Environment-Strategy Coalignment: An Empirical Test of Its Performance Implications

  • Venkatraman, N.; Prescott J
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he positive performance impact of a coalignment between environment and strategy of a business is an important proposition in strategic management. However, the extent of empirical support for the proposition is equivocal and riddled with problems of conceptualizing and testing for coalignment. An attempt is made to evaluate alternate approaches to testing the proposition. It is argued that specifying coalignment as "profile deviation" is favorable. This proposition states that coalignment is the degree to which strategic resource deployments adhere to an "ideal profile" for a given environment. This proposition is studied across 2 time periods and in 8 different environments in 2 samples drawn from the Profit Impact of Marketing Strategy database. The results are generally robust across the 2 periods and strongly support the proposition of a positive performance impact of environment-strategy coalignment.

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  • J.E. Venkatraman, N.; Prescott

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