The Food Manufacturing Industry in Zimbabwe
Felix T. Mavondo
MONASHUNIVERSITYThis article investigates the relationship among environment, strategy, and and k-selection. When environmental pressure favors those
organizational characteristics and performance in an industry at various organisms able to reproduce quickly (such as opening new
stages of deregulation in a developing economy. The focus of the study is markets or introducing new products) they called this
r-selec-organizational adaptation under different market conditions. The article tion, while k-selection means that environmental pressure
seeks to establish the contingency perspective of adaptation. The research favors organizations that compete on efficiency of using
exist-findings suggest that once an organization has chosen its strategy, organi- ing resources. On the basis of this, Brittain and Freeman
zational characteristics must be consistent with that strategy irrespective (1980) developed r-strategies and k-strategies that correspond
of the environment in which the organization operates. The results, with to the theoretical framework we used for this article.
respect to organizational variables, indicate that the environment is neither Miles and Snow (1978) developed the typology that is used
a quasi-moderator nor a homologizer. However, with respect to organiza- to organize the ideas in this article. Related work has been done
tional performance, the environment influences the form of the strategy– by McDaniel and Kolari (1987), McKee, Varadarajan, and Pride
performance relationship hence it is a quasi-moderator. The article then (1989), and Conant, Mokwa, and Varadarajan (1990).
discusses the implications of these findings for managers and policy makers The article is organized as follows. We begin with an outline
within the context of a developing economy and for academic research of the Miles and Snow typology, followed by discussion of
in general.J BUSN RES 2000. 50.305–319. 2000 Elsevier Science environmental changes in the food manufacturing industry
Inc. All rights reserved. in Zimbabwe. We develop hypotheses and empirically test them and finally discuss the results and their implications.
Overview of the Miles and
O
rganizational adaptation has been an importantsub-ject of research in strategic management (Ginsberg
Snow (1978) Typology
and Buchholtz, 1990; Hrebiniak and Joyce, 1985;Prospectors
Boeker and Goodstein, 1991; Zajac and Shortell, 1989;
Chak-“A true prospector is almost immune from the pressures of ravarthy, 1982). Adaptation is conceptualized as gradual,
long-a chlong-anging environment since this type of orglong-anislong-ation is term, and incremental change in response to environmental
continually keeping pace with change, and . . . frequently conditions (Tushman and Romanelli, 1985). Adaptation means
creating change itself” (Miles and Snow, 1978, p. 57). The adjustment toward a closer fit between strategy and
environ-primary capability of prospectors is that of finding and ex-ment (Lawrence and Lorch, 1969). While some theorists
(An-ploiting new products and markets opportunities. The pros-drews, 1971; Schendel and Hofer, 1979) have suggested that
pector’s domain is usually broad and in a state of continuous managers change their strategies to reflect environmental
development. The systematic addition of new products and changes, others (Quinn, 1980; Hannan and Freeman, 1984;
markets gives the prospectors’ products and markets an aura Boeker, 1989) observe that organizations are constrained in
of fluidity. The prospector seeks to be “first in” with new the ability to respond. Using an ecological perspective of the
products, however, this extensive adaptive capacity may come adaptive process, MacArthur and Wilson (1967) identified
at a cost (Miles and Snow, 1978; Zammuto, 1982; Frazier, two types of selection pressures which they called r-selection
Spekman, and O’Neal, 1988; McKee et al., 1989). Flexibility may be traded for efficiency. Prospectors can be viewed as
Address correspondence to Felix T. Mavondo, Monash University, Faculty of following r-strategies (Zammuto, 1988) where successful per-Business and Economics, Peninsula Campus, P.O. Box 527, Frankston, Vic
3199, Australia. Tel: (61-3) 99044621; Fax: (61-3) 99044145. formance relates to “first mover” advantages that may include
Journal of Business Research 50, 305–319 (2000)
2000 Elsevier Science Inc. All rights reserved. ISSN 0148-2963/00/$–see front matter
providing an industry standard. Thus, prospectors place a
Reactors
premium on product and market development. They scan the Organizations categorized as reactors lack consistent strate-environment extensively in order to react timely and possibly, gies. They respond to environmental pressures on an ad hoc take proactive steps to precipitate change in their product basis. They may have inconsistent structures, and are not market. This is what is called “creative destruction” (Baldwin, aggressive in what they do. They react slowly to environmental 1987; Oakely, 1990; Plater and Rahtz, 1989), or “thriving on change and perform poorly as a result (Chakravarthy, 1982; chaos” (Peters, 1987). Hambrick, 1983). This experience of slow response and poor
performance forces them to be even less proactive in future
Defenders
endeavors (Miles and Snow, 1978). Reduced slack or scarcity“While perfectly capable of responding to today’s world, a of resources may induce managerial paralysis causing rigidity defender, is ideally suited for its environment only to the and propelling the organization to decreased performance extent that the world of tomorrow is similar to that of today” (Smart and Vertinsky, 1977). Miles and Snow developed this (Miles and Snow, 1978, p. 47). The most notable features of class as a repository for organizations that did not fit into the defender’s product-market domain is its narrowness and the other three groups, however, other researchers (Conant, stability. Defenders typically direct their products or services Mokwa, and Varadarajan, 1990) identify them as a distinct to a limited number of segments and engage in continuous and stable group.
and intense efforts to become the most efficient operators thus they are conceived as following k-strategies. Success for
defenders depends on aggressively maintaining prominence in
Organizational Strategy and
these segments. With stable markets, management can directEnvironmental Adaptability
attention toward reducing manufacturing and distributionThe Miles and Snow (1978) typology suggests that an organi-cost while simultaneously maintaining or improving quality.
zation’s strategic posture may lead to better performance if it The result is seen in the defender’s ability to be competitive
is closely aligned to the demands of the task environment. on either a price or quality basis (Miles and Snow, 1978, p. 37).
