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Emerald Article: Business-level strategy and performance: The moderating effects of environment and structure M.K. Nandakumar, Abby Ghobadian, Nicholas O'Regan

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To cite this document: M.K. Nandakumar, Abby Ghobadian, Nicholas O'Regan, (2010),"Business-level strategy and performance: The moderating effects of environment and structure", Management Decision, Vol. 48 Iss: 6 pp. 907 - 939 Permanent link to this document: http://dx.doi.org/10.1108/00251741011053460 Downloaded on: 28-09-2012 References: This document contains references to 89 other documents Citations: This document has been cited by 4 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 5128 times since 2010. *

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Business-level strategy and performance

The moderating effects of environment and structure
M.K. Nandakumar
Indian Institute of Management, Kerala, India

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Abby Ghobadian
Henley Business School, Henley-on-Thames, UK, and

Nicholas ORegan
Bristol Business School, UWE Bristol, Bristol, UK
Abstract
Purpose This study aims to examine the moderating effects of external environment and organisational structure in the relationship between business-level strategy and organisational performance. Design/methodology/approach The focus of the study is on manufacturing rms in the UK belonging to the electrical and mechanical engineering sectors, and respondents were CEOs. Both objective and subjective measures were used to assess performance. Non-response bias was assessed statistically and appropriate measures taken to minimise the impact of common method variance (CMV). Findings The results indicate that environmental dynamism and hostility act as moderators in the relationship between business-level strategy and relative competitive performance. In low-hostility environments a cost-leadership strategy and in high-hostility environments a differentiation strategy lead to better performance compared with competitors. In highly dynamic environments a cost-leadership strategy and in low dynamism environments a differentiation strategy are more helpful in improving nancial performance. Organisational structure moderates the relationship of both the strategic types with ROS. However, in the case of ROA, the moderating effect of structure was found only in its relationship with cost-leadership strategy. A mechanistic structure is helpful in improving the nancial performance of organisations adopting either a cost-leadership or a differentiation strategy. Originality/value Unlike many other empirical studies, the study makes an important contribution to the literature by examining the moderating effects of both environment and structure on the relationship between business-level strategy and performance in a detailed manner, using moderated regression analysis. Keywords Manufacturing industries, Performance management Paper type Research paper

1. Introduction The strategy of an organisation describes the way it will pursue its goals given the threats and opportunities in the environment and its resources and capabilities (Rue and Holland, 1989). Corporate-level strategy relates to the product/market choice(s) of a rm and business-level strategy denes how it will deploy its resources in a given ` -vis its competitors (Hatten et al., 1978). Business-level product/market area vis-a strategy is a powerful predictor of other organisational phenomena and perhaps the

Management Decision Vol. 48 No. 6, 2010 pp. 907-939 q Emerald Group Publishing Limited 0025-1747 DOI 10.1108/00251741011053460

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most useful stream of research for practitioners is the empirical examination of its relationship with organisational performance (Hambrick, 1980). An effective strategy will provide sustainable competitive advantage to an organisation resulting in superior performance (Oosthuizen, 1997). However this can be achieved only if the strategy matches properly with the organisations external environment and internal conditions (Thompson and Strickland, 1996). Strategic management literature suggests that a successful rms strategy and structure must be favourably aligned with its external environment (e.g. Dess and Keats, 1987). The relationships between business-level strategy and environment have been widely discussed in the extant literature (e.g. Hambrick, 1983b; Kim and Lim, 1988; Miller, 1988). Organisations face signicant constraints and contingencies from their external environments and their competitiveness depends on their ability to monitor the environments and adapt their strategies accordingly (Boyd and Fulk, 1996). Many authors have argued that a rms strategy must be closely aligned with its structure (e.g. Van de Ven and Drazin, 1985; Jennings et al., 2003). The suitability of strategies and structures largely depends upon the match between strategy and structure (Chandler, 1962; Rumelt, 1974; Miles and Snow, 1978; Miller and Friesen, 1984). According to Lenz (1980) the combination of environment, strategy, and organizational structure in high-performance rms differed signicantly from that of low performance rms. A substantial number of empirical studies have examined the relationship between business-level strategy and performance (e.g. Parker and Helms, 1992; Kling and Smith, 1995; Andrews et al., 2006). However, not many of them have examined the impact of external environment and organisational structure in this relationship. The matching of organisational strategies to the internal structure of the organisation and its external environment can be termed as strategic t. This type of t has been examined by previous researchers according to six perspectives, namely t as moderation, t as mediation, t as matching, t as Gestalts, t as prole deviations, and t as covariation (Venkatraman, 1989; Camillus and Venkatraman, 1984). In this study we assessed the nature of t between strategy and environment as well as the t between strategy and structure using t as moderation perspective since it is widely used by strategic management researchers (e.g. Goll and Rasheed, 1997; Matthews and Scott, 1995). The remaining sections of this paper we discuss the conceptual model, research methodology, data analysis and ndings. In the next section we introduce the conceptual framework on the basis of which the hypotheses have been developed. In the section on Research Methodology we discuss the constructs used for measurement, the sampling procedure, the execution of the survey and issue of common method variance. In the Data Analysis section we explain the ndings from the analysis. In the last section we summarise the inferences derived from this study and indicate some of its limitations and a few directions for future research. 2. Research model and hypotheses In Figure 1 we present the conceptual model used in this study. The model shows that the relationship between business-level strategy and organisational performance is inuenced by the external environment and organisational structure. Strategic management literature suggests that environment can be operationalised using three constructs namely dynamism, complexity and hostility. Dynamism is also referred to as uncertainty and is dened as the rate of

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Figure 1. The moderating effects of environment and structure in the relationship between business-level strategy and performance

change of innovation in the industry as well as the uncertainty or unpredictability of the actions of competitors and customers (Lawrence and Lorsch, 1967; Thompson, 1967; Burns and Stalker, 1961). Complexity is also referred to as heterogeneity and is dened as variations among the rms markets that necessitate diversity in production and marketing techniques (Chandler, 1962; Khandwalla, 1972; Porter, 1979). Hostility is dened as the degree of threat to the rm posed by the intensity of competition and the downswings and upswings of the rms principal industry (Khandwalla, 1973; Miller and Friesen, 1978). Some authors have used the term municence (e.g. Goll and Rasheed, 1997) to examine the extent to which environmental forces support the organisation. This is the opposite of environmental hostility. In this study we have operationalised environment using the dynamism and hostility constructs (Miller, 1987). Burns and Stalker (1961) have proposed the theory of mechanistic and organic organisational systems which provides a simple framework to understand which

