The Fit-Concept in Strategic Management – an Inappropriate Idea for Companies in the 21st Century?

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Executive Summary The aim of this paper is confronted with the question of how the fit concept in strategic management is an appropriate idea or not for companies in the 21st century. After a short introduction about strategy which is defined by Michael E. Porter (1980), we will describe some basic concepts. Cited by Porter (1985, 1996) and Thomson/Strickland (1998), we find out that operational effectiveness is a helpful tool, but not enough for gaining competitive advantage. Strategies must be developed and it must match the organization in order to become effective. This is a task which is often fulfilled by the management. Then we will go deeper into the concept of fit. Some additional discussions of different perspectives…show more content…
Finally we are going to discuss the effect of the freedom of information- and capital movement. 2 Basic Concepts As described above, Porter (1996) claims that operational effectiveness is not sufficient to gain a competitive advantage. Creating value for buyers that exceed the costs of doing so is the goal of any generic strategy. The ideal is to find a strategy that competitors are frozen from reacting due to their present circumstances . A unique strategy is needed to prevent rivals from copying the operational effectiveness of a company. Strategic fit creates competitive advantage by lowering activities cost because of the way the activities are performed, or increase the activity 's values to customers by complementary activities . In order for a strategy to become effective it is required that the strategy matches the organization. The importance of matching organizations design and structure to the particular needs of strategy was first brought forward to the forefront in a landmark study of 70 large corporations conducted by Professor Alfred Chandler . His research revealed that changes in an organization 's strategy bring about new organizational problems which, in turn, require a new or refashioned structure for the new strategy to be successfully implemented. He found that structure tends to follow the growth strategy of the firm – but often not until inefficiency and internal operating problems

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