management
and succeeds

in

strategy.
for example,
its real strategy

be identical;
discloses

it. Or, dif

in implementing
be
the
three
exist
ferences may
among
cause of competitive
tactics or unforeseen

48

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All use subject to JSTOR Terms and Conditions

if

A GROUNDED THEORY
constraints,

opportunities,

implementation.
ways be identified
it was

in

and failures

can al

Resultant

strategy
even when
afterwards,

not

strat

intentionally
pursued.
identified,
egy is planned,
implemented,
and depicted
actions.
by strategic
are the acquisition,
actions
de
Strategic
velopment,
a
significant

Most
on

a small

number
not

variables,

of

to achieve

or affect

its long-term

goals. These actions affect the organiza

to
tion for long periods
and are difficult
undo. Examples may include acquisitions,
and
divestiture,
expansion,
joint ventures,
The choice and nature of these
mergers.
on organi
are
actions
heavily dependent
zational
characteristics.
Organizational
herent outcomes

es
of the organization's
history, and past strategy.

tablishment,
affect

characteristics

and constrain

and are difficult,

to modify

in the short
size,

ownership,

are the in

and

organizational
if not impossible,
run. Thus mode
of

resources,

for

exam

in the effort
ple, should be considered
its
match
with
the organization

to

environment.

Environment

all the factors

out

that affect (and may

the organization
are
or
affected
(and may be af
affect) it
I suggest
fected) by it. The framework

viding

(and
le

to those

that impinge
activities.
The match

aspects
on
goal attainment
between
the organization
and its environ
ment
is the focus of the strategic process;
one task environment
variable of the busi
unit

the relevant

industry

attention.

special

is the decision-making
or uninten
intentionally

whereby,
tionally, the organization's
goals and the
actions to be taken to achieve
them are

decided.
ables

This

of strategic

subsystem

vari

includes

organizational
ideology,
and power, as well as formal analy
and analytical
tools.
sis, planning,

value,

this process,
is formulated

Through

strategy
The strategic

organizational
and implemented.

takes place within

process
an organizational
design.
Organizational
design includes organiza
tional

and processes.
are
organizational
design variables
in the strategy
usually modified
imple
were
mentation
stage, they
separated
from the category of organizational
char
structure,

systems,

Since

acteristics
manipulate

that are hard

and classified

or impossible
to
as a separate

meta-variable.

covers

side

lends

the or

of the environment

process

resources

which

political,
subenviron

technological
Task environment
refers

Strategic process

process.

They
actions

and

social,

deserves

the heart of the strategic

definition

in the future

may
ganization
is composed
of the economic,

ness

at

necessarily

above

interact

ments).

focus

studies

The

fits the general environment,

includes all the factors with which

gal,

and application
of
allocation,
portion of the organization's

empirical

task environments.
better

to the accepted
practice of di
into general and
the environment

itself

September-October

in
Strategic actors are the participants
the strategic process,
such as the board
directors,

the chief executive

executive

team,

officer,

and

the

the corporate
staff.
performance is the ultimate

Organizational
meta-variable
dependent

1988 49

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in the frame

of

SEGEV
and measures

The variables

work.

products,
formance
market

markets,
measures
share,

which

and the
edge by the choice of variables
definition
of the population.
There is no
on previ
place for drawing
extensively

of

is the result

taken

the or

to match

the need

next

for a framework

may

to the

and re

suggested
a framework.
The

for developing
steps are theory

ing operational
on
bles. Theory building may proceed
two very different
and
holistic
planes:
search

The holistic

approach

a
or

relationships
for the vast number of variables.

profiles
The atomistic

approach
attention

comprehensive
small sets of variables.

entails

serial but

to relatively
Testing atomistic

has recently been a target of

hypotheses
criticism
1984; Miller
[Hambrick
1981],
in the
and much of the current research
area

is holistic

Friesen
which
ample,
mature

Miller

and

(for example,
in
holistic,
[1978]), or bounded
are
studied
(for ex
subpopulations
Hambrick's
[1983a] typology of

nevertheless,
approach
Certain

I decided,

industrial

products).
to pursue a theory-building
atomistic.
that is basically
characteristics

of the holistic

render it unfit for theory build

approach
case. First, it is only
ing in the present

INTERFACES18:5

strategic
types will
all variables would

be unique. Moreover,
have to be measured
are

by
be highly problem
atic. A large number of incompatible
and
from
emerge
noncomparable
typologies
further

entails

for simultaneous

variables,

for each organization

and the data
not
available.
Third, validation
just

and defin
building
measures
for the varia

atomistic.

and methods
[Hambrick
cases
our
in
The
data
base
focus on
1984].
a very
of or
population
heterogeneous
and any classification
of its
ganizations,

tion,
a

I have

the literature.

