Toward a Contingency Theory of Business Strategy

Abstract

In the past two decades the concept of organizational strategy has emerged as one of the cornerstones of both management theory and practice. During the period, numerous papers, articles, and books have explored this concept and its myriad characteristics and nuances. Nevertheless, some aspects of the subject have received far more attention than others. For example, much greater emphasis has been placed on the organizational processes by which strategies are developed than on the content of the strategies themselves. Also, more attention has been focused on strategy formulation at the corporate level than at the business level. [The term business level refers to that level in an organization at which responsibility for the formulation of a multifunctional strategy for a single industry or product-market arena is determined; the term corporate level refers to the top level of the organization regardless of the number of industries in which it competes. Thus, for a multi-industry company, the business level normally would correspond to the divisional level. In a single product line company, however, the business and corporate levels would be the same.] Likewise, more emphasis has been placed on the analytical and informational aspects of the strategic planning process than on its behavioral and political dimensions. Finally, nearly all of the research studies and many of the papers and articles have been descriptive rather than prescriptive in their orientation, especially with respect to the content of the strategies involved.

This article is reprinted with permission from the Academy of Management Journal, 1975, vol. 18, no. 4.