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organisational forms are suitable for specic contexts of change and stability. This framework provides a distinction between mechanistic and organic forms of structure in terms of tasks, control, communication, organisational knowledge, governance, values and prestige. The attributes of mechanistic structures include centralised decision making, strict adherence to formal rules and procedures and carefully constructed reporting relationships whereas organic structures facilitate decentralised decision making, organisational adaptiveness and exibility and de-emphasis on formal rules and procedures (Slevin and Covin, 1997). This study examines the moderating effects of external environment and organisational structure on the relationship between business-level strategy and performance. In the remaining part of this section we discuss the views of various authors regarding these contingent relationships and the ndings of some relevant empirical studies. On the basis of this discussion we derive two hypotheses to be tested in this study. Previous empirical studies suggest that there is a close relationship between strategy and environment and some strategies are appropriate for some environments (e.g. Homburg et al., 1999; Ward et al., 1996). The performance of an organisation largely depends upon the strategy-environment t (Mintzberg, 1979). The success of business-level strategy is contingent on industry environment characteristics (Pelham, 1999). Scholars have argued that a cost-leadership strategy is appropriate for stable and predictable environments and a differentiation strategy is suitable for dynamic and uncertain environments (Porter, 1980; Hambrick, 1983a; Kim and Lim, 1988; Miller, 1988; Marlin et al., 1994a). Firms adopting a cost-leadership strategy are likely to scan the external environment for opportunities and the ones adopting a differentiation strategy may scan for environmental threats (Jennings and Lumpkin, 1992). In environments which have low levels of complexity and dynamism it may not be necessary for rms to make large xed investments for sustaining low unit costs and hence the risks can be minimised (Marlin et al., 1994b; Miller, 1986). In such environments organisations need not go for high levels of innovation and product enhancement because the main competitors do not normally make huge changes in their strategies (Kabadayi et al., 2007). In hostile environments rms need to improve efciency to lower the costs and they may not give high emphasis on product differentiation (Hambrick, 1983a; Miller, 1991; Ward et al., 1996). According to Beal (2000) rms employing integrated strategies by combining cost-leadership and differentiation in mature industries need to scan the external environment and analyse information regarding their own resources and capabilities. Some of the previous empirical studies (e.g. Jauch et al., 1980; Prescott, 1986) indicated a few signicant interactions of environment variables with strategy variables and suggested that these interactions did not add signicant R-square levels of the performance models (Pelham, 1999, p. 36). Only a few empirical studies (e.g. Prescott, 1986; Lawless and Finch, 1989; Kotha and Nair, 1995; Lee and Miller, 1996; Hambrick, 1983a) have examined the impact of external environment in the relationship between business-level strategy and performance. Previous studies have been inconclusive about the nature of impact of the external environment in the relationship between business-level strategy and performance and hence there is a gap in the literature. We formulated hypothesis H1 in order to clarify this relationship. H1. Environmental dynamism and hostility moderate the relationship between business-level strategy and organisational performance.

A few studies have examined the impact of organisational structure on the relationship between strategy and performance. Jennings and Seaman (1994) in a study conducted among organisations belonging to the savings and loan industry compared the performance of rms belong to the following two groups: (1) the organisations with a high-level of adaptation to environmental changes having the best prospector strategy-organic structure t; and (2) rms with a low-level of adaptation having the best defender strategymechanistic structure t. Jennings and Seaman found that there was no signicant difference in the performance between these groups. According to Hutt et al. (1988) organic structures are more likely to promote autonomous strategic initiatives than mechanistic structures. Autonomous strategic initiatives are necessary in organisations employing either a differentiation strategy or an integrated strategy. Previous empirical studies suggest that a decentralized, informal, and specialized organizational structure is necessary for implementing a differentiation strategy (Miller, 1986; Ward et al., 1996). Such structures support the implementation of a differentiation strategy by enabling the organisation to scan the activities of its main competitors and to understand the perceptions of its customers (Miller, 1987). While implementing differentiation strategy it may be necessary for an organisation to carry out complex tasks and a specialised structure will be helpful during the implementation process (Ruekert et al., 1985). An organic structure which is decentralised, informal and complex in nature is likely to facilitate the innovation process in an organisation (Russell and Russell, 1992). It may be necessary for organisations employing a differentiation strategy to promote innovation to a large extent and hence an organic structure is likely to be more appropriate than a mechanistic structure for such organisations. It will be difcult to implement a differentiation strategy through innovation within a mechanistic structure (Burns and Stalker, 1961). Organisations implementing a cost-leadership strategy give emphasis to highly efcient and low cost production systems in order to minimise the prices. It may be difcult for organisations implementing such a strategy to achieve the desired levels of efciency through specialised structures (Ruekert and Walker, 1987). For such organisations a highly formal, centralized, and unspecialized structure will be more appropriate (Hambrick, 1980; Ruekert et al., 1985; Walker and Ruekert, 1987). The formal rules and procedures enforced by such structures help the organisations to standardise activities and minimise administrative costs (Walker and Ruekert, 1987). Hence such organisations may need mechanistic structures which emphasise cost controls and standard procedures (Miller, 1986). The nature of inuence of organisational structure in the relationship between business-level strategy and performance has not received the empirical attention it deserves. Hence this study will examine the moderating effect of structure in the relationship between business-level strategy and performance by testing hypothesis H2. H2. Organisational structure moderates the relationship between business-level strategy and organisational performance. 3. Research methodology In this section we discuss the execution of the survey and the measures taken to minimise the impact of common method variance.

