Abstract
The paper presents an investigation of the structural characteristics of firms' strategic orientation (as conceptualised by Miles and Snow (1978)). The associated relationships to profitability and perceived market share are studied in financial services firms, specifically in credit unions. The author finds that most firms have a mixed structural form, with fewer firms being either highly structured or lowly structured. Defenders are more likely than expected to be of mixed structural form and less likely to be highly structured. Prospectors are more likely than expected to be highly structured. Analysers are more likely than expected to be highly structured. Reactors show little variation from the expected distribution. No interaction of structure and strategy is evident on either share or profits. The results do indicate that strategic orientation has an influence on perceived market share, but not profitability. Reactors are shown to have significantly smaller market shares than the Prospectors, Analysers, and Defenders. Also, Defenders are shown to have smaller shares than Prospectors. On the other hand, structural form is shown to have an influence on profitability. The less structured firms are shown to be more profitable than either the highly structured or mixed structure firms. It appears, at least in this sample, that organisational structure is more relevant to profitability, while organisational strategy is more relevant to market share.
Similar content being viewed by others
References
Porter, M. (1980) ‘Competitive Strategy’, Free Press, New York.
Miller, D. (1987) ‘Strategy making and structure: Analysis and implications for performance’, Academy of Management Journal, Vol.30, pp.7–32.
Katobe, M. (1990) ‘Corporate product policy and innovative behavior of European and Japanese multinationals: An empirical investigation’, Journal of Marketing, Vol.54, pp.19–33.
Miles, R. E. and Snow, C. C. (1987) ‘Organizational Strategy, Structure, and Process’, McGraw-Hill, New York.
Aragon-Sanchez, A. and Sanchez-Marin, G. (2005) ‘Strategic orientation, management characteristics, and performance: A study of Spanish SMEs’, Journal of Small Business Management, Vol.43, No.3, pp.287–309.
Slater, S. F. and Narver, J. C. (1993) ‘Product-market strategy and performance: An analysis of the Miles and Snow strategy types’, European Journal of Marketing, Vol.27, pp.33–51.
Doty D. H., Glick, W. H. and Huber, G. P. (1993) ‘Fit, equifinality, and organizational effectiveness: A test of two configurational theories’, Academy of Management Journal, Vol.26, pp.1196–1250.
Conant, J. S., Mokwa, M. P. and Varadarajan, P. R. (1990) ‘Strategic types, distinctive marketing competencies, and organizational performance: A multiple-measures based study’, Strategic Management Journal, Vol.11, No.5, pp.365–383.
Shortell, S. M. and Zajac, E. J. (1990) ‘Perceptual and archival measures of Miles and Snow's strategic types: A comprehensive assessment of reliability and validity’, Academy of Management Journal, Vol.33, No.4, pp.817–832.
Auh, S. and Bulent, M. (2005) ‘Balancing exploration and exploitation: The moderating role of competitive intensity’, Journal of Business Research, Vol.58, No.12, p.1652.
Bednall, D. H. and Valos, M. J. (2005) ‘Marketing research performance and strategy’, International Journal of Productivity and Performance, Vol.54, No.5/6, pp.438–451.
Freel, M. (2005) ‘Perceived environmental uncertainty and innovation in small firms’, Small Business Economics, Vol.25, No.1, p.49.
Moore, M. (2005) ‘Towards a confirmatory model of retail strategy types: An empirical test of Miles and Snow’, Journal of Business Research, Vol.58, No.5, p.696.
McDaniels, S. W. and Kolari, J. W. (1987) ‘Marketing strategy implications of the Miles and Snow strategic typology’, Journal of Marketing, Vol.51, No.4, pp.19–30.
Zahra, S. and Pearce, J. (1990) ‘Research evidence on the Miles–Snow typology’, Journal of Management, Vol.16, pp.751–768.
McKee, D. O., Varadarajan, P. R. and Pride, W. M. (1989) ‘Strategic adaptability and firm performance: A market contingent perspective’, Journal of Marketing, Vol.53, No.3, p.21.
Smith, K., Guthrie, J. and Chen, M. (1989) ‘Strategy, size and performance’, Organizational Studies, Vol.10, pp.63–81.
Hawes, J. and Crittenden, W. (1984) ‘A taxonomy of competitive retailing strategies’, Strategic Management Journal, Vol.5, pp.275–287.
Shoham, A., Evangelista, F. and Albaum, G. (2002) ‘Strategic firm type and export performance’, International Marketing Review, Vol.19, No.2/3, 236–259.
Slater, S. F. and Olson, E. M. (2001) ‘Marketing's contribution to the implementation of business strategy: An empirical analysis’, Strategic Management Journal, Vol.22, No.11, pp.1055–1067.
Woodside A. G, Sullivan, D. P. and Trappey, R. J. III (1999) ‘Assessing relationships among strategic types, distinctive marketing competencies and organizational performance’, Journal of Business Research, Vol.45, No.2, pp.135–147.
Zajac, E. and Shortell, S. (1989) ‘Changing generic strategies: Likelihood, direction, and performance implications’, Strategic Management Journal, Vol.10, pp.413–430.
Hambrick, D. (1983) ‘Some test of the effectiveness and functional attributes of Miles and Snow's strategic types’, Academy of Management Journal, Vol.26, pp.5–26.
