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AN INTEGRATION OF CORPORATE CULTURE AND STRATEGY:
THE INTERRELATIONSHIPS AND IMPACT ON FIRM PERFORMANCE
AN INTEGRATION OF CORPORATE CULTURE AND STRATEGY:

THE INTERRELATIONSHIPS AND IMPACT ON FIRM PERFORMANCE
A dissertation submitted in partial fulfillment

of the requirements for the degree of
Doctor of Philosophy in Business Administration
By
Michelle Lee Doise

University of Kansas
Bachelor of Science in Business Administration, 1998
University of Arkansas
Master of Transportation and Logistics Management, 2000
August 2008
UMI Number: 3329157
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ABSTRACT
Independently, corporate culture and corporate strategy have been extensively
researched with respect to firm performance, but little is known about how the
relationship between culture and strategy affects firm performance. This dissertation will
examine the relationship between corporate culture and corporate strategy and its effect
on firm performance in the context of the trucking industry. The trucking industry is an
ideal setting in which to study these relationships since it represents a significant impact
on our economy in terms of its contribution to GDP, employment, safety, taxes,
government expenditures, and the ability of firms to competitively move goods from
points of import or manufacture through supply chains to points of end use. Furthermore,
the trucking industry is extremely competitive, being composed of approximately
500,000 firms, and currently it is facing numerous sources of rising costs making
financial performance a critical concern. The literature on corporate culture, corporate
strategy and firm performance is reviewed at length resulting in the conceptualization of
a model and relevant constructs. It is hypothesized that performance is enhanced when
specific culture types are matched with certain strategies. The results of this study
confirm that firm performance is greater depending on the fit between certain cultures
and certain strategies.
This dissertation is approved for Recommendation to the Graduate Council
Dissertation Director
Dr. John Ozment
Dissertation Committee
Dr. Jeff Murray
Dr. Molly Rapert
DISSERTATION DUPLICATION RELEASE

I hereby authorize the University of Arkansas Libraries to duplicate this
dissertation when needed for research and/or scholarship.
Agreed
Michelle L. Doise
Refused
Michelle L. Doise
ACKNOWLEDGEMENTS
This work has been the culmination of several years of effort. Through these
years there have been many to whom I wish to thank for their support and aid in this
process. First, I would like to acknowledge and thank my committee members for
surviving this effort with me. The committee chair, Dr. John Ozment, who has been
integral to my completion of this degree. Dr. Jeff Murray, who has been a sounding
board and brought light to the end of a seemingly dark and endless tunnel through these
years. Dr. Molly Rapert, who has been a large influence directly and indirectly through
these years and this process. I thank each of them for his and her time, support, feedback
and patience throughout this process.
Second, I would like to acknowledge the ones outside the department who
allowed this accomplishment to happen. My husband, who always puts things in
perspective for me. He has supported us financially, emotionally and spiritually through
these years. Now it is my turn. My mother and mother-in-law, who have watched my
beautiful daughter through the past few years to allow me the time to dedicate to this
work. Also, my mother, who has taken the time at the push of a button to edit anything,
anytime. My father, who has helped in ways he knows and ways he cannot know. He is
always there for anything, especially an opinion or a statistic question, and I greatly
appreciate him for this. Finally, I would like to acknowledge my friends through these
years, who have made the ups and downs bearable and even fun at times.
A special acknowledgement goes out to my beautiful daughter, Holland Gabrielle
Doise and my soon to be son, Jackson Cooper Doise. I love you both with all I am.
Thank you for blessing my life.
DEDICATIONS
To my daughter, Holland Gabrielle Doise, who makes each morning a blessing beyond
yesterday's. You are my light, my life, my love.
To my dear husband, Jeremy Cade Doise, who makes life more than just a life.
You are my heart, my world, my support.
To my mother, Sandy R. Johnson, who always makes life work.
You are my inspiration.
To my father, Dr. Steven Johnson, who has made me who I am for good and bad.
You are my hero.
To my soon-to-be son, Jackson Cooper Doise, who has encouraged this finale for me.
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TABLE OF CONTENTS
Contents
Page
Chapter I: INTRODUCTION, OVERVIEW AND RESEARCH QUESTIONS

Introduction
Objectives
Theoretical Foundation
Conceptual Model
Overview of Research Questions and Hypotheses
Contributions of the Study
Plan of Dissertation
Chapter II: A REVIEW OF RELEVANT LITERATURE
Introduction
Culture
Concept and Definition
Culture Types
Strategy
Concept and Definition
Strategy Typologies
Argument for a Fit Perspective
Performance
Chapter III: METHODOLOGY
Introduction
Model and Hypotheses
Research Design and Data Collection
Construct Measurements
Testing Psychometric Properties of the Measurements for each Construct
Chapter IV: RESEARCH FINDINGS
Introduction
Sampling Procedure and Data Collection Results
Psychometric Properties
Reliability Assessment
Dimensionality
Validity Assessment
Hypothesis Testing
Correlations
Main Effects: Hypothesis 1 and Hypothesis 2
Moderating Effects: Hypothesis 3 through Hypothesis 6
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1
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Chapter V: CONCLUSIONS, LIMITATIONS AND FUTURE RESEARCH

Introduction
Conclusions
Limitations
Future Research
121
121
RERFERENCES
130
Appendix A
145
Appendix B
153
viii
Chapter I
INTRODUCTION, THEORETICAL FOUNDATION AND RESEARCH
QUESTIONS
Introduction
The purpose of this dissertation is to find a best-fit path from commonly held
value sets of an organization (corporate culture) to an organization's economic
performance via a culture and strategy fit. As with many social science research areas,
the commonly held value sets of an organization, known as corporate culture, represent
philosophical challenges. The positivist approach to research maintains rationality, and
rationality cannot establish values (Bloom, 1987). However, Mitroff (1983) states that
values and cultures are becoming increasingly recognized as important influences in
scientific research. Values and culture are key to better defining performance theory,
thus is philosophically just in this research.
This dissertation presents a conceptual discussion of the fit between corporate
culture and the generic business strategies as well as empirical evidence to determine the
best-fit between the type of culture and strategy that will lead to optimal firm
performance. There are two objectives of this dissertation. The first objective is to
examine whether superior firm performance results when corporate culture and corporate
strategy are properly matched {best-fit). The second objective is to determine which
strategy should be associated with which corporate culture type for this superior firm
performance.
The extant literature on firm performance involves theoretical grounding in

economics, sociology and organizational behavior (Anderson, 1982), yet there has been
limited support for any specific theory explaining why certain organizations perform
better than other organizations. The literature on firm performance has evaluated its link
with strategy without consistent success (Dess and Davis, 1984; Miles and Snow, 1978;
Miller, 1986; Porter, 1980). There has been limited research on the link between
corporate culture and firm performance (Yarbrough, 1996). There still exists a need for
solid empirical evidence as to why certain organizations outperform others.
These two theoretical areas of corporate culture and strategy and their related
research streams have emerged independently, and neither has controlled for the effects
of the other when attempting to link these factors to firm performance. For instance,
research supporting a relationship between strategy and performance has not incorporated
corporate culture into their analysis (Dess and Davis, 1984; Miles and Snow, 1978;
Miller, 1986; Porter, 1980). On the other hand, research linking corporate culture and
performance has not incorporated strategy (Yarbrough, 1996). It may be beneficial to
integrate the two approaches.
In this dissertation, I will be evaluating firm performance on the best-fit path
between strategy and culture in the context of the trucking industry. The intuitive
thought behind this dissertation is that a company that has a well-planned strategy and a
clear corporate culture that enables the implementation of that strategy should lead to
success.
The two primary questions to this dissertation are: first, does an optimal/?? (bestfit) between corporate culture and strategy exist with regard to firm performance. If so,
then which type of corporate culture has a best-fit with which type of strategy? It is
important to note that this research utilizes the contingency management perspective,
which asserts that there is not one best way to organize the firm, but to maximize
performance, the "level" of strategy may be dependent on the "level" of corporate
culture. Thus, corporate culture can be observed as a "lever or tool to be used by
managers to implement strategy and to direct the course of their organization more
effectively" (Deshpande' and Webster, 1989, pp.7).
Corporate culture and corporate strategy have a great amount of literature for each
and as each relates to performance. Corporate culture has been studied in respect to
organizational theory (Ouchi and Wilkins, 1985; Deshpande' and Parasuaraman, 1986;
Deshpande' and Webster, 1989) and marketing theory (Anderson, 1982; Conrad, Brown
and Harmon, 1997; Day, 1990; Dennison, 1984; Deshpande' and Parasuaraman, 1986;
Deshpande', Farley and Webster, 1992,1993; Hill, Elmes and Wilemon, 1988; Goffee
and Jones, 1998; Gordon, 1985; Hogan, Gilbert, Pearson, Smith and Goffee, 1998;
Jaworski and Kohli, 1993; Kohli and Jaworski, 1990; Kotter and Heskett, 1992; Lusch
and Laczniak, 1989; Miller, 1986; Narver and Slater, 1990; Piercy and Peattie, 1988;
Reukert, 1992; Ruekert, Walker and Roering, 1985; Slater and Narver, 1994; Williamson,
1993 and Yarbrough, 1996). There has been research involving strategy, capabilities and
performance (Lynch, 1998; Lynch, Keller and Ozment, 2000)
Corporate culture is said to be "the pattern of shared values and beliefs that help
individuals understand organizational functioning and thus provide them norms of
behavior in the organization" (Deshpande' and Webster, 1989, pp.4). There is a large
gap in relating corporate culture to firm performance through all of this literature. This
gap involves the following research questions: why might the culture of an organization
not affect firm performance, or, if it does, might there be another influencing factor that
would strengthen or weaken that relationship?
Objectives
There are two primary objectives of this dissertation. The first objective is to
initiate an identification of the underlying set of organization values, or culture types,
which are most highly associated with the strategy typology of Porter (1980). The
second objective is to determine how the "fit" of corporate culture and corporate strategy
influences firm performance. Corporate culture is the independent variable or predictor
in the hypothesized model, while corporate strategy is the moderator as well as an
independent variable; firm performance will be the dependent variable or criterion. The
best-fit between corporate culture and corporate strategy illustrates a moderator effect on
their relationships with firm performance. In short, the fit between these two variables is
predicted to moderate the relationships between corporate culture, corporate strategy and
firm performance. Thus, this research involves three constructs: corporate culture type,
corporate strategy type and performance.
This study is the integration and extension of current research in organization
culture, strategy and performance. The discussion in the following section establishes the
framework for the constructs and further explains the objectives of this study. The rest of
this chapter is divided into five main sections. The first section includes the theoretical
foundation of each of the constructs: corporate culture, Porter's (1980) generic business
strategies as well as Miles and Snow's (1978) strategic types and finally firm
performance. The second section illustrates the conceptual model for this work. The
third section provides an overview of the research questions and a section identifying the
hypotheses of this study. The forth section offers the theoretical, methodological and
practical contributions of this dissertation. The final section of this chapter presents the
plan of this entire dissertation.
Corporate Culture
Corporate culture as defined earlier is "the pattern of shared values and beliefs
that help individuals understand organizational functioning and thus provide them norms
of behavior in the organization" (Deshpande' and Webster, 1989, ppp.4). This definition
is the bases for the corporate culture construct in this study. The framework for corporate
culture in this research is based on Quinn's (1988) typology utilizing two dimensions: 1)
the degree of flexibility versus control (processes) and 2) the degree of internal versus
external focus (orientation) (Deshpande', Farley and Webster, 1993). Quinn (1988)
extended Jung's theory of archetypes to the above two dimensions to create a four cell
model. Each cell has an associated value set. The four cultures in this typology are Clan,
Adhocracy, Hierarchy and Market. The descriptions and elements of each culture type
are illustrated in Table 1-1.
The Clan culture or "feeling" archetype is much like a family. It functions with
organic processes and an internal focus. The shared values for this culture are
participation, cohesiveness, openness, loyalty, teamwork and commitment to the
organization.
The Adhocracy culture or "intuition" archetype has an external focus and organic
processes to allow its members to engage and enhance the customer's experience.
Adaptability, innovation, growth, creativity and risk taking are part of its set of values.
This culture type responds quickly, often intuitively, to external signals.
The Hierarchy culture or "feeling" archetype emphasizes control with an internal
focus. The shared set of values for a Hierarchy is order, stability, uniformity, control and
smooth operations. Rules and procedures allow for control and an internal focus
promotes efficiencies.
The Market culture or "thinking" archetype maintains an external focus, yet
mechanistic processes. Competitiveness, goal achievement, goal clarity and productivity
are examples of the values that this culture type holds. A Market culture aims to satisfy
its customers, while there are guidelines and set procedures in doing so. This could
create adverse feelings among its members, as well as, confusion in productivity
evaluations.
There is a strong relationship between Quinn's (1988) theory of culture as well as
Miles and Snow's (1978) strategic types, Oliver's (1982) domain orientation, Ouchi's
(1981) organization types (1981), Williamson's (1981) transaction cost forms, Quinn
and Rohrbaugh's (1983) effectiveness model and Goffee and Jones' (1998) typology.
The similarities among these organizational theories are further detailed in Chapter II.
Deshpande', Farley and Webster (1992) conjectured that certain types of
corporate culture would be related to firm performance. The current research looks at
this conjecture through the use of corporate strategy and fit as a moderating variable to
the initial relationship.
Table 1-1
Culture Types and Values Associated
Management Emphasizes Flexibility
Organic Processes
Internal
Orientation
Maintenance
Style
Clan
"Feeling" Archetype
Adhocracy
"Intuition" Archetype
Shared Values
Participation
Cohesiveness
Openness
Loyalty
Teamwork
Hierarchy
"Feeling" Archetype
Shared Values
Adaptability
Growth
Innovation
Creativity
Risk Taking
Entrepreneurial
Market
"Thinking" Archetype
Shared Values
Order
Stability
Uniformity
Control
Smooth Operations
Administrative
Shared Values
Competitiveness
Goal Achievement
Goal Clarity
Productivity
Superiority
Decisiveness
External
Orientation
Position
Style
Mechanistic Processes
Management Emphasizes Control
Adapted from Quinn 1988; Deshpande', Farley and Webster 1992; Kimberly and Quinn,
1984; Jung 1923; Burns and Stalker 1962 and Yarbrough 1996.
Strategy
Strategy is "the determination of the basic long-term goals and objectives of the
enterprise and the adoption of courses of action and the allocation of resources
necessary for carrying out these goals" (Chandler, 1962, pp. 13).
The corporate strategy literature, like the corporate culture literature, is vast.
Strategy has been explored in respect to marketing, logistics and management
perspectives (Anderson, 1982; Barney, 1996,2001a, 2001b; Conant, Mokwa and
Varadarajan, 1990, Dess and Davis, 1984, Lynch, Keller and Ozment, 2000,
Venkatraman and Ramanujam, 1986,1987; Vorhies, 1993; Weick, 1979 and Williamson,
1999, Miller and Shamsie, 1996; Miller and Lee, 2001). Again, through the vast
literature on strategy, a best-fit view has not been applied to evaluate its relationship with
firm performance.
There are three dominant schools of thought in the strategy literature: resourcebased perspective (Barney, 1986), Porter's (1980) generic business strategies and Miles
and Snow's (1978) typology. The strategy construct of this research will pertain to the
generic strategies that Porter (1980) defines as Low Cost Leader, Differentiation or
Focus. The Focus strategy type has been shown as a subgroup to the Differentiation and
Low Cost Leader strategy type (Day, 1990; Miller, 1988; Davis and Miller, 1988). Thus,
only the Low Cost Leader and Differentiation strategies will be used for the strategy
construct in this research.
Generic Business Strategies: Porter (1980)

Porter (1980) identified three generic strategies of a firm, which are not mutually
exclusive (Dess and Davis, 1984; Lynch, Keller and Ozment, 2000 and Miller, 1987):
Differentiation, Overall Low Cost Leader and Focus. These three competitive strategies
aid a firm in creating not only a defendable position against the five competitive forces
through defensive or offensive actions but also in outperforming competitors. Porter

defines the five competitive forces (Porter, 1980):
1. The threat of new entrants

2. The threat of substitute products or services
3. Buyer power
4. Supplier power
5. Rivalry among existing firms
According to Porter, the industry profitability is determined by these forces.

Porter suggests that a firm may pursue superior performance by employing the above five
market forces to select an attractive industry or by selecting a strong competitive position
within an industry through Low Cost Leader, Differentiation or a Focus strategy. He also
explains his concept of being "stuck-in-the-middle."
A Low Cost Leader offers a product or service at a lower price than its
competitors. An organization can offer a lower cost than competitors by emphasizing
scale efficiencies, cost reduction in manufacturing and minimizing expenses associated
with R&D, services, selling and advertising. A Differentiator creates a product or service
that is perceived as being unique industry-wide. An organization can differentiate
through areas such as design or brand image, technology, features and customer service.
An organization that prescribes to a Focus strategy is one that utilizes either a Low Cost
or Differentiation strategy aimed at a specific market. This type of strategy is, also,
known as a niche strategy. A focus strategy compliments either a low cost leader or
differentiator, but does not replace it (Miller, 1986).
Miller (1992) suggests that a mixed strategy may be better than pursuing a single
generic strategy. Porter (1980) describes this idea of a mixed strategy as "stuck in the
middle." An organization that is "stuck in the middle" is one that has a mixed strategy of
the three. Porter (1980) states that this type of strategy will inevitably result in lower
profitability.
Miles and Snow (1978): The Relation to Corporate Culture (Quinn, 1988) and
Porter's Generic Strategies (1980)
Miles and Snow (1978) defined strategies for an organization as defender,
prospector, analyzer or reactor. This typology will also be used for the strategy construct
on a secondary basis as well as for the corporate culture construct. The similarity of
Miles and Snow's typology with the present corporate culture construct is presented
below. A validated measure of the Miles and Snow typology will be used in the
methodology in order to reaffirm the reasonable theoretical bases for the current research
question of the best-fit between corporate culture and corporate strategy.
Miles and Snow (1978) identified four different strategies: prospector, defender,
analyzer and reactor. These four strategies closely relate to the four types of cultures
described in the culture section of this chapter. Miles and Snow's (1978) theoretical
framework of strategy is based on the idea that a firm must maintain an effective
alignment with its environment through adaptation. They constructed a typology of four
10
different strategies that consist of different patterns of adaptive behavior within an

industry.
Prospectors maintain business in a more dynamic environment than other firms in
the same industry. Prospectors continually evaluate its product-market domain and take
advantage of new opportunities by emphasizing flexibility. One can see the similarity of
this type of strategy with a Differentiator (Porter, 1980). The risks of a prospector
strategy are as follows: They may over-extend themselves in terms of products and
markets and it may have technological and management limitations through the
underutilization or mis-utilization of resources. An Adhocracy culture is suggestive of the
prospector strategy. They both emphasize flexibility for innovations or market
exploration. They thrive in a changing and flexible market.
Defenders align themselves with a particular portion of the overall environment
and manage the internal interdependencies associated with this alignment (Miles and
Snow, 1978). One can see the similarity of this type of strategy and Porter's Low Cost
Leader. Defenders do business in an environment of greater stability than their
competitors in the same industry. The risks of a defender strategy are as follows: it relies
on the continued viability of a single narrow market domain, and that it is greatly capable
of responding to today's challenges. But, what happens if tomorrow is different? This
strategic type is closely related to the Hierarchy culture type. A defender strategy like a
hierarchy culture has the challenge of internal controls, mechanistic processes, which
slows their ability to face a different tomorrow.
Analyzers are a combination of defenders and prospectors. Analyzers analyze the
environment for new product and market opportunities, while simultaneously maintaining
11
a firm base of traditional products and customers. Analyzers avoid the expense of
research and development by imitating the successful actions of prospectors, while
producing familiar products or services efficiently. The dual nature of an analyzer
strategy creates two risks: 1) management must maintain a balance between the
organization's domain, technology and structure and 2) it can never be completely
efficient or completely effective (Miles and Snow, 1978). One can see how this type of
strategy may be an example of Porter's "stuck-in-the-middle." A Market culture
resembles the analyzers strategy type. They both use a combination of a defender
mechanistic management for control as well as a prospector flexible market position.
Reactors are forced into the response mode, because they are unable to pursue one
of the three stable strategies of prospector, defender or analyzer. This type of strategy
may, also, be considered "stuck-in-middle." The reasons a firm may become reactors are
1) top management may not have a clearly articulated organizational strategy, 2)
management may not fully shape the organization's structure and processes to fit the
chosen strategy and 3) management may maintain the organization's strategy-structure
relationship despite overwhelming changes in the environment (Miles and Snow, 1978).
A clan is indicative of the reactor strategy. They both require a stable market position
and are slow to respond due to the fact that they are comfortable as is.
Performance
Firm performance has been a strong measure for a plethora of research
paradigms. In particular to this research, firm performance is the common denominator,
or construct, of the corporate culture and strategy literature, yet separately (Anderson,
12
Fornell and Lehmann, 1994; Bourgeois, 1980; Capon, Farley and Hoenig, 1990;
Deshpande', Farley and Webster, 2000; Lynch, Keller and Ozment, 2000; Venkatraman
and Ramanujam, 1986 and Vorhies, 1993; Miller and Shamsie, 1996).
Financial measures are considered of primary importance in assessing
organizational performance (Dess and Davis, 1984; Deshpande, Farley and Webster,
1992). This dissertation will be using specific accounting measures of performance to
analyze this best-fit concept. These measures include return on investment (ROI), return
on assets (ROA), return on equity (ROE), operating ratio (OR) and yearly increases in
revenues (sales growth) (Venkatraman and Ramanujam, 1986).
Multiple measures are used in this study to measure firm performance due to the
Dess and Davis' (1984) example. They found a difference between strategy types
depending on the financial measure used for the dependent variable. Within an industry,
a certain culture may lead to a greater specific performance outcome and vice versa for
strategy. Thus, to truly gain a view of the differences between the culture-strategy/fr on
performance, multiple measures are essential.
Conceptual Model
It is expected that the results of this research will show that superior performance
is achieved when a corporation's culture matches its strategy. Figure 1-1 is an illustrative
model of the relationships and variables included, and it sets the framework for this entire
research effort.
13
Figure 1-1
An Illustrative Model of Relationships and Variables: Corporate Culture,
Corporate Strategy and Performance
Corporate
Culture
Corporate
Strategy
Best-fit between
Culture and Strategy
Figure 1-2
The Two-by-two Model: Best-Fit between Corporate Culture and Corporate
Strategy in Respect to Firm Performance
Strategy Type
Low Cost
Hierarchy
Differentiation
High Performance
Low Performance
Low Performance
High Performance
Culture Type
Adhocracy
14
Through the theoretical foundation there are four culture types (Quinn, 1988;
Deshpande, Farley and Webster, 1993) and three strategy types (Porter, 1981). However,
the following types were eliminated from this conceptual model. The clan and market
culture types as well as the focus strategy type are expected not to be significant for
reasons detailed in Chapter II. This creates a two-dimensional moderating model, known
as a two-by-two (Figure 1-2).
Research Questions and Hypotheses

