International Strategy and Environment: An Assessment of the Performance Relationship
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*ClaudioCarpanois AssistantProfessorof Managementat the Universityof North Carolinaat Charlotte. His researchinterestslie in the areasof international management and global business strategy. **JamesJ. Chrisman(Ph.D., Universityof Georgia)is Professorof New Venture Developmentin the Facultyof Managementat the Universityof Calgary. ***KendallRothis AssociateProfessorof International Businessat the Universityof SouthCarolina.His researchinterestsfocus on the implementationof intemational strategy,competitionin international industries,andtop managementdecisionmaking. Received: August 1992; Revised: August 1993, January 1994; Accepted: January 1994. 639
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JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1994
markets[Abell 1980; Chrisman,Hofer & Boulton 1988]. Segment differentiation across markets is defined as using different competitive weapons in different international markets. In contrast, a homogeneous approach means that a firm uses the same competitive weapons in each market it serves. While the international management literature has identified the segment differentiation and geographic scope dimensions of strategy as important, the two dimensions have rarely been used together to classify international strategies. Instead, because of the importanceof a firm's internationalcoordination and configuration, researchershave attemptedto use these dimensions to classify international strategies [Doz 1986; Porter 1986; Prahalad 1975]. However, coordination and configuration are structuraldecisions ratherthan strategic dimensions [Galbraith & Kazanjian 1986]. For example, Prahalad and Doz [1987] suggest a classification of three international strategies: worldwide integration, national responsiveness and multifocal. As useful as this classification is, it is based on aspects such as the centralization of decisionmaking and the coordination of operating units rather than strategic decisions with respect to productsto produce, marketsto serve, or competitive weapons to employ. Thus, it is useful for relating environments to structure rather than to strategy. While classifications of internationalstructureare clearly needed, combining strategic and structural elements into one classification makes it difficult to distinguish between the two and eliminates the possibility of alternative alignments. A distinction is necessary for determining if and when matches between certain strategies and certain structures lead to superior economic performance.Such an approachalso allows findings of other studies concerning the relationships among environment, strategy and structure to be linked to the present study [Govindarajan 1988; Gupta & Govindarajan 1985; Miller 1988; White 1986]. Indeed, development of separate classifications of these determinants of firm performance has aided empirical investigations in the field of strategic management [Miller 1986; Venka
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