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Intraindustry Differential Firm Performance - Insights of A Simulation Study about Strategy Formation
Series
Schriftenreihe der Assistierenden der Universität St. Gallen
ISBN
978-3-7272-2282-5
Type
book section
Date Issued
2008
Author(s)
Editor(s)
Juchli, Philipp
Würmli, Marcel
Haunreiter, Diego
Abstract
Organizational security is a multi-faceted concept. It appears that, in the context of organizational studies, it is synonymous to certainty. In strategy process research, much research has been conducted about the lack of long-term certainty - also termed strategic uncertainty. Factors and processes become important that influence or allow for a sustainable intraindustry differential firm performance. In this paper, I argue that the integration of atomic insights, which are taken from different threads of strategy process research, can create new findings which comprise of a higher level of complexity. In an explorative simulation study, I use research about firm's scanning behavior, influences of both environmental and organizational change on strategic for-mation to derive, test and reformulate three propositions about intraindustry differential firm performance. The first proposition indicates that an initial performance advantage cannot be sustained in the long-term, even when knowledge spill-over can be avoided, and implicates further improvements even when they are not considered necessary. The second proposition suggests that a sustained performance advantage emerges when innovations are initiated at higher relative levels of firm inertia. The third proposition shows that establishing a firm's optimal fitness configuration that balances internal and external requirements in order to obtain a performance advantage is a labor-intensive undertaking. It demands mangers to have detailed knowledge about firm's perception mechanisms as well as to be aware about possible approaches to scan the relevant environment.
Language
English
Keywords
Strategic management
strategy formation
uncertainty
theory development
simulation
firm performance
fitness
HSG Classification
contribution to scientific community
Refereed
No
Book title
Sicherheit als wirtschaftliches, rechtliches und kulturelles Phänomen
Publisher
Stämpfli
Publisher place
Bern
Number
3
Start page
45
End page
72
Pages
28
Subject(s)
Division(s)
Eprints ID
45430