The existing literature on culture, strategy and performance examines the link
between strategy and performance (Bourgeois, 1980; Conant, 1990; Dess and Davis,
1984; Frankwick, 1994; Hall, 1980; Snow and Hrebiniak, 1980; Venkatraman and
Ramanujam, 1986, 1987; Vorhies, 1993; Lynch et al, 2000) as well as culture type and
performance (Deshpande et al., 1992; 1993; 2000; Conrad et al., 1997; Dennison, 1984;
Kotter and Heskett, 1992; Ruekert, et al, 1985; Goffee and Jones, 1998). The gap that
this research aims to fill is the link between corporate culture type, strategy and the
influence on performance. This particular gap involves three principal research questions
of the current study. First, is there a relationship between corporate culture and firm
performance as well as corporate strategy and firm performance? Second, does this
relationship change significantly in strength or direction when corporate culture-strategy
fit is considered? Finally, which corporate culture-strategy fit creates the best overall
firm performance? The foundation for these research questions are further detailed in
Chapter II and Chapter III.
15
Hypotheses
"Successful organizations achieve strategic fit with their market environment and
support their strategies with appropriately designed structures and management
processes" (Miles and Snow, 1984, pp. 10). Financial performance is the governing goal
for most organizations. Thus, looking at financial performance of organizations in
respect to its corporate culture-strategy fit has contributions to the trucking industry with
empirical significance and practical significance. The previous discussion within the
Theoretical Foundation section of this chapter, the Argument for a Fit Perspective section
in Chapter II, as well as, the Hypotheses section in Chapter III, give the reasoning for the
moderating affect of the best-fit concept (Figure 1-3), and the resulting two-by-two
matrix due to the two-dimensionality of the constructs (Figure 1-2). The following is a
brief explanation of the hypotheses associated with the model.
This hypothesized model is rooted in the idea that one corporate culture type or
generic strategy type is not superior to the other (Deshpande' and Webster, 1989; Goffee
and Jones, 1998). Therefore, it is hypothesized that having a clearly defined corporate
culture and generic business strategy (whichever it may be) leads to better firm
performance than not maintaining a clearly defined corporate culture or corporate
strategy.
Hypothesis 1 (HI): A clearly defined corporate culture will be positively related to firm
performance.
16
Hypothesis 2 (H2): A clearly defined and implemented generic business strategy will be
positively related to firm performance.
Figure 1-3
Conceptual Model and the Associated Hypotheses
The Adhocracy culture has the characteristics of being market oriented and
organic in style. Organic in style means it has an open-door policy, entrepreneurial in the
means to accommodate the customer. It would be very likely that a Differentiation
strategy would best fit with this type of culture. A Differentiation strategy demands
17
flexibility. The concern for a differentiator is to scan the environment and offer new
products or services to continuously meet the needs of customers. The same
entrepreneurial values and creative drive that an Adhocracy culture holds would create
difficulty in maintaining a Low Cost Leader strategy. The goal for an Adhocracy is
customer satisfaction not low cost. For example, if your goal is to utilize R&D to create
a newer, better product or service for your customers, you are not applying low-cost
mentality.
Hypothesis 3 (H3): An Adhocracy culture-Differentiation strategy fit leads to greater firm

performance than an Adhocracy culture-Low Cost Leader strategy fit.

performance than a Hierarchy culture-Differentiation strategy fit.
A Hierarchy culture has the characteristics, which would allow successful

implementation of a Low Cost Leader strategy. To maintain a Low Cost Leader strategy,
there needs to be processes in place to control cost throughout the organizational
functions. The mechanistic style of a Hierarchy creates an excellent avenue for low cost
strategy capabilities. If a Hierarchy culture tried to differentiate there would be
roadblocks at every turn due to these well defined and written procedures. A Low Cost
Leader strategy demands control. In a Low Cost Leader strategy, it is thought that a
customer is cost-conscious and that is the purchasing persuasion. Thus, internal focus
18
and control to maintain the low cost advantage takes precedence over R&D to
accommodate the needs of the customer.
Hypothesis 5 (H5): A Hierarchy culture-Low Cost Leader strategy fit leads to greater
firm performance than a Hierarchy culture-Differentiation strategy fit.
firm performance than an Adhocracy culture-Low Cost Leader strategy fit.
Testing these hypotheses will allow the three research questions to be answered.
Hypothesis 3 and Hypothesis 5 address the question of whether introducing the culturestrategy fit component into the model changes the initial relationships significantly in
strength or direction. Hypothesis 4 and Hypothesis 6 will determine which corporate
culture-strategy fits create the best overall firm performance.
Contributions of Study
Theoretical Contributions
There is an element of theoretical contribution to the corporate culture literature
throughout this dissertation. One contribution lies in extending the current comparison
literature of organization theories and strategy (Miles and Snow, 1978; Oliver, 1982;
Ouchi, 1981; Williamson, 1981; Quinn and Rohrbaugh, 1983) to Mary Douglas'
typology (Goffee and Jones, 1998).
19
Another contribution involves the common thought that corporate culture can
create higher financial returns for an organization (Deshpande', Farley and Webster,
1993; Baker and Hawes, 2001). The relationship between the corporate culture construct
and the strategy construct has not been empirically examined in the literature. Thus, the
relationship between corporate culture and firm performance will be investigated by
using corporate strategy and the best-fit between it and corporate culture as a moderating
variable for the relationship of corporate culture and firm performance as well as
corporate strategy and firm performance. The culture type-strategy type fit is expected to
affect each construct with respect to performance. Thus, this model is original, utilizing
the best-fit as a moderator in the model.
Methodological Contributions
The measures for each construct have been shown to be empirically sound. Dess
and Davis (1984) created scales that empirically supported Porter's three generic
strategies. Moorman (1995) developed a modified Competing Values Culture measure
that has been used in previous studies and shown to have internal consistency and
reliability (Yarbrough, 1996). The performance accounting measures previously tested
will be used in the current research design and context (Anderson, Fornell and Lehmann,
1994; Bourgeois, 1980; Capon, Farley and Hoenig, 1990; Deshpande', Farley and
Webster, 2000; Lynch, Keller and Ozment, 2000; Venkatraman and Ramanujam, 1986;
Vorhies, 1993; Yarborough, 1996). Another methodological contribution is the use of a
paragraph form measure, which has been stated useful in culture research (Conant,
Mokwa and Varadarajan, 1990). As previously mentioned and discussed in detail in
20
Chapter II, there have been studies on strategy and performance, culture and
performance, but nothing that utilizes best-fit as a moderator to these relationships. The
current study will utilize a moderator variable perspective, unlike other research in the
literature on these three construct, or even each individual relationship.
The purpose of the present research is not to determine if one strategy or culture
results in greater performance, but rather that the fit between these two will determine
enhanced performance. This in itself contributes to the theory and methodology of each
construct.
Practical Contributions
The practical contributions from this dissertation are three-fold, assuming the
research affirms the research questions and hypotheses. First, this research will
encourage executives and management to realize that both corporate culture and
corporate strategy constructs are important in determining performance. Second, an
organization will have an avenue to determine its particular culture and strategy, in order
to evaluate the level of current fit (Miles and Snow, 1984). Third, this study will
illuminate the possible combinations that will lead to best performance for particular
organizations with a specified corporate culture or strategy.
It is beyond the present dissertation to determine if an organization's culture has
the ability to change greater, faster or at all compared to its strategy. There is much
literature on the ability as well as lack of ability of corporate culture to change. Also,
there is much literature on the ability or lack of ability for strategy to change as well.
This dissertation is concerned with the current culture an organization maintains and the
21
current strategy that it employs. Therefore, if amis-fit exists for an organization, further
analysis will need to be done to determine which element should change to fit the other:
corporate culture or corporate strategy.
Plan of Dissertation
The primary focus of this dissertation will be to empirically examine the "best fit"
configurations between corporate culture and generic business strategies and the
relationship of each to firm performance. The goal of this research will be to determine
which corporate culture matches best with which generic business strategy in order to
produce greater firm performance, thus it follows a best-fit model. In order to examine
this best-fit concept, I examine the moderator effect of corporate strategy on the
relationship between corporate culture and performance within the specified industry.
This dissertation includes five chapters. Chapter I consists of an introduction and
overview of the study. It explains the theoretical foundation of this research, while
Chapter II contains the literature review of each element of this study. Through this
literature review, a summary of studies on corporate culture, strategy and performance is
offered for foundational work. The more current and relevant existing research will be
discussed in detail.
Chapter III presents the methodology of this research. The proposed model is
presented through the conceptualization of the constructs (Corporate Culture, Strategy
and Performance) and the associated hypotheses. Then, the sample characteristics as well
as the measures and the validity and reliability of each construct measurement are
discussed. Finally, the methods of testing the constructs and hypotheses will be offered.
22
Chapter IV discusses the results of the hypotheses tested. This chapter includes
the psychometric properties of the study (such as, validity, reliability and
unidimensionality of the constructs), hypotheses testing, hypotheses supported and the
theoretical and practical implications of the results. Chapter V will depict the
conclusions, study limitations and areas for future research.
23
Chapter II
A REVIEW OF THE RELEVANT LITERATURE
Introduction
In the literature, organizational culture, also known as corporate culture, has been
focused in the organizational theory (Ouchi and Wilkins, 1985; Deshpande' and
Parasuaraman, 1986; Deshpande' and Webster, 1989) and resource-based theory of
strategy research (Barney 1986; 1991; 1996; 2001a/b). Although, to date, the conceptual
fit of corporate culture and the generic business strategies (Porter's (1980) low cost
leader and differentiation strategies) have not been evaluated in-depth. The construct of
corporate culture and its importance in the firm escalated in the 1980's and continues
today (Allen, 1985; Alvesson, 1993; Bagozzi and Phillips, 1982; Barley, 1983; Elmes and
Wilemon 1988; Eubanks and Lloyd, 1992; Frost, Moore, Lundberg and Martin, 1985;
Geertz, 1973; Gross and Rayner, 1985; Hendry, 1999; Hofstede, 1980; Kets de Vries and
Miller, 1986; Kilmann, Saxton and Serpa, 1985; Louis, 1983; Martin, 1992; Moorman,
1995; Oliver, 1982; Ouchi, 1980, 1981; Ouchi and Wilkins, 1985; Pascale, 1985; Quinn
and Rohrbaugh, 1983; Quinn, 1988; Quinn and McGrath, 1985; Quinn and Spreitzer,
1991; Schein, 1990,1996,1998 and Smirchich, 1983). Conflict can arise through
differences in corporate culture within and across firms in a supply chain; this issue, as
well as possible industry pressures, may create a demand for cultural change (Buono,
Bowditch and Lewis, 1985; Gregory, 1983; Hendry and Hope, 1994; Hope and Hendry,
1995; Lorsch, 1985; Posner, Kouzes and Schmidt, 1985; Shein, 1990,1996,1998;
Schwartz and Davis, 1981; Tichy, 1981; Weick, 1987 and Williamson, 1975,1981,
24
1993). Research has incorporated corporate culture theory into the marketing paradigm
in two ways: marketing orientation and marketing strategy. The interrelationships
between corporate culture and market orientation as well as marketing strategy and the
impact on firm performance have been studied (Anderson, 1982; Conrad, Brown and
Harmon, 1997; Day, 1990; Dennison, 1984; Deshpande' and Parasuaraman, 1986;
Deshpande' and Webster, 1989; Deshpande', Farley and Webster, 1992,1993; Hill,
Elmes and Wilemon, 1988; Goffee and Jones, 1998; Gordon, 1985; Hogan, Gilbert,
Pearson, Smith and Goffee, 1998; Jaworski and Kohli, 1993; Kohli and Jaworski, 1990;
Kotter and Heskett, 1992; Lusch and Laczniak, 1989; Miller, 1986; Narver and Slater,
1990; Piercy and Peattie, 1988; Reukert, 1992; Ruekert, Walker and Roering, 1985;
Slater and Narver, 1994; Williamson, 1993 and Yarbrough, 1996). Very few have looked
at strategy and corporate culture (Scholz, 1987 and Schwartz and Davis, 1981). Whereas
these researchers have significantly contributed to our understanding of corporate culture,
there is a need for an empirical investigation of the fit between corporate culture and the
generic strategies (Scholz, 1987 and Schwartz and Davis, 1981).
Corporate Culture
The literature on corporate culture is so extensive and diverse. In this section, this
effort will concentrate on and present only the relevant concepts and those closely
comparative and complementary of the corporate culture construct associated with this
research.
25
Concepts and Definitions of Corporate Culture

Bion (1961) created a theory that states that a group's culture emanates from the
interaction between its task and the unconscious basic assumptions that members use to
contain anxiety. He continues to say that there are actually two groups that are involved
within a group meeting: the group that gets the job done and the shadow group that
consists of group members' hidden anxieties, expectations and prior experiences. This
shadow group is what creates the group's culture. This is a unique way of viewing group
culture, but the metaphor of a culture being a shadow of the group is a superb depiction
of culture. Most of the time, culture is not in open view and is difficult to understand
even for those participating in it.
Culture is to people as water is to fish; they are surrounded by it all the time, yet
completely oblivious to it, until they are taken out of it. This expression of culture is the
most articulate, yet simple, metaphor to describe culture. Goffee and Jones (1998)
supplements this idea by saying that people are often aware of the corporate culture in a
company when they first join it, because they are looking through "fresh eyes." But once
they have been there for a time (saturated), they adapt and are not conscious of the
culture any longer. One of the most difficult issues a company faces today is saturation.
As Goffee states, "they may become so embedded in the culture that they actually don't
see it clearly enough to judge whether it's right for what they're trying to do" (pp. 46).
That is why corporate culture is a crucial construct to consider in respect to strategy.
There are numerous definitions of corporate culture. "What corporate culture
boils down to is the ability to get your people to say 'our company'," states Daniel
Gilbert, chairman and CEO of Rock Financial Corporation (Hogan, Gilbert, Pearson,
26
Smith and Goffee, 1998). "Corporate culture is just a habitual way of behaving and
acting, often motivated from deeply ingrained presumptions about the right way to act,"
says Rob Goffee, professor of organizational behavior, London Business School. "As in
natural evolution, organizations that can't adapt over time have little hope for future
success. Corporate culture is that evolution mechanism" (Hogan et al., 1998, pp.56).
This could be true, or it could be the idea of best-fit between a company's culture and its
strategic decisions. Conrad, Brown and Harmon (1997) operationalized corporate culture
as a pattern of values and beliefs that aid individuals in understanding organizational
functioning. The following definition of corporate culture is the accepted definition for
this research. This definition was produced by Deshpande' and Webster (1989) after a
thorough review of over 100 studies in organizational behavior, sociology and
anthropology.
"... the pattern of shared values and beliefs that help individuals understand
organizational functioning and thus provide them norms of behavior in the
organization" (Deshpande' and Webster, 1989, pp.4).
Theoretical Background
Theoretical analysis has been developed and applied to corporate culture (Ouchi,
1980; Smircich, 1983 and Deshpande' and Webster, 1989). Corporate culture has been
evaluated through the anthropological and organizational behavior perspectives
(Smirchich, 1983). Smirchich states that the difference between corporate culture and the
organizational cognition approach lies within a degree of attraction, aversion and
interrelations of values. Cognition is a thought or an idea and holds no valence, where
values have valence. This theory is supported by the idea that cognitive systems
27
recognize which values are most influential in allowing the firm to adapt to its
environment, thus making the differentiation neutralized. This theory suggests that
culture is the organization, rather than a concept that is contained within an organization.
Thus, if culture is the organization, the depth of understanding relies in evaluated
corporate culture through the interpretative paradigm and methodologies, such as, deep
interview or ethnography within the company. Schein (1993; 1996) also states the need
to use ethnographies and other interpretative methods in organizational research.
The cognitive organization theory views an organization as a knowledge system
(Weick, 1987). This theory views culture as a system of relationships between learned
values and varying arrangements of these value systems, which results in different firm
results (Smirchich, 1983; Yarbrough, 1996).
The variation in the arrangements of these value systems result in different
organizational results. This research will be evaluating corporate culture as a set of
values, which if managed properly can create higher financial returns (Baker and Hawes,
2001). In this research, the management of these values involves the best-fit with
strategy.
In cognitive theory, corporate culture has been empirically tested as an
independent variable because culture allows the firm to adapt (Smirchich, 1983). Many
others have viewed corporate culture as an independent variable as well (Kotter and
Heskett, 1992; Kunda, 1992; Deal and Kennedy, 1982 and Peters and Waterman, 1982).
As mentioned previously, corporate culture has been viewed through various
perspectives. Mary Douglas has been integral in developing the anthropologic
perspective of culture theory (Hendry, 1999). Her theory is usually referred to as the
28
grip-group theory. This theory refers to the socio-cognitive context, in which an

individual finds his/herself (Hendry, 1999). Her model proposed that an individual's
behavior, perception, attitudes, beliefs and values are shaped, regulated and controlled by
constraints that can be grouped into two domains, group commitment and grip control
with "strong" and "weak" endpoints. The grip dimension is the scope and coherence of a
dominant system of classification, structuring the individual's world- view, and the group
dimension is the control exerted on the individual ego by the rest of the community.
Douglas later created the typology of markets, hierarchies and sects to describe
societal types, which will be discussed in the culture type section. The terms are the
same but the meaning of market and hierarchy are not the same as Williamson's (1981)
transaction cost theory of economics describes. This theory was brought into an
organizational context by Altaian and Baruch (1998) and will be used in conjunction with
Hofstede's work in future research investigating corporate culture and country culture.
The academic work prior to the 1980's, evaluated corporate culture through the
cognitive perspective. Burns and Stalker (1961) depicted value systems as adaptive
(organic) or non-adaptive (mechanistic) to environmental circumstances. In the 1980's,
there was a surge of interest of corporate culture in business research. Ouchi (1981)
promoted certain values found in Japanese firms that he believed American firms should
adopt. Schein (1990) has looked at organizational psychology and culture in the context
of transition.
In 1983, the Administrative Quarterly Science publication dedicated an entire
issue (September) to the debates surrounding the conceptualization of corporate culture.
For instance, Gregory (1983) stated that organizations have multiple cultures, and Schein
29
(1990) asserts that an organization has a single culture. Schein (1996) revisits this idea of
culture and depicts three existing sub-cultures in an organization: the executives,
engineers and operators. The question in the 1980's was, is corporate culture and cultural
values simply a fad in organizational research, or is it a fundamental part of an
organization and organizational theory? The answer is that it is fundamental, in which an
extensive corporate culture theory has been developed.
Quinn and Rohrbaugh (1983) developed the competing values model for firm
effectiveness, where effectiveness is depicted as stable or adaptable or participative or
competitive. Thus, there are four types, which compete with one another (See Figure 2.1
and Figure 2.2). Quinn and Cameron (1983) utilized this competing values model to
examine firm effectiveness by relating value systems to firm life cycles.
30
Figure 2.1
Competing Values Framework
Human Relations
Model
FlexiDinty
]Vleans: Cohesion,
Morale
Ends: Human Resource
Development
Means: Flexibility,
Readiness
Ends: Growth, Resource
Acquisition
External
Internal _
Means: Information
Management, Communication
Ends" Stability, Control
Internal Process
Model
Open Systems
Model
Means: Planning, Goal