Snow, C. C. and Hrebiniak, L. G. (1980) ‘Strategy, distinctive competence, and organizational performance’, Administrative Sciences Quarterly, Vol.25, pp.317–336.
Brunk, S. E. (2003) ‘From theory to practice: Applying Miles and Snow's ideas to understand and improve firm performance’, The Academy of Management Executive, Vol.17, No.4, p.105.
Desarbo, W. S., DiBenedetto, C. A., Song, M. and Sinha, I. (2005) ‘Revisiting the Miles and Snow strategic framework: Uncovering interrelationships between strategic types, capabilities, environmental uncertainties, and firm performance’, Strategic Management Journal, Vol.26, pp.47–74.
Haines, D. W., Chandran, R. and Parkhe, A. (1989) ‘Winning by being first to market or second?’, Journal of Consumer Marketing, Vol.6, No.1, pp.63–69.
Pugh, D. S., Hickson, D. J., Hinings, C. R. and Turner, C. (1968) ‘Dimensions of organizational structure’, Administrative Science Quarterly, Vol.13, pp.65–105.
Ford, J. S. (1977) ‘Environment, technology and the structure of organizations’, Academy of Management Review, Vol.2, pp.561–575.
Fry, L. (1982) ‘Technology-structure research: Three critical issues’, Academy of Management Journal, Vol.25, pp.532–551.
Dalton, D., Todor, W., Spendolini, M., Fielding, G. and Porter, L. (1980) ‘Organization structure and performance: A critical review’, Academy of Management Review, Vol.5, pp.49–64.
Van de Ven, A. (1976) ‘A framework of organization assessment’, Academy of Management Review, Vol.1, pp.64–78.
Fredrickson, J. (1986) ‘The strategic decision making process in organizational structure’, Academy of Management Review, Vol.11, pp.280–297.
Miller, D. and Droge, C. (1986) ‘Psychological and traditional determinants of structure’, Administrative Science Quarterly, Vol.31, pp.539–560.
Miller, D. (1988) ‘Relating Porter's business strategies to environment and structure: Analysis and performance implications’, Academy of Management Journal, Vol.31, pp.280–308.
Nwachukwu, O. and Tsalikis, J. (1990) ‘Environmental heterogeneity, strategy-making, structure and small business performance: A path analytic model’, The Journal of Applied Business Research, Vol.7, pp.38–44.
Venkatraman, N. (1989) ‘The concept of fit in strategy research: Toward verbal and statistical correspondence’, Academy of Management Review, Vol.14, pp.423–444.
Miller, D. (1986) ‘Configurations of strategy and structure: Towards a synthesis’, Strategic Management Journal, Vol.7, pp.233–249.
Zeffane, R. (1989) ‘Centralization or formalization? Indifference curves for strategies of control’, Organization Studies, Vol.10, pp.327–352.
Mahajan, J. and Vakharia, A. (1990) ‘A multi-objective approach and empirical application of sales-organization design’, Decision Sciences, Vol.21, pp.608–625.
Venkatraman, N. and Ramanujam, V. (1986) ‘Measurement of business performance in strategy research: A comparison of approaches’, Academy of Management Review, Vol.11, pp.801–814.
Ruekert, R., Walker Jr, O. W. and Roering, K. (1985) ‘The organization of marketing activities: A contingency theory of structural performance’, Journal of Marketing, Vol.49, pp.13–25.
Keats, B. W. and Hitt, M. (1988) ‘A causal model of linkages among environmental dimensions, macro-organizational characteristics, and performance’, Academy of Management Journal, Vol.31, pp.570–598.
Frazier, G. L. and Howell, R. (1983) ‘Business definition and performance’, Journal of Marketing, Vol.47, pp.59–67.
Kirca, A. H., Jayachandran, S. and Bearden, W. O. (2005) ‘Market orientation: A meta-analytic review and assessment of its antecedents and impact on performance’, Journal of Marketing, Vol.69, No.2, pp.24–41.
Achrol, R. S., Torger, R. and Stern, L. W. (1983) ‘The environment of marketing channel dyads: A framework for comparative analysis’, Journal of Marketing, Vol.47, pp.55–67.
Hall, R. H., Hass, J. E. and Johnson, N. J. (1967) ‘Organizational size, complexity, and formalization’, American Sociological Review, Vol.32, pp.903–912.
Stremersch, S. and Tellis, G. J. (2004) ‘Understanding and managing international growth of new products’, International Journal of Research in Marketing, Vol.21, No.4, p.421.
Author information
Authors and Affiliations
Corresponding author
Additional information
1received his PhD from Florida State University. He specialises in marketing strategy research related to firm performance. He also investigates the area of consumer behaviour as it relates to marketing strategy. He has taught at universities in Australia, Saudi Arabia, the United Arab Emirates, the USA, Kuwait, and Jamaica. His previous work experience includes managerial and consulting positions, both in the USA and abroad.
Rights and permissions
About this article
Cite this article
Pleshko, L. Strategic orientation, organisational structure, and the associated effects on performance. J Financ Serv Mark 12, 53–64 (2007). https://doi.org/10.1057/palgrave.fsm.4760061
Received:
Revised:
Published:
Issue Date:
DOI: https://doi.org/10.1057/palgrave.fsm.4760061