Implementation of Miles and Snow`s Strategies and their Effect on Organizational Design

Implementationof Miles and Snow’s Strategies and their Effect on OrganizationalDesign

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TABLEOF CONTENT

Chapter1. INTRODUCTION

Chapter2. LITERATURE REVIEW

2.1Miles and Snow Typology

2.2Merits over other Typologies of Strategy

2.3Linking Human Resources and Human Resources Practices to Strategy

2.4Reasons for Difference in Human Resource Management in StrategicTypes

2.4.1Practices in the Prospector Strategy

2.4.2Defender Practices

2.4.3Reactor and Hybrid (Analyzer) Firms

2.5The Focus and Hypothesis of the Study

Chapter3. METHODOLOGY

3.1Strategy Questions

3.2Human Resource Practice Questions

3.3The Sample

Chapter4. ANALYSIS AND RESULTS

4.1Prospector Hypotheses–Hypothesis 14.2 DefenderHypotheses—Hypothesis 2

Chapter5. DISCUSSION AND CONCLUSIONS

5.1Limitations of the Study

5.2Implications for Managers

5.3Areas of Further Research

ABSTRACT

Thegist of the paper is a presentation supporting the idea thatdifferent companies can use different human resource practices tobring out their desired strategies. It also shows the importance ofusing the modern strategies of human resource management as opposedto the old ones, due to the significant change in company output.However, even in the implementation of the newer human resourcepractices, there is a limited use of the traditional human resourcestrategies, without unnecessary overreliance. Although a limitednumber of companies were used I this paper, most of them havingAmerican origin, it is important to also consider a wider mix ofcorporation globally. The implementation of the Miles and Snow’sstrategy bring to light which are the effective company strategies tobe followed given the specific direction of the company.

Keywords:Strategies,Defenders, Prospectors, Human Resource Practices, Miles and Snow

CHAPTERONE:

Milesand Snow Organizational Strategy has shown influence in the runningand strategy management in very many corporate organizations eversince it was published in 1978 (Hambrick, 1983). Ketchen (2003) inhis work has put out more than 1000 scholarly works that have usedthe work in citation when dealing with subjects regardingorganizational strategy. The Miles and Snow typology has categorizedorganizations into four categories, which are the Defenders, theProspectors, the Analyzers and the Reactors. These classes are basedon the nature of the organization’s response to company challenges,which may be entrepreneurial challenges that a firm faces due to theproduct-market relations. Secondly, it involves the engineeringchallenges when making decisions on what technology to use inproduction and processing of their commodities, including supplyingin their chain of activities and lastly administration problems thatinclude formation, rationalization, implementation and innovation ofthe company’s policies and structural functionality.

Thisstudy, which involved an in-depth and thorough research on a smallgroup of large corporation in the market, developed the idea thatthere are three superior performing business types with the restbeing average or less that average in terms of performance. Thetheory explains that in order for a firm to be superior in itsperformance, there must be clear sync between the firm’s missionand values (which outlines the company’s interests), the strategiesused by the firm (the basic strategy set of the firm) and thefunctional strategies, which characterizes the behavior and cultureof the firm.

Ifthe variation seen in the four different types of strategies, it isright to conclude that certain human resource practices areassociated with specific organizational strategies. A firm’sdecision to use specific human resource practices is a motivationalmove to encourage the employees to abide by the chosen organizationalculture, which defines the strategy chosen by the specificorganization. It is also known that rewarding human resourcepractices in a firm help to realize the specific strategy and theachievement of the goals of the firm. However, it is noted that manypractitioners and theorist ignore this part of implementation ofcompany strategies (Gomez-Mejia &amp Balkin, 1992 Lawler et al.,1995 and Ledford, 1995). Therefore, it is important to emphasize onstudies to establish the effectiveness of rewarding human resourcepractices, and its relationship with realizing organizationalstrategies according to the Miles and Snow Organizational Strategies.This is important not only to the corporate practitioners, but alsoto academicians in further research of the strategies. Hopes are thatan investment of time in researching this part of the study willencourage more research in this important area in the future.

CHAPTERTWO

LITERATUREREVIEW

Thereview and discussion in this section consist of:

  1. Miles and Snow Typology of organizational strategy

  2. Human Resource Practices

  3. The relationship between strategies and human resource practices.

2.1Miles and Snow Typology

TheMiles and Snow Typology classifies Defenders as the firms with asmall product-market domain. Therefore, the members of theupper-level management in these firms are experts in the limitedspecific file of specialization of their firm. In this light, themanagement coins strategies that enable them to flourish in thenarrow market domain they inject their operation, with no interest inother market interests or development (Vohries &amp Morgan 2003).Therefore, their activities are geared towards gaining more mileageand influence in this specific segment of the market, with little orno regard to the outside development in the larger market. The factthat these firms put their focus on a single mode of technology,their growth is very cautious and stepwise, with no intentions ofover ambition to step outside their comfort zone (Miles &amp Snow,1978). However, Defender firms may integrate operations vertically toallow them to use technology and remain efficient in the market.Operations and Finance form the dominant department in these firms,with growth and stability spurred from within the organizationthrough their stable organization functional structures.

Thereis a big contrast between the latter firms with Prospector companies,which are in constant search of new market opportunities, respondingto each or most of the emerging trends in the market. These are theorganizations responsible for the change and uncertainty in themarket, tasking the competitor organizations with a responsibility torespond to the change. (Miles &amp Snow, 1978). Having a broaddomain of operation, their task is to monitor the macro-environmentclosely, to allow them to choose the right time to create change inthe new markets with new products or new exploits. However, thesefirms are usually not efficient, unlike the Defender firms, andtherefore, change their strategies and technology to suit the currentmarket trends (Christiansen &amp Higgs 2008). The top executives ofthese firms tend to be poached from outside the firm, mostly fromother good performing firms in the market. Their tenures are usuallyshort, as most of them prefer short contract agreements to allow themwith the flexibility to change. The dominant departments in theseorganizations are the Marketing and Research and Developmentsections. Division of labor is less emphasized in these firms, withmost of the activities being results-intensive (Vohries &amp Morgan2003).

Onthe two poles of the market continuum are the Defenders andProspectors, which might be the two main players. However, bothgroups focus on development, expansion and increased dominance of themarket share, even though both of them use two very differentstrategies in organizational structures. Analyzers are anintermediary group of strategist, who operate in a two-domainproduct-market environment, having incorporated the qualities ofDefenders and Prosecutors (Christiansen &amp Higgs 2008). Thishybrid class of strategists operates in both a stable market settingand a constantly changing one. In the stable market domain, theorganizations use routine and careful operations based on alreadytested structures and technology. On the other hand, in theirvolatile section, the top management watches out for theircompetitors, with the new ideas they bring forward, analyzing theviability of each one of them and adopting those that seem to be moreviable in relation to the operations of the company (Miles &ampSnow, 1978). Their main strategy is therefore a mixture of stableoperation and change that suits the company’s culture andstructure. Unlike the Defenders, they allow change and are always onthe lookout through market surveillance to capture any of thecompetitor’s new ideas. Growth is not only managed through productdevelopment, but also market penetration and development. Therefore,production, applied research and the marketing department are theirdominant areas of emphasis in their organizational structure. Typically, Analyzers abide by a matrix organizational structure,which is difficult to assume full control, since the factors ofcontrol are not only firm-dependant but also market andcompetition-dependent (Vohries &amp Morgan 2003).

