Firm, strategic group, and industry influences on performance

Abstract

A long‐standing debate has focused on the extent to which different levels of analysis shape firm performance. The strategic group level has been largely excluded from this inquiry, despite evidence that group membership matters. In this study, we use hierarchical linear modeling to simultaneously estimate firm‐, strategic group‐, and industry‐level influences on short‐term and long‐term measures of performance. We assess the three levels' explanatory power using a sample of 1,165 firms in 12 industries with data from a 7‐year period. To enhance comparability to previous research, we also estimate the effects using the variance components and ANOVA methods relied on in past studies. To assess the robustness of strategic group effects, we examine both deductively and inductively defined groups. We found that all three levels are significantly associated with performance. The firm effect is the strongest, while the strategic group effect rivals and for some measures outweighs the industry effect. We also found that the levels have varying effects in relation to different performance measures, suggesting more complex relationships than depicted in previous studies. Copyright © 2007 John Wiley & Sons, Ltd.

A focus on international competitiveness

“…More broadly, "an organization" in this definition can also be replaced by other units of analysis such as a world region (e.g., Rugman et al 2012), country (e.g., Porter 1990), industry (e.g., Morgeson et al 2011;Rumelt 1991), or perhaps strategic group (e.g., Short et al 2007). As such, international competitiveness is a phenomenon that works at multiple levels in the global marketplace (e.g., ) but one where the ultimate objective, as primarily studied in marketing strategy (cf.…”

A longitudinal analysis of trajectory changes in the software industry: the case of the content management application segment

“…Another area of exploration could be the assessment of the relationship between company performance and industry change trajectory at different levels (firm, strategic group, industry), following (for instance) the methodology proposed by Short et al (Short et al, 2007). Table 4 An extract of the structured list of functions and an example of how it was used for the data collection in the Phase 1…”

Data Sparseness and Variance in Accounting Profitability

“…Since the mid-1980s, numerous studies have addressed the extent to which industry, location, and year effects explain variances in accounting profitability (e.g., Schmalensee, 1985;Rumelt, 1991;Roquebert, Phillips, & Westfall, 1996;McGahan & Porter, 1997, 2002McGahan, 1999;Hawawini, Subramanian, & Verdin, 2003Hough, 2006;Short et al, 2007;Goddard, Tavakoli, & Wilson, 2009;Makino et al, 2004;Chan, Makino, & Isobe, 2010;McGahan & Victer, 2010;Goldszmidt, Brito, & De Vasconcelos, 2011;Ketelhöhn & Quintanilla, 2012;Ma, Tong, & Fitza, 2013;Karniouchina et al, 2013). Variance decomposition analysis offers a straightforward way to assess contextuality or the extent to which there is a link between the macro-(industry, region, and year) and micro-(firm) levels.…”