Fit and Organizational Turnaround: An Examination of the Performance Implications of Strategy Content and Process Fit and Strategy and Cause of Decline Fit.
Date of Award
Doctor of Philosophy (PhD)
David J. Ketchen, Jr
Generally, extant turnaround research has been inductively based and has limited its conceptualization of strategy to strategy content. This study builds on past research by incorporating strategy process and theoretically deriving the causes of decline. In general terms, this study posits that fit (consistency) between strategy process and content is critical to an organization's ability to recover from poor performance. Specifically, the following are considered consistent responses: (1) an entrepreneurial strategy with decentralized decision making and expanded information usage; and, (2) an efficiency strategy with centralized decision making and constricted information usage. Additionally, organizations need to fit their strategy to the cause of decline to have superior turnaround performance. This study examined the implications of strategy content/process fit and strategy/cause of decline fit in the hospital industry. Specifically, archival data for the years 1987-1994 was collected for the 131 Columbia/HCA hospitals identified as in decline during 1988-1991. Primary data was collected via questionnaire from 66 of these hospitals. Confirmatory factor analysis was used to assess the reliability, variance extracted, and discriminant validity of the measures collected by survey. Moderated multiple regression failed to support the positive performance implications of either type of fit. Potential explanations for the lack of support for the positive performance implications of fit were offered. These explanations include: (1) the choice of strategy is not crucial to turnaround performance; (2) the two types of fit are necessary but not sufficient for enhanced performance; (3) turnaround processes are too idiosyncratic to generalize; and, (4) a conceptualization of fit other than the one posited in this study is more appropriate. The limitations of this study include the number of respondents per organization, limited statistical power, limited generalizability of results, untested feedback loops, and potential retrospective and survival biases. This study concludes with suggestions for future research. These suggestions involve the role of the environment, organizational resources, and other strategy processes in organizational turnaround.
Shook, Christopher L., "Fit and Organizational Turnaround: An Examination of the Performance Implications of Strategy Content and Process Fit and Strategy and Cause of Decline Fit." (1997). LSU Historical Dissertations and Theses. 6448.