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Strategic Management Of Small Firms In Hostile And Benign Environments

J. G. Covin, D. P. Slevin
Published 1989 · Medicine

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Examines the strategic postures, competitive tactics, and organization structures of small manufacturing firms that are associated with high performance in both hostile and benign environments. Hostile environments have such characteristics as difficult business climates, intense competition, and few opportunities, making such environments difficult for smaller, resource poor firms, and such environments are increasingly common in manufacturing. Two hypotheses suggest that the relationships between the organization structure and strategic posture can be determined by the level of hostility in the environment. Data were collected via surveys sent to single-industry, independently owned firms in western Pennsylvania, of which 161 responses were analyzed from among those in business for at least five years. Findings indicate that: (1) small firms with organic structures perform best in hostile environments, while small firms with mechanistic structures perform best in more benign environments; and (2) entrepreneurial firms perform better in hostile environments, while small conservative firms perform best in more benign environments. (SFL)
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