Long Range Planning, Vol. 26, No. 5, pp. 11 to 23, 1993
Printed in Great Britain
00246301/93
$6.00 + .OO
1993 Pergamon Press Ltd
0
11
Optimizing Profitability in
Turbulent Environments
A
Formula for Strategic Success
:
H. Igor Ansoff and Patrick A. Sullivan
This article describes a formula for strategic success which
states that the profitability of a firm is optimized when its
strategic behaviour is aligned with its environment. The
formula was developed over a 25-year period and has been
extensively field tested. The article briefly reviews other
prescriptions for profit optimization which now compete for
management attention, presents the formula, discusses the
results of the field research, and describes a practical strategic
diagnosis procedure which can be used to determine a firm’s
preparedness to succeed in the future.
l
Strategic Planning (Ansoff 1965)
Back to Baric$
Emerging Strategy (Mintzberg)
Logical lncrementslism (Quinn)
Stick to Strategic Knitting
(Peters 8nd Waterman)
* Return to the Core Business
Put Your Customers First
No Company is Going to Survive
by Virtue of its History {Kuehler)
Build the Future On
Your Historical Strengths
l
l
l
l
l
l
l
.l
The Problem
For the first 50 years of the twentieth
century the
formula
for optimizing
profitability
of firms
appeared to be clear and unambiguous.
Based on
microeconomic
theory, this formula was to manufacture
an undifferentiated
product
at the least
possible unit cost and to offer it to the market at the
lowest price. This formula worked with outstanding success during the first 30 years of the twentieth
century and was claimed to be universally applicable
in all industries and market places.
During the 1930s the first signs of difficulty appeared
in the United States, and 10-20 years later in the
increasing
other
industrialized
countries.
An
number
of firms found that the microeconomic
success formula no longer optimized
growth and
profitability.
As a result, managers and academics began to search
for alternative
formulas
for profit optimization.
Professor lgor Ansoff is a Distinguished Professor of Strategic
Management at the U.S. International University in San Diego,
California. He has been a leading pioneer in the development of
strategic planning and strategic management and has published over
100 articles and books. Dr Patrick A. Sullivan is an Associate Professor
of Strategic Management at US. International University in San
Diego, California, and a partner in Sullivan & Associates, a management consulting firm.
Figure
1. Prescriptions
for optimizing
profitability
Over the years a long list of replacements
for the
microeconomic
formula
has appeared in business
and academic
literature.
A selected list of these
formulas is illustrated in Figure 1.
All of these formulas have common characteristics:
they are proposed
by reputable
researchers
or
experienced
managers yet they all appear to contradict one another; most of the formulas have worked
in some firms and failed in others, and each was
claimed by its proponent to be a formula that would
lead to profitability
if properly applied.
One of the important results of the research reported
in this paper is that all of these formulas are valid
under different
environmental
conditions.
These
conditions will be discussed later.
Historical
Success Patterns
A study of patterns of business success over the past
90 years begins to explain the paradoxical
state of
the success prescriptions
described above.
A somewhat
simplified
pattern of success behaviours, which evolved since the 1900s in the U.S., is
12
Long
Range
Planning
Vol.
26
October
shown in Figure 2. The milestone dates shown in the
Figure apply to the U.S.A.
and the same patterns
have been observed 20 to 50 years later in other
industrialized
nations.
As Figure 2 shows, during the first 30 years of the
twentieth century success came to production driven
firms which used the microeconomic
success formula. The most visible example of such firms was
the Ford Motor Company
led by Mr Henry Ford I
who pioneered the development
of mass production
technology
and insisted on selling his cars ‘in any
color so long as it was black’.
In the 1930s some firms, notably those in consumer
goods industries, became market driven by shifting
their attention to satisfying customer needs and/or
convincing
the customer
that their products were
superior to those of competitors.
The pioneer in this
shift was the General Motors Corporation
under the
leadership of Alfred P. Sloan.
About 1940 some other firms, primarily
in industrial goods industries, shifted to product development
driven behaviour by basing the firm’s success on the
continual improvement
of their products.
The appearance
of the Second Industrial Revolution in the 1940s led to a proliferation
of research
driven firms which succeeded
through
marketing
products incorporating
the latest state of the art
technology.