Setting
Ends: Productivity, Goal
Setting
Control
Rational Goal
Model
Adapted from Quinn and Rohrbaugh (1983), "A Spatial Model of Effectiveness Criteria:
Towards a Competing Values Approach to Organizational Analyses," Management
Science, 29 (January), 33-51.
31
Figure 2.2
Culture Types and Values Associated
Organic Style
Clan
"Feeling" Archetype
Shared Values
Internal
Orientation
Maintenance
Style
Adhocracy
"Intuition" Archetype
Shared Values
Adaptability
Growth
Innovation
Creativity
Risk Taking
Entrepreneurial
Participation
Cohesiveness
Openness
Loyalty
Teamwork
Hierarchy
"Feeling" Archetype
Market
"Thinking"
Archetype
External
Orientation
Position
Style
Shared Values
Shared Values
Order
Stability
Uniformity
Control
Smooth Operations
Administrative
Competitiveness
Goal Achievement
Goal Clarity
Productivity
Superiority
Decisiveness
Mechanistic Style
Adapted from Quinn 1988; Deshpande', Farley and Webster 1992; Kimberly and Quinn,
1984; Jung 1923; Burns and Stalker, 1962 and Yarbrough, 1996.
32
Twenty-five years ago, a large organizational (business) form consisted of

multidivisional hierarchy or bureaucracy, also known as, vertical integration. Business
hierarchies came to be through the opportunities that technology created in transportation,
communications and mass production (Chandler, 1962). The technological innovations
that help create the evolution of the business hierarchy became its own threat, as well as,
through information technology. With information technology, economies of scale began
to decline and the competitive market was opened up to entrepreneurs. This change has
been seen in the growth of third-party providers, as well as, the Internet success stories
(Hendry, 1999). The result is that many large businesses are currently operating as
hybrid cultures, having both aspects of market and hierarchical structures and values. In
the end, Douglas says that a firm cannot sustain this hybrid, because as you gain one, the
other erodes. Quinn (1988) states that although the distinct values of a firm may overlap,
the values of one type of culture tend to compete with the values of another type. Thus,
the question may be, do firms evolve through the various corporate culture types through
its various life-cycle stages?
Quinn and Cameron (1983) found that firms tend to put greater emphasis on
certain values depending on their life-cycle stage. For instance, new firms stress
flexibility and growth with a focus on resource acquisition. In the second stage,
organizations shift their attention to human resources and find effectiveness in cohesion
and morale. In the third stage, organizations specify goals to achieve and implement
control mechanisms. Order and stability is the focus, thus representing a hierarchical
culture. In the final stage, firms begin to realize that they need to shift attention and
focus on the external environment, thus back to an Adhocracy culture. This question is
33
beyond the scope of this research, but firm size and firm age will be considered in the
analysis.
The competing values framework was also used in Kimberly and Quinn's (1984)
book suggesting the necessity of firms in transition to perform cultural analyses. In 1991,
an entire volume of Research in Organizational Change and Development was dedicated
to the use of the competing values perspective. Freeman and Cameron (1993) evaluated
a firm's effectiveness through culture strength, culture congruence and culture type.
They found that culture type is the best predictor of firm effectiveness.
The effect of management of corporate culture on firm performance was greatly
researched in the 1980's (Allen, 1985; Davis, 1984; Dennison, 1984; Gordon, 1985;
Buono, Bowditch and Lewis, 1985 and Lorsch, 1985). Posner, Kouzes and Schmidt
(1985) found through their research that a clear understanding of a corporation's culture
did lead to a significant difference in organizational performance.
Quinn and Hall (1983) illustrates that the competing values theory is a metatheory of the following organizational theories: Miles and Snow's (1978) strategic
orientation types, Ouchi's (1980,1981) organizational forms, Williamson's (1981)
transaction cost forms and Oliver's (1982) four domains (Figure 2.3). This meta-theory
is further discussed in the Culture Types section below as well as in Table 2.1. Although
this theory has been utilized and corroborated, there has not been much recent research
using the competing values model in the 1990's and the new millennium. This theory
and framework is the one that will be used in this research.
34
Figure 2.3
Meta-theory for Corporate Culture
Organic
Internal Firm
Environmental
Orientation
Maintenance
Style
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
7.
Clan
Reactors
Group Domain
Theory "Z"
n/a
Human Relations
Weak
Grid/Strong
Group
Communal
Hierarchy
Defender
Hierarchical
Domain
Hierarchy
Hierarchy
Internal Process
Strong
Grid/Strong
Group
n/a
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
7.
Adhocracy
Prospector
Professional
Domain
n/a
n/a
Open Systems
Weak Grid/Weak
Group
Networked/
Fragmented
Market
Analyzer
Task Domain
Theory "A" Firm
Market
Rational Goal
Strong
Grid/Weak Group
Mercenary
External Firm
Environmental
Orientation
Position
Style
Mechanistic Style
Organization Theories
1. Miles and Snow's Strategic Types
2. Oliver's Domain Orientation (1982)
3. Ouchi' s Organization Types (1981)
4. Williamson's Transaction Cost Forms (1981)
5. Quinn and Rohrbaugh's Effectiveness Model (1983)
6. Mary Douglas' Typology
7. Goffee and Jones (1998)
Adapted from Yarbrough, Corporate Culture, Market Orientation and Customer

Satisfaction, Unpublished Doctoral Dissertation, University of Arkansas a
dissertation.
35
Culture Types
There have been many proposed corporate culture typologies (Burns and Stalker,
1961; Hendry, 1999; Miles and Snow, 1978 and Mintzberg, 1978), but this research
utilizes the typology defined by Quinn et al. This section will describe the utilized
typology, as well as, a traditional comparison and a current comparison to further the
understanding of corporate culture literature.
Quinn and Hall (1983) began to determine the values that employees held as
valuable with regard to corporate effectiveness. They found four clusters to corporate
effectiveness. Quinn (1988) and Quinn and McGrath (1985) continued these findings
and formulated a model of corporate culture based on the Jungian framework with two
dimensions: 1) firm orientation (internal versus external) and 2) firm process (organic
versus mechanistic). The competing values theory of corporate culture uses an
information processing approach to psychological types, Miles and Snow's (1978)
strategic orientation, Ouchi's (1980) organizational forms and Williamson's (1981)
transaction cost theory. These two dimensions combine two dominant theoretical
traditions in organizational behavior: the systems-structural perspective and the
transactional cost perspective (Deshpande', Farley and Webster, 1993).
There are two extreme kinds of firm orientation, internal and external. Firm
orientation describes whether the firm focus is more on internal maintenance or external
positioning. Firm processes have two extremes as well, organic and mechanistic. Firm
processes is to the extent to which the firm's emphasis is more on flexibility, spontaneity
and individuality, or more on control and stability and order. Organic structures are
better suited for dynamic environments, because they allow quick organizational
36
responses to changing external environments. Mechanistic structures are more

appropriate for predictable environments where quick response is not crucial.
Four types of corporate culture emerge from these two dimensions, which in part
creates the model for this dissertation. These four culture types are consistent with the
works of Miles and Snow (1978), Williamson (1975), Ouchi (1980) and Mintzberg
(1978) (Figure 2.3). Table 2.1 summarizes descriptions each culture type in respect to
these various authors. Each culture type is discussed below.
37
Table 2.1
Literature Review Descriptions of Clan, Adhocracy, Hierarchy and Market
Clan
Adhocracy
Hierarchy
Market
Cohesiveness, teamwork and commitment;

Lifetime employment and collective decision making, "theory Z" firm
(Ouchi, 1981); slow to analyze market opportunities and slow to allow
customers to impact the work of its employees (Quinn and Hall, 1983);
emphasis on the group domain Oliver, 1982); stress democratic effort and
teamwork (Deshpande, Farley and Webster, 1993 & 2000);
Management are more mentors and facilitators using cohesion and group
interaction to achieve high morale and loyalty (Quinn, 1988); personal
place with a sense of family (Yarbrough, 1996)
Creativity, entrepreneurship and dynamism(Webster and Deshpande,
1990); Responds rapidly, nearly intuitively to external signals; Relatively
high level of ambiguity allowing for creativity; org. strives for growth
through development of constituents (Oliver, 1982); Decentralized and
Differentiated; More organic in its adaptability(Burns and Stalker,
1961); Managers are innovators or brokers (Quinn, 1988); Emphasis on
creative problem solving, regular change and managing transitions to
meet external constituency demands (Yarbrough, 1996); prospectors are
suggestive of this type (Miles and Snow, 1978)
Order, rule, regulations, uniformity and efficiency; emphasis placed on
control of internal functions; Managers are coordinators or monitors;
Critical Tasks = Financial control and budgeting (Quinn, 1988);
resembles the defender strategy (Miles and Snow, 1978); Org. discovers
and maintains a secure market niche, offering a limited line of products
and services; tend to be centralized wanting predictability (Quinn and
Spreitzer,1991); Sets of Specific Policies and Procedures which must be
adhered to; Risk averse and mechanistic in its orientation (Burns and
Stalker, 1961); ) orderly operations, very organized and structure place of
work (Deshpande', Farley and Webster, 1993)
Competitiveness and goal achievement; Exchange transactions and

contracts are expected to define relations~ low level of trust (Williamson,
1981); (Ouchi, 1981) Market is close to the Theory "A" organization:
specified career paths and rapid promotion; Focus is on task (Oliver,
1982); Individualism and achievement = Success; resembles the analyzers
(Miles and Snow, 1978); (Quinn and Hall, 1983; Snow and Hrebiniak,
1980) Usually 2nd in with more cost-effective products or servicesEmphasis on logical problem solving and person motivation; (Quinn,
1988) Managers are producers or directors; Goal is directed and driven
38
The Clan
The clan culture share values that are organic and internal, emphasizing
cohesiveness, participation, team work and commitment to the firm. This type of firm is
flexible and can adjust quickly to the needs of its members. An organization's financial
and market share objectives are viewed as less important than items such as cohesiveness.
There is a great amount of trust. The clan culture reflects Miles and Snow's reactor,
where they do not respond quickly to external pressures and usually wait for adversity
before taking corrective steps. Quinn and Hall (1983) state that a clan is internally
oriented, yet slow to analyze market opportunities as well as slow to allow customers to
affect the work of its employees. Ouchi (1981) defines this culture as a "theory Z" firm,
where there is lifetime employment, collective decision making and slow to external
evaluation. There is an emphasis on the group domain within a clan (Oliver, 1982).
There is a sense of family within the organization. Managers are like mentors and
facilitators. There is an emphasis on democratic effort and teamwork (Deshpande',
Farley and Webster, 1993).
The Adhocracy
The adhocracy culture has values consistent with being organic (Burns and
Stalker, 1961) and external, focusing on creativity, entrepreneurship, adaptability and
dynamism. Firm effectiveness is based on finding new markets and new directions for
growth. They pride themselves on being first in the market. The emphasis is on creative
problem solving, regular change and managing transitions to meet customer needs
(Yarbrough, 1996). The adhocracy culture is similar to the prospector having its primary
39
attention devoted to searching for new markets and innovations (Miles and Snow, 1978).
This culture type responds quickly, nearly intuitively, to external signals. Oliver's (1982)
professional domain strives to grow through developing constituents. Managers are
much like innovators or brokers (Quinn, 1988). An adhocracy is considered
decentralized, differentiated, dynamic and entrepreneurial (Deshpande' and Webster,
1989).
The Hierarchy
The hierarchy culture is mechanistic and internal, concentrating on rules and
regulations, order and uniformity. This culture type stresses control on internal functions
with specified policies and procedures to which must be adhered (Freeman and Cameron,
1993). Firm effectiveness for a hierarchy culture is consistency and achievement of
clearly stated goals. The hierarchy culture is most like Miles and Snow's (1978)
defender, being highly expert at producing or marketing a few products to a narrowly
defined and secure market. Oliver's (1982) hierarchical domain consists of authority,
role specificity, division of labor and rules that govern behavior. The main focus for a
hierarchy is financial control and budgeting (Quinn, 1988). Managers are much like
coordinators or monitors. A hierarchy is more risk averse, maintaining orderly operations
with a structured work environment (Burns and Stalker, 1961 and Deshpande', Farley
and Webster, 1993).
40
The Market
The market is mechanistic and external, stressing individualism, competitiveness
and goal achievement. Goals are directed and driven. This culture type is usually in
competitive markets. The effectiveness of a market culture is its productivity through
market mechanisms. The market culture represents Miles and Snow's (1978) analyzer,
the "copy-cats," thus not innovators and rarely first in the market. In Ouchi's (1981)
organizational theory, this is a "Theory A" firm, where there is specified career paths and
rapid promotion. The focus is on tasks (Oliver, 1982). There is a low level of trust and
contracts and exchange transactions define relationships (Williamson, 1981; 1993).
Managers are like producers or directors, emphasizing logical problem solving and
personal motivation (Quinn, 1988). The market culture type is in direct contrast to the
values associated with a clan culture type (Deshpande', Farley and Webster, 1993 and
Yarbrough, 1996).
Examples of companies that exhibit characteristics of these types of cultures are
as follows: Intel Corporation- a clan, Procter and Gamble- a market, Meridian Telephone
Company- a hierarchy and Minnesota Mining and Manufacturing- an Adhocracy (Elmes
and Wilemon, 1988).
It is plausible that various levels on this continuum may be applied within a
company depending on the department within the company and the differential demands
of the environment for the departments or specific situations (Deshpande' and Webster,
1989 and Deshpande', Farley and Webster, 1993). There is no single "correct" culture
(Goffee and Jones, 1998). Thus this research utilizes Quinn's theory of corporate culture,
as well as, the contingency management perspective. Quinn's theory states that, although
41
these types of cultures may overlap, one type tends to compete with the values of another
type. The contingency management perspective asserts that there is no one best way to
organize the firm, but to maximize performance, the "level" of strategy may be
dependent on the "level" of corporate culture- a "best-fit" solution. A brief summary of
each culture type is presented in Tables 2.2 and 2.3
Table 2.2
Corporate Culture (Quinn, 1988)
Internal Orientation
Clan:
Internal Orientation,
Organic Management,
Emphasis on Flexibility and
Stable Market Position
Miles and Snow's Typologv
Reactor
Organic Process
Mechanistic Process
Miles and Snow's Tvpologv
Hierarchy:
Internal Orientation,
Mechanistic Management,
Emphasis on Control and
Stable Market Position
Defender
External Orientation
Adhocracy:
External Orientation,
Organic Management,
Emphasis on Flexibility and
Flexible Market Position
Prospector
Market:
External Orientation,
Mechanistic Management,
Emphasis on Control and
Flexible Market Position
Analyzer
Table 2.3
Description of Clan, Adhocracy, Hierarchy and Market
Clan
Adhocracy
Hierarchy
Market
cohesiveness, teamwork and commitment

creativity, entrepreneurship and dynamism
order, rules, regulations, uniformity and efficiency
competitiveness and goal achievement
42
Traditional Comparison of Douglas' Typology

Douglas' model produced four categories. (Hendry, 1999).
1) Weak grid/weak group, which is dominated by strongly competitive
conditions, volatile circumstances and autonomy. Each person is responsible
for oneself and those s/he chooses. This is similar to an adhocracy culture.
2)
Strong grid/weak group, which is dominated by insulation and formalization.

This group would be most associated with a market culture.
3)
Strong grid/strong group, which is a social context with two main controls of
individual behavior and group boundaries. This group is like a hierarchy
culture.
4) Weak grid/strong group, which is a social context where there is a "we"

versus a "them" mentality. This group would be much like a clan culture
(Altman and Baruch, 1998).
Current Comparison of Network, Communal, Mercenary and Fragmented

Goffee and Jones (1998) identify four different types of corporate cultures based
on the two dimensions of sociability and solidarity with levels of high and low (Figure
2.4). Sociability is the extent to which people are friendly with each other. Solidarity is a
union of interests, purposes or sympathies among members of a group. They state that
the more complex the value chain is, the greater the requirement of sociability. And, the
more dynamic the environment is, the greater requirement for solidarity. A simple
company that changes quickly should maintain a mercenary culture, while a company
that is dynamic and sustains a complex value chain is best suited for a communal culture.
43
The following discussion explains these cultures and how they relate to the Quinn
typology.
Figure 2.4
The Double S Cube of Corporate Culture
High
Networked
Communal
Low
Fragmented
Mercenary
Low
High
Sociability
Solidarity
Adapted from Goffee and Jones, The Character of a Corporation: How Your Company's
Culture Can Make or Break Your Business, Chapter 2, Harper Business, 1998.
The four types of corporate culture that Goffee and Jones (1998) categorize are
networked resembling an adhocracy (low solidarity and high sociability), communal
resembling a clan (high solidarity and high sociability), mercenary resembling a market
(high solidarity and low sociability) and fragmented resembling an adhocracy (low
solidarity and low sociability). The following will describe the similarities between the
above types as well as explain how adhocracy is described by two of these types of
cultures with differing sociability levels.
44
A network organization (adhocracy) is one where people help one another and
form relationships. This type of organization would be like a learning organization,
which has induced much attention in organizational research. Information is
disseminated quickly throughout the company and even across different countries. This
company is excellent at sustaining long-term strategies and relationships with high
sociability. Unilever is a good example.
A communal organization (clan) tends to love each other in the firm, while being
perfectly clear as to whom the external enemies are. Apple Computer is a good example
of this type of culture. They require lots of maintenance and are commonly found in
first-generation small businesses. The question is can these types of firms grow and still
maintain the high sociability and solidarity. Johnson & Johnson is a good example that
this is possible. This type is like a clan culture, where the people are very friendly and
cohesive and the feeling of being apart of the company is crucial.
A mercenary organization (market) has a clear understanding of the goals, not
very friendly and solidarity is intermittent and contingent. This type of culture tends not
to innovate well, because they are focused on the bottom line and not in brainstorming
new ideas. They are better at producing what they do more efficiently, rather than
making something all together new. Teamwork is not a characteristic of a mercenary
culture. This type of culture is not very good at complex value chains, because of
ambiguity that is infused in such value chains. This type of culture mimics a market
culture, where competitiveness and goal achievement drive the culture. These two types
are very parallel in description and focus.
45
Finally, a fragmented organization (adhocracy) is more like a collective group of

entrepreneurs. Journalism and academics are good examples of this type of culture.
These individuals work with freedom and autonomy and keep an eye on the outside labor
market for comparison. These individuals are not highly sociable with one another
within the organization, but are concerned with the image of the organization as a whole.
The main concern is, "am I working with others that are good?" The fragmented culture
is nearly identical to the description of an adhocracy culture, where creativity, dynamism
and entrepreneurship are encouraged.
This typology of corporate culture does not include a clear description of a
hierarchy culture, but as Hendry (1999) affirms, there has been a drastic move from a
hierarchy to other types of corporate cultures. This movement is due to changes in the
environment, augmenting market-based ideas of entrepreneurial activity (Hendry, 1999).
Also, technological developments in transportation, communication and mass production
pose a threat to the traditional hierarchy cultural form that many companies have retained
in the past. Therefore, the absence of a clear hierarchy in Goffee and Jones' (1998)
typology creates an innovative look at corporate culture in response to the changing
environment and competitive factors involved in today's world.
Goffee and Jones (1998) reiterate that there is not one single "correct" corporate
culture, thus this research is evaluating the best-fit, not the correct culture with strategy
being a moderator to performance.
46
Competing Values Framework

The competing values framework for corporate culture has been used in the
marketing paradigm (Deshpande', Farley and Webster, 1992,1993; Moorman,
Deshpande' and Zaltman, 1993; Deshpande' and Webster, 1989; Quinn and Spreitzer,
1991 and Baker and Hawes, 2001). The competing values model is a spatial model based
on the values that individuals hold for firm performance (Quinn and Rohrbaugh, 1983).
Quinn and Rohrbaugh (1983) used a panel of experts to evaluate Campbell's (1977) 30
indices of organizational effectiveness and asked them to eliminate criterion based on a
four-decision rule. This lead to 17 criterions remaining, which the panel was then to
make a judgment as to the similarity between any possible pairing. Multidimensional
scaling was employed again. This resulted in organizational effectiveness being sorted
according to three axes or value dimensions.
There are three underlying conceptions of effectiveness: 1) organizational focus,
2) organizational preference for structure and 3) organizational means and ends with an
emphasis on important processes. The first dimension involves an internal emphasis on
the interests and development of people within the organization, to an external focus on
the interests and development of the organization itself. The second dimension
represents the contrast between stability and control and flexibility and change. These
two dimensions create four quadrants with the third value dimension explained within
(Table A): 1) Human Relations Model, 2) Open System Model, 3) Rational Goal Model
and 4) Internal Process Model. A Human Relations Model is simulated to a clan culture
with cohesiveness, morale, loyalty and teamwork as its concentration. An Open System
Model is as an adhocracy with flexibility, readiness, creativity and risk taking being its
47
focus. A Rational Goal Model represents a market culture with an emphasis on control
and an external focus with key objectives such as planning, goal clarity and goal
achievement. An Internal Goal Model, a hierarchy, emphasizes control and an internal
focus with goals of stability, uniformity and control.
Dennison and Spreitzer (1991) emphasize the usefulness of the competing values
cultural quantitative methodology. Quinn and Spreitzer (1991) assessed the
psychometric qualities between these two culture instruments and found high reliability,
convergent, discriminant and nomological validity. This assessment is further discussed
in Chapter III, Methodology.
There are two primary questions to this dissertation considering the common
thought that corporate culture can create higher financial returns for a firm, if it is
managed properly (Baker and Hawes, 2001). They are: 1) Does there exist an optimal fit
{best-fit) between corporate culture and strategy with regard to firm performance, and, if
so, 2) which type of corporate culture should best-fit with which type of strategy. It is
important to note that this research utilizes the contingency management perspective,
which asserts that there is no one best way to organize a company. To maximize
performance, the "level" of strategy may be dependent on the "level" of corporate
culture. Thus, corporate culture can be observed as a "lever or tool to be used by
managers to implement strategy and to direct the course of their organization more
effectively" (Deshpande and Webster, 1989, pp.7).
As you can see, there is much overlap in corporate culture theories in the extant
literature. The following will further explain the overlap that extends to corporate
strategy as well and the basis for the conceptualization of this dissertation.
48
Strategy
The literature on corporate strategy is so extensive and diverse; there are many
conceptualizations and theories for corporate strategy. This review of the enormous
literature on strategy will focus on the dominant thoughts of strategy and explain which
one is used for this research and the reason for this decision. This effort will present the
overlap of a strategy typology and the corporate culture typology presented previously. It
will, also, present how the competing views of strategy relate to one another. Thus, in
this section, I will concentrate and present only the relevant concepts and those closely
comparative and complementary of the corporate strategy construct associated with this
research.
Definition and Corporate Strategy

Chandler (1962) viewed strategy as long-term goals and objectives of an
organization, involving the course of action that is followed and the resource allocation to
pursue the chosen goals and objectives set forth by an organization. Hofer and Schendel
(1978) define an organizational strategy by its scope, resource deployments, competitive
advantages and synergies. It is a "fundamental pattern of present and planned resource
deployments and environmental interactions that indicates how the organization will
achieve its objectives" (Hofer and Schendel, 1978, pp. 25). Strategy can be analyzed by
its patterns in organizational resource allocations (Porter, 1973).
49
Theoretical Background
Earlier strategy research was dominated by the atomistic view. This perspective
views each firm as being unique in all aspects. Then, strategy research shifted more
towards the perspective that firms have commonalities, which has been referred to as
gestalts (Miller, 1981). This perspective of strategy has been researched in relation to the
resource-based perspective in management, marketing and logistics, as well as its impact
on firm performance (Anderson, 1982; Barney, 1996,2001a, 2001b; Conant, Mokwa and
Varadarajan, 1990; Dess and Davis, 1984; Fox, 1996; Frankwick, Ward, Hurt and
Reingen, 1994; Fuchs, Mifflin, Miller and Whitney, 2000; Hall, 1980; Hambrick, 1981;
Hitt and Ireland, 1986; Hofer and Schendel, 1978; Hrebiniak and Snow, 1982; Hunt and
Morgan, 1995a, 1995b, 1996; Lynch, 1998; Lynch, Keller and Ozment, 2000; Mahoney
and Pandian, 1992; Miller and Shamsie, 1996; Miller and Lee, 2001; Mintzberg, 1978;
Rumelt, Schendel and Teece, 1991; Snow and Hrebiniak, 1980; Stalk, Evans and
Shulman, 1992; Tichy, 1981; Venkatraman and Grant, 1986; Venkatraman and
Ramanujam, 1987, Venkatraman and Ramanujan, 1986; Vorhies, 1993; Vorhies and
Morgan, 2003; Weick, 1979 and Williamson, 1999). Hall (1993) found that culture was
ranked the forth most important intangible resource. Miller (1981) and Hill (1988)
researched the differentiation and low cost through a contingency framework.
Through this review of the literature, one will be able to see that there have been
three main influential schools of strategic thought in the past two decades (Fuchs et al,
2000), which overlap with corporate culture theory as well. These three schools of
thought are positioning, execution and process (Fuchs, et al., 2000). The positioning
50
group is based on Porter's Generic Strategies; the execution group echoes the resourcebased theory based on Barney's work, and the process group is based on organization
structure and culture with Miller contributing much work in the area of structure and
strategy.
The first group of positioning is related to Porter's generic strategy theory, also
known as the competitive forces approach. You must develop a unique strategy that will
give you a sustainable advantage (Porter, 1980, 1985,1996). The critic of this school of
thought is that it discusses competitive advantage, but does not include ideas or theories
on how to develop the skills to achieve it. Enter the resource-based thought: in order to
initiate a competitive position, an organization must use rare, valuable and inimitable
resources (Barney, 1996; Hamel and Prahalad, 1994). But through this school of thought,
there is little stated about the processes and infrastructures needed to develop these assets.
The third school of thought proclaims that strategy formulation is rooted in firm
structures and cultures (Miles and Snow, 1978,1984; Miller, 1986, 1987; Miller, Droge
and Toulouse, 1988; Miller and Shamsie, 1996 and Miller and Lee 2001).
Porter's Generic Strategies: The Competitive Forces Approach

