Strategy, Strategy Making, and Performance—An Empirical Investigation

The purpose of this paper is to study the effect of the relationships between strategic type and strategy-making mode on organizational performance. Two important typologies were used in this study, one stressing strategic type, the other, strategy-making mode. Hypotheses were stated on strategy “fit” of specific strategy type with strategy-making modes, where strategic fit contributes to organizational performance. As part of a larger study of strategy formulation, the two top executives in each of 126 kibbutz-owned industrial enterprises evaluated their organization's strategic type as Defender. Prospector, Analyzer, or Reactor, and its strategy-making mode as Entrepreneurial, Adaptive and Planning. The executives typed their organizations using textual descriptions of strategies. The findings clearly indicate links between the two typologies, i.e., associations between strategic types and strategy-making modes, and that certain combinations are more conducive to enhancing organizational performance than others. When nonoptimal stragies are adopted they result in lower levels of performance. The paper also relates the primary discussion on the relationship between the strategy type and strategy-making mode typologies to the content-process dilemma on which it sheds some light.