A majority
of these firms were in the
defence
and aerospace
industries.
A significant
number
of firms
such as pharmaceuticals
and
computers,
showed that research driven behaviour
could also be a success in civilian industries.
Figure
2. Driving
forces
for
succcss
1993
The four success behaviours discussed above had one
common
feature. In each of them behaviour
was
dominated
by one of the four key functional
activities found in all firms: production,
marketing,
product development
or advanced research.
As Figure 2 shows, since the 1950s firms in each
category
began to shift to the environment
driven
behaviour.
Such firms continually
evaluate the future critical
success factors in their businesses and recognize that,
in the environment
of the 199Os, no single function
is the success-determining
function.
As a result, all
functions that are important to the firm’s success are
allowed to exert influence on the firm’s strategy.
Consequently,
general management,
and not the
management
of one of the functions,
is the
dominant
guiding
force in environment
driven
firms; and it balances contributions
of the four
functions
in a way which optimized
the firm’s
future profit potential.
Furthermore,
environment
driven firms, unlike the
single function
driven firms, do not make the
assumption that their markets will continue to grow
and remain profitable in the future. They continually monitor the environment
for signs of demand
saturation,
technology
substitution,
structural
changes in consumer
demand, social and political
discontinuities,
and assess the future inherent profitability and growth in their historical markets. And,
if the prospects in any of the firm’s markets loom
unprofitable,
environment
driven firms search for
an enter new areas of opportunity,
while they divest
from the unpromising
market.
Optimizing
Profitability
in Turbulent
Environments:
An example
of such firms was the American
Telephone
and Telegraph
Corporation
which,
following
deregulation
of the telecommunications
industry, converted itself from a production
driven
into an environment
driven firm. Similarly
Apple
computers
and Hewlett
Packard shifted from the
technology
driven
to the environment
driven
behaviour.
Typically,
such firms become more
they were before the transformation.
successful
than
A Formula
for Strategic
formula.
We will call it the
Success Formula OY CSSF.
Environmental
Success
Contingent
13
Strategic
Turbulence
The Contingent
Strategic Success Formula is based
on three key variables. The first is the Environmental
Turbulence
which
is a measure
of the degree of
changeability
(or discontinuity)
and predictability
of
the_tirm’s environment.
As Figure 2 suggests, while many firms are shifting
to the environment
driven
orientation,
others
remain
successful
using their historical
success
formulas. Over the past 10 years Ansoffhas gathered
data from more than a thousand firms, in developed
and rapidly developing countries around the world,
on the success formulas which these firms expected
to use in order to succeed in the 1990s.
In the Contingent
Strategic
Success
Formula,
Environmental
Turbulence
is the external variable,
whose values specify the type of behaviour
necessary for success. It is described
by five different
turbulence levels. Each level is further described by
four factors which determined
the turbulence level.
The results of this research show that in the 1990s
about 85 per cent of firms expect to be environment
driven in at least one of their Strategic
Business
Units (SBUs). The remaining SBUs are likely to be
using one of the other four success behaviours.’
(2) Familiarity
These results suggest an explanation
of the paradoxical
claims of universal
applicability
by the
proponent of the respective success formulas shown
in Figure 1. The explanation
is simply that in the
environment
of the 1990s there is no single success
_formula which has universal validity.
Descriptions
of the four elements at each turbulence
level are shown in Figure 3. The environment
at
turbulence
level 1 is essentially unchanging.
When
change does occur, it is very slow and response is
gradual over a long period of time.
The results also suggest a need for a contingent success
formula
which
consists
of a series of different
formulas and identifies the conditions under which
each formula becomes successful. The remainder of
this paper is devoted to presenting such a contingent
Figure
COMPLEXITY
National
Economic
FAMILIARI-W
OF EVENTS
Familiar
RAPIDITY
OF CHANGE
Slower Than
Response
Comparable
to Response
VISIBILITY OF
FUTURE
Recurring
Forecastable
3. Environmental
turbulence
(1)
of the successive
occur
(4)
Visibility
of the consequences
in the en-
events;
(3) Rapidity with which the events evolve
are first perceived;
and
after they
of these events.