There are two extremes to the adaptability of the organization. However, defenders may be poorly placed to respond when
At one extreme, an organization can maintain an internal focus customers’ needs change (Abernathy and Wayne, 1974;
Hen-by concentrating on efficient operation in a narrowly defined derson, 1984). This arises from some resources such as plant
product market. At the other extreme, an organization can and equipment having little flexibility (Pilling et al., 1994;
Za-maintain an external focus which permits adapting to market heer and Venkatraman, 1995), historical precedents and norms
changes but at potentially significant loss of operating effi-(Aldrich, 1979), career politics, culture (Barney, 1986), and
ciency. The problem of balancing the benefits and costs of adherence to yesterday’s distinctive competencies (Daft,
Sormu-adaptability is fundamental to business strategy (Abernathy nen, and Parks, 1988; Hamel and Prahalad, 1994). Thus
de-and Wayne, 1974; Miles de-and Snow, 1978). Weick (1979) fender organizations deliberately reduce both adaptive
capa-summarized the trade-off between an internal and external bility and the costs associated with such adaptability.
focus by noting that “adaptation precludes adaptability” (p. 135). The implication is that organizations fitted to a specific
Analyzers
environment may have difficulty in adapting to change, The analyzer’s domain is a mixture of stable and changing
whereas organizations designed for change may not fit any product/markets (Nicholson, Rees, and Brooks-Rooney, 1991).
particular environment. The managerial challenge is to design The ideal analyzer is always ready to move quickly into new
organizations that are both adaptable and efficient. products or markets that recently gained some degree of
accep-Operating efficiency is associated with a narrow scope of tance. Much of the growth of the analyzer occurs through
activities and a strong emphasis on standard procedures. Adap-market penetration as the organization’s basic strength comes
tive capability, on the other hand, has been associated with the from its traditional product-market base and moderate
techno-“wandering organization” (Zammuto, 1988) or involvement of logical efficiency (Miles and Snow, 1978, pp. 72–74). In many
the “non-right type” individual (Cameron and Whetten, 1983, respects analyzer organizations are a hybrid between
prospec-p. 257) to arrive at variations of standard practice. From these tors and defenders. They seek to be “second” in new markets
observations we note that adaptive organizations have been or products through a process of imitation. To succeed, they
characterized as deliberately inefficient. From an ecological must enter new products or markets more cost-efficiently
perspective, we define prospectors as r-generalists, defenders than prospectors. Operating in a stable environment enables
as k-specialists, and analyzers as k-generalists. We note that relatively high levels of efficiency (operating like a defender),
generalism and specialism coexist and are fundamentally inter-while in more fluid environments their success is associated
related (Carroll, 1985). The success of generalism (prospec-with entrepreneurship and depends on speed and efficiency.
tors) creates the conditions favorable for specialism. General-This is similar to Bhide’s (1986) “hustle as strategy” or the
and special needs unattended. Thus prospectors will open distinctly different characteristics and that this distinctiveness is maintained in different environments” (McKee, Varadarajan, new markets, as these show promise they become attractive
to analyzers who enter more cost-effectively and build large and Pride, 1989, p. 23).
Congruence between organizational strategy and organiza-market share. The efficiency of defenders allows them to take
market share from analyzers as the industry output becomes tional variables can be examined by comparing means of orga-nizational variables across the strategy types. In this article commoditized hence industry dynamics are generated through
innovation, mass production, and commoditization. the Miles and Snow typology is the theoretical anchor for ordinally arraying the strategy types according to level of The Miles and Snow (1978) typology captures the
business-level strategic trade-off between external and internal orienta- adaptability (McKee et al., 1989; Jennings and Seaman, 1994; Oktemgil and Greenley, 1997).
tion. In the Miles and Snow (1978) typology the organizations
that most actively seek new markets and products (the pros- The organizational variables investigated in this article are: market orientation, operating efficiency, planning capability, pectors) are hypothesized to have the greatest adaptive
capa-bility. Strategy types can be ordered by degree of increasing management style, technological innovation, and human re-sources management. For each of these variables three hypoth-adaptability as: reactor-defender-analyzer-prospector (McKee
et al., 1989). eses are developed. The first two are related to microcon-gruency, the third is related to macrocongruency.
This article is based on an investigation of the food pro-cessing sector in Zimbabwe (Mavondo, 1993). At the time of
Market Orientation
the study (1992/1993), the food sector was in the process of
deregulation, some firms were operating under a regulatory A market orientation is considered an organizational adapta-regime, others in an open market, while the third category tion to consumer needs and tastes (Narver and Slater, 1990; was in transition following deregulation which had started in Ruekert, 1992; McKee et al., 1989; Walker and Ruekert, 1987; 1987. These three regulatory regimes represent the environ- Walker, Boyd, and Larreche, 1992). Collis (1991) argues that ment under investigation. The research tests the hypotheses adaptive capability is the ability to identify and respond that: (1) the level of adaptive effort is systematically related quickly to change before it happens or once change has hap-to strategy type; (2) there are significant differences in the pened. Bourgeois and Eisenhardt (1988) and Powell (1992) characteristics of the strategy types; (3) for each strategy type demonstrate empirically the link between adaptive capability there are no significant differences in the characteristics across and organizational success. The level of market orientation the environments; and (4) the performance of a given strategy should be highest in the prospector organizations (Miles and type is contingent upon the match between the adaptive con- Snow, 1978; McDaniel and Kolari, 1987; Conant, Mokwa, tent of the strategy and the environment. and Varadarajan, 1990). Hence:
H1a: The level of market orientation is positively related to the level of adaptive capability inherent in the
Hypothesized Relationships
organizational strategy.
