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1. Introduction
The strategy of an organisation describes the way it will pursue its goals given the threats and opportunities in the environment and its resources and capabilities ([74] Rue and Holland, 1989). Corporate-level strategy relates to the product/market choice(s) of a firm and business-level strategy defines how it will deploy its resources in a given product/market area vis-à-vis its competitors ([24] Hatten et al. , 1978). Business-level strategy is a powerful predictor of other organisational phenomena and perhaps the most useful stream of research for practitioners is the empirical examination of its relationship with organisational performance ([19] Hambrick, 1980). An effective strategy will provide sustainable competitive advantage to an organisation resulting in superior performance ([58] Oosthuizen, 1997). However this can be achieved only if the strategy matches properly with the organisation's external environment and internal conditions ([85] Thompson and Strickland, 1996).
Strategic management literature suggests that a successful firm's strategy and structure must be favourably aligned with its external environment (e.g. [11] Dess and Keats, 1987). The relationships between business-level strategy and environment have been widely discussed in the extant literature (e.g. [22] Hambrick, 1983b; [36] Kim and Lim, 1988; [51] Miller, 1988). Organisations face significant constraints and contingencies from their external environments and their competitiveness depends on their ability to monitor the environments and adapt their strategies accordingly ([4] Boyd and Fulk, 1996). Many authors have argued that a firm's strategy must be closely aligned with its structure (e.g. [86] Van de Ven and Drazin, 1985; [31] Jennings et al. , 2003). The suitability of strategies and structures largely depends upon the match between strategy and structure ([9] Chandler, 1962; [77] Rumelt, 1974; [48] Miles and Snow, 1978; [54] Miller and Friesen, 1984). According to [42] Lenz (1980) the combination of environment, strategy, and organizational structure in high-performance firms differed significantly from that of low performance firms. A substantial number of empirical studies have examined the relationship between business-level strategy and performance (e.g. [59] Parker and Helms, 1992; [27] Kling and Smith, 1995; [1] Andrews et al. , 2006). However, not many of them have examined the impact of external environment and organisational structure in this relationship. The matching of organisational strategies to the internal structure of the organisation and its external...