In an environment
at turbulence
level 2, change is
slow incremental.
Change is slow and a firm can
respond in the time between initial and full impact.
Changes is as fast incremental
in an environment
at
turbulence level 3. The future is a logical extension
+
Global
Socio-Political
Discontinuous
Familiar
Discontinuous
Novel
Regional
Technological
+
Extrapolable
scale
of E vents which
Complexity
vironment;
Faster Than
Response
Predictable
Partially
Predictable
Much Faster
Than Response
Unpredictable
Suprises
Long
14
Range
Planning
Vol.
26
October
1993
of the historical past. Firms at this level must have a
forward-looking
strategy
so response
can start
before initial impact.
the focus of attention
environment.
At turbulence
level 4, change is very fast and
and the future is only partially
discontinuous,
predictable.
Since the future bears little or no
resemblance
to the historical past, firms must have
both a forward-looking
strategy, and an environmental
scanning
system
that is not based on
extrapolation
of the past.
Responsiveness of General
Management Capability
The environment
at turbulence
level 5 is full of
surprises.
Change
is moving
so fast, and the
environment
is so unpredictable
that even wellmanaged firms will experience
strategic surprises.
In a particular environment,
the turbulence level is
determined
by using Figure 3 to select the subvariable (complexity,
familiarity,
rapidity and visibility), which best describes the environment,
and then
computing
their average.
Strategic
Aggressiveness
The second variable in the formula is the Strategic
Aggressiveness
of a firm’s behaviour in the external
environment.
The level of strategic aggressiveness is
determined
by two elements:
(1)Th e dg
e ree 0fh c an gbt
e e ween a firm’s successive
strategic moves in the environment.
(2) The database
used in choosing
Descriptions
of the
level of turbulence
Figure 4. A firm’s
determined just like
the moves.
two elements at the respective
are shown in the lower part of
strategic aggressiveness
level is
the turbulence level, except that
is now on thejirm
and not on the
The third variable in the CSSF is the Responsiveness
of a jrm’s
General Management.
Description
of the
responsiveness
levels is shown in the lower part of
Figure 5. For purposes
of this paper,
general
management
responsiveness
is measured by a single
subvariable:
The Way the Firm Manages Change. (In
practical applications responsiveness
is described by
a number of elements (see Figure 5 below).
Contingent
Success Formula
Figure 6 summarizes Figures 3,4 and 5 and presents
the formula in tabular form. In words the formula is
stated as follows:
For optimum profitability
the levels of both the strategic
aggressiveness andgeneral
management responsiveness
of
the firm
must be aligned
with the environmental
turbulence level.
Validation of the Contingent
Strategic Success Formula
The key concepts
of the Contingent
Strategic
Success Formula were developed by Ansoff over a
period of 25 years.‘”
During this period Ansoff presented
many occasions to senior managers,
the formula
incorporated
DISCONTINUOUS
SUPRISEFUL
Discontinuous
Discontinuous
Predictable Change Unpredictable Change
ENVIRONMENTAL
TURBULENCE
REPETITIVE
No Change
EXPANDING
Slow Incremental Change
CHANGING
Fast Incremental Change
AGGRESSIVENESS
STABLE
REACTIVE
ANTICIPATORY
ENTREPRENEUR
CREATIVE
Discontinuous
Novel
Figure
DEGREE OF
CHANGE
Zero
Incremental
Incremental
Discontinuous
Familiar
DATA BASE
Historical
precedents
Historical
Experience
Extrapolated
Future
Opportunities
4. Matching
aggressiveness
to turbulence
Creativity
on
it
Optimizing
Profitability
ENVIRONMENTAL
TURBULENCE
CHANGE
MANAGEMENT
Figure
5. Matching
STRATEGIC
AGGRESSMNESS
RESPONSIVENESS
OF GENERAL
MANAGEMENT
CAPABlLllY
6. Matching
in consulting
practice.
