Fitness map: a classification of internal strategic fit in service organisations

Abstract

PurposeThe purpose of this paper is to investigate the relationship between internal strategic fit and business performance, propose six classifications of internal fit using the “strategic map” managerial framework and identify how firms should best move from one classification to another and the impact that these changes will have on business performance.Design/methodology/approachEmpirical research was conducted in 12 service organisations. Based on these findings, two fit‐performance relationships were identified and the “fitness map” framework was developed showing six classifications of fit.FindingsThe alignment of operations strategy within an organisation is significantly and positively related to market share, whereas, the alignment of the service delivery system is significantly and positively related to return on sales. However, neither the alignment of the operations strategy nor the service delivery system appears to have a relationship with return on investment. Six classifications of internal strategic fit emerged: poorly aligned organisations are either “understanding processes” or “understanding markets”, medium‐fit companies are “managing processes” or “developing service offerings” and well‐aligned firms are “leveraging services and process capabilities” or “leveraging markets and design capabilities”.Practical implicationsThe fit‐performance relationships show how changes in the alignment of operations strategy and delivery system impact business performance differently. Using this knowledge, practitioners can use the “strategic map” framework to identify their classification of fit and understand how it has been created, benchmark their level of fit against other businesses, understand how to move from one level of fit to another and how these decisions will impact business performance.Originality/valueThe paper's findings start to address the gap in the literature on internal strategic fit within service organisations and meet the need for more management tools to help businesses develop strategies, understand the level of fit they create and how they can impact business performance.

Determinants of proactive innovative behaviour in new services: empirical investigation of service versus manufacturing firms

“…Likewise, for strategic management, the adaptation between the strategy and its environment has positive implications for a firm's performance (Venkatraman & Prescott, 1990). This approach has its roots in the belief that a firm's performance deteriorates when the strategic organizational resources are not aligned with the corresponding environment (Hill & Brown, 2007;Staughton & Williams, 1994). As a result, according to the theory of organization and strategic management, the adaptation of innovation to factors of the internal and external context will permit the firm to obtain a competitive advantage and improved performance.…”

Analysis of the internal strategic alignment of the production strategy: case study in an auto parts company of the municipality of Sorocaba/SP

“…Figure 5 shows an example of the application of the Hill & Brown (2007) technique in a company with a low level of strategic internal alignment. Hill & Cuthberson (2011), in turn, used the same technique as Hill & Brown (2007) to identify the level of internal strategic alignment of organizations by increasing their work by investigating the relationship between internal strategic alignment level and performance of the organization.…”

“…In parallel, several authors (Hrebiniak & Joyce, 2001;Atkinson, 2006) consider that the formulation of the strategy has received more attention in the literature and, consequently, researches that addresses strategy implementation (or internal alignment) is rarer. Hill & Cuthberson (2011) concluded in relation to the internal alignment and level of performance of service providers that well-aligned production strategies are significantly and positively related to the company's market share, while a well-aligned delivery system is related, in the same way, with return on sales. They further confirmed the view of authors such as Smith & Reece (1999) that alignment within certain elements is more important than the overall strategy chosen by the organization.…”

“…From this perspective, the present work intends to analyze, through a case study, the internal alignment of the production strategy in two market segments of a large auto parts company in the city of Sorocaba/SP. The analysis will be based on the works of Hill (1989), Hill & Brown (2007) and Hill & Cuthberson (2011). The central objective is to identify the level of internal strategic alignment of organizations by increasing their work by investigating the relationship between internal strategic alignment level and organizational performance.…”

Testing for strategy-structure fit and its importance for performance

“…One of the key concepts in strategic management and organizational theory is the concept of fit, seen as the corner stone of the organization's strategic development (Hill and Cuthbertson, 2011). Nadler and Tushman (1980) state that fit between the two elements is defined as the degree to which the needs, requirements, objectives, purpose and/or structure of one element is in accordance with the needs, requirements, objectives, purpose and/or structure of another element.…”