New Evidence in the Generic Strategy and Business Performance Debate: A Research Note
| Author | John A. Parnell |
| DOI | http://doi.org/10.1111/1467-8551.0049 |
| Published date | 01 June 1997 |
| Date | 01 June 1997 |
Introduction
Although numerous empirical tests of the strategy–
performance relationship appear in the manage-
ment literature, key questions remain. Beleaguered
by competing perspectives on the strategy–
performance linkage and valid methodological
disputes, many empirical studies seem to have gen-
erated more questions than they have answered.
As a result, the literature is replete with strategy
typologies, research methodologies and theories
on the strategy–performance relationship. How-
ever, consensus concerning the strategy–perform-
ance relationship at the business level has been
slow to develop.
Most business strategy research has sought to
validate one of two schools of thought, often with
typologies developed by Porter (1980) and Miles
and Snow (1978). One school – anchored by em-
pirical research in the early 1980s – has embraced
Porter’s (1980, 1985) original contention that
viable business units must seek either a low cost
or a differentiation strategy to be successful (Dess
and Davis, 1984; Hambrick, 1981, 1982; Hawes
and Crittendon, 1984). Later, a second school
proposed that the two generic strategies – low cost
and differentiation, or prospector and defender –
are not mutually exclusive (Hurst, Rush, and
White, 1989; Parnell and Wright, 1993; Wright,
1987). Wright et al. (1990) also extended the
Miles and Snow typology by proposing a high-
performing combination strategy – the ‘balancer’,
striking an effective ‘balance’ between the needs
of a stable technology and those of fluid tech-
nologies, operating in three separate product–
market spheres.
During the course of this debate, various
attempts have been made at typology integration
(Chrisman, Hofer and Boulton, 1988; Kotha and
Orne, 1989; Miller, 1987; Porter, 1980; Segev, 1989).
Although these efforts emphasized similarities
between Porter’s and Miles and Snow’s frame-
works, they have not accounted for one primary
theoretical difference: Porter’s approach does not
allow for a long-term viable combination strategy,
whereas Miles and Snow’s typology – as modified
by Wright et al. (1990) – allows for two such
strategies: the analyser and the balancer.
The present study adopts an integrative ap-
proach, acknowledging four viable strategies.
Organizations adopting the first strategy type,
referred to as ‘defender/focus’, attempt to pro-
duce low-priced products and services efficiently
for an established niche. In contrast, businesses
adopting the ‘prospector/differentiation’ strategy
attempt to achieve superior performance through
innovation and first-mover advantages. Businesses
adopting the ‘analyser/combination’ strategy tend
British Journal of Management, Vol. 8, 175–181 (1997)
New Evidence in the Generic Strategy
and Business Performance Debate:
A Research Note
John A. Parnell
School of Business, North Carolina Central University, Durham, North Carolina 27707, USA
Regardless of the numerous published tests of the business strategy–performance rela-
tionship, no consensus has been reached. Researchers continue to debate the merits of
various theories, research methods, survey techniques and the use of different strategy
typologies. This study tests for a strategy–performance linkage in a manner sensitive to
prevailing research criticisms.
© 1997 British Academy of Management
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