Thefinal strategy group is the Reactors. This class experiences changeand uncertainty but it is slow on its response and therefore, theresponse is ineffective. Since members of this group lack a specificconsistency in terms of strategy-structure relationship, they barelymake any changes in their process of operation, unless they arecompelled to do so by the business environment, of which the nextoption is usually to exit the market (Miles &amp Snow, 1978). Themanagement in this case fails to activate mechanisms that respondeffectively to change. In addition, they may be a breach of linkbetween the management style of management and the technology used bythe company, or generally use of technology that is inconsistent withthe necessities and needs of the market (obsolete technology)(Vohries &amp Morgan 2003). Therefore, the technology used by thesefirms is irrelevant to the prevailing business environment.

2.2Merits over other Typologies of Strategy

TheMile and Snow organizational strategy have been the main focus ofstrategic management and organizational theory research studies eversince their publishment in 1978 (Desarbo et al., 2005). Manyresearchers, company strategists and researchers have readily adoptedthis typology of strategic choice. Its generalizability, theoreticalorientation and logic application has been favored by manyresearchers compared to other schemes that classify strategies usedby different companies, for example Porter (1980) and Abell (1980).The Porter classification classifies firm into three generic groups,which include the cost leadership strategy, focus strategy as wellas differentiation strategy (Christiansen &amp Higgs 2008). There isjust a slight difference in the classification Abell made, which alsoincludes three generic groups, namely, Differentiated,Undifferentiated and Focus groups. However, of these two, the Porterclassification of strategies remains the most recognized andsupported as it is the most used in various textbooks concerningorganizational strategies. These include David (1999), Miller (1998),Thompson and Stickland (1998) and various literature like Miller andDess (1993) and Kim and Lim (1998). However, some critics feel likethe system only or majorly focus on the competitiveness of the largefirms, without further explanation of the exact implementation of thestrategies (Smith et al., 1989). Some also insist that there is noclear distinction between the firms that use the cost leadershipstrategy and the undifferentiated generic mode of strategy (Chrismanet al., 1988). Therefore, both critics reach a conclusion that Miles&amp Snow are relevant to widely to the various industrial andbusiness settings.

Anumber of academics also recognize that Miles &amp Snow detailedinformation regarding the basic concepts of strategic equifinality,and came up with a configurationally acceptable view of the strategy(Hambrick, 2003). This typology can be used to deduce the generalcharacteristics, behavior and structure of different strategiesemployed by different firms. Successful companies need to develop aconsistency in their strategies, with the ability to apply stabilityand balance between the stability and change in the marketenvironment. This includes the technology they use, the businessmodel adopted and the organization’s capability, which includes thehuman resource input (Ghoshal, 2003). In this light, the greatestcontribution of the Miles and Snow organizational strategy model isin its ability to explain the various business ventures in terms ofhow fast and effective they are in responding to business challengesand change in the market.

2.3Linking Human Resources and Human Resources Practices to Strategy

Firmsusually implement their operational strategies through their humanresource activities. Therefore, it is important to consider howemployees interpret their employment terms, as it affects theirproductivity, motivation and innovation skills, including customerservices. Therefore, for a firm to realize their full potential intheir venture strategy, care should be taken to study how theiremployees feel about their employment state in the organization(Rousseau &amp Wade-Benzoni, 1994). Human resource practices shouldbe effectively linked with the management and the business strategyin order to achieve this (Vohries &amp Morgan 2003).

Somequotas also appreciate the importance of a reward program to acompany. Reward programs help to encourage the productivity of theemployees through motivation. Reward some in different forms, such aspromotion, welfare packages, salary increments, tax cuts, holidays,team-building trips among other things. For this program to beeffective in a specific venture, the firm needs to clearly outlineand countercheck its strategies with the intended ways of offeringemployee appreciation (Friedman, 2004). In this case, the rewardsystem should be concurrent with the business culture and strategy ofthe firm. Therefore, it is not just enough for one firm to emulatethe reward program of another company, despite its success, withoutnecessary analysis of its strategies. The difference between the twofirms may make it possible for the program to work in one firm andfail in another. For example, it would be unwise to give free liquorto the teaching staff of a school, compared to the workers of abrewery (Christiansen &amp Higgs 2008). It is effective in the caseof a brewery’s employees since it creates that sense of belongingand pride. Innovative ways of offering rewards to employees havebecome a major concern and interest to managers, as they not onlywipe away the predictability and monotony of the traditional paymentsystem, but also react to the change in the business environment.This takes place in the form of the business culture, compensationdesign and the applied strategy (Wallace, 1987). However, somescholars agree that different ways of reward programs complement thePorter’s strategic system (Allen &amp Helms, 2002).

Firmshave adopted various ways of rewarding the managerial staff, which ismostly related to the outcome of the company. To keep up with thechanges in the market environment, firms with more discretionarymarket orientation offer managerial compensation and reward accordingto the performance of the company. Therefore, the higher the outputof the firm, the more the managerial staff is bound to receive in theform of compensation and rewards. Therefore, periods of highdiscretion in the market are associated with high compensation plansand greater pay, which is based on the outcome plans (Vohries &ampMorgan 2003). On the other hand, firms with lower discretionorientation strategies have minimal outcome-based compensation, andtherefore, the output of the firm is bound to remain the same, withfew peaks and troughs of income. This follows because of lessinnovation, invention and motivation on the side of the managementsince no matter the output, the compensation scheme will only reflecta small change if not remaining the same. Therefore, companies with adesire to quickly increase their productivity and profitability wouldprefer adapting the high discretion orientation strategy as it wouldnot only facilitate innovation and invention, but also motivate thehuman resource practices, since the benefits are direct (Rajagopalan,1996). In this case, therefore, firms with the Defender strategicplans based their incentives and reward on the accounting measures,with small or no consideration given to the performance of the firmson the market. This is because of the stable approach of the firms.This is different from the firms that use the Prospector strategicplans, whose rewards and cash incentives are based on the currentposition the firm holds in its level of competitiveness (Christiansen&amp Higgs 2008). This means that the higher the stock value of acompany and the higher the share trades of a company in the stockmarket, the higher the incentives expected by the management. Thispushes the management to be more innovative and inventive, utilizingthe current ideas, and adapting to the changes in the prevailingmarket competition to make sure that their stocks are highly valuedand they remain highly competitive in the market. Still in thislight, firms with market strategies ranging from Cost leadership,differentiation and innovation have policies regarding incentivessand employee rewarding, which suits the specific strategies they use(Boyd &amp Salamin, 2001). Therefore, it is clear that firms shouldfit their pay policies with the different strategies they use, toallow for a contingency approach in the modeling of such policiesthat affect the human resource management and practice (Montemayor,1996).

