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Conformity or divergence in describing the business concept and profitability
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Business Administration and Industrial Engineering.
1993 (English)In: Scandinavian Journal of Management, ISSN 0956-5221, E-ISSN 1873-3387, Vol. 9, no 4, p. 265-282Article in journal (Refereed) Published
Abstract [en]

The relationship between conformity or divergence in the way CEOs and chief financial officers describe the business concept, and profitability, was studied in 20 firms in one industry. Measures were obtained for firm size, profitability, degree of conformity, organizational stability, product development and the CEO's influence on strategic decisions. Controlling for the effect of size, the relationship was analysed in stepwise multiple regression analyses. Conformity was positively correlated to profitability in stable organizations, and (weakly) to divergence in unstable ones. These findings are consistent with those reported in studies of top management team consensus and performance, which suggest that environmental turbulence has a moderating effect on the relationship. It is concluded that environmental contingency factors affect the conformity-profitability relationship by way of organizational processes. Consequently, differences in organizational stability should be taken into account in studying the impact of environmental conditions on this relationship.

Place, publisher, year, edition, pages
1993. Vol. 9, no 4, p. 265-282
National Category
Business Administration
Research subject
Accounting and Control
Identifiers
URN: urn:nbn:se:ltu:diva-11292DOI: 10.1016/0956-5221(93)90024-MScopus ID: 2-s2.0-34249007555Local ID: a3a4b010-bffa-11db-834c-000ea68e967bOAI: oai:DiVA.org:ltu-11292DiVA, id: diva2:984242
Note
Godkänd; 1993; 20070219 (evan)Available from: 2016-09-29 Created: 2016-09-29 Last updated: 2018-07-10Bibliographically approved

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Häckner, Einar

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