This study investigated the relationships between business-level strategies and organization structures in undiversified firms. While extant research characterized strategy mainly by diversification and structure by divisionalization, the focus in this research was on the generic business strategies and the specific dimensions of organization structure. It was shown that each generic strategy (innovative differentiation, marketing differentiation, cost leadership, and breadth) is associated with different organizational characteristics (formalization, centralization, specialization, horizontal and vertical differentiation, and integration). These relationships were more significant in groups of high-performing firms than in groups of poor performers.
This study investigated the relationships between business-level strategies and organization structures in undiversified firms. While extant research characterized strategy mainly by diversification and structure by divisionalization, the focus in this research was on the generic business strategies and the specific dimensions of organization structure. It was shown that each generic strategy (innovative differentiation, marketing differentiation, cost leadership, and breadth) is associated with different organizational characteristics (formalization, centralization, specialization, horizontal and vertical differentiation, and integration). These relationships were more significant in groups of high-performing firms than in groups of poor performers.
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