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3.1 Execution of the survey We collected the data through a postal survey using a survey instrument which was validated by a panel of strategy scholars. We received responses from 124 manufacturing organisations and the respondents were all at CEO level. The data analysis relies on multivariate statistical methods. We used Seven-point Likert-type scales to measure the constructs. Business-level strategy was measured using cost-leadership and differentiation dimensions and the measurement scale was adapted from Luo and Zhao (2004). The items in the scale highlighted various competitive activities and the respondents were asked to indicate the extent to which their rms focused on these activities in comparison with their main competitors in the last ve years. We assessed the external environment using the constructs dynamism and hostility and we used a measurement scale which was adapted from Miller (1987). We asked the respondents to indicate the changes in their organisations external environment in the last ve years. The dynamism scale examined the extent of change taken place in the areas of technology, R&D and innovation. The hostility scale looked at the changes in market activities of the main competitors. Organisational structure was measured using nine items. One end of the seven-point scale (1) was oriented towards a mechanistic structure and the other end (7) towards an organic structure. The CEOs were asked to indicate their assessment of the organisational structure during the last ve years. In this study organisational performance was measured using subjective and objective measures. Subjective measures are objective fullment and relative competitive performance and objective measures are return on assets (ROA) and return on sales (ROS). We have adapted the measurement scales for objective fullment and relative competitive performance from Ramanujam and Venkatraman (1987a, b). Objective fullment is dened as the extent to which the organisation has achieved its short-term and long-term performance objectives and minimised the problems. We asked the respondents to indicate the extent to which their organisation has fullled its objectives in the last ve years. Relative competitive performance is dened as the extent to which organisational performance has either improved or deteriorated in terms of sales, prot, market share, return on assets, return on equity, return on sales, current ratio, overall rm performance and competitive position. We asked the respondents to compare their performance in the last ve years with their main competitors based on these nine factors. The literature provides strong support for the technique of subjective performance measurement (e.g. Dess and Robinson, 1984; Pearce et al., 1987; Priem et al., 1995; Brews and Hunt, 1999). The measurement scales that we used in this study are shown in the Appendix. We collected the nancial data for ve years from 2002 to 2006 for 88 out of the 124 organisations which participated in the survey from a commercial database and calculated the protability ratios namely ROA and ROS. Average values of these three ratios for ve years were calculated. We focused on manufacturing rms in the UK for this study. The manufacturing output in the UK accounts for 15 per cent of the economy and hence this study gains signicance in this context. We selected the sample of rms for the survey from a leading commercial database. We used UK SIC (2003) codes as the basis for selecting the sample. We included companies having more than 50 employees belonging to Section D Manufacturing, Subsections DJ, DK, DL and DM in the sample. These SIC codes represent the Electrical and Mechanical Engineering rms in the UK. Altogether there were 4,511 companies in the sampling frame. According to the guidelines

provided by Salant and Dillman (1994) the minimum number of responses necessary at 95 per cent condence level and ^ 10 per cent sampling error for a population size of 5,000 based on the conservative assumption that the population is relatively varied (50/50 split) is 94. We generated a list of 700 organisations from a population consisting of 4,511 companies as randomly as possible. We made telephone calls to these 700 organisations to verify the names of the Chief Executives and the addresses of the organisations. Some of the organisations clearly indicated that they did not want to take part in a survey and we removed from the sample. Eight rms had gone into administration and hence could not take part in the survey. A total of 16 organisations were inactive and we had to exclude them from the sample. Finally we had a sample consisting of 569 organisations. We mailed questionnaires to the Chief Executives of these 569 organisations with a covering letter and business reply envelopes. Salant and Dillman (1994) suggested sending a follow-up postcard to the members of the sample eight days after sending the questionnaire. However, since a telephone call is more effective than a postcard, we made telephone calls to all the companies that had not responded eight days after receiving the questionnaires. Following Salant and Dillman (1994), three weeks after the rst mailing, we mailed questionnaires with covering letters and business reply envelopes again to the non-respondents. Our data collection process resulted in 124 usable responses. Eleven questionnaires were undeliverable. The overall response rate according to the formula suggested by De Vaus (2002) is 22.22 per cent. 3.2 Common method variance Common method variance (CMV) refers to the amount of spurious covariance shared among variables because of the common method used in collecting data (Buckley et al., 1990). In typical survey studies in which the same rater responds to the items in a single questionnaire at the same point in time, data are likely to be susceptible to CMV (Kemery and Dunlap, 1986; Lindell and Whitney, 2001). Potential causes for spurious correlation between self-report measures are consistency motif, social desirability, behaviour due to stimuli setting and knowledge deciency (Podsakoff and Organ, 1986; Miller and Roth, 1994). The constructs used in this study required the respondents to report on discrete events reducing the likelihood of distorted self-reports and/or socially desirable responses. Hence we managed to minimise the CMV problem to a great extent. For reducing the impact of consistency motif, Salancik and Pfeffer (1997) suggested that the questionnaire could be designed in such a way that the dependent variables follow the independent variables. In this study we designed the questionnaire in line with this suggestion. CMV problem can be moderated by choosing the right informant (Miller and Roth, 1994). High ranking informants can be a more reliable source of information than their lower ranking counterparts (Phillips, 1981). Strategic decisions are top-level decisions and only those directly involved can provide valid answers (Tan and Tan, 2005). In this study the CEOs of the participating organisations were the respondents and hence the CMV problem is moderated. Podsakoff et al. (2003) have suggested that protecting respondent anonymity could reduce method bias. In the covering letter accompanying the questionnaires we clearly indicated that all replies would be treated in the strictest condence and no names or identities of individual rms would be revealed or disclosed to third parties.

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The one factor test proposed by Harman (1967) offers a statistical procedure for testing the magnitude of CMV problem. According to this test all the variables of interest are entered into a factor analysis. If there is a major CMV problem the test result will indicate: (1) emergence of a single or very small number of factors from the factor analysis; and/or (2) one general factor accounting for the majority of covariance in the predictor and criterion variables (Podsakoff and Organ, 1986, p. 536). We entered all the 41 variables into an exploratory factor analysis, using principal components method to determine the number of factors that are necessary to account for the variance in the variables. The exploratory factor analysis carried out revealed the presence of 12 distinct factors with eigenvalues greater than 1.0, rather than a single factor. The 12 factors together accounted for 70.78 percent of the total variance; the rst (largest) factor did not account for a majority of the variance (19.45 per cent). Thus, no general factor is apparent. 4. Data analysis We present the data analysis in two sections namely Preliminary Data Analysis and Moderated Regression Analysis. In the Preliminary Data Analysis section we present the descriptive statistics, results of the test conducted to assess non-response bias and the test carried out to assess the reliability of the measures. 4.1 Preliminary analysis The means and standard deviations of the variables included in this study are shown in Table I. The most fundamental assumption in multivariate analysis is normality and if the variation from the normal distribution is sufciently large, the statistical tests become invalid (Hair et al., 2006). All the variables are assumed to be normally distributed and the normality of the variables was ascertained by examining the histograms and Normal Q-Q plots. There were no missing data in the questionnaires used for analysis. We used the procedure adopted by Ghobadian and ORegan (2006) to assess non-response bias. We examined non-response bias by comparing the means of the responses received from early and late respondents. We conducted t-tests to nd out whether signicant differences existed in the means of cost-leadership, differentiation, dynamism, hostility, structure, performance-objective fullment and relative competitive performance variables between these two groups. The p values we have obtained from the t-tests corresponding to each of these variables are shown in Table II. The tests indicated that no signicant difference existed between the means of the responses received from early and late respondents. We contacted some of the non-respondents and requested to answer a few questions relating to business-level strategy. We compared the difference between the means of the measures of the main sample and that of 35 respondents who answered a small number of questions, statistically by doing a t-test. The differences were not statistically signicant. We requested the non-respondents who did not agree to answer the small number of questions to explain the reasons for non-participation. In most of the cases they said

