Generic Strategy and Performance: an Empirical Test of the Miles and Snow Typology
| Date | 01 March 1993 |
| Published date | 01 March 1993 |
| Author | Peter Wright,John A. Parnell |
| DOI | http://doi.org/10.1111/j.1467-8551.1993.tb00159.x |
British
Journal
of
Management,
Vol.
4,29-36
(1993)
Generic Strategy and Performance: an Empirical
Test of the Miles and Snow Typology
John
A.
Parnell and Peter Wright*
College of
Business, Murfreesboro, Tennessee, *Memphis State
University
SUMMARY Previous research has considered the strategy-performance relationship in industries
of
relatively low degrees of dynamism and volatility.
This
study empirically tests the
Miles and Snow
typology
with a dynamic, growing and volatile service industry. Results
support earlier research and suggest that, considering catalogue and mail-order houses
(SIC-5961),
reactors did not perform as well as businesses adopting other generic strate-
gies. However, prospectors experienced significantly higher levels of revenue growth
than other businesses. Further, analysers were significantly more profitable than busi-
nesses adopting other strategies. These results suggest that combination strategies are
a viable means for sustaining competitive advantage.
Numerous empirical tests of the strategy-perform-
ance relationship appear in the literature. However,
many of these studies (e.g. Dess and Davis, 1984;
Hawes and Crittenden, 1984; Oster,
1990)
have
considered mature, stable and manufacturing
industries. However, strategic choice (proactivity)
tends to play a lesser role in such industries (Bar-
ney, 1986; Oster, 1990). This paper seeks to test
the relationship in a volatile, dynamic and growing
industry
-
catalogue and mail-order houses (SIC-
5961).
The Miles
and
Snow
Typology
Although each firm’s strategy is idiosyncratic,
researchers have sought to clarify business strate-
gies into typologies to study more effectively rela-
tionships between strategy and other variables,
including environment, structure and performance
(Namiki, 1989). Strategic typologies represent
broad categorizations of businesses’ strategic
behaviours into a few types (Namiki, 1989).
Research has demonstrated that usefulness of typo-
logies in contingency strategy research (Herbert
and Deresky, 1987; Hill, 1988; Lawless and Finch,
1989).
A commonly used framework introduced by
Miles and Snow (1978) and utilized in this study
considers four strategic types: prospectors,
defenders, analysers and reactors. Miles and
Snow’s (1978) framework considers the rate at
which organizations change their products or mar-
kets. The Miles and Snow framework can be traced
to Child’s (1972) conceptualization of strategic
choice. Their framework is theoretically anchored,
considering research from numerous other workers
(Harrigan, 1985; Thomas and Venkatraman, 1988).
Miles and Snow assume that organizations act
to create their own environments through a series
of choices regarding markets, products, technolo-
gies, desired scale of operations, etc. The enacted
environment is severely constrained by existing
knowledge of alternative organizational forms and
managers’ beliefs about how people can and should
be motivated (Miles and Snow, 1978).
Miles and Snow proposed that organizations
develop relatively enduring patterns of strategic
behaviour to co-align the organization with the
environment. The process
of
adaptive choice
involves three key strategic problem sets. First, the
entrepreneurial problem set focuses on defining the
firm’s
product and market domain. Second, the
engineering problem set concerns the choice of
technologies to be utilized in production and distri-
bution. Finally, the administrative problem set
1045-3 172/93/01002948$09.00
0
1993
by
John
Wiley
&
Sons, Ltd.
Received
26
November
I991
Accepted
9
October
1992
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