Once researchers dedicated their research toward strategy groupings, it allowed a
framework of referencing the industry as a whole and considered each firm independently
(Porter, 1980). In the 1970's there had already been evidence of groups of firms that
follow similar strategies in various industries: home appliance (Hunt, 1972), chemical
process (Newman, 1973), consumer goods (Porter, 1973) and the brewing industry
(Hatten and Schendel, 1977 and Patton, 1976). Many researchers have evaluated these
51
various typologies of strategy through the 1980's and 1990's, thus the strategy literature
is immense. Researchers have used Porter's typology in researching the U.S. airline
industry as well (Kling and Smith, 1995). The following literature review will consist of
those who utilize Porter's (1980) generic strategy typology. The original typologies were
usually very generic, categorizing firms based on firm size or market share. Porter's
(1980) generic strategy typology allows strategy research to encompass all competitors in
an industry.
Through Michael Porter's work, there is a well-established typology for corporate
strategy (Porter, 1980, 1981,1985,1987a, 1987b, 1990 and 1996). Porter defined five
industry environments: fragmented, emerging, mature, declining and global. Porter
(1980) continues this idea by constructing three generic strategies a firm may maintain in
reaction to its environment: low cost leader, differentiation or focus. In general, a firm
does not control its environment, so the strategy it chooses may define its success or
failure in the industry through a defensible position and outperforming its competitors
(Dess and Davis, 1984).
Low Cost Leadership Strategy

A low cost leader focuses on providing, just that, low cost compared to its
competitors without neglecting quality, service and other areas (Porter, 1980). The
competitive advantage for this type of strategy is through the ability to keep their cost per
unit low compared to competitors. They maintain a low cost by emphasizing scale
efficiencies, cost reduction in manufacturing and minimizing expenses associated with
52
R&D, services, selling and advertising. Cost leaders aim to appeal to a cost-conscience
customer.
Differentiation Strategy
A differentiator creates a product or a service that is recognized industry-wide as
being unique. The uniqueness of the product or service allows them to charge a higher
price than its competitors (Porter, 1980). This type of strategy emphasizes marketing
through creativity and well designed products, a reputation for quality, a good corporate
image and strong cooperation from marketing channels. There are two varieties of
differentiators, innovation and marketing (Miller, 1986). Innovators are similar to Miles
and Snow's (1978) prospectors (discussed in a later section); they offer new products and
technologies, through a strong emphasis on R&D. Marketing differentiators offer an
attractive package, good service, convenient locations and goods or service reliability.
They focus on advertising, sales teams, promotions and distribution.
Focus Strategy
A focus firm concentrates on a particular group of customers, such as, a
geographic market or a product line segment (Porter, 1980). This is also termed a niche
strategy (Miller, 1986). This type of strategy entails using a low cost strategy or
differentiation strategy directed towards a specialized part of an industry. "In all cases
focus complements, but does not substitute for, differentiation and cost leadership"
(Miller, 1986,pp. 238). It is important to note that a focus strategy can refer to a
business-level strategy or a corporate-level strategy. Two focused strategies may be used
53
by one organization in two different industries, thus they have a diversified corporate
strategy yet a focused business strategy.
The fact that a focus strategy takes the form of a differentiation or low cost
strategy only focused to a specific customer, product or geographical location, leads to a
proposition that an organization would have the capabilities that fit either a differentiation
or low cost strategy in the various industries and not both (Lynch, Keller and Ozment,
2000). Miller (1986) validated both the differentiation and low cost leader strategies and
found that the focus strategy was just a special case of these other two types. The focus
strategy type has been shown to not be significant with respect to the generic strategies
(Day, 1990; Inhofe 1992; Vorhies 1993). Miller (1986) stated that the focus type of
strategy demands one of the other two generic strategies.
This reasoning gives support for this research conceptualizing that the
differentiation and low cost leader type strategies will prevail through the data analysis
and that a focus strategy will be a subset of these two. This presents the need to have the
respondents clearly explain if they maintain a differentiation or low cost strategy and then
determine if it is a focus strategy. This data on focus strategy will be obtained through
the data collection part of this research, but due to the above explanation, it will not be
used in the analysis of the hypotheses (Miller, 1986; Davis and Miller, 1988; Inhofe,
1992).
Stuck in the Middle

Miller (1992) challenges the pursuit of a single generic strategy and discusses a
mixed strategy. He states that there are benefits to a mixed strategy as well as to a pure,
54
generic strategy depending on the market. This mixed strategy is labeled "stuck in the
middle" by Porter (1980). Porter (1980) states that a firm that is "stuck in the middle"
versus a firm that prescribes to one of these generic strategies is "almost guaranteed low
profitability" due to its failure at realizing the advantages of either strategy (Porter, 1980,
pp. 41). Specifically, low cost and differentiation should not be pursued simultaneously.
Porter (1980) suggests that a principal economic cause for highly fragmented
industries is high product differentiation, especially if image is crucial. Also, Porter
(1980) states that "achieving a low overall cost position often requires a high relative
market share or other advantages, such as favorable access to raw materials" (pp. 36).
Researchers have encouraged the establishment of this typology by using it in
research and in the literature (Inhofe, 1992; Miles and Snow, 1978, 1984; Miles, Snow,
Meyer and Coleman, 1978; Miller, 1986; Miller and Friesen, 1986a, 1986b; Miller,
Eisenstat and Foote, 2002; Miller and Shamsie, 1996; Murray, 1988; Vohries, 1993 and
Weick, 1979). Dess and Davis (1984) provided empirical support for Porter's (1980)
generic strategies of low cost, differentiation and focus. They evaluated the firm's
strategy based on its intended strategy rather then the implemented strategy.
There has also been "evidence that strategies differ among firms and that better
strategies make a difference in performance results" (Schendel and Hofer, 1979, pp. 517).
The difference in firm performances within an industry may be explained by looking at
firm strategy groupings in an industry, although the three generic strategies are not
mutually exclusive (Dess and Davis, 1984; Lynch, Keller and Ozment, 2000 and Miller,
1987).
55
Dess and Davis (1984) evaluated the construct validity of Porter's (1980) generic
business strategies and the generalizability of a strategy measure and further developed
their measure with other data. The final measure is the measure used in this research. It
was a three-phase study. The first phase is a field study to evaluate the relationship
between an organization's "intended or espoused" strategy (Mintzberg, 1978). These
were represented by: 1) the most important competitive methods as seen by top
management of an organization as well as 2) the presence of strategic orientation within
an industry, which were classified on the basis of their close relation to the three generic
strategies. The second phase includes an assessment by a panel of experts on the
importance of each of the identified competitive methods for each generic business
strategy. The third phase "uses the perceptions of the chief executive officers to cluster
firms that exhibit a similar strategic orientation into distinct groups" (Dess and Davis,
1984, pp. 468).
Firm performance is used to assess any significant difference that may exist
between the strategic groups within an industry (Dess and Davis, 1984). There is a
significant difference between the strategic groups as well as performance between them.
They found that the cluster solution supported the differentiation and focus strategies of
Porter's three generic strategies, but low cost was not as significant in determining the
composition of an organization's strategy.
On the other side, as mentioned earlier, there have been several authors that have
illustrated that a focus strategy is just a subset of cost leadership or differentiation
(Miller, 1986; Davis and Miller, 1988 and Inhofe, 1992). Miller and Dess (1993) assess
Porter's (1980) model and found that performance norms varied significantly across
56
strategic types. They state that the strategies may be more contingent rather than generic,
thus an issue for generalizability. This will be considered and evaluated through the
context of this dissertation.
In short, Dess and Davis' (1984) strategy measure evaluates the importance of 21
competitive methods a firm may use for its overall strategy. It uses a five-point Likert
scale with one being "not at all important" and five being "extremely important."
Through their analysis, they were unable to identify the focus strategy group clearly.
This review of the literature on the generic strategies leads the current research to use the
scale developed by Dess and Davis (1984) to measure low cost leader and differentiation
strategies.
Resource-Based Theory
Barney (1991) considers Porter's "view of strategy as very externally (market)
oriented and as dealing primarily with the opportunities and threats with which a firm
must contend" (Lynch, Keller and Ozment, 2000, pp. 48). Barney (1986,1996,2001a,
2001b) prescribes more to an internal, or resource-based, oriented view of strategy.
Resource-based theory of strategy is the second dominant thought in the strategic
literature. The following is a brief summary of the resource-based theory of strategy due
to its important to the strategy literature, but not pertinent to this current research.
Rumelt, Schendel and Teece (1991) challenge Porter's (1980) generic strategy
theory by suggesting an organization develops certain capabilities or resources over a
long period of time, which eventually become the organization's competitive advantage.
The sustainability of the competitive advantage exists due to the inability of competitors
57
to duplicate these resources (Barney, 1991). This perspective involves the well-known
SWOT (strengths, weakness, opportunities and threats) analysis (Barney, 1991). Not
only is the external environment important to analyze, but the internal capabilities are as
well. This perspective entails the capabilities or resources that are internal to an
organization. "This approach focuses on the rents accruing to the owners of scarce firmspecific resources rather than the economic profits from product market positioning"
(Teece, Pisano and Shuen, 1997). Barney (2001) addresses the issue presented by Priem
and Butler that the resource-based view is tautological among others. Barney (2001)
stands behind this perspective with additional support for its parameters, implications and
definition of a resource-based view itself and its constructs.
Miles and Snow's Typology

Miles and Snow's (1978) theoretical framework of strategy is based on the idea
that a firm must maintain an effective alignment with its environment through adaptation.
They constructed a typology of four different strategies that consist of different patterns
of adaptive behavior within an industry.
The three main ideas behind this theory are that organizations act to create their
own environments, management's strategic choices shape the organization's structure
and process and structure and process constrain strategy. The mechanical view of
organizations assumes that organizations respond in predictable ways, adjusting their
purpose and shape to meet market and environmental challenges. Thus, researchers
looked to the environment to find the factors that affect an organization's behavior. The
58
organic view of organizations emphasizes the individuals who make strategic decisions
(e.g. top management).
Miles and Snow (1978) created a typology for strategy, including defenders,
analyzers, reactors and prospectors. These four strategies closely relate to the four types
of cultures described in the culture section of this chapter. First, this effort will describe
each type of strategy. Then, it will list its relation to the specific corporate culture types
within each section (Table 3 and 4.)
Defenders
Defenders aim to protect their position. They have great expertise at producing or
marketing a few products, thus, they have narrowly defined markets. Defenders
predominantly focus on efficiency in operations, rather than searching for new markets or
product development. Defenders' goal is "to seal off a portion of the total market in order
to create a stable domain.. .(they) strive aggressively to prevent competitors from
entering its 'turf" (Miles, Snow, Meyer and Coleman, 1978, pp. 550). Defenders
achieve efficiency through strict control of structural and process mechanisms (Miles and
Snow, 1978). These mechanisms include specialists of production and cost-control in top
management, extensive division of labor, centralized control, and communications
through formal hierarchical channels. Defenders align themselves with a particular
portion of the overall environment and manage the internal interdependencies associated
with this alignment (Miles and Snow, 1978). Thus, a hierarchy most resembles the
Defenders strategy of Miles and Snow. They both emphasize control and a stable market
position, rather than market exploration. They are internally oriented, focusing on
59
efficiency. There is a mechanistic management employed due to the need to control for
efficiency.
Prospectors
Prospectors, on the other hand, are the innovators with their primary focus on
searching for new markets. They face change easily and tend to differentiate.
Prospectors are almost the opposite of Defenders. They function in more dynamic
environments than other types of organizations in the same industry (Miles and Snow,
1978 and Miles, et al., 1978). "Maintaining a reputation as an innovator in product and
market development may be as important as, perhaps even more important, than high
profitability" (Miles et al., 1978,pp. 551). In order to determine areas of opportunity, the
Prospector must develop and maintain the ability to survey a wide range of
environmental conditions. They are continuously scanning the environment, in which
they invest a large amount of time. They are the initiators of change in an industry,
which is used for a competitive advantage. Their technological commitment is constantly
changing and capabilities progressing, thus requiring multiple solutions. The "structureprocess mechanism for this type of strategy must be organic," including marketing and
R&D experts in top management (Miles et al., 1978,pp. 553). A low degree of
formalization is essential for this type of strategy with decentralized control and lateral,
as well as, vertical communications. Flexibility is the keyword for Prospectors.
An adhocracy culture is suggestive of the Prospector strategy. They both
emphasize flexibility for innovations or market exploration. They thrive in a changing
and flexible market.
60
Analyzers
Analyzers operate in both stable and changing markets. They are known as "copy
cats." Analyzers lie in the middle of the Defender and Prospector continuum (Miles and
Snow, 1978 and Miles, et al., 1978). They employ components of both the Defender and
Prospector strategies. Their goal is to minimize risk while maximizing profit, but
combining the strengths of the previously discussed strategy types. Analyzers' goal is "to
locate and exploit new product and market opportunities while simultaneously
maintaining a firm core of traditional products and customers" (Miles et al., 1978,
pp.555). They "copy cat" new products, meaning they move into new products and
markets only after it is shown viable. Analyzers must be able to move quickly when
imitating a Prospector, as well as, maintain operating efficiency in its stable product and
market areas as Defenders. This is a simultaneous balancing act for Analyzers. This type
of strategy demands the very delicate balance in organizational structure. The
organization's structure and process must contain elements that allow it to adapt to both
its stable and dynamic operations. The structure and processes usually in place for an
Analyzer strategy is a matrix structure, where there are functional divisions and product
groups. There are centralized control mechanisms in place between the functional
divisions, yet decentralized control techniques within the product groups.
A market culture resembles the Analyzers strategy type. They both use a
combination of a Defender mechanistic management for control as well as a Prospector
flexible market position.
61
Reactors
Reactors do not respond to the environment or demands quickly, and possibly not
until they are forced. They do not react well to either change or environmental pressures.
Reactors respond to their environment in an inconsistent and unstable way. This type of
strategy is termed the "residual" strategy (Miles and Snow, 1978). It could be considered
the same as Porter's "stuck in the middle." A Reactor strategy tends to develop when one
of the other three strategies is unfittingly pursued, placing the organization in a constant
state of instability.
A clan is indicative of the Miles and Snow's Reactor strategy. They both require
a stable market position and are slow to respond due to the fact that they are comfortable
as is. A clan is very tight within its organization and may survive, but to thrive it must
develop into one of the other three cultures (Defender, Prospector or Analyzer). Due to
the fact that this type of organization is "getting by," this effort will assume that it will be
of little significance in the data analysis. As with Porter's focus strategy, the data on this
type of culture and strategy will be obtained, but will not be included in current research
questions. A clan is suitable for a very narrow type of industry, and even at that it is
necessary to change as more competition enters and the business environment changes.
Central Emergency Medical Service in Fayetteville Arkansas is a good example
of the issues associated with a clan culture. They began over 20 years ago in Fayetteville,
Arkansas as the primary emergency medical service. It is a small not-for-profit
organization with approximately 75 employees. It prescribes to a clan culture concept
with an organic style and an internal orientation. Loyalty, teamwork and cohesiveness
were dominant concepts. It survived, and for a not-for-profit organization it was
62
successful. Then a multi-billion dollar corporation enters the market. They have the
power and ability to influence the industry and place Central EMS in a constant state of
instability; a Reactors strategy has been formed. The survival of this organization is
unknown even to the top administrators.
Conant, Mokwa and Varadarajan (1990) used a paragraph method, as well as, a
multi-item scale to test Miles and Snow's typology. They faced the issue of a possible
response bias associated with a Reactor, so they took special care in forming the
conceptualization, operationalization and measurement for the Reactor archetype. They
operationalized Reactors as having a short-term and unassertive orientation with an
inconsistent response behavior pattern. They found that Reactors are, clearly,
"stragglers," and in response their performance suffers.
Again, the current research will be evaluating organizations that have a significant
corporate culture and strategy type in order to evaluate the fit between them via financial
performance. I am assuming that a clan type will not be significantly present in the data
analysis, thus, not part of the conceptualization of culture for the present research.
When Conant, Mokwa and Varadarajan (1990) used a paragraph method to test
Miles and Snow's typology, they faced the issue of a possible response bias associated
with a Reactor, so they took special care in forming the conceptualization,
operationalization and measurement for the Reactor archetype. They operationalized
Reactors as having a short-term and an unassertive orientation with an inconsistent
response behavior pattern. This research method will be further discussed in Chapter III.
63
Summary of the Three Dominant Theories of Strategy

Fuchs, Mifflin, Miller and Whitney (2000) assert that the three schools of thought
on strategy (positioning, execution and process) need to be integrated. This dissertation
will provide further research into this new idea, "Strategic Integration Approach," by: 1)
evaluating the overlap in the literature among these traditional strategic theories as well
as with organization culture theory and 2) testing for a best-fit, which will lead to greater
overall performance.
Fuchs, et al. (2000) suggest five groups of elements that form their model of
strategy. These five groups are as follows in respect to the traditional school of thought
on strategy. Direction and product-market focus fall under the positioning tier related to
Porter's strategy theory. Resources, operational capabilities and organizational culture
fall under the execution, or resource-based theory of strategy. The advice Fuchs, et al.
(2000) offer on organization culture is, "the culture and structure of an organization must
comprise a set of powerfully reinforcing policies, behaviors and rituals" (pp. 130). This
defined suggestion for organizational culture reflects a hierarchy. They state that
"cohesive cultures, inspiring leaders and motivated employees, engender a high-energy
work environment where even the most complex initiatives may succeed. Similarly,
sensitive controls and a clear distribution of roles and power help sub-units collaborate to
achieve common objectives. This effort challenges this thinking on the basis of corporate
culture theory discussed previously. Fuchs, et al. (2000) have given a general Utopia of a
culture, but these thoughts are contradictory in themselves. A company cannot have both
creativity and collaboration if there are strict roles and power (mechanisms) to hinder the
acceptance of movement and thought in an organization. This research will challenge
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this statement by testing the different cultures in respect to Porter's generic strategies and
finding a difference, as well as, in overall performance.
Fuchs, et al. (2000) created "The Integration Valuator." Top managers of each
business unit is to fill out a valuator form when s/he is alone and have plenty of time to
provide thoughtful, honest answers. There is a Valuator coding sheet, which is used to
find the level of disagreement. This level of disagreement is used as the standard
deviation of the scores of the different respondents. Through their experience they have
proposed a 0.7 standard deviation to determine confidence in agreement between the
respondents.
Integration may be useful to investigate in future research as it is associated with
corporate culture, but "The Integration Valuator" is limited to practical usefulness. Miles
and Snow's (1978) typology reinforces the corporate culture typology to a great extent,
thus Porter's strategic theory will be used to guide the corporate strategy construct in this
research. Dess and Davis's (1984) measure will be used for this construct.
Argument for a Fit Perspective