Strategy Type/Organizational
H1b: There are significant differences in the mean level of
Variables Congruence
market orientation among the strategy types.Contingency theory postulates that the effectiveness of an
orga-H1c: The strategy type–market orientation relationship is nization depends on the congruence between the elements of the
maintained in all environments. organizational sub-system and the demands of the environment
(macrocongruence), as well as the congruence of these sub-
Operating Efficiency
system elements among each other (microcongruence). TheThe distinctive competence of the defenders is in controlling contingency approach that has gained general acceptance is
costs through routinization of operations, investing in efficient that the environment operates as a homologizer, that is,
envi-manufacturing technology, and focusing on a narrow range ronments influence the strength of the relationship between
of activities (Miles and Snow, 1978; Hambrick, 1980; Snow strategy and organizational variables but not the form (there is
and Hrebiniak, 1980). Lowering average and marginal costs no significant interaction between strategy and environment)
enables a firm to reduce prices or increase profits or both, (Prescott, 1986; McKee et al., 1989; Schroder and Mavondo,
and allows more options in competitive decision making. 1994; Venkatraman, 1989).
Cost-cutting innovations are particularly attractive because Development of a contingency perspective or
organiza-their effects are more predictable, the firm has more control tional variables requires the demonstration of (1) congruence
over costs than it does over other aspects of production and between strategy type and organizational variables
(microcon-marketing, and cost-cutting innovation is less likely to be gruency), and (2) maintenance of this relationship in different
detected and imitated immediately by competitors. Hence: environmental states (macrocongruency) (Fry and Smith,
1987). “This [establishing a contingency perspective] means H2a: The level of operating efficiency is negatively related to the level of adaptive capability.
H2b: There are significant differences in the mean level of (1991) and Jaworski (1988), the more uncertain the problem or opportunity the more desirable it is to have higher fre-operating efficiency across the strategy types.
quency and informality in communication patterns. Prospec-H2c: The strategy type–operating efficiency relationship is
tor organizations need to have more organic management maintained in all environments.
styles than other strategy types because they tend to operate in fast changing environments or seek to proactively change
Planning System’s Capability
their environment. It is hypothesized that prospectors will be A firm’s ability to adapt to changing markets depends on the most organic and the defenders the most mechanistic. market scanning (McKee et al., 1989; Walker and Ruekert, Hence:
1987; Lant, Milliken, and Batra, 1992). Environmental
scan-H4a: Organic managerial style is positively related to the ning is the domain of strategy types with an external
orienta-level of adaptive capability inherent in the organiza-tion (Snow and Hrebiniak, 1980; Hambrick, 1983; McDaniel
tion strategy. and Kolari, 1987). Strategic planning is the search for more
effective and efficient routines, the genes that determine how H4b: There are significant differences in managerial style the firm evolves. The creative planner takes present routines across the strategy types.
and production rules and by “gene splicing” creates new rou- H4c: The strategy type-managerial style relationship is tines, tactics, and functions. Firms which are open-minded maintained in all environments.
and good at such creative gene splicing are more competitive
(Nelson and Winter, 1982). Thus, prospectors and analyzers
Innovation
are expected to score better than defenders and reactors.How-Innovation is reflected in new products, manufacturing pro-ever because the strength of analyzers lies in imitation (wait
cesses, and management techniques. A search of the literature and see) and then entering the market with a more
cost-reveals that there are three organizational activities that charac-effective product, they are presumed to require less
environ-terize adaptability: response to product-market opportunities, mental scanning (planning capability) than prospectors whose
marketing activities for responding to these activities, and success depends on first-mover advantages. It is hypothesized
speed of response in pursuing these opportunities (Oktemgil that planning capability will be highest in prospectors,
fol-and Greenley, 1997). All these activities are closely associated lowed by analyzers, then the defenders, with the reactors
with innovation. We expect, in line with the Miles and Snow having the lowest score. Hence: typology, prospectors would have a higher proclivity toward
product innovation (new products) while defenders would H3a: Planning capability is positively related to the level
focus on process innovation (efficiency yielding). The notion of adaptive capability inherent in the organization
of innovation operationalized in this research emphasizes the strategy.
critical role of product innovation in organizational adaptive H3b: There are significant differences in planning
capabil-capability. By this measure, prospectors should score best, ity across the strategy types.
then the analyzers, followed by the defenders and finally the H3c: The strategy type-planning capability relationship is reactors. Hence:
maintained in all environments.
H5a: The level of innovativeness is positively related to adaptive capability inherent in the organization
Management Style
strategy. Burns and Stalker (1961) were the first to suggest that high
H5b: There are significant differences in the mean level of performing firms that compete in complex and dynamic
envi-innovation among the strategy types. ronments adapt an “organic” form (i.e., organizational
archi-H5c: The strategy type–innovation relationship is main-tecture that is decentralized with fluid and ambiguous job
tained in all environments. responsibilities and extensive lateral communication).
Wood-man, Sawyer, and Griffin (1993) came to the same conclusion
Human Resources Management
in their empirical study. Dickson (1992) argues that when
learning facilitates behavior change and leads to improved Where the environment is highly constraining (such as government regulation) but the degree of conflict in functional performance (Garvin, 1993; Senge, 1990; Sinkula, 1994). For
effective adaptability, human resource practices must also fa- demands is low, it is possible to postulate the existence of an “ideal type.” Under a regulated environment it would appear cilitate unlearning (Schein, 1990; Hamel and Prahalad, 1994)
especially if previous behavior is in conflict with the new the ideal type is a defender with its emphasis on operating demands of the environment. Dess and Origer (1987) find efficiency. Following deregulation the situation changes to that high performing firms in dynamic and complex markets trade-off (Gresov and Drazin, 1997) configuration where a strive for consensus to ensure effective strategy implementa- careful balance of competing functional demands may be criti-tion. The prospectors would be expected to have supportive cal for organizational success. Configurational equifinality has people management skills to stimulate creativity; defenders been investigated by Meyer, Tsui, and Hinings (1993) and would prefer a degree of bureaucratization that is consistent Ketchen, Thomas, and Snow (1993), Venkatraman (1989), with efficient operation of routine functions. Hence: and Venkatraman and Prescott, (1990). Configurational equi-finality is possible under situations of multiple, conflicting H6a: The level of human resources management is
posi-functions combined with structural latitude (e.g., open market tively related to the level of adaptive capability
inher-conditions in this study). Managers will choose between alter-ent in the organization strategy.
natives based on organizational goals and personal prefer-H6b: There are significant differences in human resources ences. Configurations that fit the chosen functions will be management practices among the strategy types. equifinal relative to each other and will outperform those H6c: The strategy type–human resources practices rela- that do not. This implies that under open market conditions tionship is maintained in all environments. prospectors, analyzers, and defenders would perform equally
successfully but reactors will perform poorly.