Variable 4.8347 4.5860 4.3790 4.7984 4.9798 4.9686 5.9191 3.4435 2.15 1 0.449 * * 0.075 0.303 * * 0.094 0.016 0.121 0.051 1 0.127 0.317 * * 0.127 2 0.099 2 0.023 0.162 1 0.066 2 0.130 2 0.094 2 0.026 0.044 1 0.417 * * 2 0.145 0.045 0.139 0.9972 0.9752 1.0097 1.0968 0.7293 0.8938 11.0706 7.3850 0.871 1 0.113 0.163 0.057 0.353 * * 0.151 2 0.069 0.069 0.056

Mean

SD

Cost-leadership Differentiation Dynamism Hostility Objective fullment Relative competitive performance ROA ROS Size

1 0.047 0.061 0.062

1 0.843 * * 2 0.143

1 2 0.022

Notes: *Correlation is signicant at the 0.05 level; * *Correlation is signicant at the 0.01 level

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Table I. Correlations, means and standard deviations of business-level strategy, environment and performance variables

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that it was because of lack of time to complete the questionnaire. In some cases the company policy did not allow them to respond to surveys. The internal consistency method is the most commonly used method to assess the reliability of measures and it assesses the consistency among the variables in a summated scale. A diagnostic measure of internal consistency which is commonly used in management research is the reliability coefcient which assesses the consistency of the whole scale. Cronbachs alpha (Cronbach, 1951; Nunnally, 1979; Peter, 1979) is the most widely used reliability coefcient to measure internal consistency. In this study we used Cronbachs alpha to assess the reliability of the scales. Even though many authors have suggested that the lower limit of Cronbachs alpha is 0.7, in empirical research 0.6 is also acceptable (Robinson et al., 1991). The Cronbachs alpha values we have obtained for each of the scales are shown in Table III. 4.2 Moderated regression analysis We conducted moderated regression analysis and sub-group analysis to examine the moderating effects of environment and structure on the relationship between business-level strategy and performance. Sharma et al. (1981) developed a methodology for carrying out moderated regression analysis and this was adopted by Prescott (1986), Goll and Sambharya (1995), Goll and Rasheed (1997) and Goll and Rasheed (2004). We adopted this procedure in our study to carry out moderated regression analysis. A specication variable is one which species the form or magnitude or both of the relationship between a predictor and a criterion variable (Lazarsfeld, 1955; Rosenberg, 1968). Moderator variables can be considered to be subset of specication variables. According to Sharma et al. (1981) there are two types of moderator variables. One type of moderator variable inuences the strength of relationship between the predictor (independent) variables and the criterion

Variable Cost-leadership Differentiation Environmental dynamism Environmental hostility Structure Performance Objective fullment Relative competitive performance

p value (two-tailed) 0.40 1.00 0.23 0.48 0.26 0.85 0.81

Table II. Results of the t-tests comparing early and late respondents

Variable Cost-leadership Differentiation Environmental dynamism Environmental hostility Structure Performance Objective fullment Relative competitive performance

Cronbachs alpha 0.825 0.776 0.696 0.786 0.660 0.755 0.917

Table III. Cronbachs Alpha values of the measurement scales

(dependent) variable and the other type modies the form of relationship (e.g. changing the sign of the slope). Sharma et al. (1981) developed a typology of specication variables using two dimensions namely the relationship with the criterion variable and interaction with the predictor variable. If the specication variable is related to the criterion or predictor variable or both but does not interact with the predictor variable, the variable is referred to as an intervening, exogenous, antecedent, suppressor or additional predictor variable depending on its other characteristics. A type of moderator variable known as homologiser affects the strength of the relationship whereas the other two types of moderator variables known as quasi moderators and pure moderators inuence the form of the relationship between the predictor and criterion variables. A homologiser does not interact with the predictor variable and is not signicantly related to either the predictor or criterion variable. This type of variable inuences the strength of relationship between the predictor and criterion variables. The quasi-moderator interacts with the predictor variable and is related to the criterion and/or predictor variable. The pure moderator variable interacts with the predictor variable but it is not related to the criterion and/or predictor variable. These two types of variables modify the form of relationship between the criterion and predictor variables. We carried out regression analysis separately on the four dependent variables namely objective fullment, relative competitive performance, ROA and ROS. The details of the analysis are presented below. 4.2.1 Hypothesis H1: The moderating effect of environment. We carried out two sets of moderated regression analyses and the details of the independent and dependent variables are shown in Tables IV and V. In the rst set of four regressions we regressed the performance measures on cost-leadership and environment and in the second set of four regressions, we regressed the performance measures on differentiation and environment. We controlled for organisational size which was
Independent variables for Regressions 1 to 5 Cost-leadership Dynamism Hostility Size Interaction terms for Regressions 1 to 5 Cost-leadership Dynamism Cost-leadership Hostility Dynamism Hostility

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Regression Dependent variable 1 2 3 4 Objective fullment Relative competitive performance ROA ROS

Table IV. Variables used for regressing performance on business-level strategy, environment

Regression Dependent variable 5 6 7 8 Objective fullment Relative competitive performance ROA ROS

Independent variables for Regressions 6 to 10 Differentiation Dynamism Hostility Size

Interaction terms for Regressions 6 to 10 Differentiation Dynamism Differentiation Hostility Dynamism Hostility Table V. Variables used for regressing performance on business-level strategy, environment