Accordingto Miles and Snow, there is a renewed interest in the effectivenessof the human resource practices and management, as it is the maindriver of the viability of a firm. Therefore, this has given thehuman resource specialist in firms a kick in claiming for asignificant stake in the strategic planning procedures of a company.A number of studies elaborate the effectiveness of efficient linkinghuman resource practices with the firm’s performance (Christiansen&amp Higgs, 2011). In their explanation, Miles and Snow also explainthe types of alignment of human resource practices with thestrategies of the firm. These include tight fit, minimal fit andmisfit.

Firmsthat employ a tight fit in engaging human resource management and thecompany’s policy have realized a high productivity andprofitability since the output of the workers is consistent with themission, vision and goals of the company. Therefore, the workers arein harmony with the culture and objectives of the company (Vohries &ampMorgan 2003). Companies with average or slightly below averageperformance have a minimal fit model for some of their technologicalapplications and human resource management plans are detached fromthe strategies of the firm. There may exist a breakdown orineffectiveness of vertical communication between the management andthe employees, or horizontal communication among the differentdepartments, in such a way that the strategies are incompletely met.In the last orientation dynamic, the company is completely detachedfrom its human resource practices and the managerial activities(Christiansen &amp Higgs 2008). This means that each department inthe organization speaks its own language, with clashing objectivesthat do not reflect the final mission and vision of the company. Itmay also mean that the company is employing practices that do not fitthe current market trends and competition. There is bound to bedisharmony in the firm in a misfit kind of orientation strategy(Miles &amp snow, 1978).

Innonprofit making organizations, the strategic human resourcemanagement is not necessarily emphasized. However, Defenders,Analyzers, Prospector and Reactors have a sense of emphasis placed onthe importance of quality human resource recruitment (Vohries &ampMorgan 2003). There is however a small change in the way thesestrategies view training, with the practice being most intense in theDefender strategic setting, which employs stability and cautiousnessin its operations, as opposed to the Prospector strategic operation,which looks out to capture the available highly trained personnel,extracting their value and relieving them of their duties shortlyafterwards. This therefore means that the Defender system offers thehuman resource more security and longevity, while the Prospectorsystem allows the human resource freedom to be flexible and injectinput in their desired areas (Akingbola, 2007).

Prospectorcompanies are usually more likely to have an external orientation inhuman resource strategies, as opposed to an internal orientation,which is likely to be associated with the Defender firms. Tanova andKaradal established this after a study of 100 different small andmedium size enterprises across Turkey in 2006. The study usedinformation gotten from a study done by Zajac and Shortell, whichalso borrowed heavily from the work of Miles and Snow (1978). Thestudy also elaborated the use of external orientation in humanresources as reflected in the recruitment, retention, performance andevaluation of Prospector firms. Human resources and human resourcestrategic management systems have created a cv0mpetitve environmentin today’s business world. Therefore, the competitive nature of theglobal economy is not affected by the existence of the Prospector,Analyzer and the Defender strategies of management (Miles &amp Snow1984). However, a study of the Indian Software market showed that theuse of the Reactor strategy of management different from the lastthree, most probably due to their disintegration in terms ofstrategic management and human resource strategies (Laugen et al.,2006).

Therefore,according to various sources, human resource management and practicesshould be chosen based on the strategic management of the company inquestion. This ensures accountability and consistency in thecompany’s structure and culture (Lawler, 1986 Hambrick and Snow,1989 Ulrich and Lake, 1990 and Zingheim and Schuster, 2000). Inaddition, the reward system should be in line with the strategies ofthe organization, according to the various literature stated above.In different studies, it is apparent that human resource practicesand effective management can help a firm secure unique competitiveand market advantage over the competitors. This is especiallycomplete when the firm realizes better ways of achieving bothexternal and internal fit in its strategic management of humanresource practices. This might be because the policies regardinghuman resource are made indoors therefore, careful formulation ofsuch policies closes the loopholes in production, supply and customercare services, to the oblivion of the competition (Miles &amp Snow1984). Additionally, the traditional way of rewarding human resource,which is based on the job structure, level of employment,classifications, job specifications and job analysis is not effectivein today’s global economy. This is because this form ofcompensation does not put into consideration individual level ofoutput, but generalizes the output. This allows for some people invarious positions, especially senior ones, to be complacent with thebelief that the junior ones will cover their responsibilities, henceno gap of production noted. Adoption of compensation plans based onoutput put the firm in a firm competitive position since the benefitsof the output trickles down to an individual employee (Christiansen &ampHiggs 2008). Therefore, increased output of an individual meansincreased compensation and reward of that particular person(Gomez-Mejia &amp Balkin, 1992). Different organization should,therefore, employ compensation strategies based on the strategiesused by the organization in its management and human resourcepractices. Nevertheless, these studies are merely on a theoreticallevel and further studies and trials are necessary to ascertain theirviability in the business environment (Ghoshal, 2003).

2.4Reasons for Difference in Human Resource Management in StrategicTypes

Itis expected that there will be a big difference in the way a firmhandles its human resource practices based on its strategicemployment. Firms with Prospector strategies differ from those withDefender strategies since both of them have stack differences interms of strategic orientation and market analysis and maneuver. Thisis also different compared to the hybrid type of marketing strategy,the Analyzers, as well as the Reactors. Therefore, human resourcerecruitment should be largely based on these operational strategiesto avoid a clash between the firm’s objectives and the actualproduction on the ground (Miles &amp Snow 1984).

2.4.1Practices in the Prospector Strategy

Themajor focus of the Prospector strategy is based on the long-termsurvival and the output of the firm. These firms promote the virtueof risk taking, with the changes made in order to fit with theconsumer’s desires. They reward long-term future increasesdepending on the output of the market and the stock values, whichoccurs at the expense of planned management longevity that is usuallybuilt on open-ended plans (Vohries &amp Morgan 2003). The element ofbuilding their management longevity on open-ended plans is to allowfor flexibility and adjustment of the company’s operations, sincethe employees are not offered long-term job opportunities (Vohries &ampMorgan 2003). This is in line with the constant need for change inthe companies. This is because these firms are on constant lookoutfor emerging trends in the market, with a continuous search for newideas. This constant scanning of the macro-environment helps them tocome up with new products based on the emerging trends in the marketand the latest consumer preferences. This kind of marketing strategyembraces the use of qualitative market measures that reflects aholistic approach, with their activities based on results rather thanfirm culture (Miles &amp Snow 1984). The use of incentive-based paycoupled with low basic salaries is perfect for these firms since thismode of payment facilitates individual productivity. An increase inunit production of an individual means an increase in the incentivesso that the net income is high despite the low basic salaries. Thissystem of payment discourages people who are in employment just toseek a comfort zone (Vohries &amp Morgan 2003).