Strategy Type and Performance
The choice of performance measures, in this research, tookMiles and Snow (1978) suggested that their three stable strat- into account the sentiments expressed by Venkatraman and egy types would be equifinal, that is, there are no differences Ramanujam (1986) who argue that financial measures reflect in performance among the stable types (prospectors, ana- “fulfillment of the economic goals of the firm” (p. 803) and lyzers, and defenders). However, reactors would be expected operational measures reflect “key operational success factors to perform poorly in relation to the stable types. Bourgeois that might lead to financial performance” (p. 804). A number (1980) hypothesized a curvilinear relationship between adap- of measures were used as each reflect a different dimension tive capability and performance. Snow and Hrebiniak (1980) of organizational effectiveness. Hypothesized relationships showed that prospectors and defenders performed equally among environment, strategy type, and organizational perfor-and at lower levels compared to analyzers. The underlying mance are discussed later.
logic is that reactors and defenders will not adapt to market
REGULATED ENVIRONMENT. In this environment the prices changes, while prospectors will incur higher costs for their
of inputs and output were controlled by the government. The greater adaptive capability (McKee et al., 1989; Zammuto,
quality of products had to meet gazetted specifications. Thus 1988). However, Jennings and Seaman (1994) and Hooley,
product innovation was neither rewarded nor encouraged. Lynch, and Jobber (1992) found that prospectors seem to
The most effective means of competing was to be a low-cost perform better than other strategy types. We hypothesize that
producer. This environment is unlikely to be an appropriate H7: The relationship between organization strategy and domain for prospectors while reactors, following inconsistent performance is curvilinear, with optimal performance strategies would be expected to perform poorly. To the extent in organizations that balance efficiency and adaptive that both defenders and analyzers have core competencies requirements (i.e., analyzers). emphasizing efficiency, they would both be expected to per-form relatively well, however, defenders (following
k-strate-Environment, Strategy Type, and Performance:
gies) could be conceived as the “ideal type” for thisenviron-A Contingency Perspective
ment and would be expected to outperform other strategytypes. Hence: The Miles and Snow typology is especially suitable for
exam-ining equifinality. Equifinality has come to mean that
perfor-H8a: In regulated markets, organizational performance is mance can be achieved through multiple different organizational
negatively related to adaptive capability. Defenders configurations even if the contingencies the organizations face
will outperform other strategy types. are the same (Hrebiniak and Joyce, 1985; Nadler and
Tush-TRANSITIONAL ENVIRONMENT. The term transitional is used man, 1988; Pennings, 1992; Scott, 1981; Tushman and Nadler,
here to describe firms whose principal business activities had 1978; Drazin and Van de Ven, 1985; Gresov and Drazin, 1997;
been deregulated between 1987 and 1992. Following deregu-Doty, Glick, and Huber, 1993). Equifinality implies that
strate-lation, successful strategy types change. Competition becomes gic choice or flexibility is available to organization designers
environment. To succeed under these conditions requires that dix A). The scalar measures were computed as the average score on the items. Performance measures were averages over an organization insulates its core competencies, while
simulta-neously increasing its capacity to respond (or proactively pre- a three-year period (1990/91–1992/93). The scales were de-veloped from existing measures as indicated in Appendix A. cipitate change in) the new environment. This suggests the
need for efficiency and adaptability. This suggests that
ana-lyzers should outperform other strategy types. Hence:
Assigning Companies to Strategy Types
To allocate businesses to the Miles and Snow (1978) strategy H8b: Under transitional conditions, performance should
types, a subset of 7 of the 11 questions developed by Conant, be related to the ability to balance efficiency and
Mokwa, and Varadarajan (1990) was used together with the adaptive requirements. Analyzers should outperform
“paragraph” approach (Snow and Hrebiniak, 1980). For each other strategy types.
of the seven questions there were four alternative answers,
OPEN MARKET (FREE). A number of sub-sectors in the food each corresponding to a specific strategy type. The decision industry in Zimbabwe were never subject to regulation. Com- rule was that a business had to score at least 5 out of 7 panies in these food sectors were classified as operating in an “correct” responses to be classified as one of the four strategy open market environment. The open market environment types (prospector, analyzer, defender, or reactor). If there was permits the conceptualization of equifinality (i.e., multiple any doubt as to the appropriate strategy group, the organiza-configurations that are potentially equally effective). However, tion was classified as a reactor. Once the firm was allocated the conditions in a developing economy like Zimbabwe are to a strategy type, this was compared to how the companies such that demand generally exceeds supply enabling innova- classified themselves on the “paragraph approach.” The two tive producers to charge higher prices and obtain a premium approaches resulted in nearly identical classifications. The on their innovation. The higher margins may adequately off- resulting distribution is shown in Table 1.
set the costs of adaptability and lead to superior performance. To test the proposition that the mean level of marketing effort Hence: increases from reactor to defender to analyzer to prospector strategy types, 15 single items (used to measure market orien-H8c: Under open market conditions organizational
perfor-tation by Narver and Slater, 1990) were compared across the mance is directly and positively related to adaptive
strategy types using a one-way ANOVA. In 14 of these, the capability.
means for prospectors were greater than those for analyzers; analyzers were greater than defenders in 13; defenders were
Sampling and Data Collection
greater than reactors in 14. These results provide a justifica-tion for ordinally ranking the strategy types by adaptive capa-The sample for this study was drawn from a population ofbility. These results are very similar to those of McDaniel and food manufacturing businesses in Zimbabwe. Of the 220 food
Kolari (1987), Conant et al. (1990), Segev (1987), and McKee manufacturing businesses in the principal industrial areas of
et al. (1989). Harare, Bulawayo, Gweru, and Mutare, 25 could not be
reached and 19 refused to participate resulting in an effective
sample size of 176. This is effectively an 80% response rate.
