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Papers by Odunayo Adebayo

Strategic Management Journal, 1981

The paper contains a review and evaluation of empirical and case studies on the performance of wh... more The paper contains a review and evaluation of empirical and case studies on the performance of whole enterprises. Research from a diverse array of academic disciplines and research traditions is included. Thecentral focus is on identifying factors that influence organizational performance, and discussing implications for future interdisciplinary research and the strategic management of contemporary organizations. LITERATURE REVIEW To facilitate an orderly review and evaluation, the following discussion is organized around constructs and linkages used by various researchers to explain organizational performance. This approach results in the identification of six groups of research. The 0l43-2095/81/020131-24$02.40 g; 1981 by John Wiley & Sons. Ltd. Reccivd 10 April I980 Revrscd 21 July I980 132 R. T. Lenz first group comprises investigations concerning the environment-performance linkage. Included are studies growing out of microeconomics, business policy, and sociology. Next, attention centres on research in which environment and organization structure are key variables. Of particular interest are findings regarding the structuralcontingency hypothesis advanced by Lawrence and Lorsch (1967). The third group consists of studies based upon the idea that the structure of an organization is a principal determinant of performance. The relationships between size and performance and factors moderating this linkage are considered. Then, the widely discussed strategy-organization structure-performance hypothesis is examined by reviewing both empirical and case studies conducted in a variety of competitive settings. A fifth group of studies employs the concepts of environment and strategy to explain firm performance, and afford insight into intra-industry competitive structures. Finally, attention centres on investigations concerning the effects of various aspects of administration on organizational performance. Findings about belief structures held by senior-level executives, profit-maximizing behaviour, and influences stemming from managerial succession are examined. Environment and performance Some of the most extensive studies of relationships between environment and organizational performance are found in the literature of industrial organization. Within this discipline the environment is referenced with respect to the market, or industry, in which a firm competes. Empirical research is usually based on the idea that the structure of a market influences the conduct of firms within it and their conduct, in turn, affects performance (Mason, 1939; Caves, 1977). Market structures are typically assessed with summary measures intended to capture the overall configuration of a competitive setting (e.g. sales concentration ratios, the rate of growth in demand, the advertising-to-sales ratio). Until recently, the role of conduct has been given little attention. Instead, primary interest centres upon the market structure-performance relationship. Vernon (1 972) and Weiss (1 971) provide excellent reviews of this extensive body of empirical research. Findings from market structure-performance studies are often used in formulating public policy. Nevertheless, it is widely acknowledged that the power of structural characteristics of a market alone to explain performance is quite modest (Vernon, 1972; Grether, 1970; Phillips, 1976). This deficiency stems from many circumstances (see Weiss, 1971: 369). However, two closely related factors are of particular importance: (I) heterogeneity among market structures and the competitive positions of firms within a market, and (2) assumptions about causal relationships between market structures and organizational performance. There is mounting evidence that the effect of certain aspects of market structure on firm performance is not uniform among industries and classes of products. Cattin and Wittink (1976) found that the relationship between the advertising-to-sales ratio and profitability differs greatly among industries. In a similar study, Bass, Cattin, and Wittink (1975) confirm differences in market structure-performance relationships. In addition, they note that the effect of firm-related variables (elsewhere discussed as elements of conduct) on performance also differs among industries. Two empirical studies focus on firm-related variables when considering heterogeneity rr,ithin industries. Results show that the relative competitive position of firms within an industry affects organizational performance. Building on the work of Hunt

Strategic Management Journal, 1981

The paper contains a review and evaluation of empirical and case studies on the performance of wh... more The paper contains a review and evaluation of empirical and case studies on the performance of whole enterprises. Research from a diverse array of academic disciplines and research traditions is included. Thecentral focus is on identifying factors that influence organizational performance, and discussing implications for future interdisciplinary research and the strategic management of contemporary organizations. LITERATURE REVIEW To facilitate an orderly review and evaluation, the following discussion is organized around constructs and linkages used by various researchers to explain organizational performance. This approach results in the identification of six groups of research. The 0l43-2095/81/020131-24$02.40 g; 1981 by John Wiley & Sons. Ltd. Reccivd 10 April I980 Revrscd 21 July I980 132 R. T. Lenz first group comprises investigations concerning the environment-performance linkage. Included are studies growing out of microeconomics, business policy, and sociology. Next, attention centres on research in which environment and organization structure are key variables. Of particular interest are findings regarding the structuralcontingency hypothesis advanced by Lawrence and Lorsch (1967). The third group consists of studies based upon the idea that the structure of an organization is a principal determinant of performance. The relationships between size and performance and factors moderating this linkage are considered. Then, the widely discussed strategy-organization structure-performance hypothesis is examined by reviewing both empirical and case studies conducted in a variety of competitive settings. A fifth group of studies employs the concepts of environment and strategy to explain firm performance, and afford insight into intra-industry competitive structures. Finally, attention centres on investigations concerning the effects of various aspects of administration on organizational performance. Findings about belief structures held by senior-level executives, profit-maximizing behaviour, and influences stemming from managerial succession are examined. Environment and performance Some of the most extensive studies of relationships between environment and organizational performance are found in the literature of industrial organization. Within this discipline the environment is referenced with respect to the market, or industry, in which a firm competes. Empirical research is usually based on the idea that the structure of a market influences the conduct of firms within it and their conduct, in turn, affects performance (Mason, 1939; Caves, 1977). Market structures are typically assessed with summary measures intended to capture the overall configuration of a competitive setting (e.g. sales concentration ratios, the rate of growth in demand, the advertising-to-sales ratio). Until recently, the role of conduct has been given little attention. Instead, primary interest centres upon the market structure-performance relationship. Vernon (1 972) and Weiss (1 971) provide excellent reviews of this extensive body of empirical research. Findings from market structure-performance studies are often used in formulating public policy. Nevertheless, it is widely acknowledged that the power of structural characteristics of a market alone to explain performance is quite modest (Vernon, 1972; Grether, 1970; Phillips, 1976). This deficiency stems from many circumstances (see Weiss, 1971: 369). However, two closely related factors are of particular importance: (I) heterogeneity among market structures and the competitive positions of firms within a market, and (2) assumptions about causal relationships between market structures and organizational performance. There is mounting evidence that the effect of certain aspects of market structure on firm performance is not uniform among industries and classes of products. Cattin and Wittink (1976) found that the relationship between the advertising-to-sales ratio and profitability differs greatly among industries. In a similar study, Bass, Cattin, and Wittink (1975) confirm differences in market structure-performance relationships. In addition, they note that the effect of firm-related variables (elsewhere discussed as elements of conduct) on performance also differs among industries. Two empirical studies focus on firm-related variables when considering heterogeneity rr,ithin industries. Results show that the relative competitive position of firms within an industry affects organizational performance. Building on the work of Hunt