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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.