Strategy and Structure in Context: Universalism versus Institutional Effects

Abstract

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.

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