The effect of compensation program and structure on sbu competitive strategy: A study of technology‐intensive firms

Craig S. Galbraith · Gregory B. Merrill

108 citations0/0 files storedStrategic Management Journal

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Accounting and Organizational Management Innovation and Knowledge Management Management and Organizational Practices

Abstract

Abstract In this paper we examine the impact various compensation programs have upon business‐level strategy for technology‐intensive firms. Similarly, we examine the effect of centralization of R&D and non‐R&D decision‐making, formality of procedures, and SBU size on competitive strategy. Analysis of data from 79 SBUs suggest that there is a resource trade‐off between marketing‐oriented strategies and R&D‐oriented strategies, and that managers who operate under certain types of compensation programs will tend to favor R&D/innovation strategies and capital investment over other alternatives. Structure and competitive position also appear to play a significant role in determining technology and investment strategy.

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References

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