Why pure strategies may be wrong for transition economy firms

George A. Shinkle · Aldas Pranas Kriauciunas · Greg Hundley

78 citations0/0 files storedStrategic Management Journal

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Business Strategies and Innovation International Business and FDI Innovation and Knowledge Management

Abstract

The strategy purity hypothesis argues firms will have better results pursuing a single, business‐level strategy of either cost leadership or differentiation rather than a mix of both. Since this claim implicitly assumes a developed‐economy context, we examine the efficacy of business strategies in transition economies. We find the benefits of a pure strategy are diminished when the institutional environment has a low degree of market orientation but are increased when the institutional environment is more market oriented. Our results indicate a boundary condition for the strategy purity hypothesis and support arguments for an institution‐based view of business strategy . Copyright © 2013 John Wiley & Sons, Ltd.

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References

1990Institutions, Institutional Change and Economic Performance 1991Exploration and Exploitation in Organizational Learning 1978Organizational Strategy, Structure, and Process 2000What is strategy 1996Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change 2000STRATEGY IN EMERGING ECONOMIES.1993Economic Performance Through Time 2003Institutional Transitions and Strategic Choices

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