In Armstrong (1982a), I examined alternative explanations to the empirical findings that supported the use of formal planning. In considering the possibility that researcher bias might lead to such results, I used Terpstra's (1981) evaluation scheme. Based on this test, poor methodology did not seem responsible for the conclusions on the value of formal planning.
This study suggests that simulated mergers can be used to help evaluate the effects of diversification on corporate performance. The results, which are consistent with a risk‐reduction motive for conglomerate diversification, imply that conglomerate strategies focused on fewer and larger units may be advantageous in terms of certain measures of risk and return. Forecast error is used here to measure strategic risk, and return on equity is used to measure return.
This research investigates the characteristics of 354 directors of Britain's largest companies. Three sections of independent variables were analysed: those relating to the economic environ; those relating to the domestic environ—family background and educational experiences; those relating to self‐concept. Directors were categorized according to the economic performance of their industries—GOGOs (industries in growth); YOYOs (industries in turbulence); and DODOs (industries in decline). Several differences emerged between the characteristics of directors and the economic success of their industries for which they were strategically influential.
Bowman's (1980, 1982) widely quoted papers have reported the existence of a risk‐return paradox for strategic management. In this paper the authors examine the dynamic behavior of the risk‐return relationship and analyze whether the risk‐return paradox is stable across time. The analysis involves tracking Bowman's so‐called negative association ratio across time. Using accounting measures of risk and return, it is demonstrated that while the paradox holds during the 1970s, the finding does not hold in the environment of the 1960s. Further, the paradox disappears if market‐based risk measures are used. Some implications for strategic management are then discussed and attention is directed towards the meaning of risk in the context of strategic management. In addition, possible explanations for this paradox are evaluated and directions for further research are suggested.
This paper discusses the concept of strategic groups , focusing upon the importance of intra‐industry strategic groupings in understanding differences across firms within an industry. The problems involved in identifying strategic groups within industries are examined through a comprehensive review of recent studies. It is demonstrated that much of the research has used surrogates for elements of a firm's strategic direction, e.g. vertical integration, product range, R & D expenditure, to suggest bases by which creative and sustainable groups are formed. The authors argue that certain theoretical concepts such as mobility barriers, isolating mechanisms and controllable variables provide much firmer bases for identifying strategic groups within industries. Thus, taxonomies for understanding the nature of strategic group formulation can be developed. Implications of the strategic group concept for such strategic issues as the structure‐performance linkage, firm mobility, patterns of rivalry, industry evolution and firm growth are then examined. The paper concludes by indicating fruitful directions for strategic group research in the context of the strategic management field.
Current research offers alternative explanations to the ‘linkage’ between the pattern of diversification and performance. At least four streams of research can be identified. None of these can be considered to be a reliable, predictive theory of successful diversification. They are, at best, partial explanations. The purpose of this paper is to propose an additional ‘linkage’, conceptual at this stage, that might help our understanding of the crucial connection between diversity and performance. The conceptual argument is intended as a ‘supplement’ to the current lines of research, rather than as an alternative explanation.