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measured as the total number of employees in the organisation since this variable may be related to rm performance. The means, standard deviations and correlations of all the variables involved in testing this hypothesis are shown in Table I. The correlations between objective fullment and the two types of business-level strategies are signicant. The correlations of these two types of strategies with relative competitive performance are positive but not signicant. There is a negative correlation between cost-leadership and ROA and a positive correlation between ROA and differentiation. The correlations between ROS and the two strategic types are positive. However, none of the correlations between the objective performance measures and the strategic types is signicant. These variations in the correlations between strategic types and performance measures suggest the need to examine the role of contextual factors as potential moderators of the relationship. Table VI shows the models summaries obtained by regressing the performance measures on strategy and environment measures in the eight regressions as shown in Tables IV and V. The results of the sub-group analyses examining the relationship between business-level strategy and the performance measures in high-low dynamism and hostility environments are summarised in Table VII. There are 51 organisations in the low dynamism group and 73 in the high dynamism group. In the low hostility group there are 58 organisations and 66 in the in the high hostility group. The results obtained from the moderated regression analysis are summarised in Table VIII[1]. In regression 1 objective fullment was regressed on cost-leadership and environment. Model 1 comprises of cost-leadership, dynamism, hostility and size as independent variables and model 2 includes the interaction terms in addition to these three variables. We can see that the change in R 2 value is not signicant and hence there is no signicant interaction between environmental variables namely dynamism and hostility and cost-leadership strategy. In the second step of the analysis we examined the correlations between the environmental variables and both the predictor and criterion variables to determine whether they are signicantly related to each other or not. The correlation matrix shown in Table I indicates that cost-leadership is not signicantly correlated with either environmental dynamism or hostility. Objective fullment is signicantly correlated with environmental dynamism but not with hostility. Hence environmental dynamism could be an intervening, exogenous, antecedent, suppressor or a predictor variable in the relationship between cost-leadership and objective fullment. Further analysis (e.g. Rosenberg, 1968) is necessary to ascertain the nature of this variable. The sub-group analysis shown in Table VII indicates that the correlations between cost-leadership and objective fullment are not signicantly different in high-low hostility environments. Hence environmental hostility does not act as a moderator in this relationship. The correlation was much stronger for the low hostility and low dynamism groups indicating that a cost-leadership strategy is more favourable in environments with low dynamism and hostility. In regression 2, relative competitive performance was regressed on cost-leadership and environment. The R 2 change is signicant and hence environmental dynamism and hostility could be either pure or quasi-moderators in this relationship. In order to assess the nature of relationships we examined the correlations between the

Beta coefcients Independent variables and interaction terms Model 1 Model 2 1.006 * 2 0.010 0.275 2 0.242 2 0.886 0.624 0.083 0.223 1.126 Regression 1: Objective fullment regressed on cost-leadership, environment Cost-leadership 0.307 * * Dynamism 0.252 * * Hostility 0.013 Cost-leadership Dynamism Cost-leadership Hostility Dynamism Hostility Size 0.081 0.200 R2 F Change 7.441 * *

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Regression 2: Relative competitive performance regressed on cost-leadership, environment Cost-leadership 0.138 0.269 Dynamism 0.117 2 1.213 * Hostility 2 0.154 2 0.819 Cost-leadership Dynamism 0.261 Cost-leadership Hostility 2 0.484 Dynamism Hostility 1.650 * * Size 0.042 0.071 0.058 0.128 R2 F Change 1.838 3.109 * Regression 3: ROA regressed on cost-leadership, environment Cost-leadership 2 0.047 Dynamism 2 0.061 Hostility 2 0.079 Cost-leadership Dynamism Cost-leadership Hostility Dynamism Hostility Size 2 0.127 0.035 R2 F Change 0.747 Regression 4: ROS regressed on cost-leadership, environment Cost-leadership 0.076 Dynamism 2 0.029 Hostility 2 0.026 Cost-leadership Dynamism Cost-leadership Hostility Dynamism Hostility Size 2 0.020 0.007 R2 F Change 0.148 Regression 5: Objective fullment regressed on differentiation, environment Differentiation 0.203 * Dynamism 0.207 * Hostility 0.020 Differentiation Dynamism Differentiation Hostility Dynamism Hostility Size 0.094 0.142 R2 F Change 4.910 * * 2 0.885 2 0.623 2 0.743 0.606 0.742 0.195 2 0.111 0.055 0.586 2 0.186 2 0.226 2 0.255 0.187 0.234 0.094 2 0.015 0.009 0.060 0.509 2 0.198 2 0.326 2 0.282 2 0.227 0.825 0.105 0.158 0.758 (continued )

Table VI. Model summaries obtained by regressing performance on business-level strategy, environment

MD 48,6

Beta coefcients Independent variables and interaction terms Model 1 Model 2 Regression 6: Relative competitive performance regressed on differentiation, environment Differentiation 0.051 2 0.525 Dynamism 0.115 2 1.054 Hostility 2 0.150 2 1.407 * * Differentiation Dynamism 0.365 Differentiation Hostility 0.628 Dynamism Hostility 1.324 * Size 0.047 0.085 0.042 0.129 R2 F Change 1.296 3.863 * * Regression 7: ROA regressed on differentiation, environment Differentiation 0.074 Dynamism 2 0.101 Hostility 2 0.082 Differentiation Dynamism Differentiation Hostility Dynamism Hostility Size 2 0.126 0.037 R2 F Change 0.797 Regression 8: ROS regressed on differentiation, environment Differentiation 0.164 Dynamism 2 0.092 Hostility 2 0.026 Differentiation Dynamism Differentiation Hostility Dynamism Hostility Size 2 0.014 2 0.023 R F Change 0.487 0.163 0.221 2 0.450 2 0.659 0.427 0.110 2 0.112 0.051 0.403 0.826 0.126 2 0.048 2 0.825 2 0.334 0.420 2 0.012 0.048 0.696

920

Table VI.

Notes: * p # 0.05; * *p # 0.01

environmental variables and the criterion and predictor variables (Prescott, 1986). Both dynamism and hostility are not signicantly correlated with either cost-leadership or relative competitive performance. Hence both dynamism and hostility act as pure moderators in the relationship between cost-leadership and relative competitive performance. The sub-group analysis shown in Table VII indicates that the performance levels between the sub-groups are not signicantly different. However, the high dynamism group and the low hostility group have slightly higher level of performance. Regressions 3 and 4 indicate that neither dynamism, nor hostility act as moderators in the relationship between cost-leadership and the performance measures, namely ROA and ROS. The sub-group analyses indicate that the high dynamism group had higher levels of performance in terms of ROA and ROS. The high hostility group had a higher level of performance only in terms of ROS. The ndings of regressions 5, 7 and 8 indicate that neither dynamism nor hostility act as moderators in the relationship between differentiation and the performance measures namely objective fullment, ROA and ROS. Regression 6 suggests that dynamism acts as a quasi-moderator and