No Change
mental Change
Supressess
Change
Adapts to
Change
Fast Incremental Change
Seeks
Familiar
Change
for Strategic
Success
15
DISCONTINUOUS
Discontinuous
Discontinuous
Predictable Change Unpredictable Change‘
Seeks Related
Change
Seeks Novel
Change
to turbulence
EXPANDING
Slow Incremental Change
CHANGING
Fast Incremental Change
DlSCONTlNUOUS
Discontinuous
Predictable Change
SUPRISEFUL
Discontinuous
Unpredictable Change
STABLE
Stabe based
on Precedents
REACTIVE
Incremental
Change Based
on Experience
ANTlClPATORY
Incremental
Change Based on
Extrapolation
ENTREPRENEURAL
Discontinuous New
Strategies Based on
Observable
Opportunities
CREATIVE
Discontinuous
Novel Strategies
Based on
Creativity
STABILITY
SEEKING
Rejects
Change
EFFICIENCY
DRIVEN
Adapts to
Change
MARKET
DRIVEN
Seeks Familiar
Change
ENVIRONMENT
DRIVEN
Seeks Related
Change
ENVIRONMENT
CREATING
Seeks Novel
Change
REPETITIVE
No Change
aggressiveness
and responsiveness
and used it in consulting
On all of these occasions
the formula
received a
favourable
reception.
However,
such credibility test
was also passed by most of the other success
formulas described in Figure 1, and later turned out
to be valid in some cases and invalid in others. Thus,
the ‘favourable
reception’
credibility
test does not
guarantee that any of the formulas will optimize the
profitability
of firms which use it.
With this in mind, during the period from 1984 to
1992, the authors of this paper conducted a series of
empirical
tests of the CSSF”
in The
Strategic
Management
Doctoral
Program
at the U.S. International University
in San Diego, California.
These
tests are summarized
below.“‘”
‘CSSF=the
A Formula
CHANGING
EXPANDING
Slow Incre-
turbulence,
intruments,
Environments:
REPEllTlVE
responsiveness
ENVIRONMENTAL
TURBULENCE
Figure
in Turbulent
contingent strategic success formula.
Figures 3, 4 and 5 were expanded into a detailed
questionnaire
expressed
in managerial
language.
The questionnaire
was administered
in nine different settings to senior managers
of enterprises
in
seven different types of firms and five countries. A
total of 420 firms was studied. The list of settings is
shown in Figure 7.
Managers
used the questionnaire
to diagnose the
average environmental
?turbulence, strategic aggressiveness, and responsiveness
of general management
capability over the 5-year period immediately
prior
to administration
of the questionnaire.
In addition
to responding
to questionnaires,
each firm also
supplied data on their average financial performance.
As the next step, the alignment of the firm’s strategy
and capability
with the environmental
turbulence
16
Long
Range
Planning
Vol.
October
26
1993
Figure 8 illustrates the application of the gap concept
to the measurement
of alignment.
THE STARTEGIC SUCCESS FORMULA HAS
BEEN STATlSTlCALLY PROVED IN THE
FOLLOWlNG SETTINGS
(A TOTAL OF 420 FIRMS):
Conclusions
from the Research*
(1) There
is no single success formula which can
guarantee optimum
profitability
to all firms.
United States (Total 210)
l Manufacturing
Firms (43)
l Retail and Service Firms tl6)
l Federal Service Agency
(69)
l Regional Banks in San Diego (16)
l Major U.S. Banks (28)
l Savings & Loan Banks (39)
(2) Instead
formula
level.
Strategic
Success
Formula
provides
a
‘conceptual
umbrella’
which identifies the environmental
turbulence
levels at which success
prescriptions
found in management
literature
become
valid. Figure 9 demonstrates
this by
matching
names of distinguished
management
scientists who offered
(apparently
contradictory) success formulas with turbulence
levels at
which the formulas become valid.
Algeria (Total (34)
l State-Owned
Enterprises
Ethiopia (Total 54)
l Statc&vvnad
Figure
7. Research
Manufacturing Firms
Manufacturing Firms
settings
was computed
and compared
performance
of the firm.
with
the
financial
The alignment
of environmental
turbulence
and a
firm’s response was measured by the respective gaps
between
the level of turbulence
and the level of
strategic aggressiveness
on the one hand, and general
management
responsiveness
level on the other hand.
For technical
details of the research the reader is referred to Empirical
Proof of A Paradigmic
Theory of Success Behaviors
in Environment
Serving Organizations,
Ansoff, Sullivan eta/., international Review of
Strategic Management, Vol. 4 (II. E.. Hussey, ed), John Wiley and
Sons, 1993.
