Measuring organizational capabilities to horizontal strategy implementation for conglomerates

Abstract

AbstractThe horizontal strategy is recommended for the conglomerates by Porter to achieve competitive advantage. There is no established or standard way to execute a horizontal strategy. However, for the execution of a horizontal strategy in an organization, it requires advanced organizational capabilities. Therefore, the purpose of this paper is to identify how to implement horizontal strategies in conglomerate firms. In particular, we investigated the extent to which organizational capabilities or competencies were related to the implementation of a horizontal strategy in conglomerate firms. Apart from this, we considered two organizational capabilities as a management control system and leadership styles. In this study, four novel hypotheses addressing primary constructs, that is, the interactive control system, collective, participatory, and transformative, have been explored. The data for this study were drawn from a sample survey of 122 firms in India. In addition, the data were analyzed by correlation, and then multiple regression analysis followed by the results of this analysis helps to identify the influence of leadership styles and interactive control system on horizontal strategy implementation. We argue through a theoretical and statistical analysis that demonstrates that collective, participative, and transformational leadership will contribute to the success of the horizontal strategy and lent good support to our hypotheses. This study helps the company to investigate the perceived role of organizational arrangements in the implementation of a horizontal strategy in conglomerate firms. This was done in an effort to provide guidelines for the effective use of organizational capabilities as drivers of horizontal strategy implementation. The study provides two key contributions in the field of strategic management: The first explicitly identified horizontal strategies are present in conglomerate firms; the other organizational capabilities that play a significant role in the implementation of horizontal strategy.