A dominant concept to organizational success or failure is the fit between an
organization's strategy, structure and management processes (Miles and Snow, 1984).
"Successful organizations achieve strategic fit with their market environment and support
their strategies with appropriately designed structures and management processes" (pp.
10). Miles and Snow define four main points to a conceptual fit framework: minimal fit,
tight fit, early fit and fragile fit. First, minimal fit between strategy, structure and process
is crucial to all organizations operating in competitive environments. Second, tight fit,
65
internally and externally, "produces sustained, excellent performance and strong

corporate culture" (pp.10). Third, early fit is defined as "the discovery and articulation of
a new pattern of strategy, structure and process" (pp.11). Finally, fragile fit is explained
as an organization with deteriorating fit through vulnerability to both dynamic external
conditions as well as internal breakdowns.
According to Collins and Porras (1994), firms such as Merck, Proctor & Gamble,
3M and Hewlett-Packard have excelled decade after decade, because they do not "put
into place any random set of mechanisms or processes. They put into place pieces that
reinforce each other, clustered together to deliver a combined punch. They search for
synergy and linkages (pp. 214)." Hewlett-Packard, a company developed in 1939 by
William Hewlett and David Packard is a great example of strategy and corporate culture
fit. Decentralization is the key to this organization. It maintains a strategy of
diversification and technological innovation with an integrated, self-sustaining
organization with "a great deal of independence" (Miles and Snow, 1984, pp. 21). This
description of the corporate culture reflects an Adhocracy.
Miller (1986) poses a case for configurations between strategy, structure and
environment. He conceptualizes structure into four types: simple structure, machine
bureaucracy, organic structure and divisionalized structure. The strategies he defined
were marketing differentiation, niche differentiation, innovative differentiation,
conglomeration and cost leadership. The configurations presented were the following:
mechanistic cost leaders, innovating adhocracies and divisionalized conglomerates.
Miller (1986) presents two important configurations relevant to this research: a machine
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bureaucracy, hierarchy, matches best with cost leadership, while organic structure
matches best with innovative differentiation.
Miller, et al. (1988) furthered the literature on structure and strategy by creating a
theoretical model consisting of: 1) organizational context, CEO need for achievement,
firm size and environmental uncertainty and 2) strategic process and content, rationality
and product innovation and 3) structure, integration, formalization and centralization.
They used a LISREL analysis using small firm data and found that CEO need for
achievement "influences strategy-making rationality, which has a significant impact on
structural formalization and integration" (pp. 564). A directional path was not
determined between strategy-making rationality and innovation. "Firms that innovate
little can routinize things, becoming less deliberative in their strategy making" (pp. 564).
These findings support the need for an empirical look at corporate culture and corporate
strategy defined in this dissertation. The paths unexplained may be better understood
through the presently defined constructs.
Drucker (1954) argued that the best performance is achieved when jobs are
enriched rather than narrowed and overstaffing is a threat to corporate responsiveness.
He saw the success of the top companies he studied in the 1950's as being attributed to
each knowing what business it was in, what its competencies were and how to keep its
efforts focused on the goals. He also, stated that organizations that had a sustained high
performance had a "clear business focus, a bias for action and lean structures and staffs
that facilitated the pursuit of strategy" (Miles and Snow, 1984, pp. 14). Organizational
structures, environments and technologies have changed since the 1950's, but the same
general but specific ideas are true for today's organizations.
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Through a dynamic process called fit, the search for an organization form that is
both internally and externally consistent is essential (Miles and Snow, 1984). This
research will offer further analysis of this concept of fit through specifically looking at
strategy and corporate culture fit and its impact on performance. Financial performance
is the governing goal for most organizations, thus, looking at financial performance of
organizations in the trucking industry with respect to their corporate strategy-culture fit
will shed more empirical light on this concept.
Performance
Organization performance has been a strong measure for a plethora of research
paradigms. In particular to this research, organization performance is the common
denominator, or construct, of all the literature discussed in the previous sections
(Anderson, Fornell and Lehmann, 1994; Bourgeois, 1980; Capon, Farley and Hoenig,
1990; Deshpande', Farley and Webster, 2000; Lynch, Keller and Ozment, 2000;
Venkatraman and Ramanujam, 1986 and Vorhies, 1993). Miller and Shamsie (1996)
showed within the Hollywood film industry that certain resources did lead to greater
performance.
Financial measures are of primary importance in assessing organizational
performance (Dess and Davis, 1984). Dess and Davis (1984) acquired "total firm sales"
figures from 1976 to 1980 to determine sales growth as well as "average after tax return
on total assets" from 1976 to 1980 to determine profitability for their analysis. They
found that there was not a significant difference between the strategic groupings
regarding profitability measured by return on assets, but there was a significant difference
68
between the groups regarding annual sales growth, which is consistent with Porter's
contention that firms that adopt a generic strategy will outperform those who are "stuck
in the middle." The largest contribution of Dess and Davis' (1984) work was that there
was "an apparent lack of singularity in strategic orientation that characterizes the highest
performance group (pp. 484).
Dess and Davis (1984) measured firm performance of each strategic group to
assess whether a significant difference exists between Porter's (1980) strategic groups.
They state that a difference in firm performance within an industry based on intended
strategy has important managerial and academic implications. Conant, et al. (1990)
evaluated firm performance utilizing Miles and Snow's (1978) strategy archetypes and
distinctive competencies. They operationalized firm performance through a two-item,
subjective, self-report instrument. "The first item asked respondents to evaluate their
organization's general profitability relative to their competitors on a seven-point Likert
scale. The second item asked respondents to evaluate their organization's performance in
reference to a specific measure of profitability, namely, return on investment (ROI). The
scores on these two items were summed for a total measure of organizational
performance.
This research evaluates corporate culture as a set of values, which if managed
properly, can create higher financial returns (Baker and Hawes, 2001). Posner, Kouzes
and Schmidt (1985) found through their research that a clear understanding of a
corporation's culture did lead to a significant difference in organizational performance.
In this research, the corporate culture is viewed through a best-fit model with strategy.
69
This research utilizes specific accounting measures of performance to analyze this

"best-fit" concept. These measures include return on investment (ROI), return on assets
(ROA), return on equity (ROE), operating ratio (OR) and yearly increases in revenues
(sales growth) (Venkatraman and Ramanujam, 1986). Five measures have been chosen,
because this is a cross sectional study (Yarbrough, 1996). Each strategy may be closely
associated with a specific accounting measure. In order to make sure a more accurate
assessment of the organization's performance in this cross sectional study is done, more
than one accounting measure is essential. A specific accounting measure may produce a
greater ROE versus sales growth, thus using multiple measures will reflect a better
evaluation of an organization's overall performance.
Operating Ratio (OR) is a traditional accounting based performance measure
within the trucking industry. OR is the organization's annual operating expenses divided
by its operating revenue. The use of "operating" expenses and revenues eliminates the
effects of non-operating income and expenses (Yarbrough, 1996).
Sales growth indicates the rate an organization is adding customers and
penetrating markets. The context of the current research is an over-the-road
transportation industry. This industry is near saturation, thus, sales growth likely results
from share gains. The sales growth measure only reflects the growth, not the possible
performance improvements measured by a Return on Equity (ROE) or an OR.
The next chapter, Chapter III, is three-fold. First, there will be a discussion of the
conceptual model, research questions and hypotheses associated with the corporate
culture, corporate strategy and performance constructs. Second, the research design and
70
data collection process will be presented. Finally, an explanation of the analyses that will
be used to test the hypotheses will be conferred.
71
Chapter III
METHODOLOGY
Introduction
Chapter I presented an introduction, an overview of this research and research
questions. Chapter II provided a review of the relevant literature of corporate culture,
strategy and performance. There are questions that remain when evaluating the
relationships among corporate culture, strategy and performance. Thus, the aim of this
research is to answer the following question. Do firms that match their strategy to their
culture perform better than firms that do not?
This chapter has four main sections. In the first section, Model and Hypotheses,
the specific model and the associated hypotheses that will be tested will be reiterated.
The analyses to be used will be presented as well in this section. In the second section,
Research Design and Data Collection, the research design, sample of respondents and
data collection techniques for this study will be discussed. In the third section, Construct
Measures, the measurement of each construct will be justified, and their associated
psychometric properties will be presented. The final section, Psychometric Properties of
the Measurements for each Construct, will outline how the psychometric properties will
be tested for each measure used in this research.
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Concept Model and Hypotheses

Hypothesized Model
The conceptual model for this research is illustrated in Figure 3.1, including the
hypotheses that pertain to each path. With all of the proper elements in place, it is
hypothesized that firms that maintain a particular corporate culture should choose a
strategy that matches their corporate culture in order to achieve superior firm
performance. The first hypothesis involves the direct effect of corporate culture and its
relationship to firm performance. The second hypothesis entails the relationship between
the generic business strategies and firm performance. The third set contains hypotheses
that examine the moderating effect of the best-fit between corporate culture and corporate
strategy on firm performance, thus the interaction, or best-fit, effect on firm performance.
73
Figure 3.1
H3 , H4, H5 & H6
Another Way to View the Model
74
There is not one single "correct" corporate culture (Goffee and Jones, 1998), or strategy
(Lynch, Keller and Ozment, 2000). The current research is not determining the best
culture type or generic business strategy type for the motor carrier industry, rather it is
evaluating the best-fit between the two that will lead to greater performance.
Thus, the best-fit between corporate culture and strategy will moderate the
relationships of each and firm performance. Culture is considered the independent
variable and strategy is the moderator due to the contention that organizations are
conservative and resistant to change, meaning an organization's culture is slow to change
(Carter, 1971). Strategy can be changed and implemented faster, thus a possible
moderator when considering best-fit.. The interaction, or best-fit, between corporate
culture and corporate strategy (Porter's generic business strategy) will lead to a stronger
relationship with firm performance than the relationship of each independent variable
individually.
Baron and Kenny (1986) address the difference between a moderator and a
mediator, conceptually, strategically and statistically. They define "a moderator (as) a
qualitative (e.g., sex, race, class) or quantitative (e.g. level of reward) variable that affects
the direction and/or strength of the relation between an independent or predictor variable
and a dependent or criterion variable" (pp. 1174). Holmbeck (1997) defined a moderator
as a variable "that affects the relationship between two variables, so that the nature of the
impact on the predictor on the criterion varies according to the level or value of the
moderator" (pp. 599). Sharma, Durand and Gur-Arie (1981) present a framework for
identifying moderator variables. They declare two types of moderators: one type
75
influences the original model by affecting the strength of the relationship, the second type
modifies the form of the original model.
Moderators also function as independent variables, and should be uncorrelated
with both the predictor and dependent variable (Sharma, Durand and Gur-Arie, 1981;
Baron and Kenny, 1986; Holmbeck, 1997). Corporate strategy is uncorrelated, due to the
fact that this research is not hypothesizing that one type of generic strategy is superior to
another in reference to firm performance, and is the same for culture. Rather, when there
is a fit between the two, firm performance will be greater than when a mis-fit exists.
Within correlation analysis, a moderator is a third variable that affects the zero
correlation or changes the direction of the correlation (Baron and Kenny, 1986). In
analysis of variance (ANOVA) terms, a moderator effect is signified by an "interaction
between a focal independent variable and a factor that specifies the appropriate
conditions of operation (pp. 1174). A moderator-interaction effect would exist, as well, if
the relationship between the independent variable and dependent variable are
substantially reduced (Baron and Kenny, 1986).
There are three paths in a conceptual moderator model (Figure 3.1): Path A) how
the independent variable affects the dependent variable; Path B) how the moderator
affects the dependent variable and Path C) how the interaction between the independent
variable and the moderator affects the dependent variable. If path C is supported then a
moderator effect is present.
Holmbeck (1997) declares two types of statistical strategies for testing moderator
effects: multiple regression and structural equation modeling. In multiple regression, the
predictor and the moderator, as well as any covariates, are entered into the regression
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equation first. Then, the interaction of the predictor and moderator are entered into the
regression equation. The main effects may be entered hierarchically, stepwise or
simultaneously; thus in any order, but they must be entered prior to the interaction term
(Holmbeck, 1997). Multicollinearity may be an issue with the independent variable and
the moderator as well as with the interaction terms. Aiken and West (1991) suggest that
the independent and moderator variables be centered before testing the interaction term.
Centering a variable is done through setting the scores into a deviation scores form by
subtracting the sample mean from all individuals' scores on the variable. These deviation
scores creates a revised sample mean of zero, which has no impact on the level of
significance of the interaction.
The structural equation modeling (SEM) approach for categorical variables is
quite simple. SEM tests a moderator effect by assessing the overall fit of the model
under two conditions: 1) when there are no constraints on the solution, meaning the
relationship between the independent variable and the dependent variable is allowed to
vary as a function of the moderator and 2) when the association between the independent
variable and the dependent variable is constrained to be equal (Jaccard and Wan, 1996;
Holmbeck, 1997). This constraint is in order to test the model where no interaction
between the independent variable and moderator occurs. A significance test is performed
by calculating the difference between the goodness-of-fit chi-square values for each of
the two models. Contrary to multiple regression, nonsignificant (lower) chi-square
values mean a better fit. The magnitude of the difference between the two chi-square
values indicates the degree to which an interaction effect is present.
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Baron and Kenny (1986) suggested using four different procedures depending on
the characteristics of the independent variable and the moderator. Case 1 pertains to
when both the moderator and independent variable are categorical variables; Case 2
pertains to when the moderator is a categorical variable and the independent variable is a
continuous variable; Case 3 pertains to when the moderator is a continuous variable and
the independent variable is a categorical variable; Case 4 pertains to when both variables
are continuous variables. The current research uses two methods of obtaining data that
will allow for analysis in each of these cases: paragraph approach (nominal data,
categorical) and previously established Likert-type scales (ordinal data, but when the sum
of the scores is taken, the data is interval, continuous). Utilizing these two approaches,
allows for analysis of the moderator effect in each case proposed by Baron and Kenny
(1986). The initial analysis will pertain to Case 1. These two methods are further
discussed in the Construct Measures section of this chapter.
The simplest, Case 1, would be analyzed through a 2x2 ANOVA (Kenny and
Baron, 1986). This conceptual framework is graphically depicted in Figure 3.2. A 2x2
model is created due to previous research and the current research assumptions
determining there are two dominant corporate culture types, Hierarchy and Adhocracy
(Yarbrough, 1996) and only two generic business strategies, Low Cost Leader and
Differentiation (Miller, 1986; Davis and Miller 1988; Day, 1990; Inhofe 1992; Vorhies
1993; Lynch, 1998, Lynch et al. 2000).
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re 3.2
Strategy in Respect to Firm Performance
Strategy Type
Low Cost
Differentiation
High Performance
Low Performance
Hierarchy
Culture Type
High Performance
Adhocracy
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Hypotheses
Corporate culture is defined as "the pattern of shared values and beliefs that help
individuals understand organizational functioning and thus provide them norms of
behavior in the organization" (Deshpande' and Webster, 1989, ppp.4). In cognitive
theory, corporate culture has been empirically tested as an independent variable because
culture allows the firm to adapt (Smirchich, 1983). Many others have viewed corporate
culture as an independent variable as well (Kotter and Heskett, 1992; Kunda, 1992; Deal
and Kennedy, 1982 and Peters and Waterman, 1982). This research will view corporate
culture as the independent variable in the model. Corporate culture is operationalized in
two types: Adhocracy and Hierarchy (Quinn and Hall, 1983; Quinn and McGrath, 1985
and Quinn, 1988).
Corporate strategy is defined as a "fundamental pattern of present and planned
resource deployments and environmental interactions that indicates how the organization
will achieve its objectives" (Hofer and Schendel, 1978, pp. 25). Strategy may be
analyzed by its patterns in organizational resource allocations (Porter, 1974). In this
research, strategy is operationalized with Porter's (1980) generic business strategies: low
cost leader and differentiator.
Firm Performance is widely used as a dependent measure in a plethora of research
paradigms. Firm performance is operationalized with 5 financial measures to analyze the
hypothesized best-fit concept: return on investment (ROI), return on assets (ROA), return
on equity (ROE), operating ratio (OR) and yearly increases in revenues (sales growth)
(Venkatraman and Ramanujam, 1986; Dess and Davis, 1984; Yarbrough, 1996).
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The constructs of corporate culture, corporate strategy and firm performance as

well as the details of how each is operationalized in the current research as well as the
justifications is extensively reviewed in Chapter II.
Direct Effects
It is important to remember that this research utilizes the contingency
management perspective, in which it is declared that there is no one best way to organize
the firm, but to maximize performance, the "level" of strategy may be dependent on the
"level" of corporate culture. Thus, corporate culture can be observed as a "lever or tool
to be used by managers to implement strategy and to direct the course of their
organization more effectively" (Deshpande and Webster, 1989, pp.7). Since there is no
correct corporate culture or correct corporate strategy for an organization, Paths A and B
involve the idea that a clearly defined corporate culture and/or strategy will lead to
greater firm performance. Prior research has shown a relationship between culture and
firm performance as well as strategy and firm performance, thus hypotheses 1 and 2 are
simply to establish the model in order to evaluate the hypothesized moderator effect, Path
C. Path C and the associated hypotheses are the dominant scope of this dissertation, and
presented in the next section.
performance.
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Moderator Effect
The Adhocracy culture has the characteristics of being market oriented and
organic in style. Organic in style means it has an open-door policy, entrepreneurial in the
way of accommodating the customer. It would be very likely that a Differentiation
strategy would best fit with this type of culture. A Differentiation strategy demands
flexibility. The concern for a differentiator is to scan the environment and offer new
products or services to continuously meet the needs of customers. The same
entrepreneurial values and creative drive that an Adhocracy culture holds would create
difficulty in maintaining a Low Cost Leader strategy. The goal for an Adhocracy is
customer satisfaction not low cost. For example, if your goal is to utilize R&D to create
a newer, better product or service for your customers, you are not applying low-cost
mentality.

performance than an Adhocracy culture-Low Cost Leader strategy fit.

performance than a Hierarchy culture-Differentiation strategy fit.
A Hierarchy culture has the characteristics, which would allow a successful

implementation of a Low Cost Leader strategy. To maintain a Low Cost Leader strategy,
there needs to be processes in place to control costs throughout the organizational
functions. The mechanistic style of a Hierarchy creates an excellent avenue for low cost
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strategy capabilities. If a Hierarchy culture tried to differentiate there would be

roadblocks at every turn due to these well-defined and written procedures. A Low Cost
Leader strategy demands control. In a Low Cost Leader strategy, it is thought that a
customer is cost-conscious and that is the purchasing persuasion. Thus, internal focus
and control to maintain the low cost advantage takes precedence over R&D to
accommodate the needs of customers.
Testing these six hypotheses will allow the three research questions of this
dissertation to be answered. First, is there a relationship between corporate culture and
firm performance as well as corporate strategy and firm performance? Second, does this
relationship change significantly in strength or direction when corporate culture-strategy
fit is considered? Finally, which corporate culture-strategy fit create the best overall firm
performance?
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Research Design and Data Collection

The methodology used in this research is confirmatory rather than exploratory in
nature. Thus, it is expected that the relationships hypothesized will be confirmed based
on a partial test of existing theory. Once again, the primary objective of this research is
to examine the relationships between corporate culture, generic business strategy, and
firm performance.
Research Setting
Porter (1980) classifies industries as one of five generic industrial environments:
fragmented, emerging, mature, declining or global. The LTL trucking industry has no
true market leader, and there are a large number of small and medium-sized firms, many
of them privately held. With the new technologies, this industry is identified as a
fragmented industry based on Porter's (1980) classification. The extant research in
strategy has focused on assessing firms within a particular industry, through an intraindustry perspective. This research will follow that model with the research setting being
the trucking industry.
Studying one industry is widely accepted, because it allows for more control of
extraneous variables, thus controls cross-industry variance and provides robust results for
theory testing (Snow and Hambrick 1980; Morash, Droge and Vickery, 1996; Innis and
La Londe 1994; Lynch, 1998). Researchers have also suggested that while the
generalizability of a single industry studies may be somewhat restricted in their
environmental contexts, these constraints enhance the internal validity of the study
(Conant, Mokwa, Varadarajan, 1990).
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This industry has been selected for a number of reasons. First, trucking
companies often have limited product offerings. Second, the economic performance
information is vast for this industry and its individual members (Yarbrough, 1996).
Third, deregulation of this industry as well as internationalization and e-commerce have
increased competition leading to greater innovation. Finally, the trucking industry offers
a large enough sample to provide a reasonable assessment of the hypothesized model.
Limited Product Offerings

Trucking companies usually provide a single or very few services, thus fewer
company divisions. Fewer company divisions create fewer possible sub-cultures or
multiple cultures within one firm (Gregory, 1983). This is important to the current
research, because we are aiming to identify a single predominant culture type. Limited
product offerings, also, means that the economic performance indicators will be better
associated to each firm's overall performance rather than to specific Strategic Business
Units" (Anderson, Fornell and Lehmann, 1993; Yarbrough, 1996).
Economic Performance Information

The companies are required by the federal government to make their financial
information available to the general public through regular filings. These government
reports are summarized and published annually in the TTS Blue Book of Trucking
Companies (Blue Book) regarding the nation's largest trucking companies. This Blue
Book offers reliable secondary information to verify performance data.
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Deregulation, Internationalization and E-commerce

In 1980, deregulation changed the dynamics of the trucking industry. When once
strictly controlled economically and geographically, entry into the trucking industry post
deregulation was "open game." Competition followed and altering operations was a
must. With the climate of business in the United States becoming increasingly
international in scope, trucking companies have faced a greater need for innovative ways
of doing business, continentally and internationally. Finally, as e-commerce is gaining
popularity in both business-to-business and business-to-consumer transactions,
innovative configurations and offerings of services provided are essential as competition
increases in the trucking industry. Through the effect of each of these elements that have
changed the trucking industry, one can see the necessity of defining, implementing and
maintaining a corporate strategy. This research evaluates the best-Fit between its strategy
and culture with the conviction that a good-fit will lead to greater performance.
Respondents
A key informant survey research strategy was employed in this study (Campbell
1955). The initial sample consisted of trucking company executives, who were
questioned relative to their firms' culture, strategy and performance. Trucking company
executives were chosen, because they are the most aware of the company's historical,
present and future goals. They are known to be the originators and perpetuators of a
company's culture (Kilman, Saxton and Serpa, 1985; Kotter and Heskett, 1992; Quinn,
1988). These informants should be aware of the business strategy employed and should
be responsible for implementing that strategy. This follows Campbell's (1955)
86
suggestions that key informants be both knowledgeable about the issues being studied
and willing and able to communicate this information. Trucking company executives
have the knowledge of each construct being studied. The survey issued allowed them to
communicate this knowledge of their specific company culture, strategy and
performance.
There have been some criticisms of a key informant survey method. They may
produce unreliable or invalid data when only single respondents are used, but there is no
other viable alternative to gain information from top managers (Phillips 1981; John and
Reve, 1982). Several studies have shown success in utilizing the key informant method
in testing hypotheses (Narver and Slater 1990; Jaworski and Kohli 1993; Quinn and
Spreitzer 1991; Ellinger, Daugherty and Keller, 2000). Each participant was guaranteed
confidentiality of their individual responses and offered an executive summary of the
study results.
Data Collection
This study used cross sectional, non-experimental mail as well as web-based
survey methodology to examine the U.S. motor carrier sample. Mail surveys are very
useful and maintain many advantages, while web surveys are growing in use and have
associated advantages. This effort uses these two types of survey methodologies in order
to ensure a useful sample size and to minimize a bias that may exist due to different
levels of technological capabilities across the sample.
Mail surveys allow for a large geographically dispersed population to be studied
at a relatively low cost and aid in testing measurement scales (Davis and Consenza,
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1988). Mail surveys can be used to find and test relationships between variables
(Sonquist and Dunkelberg, 1977) and the validity can be assessed (Kerlinger, 1986).
A concern with mail surveys is response rates, but there has been research that
defines techniques for greater response rates (Dillman, 1978; Dillman, Clark and Sinclair,
1995). Therefore, to generate a significant response rate, phone calls will be made prior
to the surveys being mailed out to verify the correct individual to be contacted, and
contact with that individual will be made. Additionally, the survey will be mailed with a
cover letter outlining the research and directions for filling out the survey and returning it
in a self-addressed, stamped envelope.
Web (World Wide Web) surveying is a new methodology in respect to today's
growing Web (World Wide Web) surveying is a new technology in respect to today's
growing technology. The Internet is a way of surveying the public and it is increasing
(Couper, 2000). There are advantages to Internet surveys, such as eliminating the
printing and mailing costs associated with mailing a survey as well as cost savings
associated with having the returned survey data already in electronic format (Cobanoglu,
Warae and Moreo, 2001; Kaplowitz, Hadlock and Levine, 2004).
An issue exists concerning the response rate with web surveys with respect to
privacy issues and junk mail or "spam" overload (Sills and Song, 2002). When a web
survey is sent via e-mail, the respondents may think it is junk mail or contain a virus and
ignore or delete it. The differences in response rates maybe the fact that less research has
been done in developing and testing motivating tools to increase Web survey response
rates. There has been extensive research (e.g. "tailored design method") in tools and
techniques to increase response rates for mail surveys (e.g., the use of personalization,
88
precontact letters, follow-up postcards, and incentives) (Dillman, 1978; Dillman, 2000).
These approaches may translate into web survey methodology, or they may not.
Kaplowitz, Hadlock and Levine (2004) found an age difference in responses
between the two survey methods. Thus, a mix-mode methodology will be used to
minimize the possible age bias as well as the Internet access or frequency bias. A mixmode survey strategy allows for exploitation of the advantages of web surveys and
minimizes non-responses (Dillman, 2000; Schaefer and Dillman, 1998).
Kaplowitz, Hadlock and Levine (2004) found that response rates for web survey
and mail surveys were comparable if a notification prior to the web version was received
via surface mail. Interestingly, reminder notification did not yield higher response rates
for web surveys. They conclude that a web survey with a mailed pre-notice (mix-mode
strategy) would be a beneficial method of studying a population with full access to the
Internet due to the substantial differential between mail surveys and web surveys.
Construct Measures
This section discusses the operational definitions of the constructs used in this
research. A fairly comprehensive set of items from pre-validated measurements is used
to measure the dependent variable (firm performance) and two independent variables
(corporate culture and generic strategy). The scales used in this research are discussed
below as well as presented in Appendix A. with the actual questions associated with each
construct.
Each of the variables were rated on a seven point Likert scale for which a score of
1 indicated "poor," or "low," and a score of 7 indicated "excellent," or "high."
Intermediate scores represented ratings between these extremes.
89
A paragraph form is also employed in the scales for this research (Appendix A).
The paragraph methodology, or fix choice scale has been widely used in research
(Conant, Mokwa and Varadarajan, 1990). A paragraph descriptor is used to
operationalize each element of the two independent variables (corporate culture and
corporate strategy). The respondents will be required to read these short paragraphlength descriptions of each culture type and select the one that best describes their
organization. The same process will be used for Porter's generic business strategy.
The
paragraph method is used, in addition to the previously tested instruments described

below, to more clearly define the particular culture and strategy to which the respondents
prescribe in their organization. Using these two methods, also, gives an additional
opportunity to test validity.
Corporate Culture Measure

