Research Article
Strategy, Organizational Structure, and Firm Performance
Published: January 1990 · Vol. 20, No. 1 · pp. 147-172
Full Text
Abstract
Based on the results of a preceding study (Lee, 1989), this study sought to examine how organizational structure variables differ according to strategy types and how their relationships with profitability vary across two periods of the computer hardware manufacturing industry, which exhibit different environmental characteristics. In the case of the cost leadership strategy, variables representing mechanistic organizational structure characteristics showed significantly higher values, and positive correlations existed between these variables and profitability. In contrast, the technological innovation differentiation strategy exhibited relatively organic organizational structure characteristics, and negative correlations existed between variables representing mechanistic organizational structure characteristics and profitability. Additionally, in the case of the industry dominance strategy, the degree of divisionalization was relatively and significantly higher, and although not statistically significant, a positive correlation between the degree of divisionalization and profitability was observed.