Inthis view, human resource management practices that are consistentwith these views and strategies should be employed in Prospect firmsto help them boost their strategies. Therefore, performance appraisalshould equip the employees with new skills and knowledge that willenable them to be flexible and adjust to the changes experienced inthe market in the future. Therefore, a report on the performance ofthe employee to guarantee performance appraisal should not just beobtained from the direct supervisor, as there might be some bias inthe selection (Vohries &amp Morgan 2003). The approach should beholistic, involving not only the direct supervisor, but also theco-workers in the same department, the junior staff under theindividual and the internal and external customers the employee hasmanaged interaction. This provides a more generalized and conclusiveway of getting information regarding the performance of anindividual, that is beyond bias and nepotism (Miles &amp Snow 1984).This gives an accurate and more comprehensive picture of theaccomplishments of the employee on a long-term basis. Additionally,modes of payment should be broadly based on the merit performance ofthe employee, as well as increase the company’s productivity over along period with more than just one factor being considered. Thismeans that apart from individuals’ work, group work should beevaluated and pay bands modeled to reward teamwork to motivatecoordination and co-operation in the company. Apart from just issuingpayment in form of cash and job promotions, the firm should come upwith ways to allocate shares of profit gains and facilitate employeeacquisition of the firm’s stock shares, to help the employeesderive some pride in ownership of the company. This creates a senseof originality, loyalty and belonging, improving the firm’sproductivity through commitment (Miles &amp Snow 1984).

SinceProspector strategists use risk taking as part of the explorationinto the market, the employers should come up with easy ofencouraging their employees to take up risk, which should beaccompanied with good risk analysis procedures. The employers can dothis by promoting the employees to risky positions, and encouragingthem to take riskier but profitable tasks (Vohries &amp Morgan2003). Nevertheless, the employees might be unwilling to take upthese tasks for fear of job insecurity. To deal with this, theemployment should devise ways of ensuring that the employees have jobsecurity, by avoiding total sacking of employees as a means ofpunishing misjudgment and poor decision-making, with layoffs beingthe last options when all the alternatives like financial punishment,forced short leaves and demotion have been exhausted. Entrepreneurial skills should be encouraged, which may also includeworkshop arrangements to teach on entrepreneurial skills (Miles &ampSnow 1984). This motivates the employees and equips them with thenecessary skills to identify new ideas and markets that are in linewith the current emerging trends and issues.

Allthese are the new sets of human resource practices that fit into thecurrent Prospector strategy of management, as compared to thetraditional ones.

2.4.2Defender Practices

Asopposed to the long-term orientation of the Prospector strategy,firms aiming to manage themselves in a Defender manner of strategyshould encourage practices that evade risk to minimize on theuncertainty, reward the past performances of individuals, and come upwith ways that will enable the management issue individual-basedincentives. These firms should put their employees on a good basicstandard salary level, with minimal production incentives, andemphasize focus on quantitative compensation methods (Christiansen &ampHiggs 2008). These firms should use procedures that focus onproduction of the company, emphasizing on the quantity of productionwith comparisons of similar business periods, for examples thisyear’s production versus last year’s production at such astime(Miles &amp Snow 1984). They should emphasize on production thatstrives to meet time deadlines. Therefore, meeting production targetsin a timely period should be one of the focuses of such firms.Rewards should be based on the production efficiency utilized acrossthe vertical divide in the management and production structure. Theyshould be more internally focused in terms of production, management,coming up with products and improving their quality to meet theirdesired output.

Therefore,the type of strategies employed in a Defender firm is more likely tobe traditional, compared to those employed in a Prospector firm. Thisincludes development of goals that are geared towards intensive useof resources and cutting on costs of production. Apart from beingnarrow, pay bands should generally be structured to reflect theposition of an employee in the organization (Miles &amp Snow 1984).Payment raises should be across the board, rather than being based onthe output and merit. However, bonuses and rewards are based on theindividual’s performance, with less regard on teamwork, unlike theProspector firms. This means that bonuses do not reflect the generalorganizational performance, but is a firm’s tradition based on theperiod of operation (Miles &amp Snow 1984). So that the firm ensuresshort-term profitability and ensure cost-saving with minimal lossmaking, the company uses layoffs and outsourcing based on the desiredcost of production.

2.4.3Reactor and Hybrid (Analyzer) Firms

Itis expected that the Analyzer firms, which are the hybrid types willemploy a mixture of both the Defender and the Prospector elements.Additionally, the Reactor firms, which practically have no particularstrategy, will a play a confused and non-oriental mixture of theabove in spite of the fact that they lack a specific proactivestrategy (Christiansen &amp Higgs 2008).

Thesestudies are usually difficult to analyze given their hybrid andreactive nature (Ghoshal, 2003). Therefore, in most of the remaininganalysis, the focus is put on, the more direct and orientalstrategies, which are the Defender and Prospector strategies as thesetwo will provide a clarified contrast.

2.5The Focus and Hypothesis of the Study

Thegeneral information on the study done by Miles and Snow on theorganizational strategy has largely remained on a conceptual basis.Therefore, in this paper, the main focus is to empirically connectthe relevance of the information presented in the Miles and Snowstrategic typology with the current human resource practices (Vohries&amp Morgan 2003).

Expectationsare that two distinctly different types of reward systems should beassociated with the two strategies (Ghoshal, 2003). We also expectthe Prospector strategy to include long-term operations, orientationsthat are externally focused, encouragement of invention, innovationand risk taking and rewarding successes basing on the group andorganization performance. These types of human resource practices arelabeled modern as they are contradictory to the known traditionalstrategies and are recent vintage(Vohries &amp Morgan 2003).Therefore, modern types of human resource practices are more relatedto the Prospector firms rather than Defender firms. To be specific,the following human resource practices are expected to be associatedwith the Prospector type of strategy:

  • Plans to include employees in stock ownership

  • Sharing of gains

  • Sharing of profits

  • Developmental focused performance appraisal

  • Goals and objectives that are externally reflecting

  • Promotion to riskier positions

  • Raises based on meritorious performance

  • Qualitative goals

  • Holistic performance appraisal

  • Employment security

  • Payment procedures that are broader

  • Entrepreneurship

Onthe other hand, we also expect that short range strategies thatinclude evasion of risk taking, internally focused orientation of thefirm, rewarding individuals on the basis of their position in thefirm and their individual goals will match a Defender strategy (Miles&amp Snow 1984). Human resource activities that discourage takingrisks in the organization by the use of layoffs and outsourcing ofemployees is characteristic of this type (Ghoshal, 2003). Therefore,the specific proposition that the Defender strategies are traditionalstrategies is correct, since they stick to the old routine methods.Furthermore, the following human resource practices will be closelyrelated to the traditional methods used by the Defender strategy:

  • Raises that are across the board

  • Individual performance bonuses

  • Pay bands that are narrow

  • Frequent use of layoffs to cut on costs

  • Outsourcing to control the cost of production

  • Rewards that are internally based

  • Salaries based on the position of the employee

CHAPTERTHREE

3.METHODOLOGY

Aquestionnaire was made to explore these hypotheses. Pre-existingscales and items were utilized to develop the questionnaire.