CSSF
deals only with
(4) As its name implies,
strategic
behaviour
of the firm.
Once
the
strategic behaviour
(which generates
a firm’s
pro@ potential
in the form of new products,
markets,
and technologies
and competitive
strategies)
is completed,
the firm’s operating
bchaviour
must also be optimized
before the
firm can realize optimum
profitability.
The
results of the research on CSSF show that firms
which succeed strategically
tend to be successful
operationally.
Consequences
1990s
*For Research
,{
p
RESPONSIVENESS OF
GENERAL MANGEMENT
CAPABILITY
the gap concept
Findings,
see Appendix
.#r Aggresive-
’
8. Using
for Managing
to measure
alignment
in the
According
to CSSF, firms which aspire to succeed
during shifts in turbulence
must anticipate
and
respond to such shifts.
AGGRESIVENESS
Figure
is a different contingent
success
each environmental
turbulence
(3) The
United Arab Emirates (Total 25)
l Western
Banks
Indonesia tTotal(97)
PrivatelyOwned
there
for
,J? ness Gap
2’
5:
;;c
Capability
Gap
1
%
j,
2
$
1.
Optimizing
Profitability
in Turbulent
Environments:
A Formula for Strategic Success
17
Ansoff &
McDonnell
(19901
Henry Mintzberg
(1990)
Ansoff 0970)
Cyert & March
(1963)
Peters &Waterman
(1982)
Ansoff, Declerk,
Hays
(1974)
Brian Quinn
tl98Ot
Ansoff
(3966)
Michael Porter
(19801
Simon & March
(1958)
Hemy Mintzberg*
11990)
* Applies in Technology
Driven Environments
I
I
J
3
4
5
A.P. Chandler
(1962)
Cohen, March &
Olsen
(1972)
Lindblom
(1959)
1
2
ENVIRONMENTAL TURBULENCE LEVEL
Figure 9. ‘Umbrella’
A mangement
nature of the contingent
system, derived from CSSF,
success formula
application
diagnosis.
called
Strategic
Mangement
provides
practical
management
tools which assure that a firm’s profitability
will be
optimized
in thefuture.
These procedures are briefly
described below. (For a detailed description
Strategic Management see ref. 6).
(1) The first step is strategic diagnosis,
used at the beginning of a jirm’s
cycle. The diagnosis identifies the gaps between a
firm’s present strategic aggressiveness and
general management capability and the aggressiveness/capability which will be needed for
success in the future (see ref. 16). Figure 10,
which is a modification of Figure 9 , shows the
If both gaps are less than one, the firm is
strategically ready for the future. (Although
some improvements may be needed).
(3)
If the general management capability gap is
greater than one, a discontinuous transformation of the general management capability must
be made.
Figure 11 shows optimum profiles of general
management
capability at different turbulence
levels. As the Figure shows, a gap of one requires a
FUTURE ENJ\IIRQNMENTAL
TURBWLENCE
ENVIRONMENtAL
TURBULENCE
STf?ATEGIC
AGGRESSIVENESS
RESPONSIVENESS OF
GENERAL MANGEMENT
CAPABIUTY
Figure 10. Strategic diagnosis
’
2
to strategic
(4
of
which should be
annual planning
of gap measurement
3
4
6
Long
Range
Planning
KEY MANAGER(S)
I I
I I
26
October
Custodian
CULTURE
REWARDS
Vol.
Stabitty
Seeking
I
FOR
/ Longetivity
PROBLEM SOLVING
KEY
MANAGEMENT
SYSTEM
Growth Leader
Entrepreneur
Efficiency
Seeking
Growth
Seeking
Opportunity
Seeking
Profitability
Future Profti
Potential
Creativity
Opportunity
Finding
Opportunity
Creating
Entrepreneurial
Strategic Planning
Strong Signal
Issue
Management
Entrepreneurial
Stmtegic Planning
Weak Signal
Issue
Management
Suprise
Management
1 Min~~tion
Optimizing
Diagnostic
Policies
Procedures
l
l
l
Controller
I
Change
Control
l
1993
Flnencial
Control
Budgeting
l
Extrapolative
Strategic
Planning
Creator
I
I
Opportunity
Creating
I
I
I
l
l
l
l
l
l
l
KEY DATA BASE
I
I
Figure
Precedents
11. Optimum
general
Past
Performance
Such discontinuous
izational resistance
management
transformations
to change.