High dynamism Correlations between cost-leadership and objective fullment Correlations between cost-leadership and relative competitive performance Correlations between cost-leadership and ROA Correlations between cost-leadership and ROS Correlations between differentiation and objective fullment Correlations between differentiation and relative competitive performance Correlations between differentiation and ROA Correlations between differentiation and ROS 0.276 * 0.195 0.036 0.148 0.183 0.144 0.051 0.053

Low dynamism 0.387 * * 0.109 2 0.110 0.037 0.331 * 0.051 0.136 0.341

High hostility 0.281 * 0.064 2 0.017 0.085 0.305 * 0.243 * 0.070 2 0.023

Low hostility 0.426 * * 0.255 2 0.105 0.063 0.298 * 2 0.021 2 0.005 0.255

Business-level strategy

921

Notes: *Correlation is signicant at the 0.05 level (two-tailed); * *Correlation is signicant at the 0.01 level (two-tailed)

Table VII. Results of the sub-group analysis examining the relationship between business-level strategy and performance in high-low dynamism and hostility environments

hostility acts as a pure moderator in the relationship between differentiation and relative competitive performance. The sub-group analyses suggest that the low dynamism group had higher correlation than the high dynamism group in the relationship between differentiation and the performance measures namely objective fullment, ROA and ROS. However, the high dynamism group had a higher correlation than the low dynamism group when relative competitive performance was the dependent variable. The high hostility group had a higher correlation between differentiation and the performance measures namely objective fullment and relative competitive performance. However, the low hostility group had a higher correlation than the high hostility group when ROS was the dependent variable. The moderated regression analysis indicates that environmental dynamism and hostility act as moderators only in the relationship between business-level strategy and relative competitive performance. Environment does not act as a moderator in the relationship between business-level strategy and the remaining performance measures namely objective fullment, ROA and ROS. Cost-leadership strategy has a stronger relationship with relative competitive performance when the level of dynamism is higher. Similarly this relationship is stronger when the level of hostility is low. The relationship between differentiation and relative competitive performance is stronger for the high dynamism and high hostility groups. It is interesting to note that in terms of nancial performance, a cost-leadership strategy is more favourable in highly dynamic environments and a differentiation strategy is more helpful in environments with low levels of dynamism. The sub-group analyses with the subjective performance measures indicate that a cost-leadership strategy is more favourable in low hostility environments and a differentiation strategy is more helpful in highly hostile environments.

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Hypothesised Regression moderators Predictor variable Criterion variable Cost-leadership: not signicant Not signicant Not signicant Objective fullment: signicant No Correlation is stronger for the low dynamism group

Table VIII. Results of the moderated regression analysis performance regressed on business-level strategy, environment
Correlations with Interaction effect Results of the sub-group analysis Type of effect Intervening, exogenous, antecedent, suppressor or predictor Not a moderator Cost-leadership: not signicant Relative competitive performance: not signicant Not signicant ROA: not signicant No Yes Not signicant Cost-leadership: not signicant Pure moderator Pure moderator Not a moderator Not signicant Cost-leadership: not signicant Not signicant Not signicant ROS: not signicant Not signicant No Not a moderator Not a moderator Correlations between the predictor and criterion variables are not signicantly different for both the groups. There is a stronger correlation for the low hostility group High dynamism group performed slightly better than the low dynamism group Low hostility group performed slightly better than the high hostility group Correlations are not signicantly different for both the groups. The high dynamism group had slightly higher level of performance Correlations are not signicantly different for both the groups. Correlations are not signicantly different for both the groups. The high dynamism group had slightly stronger correlation Correlations are not signicantly different for both the groups. The high hostility group had stronger correlation Not a moderator (continued )

Dynamism

Hostility

Dynamism

Hostility

Dynamism

Hostility

Dynamism

Hostility

Correlations with Predictor variable Criterion variable Differentiation: signicant Not signicant Not signicant Objective fullment: signicant No The low dynamism group had stronger correlation Interaction effect Results of the sub-group analysis Type of effect

Hypothesised Regression moderators

Dynamism

Hostility

6 Not signicant Differentiation: signicant Not signicant Not signicant ROA: not signicant No Not signicant

Dynamism

Differentiation: signicant

Relative competitive performance: not signicant

Yes

Hostility

Dynamism

Hostility

8 Not signicant Not signicant

Dynamism

Differentiation: signicant

ROS: not signicant

No

Hostility

Intervening, exogenous, antecedent, suppressor or predictor Correlations are not signicantly Not a moderator different for both the groups. The high hostility group had slightly higher correlation. Quasi-moderator High dynamism group performed slightly better than the low dynamism group High hostility group performed Pure moderator signicantly better than the low hostility group The correlation for the low Intervening, exogenous, dynamism group was greater antecedent, suppressor or predictor Correlations are not signicantly Not a moderator different for both the groups. The correlation for the high hostility group was greater Correlation for the low Intervening, exogenous, dynamism group was greater antecedent, suppressor or predictor Correlations are not signicantly Not a moderator different for both the groups. The low hostility group had higher correlation

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923

Table VIII.

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924

4.2.2 Hypothesis H4: The role of structure. We performed eight moderated regression analyses to assess whether structure acts as a moderator in the relationship between business-level strategy and performance, as shown in Tables IX and X. In the rst set of four regressions, we regressed the performance measures on cost-leadership and structure and in the second set of four regressions, we regressed the performance measures on differentiation and structure. We controlled for organisational size which was measured as the total number of employees in the organisation since this variable may be related to rm performance. The means, standard deviations and correlations of all the variables involved in testing this hypothesis are shown in Table XI. Table XII shows the models summaries obtained by regressing the performance measures on strategy and structure in the eight regressions. The results of the sub-group analyses examining the relationship between business-level strategy and the performance measures for organisations with organic and mechanistic structures are summarised in Table XIII. The above-median group represents organic structure and below-median group represents mechanistic structure. 70 organisations belonged to the organic structure group and 54 to the mechanistic structure group. The results of the eight moderated regression analyses are summarised in Table XIV. In regression 1, objective fullment was regressed on cost-leadership and structure. The change in R 2 value between model 1 and model 2 is not signicant and hence there is no interaction between structure and cost-leadership. Structure is signicantly correlated with objective fullment and hence it could be an intervening, exogenous, antecedent, suppressor or a predictor variable. The sub-group analysis shown in Table XIII indicates that the performances of mechanistic and organic structure groups are more or less at the same level. The results of regression 2 indicate that structure does not moderate the relationship between cost-leadership and relative competitive performance. Regression 3 suggests
Independent variables for Regressions 1 to 4 Cost-leadership Structure Size Interaction terms for Regressions 1 to 4 Cost-leadership Structure