The Competing Values Scale has been used in numerous studies on corporate
culture. Quinn and Speitzer (1991) examined the psychometric properties of this scale.
They used a fixed choice scale. The respondents were asked to divide 100 points into
each of the four categories. Deshpande', Farley and Webster (1992) used this scale to
define the specific culture types. Moorman (1995) challenged the "Split 100 point"
format due to the ipsative nature of the data resulting in spurious correlations (Johnson,
Wood and Blinkhorn, 1988). This type of data is automatically correlated, because more
of one choice results in less of another, which is not appropriate for correction-based
analysis (Quinn and Spreitzer, 1991), therefore the scale needed modification.
90
Quinn and Speitzer (1991) tested a variation of the competing values scale. This
variation uses Likert type questions. Most firms retain elements of several culture types.
A Likert type scaling allows for more flexibility by the respondents and is more
representative. Quinn and Spreitzer (1991) as well as Yarbrough (1996) used a Cronbach
(1951) alphas and multidimensional scaling techniques to test the current scale. They
found the following coefficient alphas (Cronbach (1951) alphas) of reliability for each
culture types, respectively: Clan culture type, .84, .71; Hierarchy culture type, .81, .71;
Adhocracy culture type, .77, .72 and Market culture type .78, .63. All of these alphas
exceed the generally accepted .65 reliability rule (Nunnally, 1978). These results are
depicted in Table 3.1
Quinn and Spreitzer (1991) also analyzed the competing values scale via
multidimensional scaling for convergent and discriminant validity. The results located
the culture types in the hypothesized opposing quadrants, which supports the nomological
validity of the measure (Quinn and Spreitzer, 1991).
Table 3.1
Cronbach Alpha for Corporate Culture Measure
Quinn and Spreitzer (1991)
Yarbrough (1996)
Clan
.84
.71
Hierarchy
.81
.71
Adhocracy
.77
.72
Market
.78
.63
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Porter's Generic Business Strategy Measure

Porter (1980) conceptualized three generic business strategies: low cost leader,
differentiator and focus. These three strategies were initially empirically tested by Dess
and Davis (1984), Davis and Miller (1988), and Miller (1988). The measurement of both
the cost leadership and differentiation strategies will be done utilizing the scales
developed by Dess and Davis (1984). Dess and Davis (1984) began with 21 competitive
methods of a firm's overall strategy. 15 of the 21 had factor loadings greater than 0.50.
The results empirically support Porter's three generic strategies: cost leadership,
differentiation, and focus. Since that study, there has been research that makes a
significant case for only two truly unique generic business strategies, cost leadership and
differentiation (Davis and Miller 1988; Inhofe 1992; Vorhies 1993; Lynch, 1998, Lynch,
Keller and Ozment, 2000). Additionally, Miller (1988) validated both the cost leadership
and differentiation strategies, while he determined a focus strategy as simply a special
case of these two strategic alternatives. Therefore, the Dess and Davis (1984) scale will
be used to measure both cost leadership and differentiation.
Reliability and validity of the Dess and Davis (1984) scale have been determined
through its application in research (Inhofe, 1992, Vohries, 1993 and Lynch, Keller and
Ozment, 2000). Inhofe (1992), Vorhies (1993) and Lynch (1998) obtained coefficient
alphas (Cronbach, 1951) of .80, .67 and .83, respectively, on the low cost strategy items.
The differentiation strategy items obtained coefficient alphas of .887, .70 and .92,
respectively. Therefore, it appears that adequate reliability exists for these scales
according to Nunnally (1978). These results are shown in Table 3.2. Inhofe (1992) also
examined the issue of validity relative to this scale. The results of a confirmatory factor
92
analysis demonstrate adequate convergent validity with having high loadings on one
factor while not having significant cross loadings on the other factor.
Table 3.2
Cronbach Alpha for Porter's Generic Business Strategy Measure
Inhofe (1992)
Vorhies (1993)
Lynch (1998)
Low Cost
.80
.67
.83
Differentiation
.887
.70
.92
Miles and Snow (1978) Strategy Typology Measure

Two measures for Miles and Snow's (1978) typology of strategic types were
used. The first measure is the paragraph approach used by Snow and Hrebiniak (1980),
which operationalized the prospector, defender, analyzer or reactor typology. The second
measure is the one that is prescribed by Conant, Mokwa and Varadarajan (1990) based on
this typology. The items in this measure were developed using a panel of organization
theory and strategy researchers. There were revisions to the items until the entire panel
agreed that each question and response option accurately measured the intended strategic
type. Conant et al. (1990) used both measures as well and found that their measure
needed refinement, but it was strong enough to use in strategy research. Grover and
Saeed (2004) found success in their research of internet-based businesses using Conant et
al.'s (1990) measure.
93
Firm Performance Measure

The more traditional accounting performance measures will be used in this
research as in previous research (Dess and Davis, 1984; Deshpande', Farley and Webster,
1992, Lynch, Keller and Ozment, 2000). These include return on investments (ROI),
return on assets (ROA), return on equity (ROE), operating ratio (OR) and yearly
increases in revenue or sales growth (Venkatraman and Ramanujam, 1986; Deshpande',
Farley and Webster, 1992; Narver and Slater, 1990; Yarbrough, 1996; Lynch, 1998).
Certain perceptual performance measures (e.g. market share and profit margin) have been
shown to significantly correlate with objective financial and marketing information (e.g.
percentage of market share, return on investment (ROI) and return on equity (ROE) (Dess
and Robinson, 1984; Fawcett et al., 1997; Vickery et al., 1993). This research will use
the perceptual performance measures associated with financial and marketing issues,
such as profitability, sales growth, ROI, ROA and ROE.
The efficiency versus the effectiveness may differ among companies, simply due
to the strategy they employ; these measures will attempt to ascertain both efficiency and
effectiveness in terms of firm performance. One company may have greater focus on
efficiency (cost leadership), while another may have more directives towards
effectiveness (differentiation) (Dess and Davis, 1984). In order to assess efficiency,
ROI, ROA, ROE, and sales growth will be asked relative to the firm's competitors.
Respondents will be asked to self-evaluate their firm's performance in comparison to
their perception of the performance of their greatest competitor for each measure of
performance. Effectiveness refers to the ability of a firm to reach its goals (Ruekert,
Walker, and Roering, 1985). In order to assess effectiveness, the same scales mentioned
94
above (ROI, ROA, ROE and sales growth) will be used, but respondents will be asked to
self-evaluate their firm relative to meeting the stated goals of the organization. The
scores on these two methods are summed for a total measure of organizational
performance (Conant, Mokwa and Varadarajan, 1990). This scale has been successfully
used in various research (Conant, Mokwa and Varadarajan, 1990; Ellinger, Daugherty
and Keller, 2000; Lynch, 1998; Lynch, Keller and Ozment 2000; Thomas, 1998). It is
used to evaluate the efficiency and effectiveness of an organization in respect to the
firm's performance has been successful in various research. It is important to reiterate
that the trucking industry's published reports offer an additional advantage of obtaining
actual performance measures as well as perceptual performance measures. The actual
performance measures can be found in the Blue Book, while the perceptual performance
measures will be obtained from the respondents of the surveys. This offers an
opportunity to test the validity of the performance measures.
It is expected that the employment of the above measures for corporate culture,
generic business strategy and firm performance will lead to the hypothesized
relationships and support for the thesis proposed here. The correct best-fit between
corporate culture and corporate strategy will lead to superior firm performance.
Testing the Psychometric Properties of the Measurements for each Construct

Psychometric properties of measurements for constructs are tested through
unidimensionality, validity and reliability. Anderson and Gerbing (1991) define
unidimensionality as the degree to which items of a scale represent one and only one
underlying latent construct. Validity simply means that the scale actually measures that
95
which it is supposed to measure. Reliability is basically the consistency of the items in

respect to the construct under analysis (Bollen, 1989).
Anderson and Gerbing (1991) propose two methods to measure
unidimensionality. The first method is the use of item to total correlation. The second is
the use of exploratory factor analysis as well as confirmatory factor analysis, for a stricter
interpretation. CFA will be used in the present research to determine unidimensionality;
more than 70% of variance explained is the acceptable level to determine
unidimensionality. Once, unidimensionality is determined than validity can be tested.
Construct validity is most frequently determined through support of convergent
and discriminant validity (Peter, 1981; Churchill, 1979). Convergent validity is the
degree to which the items represent the particular construct and not any other construct.
Discriminant validity is indicated by predictably low correlations between the measure of
interest and other measures that are supposedly measuring different constructs (Churhill,
1979). The multi-trait-multimethod (MTMM) approach has been used to examine
convergent and discriminant validity of multidimensional scales (Peter, 1981; Malhotra,
1987; Campbell and Fiske, 1959).
Fornell and Larcker (1981) as well as Bollen (1989) state that confirmatory factor
analysis (CFA) is the appropriate way to assess construct validity. CFA will be
employed to determine the actual culture items related to its construct and the strategy
items related to its construct (Joreskog and Sorbom 1982). This CFA will help to
examine construct (convergent and discriminant validity) for a measure in the specific
context of the current research.
96
The coefficient alpha, Cronbach (1951) alpha, will be calculated to evaluate the
internal consistency (reliability) of the measures and constructs (Anderson, Gerbing and
Hunter, 1987; Nunally, 1978; Churchill, 1979). A high Cronbach (1951) alpha indicates
that the items sufficiently capture the constructs intended for analysis. A measure is
considered reliable with an alpha value of .65 or above (Nunnally, 1978).
As previously mentioned, this research is confirmatory in nature. The testing of
the psychometric properties of the construct measurements is used to verify previous
research of these constructs as well as to confirm their usefulness in this dissertation's
research design and context.
Chapter IV explains the details of the empirical analyses of the hypotheses. This
chapter includes the psychometric properties of the study (such as, validity, reliability and
unidimensionality of the constructs), hypotheses testing, hypotheses supported and the
theoretical and practical implications of the results.
97
Chapter IV
RESEARCH FINDINGS
Introduction
This chapter presents the empirical analyses undertaken in this study. It includes
three sections. The first section, Sampling Procedure and Data Collection Results,
discusses the results of implementing the sampling procedures and collection of the data
along with the descriptive statistics. The second section, Psychometric Properties,
presents the results of the tests of the measurement properties of each construct in respect
to unidimensionality, reliability and validity. The third section, Hypotheses Testing,
shows and discusses the results of each hypothesis test and their related implications.
Sampling Procedure and Data Collection Results

The survey was printed and sent by mail as well as an online option. A mailing
list was generated by using the U.S. Department of Transportation information and
sorting by revenue. The top 1000 companies in the sort were then placed into a
spreadsheet. The following information was added with the use of the Fleet Owner's
FleetSeek National Motor Carrier Directory, both hardcopy and online forms: company
name, full name of contact, title, Department of Transportation number (DOT #),
revenue, full address, phone number, website, equipment (owned or leased), commodity,
SIC classification, less-than-truck-load (LTL) or truckload (TL) classification and a final
column for any comments. The company's website was used if the above information
could not be found in the FleetSeek directory as well as to verify the information when
necessary. The target contact name was the President, CEO or owner of the company
98
depending on the company's structure of executives. The following is a summary of

titles entered in the generated sample: President: 828, 80.4%; CEO: 68, 6.6%; Owners:
60, 5.8%; Vice Presidents: 24, 2.3%; Managers: 36, 3.5%; other, 14, 1.4%.
Response rates are the concern for both types of surveying, mail and web-based.
There are ways to increase response rates, such as the use of personalization, pre-contact
letters, follow-up postcards, and incentives (Dillman, 1978; Dillman, Clark and Sinclair,
1995; Dillman, 2000; Kaplowitz, Hadlock and Levine, 2004). Since the target
respondent was the President, or another executive position, and response rates may be
even more difficult to acquire with this sample, we initiated many of the techniques for a
greater response rate.
First, we obtained the first and last name of each contact with his or her title in
order to personalize each correspondence. Second, a single page initial contact letter was
sent out to each in the sample (1000) to inform potential respondents, and to notify them
that the survey is soon to follow (Appendix A). This pre-notice letter, also, allows for
return mail to be corrected before the cost of the survey is sent out with errors. Within
this letter, a link was typed out in reference to the online form that one could fill out if
preferred. The investigator's e-mail address was listed along side the link with text
stating that if he or she preferred to be e-mailed the link via e-mail that that is an option
as well. The online link was included in the first letter to allow those who chose to
respond via the web survey to do so, thus cutting the cost of sending a hardcopy survey to
that contact. There is research stating that prior notification to a web version received via
surface mail increases the response rate for web-based surveys (Kaplowitz, Hadlock and
Levine, 2004).
99
Third, a personal phone call was placed to the sample (500 of the sample): 1) to
answer any questions about the study he or she may have, 2) to notify him or her that the
survey will be mailed out on August 8th and to keep an eye out for it later this week or
the beginning of next week and 3) to request that he or she fill the survey out and return it
in the provided envelope. Fourth, the survey mailing which contained a cover letter, a
survey and a postage-paid return envelope was mailed (Appendix A). The cover letter
reflected the date of the prior letter, and the link for the online format was repeated as
well as the option to receive the link via e-mail. The survey was mailed to the sample.
The web-based survey yielded 16 respondents total, while the mail survey yielded 88
within the first three weeks.
Fifth, another round of personal phone calls was made to the return mailings and
others in the sample to gain a better response. The return mail for survey mailing was
only 30 in total. A survey was mailed to each of the contacts called. This yielded
another 12 responses. Sixth, another 35 surveys were administered personally to
executives.
These efforts yielded a total response rate of 15.1%: 10% mail responses, 1.6%
online responses and 100% personal contact responses (3.5% of total). Eighty of the mail
respondents identified themselves, thus leading to another round of phone calls to the
ones with missing data. The effective sample was 132, after deleting responses due to
missing data and not fitting framework criteria.
Table 4.1 provides descriptive statistics of the sample. On average, respondents'
annual revenue was $504,057,335 and operating ratio was 95%. Truckload accounted for
68% of the respondents, while less-than-truck-load (LTL) accounted for 16%. Specialty
100
transport, such as refrigeration or chemicals, constituted 3.8%. The respondents that

were at the executive level holding the title of President, CEO, CFO, COO, Owner, Vice
President or Director made up 96.2% of the sample with 95.5% of the respondents being
men. The adhocracy culture and hierarchy cultures were nearly equally represented in
the responses: Adhocracy, 24.4% and Hierarchy, 30.5%, while the clan culture and
market culture types were close as well: Clan, 25.2% and Market, 19.9%. The strategies
did not reflect the same dispersion in the responses: Differentiation, 62.6%, Low-Cost
Leader, 37.4%. An evaluation of these results will be offered following the hypotheses
testing section.
101
Table 4.1
Survey Respondents Characteristics
Total
Annual Sales Revenue ($):
Minimum
$10,000,000
Maximum
$3,500,000,000
Median
$107,436,000
Mode
$14,000,000
Mean
$504,057,335
Operating Ratio:
Minimum
80
Maximum
105
Median
96
Mode
97
Mean
95
Type of Operation:
LTL
21
TL
89
Both: LTL & TL
16
Other
5
Title:
President in Title
86
CEO/COO/CFO/Owner
(w/o President in Title)
21
Vice President/Director
19
Other
5
Gender:
Male
125
Female
6
Culture:
Adhocracy
32
Hierarchy
40
Clan
33
Market
26
Strategy (Porter's Generic Strategy):
Differentiation
82
Low-Cost Leader
49
102
Percentage
16.0%
68.0%
12.2%
3.8%
65.7%
16.0%
12.2%
3.8%
95.5%
4.5%
24.4%
30.5%
25.2%
19.9%
62.6%
37.4%
Psychometric Properties
Reliability Assessment
The reliability, unidimensionality and validity of this study were assessed in
accordance with accepted practice (Anderson, 1987; Churchill, 1979; Gerbing and
Anderson, 1988) using two techniques: 1) the Cronbach alpha technique for reliability
and 2) Confirmatory Factor Analysis for reliability as well as validity. The Statistical
Package for the Social Sciences (SPSS) was the tool used for these analyses. Test of
reliability of the constructs was first performed.
Reliability refers to the internal consistency of the measurements of a scale
(Anderson, Gerbing and Hunter, 1987; Peter, 1979; Churchill and Peter, 1984). There are
two types of statistical reliability one can evaluate: 1) whether the measurements of the
same scale give the same measurement when tested and retested and 2) for a more
subjective instrument, whether two independent measures give a similar score, inter-rater
reliability. The most common measurement statistic of the first reliability assessment is
Cronbach's coefficient alpha. Reliability is required because the construct employed
must provide consistent results across repeated measures. Typically, a measurement
scale is said to be reliable and internally consistent if the alpha level is .7 or higher and as
low as .6 for new scales, thus .65 is the guideline (Nunnally, 1978; Churchill, 1979). The
reliability of the measures is given in Table 4.2.
There were a few issues with the established strategy measure for Porter's
Generic Strategies. The skewed distribution of responses for items 4, 6, 13, 16, 17 and
21 is likely the result of the Motor Carrier Industry viewing themselves as service
oriented, rather than production oriented. Thus, terms such as "channels of distribution,
103
inventory levels, procurement, products, product control and manufacturing processes"

