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Strategy and Performance: Does Environmental Dynamism Matter?

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  • Ahmed Agyapong
  • Stephen Zamore
  • Henry Kofi Mensah

Abstract

This paper examines the moderating role of environmental dynamism on the link between strategy and performance. Based on a random sample of micro and small businesses (MSBs) in an emerging economy – Ghana, this study tests the applicability of the strategic-fit paradigm, which assumes that positive organizational outcomes require a match between environment and strategy. Using confirmatory factor analysis and ordinary least squares regression techniques, the results show that MSBs pursuing low-cost strategy in a dynamic environment may have higher performance while those pursuing differentiation strategy in a dynamic environment may have lower performance. The results suggest that MSBs should enhance the implementation of cost-leadership strategy when environmental dynamism is high and implement differentiation strategy only when environmental conditions are stable.

Suggested Citation

  • Ahmed Agyapong & Stephen Zamore & Henry Kofi Mensah, 2020. "Strategy and Performance: Does Environmental Dynamism Matter?," Journal of African Business, Taylor & Francis Journals, vol. 21(3), pages 315-337, July.
    • Handle: RePEc:taf:wjabxx:v:21:y:2020:i:3:p:315-337
    DOI: 10.1080/15228916.2019.1641304
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    Cited by:

    1. Asikhia, Olalekan. U. & Makinde Grace. O. & Akinlabi, Bababtunde. A. & Adewole, Adekunle. A., 2022. "Strategy execution as determinant of deposit money banks’ customer satisfaction in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(5), pages 633-638, May.

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