Matching an organization's strategy and structure to explain firm performance is one of the fundamental insights in strategic management literature. Successful organizations achieve strategic fit and support their strategy with appropriate structures and processes, while less successful firms typically exhibit poorer fit. Hence, firms will strive for the ideal fit to reach highest performance and outperform those that do not. However, recent developments raise the question if the concept still works today. To answer that question, this study analyzes the concept of strategic fit and examines the different research streams. In order to reach this goal, the empirical literature is classified according to different perspectives and domains of fit and the empirical findings are aggregated and evaluated. Based on the analysis of 105 identified studies publicized between 1962 and 2010, different research streams are highlighted and it is suggested that the performance implications of strategic fit are still valid today.

Text Sample: Chapter 3.2.1, Fit as moderation: 22 studies were found to take a moderation perspective of fit. 17 of these examine internal fit, four external fit, and one integrated fit. Regarding the domains of fit of the works that study internal fit, most investigate strategy/structure-fit (eight papers), followed by strategy/HRM-fit (four papers). The remaining studies investigate strategy/IT-fit, inter strategy fit , other forms of bivariate internal fit, and multivariate internal fit. Of the four studies that looked at external fit, three studied the fit between environment and strategy, and one other bivariate external fit. One study investigated integrated fit. To get a better understanding of the studies within the moderation perspective, the five most important ones (i.e. published in the highest ranking journals and being quoted the most) will be summarized in the following. McKee, Varadarajan and Pride proposed that the performance of a particular strategy depends on the volatility of the market a firm operates in . Strategies are operationalized as the Miles and Snow strategic types. The studied sample consisted of 560 U.S. banks . The main finding was that analyzer organizations outperform other strategic types in moderately dynamic markets, but that in more dynamic markets, no strategy seems to be clearly superior. Hill, Hitt and Hoskisson, who were researching within the strategy/structure-fit domain, investigated the fit between diversification strategy and structure and control systems . They argued that related diversification can lead to economies of scope, while unrelated diversification can lead to gains from efficient governance mechanisms. It is hypothesized that in order to realize these benefits, different structures and control systems are necessary, namely that cooperation between business units is needed to realize economies of scope, while competition between business units is needed to realize gains from efficient internal governance. Thus, not diversification strategy itself leads to superior performance, but its implementation in the form of appropriate organizational arrangements. The sample contained 184 Fortune 1,000 firms and support for the hypotheses was found. Chan et al. examined the alignment of business strategy and IT in a sample of 170 North American financial services and manufacturing companies and found that fit has a positive impact on performance . Yin and Zajac operated in the strategy/structure-fit arena and studied the fit between strategy and governance systems (i.e. franchise versus company-owned arrangements) . They posited that franchisees will rather follow strategies of flexibility and decentralization, while company-owned stores will rather stress predictability and control and that this fit brings about superior performance. The sample used for testing these hypotheses comprised more than 6,000 outlets of a major U.S. restaurant chain. The findings significantly support the mentioned hypotheses . Olson, Slater and Hult investigated the fit among business strategy, marketing organization structure, and strategic behavior and tested it with a sample of 228 senior marketing managers from manufacturing and service firms of 20 different industries . They used the Miles and Snow strategy types and took a look at how well they were implemented through appropriate organization of marketing activities and organizational behavior. The latter thereby concerns customer orientation, competitor analysis, cost management, and innovation. Support for the hypotheses that each strategy needs a specific combination of marketing organization and strategic behavior to perform well was found . From analyzing the remaining studies within the moderation perspective, it can be summarized that eight studies clearly support the fit paradigm, seven studies report mixed results, and two studies find no support. The eight studies that find clear support investigated the fit between corporate ideology (as a part of corporate culture) and diversification strategy strategy, structure, and the evaluation system of marketing managers business strategy and organization design of the purchasing function the flexibility a firm pursues and the flexibility demanded from the environment strategy and structure of venture capital firms business strategy and HRM policies environment and strategy and business strategy and marketing organization . Among the studies that find mixed results are Simons, Shadur and Kienzle, who examined the fit between strategy and HR practices and find mixed results regarding the performance implications of fit as do Lukas, Tan and Hult, who investigated the coalignment between environment and strategy in China's transitional economy and find positive performance implications only in case of certain environmental conditions . Burton, Lauridsen and Obel investigated misfits between strategy and organizational climate and find support for negative performance effects of some misfits, but not for others . Geiger, Ritchie and Marlin studied the fit between strategy and structure in firms operating under different industry conditions. They find that firms with good fit outperform in highly concentrated industries, but underperform in low and moderately concentrated industries . Chow and Liu investigated the fit between business strategy and HRM and could not find support of positive performance implications . Meier et al. examined the fit among strategy, structure, and the environment . Their findings surprisingly suggest that the fit relationships proposed by Miles and Snow do not hold. Specifically, they neither find support for the argument that a turbulent environment should be matched with a prospector strategy and a decentralized structure, nor that a more stable environment should be complemented by a defender strategy and more centralized structures.

• strategic fit

• performance

• paradigm

• contingency theory

Moritz Garlichs ist Analyst im Bereich Capital Markets and Derivatives bei der IKB Deutsche Industriebank. Vor Aufnahme dieser Tätigkeit schloss er im Jahr 2010 erfolgreich sein betriebswirtschaftliches Studium als M.Sc. in Management an der Handelshochschule Leipzig (HHL) ab. Dem Masterstudium vorausgegangen war ein erster Abschluss als Dipl.-Betriebsw. (FH). Während seines Studiums sammelte der Autor praktische Erfahrungen unter anderem in der Managementberatung von IBM, im E-Commerce so wie bei einem DAX-Unternehmen. Sein besonderes Interesse gilt neben dem Bereich Finanzen dem Feld der Strategie und ihrer Implementierung durch geeignete organisatorische Maßnahmen, woraus das vorliegende Buch entstanden ist.