Results
The researcher personally visited the food companies to secureRelationship between Strategy Type and
their participation. This effectively meant most companies
Organizational Variables
were visited at least twice, first to get them to participate,
then to give the questionnaire, and finally to pick up the The results in Table 2 summarize the findings for hypotheses that posit a positive relationship between organizational vari-completed questionnaire. In each participating company the
CEO or his immediate junior was briefed about the aims of ables and organizational strategy. These relationships were tested using Spearman correlation between organization strat-the research and how strat-the questionnaire was to be completed.
The questionnaire was then left for completion with a date egy (ordinally arrayed by adaptive capability) and organiza-(generally 10 days later) fixed for collection by the researcher.
At the time of collecting the completed questionnaire, a general
Table 1. Distribution of Strategy Types
discussion was held to explore any relevant issues not covered
in the questionnaire and any industry insights the respondent Environment
felt important. This was because this study was a part of a Strategic Type Regulated Transitional Open Market Total major study of the food industry in Zimbabwe.
Reactor 7 6 6 19
Defender 20 11 19 50
Development of Scales
Analyzer 22 21 12 55Prospector 11 13 28 52
Appen-Table 2. Organizational Differences by Strategic Type
Mean Value of Organization Strategy Type
Spearman F-Stat
Correlation with Prospector Analyzer Defender Reactor ANOVA Control
Strategy Variables Strategic Type n552 n555 n550 n519 F-Stat for Size Different Setse
Market orientation 0.358a 4.43 3.74 3.58 2.94 7.143a 5.75a P.R, P.D, A.R
Planning capability 0.361a 4.73 4.84 4.26 3.14 8.68a 7.25a A & P & D.R, A.D
Human resource 0.232b 5.00 4.494 4.65 3.96 3.76b 2.99d P.R, P.A
management
Management style 0.245b 4.18 3.88 3.67 3.00 2.43d 2.57d P.R
Innovation 0.377a 4.02 3.74 3.33 3.18 10.25a 9.92a P.D & R, A.D & R
Operating efficiency 20.213c 3.83 4.04 4.43 4.65 2.50d 1.85 R & D.P
ap,0.001.
bp,0.01.
cp,0.05.
dp,0.010.
eAbbreviations: P5Prospector; A5Analyzer; D5Defender; R5Reactor.
tional variables. Support is provided for H1a, H3a, H4a, H5a, size. This is in response to Lindsay and Rue (1980), Robinson and H6a representing respectively, market orientation, plan- (1982), and Hannan and Freeman (1984) who have argued ning capability, management style, innovation, and human that small-sized firms may exhibit different organizational char-resource management. Support for H2a, which posits a nega- acteristics and hence performance. This check was achieved tive relationship between adaptive capability and operating by running an ANOVA model controlling for organizational efficiency, is also provided. These hypotheses were tested size. The results seem to suggest that organizational size has using Spearman’s correlation in recognition of the categorical some effect on human resource management and operating nature of organization strategy. Hypotheses 1b, 2b, 3a, 4b, efficiency. Larger organizations appear to have better human 5b, and 6b that posit the existence of significant differences resource management practices but lower operational effi-among the strategy types for market orientation, operating ciency. However, controlling for organizational size does not efficiency, planning capability, management style, innovation, change the interpretation of the results.
and human resource management, respectively, were sup-ported. These hypotheses were tested using a one-way
AN-Relationship between Strategy Types
OVA. Support for the hypotheses is provided by examining
and Organizational Performance
the F-ratios. All the F-ratios are significant at at least (p ,
Results in Table 3 relate to performance measures. The results 0.01). Strategy types that are significantly different from each
in Table 3 show that there is a positive relationship between other are indicated. The direction of differences among the
strategy type and each performance measure because all the strategy types across the variables is consistent with literature.
Spearman correlations are significant to at least (p, 0.01).
An additional check on the results was tested, namely, the
extent to which these results are influenced by organizational These results are not consistent with theory because high
adap-Table 3. Performance Differences by Strategic Type
Mean Value of Organization Strategy Type
Spearman F-Stat
Correlation with Prospector Analyzer Defender Reactor ANOVA Control
Performance Variables Strategic Type n552 n555 n550 n519 F-Stat for Size Different Setse
Return on assets 0.239b 2.36 1.83 1.87 1.64 3.41c 5.00b P.D & A & R
Sales growth 0.189c 3.14 2.91 2.80 2.55 1.58 1.60
New product success 0.301a 3.11 2.57 2.33 1.91 3.93b 4.32b P.D & R
Market share changes 0.356a 2.36 1.54 1.37 1.09 2.50d 3.68c P.D & R
Exports 0.284 1.50 1.89 1.40 1.73 3.56b 3.97b A.D
ap,0.001. bp,0.01. cp,0.05. dp,0.010.
Table 4. ANOVA Model: Environment–Strategic Type Interaction
Strategy–Environment
Variables Full Model Strategy Type Environment Interaction
Market orientation 3.902a 4.683a 5.477b 2.022
Planning capability 2.518b 6.165a 1.742 0.631
Human resource 1.948c 3.968b 1.797 1.059
management
Management style 2.278c 1.882 3.856c 1.575
Innovation 3.364a 8.165a 1.947 0.495
Operating efficiency
Figures in the table are F-ratios.
ap,0.001. bp,0.01. cp,0.05.
tive capability is supposed to impose costs and lead to poorer environment. The F-ratios in the fourth row for each organiza-financial performance (Bourgeois, 1980; Zammuto, 1988; tional variable test the hypothesis that, for a given strategy McKee et al., 1989). The results are, however, consistent with type, there are no significant differences in the means of the Hooley et al. (1992). These results will be analyzed further organizational variable across the environments (i.e., the envi-to gain additional insight (Table 7) later in this article. Com- ronment is not a homologizer).
