Strategic business cycle management and organizational performance: a great unexplored research stream

Abstract

This lament is as true today as it was almost 20 years ago. Indeed, most scholars continue to ignore one of the most important, but least developed, research streams in all of management strategy and organizational science – strategic business cycle management (BCM). BCM involves the application of a set of typically countercyclical prescriptive behaviors that, when applied in a timely way over the course of the business cycle, can improve the performance of an organization relative to rivals. For example, countercyclical advertising in a recession may help increase market share and build brand identity (Dhalla, 1980), countercyclical hiring during a recession may help build a lower-cost, higher-quality workforce (Greer, 1984) and an organization that cuts production and inventories in anticipation of a recession may cut costs relative to rivals that do not (Navarro, 2004). Despite the performance claims of the prescriptive BCM literature, BCM research remains relatively rare, Balkanized in its treatment by functional silo, significantly lacking in empirical testing and considerably hampered by the lack of any unified general theory that explains observed BCM heterogeneity across organizations. After more than five years of case work and empirical study in which we have identified and tested potential causal links between prescriptive BCM and organizational performance (Navarro, 2004, 2005, 2006; Navarro et al., 2006), we find this lack of scholarly attention to BCM both puzzling and exciting. It is puzzling because BCM involves all functions of the organization; thus, it should STRATEGIC ORGANIZATION Vol 6(2): 207–219 DOI: 10.1177/1476127008090011 Copyright ©2008 Sage Publications (Los Angeles, London, New Delhi and Singapore) http://so.sagepub.com