3.1Strategy Questions

Inorder to assess the strategies of the different firms, the scalesvalidated by Snow and Hrebiniak (1980) were used to analyze thestrategies employed using features that suited the Miles and Snowtypology descriptions. This form enables the use of a large sampleand analysis of the individual perception of the employees of thedifferent firms concerning their strategies. The following questionis an example related to the Defender strategy.

ORGANIZATIONSTRATEGY: To what level does each of the following characteristicsdescribe the strategies employed by your organization? Tick in thebox on a scale of 1-5.

Thisorganization tries to identify and locate a relatively stable nicheof 13245 commodities or working area. The firm offers a limitedvariety of commodities compared to its competitors, and it attemptsto secure its market and influence by producing high qualityproducts, superior services, and moderate process among other things.This organization does not embrace developments in the market. By sodoing, it does not get involved in the changes taking place in theindustry and tries its best to offer the best quality with limitedoutput or service area.

  1. Totally disagree

  2. Partially disagree

  3. No opinion

  4. Partially agree

  5. Totally agree

3.2Human Resource Practice Questions

Compilationof a number of questions touching on the human resource practices ofdifferent companies was done. These questions were based on the humanresource practices used on pre-existing questionnaires and researchdone by Lawler, Ledford and Mohrman (1995) Day et al., (1993), Allen(1998) and Helm &amp Allen (2002). These items included aresummarized in Exhibition 1.

Therespondents used of these questionnaires were asked to account forthe number of employees who were covered by a number of rewardsystems on a scale of 0-7. For example:

3.3The Sample

Asatisfactory sample of managers from South East United States whowere well versed with their companies’ strategic and human resourcemanagement practices did the survey. Basing on the pilot test and thepost administration, interviews determination were done that anemployee needed at least half a year of experience, after beingemployed in the firm to have the required organizational knowledge tocorrectly and effectively provide answers to all the questions(Vohries &amp Morgan 2003). Therefore, the respondents who have lessthan six months of experiences in the specified firms were notincluded giving a final workable sample number of 239. The averageworking years for the remaining respondents was 9.2 years, and thetime employed ranged from six months to 36 years with a standarddeviation of 7.87 years.

Althoughthe median number of employees for the sample number of organizationsincluded in the study was 180, the number ranged from 2 to 300,000 asthe organizations ranged from small businesses to large corporations.59, 3% of the organizations isolated for the study comprised ofservice organizations, with 24.4% comprising of firms from themanufacturing sector, 9.3% coming from the non-profit makingorganizations, 5.1% from the government domain and 1.1% failing toindicate their sector.

Fromthis study, the Prospector and Defender firms were isolated anddistinguished based on the responses and score on the scale (Vohries&amp Morgan 2003). The response was either they ‘totally agreed’or they ‘partially agreed.’ Firms that gave responses thatalluded for both Prospector and Defender strategies were isolated anddisqualified.

CHAPTERFOUR

ANALYSISAND RESULTS

Descriptivestatistics and correlation are presented in the table 1 in theAppendix. The correlation matrix shows that there are significantcorrelations between different variable in the table. However, thesecorrelations only make conceptual sense, and this was expected. Inthe actual sense, real firms rarely follow one of the strategiesidentified to the finer details. This shows that most firms employthe hybrid type of strategy that incorporates a part of one of thepure forms of strategies. For instance, a correlation of 0.419 (p&lt0.001) exists between the Prospector and the Defender strategictypologies in the sample size. This is clearly outlined in the Table1 in the Appendix.

Foreach of the sub-hypotheses available, a T-test was done to establisha difference in the responses organizations gave regarding theirstrategies as being either Prospector or Defender. The results areshown on the summary below:

4.1Prospector Hypotheses–Hypothesis 1:[H.sub.1a]was supported which is, Prospectors noted that they were likely touse profit sharing to distribute a part of the firm’s profits asincentives to the employees than did those reporting the employmentof a Defender strategy (T = 2.49, p &lt 0.05, p =0.014).[H.sub.1b] was supported which is, Prospectorsnoted that they were likely to utilize gainsharing to share the portions of production unit improvements to workers in bonuses thandid those indicating the employment of a Defender strategy (T = 2.52,p &lt 0.05, p = 0.017).[H.sub.1c] was supported thatis, Prospectors reported they were more likely to use an employeestock ownership plan (ESOP) to reward employees with company stockthan did those reporting the use of a Defender strategy (T = 2.462, p&lt 0.05, p = 0.016).[H.sub.1d] was supported which is,Prospectors reported that they were likely to utilize performanceappraisal for the development of workers to improve their output andperformance in the future than did those indicating the use of aDefender strategy (T = 2.276, p &lt 0.05, p = 0.024).[H.sub.1e]was supported which is, Prospectors indicated that they were likelyto employ reward systems based on the accomplishment of theexternally set goals than did those indicating the application of aDefender strategy (T = 2.084, p &lt 0.05, p = 0.039).[H.sub.1f]was supported which is, Prospectors noted that they were more likelyto employ annual raises amount significantly based on merit than didthose applying the use of a Defender strategy T = (2.459, p &lt0.05, p = 0.015).[H.sub.1g] was strongly supported whichis, Prospectors indicated that they were likely to utilize promotionsas a technique of encouraging workers to develop, and by taking onhigher and/or riskier positions in the firm, than did thoseindicating the use of a Defender strategy (T = 2.970, p &lt 0.01, p= .003) .[H.sub.1h] was strongly supported which is,Prospectors said that they were likely to give performance appraisalsand rewards to their employees based on achievement of quantitativeobjectives than did those indicating the use of a Defender strategy(T = 2.694, p &lt 0.01, p = 0.008).[H.sub.1i] wasstrongly supported which is, Prospectors reported that they werelikely to use a holistic or 360 degrees approach in rewardingperformance appraisals than did those indicating the use of aDefenders strategy (T = 2.864, p &lt 0.01, p = .005).[H.sub.1j]was strongly supported which is, Prospectors indicated that theywere likely to use a broad pay band system in rewarding their workersthan did the firms indicating the use of a Defender strategy (T =2.839, p &lt 0.01, p = 0.005).[H.sub.ik] was notsupported which is, Prospectors did not promise that they weresignificantly more likely to have a firm policy of employmentsecurity than did those firms employing a Defender strategy (T =0.805, p = n.s.).[H.sub.1l] was strongly supported whichis, Prospectors reported their workers were motivated to take part inentrepreneurial types of activities than did the firms indicating theemployment of a Defender strategy (T = 3.004, p &lt 0.01, p =0.003).4.2Defender Hypotheses–Hypothesis 2:[H.sub.2a]was not supported which is, Defenders did not indicate that theywere likely to set aside cash bonuses for individual employeeperformance than did the firms that reported the employment of aProspector strategy at a statistically significant level (T = 0.805,n.s.). [H.sub.2b] was not supported which is, Defendersdid not indicate that they were likely to establish the basic salaryraises across the organization’s board than did the firmsindicating the employment of a Prospector strategy at a statisticallysignificant level (T = 0.862, n.s.).[H.sub.2c] was notsupported which is, Defenders did not indicate that they were likelyto establish salary payment on individual position of their workersin the firm rather than performance, than did the organizationsreporting the employment of a Prospector strategy at a statisticallysignificant level (T = 0.862, n.s.).[H.sub.2d] was notsupported which is, Defenders did not note that they were likely tohave narrow pay band system than did the organizations that used aProspector strategy at a statistically significant level (T = 0.555,n.s.).[H.sub.2e] was not supported which is, Defendersfailed to report that they were likely to utilize layoffs duringperiods of economic recessions than did the ones indicating theemployment of a Prospector strategy at a statistically significantlevel (T = 1.323, n.s.).[H.sub.2f] was not supportedthat is, Defenders failed to indicate that they were more likely toutilize the element of outsourcing than did the ones indicating theemployment of a Prospector strategy at a statistically significantlevel (T = -1.907, n.s.).[H.sub.2g] was not supportedwhich is, Defenders did not outline that they were more likely toissue rewards to their employees based on the accomplishment ofinternally modeled goals and objectives (cutting on costs) than didthe organizations reporting the employment of a Prospector strategyat a statistically significant level (T = 1.647, n.s.).

