Transformation of Strategic Types: An Examination of The Internal Antecedents to Organizational Change

Abstract

A change in the strategic direction of an organization is usually regarded as a deliberate effort to impact firm performance. Yet empirical examinations of the drivers of organizational transformations have been inconclusive. In this study of banks, results indicate that financial performance is inversely related to a transformation of strategic type while changes in the dominant coalition are significant predictors of subsequent change in the firm's strategic type. It appears that a firm's ability to change its strategic focus is highly dependent upon it changing the membership of its Board of Directors, CEO, and its top management team.