How Does Strategy Process Influence Strategy Content? Antecedents of Consistency between Resource Allocation Decisions and Corporate Strategy

Schmalenbach Business Review, Vol. 57, No. 4, pp. 332-350, 2005

20 Pages Posted: 23 Nov 2005

See all articles by Ansgar Richter

Ansgar Richter

University of Liverpool - Management School (ULMS)

Sascha L. Schmidt

EBS Universität für Wirtschaft und Recht - Institute for Sports, Business & Society

Abstract

We investigate the relative importance of organizational and decision-specific factors that shape decision-making processes as antecedents of consistency between corporate strategy concept and individual resource allocation decisions. Our empirical study examines the Swiss pharmaceutical companies Ciba and Sandoz from 1989 to 1996. We use a model from which we derive hypotheses on the influence of organizational and decision-specific factors on consistency. We test these hypotheses using data on 493 resource allocation decisions, and applying maximum likelihood ordered logit estimation. Our results indicate that factors specific to individual resource allocation decisions are far more important for their consistency with the prevailing corporate strategy concept than are organizational factors. In particular, we find that the longer the time lag between the announcement of a corporate strategy concept and individual resource allocation decisions, the lower the likelihood of high consistency levels. As to the role of organizational factors, lower decision-making levels tend to be associated with higher consistency levels.

Keywords: Consistency, Corporate Strategy Concept, Resource Allocation Decisions

JEL Classification: M10, M19

Suggested Citation

Richter, Ansgar and Schmidt, Sascha L., How Does Strategy Process Influence Strategy Content? Antecedents of Consistency between Resource Allocation Decisions and Corporate Strategy. Schmalenbach Business Review, Vol. 57, No. 4, pp. 332-350, 2005. Available at SSRN: https://ssrn.com/abstract=852685

Ansgar Richter (Contact Author)

University of Liverpool - Management School (ULMS) ( email )

Chatham Street
Liverpool, L69 7ZH
United Kingdom
44 [0]151 795 3713 (Phone)
44 [0]151 795 3001 (Fax)

Sascha L. Schmidt

EBS Universität für Wirtschaft und Recht - Institute for Sports, Business & Society ( email )

Gustav-Stresemann-Ring 3
65189 Wiesbaden, Hessen 65189
Germany
0611 7102 2064 (Phone)

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