may have caused confusion and misdirected responses. The resulting Cronbach's Alphas
are Low Cost Leader, 0.69, with 6 items remaining and Differentiator, 0.80, with 8 items
remaining. Item 11 was deleted to improve the score. Item 11 involves innovation in
marketing techniques and methods, which may not be a driving force in this industry and
context. These reliability scores are within the acceptable scores of 0.65 or higher
(Nunnally, 1978; Churchill, 1979). The factor analysis for establishing unidimensionality
offered a few more items to be deleted. This is discussed in the next section, but the final
reliability and item number for the measures are reflected in Table 4.2.
The culture measure results of reliability are as follows. The clan type culture has
a Cronbach's Alpha of .82 with all 4 items. The adhocracy has an alpha of 0.77 with all 4
items. The hierarchy type culture has a reliability score of 0.77 with all 4 items. The
market type culture has a reliability of 0.694 with all 4 items. The reliability for the
market type culture measure could be improved to 0.706 by deleting item 4. The
explanation for deleting item 4 is similar to the strategy measure issues as well as
Yarbrough's (1996) issues with the culture measure. It states ".. .very production
oriented," which may have caused a sample that views themselves as services providers.
Each of these scores is well above the accepted guidelines for reliability of a measure,
0.65 and even the 0.70 (Nunnally, 1978; Nunnally and Bernstein, 1994). It was decided
to keep Item 4 among the items for the market type culture measure, because this
measure is not significantly improved by deleting item 4, and it is within the acceptable
range for reliability with all items included. The market type has had higher reliability
scores in previous research by Moorman, 1995 and Deshpande', Farley and Webster,
104
1993 (0.81 and 0.82, respectively). But in respect to a Motor Carrier Industry sample, the
current research reflects a much higher reliability score for each of the culture measures
than previous culture research in the Motor Carrier Industry (Yarbrough, 1996). This
may be due to various reasons, such as the respondents' position in the company.
The performance measure involving "how do you think your company is
performing compared to last year in the following categories?" led to a reliability score of
0.954 with all 5 items retained. The performance measure involving "how do you think
your company performed last year relative to your competitors in the following
categories?" revealed a reliability score of 0.942, again retaining each of the 5 items of
the measure. For both measures, if item 1 (Sales Growth), in both scales, were to be
deleted, the Cronbach's alpha for each measure would be 0.974 and 0.972, respectively.
This may be due to the vast decline in the trucking company revenues in the past few
years as a result of the housing market decline and consumerism decline in general and
especially as of late (Trucking Hits the Brakes, 2007). This reliability assessment of the
measure, which compares to competitors, is much greater than previous works using this
measure in similar contexts by Jay Joong-Kun Cho (2004) and Larry Yarbrough (1996):
0.75 (5 items) and 0.57 (3 items), respectively.
105
Construct Reliability
Constructs/
Items
Cronbach 's
Alpha
Number of
Items
.821
.719
5
5
.818
.770
.767
.691
4
4
4
4
0.974
0.972
4
4
Strategy
Differentiation
Low Cost Leader
Culture
Clan
Adhocracy
Hierarchy
Market
Performance
Compared to Last Year
Compared to Competitor
106
Dimensionality
Unidimensionality is obtained if a single construct is represented by a set of items
(Kumar and Dillon, 1987; Anderson, Gerbing and Hunter, 1987). In other words,
unidimensionality means the degree to which items represent one and only one
underlying latent construct. The method to measure unidimensionality for these scales is
factor analysis. This analysis evaluates if the items load on the correct factor with items
having higher factor loadings on their constructs than others. The established level to
verify unidimensionality is above 0.30. As well, items may not cross-load on other
factors, which means it must load below 0.30 on all other constructs. This research
employs both methods. Tables 4.3-4.5 show the factor loadings for each item in each
construct to establish unidimensionality.
The strategy measure faced a few more issues in this analysis. Item 15 loads
nearly equally on both constructs, thus it was eliminated. It states "serving geographical
markets," which a trucking company very well is going to have the resources and goal of
serving a specific geographical market in its region, no matter what particular strategy it
employs, thus the cross-loading. Items 14 and 20 do not have significant factor loadings
on either construct, thus they are eliminated. Item 14 involves "outside financing," and
that idea or term may simply not be a part of the trucking industry's mind-set in general.
Item 20 entails "forecasting market growth," which would be considered a low cost
leader dimension, but it has no significance in this context and the current research. As
mentioned previously, the economy and markets the trucking industry serves are
declining, thus they may not see the word "growth" as applicable to them currently. Item
12 cross-loads as well, thus deleted. Each of the remaining factor loadings is greater than
107
the established 0.30 within the constructs and below 0.30 between the constructs. The
revised reliabilities are in Table 4.2 and the factor loadings are represented in Table 4.3.
The culture measure had four factors and each associated item loaded on each
type of culture without cross-loading on any other type; the results are shown in Table
4.4. Thus, unidimensionality is established for the culture measure with factor loadings
being above 0.30 within constructs and below 0.30 between constructs. This is the same
results for the performance measures. The items load on each of the measure without
loading on another. Table 4.5 presents the factor loadings of each item and the resulting
reliability alphas.
Table 4.3:
The Factor Loadings of the Remaining Items for Strategy after Principal
Component Factor Analysis and the Ending Reliability Coefficient, a.
Factor Loading
(Varimax Rotation)
Factor One
.785
.792
.855
.552
.593
a=0.821
Factor Two
.847
.870
.518
.396
.632
a=0.719
Item
Differentiation
SI
S8
S9
S10
S18
Low Cost Leader
S2
S3
S5
S7
S19
108
Table 4.4:
The Factor Loadings of the Remaining Items for Culture after Principal
Factor Loading
(Varimax Rotation)
Factor One
.851
.704
.835
.768
a=0.818
Factor Two
.814
.617
.835
.722
a=0.770
Factor Three
.812
.735
.720
.788
a=0.767
Factor Four
.694
.766
.713
.641
a=0.691
Item
Clan
CI
C5
C9
C13
Adhocracy
C2
C6
CIO
C14
Hierarchy
C3
C7
Cll
C15
Market
C4
C8
C12
C16
109
Table 4.5:
The Factor Loadings of the Remaining Items for Performance after Principal
Factor Loadings
(Varimax Rotation)
Item
Performance Compared to Last Year
PLRA
PL RE
PLRI
PL OR
.976
.956
.970
.943
a=0.974
Performance Compared to Competitors

PCRA
PC RE
PCRI
PC OR
.964
.970
.972
.927
a=0.972
Validity Assessment
Once unidimensionality has been established, construct validity can be
investigated. Construct validity is the extent to which an item measures the construct in
which it is intended to measure (Churchill, 1979; Bollen, 1989). Convergent and
discriminant validity are the criteria most frequently used to support construct validity
(Peter, 1981; Churchill, 1979). Fornell and Larker (1981) suggested two tests. The first
is testing if the correlations within construct measures are significantly larger than any
correlations between measures of different constructs. This allows a test of discriminant
validity. The correlation matrix of each item and construct is in Appendix B (Tables
4.6a-d). One can see that there exists discriminant validity. The second is a test of
convergent and discriminant validity using a statistic they termed Average Variance
Extracted (AVE). The latent variables should have measures that contain more than 50%
110
explained or common variance (less than 50% error variance). Thus, the rule of thumb
for AVE is higher than 0.50 and there is convergent validity. AVE is computed through
the ratio of the sum of squared standardized indicator item loadings on the factor
representing the construct to the sum plus the sum of indicator item error. Table 4.6
presents the results of the AVE analysis.
The average variances extracted are well above the 0.50 for determining validity
using the average variance extracted method (Fornell and Larker, 1981). Thus, the
conditions for convergent and discriminant validity are met for all measurement
constructs and validity is established for the measurement scales. The hypotheses can be
assessed in the following section with this establishment of reliability and validity for the
measures.
Table 4.6:
Convergent and Discriminant Validity
Strategy
(.69)
Culture
(.63)
Performance
(.92)
.69
.63
,92
Low Cost Le ader
Clan
Adhocrac
Hierarchy
Market
Compared to Last
Year
Compared
Competito
Average
Variance
Extracted
Differential ion
Average
Variance
Extracted for
each of the
Measures
.77
.75
.65
.55)
.59
.52
.92
.92
>.
111
-2 B
Hypothesis Testing
This section involves the results of the hypothesis testing for this research as well
as a discussion of the results. One can see from the characteristics of the responses in the
previous section (Table 4.1) that the predicted two-by-two model discussed in Chapter 3
did not occur. The responses were well distributed between each of the four types of
cultures, thus the following section will present and discuss the proposed hypotheses as
well as offer a discussion on a few additional analyses performed due to these results.
Regression was employed to test the hypotheses. Covariates, such as type of carrier and
revenue to control for size, were included as control variables, but did not have an effect
on the results. The theoretical model of a "best-fit" interaction between culture and
strategy modifying the culture-performance relationship is tested through the following
hypotheses and illustrated in Figure 4.1 and 4.2.
Correlations between Culture Type and Strategy Type
A one-tail Pearson's correlation test was preformed using the summated culture
type scores to the summated strategy scores (Table 4.7). In mind of the proposed model,
the results confirmed our assumption that an adhocracy culture is most correlated with a
differentiation strategy, while a hierarchy culture is more highly correlated with a low
cost leader strategy. Expanding the analysis to include the other types of cultures leads to
a clan culture being the most greatly correlated with a low cost leader strategy. These
results showing high correlation of most types of cultures with low cost leader strategy
rather than differentiation may in fact reflect the economic issues facing the trucking
112
industry, per discussed earlier in this chapter. The need to try to lower cost, thus viewing
itself as enacting low cost leader traits may be in response to the great economic
pressures they are facing in the recent year.
Table 4.7
Pearson's Correlation of the Summated Score for Culture and Strategy
Differentiation Strategy
Correlation
p-value
Clan
.085
.167
Adhocracy
.153
.041
Hierarchy
.008
.464
Market
-.033
.355
Low Cost Leader Strategy

Clan
.538
.000
Adhocracy
.233
.004
Hierarchy
.507
.000
Market
.401
.000
Figure 4.1
H3 , H4, H5 & H6
Figure 4.2
Another Way to View the Model
114
Hypothesis 1 and Hypothesis 2: Main Effects
performance.
In order to evaluate the path from culture to performance, hypothesis 1, it was
thought that a company may have better performance if they had a clearly defined and
known culture. As well, hypothesis 2, a company that had a clearly defined strategy
could function and implement that strategy better, and therefore may have greater
performance. The results do not support these hypotheses. The main effects of culture
and strategy individually on firm performance were not statistically significant, thus
hypotheses 1 and 2 are rejected: 1) there is no main effect between a clearly defined
culture and firm performance, and 2) there is no main effect between a clearly defined
strategy and firm performance. The lack of support for hypothesis 1 reflects many
previous studies in culture; culture exists, but it may be just that, it exists on its own in
respect to analysis of relationships. That is why a moderating effect is hypothesized in
this research. Culture exists, and it seems that it must affect or be affected by some
aspect of business. So what is that effect? The following hypotheses (3-6) analyze a
moderating effect between the four types of fit proposed in this study.
115
Hypothesis 3 through Hypothesis 6: Moderating Effects
Hypothesis 3 (H3): An Adhocracy culture-Differentiation strategy fit leads to greater

Hypothesis 3 did not have statistical significant support. Therefore, there was not
a statistically significant difference between an adhocracy culture-differentiation strategy
fit and an adhocracy culture-low cost leader strategy fit. Therefore, there is not a
significant difference for the adhocracy culture in respect to strategy. Specifically, the
lack of support for hypothesis 3 means that the magnitude of the effect given the
adhocracy culture type is not different for the two different types of strategy: low cost
leader and differentiation. (Figure 4.4).
Hypothesis 4 (H4): An Adhocracy culture-Differentiation strategy fit leads to greater

Hypothesis 4 was not supported with statistical significance either. There is not a
significant difference in a firm's performance between an adhocracy culturedifferentiation strategy fit and a hierarchy culture-differentiation strategy fit. Thus, there
is not a significant difference when considering the culture type in respect to a
differentiation strategy. The rejection of this hypothesis directly means that the
magnitude of the effect given a differentiation type strategy is not significantly different
between the two types of cultures: adhocracy and hierarchy. Concisely, a moderating
effect of best-fit was not found for the differentiation strategy or adhocracy culture in the
current study (Figure 4.4).
116
Hypothesis 5 is reversely supported with statistically significant of p=0.003
(F=6.16 with degrees of freedom= 2). These results indicate that the degree of effect is
different for a hierarchy culture depending on the type of strategy: low cost leader or
differentiation. The results show that a hierarchy-differentiation strategy fit leads to
better performance, a lower operating ratio, than a low cost leader fit. In short, if a
trucking company maintains a hierarchy culture, it does matter which strategy they
employ. These finding are counter to the initial proposed hypothesis, but there does exist
a significant difference, which will be discussed in the Conclusions section of Chapter V.
Table 4.8, Figure 4.3 and Figure 4.5 show the results of the hypothesis testing for
Hypothesis 3 through 6.
Hypothesis 6 is reversely supported as well with a statistically significant of
p=0.009 (F=4.90 with degrees of freedom=2). These results state that the magnitude of
the effect is different for low cost leader strategy depending on the type of culture. A
hierarchy culture-low cost leader strategy fit leads to poorer performance than an
adhocracy culture-low cost leader strategy fit (Table 4.8, Figure 4.3 and 4.5). These
results show that if a trucking company maintains a low cost strategy, then an adhocracy
117
culture has the best-fit for greater firm performance. These findings will be further
discussed in the Conclusions section of Chapter V.
A few more analyses were run to investigate a best-fit influence on performance

for a clan culture and a market culture. The results did not support the idea that a clan
culture and low cost strategy fit leads to a statistically significant difference or
improvement in operating ratio over clan culture and differentiation strategy and vice
versa. The same lack of support was found in the results for a market culture and low
cost strategy fit over a market culture and differentiation strategy fit and vice versa.
Chapter V has three final sections. First, there will be a discussion of the results
as well as conclusions presented. Second, the limitations inherent in this study will be
offer with the implications discussed. Finally, future research for this study and research
streams from this study will be conferred.
118
Figure 4.3
Regression Estimates of Relationships
HI: not supported
H2: not supported
Table 4.8
Results for Proposed Two-by-Two Matrix: Hypothesis 3 through Hypothesis 6
Adhocracy/Differentiation
Adhocracy/Low Cost Leader
Hierarchy/Differentiation
H3: 1.18 (.175)

H4: .562(.571)
Hierarchy/Low Cost
Leader
H6: 4.90 (.009)*
H5: 6.16 (0.003)*
Notes:
1. Numbers are F values and numbers in parentheses are significance levels (*p< 0.05); 2
degrees of freedom.
119
Figure 4.4
Mean Estimates of Operating Ratio for the Fit Perspective
98.55
Firm
Performance:
Operating
Ratio
91.56
Low Cost Leader
Differentiation
Figure 4.5
Strategy in Respect to Firm Performance:
Strategy
Low Cost
Differentiation
18%
6%
24
18%
Hierarchy
24
33%
Medium
Performance
92
High
Performance
Medium
Performance
Adhocracy
Culture
95
94
11%
12%
99
Low
Performance
33%
120
16
22%
Chapter V
CONCLUSIONS, LIMITATIONS AND FUTURE RESEARCH
Introduction
This chapter has three sections. The first section gives a brief summary of the
conclusions to this study as discussed through the empirical finding of each hypothesis.
The second section will confer the limitations inherent in this study. Finally, the third
section will address some important future research questions that arose from this study
and its limitations as well as future research paths that this study provokes.
Conclusions
This research effort had two objectives. The first objective was to initiate an
identification of the underlying set of organization values, or culture types, which are
most highly associated with the strategy typology of Porter (1980). The second objective
was to determine how they// of corporate culture and corporate strategy influences firm
performance. These objectives were conceptualized, hypothesized and analyzed through
a Pearson's correlation of the value sets for each culture and the type of strategy as well
as testing the hypotheses through regression analysis. The hypotheses were examined by
regressing firm performance against corporate culture and corporate strategy variables
defined in Chapter 3 and the control variables. The moderating effects, the fit between
corporate culture and corporate strategy, were also assessed using separate regressions
(Baron and Kenny, 1986; Holmbeck, 1997).
The Pearson's correlation addressed the first objective resulting in the following.
The set of organizational values that define an adhocracy culture is mostly associated
121
with a differentiation strategy type. This confirms the initial thought that the structureprocess mechanism for a differentiation type of strategy must be organic (Burns and
Stalker, 1961; Deshpande' and Webster, 1989; Quinn, 1988). A differentiator creates a
product or a service that is recognized industry-wide as being unique (Porter, 1980).
Flexibility is the keyword for differentiators to allow for unique or adaptable servicing.
The results confirm that an adhocracy culture is most highly associated with a
differentiation strategy.
All the cultures (hierarch, adhocracy, market and clan) were significantly
associated with a low cost leader strategy. It was proposed that the organizational value
set for a hierarchy culture most resembles the low cost leader strategy type. They both
emphasize control and a stable market position, rather than market exploration. They are
internally oriented, focusing on efficiency. There is a need for a mechanistic
management to be employed due to the need to control for efficiency. Between the two
cultures, a hierarchy culture had a correlation of 0.507 (p=.000), while an adhocracy
culture had a 0.233 (p=.004). This verifies that there is a stronger correlation between a
hierarchy culture type and a low cost leader strategy.
The significance of all types of cultures being associated with a low cost strategy
may be due to the following reasons. This study was conducted in an industry that is
desperate to understand and encourage a better bottom line. The need for a better bottom
line by most of the companies addresses a possible reason for the results found in this
study. The industry is facing many constraints and issues, such as the United States
economy going into a recession. As the housing industry decreases and spending in
general decreases across the country, trucking companies inevitably have less business
122
with less to ship and are struggling to stay afloat. The issues facing the trucking industry
alone may have had an influence on the results. The need to concentrate on cost and
lower cost may be essential in survival for the trucking industry, thus any type of culture
may see itself as having a low cost strategy depending on the constraints they face today.
It is important to remember that this research used the contingency management
perspective (Deshpande' and Webster, 1989; Goffee and Jones, 1998; Lynch, Keller and
Ozment, 2000) in the sense that one culture type or strategy type is not better than
another with respect to performance. Thus, the current research was not determining the
best culture type or generic business strategy type for the motor carrier industry. Rather,
it was thought that a company may have better performance if they had a clearly defined
and known culture. As well, a company that had a clearly defined strategy could function
and implement that strategy better, and, therefore, may have greater performance.
The results showed that having a distinct and known culture does not influence
the bottom line for this trucking industry sample. It does not seem to make a difference
in firm performance, whether a company has a clearly defined culture or strategy as
defined in this study. There are two main implications to these results. First, many
research efforts have evaluated a direct relationship between corporate culture and firm
performance with little support prevailing (Allen, 1985; Davis, 1984; Dennison, 1984;
Gordon, 1985; Buono, Bowditch and Lewis, 1985 and Lorsch, 1985). On the other hand,
this study does not confirm Posner, Kouzes and Schmidt's (1985) research of American
managers. A clearly defined culture for a company in the trucking industry does not
influence the bottom line. Second, trucking companies may be more tactical than
strategic and the scale for this study measures the summation of tactical elements that fall
123
under a particular strategy. If the trucking industry is more tactical in nature, then a
clearly defined strategy would not affect the bottom line.
The findings for the best-fit between corporate culture and corporate strategy that
will lead to greater performance were of great interest. A company's firm performance is
not significantly better for an adhocracy culture depending on either type of strategy.
There is no moderating effect for the type of company culture given a differentiation
strategy. The implications of these findings are of practical interest.
In the trucking industry, a company who defines itself as an adhocracy culture,
with an organic structure and external orientation (Quinn, 1988), can implement either
type of strategy with no substantial difference in effect on its operating ratio. An
adhocracy culture allows for freedom to accommodate the customer. A differentiation
strategy match has been previously discussed with little discussion on a low cost leader
strategy match. Since, there is no difference between the two types given an adhocracy
culture, an adhocracy-low cost leader match needs to be discussed. The main objective
of a customer of the trucking industry may be the lowest cost of route within certain
constraints, therefore, an adhocracy allows the employee to create this unique service for
them and may be viewed as low cost leader strategy. In short, an adhocracy culture
permits the ability of an employee to accommodate either strategy type. The findings do
not state that the fit of these two are equal; only that there is not a statistical difference
between them given a differentiation strategy.
The same results were found for a trucking company who defines its strategy as
differentiation. Either culture type, adhocracy or hierarchy, would adequately match with
124
a differentiation strategy with no significant influence to its operating ratio. A

differentiation strategy is one that creates a competitive advantage through a unique
service offering. Again, an adhocracy-differentiation match has been discussed at length,
but why is there no significant difference for a hierarchy-differentiation match. This
finding initially seems counterintuitive. A hierarchy culture type stresses control on
internal functions with specific policies and procedures to which must be adhered, and it
is more risk averse, maintaining orderly operations with a structured work environment
(Burns and Stalker, 1961 and Deshpande', Farley and Webster, 1993; Freeman and
Cameron, 1993). This type of culture would seem to hinder a differentiation application.
Conversely, a differentiation strategy offers an attractive package, good service,
convenient locations and goods or service reliability (Porter, 1980; Miller, 1986). The
definition of a differentiation strategy may be part of the mission statement of many
trucking companies with 63% of the respondents associating themselves with this type of
strategy. This fact simply helps to explain the lack of difference for the two types of
cultures. No matter what a company's culture is, they are still aiming for a differentiation
strategy as a service provider. Again, the findings do not state that these two fits are
equal only that there is not a statistical difference between them given a differentiation
strategy.
There is a significant difference in firm performance for a hierarchy culture
depending on the type of strategy. These findings show a large statistical difference
between the two types of strategies for a hierarchy culture. The best-fit for a hierarchy
culture is a differentiation strategy, which is counterintuitive. The aforementioned
description of a hierarchy would lead to the thought that a structure environment with
125
specific policies and procedures would match best with a low cost leader strategy. A low
cost leader finds a competitive advantage through the ability to keep costs per unit low
compared to competitors (Porter, 1980). A differentiation strategy emphasizes marketing
through creativity and well designed services, a reputation for quality and a good
corporate image (Miller, 1986). Thus, these two descriptions seem to fly in the face of
one another. So why does a trucking company find a better (lower) operating ratio when
there is a hierarchy culture-differentiation strategy fit than a hierarchy culture-low cost
leader strategy fit? Future research must address the questions that these results pose.
There is, also, a significant difference in firm performance for low cost leader
strategy depending on the type of culture. The best-fit for a low cost leader strategy is an
adhocracy culture, which is also reverse of what was expected. An adhocracy culture
emphasizes creative problem solving, regular change and managing transitions to meet
customer needs (Yarbrough, 1996). It is considered decentralized, differentiated,
dynamic and entrepreneurial (Deshpande' and Webster, 1989). A low cost leader
maintains a low cost by emphasizing scale efficiencies, cost reduction in manufacturing
and minimizing expenses associated with R&D, services, selling and advertising (Porter,
1980). These two descriptions seem to challenge each other, but the results show that
they lead to better performance within the trucking industry. Further investigation will be
necessary for greater understanding.
The results lead to a few conclusions with many questions arising as well. In
conclusion, the two main fits that influenced firm performance to a significant level were:
1) an adhocracy culture given a low cost leader strategy and 2) a differentiation strategy
126
given a hierarchy culture. The implications of these rinding provoke a need for further
analysis for a deeper understanding beyond the current research.
Limitations
The findings of this research could be enhanced by taking this study into other
industries. Using a single industry for testing allows a controlled evaluation of the
theoretical constructs, yet expanding to other industries would allow further validation to
the results. The motor carrier industry has been facing hard times since this study began
and that may have affected the responses, thus the results. So, a longitudinal study of this
industry and this model would be greatly beneficial to this research.
Another issue with this study involves the culture construct. As mentioned
previously, the lack of statistical support for hypothesis 1 may be due to the culture
construct itself; which seems to exist with no debate but the measure, calculation and
definitions of the construct may be in need of investigation. A qualitative, in-depth
interview, method may lead to the reevaluating this construct for current influences.
Corporate culture is crucial to an organization's existence, yet dwindling in research
efforts. The lack of direct effects to other constructs limits its understanding, and this
direct effect may be found in more in-depth work for a definition and understanding of
the factors that lie within it.
The initial sample for this study included only the top 1000 motor carriers in an
industry that contains over 100,000 members. This is a limitation in respect to
generalizability of the results to the motor carrier industry as a whole. Thus, expanding
127
the sample to include smaller carriers may affect the results and increase the
generalizability of this study.
Another limitation is that there are many variables that may affect economic
performance for a carrier that were not included in this study. This research was
established with the purchasing and understanding that there is public data on the motor
carrier industry and individual carriers that would offer three things: 1) variables that may
affect operating ratio, 2) various control variables and 3) validation to the samples
performance responses. This data has not been updated since 2003, thus, obsolete to the
current study. An additional study including these various factors as control factors may
influence the results and benefit the research.
Future Research
The main direction for future research would involve a greater understanding of
the current findings. This could be done through various ways. Extending this research
into other industries would be beneficial for generalizablity. There has been extensive
culture research with little determination upon the constructs; therefore, the culture
construct may need to be reevaluated by applying more of a qualitative approach for
conceptualization. Since hypothesis 3 and 4 were not supported, there could be further
investigate into the adhocracy type of culture as well as clan and market. Hierarchy is
very tradition and might be more recognizable and defined for some than the others. So
an in-depth study as to what culture is and its descriptions and antecedents would be very
beneficial. Possible future research for the current study involves the aforementioned,
while future research streams are described in the following.
128
A supply chain embodies multiple companies, therefore multiple corporate

cultures. In order to begin to understand the best fit of corporate culture across the
supply chain, we must first evaluate the fit between the culture of a company and the
strategy implemented by that company. This study evaluates just that, a single
company's culture and strategy. Future research could take this study to the next level of
a fit perspective for culture as well as strategies across companies within a supply chain.
Furthermore, as business transactions and strategies have been expanding across
the globe, it may be important to study a fit perspective in respect to corporate culture,
country culture and corporate strategies implemented through the international supply
chains of the day. This research would involve defining country culture in respect to four
main views: 1) collective vs. individualistic, 2) underdeveloped to developed spectrum,
3) communication type: literacy, language and technology and 4) distance: personal space
and geographical space. There seems to be a well established trial and error formula to
international business. This research may help explain a fit perspective for international
business, if not to allow a company to understand the differences and work with that
knowledge if a fit does not exist.
In conclusion, future research associated with the current study could involve
three areas: 1) resolving the limitations of the research at hand, 2) extending the current
study into the supply chain involving multiple companies, and 3) broadening the current
research to include country culture.
129
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Appendix A
July 27, 2007
MrMs Name
Title
Company_Name lstline
Address
City, St ZIP
Year_Establ
Dear MrMs Name,

