1997 Research Methods Forum
No. 2 (Summer 1997)
Introduction —Jeffrey R. Edwards, Jeanne C. King Regression Models for Discrete and Limited Dependent Variables —Michael R. Frone Hierarchical Linear Models in Organizational Research: Cross-level Interactions —Mark A.Griffin, David A. Hofmann The Qualitative Corner What Are We Doing When We Cite Others’ Work in the Methodological Accounts We Provide of Our Research Activities?—Karen Locke Current and Future Research Methods in Strategic Management—Michael A. Hitt Validity, Variance, and the Interpretation of Power Values —Jose M. Cortina Do Structural Equation Models Correct For Measurement Error?—Richard P. DeShon |
Current and Future Research Methods in Strategic Management
Michael A. Hitt
Texas A&M University
Editors’ Note: The following is a synopsis of a workshop presented by Michael A. Hitt at the 1997 Western Academy of Management meetings. The workshop provided a historic overview of methodological issues in strategic management research and offered recommendations for future research in this area.
We thank Mike for summarizing this workshop for RM Forum readers.
April 3, 1997: There have been significant developments in the field of strategic management over the last two decades. We have observed dramatic developments of both theory and method in strategic management research, and the number and quality of researchers in this field has continued to grow. However, while the strategic management field has enjoyed significant popularity and growth, there has been little emphasis in the published literature on research methodology within strategic management. The purpose of this workshop was to examine the development of the strategic management field and the research methodologies applied in this development.
Early research and teaching in this field focused on business policy and general management. The primary emphasis in terms of research and teaching was on single case studies (firm and industry). Oftentimes, the faculty working in this area came from diverse disciplines such as economics and other areas of business and also included retired executives from both the private and public sectors. However, research in this field began to develop with a series of dissertations at Harvard focused on corporate strategy and firm performance, exemplified by the work by Richard Rumelt (1974). Transformation of the field continued with an influential book published in 1979, edited by Dan Schendel and Chuck Hofer, which has been credited with changing the name of the field from business policy to strategic management. This work redirected the focus toward a stronger research emphasis and away from overreliance on general management of the firm. Finally, Michael Porter's now classic 1980 book, Competitive Strategy completed the initial transformation of the strategic management field. His generic strategies explained in this book continue to live on today in current research and strategic management thinking.
Intermediate work in the strategic management field revolved around oneof three themes: (1) the effects of the environment on strategy, (2) the importance of the fit between strategy and environment and (3) the effects of strategy on performance. Much of this work grew out of two deterministic traditions in the fields of organization theory and industrial organization economics.
Most of this research in these three foci involved large sample studies using secondary data. Additionally, many studies used parametric statistical tools for analysis and multiple regression became the dominant statistical technique used in strategic management research. This research was dominated by cross-sectional, static studies and employed few control variables. Exceptions include the Keats and Hitt (1988) causal modeling approach with longitudinal (time ordered) data. However, as research in strategic management continued to develop, new scholars entered the field with better research, theory, and statistical method training.
Recent research in strategic management has emphasized increasing specialization and focus on such topics as strategic leadership, competitive dynamics, and restructuring, among others. Perhaps the most important development in the field, however, has been the acceptance, integration, and application of the resource-based view of the firm. Essentially, the resource-based view of the firm suggests that firms can achieve competitive advantage through the development and application of idiosyncratic firm resources that are valuable, rare, costly to imitat,e and nonsubstitutable (Barney, 1991). However, this theory is difficult to test empirically because of the complexity in operationalizing and measuring idiosyncratic firm resources and capabilities. Most of the empirical research on the resource-based view to date has used course-grained measures of firm resources, particularly intangible resource. These include such proxies as R&D intensity, advertising intensity, human capital leverage, and investments in large film projects. Many of the studies conducted are single-industry to capture the resources critical to a particular market.
