Strategic and structural responses to international dynamics in the open Dutch economy, 1963–2003

Abstract

This paper investigates the strategies, structures and performance of large Dutch firms in the period 1963-2003, and compares the results with those of other European companies. Did Dutch companies develop corporate strategies and structures comparable to other European companies in response to the Treaty of Rome 1957, which signalled the start of gradual European economic integration? In this period Dutch firms became larger and increasingly active outside their national borders. This article describes the strategies and structures of large firms in this period, in order to investigate how firms dealt with the changing environment and also how firms anticipated and benefited from these changes. In addition, it analyses the corporate performance effects of changes in the environment and strategies and structures. With a strong preference for related diversification, Dutch companies showed a strategy comparable with three large European countries. Initially, many Dutch companies opted for the multidivisional structure, but after the 1980s the functional holding gradually became the most important structure. The choice of structure, however, was not critical to performance, in contrast to the choice of strategy. The related diversified strategy turned out to be the best performing strategy.