How Effective are Strategy Repertoires in the Context of Environmental Dynamism?

Abstract

How does environmental dynamism influence the performance effect of different combinations of strategies? Moving beyond a predominant isolated treatment of firm-level strategy, we investigate a strategy repertoire consisting of four different strategies that may be simultaneously in play but varying in degree. We argue that repertoires exhibit different patterns based on intensity (absolute magnitude) and focus (relative magnitude). Taking an organizational learning lens, we hypothesize that the effectiveness of repertoire patterns depends on the kind of dynamic environment; exhibiting varying levels of velocity, uncertainty, ambiguity, or complexity. Hypotheses are tested via survey data from 203 firms in different industries in Australia, China, Israel, and U.S.A. Findings show strong moderating effects. Contributions to the strategy literature include providing more insight into performance effects of multiple well-known strategies in varying dynamic environments.