Strategy, Contextual Factors, and Performance

Abstract

Relationships between multiple contextual factors and performance in 185 large industrial firms were examined. Medium size, external acquisitive growth grand strategy, unit and small batch predominant production system, consumer nondurable goods industry, and high perceived environmental uncertainty were positive predictors of firm performance. Functional structure, geographic divisional structure, and large batch and mass predominant production systems were negative predictors. The highest performers were mnedium-sized firms, those using unit and small batch as the predominant production system and those employing an external acquisitive growth grand strategy.

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