Executive characteristics, strategic orientation and organizational performance: a study of relationships in the U.S. electronic computing equipment industry

Abstract

The primary goal of this study was to develop a theoretically based, parsimonious framework for the examination of the relationships between executive characteristics, strategy and performance. In order to achieve this goal, prior literature examining the linkages between executive characteristics and strategy and executive characteristics and performance was integrated to derive two broad theoretical propositions.

The first proposition stated that different managerial profiles would be associated with different strategic postures. The rationale for this proposition was derived from previous empirical and theoretical evidence which suggests that since different strategies emphasize different organizational competences, they can be best implemented by managers who have skills compatible with these competences. Building on this logic, the second proposition suggested that a fit between managerial profiles and organizational strategy would enhance performance. This proposition stems from the behavioral literature which argues that the characteristics of managers influence their perception of the environment and consequently their decision-making. Thus, if managerial decisions are not compatible with the strategy and consequently the competences of the organization, performance will suffer.

In order to test these propositions each of the three constructs were operationalized in a multidimensional manner. Strategy was conceptualized in terms of the Miles & Snow (1978) typology which delineates comprehensive and internally consistent postures of organizational behavior encompassing their structures and processes. The executive characteristics construct was operationalized through five demographic dimensions each of which had been found significant in previous research. Finally, performance was operationalized to include the separate market based and efficiency goals of the different strategies.

The data used to perform the empirical test were obtained from objective, secondary sources to control for the effects of perceptual bias which plagues researchers who use self-report data. The measures of strategic orientation and performance were standardized through the use of ratios to limit the unwanted variation introduced by differences in organizational size. The research site was restricted to a single industry containing relatively homogeneous firms, to control for spurious results that can occur due to the different environmental factors that operate in different industries.

The manuscript includes detailed descriptions of the theoretical literature from which the research was conceived, the results obtained and the conclusions derived. The primary contributions of this study were the integration of two distinct research streams, and the development of a broadly applicable model which is a useful platform for the future study of strategic leadership.