Strategic Fit
STRATEGIC FIT – A STRATEGY TO ALIGN ORGANIZATION AND ENVIRONMENT
Abstract This paper analyzes the term ‘strategic fit’ exactly means, types of strategic fit, necessities to focus on strategic fit, and most importantly how well an organization can align its resources & capabilities with the opportunities that exist in the external environment so as to achieve peak performance in the business. Strategy of Nestlé as an example to discuss how far it is true that effective strategic fit ensures organization’s resources & capabilities and what the environment exactly needs from it.
Key Words
Strategic, Fit, Strategy, Resource, Capabilities, Opportunities, Environment, Business
Introduction
It should be recognized that any strategy or management style is appropriate only in a particular set of circumstances. Strategic fit enables an organization to operate in its particular competitive situation at peak effectiveness. It expresses the degree to which an organization is matching its resources and capabilities with the opportunities in the external environment. The matching takes place through strategy and it is therefore vital that the company have the actual resources and capabilities to execute and support the strategy.
Meaning of Strategic Fit
The contingency theorist’s argument that performance outcomes are maximized when a firm achieves an alignment or “fit” between a firm’s external environment, its internal factors and its strategy has been well established in the literature (Burns & Stalker 1967; Lawrence & Lorsch 1967; Keats & Hitt, 1988). Nadler and Tushman (1979) theorized that the greater the total degree of congruence or fit between the various components, the more effective will be the organization, leading to higher levels of goal attainment, utilization of resources, and adaptation.
Need for Strategic Fit
Strategic fit is a quest to align the organization’s operation with the needs of the market. It also involves identification of the opportunities and
Abstract This paper analyzes the term ‘strategic fit’ exactly means, types of strategic fit, necessities to focus on strategic fit, and most importantly how well an organization can align its resources & capabilities with the opportunities that exist in the external environment so as to achieve peak performance in the business. Strategy of Nestlé as an example to discuss how far it is true that effective strategic fit ensures organization’s resources & capabilities and what the environment exactly needs from it.
Key Words
Strategic, Fit, Strategy, Resource, Capabilities, Opportunities, Environment, Business
Introduction
It should be recognized that any strategy or management style is appropriate only in a particular set of circumstances. Strategic fit enables an organization to operate in its particular competitive situation at peak effectiveness. It expresses the degree to which an organization is matching its resources and capabilities with the opportunities in the external environment. The matching takes place through strategy and it is therefore vital that the company have the actual resources and capabilities to execute and support the strategy.
Meaning of Strategic Fit
The contingency theorist’s argument that performance outcomes are maximized when a firm achieves an alignment or “fit” between a firm’s external environment, its internal factors and its strategy has been well established in the literature (Burns & Stalker 1967; Lawrence & Lorsch 1967; Keats & Hitt, 1988). Nadler and Tushman (1979) theorized that the greater the total degree of congruence or fit between the various components, the more effective will be the organization, leading to higher levels of goal attainment, utilization of resources, and adaptation.
Need for Strategic Fit
Strategic fit is a quest to align the organization’s operation with the needs of the market. It also involves identification of the opportunities and