paring the performance differences across the strategy types Results in Table 5 provide further support to the hypothesis indicates there are significant differences as revealed by the that organizations following the same strategy do not have F-ratios. Controlling for organization size does not alter the significant differences in their organizational variables. The level interpretation of the results. Hypothesis 7, which states that of each organizational variable across the environments was analyzers would have the highest performance, is generally tested for significance of difference using a one-way ANOVA. not supported except for contribution of exports to total sales. The F-ratios (in the fourth row for each variable in Table 5) are used as the test statistic. There are 24 F-ratios from comparing
Environment, Strategy, and
organizational variables across environments, 20 of these re-sults are not significant. This supports the hypothesis that theOrganizational Variables
environment in which a specific strategy type operates does To test whether there is congruence in the relationship
be-not influence the level of the organizational variables. How-tween strategy type and organizational variables, it is necessary
ever, four F-ratios were significant indicating that for some to find whether and how the environment affects the
relation-variables the level is significantly influenced by the environ-ship (Fry and Smith, 1987). If the environment influences the
ment. For analyzers, the F-ratios for market orientation and strategy type–organization variable relationship, this would
human resource practices are significant. This arises from be indicated by the significance of the environment–strategy
high mean values in the transitional environment. This could interaction (Sharma, Durand, and Gur-Arie, 1981; Prescott,
potentially arise from over-reacting to environmental change 1986; Venkatraman, 1989). Thus, the significance of the
inter-resulting in temporary misalignment which could be corrected action term (environment3strategy) indicates the
environ-in the short term. For reactors, the significant F-ratio is for ment influences the form of the strategy type–organizational
managerial style where the highest mean occurs in the transi-variable relationship. The organizational transi-variables were treated
tional environment suggesting that following deregulation re-as dependent variables with environment and strategy re-as factors
actor organizations perceived change in managerial style a (independent variables). The results of the ANOVA, presented
potential source of competitive advantage. For prospectors, in Table 4, show that there are no significant interactions
be-the F-ratio for managerial style is significant with highest mean tween strategy and environment. The general conclusion is that
value in the open environment. This is consistent with the the environment moderates the relationship between strategy
need to attract and retain highly innovative people who resent and organizational variables, that is, the environment is a
homol-close supervision and mechanistic managerial styles (Porter, ogizer (Sharma et al., 1981; Prescott, 1986). This means the
1980). Taking the overall results in Table 5 it can be concluded environment may moderate the strategy type–organizational
that there is support for H1c, H2c, H3c, H4c, H5c, and H6c. variable relationship. This may be established by demonstrating
It can also be concluded that the necessary and sufficient that the level of the organizational variable varies with the
conditions for a contingency perspective have been established environment in which the organization operates (see Table 5).
by showing that: (1) each strategy type is associated with Table 5 has two sets of F-ratios, the ratios in column 5
distinctively different levels of organizational variables (micro-test hypotheses that strategy types have significantly different
Table 5. Difference Among Strategic Types in Organizational Variables
Strategy Types (Means)
P A D R F-ratio Different Setsd
Market orientation
Regulated 4.02 3.33 3.51 2.49 3.90b P, D & A.R
Transitional 4.39 4.55 2.92 4.01 2.64 A & P.D
Open market 4.43 3.08 3.90 3.03 4.83b P.R & A
F-ratio 0.72 6.23b 2.11 1.91
Planning capability
Regulated 3.95 3.52 3.95 2.24 1.69
Transitional 4.54 3.78 2.29 2.80 1.55
Open market 4.21 2.00 3.72 2.71 3.94c P & D.A
F-ratio 0.26 1.90 1.90 0.15
Human resource management
Regulated 4.90 4.21 4.77 4.03 3.91c P & D.A & R
Transitional 5.16 5.07 4.55 4.24 1.08
Open market 4.96 3.78 4.51 3.45 6.78a P.R & A; D.R
F-ratio 0.38 6.70b 0.40 0.97
Managerial style
Regulated 3.16 3.75 3.41 2.89 0.87
Transitional 4.40 4.26 4.46 4.33 0.08
Open market 4.70 3.06 3.76 2.32 10.71a P.D, A & R; D
F-ratio 7.20a 1.78 2.35 6.63b
Innovation
Regulated 5.85 5.25 4.61 5.44 3.69b P, R & A.D
Transitional 6.54 5.91 5.43 4.43 2.25 P.R
Open market 6.66 4.90 5.33 6.03 7.31a P.A & D
F-ratio 1.60 2.88 2.59 1.73
Operating efficiency
Regulated 4.91 4.63 4.33 4.00 1.89
Transitional 4.87 4.68 4.38 4.11 1.15
Open market 4.62 4.74 4.38 4.00 1.44
F-ratio 0.68 0.06 0.02 0.01
ap,0.001. bp,0.01. cp,0.05.
dAbbreviations: P5Prospector; A5Analyzer; D5Defender; R5Reactor.
in different environmental states (macrocongruency) as argued and other resources required to develop the distinctive compe-tencies, technologies, structures and management processes by Fry and Smith (1987).
needed to pursue a particular strategy is large. . . . Perhaps Is the Miles and Snow (1978) typology equally applicable
the greatest obstacle to strategic change stems from the fact to the three environments? To answer this question each
orga-that over time a given strategy attracts and fosters a set of nizational variable was compared across the environments.
managerial values and philosophies that are wedded to the The size of the F-ratio was used as the test statistic (Table 5,
strategy” (p. 529). column 6). The results in Table 5 suggest that the general
pattern of differences across the strategy types holds in all
Environment, Strategy Type, and
environments. However, the largest differences occur in the
Organizational Performance
open market environment followed by the regulated
Table 6. ANOVA Model: Environment–Strategy Type Interaction
Strategy–Environment
Variables Full Model Strategy Type Environment Interaction
Return on assets 5.584a 2.187 1.4120a 3.203b
Growth in sales 1.009 1.293 1.095 0.708
New product success 3.432a 3.422c 4.530c 2.523c
Market share change 2.227c 0.299 7.619a 0.953
Exports 2.298c 2.193 4.079c 2.256c
Figures in the table are F-ratios.
ap,0.001. bp,0.01. cp,0.05.
dictors of organizational performance. This is in line with our To test Hypotheses 8a, 8b, and 8c in view of the above, ANOVA model and one-way ANOVA (using Duncan’s multi-conceptualization of the environment as degree of regulation
which should have performance implications. Further, the ple range test of means) were used (Table 7).