CHAPTERFIVE

DISCUSSIONAND CONCLUSIONS.

Hypothesis1, which was based on organizations that used the Prospector type,led to the establishment of 11 associated human resource practiceswhere the Prospector firms were highly likely to employ the specifiedhuman resource practices and management systems, as opposed theDefender system on the other hand. The nine practices elaborated onthe hypothesis are in harmony with the modern strategies ofmanagement and operation of the firms, as expected of Prospectivestrategic typology. It is noted that these practices embrace anelement of change and are flexible to the current trends in themarket. Therefore, the results shown on the hypothesis stronglysupport the Prospector strategic typology, which lays major emphasison the use of techniques that are effective first to market moves,cutting edge technology that is updated to the latest technologicalapplication and a focus on innovation, invention and creativity. Italso lays much focus on extensive utilization of human resourcepractices and management procedures that seem to put a lot of focushigher risk and higher reward. Higher risk means creating anenvironment that will create the existence of risks, and puttingemployees to the challenge of embracing the risks. This also includespromoting the employees to higher and newer positions, which mostlyinvolve higher risks, to make them get accustomed to the culture oftackling risks. These are the “modern&quot practices in strategicmanagement and human resource employment, which fit with theProspector approach to business.

Alternatively,Hypothesis 2, which largely explains the existence of the Defendertype, culminated into no significantly associated human resourcepractices as the firms insisted on use of already tested andaccredited practices to avoid uncertainty and the element of risk,where the Defender firm was more likely to use that human resourcepractice than the Prospector type. At first analysis of the outcome,these results were slightly disturbing. With the Defender and theProspector at the two poles of the of strategy continuum, wesuspected there would be the existence of a similar distinctionwithin human resource practices. Our a priori classification of&quottraditional&quot reward systems come into harmony with theorganizations that employ the Defender type of strategic typology.These are the firms that fight to maintain their highest level ofcompetitive in the current market, without necessarily embracingchange by investing in new technologies or making major adjustmentsin their position or market orientation. These organizations woulduse their already made product to lure more customers to their sideby intensifying on service delivery and the quality of output withthe little resources they have. Their main aim, therefore, is to cuton costs, but maintain a high output in the market. Therefore, thesefirms are likely to find ventures that involve the least amount ofrisk and focus on individual productivity and accomplishment suitablefor their application.

However,while there might not be a significant difference between the twomarket strategic typologies, which are the Defender or the Prospectorin terms of their &quottraditional&quot human resource practices,we still anticipate that there should be a logical explanation. Ourconclusion is that even though most people will tend to associate theuse of the ‘traditions methods’ with the Defender system, this isjust at the theoretical level. In the actual sense, no company purelyuses the modern system of management and human resource practices,without employing some elements of the ‘traditional methods.’

Sincethese &quottraditional&quot HR practices are pervasive in all typesof strategic approaches, there is not a strong enough distinctionbetween Prospectors and Defenders to achieve an acceptable level ofsignificance. However, point should be taken that the Defender typeof strategic typology appeared to be employing most, if not all ofthese ‘traditional’ human resource methods, with little deviationoff the norm to embrace the ‘modern’ ones. On the other hand, asmuch as the Prospective firms did not purely abide to the ‘modern’human resource practices, they shunned from practicing most of thetraditional strategies in order to fit in their flexible andrisk-approving nature of the operation. It is the greater relativeuse of the &quotmodern&quot HR practices that distinguishes theProspectors from the Defenders. Therefore, generally speaking, theProspector strategy is distinguished from the Defender strategy basedon the employment of the more extensive &quotmodern&quot humanresource practices that serve as a supplement to some of the“traditional&quot human resource practices. Since we have alreadyestablished that it is only at the theoretical level that the pure‘modern’ human resource strategies can be sued, most of the firmsthat we are calling Prospector firms in this study are actuallyhybrid. They employ many of the extensive modern strategies, butstill hold on to the old traditional strategies.

5.1Limitations

Thereis little research, which has produced clarification on therelationship between the Miles and Snow strategy typologies and thehuman resource practices attached to the Defender and the Prospectortype of strategies. However, in this effort, this research used aconvenient number of questions to help investigate the relationship,using a chosen sample of firms and connect the association of somebasic hypothesis with literature concerning these typologies. Forfurther strengthening of the results of similar research, futurestudies should consider using a bigger number of randomly selectedsamples that will allow for diversity. This diversity comes in termsof the different industrial types in the market, the level ofoperation of different firms, the level of experience of differentrespondents participating in the study: the type of technology usedin the different firms and industries among other diversities. However, in our maiden research, it was very difficult to achievesuch a perfect set of research sample, and this may take longer if wehave to consider all the diversities available in the market.

Inthis study, the kind of data collection used, the cross-sectiondesign, allowed from preclusion of cause-and-effect conclusion sinceit only allowed for collection of data from a single respondent at aspecific time. It was, therefore, challenging to draw causalinferences from the cross-section design approach. Repeatedobservation of the same variable (firms) over a long period wouldhave given us the true picture in terms of changes in associationwith practices in the firms, organizational culture, payment modesand other variable that would have strengthened our hypotheses. Usingthe observing changes, it would have been more accurate for us todraw conclusions on the human resource practices of each firm.

Therefore,with the limitations of this study outlined above, the finding andobservations of this study should be viewed on a provisional andexploratory level, with room left for further research to develop theconcepts mentioned and suggested in the study. It is important to usemore effective research procedures and designs in the future thatwill facilitate clear verification of the findings of the presentstudy.

5.2Implications for ManagersEventhough we consider this study as an exploratory and tentativeresearch in nature, the results are still important and interestingfor executives and top management. These results are also consistentwith much of the popular collection, studies, information anddiscussions about aligning human resource practices to correlateproperly with the organizational strategy chosen for a specific firm.According to the popular press, in the setting of a company, what getmeasured is done whereas what is rewarded gets accomplished.Therefore, the belief of matching human resource practices to thestrategic typology of an organization is intuitively appealing notonly to the practitioners, but also to the academicians as it givesthem the exact and working relations of the various studies conductedon human resource practices.

