Alex Hill, Richard Cuthbertson, Benjamin Laker and Steve Brown
The purpose of this paper is to present 13 propositions about how internal strategic fit (often referred to as fit) impacts the business performance of low cost and differentiated…
Abstract
Purpose
The purpose of this paper is to present 13 propositions about how internal strategic fit (often referred to as fit) impacts the business performance of low cost and differentiated services. It then uses these relationships to develop two “fitness ladder” frameworks to help practitioners understand how to improve fit given their business strategy (low cost or differentiation) and performance objectives (operational, financial or competitiveness).
Design/methodology/approach
In total, 11 strategic business units were studied that perform differently and provide a range of low cost and differentiated services to understand how changes in internal strategic fit impacted business performance over a 7 year period.
Findings
The findings suggest aligning systems with market needs does not improve performance. Instead, firms serving low cost markets should first focus managers’ attention on processes and centralise resources around key processes, before reducing process flexibility and automate as many steps as possible to develop a low cost capability that is difficult to imitate. By contrast, firms serving differentiated markets should first focus managers’ attention on customers and then locate resources near them, before increasing customer contact with their processes and making them more flexible so they can develop customer knowledge, relationships and services that are difficult to imitate.
Research limitations/implications
Some significant factors may not have been considered as the study only looked at the impact of 14 internal strategic fit variables on 7 performance variables. Also, the performance changes may not be a direct result of the strategic fit improvements identified and may not generalise to other service organisations, settings and environments.
Practical implications
The strategic fit-performance relationships identified and the “fitness ladder” frameworks developed can be used by organisations to make decisions about how best to improve fit given their different market needs, business strategies and performance objectives.
Originality/value
The findings offer more clarity than previous research about how internal fit impacts business performance for low cost and differentiated services.
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Keywords
Alex Hill and Richard Cuthbertson
The purpose of this paper is to investigate the relationship between internal strategic fit and business performance, propose six classifications of internal fit using the…
Abstract
Purpose
The purpose of this paper is to investigate the relationship between internal strategic fit and business performance, propose six classifications of internal fit using the “strategic map” managerial framework and identify how firms should best move from one classification to another and the impact that these changes will have on business performance.
Design/methodology/approach
Empirical research was conducted in 12 service organisations. Based on these findings, two fit‐performance relationships were identified and the “fitness map” framework was developed showing six classifications of fit.
Findings
The alignment of operations strategy within an organisation is significantly and positively related to market share, whereas, the alignment of the service delivery system is significantly and positively related to return on sales. However, neither the alignment of the operations strategy nor the service delivery system appears to have a relationship with return on investment. Six classifications of internal strategic fit emerged: poorly aligned organisations are either “understanding processes” or “understanding markets”, medium‐fit companies are “managing processes” or “developing service offerings” and well‐aligned firms are “leveraging services and process capabilities” or “leveraging markets and design capabilities”.
Practical implications
The fit‐performance relationships show how changes in the alignment of operations strategy and delivery system impact business performance differently. Using this knowledge, practitioners can use the “strategic map” framework to identify their classification of fit and understand how it has been created, benchmark their level of fit against other businesses, understand how to move from one level of fit to another and how these decisions will impact business performance.
Originality/value
The paper's findings start to address the gap in the literature on internal strategic fit within service organisations and meet the need for more management tools to help businesses develop strategies, understand the level of fit they create and how they can impact business performance.
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Alex Hill and Steve Brown
The purpose of this exploratory research paper is to present a strategic profiling managerial framework that enables businesses to show visually the level of internal strategic…
Abstract
Purpose
The purpose of this exploratory research paper is to present a strategic profiling managerial framework that enables businesses to show visually the level of internal strategic fit in their organisation. Using this framework, service operations managers are able to understand the level of fit that exists, how it is created and identify actions for improving it.
Design/methodology/approach
Case‐based research was conducted in eight service organisations to investigate their level of internal fit and the corresponding characteristics of their market, operating strategy and service delivery system. Based on these findings, a strategic profiling framework was developed.
Findings
The strategic profiling framework allows a service organisation to compare the characteristics of its market, operating strategy and service delivery system and determine the level of internal strategic fit. This enables it to see more clearly where conflicts exist and to start to understand the steps required to improve the level of fit in its organisation.
Research limitations/implications
The research used the Heskett strategic service vision and Hill's order‐winner and qualifier technique to investigate the level of internal fit. It looked at how they can be applied and the insights they reveal rather than whether the elements they contain are correct. The research focused on developing and presenting a method of visualizing internal fit, rather than investigating the link between fit and performance. The strategic profiling framework developed needs to be tested on a wider sample of organisations to see whether high‐fit profiles have high performance and whether the insights it reveals are true for other businesses.
