Collectively, these different models of the mechanistic perspective see firm performance as affected by the environment and by firm strategy and other internal attributes, such as resources and organizational structure. Strategy itself is influenced by internal firm attributes and by attributes of the environment. This basic causal model describes the main relationships between central constructs in strategy research: organizational resources, environment, strategy, organizational structure, and performance. It also informs corresponding models of strategic management and choice.
What implicitly provided the glue for integrating different causal models of strategy was the design model, a prescriptive framework widely used as a guide for practice and teaching (Andrews, 1971; Porter, 1980; Barney, 1997). The framework describes the strategic management process —the actual steps and subprocesses of a firm’s strategy that need to be managed to maintain or improve the firm’s performance. In the standard design model, the strategic management process generally consists of two main subprocesses: strategy formulation and strategy implementation. The strategy formulation subprocess is concerned with analyses of the external and internal environment and the choice of strategy at the corporate, business, and functional levels. Strategy implementation comprises a series of primarily administrative activities and includes the design of organizational structure and processes (Chandler, 1962), and the absorption of policy into the organization’s social structure (Selznick, 1957: 91–107).
Each of the main research programs reviewed has contributed to the design model. Derived from the SCP are the five forces model and its dynamic counterpart—the industry life cycle model—which became the dominant models for analyzing the external environment (Porter, 1980). The SSP has provided a theoretical basis for the formulation–implementation link in the design model. In addition, by focusing on internal firm attributes, the RBV model, together with the value chain model of firm workflow activities (Porter, 1985, 1996), has become a standard tool for analyzing the internal (i.e., organizational) side in the design model (Barney, 1997).
The SWOT model is often used to prescribe the strategic choice (i.e., strategy formulation) part of the design model. In this model, strategy needs to match the firm’s internal resources and distinctive competencies with environmental opportunities and threats, so as to better meet overall goals and objectives (Andrews, 1971). The decision rule used is to choose a strategy that capitalizes on the firm’s strengths, fixes its weaknesses, exploits its opportunities, and defends or neutralizes threats (Barney, 1997). Strategy needs to exhibit external consistency —firm resources need to be matched with environmental opportunities, and internal consistency —a fit between strategy and organizational elements. In addition, strategy needs to be in line with managerial values and with societal expectations (Andrews, 1971; Porter, 1980). The different research programs reviewed have also provided support for these different forms of fit (e.g., Chandler, 1962).
Despite differences in content and emphasis, the field’s main issues—the nature of strategy, its relations, and the ways it is managed and selected—are addressed in the mechanistic perspective in a consistent and mutually reinforcing manner. A view of strategy as a position or posture implies that strategic choice is mostly a selection among static configurations. Furthermore, the view of strategy as mainly determined by the industry environment, implicit in the SCP, is paralleled in the design model by the relative neglect of strategies that change the environment (e.g., Child, 1972). Finally, the SWOT model of strategic choice is now characteristically accompanied by explanatory models of the external environment (e.g., Porter, 1980) and of internal resources (e.g., Barney, 1991). A prime reason for this coherence is the shared but largely implicit views on time, flow, and coupling. These were influenced to a large extent by Newtonian mechanics and its application to microeconomics, and by the ideas prevailing in the behavioral and economic disciplines when the formal study of business strategy began.
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