Thefindings of this tentative study have clear and importantconsequences, including practical implications for senior managementand other personnel who are responsible for the implementation ofhuman resource strategies and management, including the strategy intheir organizations. In this light, the top management of thedifferent companies involved should work in close contact with therelevant [personnel responsible for human resource development andother human resource specialists in order to come up with humanresource strategies that suit the goals, objectives and operationalstrategies of the firm. This, with motivational concepts andconcurrent supporting of the organization’s staff, will facilitatethe success of their chosen organizational strategy. Employees shouldalso be part of the parties that come up with the human resourcepractices and the company’s strategies, not only at theimplementation level, but also at the formulation level, for them toidentify with the strategies. This creates a sense of company cultureand nature, in the sense that the employees also feel responsible forthe business activities of their firms.

Moreso,there should be effective and timely communication between theemployees and the management or the employers on the strategies ofthe firm so that they understand the organization`s strategy as wellas the linkages to the motivational components of the human resourcesystem. In the implementation of the strategies of the company, thereshould be adequate inter-departmental communication, which will allowfor harmonious running of different departmental activities andcoordination of the activities to suit the common goal of theorganization. Therefore, there should be constant coordinationbetween the organization’s top managers and the employees of agiven firm so that not only will it allow for the strategies of thecompany to be followed, but also facilitate stepwise breakdown andanalysis of the usefulness and viability of the strategies used. Thisway, the organization will be quick to assess of the strategy used inits operation is working or requires a total change. Most of thecompanies fail to meet this part because of a communication breakdownbetween the top managers and the employees.

Notonly should a human resource professional be involved at theformulation stage of the human resource strategic policy-making, butalso in the implementation phase. This is because they have the bestknowledge available to see through the proper mechanization of theideas coined in the formulation phase. Professionals should also beincluded in the top managerial team in the firms, which isresponsible overseeing formulation and implementation of theorganization’s strategy. At the top management, the work of theprofessionals is to link their knowledge with the actual activitieson the ground, by applying the theoretical concepts in practice, andallowing for testing the tentative studies on human resourcedevelopment. These professionals will not only oversee implementationof the business concepts in the study, but it will provide them witha field to evaluate the workability and the relevance of some of theresults of their studies, to help them understand where they needchange. This is important to the company, because some companies maywant to adapt enactments by professionals, some of which are nottested and verified.

Therefore, the firm’s strategycascaded to the lower levels in the firm supportive human resourcepractices should be enacted. More specifically, the management shouldimplement policies and programs that coordinate the accomplishment ofstrategic goals at all organizational levels and departmentssupported by human resource activities that facilitate rather thanimpede the formulated organizational strategy. The current strategiessuggest that the strategies of the firm should be well articulatedand clearly implemented to realize the company’s goals andobjectives. At the same time, adaptation to change in the humanresource systems should be taken into consideration to reinforce andadvance the chosen strategic typology of the organization. Therefore,for this to happen, the above-mentioned practices should be put tolight in the organizations. This includes including the humanresource professional in the top management, allowing them freedom tobe involved in the company’s activities up to the implementationlevels, create a good communication channel between the topmanagement and the employees to ensure linking of the organization’sstrategy and allowing employees to be part of the decision-makingprocess in the organization.

5.3Areas for Further Research

More than anything else touchedon, this study emphasizes on the usefulness of modeling the humanresource systems to suit the strategies of the firm. This studyfocuses on the fact that harmonization of human resource objectivesto understand the strategy of the company is vital in realizing andimplanting the exact strategic plans. A study by Lawler and Jenkins(1994) has reinforced these comments, which clarify the importantrelationship between a good and workable reward systems that isconsistent with the strategy of the firm and all activities gearedtowards change, which include the overall organizational strategy.Therefore, this tentative, but exploratory study should encourageother researchers to develop more studies on an empirical basis,identifying the loopholes in realizing better results, in order tocome up with better information relating to the interrelation betweenorganizations’ strategies and their effectiveness when couples witheffective human resource practices.

The preliminary results of thisresearch should be ascertained with studies that are more detailed inorder to uncover the psychological elements that are responsible forthe results of firms indicated in this paper. There is a need fordevelopment of further research to evaluate on the effectiveness ofthe different reward systems. Clear results should be producedregarding the relationship of each type of reward system with theperformance of the organization, particularly that the employee leveland the specific teams within an organization. The results shouldalso emphasize on the advantages and disadvantages experienced ineach of the reward systems, to help readers, and practitioners learnboth sides. For example, they should be able to establish if there isan interaction effect between the use of increased job autonomy and aProspector approach in production of higher levels of firms’performance.

Just as any other tentative andexploratory work, a number of questions unravel in the course of theresearch and after the findings. Therefore, we motivate researchersto improve on the presented demerits and limitations of thisresearch. First, the subsequent researches should include a morediverse sample. The diversity should be not only be based on thegeographical distribution, but also the type of industries the chosenfirms operate in, the number of years of operations, the number ofemployees, the level of operation among other aspects. The use of aconvenience sample helped us realize the initially intended theory,which was building objectives, but reaching a wider geographic rangeof firms is needed in the study. Furthermore, instead of just relyingon the information of the respondents, most of whom were managers,the studies should come up with ways to make sure that they do anindependent analysis of the data collected, including the financialposition, viability and records of the firms being studied. In thisway, there will be little room for relaying or recalling thepossibilities of common variance from all information being availedby the same respondents. Probably a series of case-study effortscould be made study several organizations that are willing to remitnot only their formal documents, but also allowing researchers totalk to their employees in an interview and study-relatedinteractions on matters regarding theirstrategic and human resource practices as well. Therefore, thistentative study is just the beginning,opening doors to the possibilities of more studies aimed atascertaining the relationship between the human resource practices ofdifferent organizations and their strategic typologies.

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APPENDICES

Exhibit1

HumanResources Practices Descriptions and Corresponding Q#

Q1Profit sharing—this is where the firm distributes some portion ofthe

previousyear`s company profits to workers in the form of cash bonuses.

Q2Gainsharing–parts of departmental or work unit gains in

Productivity,cost effectiveness, quality of production, or other

Improvementsin performance are distributed among employees as cash bonuse basingon a company formula.

Q3Cash bonuses— monetary rewards given to employees for theirperformance.

Q4Employee stock ownership plan—a plan aimed at allowing theemployees to acquire some of the company stock.

Q5Developmental based performance appraisals–performance

appraisalsare used for developing employees to perform better in

thefuture rather than for evaluating only their past performance.

Q6Internally based rewards—rewards based on the accomplishment of theinternally set objectives by employees (i.e., meeting productiondeadline

orobjectives aimed at cutting on costs).

Q7Externally based rewards– due to employees

accomplishmentof externally set goals (i.e., performance of the employees versusthat of the competitors).