We are currently conducting research that we believe will be of value to motor carrier managers,
as well as managers in other industries. The intense competitive environment and added costs
from various sources threaten the performance and survival of many companies. Members of the
academic community have studied corporate strategy for many years, and other members have
studied corporate culture. However, the relationship between these concepts has not been
explored, and anecdotal evidence leads us to believe that significant improvements in
performance are possible when firms match their strategy to their culture.
Within the next few weeks you will receive a short survey to help identify how corporate culture
and corporate strategy relate to firm performance. It should take no more than 5-7 minutes to
complete the survey. Please help us by filling out and returning the survey in the postage paid
envelope sent at that time.
If you would prefer to complete the survey electronically, an online format is available. Simply
go to the following direct link and complete the survey:
http://waltonuark.aualtrics.com/SE?SID=SV bCbnJWCYTqtbcNu&SVID=Prod
This research is sponsored by the Supply Chain Management Research Center in the Sam M.
Walton College of Business at the University of Arkansas, and responses will remain strictly
confidential. This research project (Protocol #07-04-483) and its methods for ensuring
confidentiality of respondent data are governed by the Institutional Review Board of the Office of
Research and Sponsored Programs at the University of Arkansas in Fayetteville, Arkansas.
If you are unable to respond to the survey, please pass it along to another within your
organization (e.g. chief executive officer, vice president of operations).
We would sincerely appreciate your time and participation in this study and look forward to your
assistance.
Dr. John Ozment

Oren Harris Chair of Transportation
Fayetteville, AR 72701
jozment@walton.uark.edu
Michelle Doise
(479) 225-7590
mdoise@walton.uark.edu
145
August 8, 2007
MrMs Name
Title
Company_Name_l st_line
Address
City, St ZIP
Dear MrMs Last,
Enclosed is the corporate culture and strategy survey, which we wrote to you about on July
27th.
We are very interested in your responses to this survey in order to learn more about the
relationship between strategy and culture and its effect on performance.
Please take a few moments to complete the survey. It should only take about 5 minutes to
complete, and a postage paid return envelope is included for your convenience.
If you would prefer to complete the survey electronically, e-mail Michelle
(mdoise@walton.uark.edu) and the link to the online format will be sent to you, or type the
following into your browser:
http://waltonuark.qualtrics.com/SE?SID=SV_bCbnJWCYTgtbcNu&SVID=Pr
od
Either method of completing the survey takes approximately 5 minutes. We would sincerely
appreciate your time and participation in this study and look forward to your assistance.
We feel confident that this research will prove helpful to your company and to the entire
motor carrier industry as well. Thank you for participating in this important study, and be
sure to let us know if you would like a summary of the results.
Sincerely,
John Ozment
Fayetteville AR 72701
479- 575-6142
479- 575-8407 (FAX)
Michelle Doise
PhD Candidate
Fayetteville AR 72701
479- 225-7590
479- 575-6142
146
Corporate Strategy and

Corporate Culture Survey
Sponsored by:
Supply Chain Management Research Center
Sam M. Walton College of Business
Fayetteville, Arkansas 72701
University Emblem
Project Team
John Ozment
479-575-6142 (Office)
479-575-8407 (FAX)
Michelle Doise
Adjunct Professor
479-225-7590
479-575-6142
Thank you in advance for taking the time to complete this confidential survey. We ask that it be
filled out by the president of the trucking company. If you are unable to respond to the survey,
please pass it along to another with in your organization (e.g. chief executive officer, vice
president of operations, general manager). We would like to provide you with a summary of the
results of this study. If you would like to receive this information, please provide us with your
name and address below, or attach a business card.
Name
Title
Address
All replies to this survey will be kept strictly confidential.

This research project (Protocol #07-04-483) and its methods for ensuring confidentiality
of respondent data are governed by the Institutional Review Board of the Office of
Research and Sponsored Programs at the University of Arkansas, Fayetteville.
147
Please choose from the following culture descriptions the one (only one) that best describes
your firm and place an "X" next to the culture description.
This type of culture has an internal orientation. It is a flexible organization

that can adjust quickly to the needs of its members. There are high levels of
trust. Managers are more mentors and facilitators using cohesion and group
interaction to achieve high morale and loyalty. There is collective decisionmaking.
This type of culture is flexible and externally oriented. It has the ability to
respond rapidly, nearly intuitively to external signals. There is a relatively
high level of ambiguity allowing for creativity. It is decentralized and
differentiated. Managers are innovators or brokers; Emphasis is on creative
problem solving, regular change and managing transitions to meet external
constituency demands.
This type of culture places an emphasis on control of internal functions.

Managers are coordinators or monitors. There is authority, role specificity,
division of labor and rules that govern behavior. It tends to be centralized
wanting predictability. It is a very organized and structured place of work.
There are sets of specific policies and procedures, to which must be adhered.
This type of culture is based on exchange transactions, and contracts are

expected to define relations. The focus is on the task. Managers are
producers or directors. The key to success for this organization is efficiency
in productivity and goal achievement.
Please choose from the following strategy descriptions the one (only one) that best describes
your firm and place an "X" next to the strategy description.
We offer a service at a lower price than our competitors by emphasizing cost

reduction strategies and minimizing expenses associated with selling and
advertising. (1)
We create and offer a service that is perceived as being unique industry-wide,
through areas such as design or brand image, technology, features and
customer service. (2)
We offer a service to a specific market only using which of the above
strategies 1)
or 2)
.
148
Please choose from the following descriptions, the one (only one) that best describes your
firm and place an "X" next to the description.
We operate in a dynamic environment. We are innovators with our
primary focus on searching for new opportunities in new markets or
developing new products/services to meet customer needs. We emphasize
flexibility.
We operate in a narrow product/service market domain, competing
aggressively on price by stressing quality and customer service. We stress
efficiency of operations and have little investment in product/service
development. Our focus is the bottom line.
We operate in both stable and changing markets We are focused on
efficiency and productivity in a stable market domain, yet in an unstable
market domain we have processes in place to take advantage of new
market opportunities and invest in innovations.
We respond by adjusting our strategy when faced with environmental
and/or competitive challenges. We do not have a consistent strategy.
149
Please indicate the importance of the following competitive methods to your firm's
overall strategy.
(1= not at all important and 7= extremely important)
Not
At all
1
2
New service development
Customer service
Operating efficiency
Service quality control
Experienced/trained personnel
Maintain high inventory/equipment levels
Competitive pricing
Broad range of services
Developing/refining existing services
Brand identification
Innovation in marketing techniques and
methods
Control of channels of distribution
Procurement of raw materials
Minimizing use of outside financing
Serving special geographical markets
Capability to produce specialty goods
Services in high price market segments
Advertising
Reputation within industry
Forecasting market growth
Innovation in producing services
150
Somewhat
Important
4
5
Extremely
Important
6
7
These questions relate to the type of organization that your company is most like. Indicate the
degree to which of these qualities reflect your company. None of the descriptions is better than
the others; they are just different. For each question please rate the statement from 1 to 7. (1=
not at all like us and 7 - very much like us)
not
very
at all
sort of
much
like us
like us
like us
1
2
3 4
5
6 7
This is a very personal place. It is like an extended family
We are an organized and structured place. Detailed
procedures help people know what to do.
This is a very dynamic and entrepreneurial place. People
are willing to stick their necks out and take risks.
Our company is very production oriented. A major
concern is with getting the job done. People aren't very
personally involved.
The head of this company is generally considered to be a
mentor, a sage or a father, or mother figures.
coordinator, an organizer or an administrator.
The head of this company is generally considered to be an
entrepreneur, an innovator or a risk taker.
producer, a technician or a hard-driver.
The glue that holds us together is loyalty and tradition.
Commitment to this company runs high.
The glue that holds us together is formal rules and
policies. Maintaining a smooth-riding company is
important here.
The glue that holds us together is a commitment to
innovation and development. There is an emphasis on
being first.
The glue that holds us together is the emphasis on tasks
and goal accomplishments. A production orientation is
commonly shared.
Our company emphasizes human resources. High
cohesion and morale in the company are important.
Our company emphasizes permanence and stability.
Efficient, smooth operations are important.
Our company emphasizes growth and acquiring new
resources. Readiness to meet new challenges is important.
Our company emphasizes competitive actions and
achievements. Measurable goals are important.
151
Questions about you and your company:

1. What is your primary service offering? Please place an "X" by your response.
LTL
TL
Other (please explain)
2. Approximately what was your company's annual sales revenue last year?
3. Approximately what was your company's operating ratio last year?

4. How do you think your company is performing compared to last year in the following
categories? Please circle your response.
Sales Growth
Return on Assets
Return on Equity
Return on Investment
Operating Ratio
Not nearly
as Good
1
1
1
1
1
3
3
3
3
3
2
2
2
2
2
About
the Same
4
4
4
4
4
5
5
5
5
5
6
6
6
6
6
Much
Better
7
7
7
7
7
How do you think your company performed last year relative to your competitors in the
following categories? Please circle your response.
Sales Growth
Return on Assets
Return on Equity
Return on Investment
Operating Ratio
Not nearly
as Good
1
1
1
1
1
2
2
2
2
3
3
3
3
About
the Same
4
4
4
4
5
5
5
5
6
6
6
6
Much
Better
7
7
7
7
6. How long have you been employed by this company?

7. How long have you been in your current job?
8. What is your job title?
9. What is your year of birth
____
, are you male
or female
Please feel free to add any comments or questions you may have on the following page of this
booklet.
Thank you greatly for you help.
Comments:
152
-.066
-.28**
-.35**
.229
.183*
.170*
.160*
-.095
. 21**
.100
.082
.070
-.097
-.28**
.106
.062
0.25
.076
.061
S3
S5
S7
S19
PLRA
PL RE
PLRI
PL OR
.151*
-.045
-.031
.158*
.213**
-.024
.068
.202*
-.046
.039
.087
.129
.142
.41**
.35**
.545**
.131
1.000
-.040
-.015
.004
1.00
.58**
.013
-.018
-.123
-.132
-.127
1.00
-.008
-.132
.086
.165*
.166*
1.000
.160*
1.000
.924**
.853**
947**
.894**
PL RE
93 j * *
1.000
PLRA
3.92
3.17
6.18
5.67
5.02
3.85
3.89
3.47
4.32
5.75
5.91
3.84
Mean
1.69
1.68
1.48
1.45
1.53
S.D.
2.078
2.91
2.59
1.98
2.10
1.54
1.91
Notes:
1. PC: Performance compared to Competitors; S: Strategy; C: Culture; PL: Performance compared to Last Year
2. *p<.05, **p<M
.093
-.29**
.070
.099
.22**
.06
793**
.210**
-.20**
-.13
.348**
.032
.686**
1.000
.223**
-.40**
-.34**
.097
-.053
.136
.035
339**
.222**
.068
.249**
1.000
.364**
S2
.442**
413**
.396**
S18
1.000
Straltegy and Performance Compared to Last Year

S10
S18
S2
S5
S7
S3
S19
Correlations of Items and Constructs
.451**
.425**
S10
.405**
.848**
.739**
S9
1.000
1.000
.705**
S8
S9
1.000
S8
SI
SI
Table 4.6a:
Appendix B
3.78
1.56
.888**
1.000
PLRI
3.61
1.66
1.000
PL
OR
.040
.140
-.090
..094
-.30***
.044
.077
.259
**
5.17
1.79
C3
C7
Cll
C15
C4
C8
C12
C16
Mean
S.D.
.28**
C14
-.031
.007
.032
.283
**
.276
**
4.86
1.65
.125
.179*
.058
.147*
.039
.124
.316
**
5.13
1.69
.145*
-.001
-.011
-.134
-.074
.021
.084
4.23
1.79
.144
-.008
.096
-.16*
.014
.37**
.107
.26**
.033
-.199
.039
-.081
CIO
.065
-.067
.057
C6
.168
**
.058
C2
1.000
.253
**
.111
C13
1.00
-.095
.599**
C9
C13
.54**
49**
.687**
C5
C9
.48**
1.000
.443**
CI
C5
CI
1.000
Table 4.6b:
.206
**
.209
**
4.33
1.63
.157*
-.070
-.040
-.093
Culture
.195*
3.42
1.61
4.11
1.69
.158**
.150*
-.041
4.96
1.74
.362**
.288**
.123
-.092
.171*
-.086
.104
.083
.202*
.077
1.000
C14
-.063
-.067
.46**
1.000
C10
.203
**
.168*
.32**
.059
.053
-.085
.008
-.023
-.097
.030
.386
**
.41**
1.000
C6
.355
**
.592
**
.52**
1.000
C2
4.17
1.66
.154*
4.73
1.88
.231**
.199**
.143
.014
.072
-.004
.510**
.464**
-.091
.333**
1.000
C7
.489**
.509**
1.000
C3
3.38
1.69
-.039
.009
.049
.080
.428**
1.000
Cll
.376
**
4.42
1.78
.110
.135
-.077
1.000
C15
2.84
1.62
.282
**
.204*
.34**
1.000
C4
.454
**
3.79
1.80
.434**
1.000
C8
4.13
1.68
.448
**
1.000
C12
4.64
1.78
1.00
C16
.058
-.010
.063
-.075
.008
.062
C5
C9
C13
C2
-.15*
-.126
-.098
.029
-.041
.112
-.046
-.094
.003
.106
.020
.111
-.045
.096
-.024
.263** ..083
.460** .352**
.419** .236**
.266** .432**
.422**
.191*
.176*
.331**
.565** 749**
.021
.056
.283** .287**
-.157*
-.111
.184*
.183*
-.078
-.106
.138
.185*
.313** .325**
.386** .398**
.252**
.160*
-.001
474**
.274** .199*
.265** .182*
.392**
.084
.106
.291**
.052
.155*
.181*
-.039
.063
.173*
.204*
.172*
.507**
.161*
.012
.095
.223** .136
.336**
-.047
.118
-.116
.199*
.238** .222**
.054
.066
-.145
.143
.391** .085
.203*
.296**
.283**
.275** .366*** .350**
.061
.063
.130
-.084
-.056
.010
.100
.029
.160*
.099
.149*
-.050
.156*
.140
.174*
Culture and Strategy and Performance Compared to Last Year

S10
S18
S2
S3
S5
S7
S19
PL
RA
-.012
-.076 .522** .392** .348** .248** .459** .139
.106
.151*
.125
.094
.260** .225**
.057
.149*
-.106
.063
.027
.108
.010
.225**
.162*
.145*
.080
.107
.187* .163*
.065
.070
-.066
.100
-.030
.014
.074
.290**
.035
.163*
.092
S9
-.090
-.048
.014
.116
.046
.021
.131
.005
.167*
.130
.147*
-.014
.157*
.121
PL
RE
.161*
C16
.097
Notes
1. PC: Performance compared to Competitors; S: Strategy; C: Culture; PL: Performance compared to Last Year
2. V<.05, **p<.01
C8
C12
C3
C7
Cll
C15
C4
C6
CIO
C14
-.049
-.095
CI
.045
-.018
.078
-.062
-.126
-.005
-.001
.023
.097
.129
.029
.000
.277** .258**
.064
.046
.024
-.029
-.070
-.020
.037
-.039
-.152*
.000
S8
SI
Table 4.6c:
-.096
-.033
.008
.102
.141
.136
.175*
.053
.026
.086
.051
.163*
.116
.159*
-.002
.118
PLRI
.009
.035
.044
-.025
.171*
.080
.147*
.040
.040
.087
-.065
-.001
.035
.093
.102
PL
OR
.059

Table 4.6d:
Performance Compared to Competitors, Strategy, Culture and Performance
___
_^___
Compared to Last Year
PCRA
PC RE
PCRI
PC OR
PCRA
1.000
.935**
.938**
.863**
PC RE
.935**
1.000
.943**
.854**
PCRI
.938**
.943**
1.000
.862**
PC OR
.863**
.854**
1.000
.862**
SI
.160*
.130
.126
.091
S8
.180*
.139
.138
.157*
S9
.262**
.242**
.262**
.242*
S10
.233**
.235**
.208**
.145
S18
.043
.082
.059
.050
S2
.259**
.258**
.238**
.189*
S3
.220**
.246**
.205**
.171*
S5
.028
.018
.026
-.002
S7
-.082
-.060
-.089
-.070
S19
.261**
.260**
.235**
.218**
CI
.117
.119
.101
.145
C5
.128
.118
.130
.072
C9
.258**
.254**
.242**
.213**
.105
.109
.051
C13
.115
C2
.202*
.229**
.159*
.203*
.024
C6
.013
.031
.029
CIO
-.004
.001
.012
-.033
C14
.222*
.179*
.254**
.209**
.039
-.041
.005
-.049
C3
.066
C7
.143
.151*
.136
.071
.024
.030
.040
Cll
.033
.017
.025
C15
.056
.132
C4
.180*
.118
.170*
.119
.104
.107
.118
C8
C12
.254**
.241**
.180*
.219**
.215**
.231**
.146*
C16
.243**
.123
PLRA
.191*
.116
.235**
.151*
PL RE
.210**
.177*
.122
.133
PLRI
.222**
.149*
.145
.174*
.100
.156*
PL OR
.076
4.35
Mean
4.42
4.47
4.40
1.46
1.34
1.39
1.33
Std. Dev.
Notes:
1.
PC: Performance compared to Competitors; S: Strategy; C: Culture; PL: Performance compared to Last Year
2. *p<.05, **/?<.01
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AN INTEGRATION OF CORPORATE CULTURE AND STRATEGY:

THE INTERRELATIONSHIPS AND IMPACT ON FIRM PERFORMANCE

AN INTEGRATION OF CORPORATE CULTURE AND STRATEGY:

A dissertation submitted in partial fulfillment

Michelle Lee Doise

UMI Number: 3329157

This dissertation is approved for Recommendation to the Graduate Council

Dr. John Ozment

Dr. Jeff Murray

Dr. Molly Rapert

DISSERTATION DUPLICATION RELEASE

Chapter I: INTRODUCTION, OVERVIEW AND RESEARCH QUESTIONS

Chapter V: CONCLUSIONS, LIMITATIONS AND FUTURE RESEARCH

The extant literature on firm performance involves theoretical grounding in

Generic Business Strategies: Porter (1980)

through defensive or offensive actions but also in outperforming competitors. Porter

1. The threat of new entrants

According to Porter, the industry profitability is determined by these forces.

different strategies that consist of different patterns of adaptive behavior within an

Research Questions and Hypotheses

Hypothesis 3 (H3): An Adhocracy culture-Differentiation strategy fit leads to greater firm

Hypothesis 4 (H4): An Adhocracy culture-Differentiation strategy fit leads to greater firm

A Hierarchy culture has the characteristics, which would allow successful

Concepts and Definitions of Corporate Culture

grip-group theory. This theory refers to the socio-cognitive context, in which an

Means: Planning, Goal

Twenty-five years ago, a large organizational (business) form consisted of

Adapted from Yarbrough, Corporate Culture, Market Orientation and Customer

responses to changing external environments. Mechanistic structures are more

Cohesiveness, teamwork and commitment;

Competitiveness and goal achievement; Exchange transactions and

Miles and Snow's Tvpologv

cohesiveness, teamwork and commitment

Traditional Comparison of Douglas' Typology

Strong grid/weak group, which is dominated by insulation and formalization.

4) Weak grid/strong group, which is a social context where there is a "we"

Current Comparison of Network, Communal, Mercenary and Fragmented

Finally, a fragmented organization (adhocracy) is more like a collective group of

Competing Values Framework

Definition and Corporate Strategy

Porter's Generic Strategies: The Competitive Forces Approach

Low Cost Leadership Strategy

Stuck in the Middle

Miles and Snow's Typology

Summary of the Three Dominant Theories of Strategy

Argument for a Fit Perspective

internally and externally, "produces sustained, excellent performance and strong

This research utilizes specific accounting measures of performance to analyze this

Concept Model and Hypotheses

Conceptual Model and the Associated Hypotheses

Another Way to View the Model

The constructs of corporate culture, corporate strategy and firm performance as

Hypothesis 3 (H3): An Adhocracy culture-Differentiation strategy fit leads to greater firm

Hypothesis 4 (H4): An Adhocracy culture-Differentiation strategy fit leads to greater firm

A Hierarchy culture has the characteristics, which would allow a successful

strategy capabilities. If a Hierarchy culture tried to differentiate there would be

Research Design and Data Collection

Limited Product Offerings

Economic Performance Information

Deregulation, Internationalization and E-commerce

paragraph method is used, in addition to the previously tested instruments described

Corporate Culture Measure

Porter's Generic Business Strategy Measure