Journal of Management Research
Volume 20, Number 2 (April - June 2020)
ISSN: 0972-5814 Online ISSN: 0974-455X
Optimal Misalignment: Strategic Intent, Organizational Capabilities, and Performance
Richard Brown and William Kline
| Abstract |
The purpose of this paper is to explore the linkage between strategic intent and firm performance. We find that while strategic intent is associated with lower levels of financial performance, those firms that have specific combinations of both intent and capabilities outperform rivals. We test the hypotheses on a panel data set of pharmaceutical firms from 1993 to 2003. We find empirical evidence supporting the tenets of strategic intent theory (Hamel & Prahalad, 1989). Secondly, we find evidence that optimally misaligned firms are associated with increased profitability over those firms with different intent-capabilities mixes. These two findings add to the knowledge stocks in strategic management, generally, and to the literature on strategic intent and capabilities, specifically. The evidence in this paper points to firms that have a high level of patents yet low levels of strategic intent and calibration as being laggards in the market. On the other hand, firms that are misaligned in the opposite direction (i.e. a lower level of patents but increased intent) seem to outperform rivals, at least in the short term.
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