Q8Basic salary increases— increment in the primary amount of salarywithout additional incentives.

Q9Incentive/merit pay–a significant portion of annual raises are

givenas merit based payments rather than across the

boardincreases to base salary.

Q10Promotions to encourage employee development—improving the statusof the employee vertically or horizontally in the firm’s structureto encourage increased output.

Q11Quantitative performance measurement–performance appraisals

thatare based basically on achieving specific,

quantity-relatedobjectives e.g. the number of units sold.

Q12Position based pay system—system that takes into consideration therank of an employee on the firm’s structure.

Q13Narrow pay bands–pay ranges or grades (i.e., maximum and

minimumamounts paid for a specific position) are relatively

narrow.Employees at similar ranks are paid averagely the same salary.

Q14Broad pay bands–pay ranges or grades are relatively wide thus

allowingfor much discretion regarding how much an employee is paid

fordoing a particular job.

Q15Employment security— a firm’s policy that uses layoffs as thelast alternative, giving employees a sense of continuity andlongevity in their jobs.

Q16Layoffs—asking employees to leave their jobs during periods ofeconomic difficulties.

Q17Outsourcing—looking for employees outside the firm who will requireless cash in terms of payment.

Q18Entrepreneurship–employees are deliberately encouraged by

managementto take risks and try new ideas in hopes that these

effortswill yield results in the future.

Q19Holistic performance appraisals—appraisal that is based on a numberof things, apart from direct supervisor’s comments, which includesresponses from co-workers and internal and external customers.

NONE ALMOSTSOMEABOUT MOST

NONE HALF

(0%) (1-20%)(21-40%)(41-60%)(61-80%)

Employeestock 1 23 4 5

Ownershipplan–

Employeesare

rewardedwith

companystock, thus,

givingthem an

ownershipstake in

theorganization.

ALMOST ALL

ALL

(81-99%) (100%)

Employeestock67

ownershipplan–

employeesare

rewardedwith

companystock, thus,

givingthem an

ownershipstake in

theorganization.

APPENDIX-I:

Table1 (see Exhibit 1 for Q descriptions)

Variable Mean SD12

1 Defender 3.13 1.42 1

2 Prospectorr2.951.300 0.419 *** 1

3 Q1 3.0452.205-0.105 0.173 **

4 Q2 2.2581.826-0.087 0.096

5 Q3 3.0332.000 0.001 -0.043

6 Q4 1.6141.311-0.058 0.152 *

7 Q5 3.8522.264-0.120.163 *

8 Q6 3.2542.008-0.109 0.065

9 Q7 1.6611.225-0.140 *0.162 *

10Q8 3.9742.222 0.015 -0.052

11Q9 3.7582.019-0.147 *0.086

12Q10 3.1911.776-0.175 ** 0.189 **

13Q11 3.2711.841-0.132 *0.122

14Q12 5.0401.799 0.045 -0.032

15Q13 4.0691.822 0.123 0.024

16Q14 3.3021.781-0.168 *0.136 *

17Q15 3.3452.400-0.082 0.059

18Q16 2.4721.672 0.079 -0.130 *

19Q17 1.9281.099-0.095 0.084

20Q18 3.5061.860-0.190 ** 0.138 *

21Q19 2.8211.904-0.009 0.207 **

Variable 3456

1 Defender

2 Prospector

3 Q11

4 Q20.184 ** 1

5 Q30.295 *** 0.220 ** 1

6 Q40.105 0.196 ** 0.047 1

7 Q50.209 ** 0.078 0.195 ** 0.151 *

8 Q60.221 ** 0.258 *** 0.390 ***0.109

9 Q70.129 *0.166 *0.041 0.248 ***

10Q80.105 -0.107 -0.041 0.001

11Q90.129 *0.089 0.190 ** 0.026

12Q10 0.185 ** 0.184 ** 0.216 ** 0.222 **

13Q11 0.207 ** 0.364 *** 0.324 ***0.250 ***

14Q12 0.215 ** -0.083 0.098 0.105

15Q13 0.004 -0.075 -0.068 0.063

16Q14 0.1 0.165 *0.042 0.166 *

17Q15 -0.05 -0.083 -0.053 0.106

18Q16 0.037 0.031 -0.02 0.162 *

19Q17 0.007 0.1 0.21 0.067

20Q18 0.151 *0.207 ** 0.282 ***0.016

21Q19 0.126 0.305 *** 0.177 ** 0.211 **

Variable 78 9 10

1 Defender

2 Prospector

3 Q1

4 Q2

5 Q3

6 Q4

7 Q51

8 Q60.317 *** 1

9 Q70.099 0.02 1

10Q8 -0.037 0.039 -0.045 1

11Q90.247 *** 0.239 **0.111 -0.562 ***

12Q10 0.361 *** 0.366 ***0.213 **-0.035

13Q11 0.252 *** 0.353 ** 0.221 **-0.123

14Q12 0.023 -0.07 0.08 0.180 **

15Q13 -0.091 -0.165 * 0.061 0.156 *

16Q14 0.193 ** 0.183 **0.014 -0.196 **

17Q15 0.103 -0.1 -0.122 0.124

18Q16 -0.083 -0.10.06 -0.001

19Q17 -0.096 0.034 0.09 -0.055

20Q18 0.303 *** 0.325 *** 0.091 -0.086

21Q19 0.208 ** 0.155 * 0.158 * -0.136 *

Variable 11 12 13 14

1 Defender

2 Prospector

3 Q1

4 Q2

5 Q3

6 Q4

7 Q5

8 Q6

9 Q7

10Q8

11Q91

12Q10 0.270 *** 1

13Q11 0.235 *** 0.319 *** 1

14Q12 -0.057 -0.079 0.0881

15Q13 -0.118 -0.124 -0.0560.304 ***

16Q14 0.229 ** 0.154 *0.0490.003

17Q15 -0.087 -0.088 0.0190.046

18Q16 0.016 -0.012 -0.0090.059

19Q17 0.029 -0.079 0.0310.014

20Q18 0.247 *** 0.451 *** 0.161 *-0.046

21Q19 0.144 0.213 ** -0.012 -0.038

Variable 15 16 17 18

1 Defender

2 Prospector

3 Q1

4 Q2

5 Q3

6 Q4

7 Q5

8 Q6

9 Q7

10Q8

11Q9

12Q10

13Q11

14Q12

15Q13 1

16Q14 -0.585 *** 1

17Q15 0.116 -0.0111

18Q16 0.053 0.025 -0.013 1

19Q17 0.031 0.061 -0.001 0.210 **

20Q18 -0.074 0.135 * 0.002 0.012

21Q19 0.022 0.057 -0.109-0.069

Variable 1920 21

1 Defender

2 Prospector

3 Q1

4 Q2

5 Q3

6 Q4

7 Q5

8 Q6

9 Q7

10Q8

11Q9

12Q10

13Q11

14Q12

15Q13

16Q14

17Q15

18Q16

19Q17 1

20Q18 0.0321

21Q19 0.0460.300