Donald C. Hambrick

Some Tests of the Effectiveness and Functional Attributes of Miles and Snow's Strategic Types

The Miles and Snow strategic typology is tested and extended. Based on a sample of businesses in the PIMS data base, the study explores the effectiveness of the strategic types in different environments and the ways in which defenders and prospectors differ in their functional attributes.

Diversification Posture and Top Management Team Characteristics

This studys argument is that a firms diversification posture determines the degree of integration it needs across business units, which in turn influences the ideal composition of its corporate t...

High Profit Strategies in Mature Capital Goods Industries: A Contingency Approach

Compares and analyzes the strategies for success for two categories of mature industrial-product environments. The two categories considered are the disciplined capital goods makers and the aggressive makers of complex goods. Data used in the analysis were drawn from the PIMS database. Six position attributes were identified for examination, including market share and capital intensity, while eleven choice attributes were used including value added and current assets. The results are presented in terms of clusters of high profit firms and low profit firms. These results support the proposition that the primary strategies pursued by the high performers in the two groups considered closely resemble Porters three strategic types – cost leadership, differentiation, and focus. Interestingly, not all three of these strategic types were found in each setting. In fact, none of the high profit aggressive makers demonstrated the cost leadership strategy. In this attempt to contribute to the medium-grain contingency view of strategy, this analysis demonstrates that there are various strategies that lead to high profitability within an industry, but the effective strategies used differ by industry. (SRD)

Relative Standing: A Framework for Understanding Departures of Acquired Executives

Prior attempts to explain the departure rates of the executives of acquired firms, primarily through strategic and economic logics, have yielded limited results. This study drew on the concept of r...

Attention as the Mediator Between Top Management Team Characteristics and Strategic Change: The Case of Airline Deregulation

We integrate the upper-echelons perspective with the attention-based view of the firm by examining the role of attentional orientation of top management teams (TMTs). In the context of airline deregulation, we find that deregulation caused a shift in managerial attention, but that this shift in attention was the greatest for firms that changed the composition and compensation of their TMTs in ways that favored the deregulated regime. We also find that attention partially mediated the relationship between TMT changes and strategy changes. The results of this study shed light on the transformation of industry attention patterns following an environmental shift, and the role of TMT composition and incentive systems in that process.

Stumblers and stars in the management of rapid growth

This article examines the problems of managing a rapid-growth firm. We contend that instead of being a time for entrepreneurial celebration and relief, a period of over-50% growth is a time for wariness and some very difficult decisions. Such firms face a fragile transition: they are beyond being intimate, cohesive entrepreneurial ventures but they have not yet become secure, stable entities. Not only are they in flux, but these firms are often disoriented by the pace at which change is occurring. Firms such as Atari, Cray Research. Cullinet, Osborne Computers, People Express, and Rolm recently have faced (or now face) these challenges with very different degrees of success. This article presents observations drawn from several sources: a study of thirty rapid-growth firms which we have underway, literature and press accounts of rapid growth, and our consulting and discussions with executives in such firms. While far from definitive, the article reports several themes that are very pronounced in the situations we have studied. These themes are of two types: 1) recurring challenges and traps faced by rapid-growth companies, and 2) characteristics af firms which seem to avoid or surmount these traps. These are the four fundamental challenges that we see confronting rapid-growth firms: 1. 1. Instant Size These firms double and triple in size very quickly. This in turn creates problems of disaffection, inadequate skills, and inadequate systems. 2. 2. A Sense of Infallibility By virtue of their success to date, rapid-growth firms often view their strategies and behaviors as infallible. The unfortunate irony is that they become convinced of their wisdom while the environment is turbulent and large competitors are entering. 3. 3. Internal Turmoil As a social organism, a firm growing at 50% per year is under great strain. There is a stream of new faces, people who do not know each other and who do not know the company. Decision-making suffers, turf battles abound, and people burn out. 4. 4. Extraordinary Resource Needs Rapid-growth firms are typically cash starved. Instead of abundance, they often face a bare-bones existence. Each of these challenges calls for its own solutions. But we have observed some overarching themes in firms that have successfully traversed a period of rapid growth: • • The chief executive is able to envision and anticipate the firm as a larger entity. • • The team needed for tomorrow is hired and developed today. • • The original core vision of the firm is constantly and zealously reinforced. • • New “big-company” processes are introduced gradually as supplements to, rather than replacements for, existing approaches. • • Hierarchy is minimized. • • Employees hold a financial stake in the firm. Beyond developing these themes for success, the article concludes with a brief discussion of the effectiveness of owner-founders in rapid-growth situations.

Swinging for the Fences: The Effects of Ceo Stock Options on Company Risk Taking and Performance

We unpack the concept of managerial risk taking, distinguishing among three of its major elements: the size of an outlay, the variance of potential outcomes, and the likelihood of extreme loss. We ...

An Empirical Typology of Mature Industrial-Product Environments

This paper pursues the goal of parsimony by presenting a typology of mature industrial-product environments, derived from the PIMS data base. Cluster analysis yields eight environmental types that are discussed and tested for reliability in a holdout sample. The ultimate goal is to develop a contingency approach to business-level strategy.

When Groups Consist of Multiple Nationalities: Towards a New Understanding of the Implications

International companies are rapidly increasing their use of multinational groups (MNGs), sometimes with great success and sometimes severe frustration. The purpose of this paper is to establish a conceptual understanding of the implications of multinational composition for group functioning. Moving across units of analysis, we focus first on the individual group members characteristics as a reflection of his or her nationality, then on the effects of multinational diversity on group functioning and performance, and finally on the association between corporate policies and the use of MNGs. We close the paper with a proposed research agenda on multinational groups.

Taxonomic Approaches to Studying Strategy: Some Conceptual and Methodological Issues

Taxonomic inquiry is emerging as an important type of research in the field of strategy. This paper builds a case for strategy taxonomy-building and addresses selected conceptual and methodological issues for researchers interested in such investigations. Among the issues discussed are the following: choosing variables to classify, framing the domain of the taxonomy, developing longitudinal taxonomies, manipulating variables, and incorporating organizational performance into strategic taxonomies. Drawing from the literature and from my own experiences in taxonomic studies, this paper is intended as a special supplement to more generic and technically detailed treatments of numerical classification.