Weak Signals
I
I
discontinuous
transformation
of key
mindset, organizational
culture, etc.
Vision of the
Future
Extrapolation of
Past Performance
capability
managers’
trigger
organ-
the general management
capability
(4) Therefore,
transformation
process must include anticipation, diagnosis, reduction
and control of resistance to change (see part 6 of ref. 6).
gap is greater than
(5) If the strategic aggressiveness
one, the competitive
strategy of the firm must
be transformed.6,‘7
11 shows,
if the expected fittrre
(6) As Figure
environmental
turbulence level is 4 or 5, the _firm
must install three new key management
systems:
entrepreneurial
strategic planning,
issue management, and at level 5, surprise management.
All three of these systems have been developed
recently
and are not yet widely used. Figure 12
describes the key differences between entrepreneurial strategic
planning
and extrapolative
strategic
planning (which is widely used in current practice).
(For a description
of the new systems see ref. 6.)
The Strategic Management
System must be used in
turbulent environments.
It consists of the following
components :
1
I
profiles
In environments
with frequent
Turbulence Levels:
(1)
Strategic
shifts in Environmental
Diagnosis
(2) Transformation
ability
of General
(3) Transformation
of Strategy
(4) Anticipation,
of resistance
diagnosis,
to change.
environments
at Turbulence
In
Management
reduction
Levels
Cap-
and control
4 and 5:
(1) Entrepreneurial Strategic Planning
(2) Real Time Strategic Response (Issue
Manage-
ment)
(3)
Surprise
(4)
Strategic
Management
Control
Figure 13 shows a flow
Management
System.
diagram
of The
Strategic
Summary
This paper presented a research-validated
Contingent Strategic Success Formula which specifies the
conditions
under which a firm’s profitability
is
optimized.
Optimizing
I
I
Profitability
1. Turbulence Level
in Turbulent
1-3
I
2. Assumption About Future
Environment
A Formula for Strategic Success
4-5
I
Extrapolation of the Past
Discontinuous From the Past
Strategy
Strategic Posture
(Strategy + Capability +
Strategic Investment)
Historical Success Which
Matches ESO’s Strengths
+
Creatively Visualized Success
Which Will Optimize ESO’s l
Performance
Familiar
Unfamiliar
6. Organizational Renewal
Incremental
Discontinuous
7. Anticipation of Suprises
None
Active Anticipation
3. Planning of:
4. Planning Method
5. Type of Risk
I
Environments:
8. Control
I
I
Periodic/Operating
I
I
Real Time/Strategic
I
* ES0 = Environmental Serving Organfsattans
Figure 12. Comparison
of extrapolative
Figure 13. Strategic management
system
and entrepreneurial
strategic planning
19
I
I
I
20
Long
Range
Planning
Vol.
October
26
1993
PERFORMANCE OF 59 U.S. FIRMS
VS STRATEGIC GAP
ROI of Company / ROI of Industry
Small Gap e 1
DISSERTATION
PERFORMANCE OF 40 SAVINGS
AND LOAN ASSOCIATIONS
VS MANAGER CULTURE PROFILE GAP
Financial
Performance
Small Gap < 1
Large Gap > 1
PEIN WANG 1991
Figure 14. Strategic effectiveness
vs performance
loan associations,
Indonesian firms
1986
PERFORMANCE OF 54 INDONESIAN
VS STRATEGIC GAP
Index
DISSERTATION
Large Gap > 1
PETER HATZIANTONIOU
ROI & ROS of Company
Small Gap c 1
DISSERTATION
U.S.
manufacturing,
FIRMS
/ ROI & ROS of Industry
Large Gap > 1
SETIADI DJOHAR 1991
wholesale,
retail firms,
savings
and
Optimizing
Figure 15. Strategic
Emirates banks
Profitability
effectiveness
in Turbulent
Environments:
vs performance
San Diego
A Formula
banks,
major
for Strategic
U.S.
banks,
Success
United
Arab
21
22
Long Range Planning Vol. 26
October
1993
Figure 16. Strategic effectiveness vs performance Ethiopian state owned enterprises, Algerian state owned
enterprises, U.S. Federal public works organizations
Optimizing
Profitability
in Turbulent
Environments:
These conditions consist of five matching levels of
environmental
turbulence,
strategic aggressiveness
and the responsiveness
of general management
capability.