Hypothesis 8a, which states that performance under regula-results suggest that the interaction terms for environment
and strategy are generally significant across the performance tion should favor defenders is supported for return on asset, sales growth, and successful new product development. The measures. These results suggest that the environment as
de-fined in this article is a quasi-moderator (Sharma, Durand, Duncan’s test of means across the strategy types, indicates that defenders significantly outperform the other strategy and Gur-Arie, 1981).
Table 7. Performance Differences Among Strategic Types
Strategy Types (Means)
P A D R F-ratio Different Setse
Return on assets
Regulated 1.45 1.32 1.95 1.44 4.23b D.A, R & P
Transitional 2.23 2.00 1.43 1.33 2.22 P.R & D
Open market 2.93 3.22 1.95 1.86 10.93a A & P.D & R
F-ratio 14.22a 23.45a 2.21 0.73
Growth of sales
Regulated 2.63 2.96 2.81 2.00 3.14c A & D.R
Transitional 2.92 3.00 2.71 2.67 0.20
Open market 3.50 3.00 2.90 2.57 3.63b P.R & D
F-ratio 6.45b 0.02 0.12 0.68
New product success
Regulated 2.27 2.08 2.50 1.11 3.12c P & A.D & R
Transitional 2.69 2.81 2.43 2.67 0.17
Open market 3.79 3.44 2.19 2.43 13.10a P & A.D & R
F-ratio 15.40a 5.28b 0.29 22.65a
Market share change
Regulated 1.36 0.6 1.23 0.33 0.69
Transitional 2.54 2.24 1.00 1.67 2.50d P & A.D
Open market 2.93 2.22 2.09 2.00 1.78
F-ratio 9.56a 5.33b 1.39 1.24
Exports
Regulated 1.09 1.80 1.09 1.00 5.73a A.P, D & R
Transitional 1.46 1.71 1.71 3.33 2.91d R.P, A & D
Open market 1.76 2.78 1.57 2.00 4.34b A.D & P
F-ratio 2.76 3.54c 3.91c 15.62a
aP,0.001. bP,0.01. cP,0.05. dP,0.10.
types. For other performance measures the hypothesis is not mental change and uncertainty, perform poorly as a result, and then become reluctant to act aggressively in the future” supported. HenceH8areceives partial support.
Hypothesis 8b, which posits that under transitional condi- (p. 90). The proposition that reactors follow inconsistent strat-egies is supported by lack of planning capability. Effective tions the successful strategy type will be the analyzer, was
generally supported for most performance measures although planning presupposes the existence of planning goals that the firms seek to achieve. The characterization of the reactor is less only statistically significant for market share changes. Thus
H8b receives partial support. Hypothesis 8c, which posits that precise in the literature. Invariably it has been considered a repository for organizations that could not be classified else-prospectors would perform optimally in a free environment,
is supported. The results are statistically significant for all where. Conant et al. (1990) suggest that the reactor could be a stable type characterized by being “consistently inconsistent” measures of performance except market share changes. These
findings do not support equifinality (Miles and Snow, 1978) in its product market. In some environments the reactor organi-zations may succeed by rigging the solutions to problems. but lend support to Hooley et al. (1992).
Does performance differ by environment for each strategy The general proposition of equifinality of performance for the stable strategy types (prospectors, analyzers, and defend-type? The results of comparing each strategy type across
differ-ers) as proposed by Miles and Snow (1978) should be rejected ent environments, as would be expected, indicate significant
in favor of a contingency approach. Some strategy types per-differences (row 4 for each performance measures in Table
form better in certain environments. The results of this re-7). The conclusion to be drawn from these results is that
search imply that defenders outperform other strategy types organizational performance is enhanced by a more open and
under a regulated environment. This environment can be competitive business environment.
considered stable and organizational performance primarily depends on operational efficiency and an ability to read
socio-Discussion and Implications
political trends. The results also suggest that defenders mayperform poorly in turbulent environments. Analyzers would These results suggest that the Miles and Snow typology is an
generally outperform defenders and reactors in transitional effective framework for investigating the strategies followed
settings and under open market conditions. Prospectors per-by firms in the food manufacturing industry in Zimbabwe.
form well in transitional and open market conditions. The prospectors show distinct competence in marketing and
have more organic management styles. This agrees with
orga-Public Policy Implications
nization theory which suggest that when tasks are not routine,
Regulation appears to depress organizational performance. an organic management style should be followed (Walker and
This may have undesirable consequences for investment in Ruekert, 1987; Miles and Snow, 1978). The prospectors show
plant and equipment and employment generation especially distinct competence in planning. Scanning the environment
in developing economies. The firms most seriously affected is a critical requirement for a market-oriented organization
by regulation are those that are externally oriented as evi-that seeks to understand and proactively position itself for
denced by the poor performance of prospectors under regula-market changes.
tion. The implications are that the firms most likely to succeed Defender organizations show a superior score on operating
either as exporters or product innovators are the most seriously efficiency. This is the general findings of other researchers.
affected by regulation. Following deregulation, performance In line with search for operational efficiency, the management
improves in terms of return on assets and successful new style in defender organizations is mechanistic. The defenders
product introduction. The improvement in performance is score high on planning capability. In this case, the purpose
observed for all the strategy types except defenders. Firms of of planning is to enable organizational integration as distinct
the same strategy type operating in different environments from prospectors for whom planning permits adaptation to
have significant differences in performance suggesting the en-environmental dynamics.