Practical implications
Service organisations can use the strategic profiling framework to understand their level of internal strategic fit, and why it exists, in order to understand how to improve it.
Originality/value
The strategic profiling framework presented in this paper starts to address the gap in the literature around research into the field of internal strategic fit. It also meets the need for more management tools to help businesses develop strategies and understand the level of fit they create.
Details
Keywords
THE Leeds Conference of the Library Association was, in many respects, the most important gathering of librarians which has taken place in Britain since librarianship first became…
Abstract
THE Leeds Conference of the Library Association was, in many respects, the most important gathering of librarians which has taken place in Britain since librarianship first became organised. The value and interest of the topics discussed, the joint discussion with representatives of famous educational bodies, and other features of a novel kind, all contributed to give the Leeds meeting a character which was very impressive; and its results are likely to be fruitful, if a strong effort is made to follow up the various important matters which were brought forward.
Aleda V. Roth, Ann S. Marucheck, Alex Kemp and Dong Trimble
The Knowledge Factory is a metaphor to describe an accelerated learning organization. World‐class manufacturers are gearing every aspect of their business, from the shop floor to…
Abstract
The Knowledge Factory is a metaphor to describe an accelerated learning organization. World‐class manufacturers are gearing every aspect of their business, from the shop floor to administrative offices, toward the rapid acquisition and deployment of knowledge. This article, based on an extensive research project to identify and interview best‐in‐class operations, provides conceptual guidelines and action steps for organizations striving to practice knowledge‐based competitiveness.
ANOTHER Annual Meeting has come and gone. It was scarcely to be expected that the meeting at Bradford would be a record in the number of members attending, seeing that it is only…
Abstract
ANOTHER Annual Meeting has come and gone. It was scarcely to be expected that the meeting at Bradford would be a record in the number of members attending, seeing that it is only three years ago since the Association met in the neighbouring city of Leeds, and that Bradford cannot boast either the historical associations or the architectural and scenic setting of many other towns. For the most part therefore the members who did attend, attended because they were interested in the serious rather than the entertainment or excursion side of the gathering, which was so far perhaps to the advantage of the meetings and discussions. Nevertheless, the actual number of those present—about two hundred—was quite satisfactory, and none, we are assured, even if the local functions were the main or an equal element of attraction, could possibly have regretted their visit to the metropolis of the worsted trade. Fortunately the weather was all that could be desired, and under the bright sunshine Bradford looked its best, many members, who expected doubtless to find a grey, depressing city of factories, being pleasingly disappointed with the fine views and width of open and green country quite close at hand.
THE twenty‐eighth annual meeting of the Library Association was held for the second time at Cambridge, from August 21st to 25th, 1905, and proved to be well above the average for…
Abstract
THE twenty‐eighth annual meeting of the Library Association was held for the second time at Cambridge, from August 21st to 25th, 1905, and proved to be well above the average for the variety and interest of its proceedings. No better or more appropriate meeting‐place could well be conceived than this venerable old University town, with its countless literary and historical memories and lovely college buildings, set in a maze of gardens and lawns. The local authorities did everything to make the meeting a success, and an attendance of over 200 members proved that the place was well chosen. A peculiar fitness attached to the selection of the meeting‐place this year, as it coincided with the Jubilee of the Cambridge Free Public Library and also that of Mr. John Pink, the librarian, who has long been a much‐respected and esteemed member of the Association. His courtesy and kindness to everyone at the twenty‐eighth meeting of the L.A., and in particular the trouble he expended, and the fatherly interest he bestowed on the younger members of the profession, will not soon be forgotten by those who profited by his attentions.
Pleasing and satisfying as it is for the national ego to record that Australian book production continues to expand — and the commercial benefits that accrue therefrom to…
Abstract
Pleasing and satisfying as it is for the national ego to record that Australian book production continues to expand — and the commercial benefits that accrue therefrom to Austrialian authors, publishers and booksellers are surely swelling the pocket books of a small sector of Australian society — the year under review included three events which are perhaps of greater interest to those who care for Australian literature in its broad sense.
Given the size of the Australian population the regional output of publications is impressive. The Australian National Bibliography, compiled and published by the National Library…
Abstract
Given the size of the Australian population the regional output of publications is impressive. The Australian National Bibliography, compiled and published by the National Library of Australia, includes in its annual volume a statistical survey of Australian book production. The latest figures available are those for 1976 and a comparative table for the preceding five year period shows a modest rate of growth. The titles of specific Australian interest published overseas are also shown. I have added figures for 1977 based on still unpublished information.