Regression Dependent variable Table IX. Variables used for regressing performance on business-level strategy, structure 1 2 3 4 Objective fullment Relative competitive performance ROA ROS

Regression Dependent variable Table X. Variables used for regressing performance on business-level strategy, structure 5 6 7 8 Objective fullment Relative competitive performance ROA ROS

Independent variables for Regressions 5 to 8 Differentiation Structure Size

Interaction terms for Regressions 5 to 8 Differentiation Structure

Variable 4.8347 4.5860 4.2858 4.9798 4.9686 5.9191 3.4435 2.1500 1 0.409 * 0.303 * 0.094 0.016 0.121 0.051 1 0.466 * 0.403 * 2 0.063 0.049 0.160 1 0.417 * 2 0.145 0.045 0.139 0.9972 0.9752 0.8097 0.7293 0.8938 11.0706 7.3850 0.8710 1 0.113 0.097 0.353 * 0.151 2 0.069 0.069 0.056

Mean

SD

1. 2. 3, 4. 5. 6. 7. 8.

Cost-leadership Differentiation Structure Objective fullment Relative competitive performance ROA ROS Size

1 0.047 0.061 0.062

1 0.843 * 2 0.143

1 2 0.022

Note: *Correlation is signicant at the 0.01 level

Business-level strategy

Table XI. Correlations, means and standard deviations of business-level strategy, structure and performance variables

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MD 48,6

Independent variables and interaction terms

Model 1

Beta coefcients Model 2 0.969 * 1.019 * * 2 0.937 0.056 0.332 2.907 2 0.093 0.208 0.293 2 0.008 0.176 0.230 0.948 0.839 2 1.412 2 0.139 0.061 3.232 1.893 * * 1.635 * * 2 2.575 * * 2 0.052 0.129 11.600 * * 0.552 0.747 * 2 0.648 0.065 0.246 1.373 2 0.525 0.071 0.685 0.000 0.178 1.406 (continued )

926

Regression 1: Objective fullment regressed on cost-leadership, structure Cost-leadership 0.308 * * Structure 0.428 * * Cost-leadership Structure Size 0.053 0.316 R2 F Change 18.455 * Regression 2: Relative competitive performance regressed on cost-leadership, structure Cost-leadership 0.113 Structure 0.393 * * Cost-leadership Structure Size 2 0.007 0.175 R2 F Change 8.470 * * Regression 3: ROA regressed on cost-leadership, structure Cost-leadership Structure Cost-leadership Structure Size R2 F Change Regression 4: ROS regressed on cost-leadership, structure Cost-leadership Structure Cost-leadership Structure Size R2 F Change 2 0.052 2 0.031 2 0.131 0.024 0.698 0.067 0.048 2 0.038 0.008 0.220

Regression 5: Objective fullment regressed on differentiation, structure Differentiation 0.136 Structure 0.400 * * Differentiation Structure Size 0.068 0.237 R2 F Change 12.421 * Regression 6: Relative competitive performance regressed on differentiation, structure Differentiation 2 0.085 Structure 0.438 * Differentiation Structure Size 2 0.004 0.168 R2 F Change 8.084 * *

Table XII. Model summaries obtained by regressing performance on business-level strategy, structure

Independent variables and interaction terms Regression 7: ROA regressed on differentiation, structure Differentiation Structure Differentiation Structure Size R2 F Change Regression 8: ROS regressed on differentiation, structure Differentiation Structure Differentiation Structure Size R2 F Change Notes: *p # 0.05; * *p # 0.01

Beta coefcients Model 1 Model 2

Business-level strategy

0.053 2 0.059 2 0.135 0.024 0.686 0.122 0.003 2 0.033 0.016 0.443

0.376 0.215 2 0.510 2 0.143 0.030 0.561 1.124 * 0.853 * 2 1.583 * 2 0.055 0.079 5.690 *

927

Table XII.

Mechanistic structure Correlations between cost-leadership and objective fullment Correlations between cost-leadership and relative competitive performance Correlations between cost-leadership and ROA Correlations between cost-leadership and ROS Correlations between differentiation and objective fullment Correlations between differentiation and relative competitive performance Correlations between differentiation and ROA Correlations between differentiation and ROS 0.358 * * 0.149 0.137 0.371 * 0.166 2 0.003 0.049 0.238

Organic structure 0.369 * * 0.149 2 0.297 * 2 0.232 0.314 * * 0.037 0.007 2 0.055

Notes: *Correlation is signicant at the 0.05 level (two-tailed); * *Correlation is signicant at the 0.01 level (two-tailed)

Table XIII. Results of the sub-group analysis examining the relationship between business-level strategy and performance in organisations with organic and mechanistic structures

that structure acts as a homologiser in the relationship between cost-leadership and ROA. The results of the sub-group analysis indicate that a mechanistic structure is more suitable for organisations adopting cost-leadership strategy. The ndings of regression 4 suggest that structure is a pure moderator in the relationship between cost-leadership and ROS. The sub-group analysis indicates that a mechanistic structure is more helpful in improving performance for organisations following a cost-leadership strategy. The results of regressions 5, 6 and 7 indicate that structure does not act as a moderator in the relationship between differentiation and the performance measures namely objective fullment, relative competitive performance

MD 48,6

928

Correlations with Hypothesised Regression moderator Predictor variable Criterion variable Interaction Results of the sub-group effect analysis No Cost-leadership: not signicant Cost-leadership: not signicant Cost-leadership: signicant ROA: signicant No Relative competitive No performance: not signicant Objective fullment: signicant

Table XIV. Results of the moderated regression analysis performance regressed on business-level strategy, structure Type of effect Intervening, exogenous, antecedent, suppressor or predictor Intervening, exogenous, antecedent, suppressor or predictor Homologiser Cost-leadership: signicant Differentiation: not signicant Differentiation: not signicant Differentiation: signicant Differentiation ROS ROA: signicant Objective fullment: signicant No ROS: signicant Yes Pure moderator Not much difference in the correlations between the groups No difference in the correlations between the groups Correlations are signicantly different for both the groups. The mechanistic structure group had stronger correlation The mechanistic structure group performed signicantly better than the organic structure group The correlation is stronger for the organic structure group The organic structure group had stronger correlation No Yes Relative competitive No performance: not signicant The mechanistic structure group had stronger correlation The mechanistic structure group performed better than the organic structure group Intervening, exogenous, antecedent, suppressor or predictor Intervening, exogenous, antecedent, suppressor or predictor Intervening, exogenous, antecedent, suppressor or predictor Quasi-moderator