vironment is an important determinant of organizational per-Analyzers show distinctive competence in innovation. Top
formance. From a public policy perspective, it is important management is constantly on the alert for technological (both
to note that firms do not change their strategies and character-process and product) developments. This enables the analyzer
istics quickly in response to regulatory changes. In the short to imitate quickly and be “second in” with products on the
term, many firms may actually become misaligned to the market. The management style is moderately mechanistic. This
environment and hence perform poorly as exemplified by is consistent with the need for efficiency while maintaining
defenders in this study. entrepreneurship in newer ventures. In other key variables
the analyzers behave like hybrids between prospectors and
Managerial Implications
defenders (Nicholson, Rees, and Brooks-Rooney, 1991). This
environ-culture of internal orientation and superior operating effi- (a) Predict future trends (b) Anticipate surprises (c) Improve response flexibility (d) Identify new businesses (e) Identify ciency should seek opportunities afforded by regulatory
envi-ronments (secure markets and predictable cashflows). Perfor- key problem areas (f) Generate new ideas (g) Integrate func-tions (h) React to competitor moves (i) Predict future customer mance in other environments would be relatively poorer.
Under a transitional environment, organizations that balance neds (j) Evaluate alternatives (k) Enhance management devel-opment
the need for efficiency and adaptive capability outperform
other strategy types on most performance measures. Manage- Source: Ramanujam and Venkatraman (1987). ment that combines the need for efficiency and adaptive
capa-Innovation a 5.8468
bility should find the period following deregulation most
ad-Marketing tried product 1 2 3 4 5 6 7 vantageous. However because the environment is transitional,
No of new products (last 5 years) this should provide opportunities for sharpening their
adap-Minor product changes tive capability to improve competitiveness as the industry
Responds to competitor moves evolves toward an open market. Under open market
condi-Rarely the first with new products tions, organizations that have the highest adaptive capability
Proclivity to low risk projects outperform other strategy types. The results suggest that the
Incremental behaviour benefits of external orientation outweigh the costs. As Stalk,
Emphasis on R&D and Innovation leadership Evans, and Shulman (1992) state: in the 1990s successful
Very many new products in 5 years companies will be those that are able to respond quickly to
Dramatic product changes customer or market demands and see the competitive
environ-Initiates innovation competition ment clearly, thus anticipate and respond to customers’
evolv-Often the first with new products ing needs and wants and adapt simultaneously to many
differ-Proclivity to high risk projects ent business environments.
Bold new initiatives Adaptability and responsiveness are crucial as Fink, Beak,
Source: Covin, Prescott, and Slevin (1990) (modified) and Taddeo (1971) pointed out. Extremely adaptive and
re-sponsive Japanese firms, have, through their sustained innova- Human Resources Management a 5.7876
tion, created such market turbulence that they have driven To what extent is your company have or perform the following: their rivals into self-destructive modes of decision making and (15 not at all, 75to a very great extent).
market behavior–that is, organizational nervous breakdown. (a) Effective personnel policies (b) Model employer (c) Em-ployee education (d) Design effective reward system (e)
Effec-Contribution to Research
tiveness of grievance procedures (e) Stimulate employee self-education (f) Value relations with trade unionsThis study extends the application of the Miles and Snow
Source: Narver and Slater (1990) typology by examining it in a developing economy. The results
of this study suggest that the environment is a homologizer
Managerial Style a 5.8400
in the relationship between strategy and organizational
vari-In general senior management favors (1 5 not at all, 7 5
ables but a quasi-moderator in the strategy–performance
rela-to a very great extent). tionship. It is therefore not enough for researchers to state
Formal—informal that the environment is a moderator without accurately
speci-Procedure—Objectives driven fying how it moderates the relationship. The study examines
Uniform—Free ranging managerial styles equifinality in the performance of the stable strategy types
Adherence—situation determines job performance and rejects it in favor of a contingency perspective through
Source: Covin, Prescott, and Slevin (1990) establishing the necessary and sufficient conditions for a
con-tingency theory in the context of this study. Operating Efficiency a 5.6857
Relative to competitors to what extent does your business have advantages in (15not at all, 75to a very great extent.
Appendix A
Cost efficiencyCost of sales Market orientation a 5.9216
Economies of scale achieved (a) Customer orientation (6 items)
Performance Measures (b) Competitor orientation (4 items)
a. Return on assets (ROA) (c) Interfunctional Coordination (5 items)
Net income (or loss)/total assets. Averaged over three years Source: Narver and Slater (1990)
1990–92 (or 1991–93) b. Growth in sales (SALES) Planning Capability a 5.8694
(St112St/St(sales in timet11 divided by sales timet)
To what extent is your planning system capable of contributing
Distinctive Marketing Competences and Organisational
Perfor-Sales($) (of products introduced in the last three years)/Total
mance: A Multiple Measures-Based Study.Strategic Management
Sales($) average of 3 years
Journal11 (1990): 365–383.
d. Market share changes
Covin, J. G., Prescott, J. E., and Slevin, D. P.: The Effects of
Techno-(MSt132MSt)/MStwhere MStand MSt13are market share in logical Sophistication on Strategic Profiles, Structure and Firm 1990 and 1993, respectively. Performance.Journal of Management Studies(1990).
Strategic type: This was based on responses to seven items: (3 Daft, R. L., Sormunen, J., and Parks, D.: Chief Executive Scanning, entrepreneurial; 2 engineering; and 2 administrative) derived Environmental Characteristics, and Company Performance: An from the distinctive characteristics of the Miles and Snow Empirical Study.Strategic Management Journal4 (1988): 137–151.
strategic types Dess, G. G., and Origer, N. K.: Environment, Structure and
Consen-sus in Strategy Formulation: A Conceptual Integration.Academy
Source: Conant, Mokwa, and Varadarajan (1990).
of Management Review(April 1987): 313–330.
Dickson, P. R.: Towards a General Theory of Competitive Rationality.
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