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Introduction
The relationship between strategy and performance has been examined in numerous works, both theoretically and empirically. In empirical studies, the linkage between strategy and performance is typically operationalized by using various measures and explicit ideas of causality fueled by advancements in strategy research, such as Porter’s (1980) generic strategies and Miles and Snow’s (1978) idea of strategic types. This type of research offered workable frameworks for distinguishing different strategies and for evaluating the impact of such strategies on various measures of performance (Luoma, 2015). The original idea that pure strategy leads to superior performance in strategy-performance relationship is challenged by the contemporary researchers who argue that there is a shift in emphasis from the pure strategy to hybrid (a combination of viable strategies) form of competitive strategy and the evidence in favor of this shift is ever-increasing (Salavou, 2015). This shift has raised the question whether pure strategy is still superior to hybrid strategy or not?
Miles and Snow (1978) suggested that organizations adopt one of the four strategic types (prospector, defender, analyzer, or reactor) in order to attain organizational effectiveness. While this typology is examined and validated widely, there are several unresolved issues that present a gap in the extant literature. One of the issues is the existence of hybrid of several strategic orientations. But, there is a scarcity of studies, particularly in developing countries, that use hybrid forms of competitive strategies and relate these hybrid strategies to organizational performance when Miles and Snow typology is used (Claver-Cortés et al., 2012; Madanoglu et al., 2014).
The objective of this research is threefold: first, identifying the strategic orientation of the firms in terms of pure, hybrid, and reactor strategies; second, investigating whether hybrid strategies are performing better than pure strategies or vice versa; and third, test the impact of strategy, firm size, and industry on the organizational performance and to know whether strategy is the better predictor of the performance than firm size and industry? Multi-industry data of seven years (2007-2013) for 307 Pakistani joint stock companies are used for this research. SAS is used for data management and regression analysis.
The structure of the paper is as follows: first, we briefly refer to the concepts of strategy, performance, pure and hybrid...