viewing
method

reflect reality
and
found
[Hambrick
1984],
empirically
are
re
strategic clusters
just that. Second,
on the popula
sults are highly dependent

per
technology),
such as profitability,
relate

or
hypothesized
relationships
Thus
types.
conceptualizations

strategic
not accurately

and

and cash flow

approach
in the accumulated

found

ously

(such as

in a given domain.
degree of match
The Next Research
Steps
I have described
the first steps toward
grounded
theory of corporate policy dis
cussing

may be a
knowl

knowledge.
priori rooted

its environment

with

ganization

in the accumulated

A holistic

and

to
the degree
goals
ganizational
are achieved. While
which
fit, sur
they
on
focus
and
effectiveness
vival,
long
term performance,
the major decisions

anchored

partially

of or

to the choice

relate both

category

in this

studies

will

the literature
Galbraith

1984;
[Dess and Davis
and Schendel
1983; Hambrick

1983a; Miles

and Snow

1978; Miller

and

Friesen

1978; Mintzberg
1973; Porter 1980;
and Vivas
1984; Vesper
1979; and
Van der Pol, and Messer
Wissema,
1980].
Thietart

Comparative
analysis
is cumbersome
studies
minor

contributions,

holistic

of the different

and yields only

if any. Fourth,
the
not
lend itself to
does

approach
refinement
step-by-step

and accumulation

on the studied
of knowledge
non.
studies using
Empirical
proach have rarely prompted
research,
have

although
done so.

In this project
but comprehensive

phenome
this ap
subsequent

conceptual
Iwill

use

typologies

piecemeal
Iwill use
approach.

50

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All use subject to JSTOR Terms and Conditions

A GROUNDED THEORY
of cases

subsets

meta-variables

that focus on one or two

and analyze

them

to iden

Iwill

tify patterns.
study the emerging
in light of the existing
literature
patterns
This is a
and report them as propositions.
large-scale project, and it will require
In order to
time to complete.
I have
the approach
chosen,

considerable
demonstrate

a few variables:

chosen

three

relate

scope;
strategy
(product-market
of
and
of
innovation;
pace
type
product
two
to
the
market
and
strategic
change),
and formal
process
(power centralization;
analysis).
are some

opera
suggested
for these variables.
The

scope may be measured

product-market
measures:
or
some
all
the
by
following
SIC (Standard Industry Classification)
codes;

the number

the number

of different

of different

main

products;
the do

to industry

relative

coverage
the relative breadth

markets;

leader;

line; the

of product

relative

number

variety
vation

of customer

of customers;
types.

could be divided,
in the market

the relative

Type of inno
for example,
into

(first-in), inno
in the organization
(me-too); and
The
product
pace of product
adaptation.
market
be
measured
change may
by the
vation

of product-market

by the organization
the relative number

made

changes
per time unit or by
of new products.

Of

the strategic process variables,

power centralization
may be measured
by
the number of decision units,
the degree

September-October

use

of staff specialists,
and
choice among alternatives.
Three

erature
market

not discuss

will

the relevant
1: A narrow

Proposition

scope ("niche strategy")

ness performance
when
text of extensive
power
hands

literature):

product/market
busi
enhances

in a con
pursued
in the
centralized

of the chief executive

business

the formal

from the lit

emerge
propositions
survey that relate to the product
I
scope (because
space is limited,

officer

of the

unit.

Proposition 2: Pursuit of a wide product

market domain
in a centralized
context
decreases

the performance

of the business

unit.

Proposition 3; A wide product-market

increases business
strategy
performance
of formal

Two propositions
innovation:

innovation

number

may include the amount of time invested

use of formal
in analysis,
the
techniques,

in a context

should be

What exactly
classified?

the size and composition

of the strategy
team.
Formal analysis measures
making

to

business

Following
tional measures

for strategic deci

of power distribution
in monetary
sions measured
and
values,

relate

analysis.
to the type of

Proposition 4: A first-in product-market

innovation
increases business
strategy
when
performance
power
level unit is centralized.

in the business

Proposition 5: First-in product-market

innovation
business
in a context
strategy
of formal

analysis

increases

business

performance.

The

last three propositions

relate to the
pace of product-market
change:
Proposition 6: A rapid product-market
in a centralized
business
change strategy
its performance.
decreases
is decreased
Proposition 7: Performance

1988 51

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All use subject to JSTOR Terms and Conditions

SEGEV
a centralized

when

a low

with

business

record

performance
implements
of rapid product-market
changes.

a strategy

Proposition 8: An accelerated
product
market
business
strategy requires
change
to increase the
formal analysis procedures
business's

performance.

by itself
system of in
a com

in business
terrelationships
policy,
set
of
such
prehensive
propositions

will

and map all interrelationships

encompass
in the variables'
system. Single proposi
to em
tions of this type lend themselves
to further

and

refinement
Sets of

research

projects.
these propositions
may be used to iden
strategic
tify and study further unique
and types. Once
this enor
populations

mous

or meaningful
parts of it are
a
as
serve
it
will
completed,
filing system
for existing
research
findings and may fa
accu
cilitate the orderly and systematic
project

of new

mulation
enable

findings. My aim is to
future re
than constrain

rather

the list of varia

efforts. Although
no single population,
data
is defined,
is implied, and
base, or research method
measures
will depend
specific operational
search

bles

on the research
The

and

method

requirement
contribution

only
additional

its context.

is an identifiable
to the area.

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McGraw-Hill,
D. W.

Beard,

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