A Formula
for Strategic
Success
23
(11) Alfred Olanrewaju
Lewis, Strategic Posture and Financial
Performance of the Banking Industry in California: A Strategic
Management Study. Unpublished doctoral dissertation, School
of Business and Management, United States International
University (1989).
(12) Abainesh Mitiku, The Relationship of General Management
Capability with Performance in State-Owned Industrial Enterprises in Ethiopia A Strategic Approach. Unpublished doctoral
dissertation, School of Business and Management, United
States International University (1991).
A systematic management
process derived from the
Success Formula-the
Strategic Management
System-was
briefly described.
(13)
Tamer Tamer Salameh, Analysis and Financial Performance of
the Banking Industry in United Arab Emirates: A Strategic
Management Study. Unpublished doctoral dissertation, School
of Business and Management, United States International
University (1987).
(14)
Patrick A. Sullivan, The Relationship Between Proportion of
Income Derived From Subside and Strategic Performance of a
Federal Agency Under the Commercial Activities Program.
Unpublished doctoral dissertation, School of Business and
Management, United States International University (1987).
(15)
Pien Wang, Determinants of Perceptions of Environmental
Turbulence and Strategic Responses of Savings and Loan Top
Managers. Unpublished doctoral dissertation, School of Business and Management, United States International University
(1991).
(16)
H. lgor Ansoff, ANSPLAN-CD.
Computer Based Interactive
Program for Strategic Diagnosis (1992). (A proprietary product.)
(17)
H. lgor Ansoff, ANSPLAN-A
Computer Based Interactive
Program for Competitive Strategy Analysis (1990) (A proprietary product.)
References
(1) H. lgor Ansoff, Management Expectations of Future Success
Behaviors, unpublished results (1992).
(2)
(3)
H. lgor Ansoff, Corporate Strategy, McGraw Hill (1965).
H. lgor Ansoff, Roger Declerk, and Robert Hays, From Strategic
to Strategic
Management,
John Wiley and Sons,
London (1976)
Planning
(4)
H. lgor Ansoff, Strategic
don (1979).
(5)
H. lgor Ansoff, Implanting
London (1984).
(6)
Management,
Strategic
Macmillan Press, Lon-
Management,
Prentice Hall,
H. lgor Ansoff and Edward McDonnell, Implanting
Prentice Hall, London (1990).
Strategic
Management,
(7)
Hassane Chabane, Restructuring and Performance in Algerian
State-Owned
Enterprises: A Strategic Management Study.
Unpublished doctoral dissertation, School of Business and
Management, United States International University (1987).
(8)
Setiadi Djohar, The Relationships Between Strategic Effectiveness, Competitive Efficiency and Performance in Indonesian
Firms. Unpublished doctoral dissertation, School of Business
and Management,
United States International University
(1991).
(9)
Peter Hatziantoniou, The Relationship of Environmental Turbulence, Corporate Strategic Profile, and Company Performance.
Unpublished doctoral dissertation, School of Business and
Management, United States International University (1986).
(19)
Reuben Mietamuno Jaja, Technology and Banking: The Implications of Technological Change on the Financial Performance
of Commercial Banks. Unpublished doctoral dissertation,
School of Business and Management, United States International University (1989).
Appendix
1. Research
The contingent
strategic
success
validated in all nine projects.
Findings
hypothesis
was
strongly
The probability
that the results were obtained by chance was
very small. (p =0.04 to p <O.OOl). The impact of misalignment on financial performance
is shown in Figures 14, 15 and
16 in which the gap is the average of the strategy and capability
gaps. As the Figures show, with the exception
of Algerian
firms, performance
of firms whose average gap was greater
than one was 25 per cent to 100 per cent lower than of the
firms with gap less than one.