Richer empirical tests include field-based case study methodologies such as the one employed by Doz (1996). He collected both archival and interview data from three sets of alliance partners, using a qualitative theory building approach. The first case was used for theory development and the second two cases for theoretical replication and extension. Other approaches include small comparative outlier samples such as employed by Hitt, Harrison, Ireland, and Best (1996) to study highly successful and highly unsuccessful mergers and acquisitions and the case survey methodology proposed by Larsson (1993).
Future research in strategic management is likely to employ integration of multiple theories to build complex models of strategic management phenomena. Such modeling approaches will require the use of more sophisticated statistical tools such as structural equations modeling and multinomial logit analysis. Also, there is a trend in this research toward the integration of both quantitative and qualitative data in research projects (exemplified by Judge and Zeithaml, 1992). Such complex modeling is also likely to require the use of multiple methods and multiple measures of specific constructs that provide more confidence in the accuracy and generalizability in the results, as exemplified by Hitt, Hoskisson, Johnson, and Moesel (1996). Such analytical tools as event studies, event history analysis, logistic regression, simultaneous equations analysis, and multidimensional scaling are becoming more common in strategic management research. Other data approaches such as the repertory grid (Ginsberg, 1988, 1989; Reger & Huff, 1993), cognitive mapping (Huff, 1990), and policy capturing (Hitt & Tyler, 1991) are useful in the study of cognitive models of CEOs and top management teams.
Strategic management research is beginning to mature in both theory and method. The intent of this workshop was to provide a description of the development of such theory and the methods used to help develop and test these theories. Clearly, the methods and tools used are becoming more sophisticated and valuable in building a knowledge base of how to strategically manage business organizations. The workshop was designed to present a broad blueprint of current and future research in strategic management with the hope of providing a map and directions to developing the necessary knowledge of appropriate methods and tools for strategic management scholars to continue improving research and produce contributions to our knowledge in the field.
References
Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17: 99-120.
Doz, Y.L. 1996. The evolution of cooperation in strategic alliances: Initial conditions or learning processes? Strategic Management Journal, 17(Special issue): 55-84.
Ginsberg, A. 1988. Measuring and modelling changes in strategy: Theoretical foundations and empirical directions. Strategic Management Journal, 9: 559-575.
Ginsberg, A. 1989. Construing the business portfolio: A cognitive model of diversification. Journal of Management Studies, 26: 417-438.
Hitt, M.A., Harrison, J.S., Ireland, R.D. & Best, A. 1995. Learning how to dance with the Tasmanian Devil: Understanding acquisition success and failure. Paper presented at the Strategic Management Society Conference, Mexico City.
Hitt, M.A., Hoskisson, R.E., Johnson, R.A. & Moesel, D.D. 1996. The market for corporate control and firm innovation. Academy of Management Journal, 39: 1084-1119.
Hitt, M.A. & Tyler, B.B. 1991. Strategic decision models: Integrating different perspectives. Strategic Management Journal, 12: 327-351.
Huff, A.S. 1990. Mapping strategic thought. In A.S. Huff (Ed.), Mapping strategic thought. Chichester: John Wiley & Sons.
Judge, W.Q., Jr. & Zeithaml, C.P. 1992. Institutional and strategic choice perspectives on board involvement in the strategic decision process. Academy of Management Journal, 35: 766-794.
Keats, B.W. & Hitt, M.A. 1988. A causal model of linkages among environmental dimensions, macro organizational characteristics and performance. Academy of Management Journal, 31: 570-598.
Larsson, R. 1993. Case survey methodology: Quantitative analysis of patterns across case studies. Academy of Management Journal, 36: 1515-1546.
Porter, M.E. 1980. Competitive strategy. New York: The Free Press.
Reger, R.K. & Huff, A.S. 1993. Strategic groups: A cognitive perspective. Strategic Management Journal, 14: 103-124.
Rumelt, R.P. 1974. Strategy, structure and economic performance. Cambridge, MA: Harvard University Press.
Schendel, D.E. & Hofer, C.W. (Eds.) 1979. Strategic management: A new view of business policy and planning. Boston: Little Brown.
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