Why pure strategies may be wrong for transition economy firms | Zendy

Shinkle George A. | Zendy; Kriauciunas Aldas P. | Zendy; Hundley Greg | Zendy

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Why pure strategies may be wrong for transition economy firms

Author(s) -

Shinkle George A.,

Kriauciunas Aldas P.,

Hundley Greg

Publication year - 2013

Publication title -

strategic management journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 11.035

H-Index - 286

eISSN - 1097-0266

pISSN - 0143-2095

DOI - 10.1002/smj.2060

Subject(s) - institution , context (archaeology) , transition (genetics) , economics , market orientation , transition economy , industrial organization , strategic management , business , market economy , microeconomics , economic system , marketing , paleontology , biochemistry , chemistry , biology , political science , law , gene

The strategy purity hypothesis argues firms will have better results pursuing a single, business‐level strategy of either cost leadership or differentiation rather than a mix of both. Since this claim implicitly assumes a developed‐economy context, we examine the efficacy of business strategies in transition economies. We find the benefits of a pure strategy are diminished when the institutional environment has a low degree of market orientation but are increased when the institutional environment is more market oriented. Our results indicate a boundary condition for the strategy purity hypothesis and support arguments for an institution‐based view of business strategy . Copyright © 2013 John Wiley & Sons, Ltd.

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