Structure

Structure

Structure

Structure

Structure

Structure

Structure

Structure

and ROA. The ndings of the sub-group analyses show that an organic structure is more helpful for organisations employing a differentiation strategy to improve their performance in terms of objective fullment and relative competitive performance. However, the mechanistic structure group had a better correlation between differentiation and ROA. The ndings of regression 8 indicate that structure acts as a quasi-moderator in the relationship between differentiation and ROS and the sub-group analysis shows that the mechanistic structure group performed better than the organic structure group in terms of ROS. The results of the moderated regression analysis indicate that structure acts as a moderator in the relationship between cost-leadership strategy and the objective measures of performance. It acts as a moderator in the relationship between differentiation strategy and ROS. Structure does not act as a moderator in the relationship between business-level strategy and the subjective measures of performance. The sub-group analyses indicate that a mechanistic structure is more helpful for improving nancial performance for organisations adopting either a differentiation strategy or a cost-leadership strategy. However, in terms of the subjective performance measures an organic structure seems to be more favourable. 5. Closure The ndings of this study indicate that environmental dynamism and hostility act as moderators in the relationship between business-level strategy and relative competitive performance. This result supports the ndings of some previous studies which have found the moderating effect of environment on the relationship between business-level strategy and performance (e.g. Prescott, 1986; Lee and Miller, 1996). For improving a rms performance in comparison to its competitors both cost-leadership and differentiation strategies are effective in environments with high level of dynamism. In low-hostility environments a cost-leadership strategy and in high-hostility environments a differentiation strategy lead to better performance in comparison to competitors. A cost-leadership strategy is more favourable for improving nancial performance in highly dynamic environments. However, in environments with low levels of dynamism a differentiation strategy is more helpful in improving nancial performance. The relationship of both cost-leadership and differentiation with ROS is moderated by organisational structure. However, in the case of ROA, the moderating effect of structure was observable only in the case of cost-leadership strategy. The sub-group analysis resulted in some interesting ndings regarding the impact of organisational structure on the relationship between business-level strategy and the performance of organisations. The results indicated that a mechanistic structure was more helpful in improving the nancial performance of organisations adopting both cost-leadership and differentiation strategies. This could be because of the effectiveness of a mechanistic structure in controlling the cost and improving coordination within the organisation. 5.1 Limitations of the study One of the main limitations of this study is the problem of single respondents (e.g. Bowman and Ambrosini, 1997). However, a number of authors contend that the CEO is likely to provide accurate information about organisational strategies (e.g. Hambrick, 1981). Since all the respondents in this study are CEOs the information

Business-level strategy

929

MD 48,6

they have provided about the strategies of their organisations can be considered to be accurate. This approach is extensively used in strategic management research. 5.2 Directions for future research This study has examined only the electrical and mechanical engineering sectors of the manufacturing industry. In order to generalise the ndings to the whole manufacturing industry, it needs to be ascertained whether the relationships hold good for other industry sectors as well. The study may not be complete unless it is complemented by in-depth case studies examining the business-level strategies of organisations. Perceived measures have been used to measure environment in this study. The moderating effect of environment needs to be assessed using objective measures in future research to conrm the ndings. The role of structure needs to be examined in greater detail by using a different sample and a different measure. The correlations between the strategic types and the performance measures indicate that cost-leadership and differentiation strategies help organisations to full their objectives. However, they are not very helpful in improving the nancial performance and the performance in comparison to competitors. This nding points towards the limitations of Porters generic strategies in explaining performance heterogeneity. This study makes an important contribution to the literature by examining the impact of both environment and organisational structure on the relationship between business-level strategy and organisational performance. To the best of our knowledge no other study has examined the moderating effect of organisational structure in a detailed manner. This study has examined the moderating effect of structure thoroughly using moderated regression analysis.
Note 1. In order to assess whether environment moderates the relationship between integrated strategies and performance, moderated regression analysis was carried out by including both cost-leadership and differentiation as predictors along with environmental dynamism and hostility. It was found that there were no interaction effects. Hence environmental dynamism and hostility do not act as either quasi-moderators or pure moderators in the relationship between integrated strategies and the performance measures.

930

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About the authors M.K. Nandakumar joined Indian Institute of Management Kozhikode in May 2009. He obtained his PhD from Middlesex University Business School and his thesis is entitled Strategy formulation and implementation in manufacturing organisations the impact on performance. He has worked as Lecturer in Management at Middlesex University Business School for nearly ve years. During this period he has taught Strategic Management and other Management modules at both the Masters and Undergraduate levels. He has also supervised a number of Masters and Undergraduate dissertations. He has also worked at University of East London Business School for a short period of time. He has presented a number of papers at major international conferences including the Academy of Management Conference. He has had 14 years of commercial experience in the sales and marketing area. He has worked in managerial positions in India and in the Middle East. M.K. Nandakumar is the corresponding author and can be contacted at nandakumarmk@iimk.ac.in

Abby Ghobadian moved to Henley as Director of the School of Projects Processes and Systems on 1 January 2007; later he became Henleys Academic Director. Before joining Henley he was at Brunel University Business School where he was Professor of Management. Prior to this he was the Director of Research at Middlesex University Business School where he held a number of other managerial positions including that of Director of Postgraduate Programmes and Head of Business and Management Group. He was a visiting professor at Warwick Business School and Monash University in 2005. He has also worked for University of West of England, Policy Studies Institute, Imperial College, Loughborough University and BP. He has acted as a consultant to a large number of organisations. He is a member of British Academy of Management (BAM) Council and Director of Research Network (DoRN) Committee. He is a member of ESRCs virtual college. He edits the International Journal of Process Management and Benchmarking (IJPMB) and is on the editorial board of journals in the UK, USA and Hungary. He received an honorary doctorate from University of Pecs in Hungary for scientic achievements in October 1997. Nicholas ORegan currently works at Bristol Business School as Professor of Strategy/Enterprise and Innovation. Before joining Bristol, he was working at Middlesex University Business School as Professor of Strategic Management. He has published extensively in leading academic journals including Technovation, Strategic Change, Management Decision, International Small Business Journal and Journal of Small Business Management. He has also presented a number of papers at leading international conferences. His areas of specialisation are Contemporary Issues in Business, Business Management and International Business. He teaches Strategic Management Modules for MBA and other Masters programmes. His research/consultancy interests are in the areas of Corporate strategy; Organisational leadership, culture and performance; Small business and their operating environment and E-business and technology deployment.

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