Strategic dynamics and corporate performance: A longitudinal assessment

Abstract

The analysis of the relationship between strategic change and corporate performance has already been a topic of research. An up-to-date discussion of the respective results can be found in Parnell (1998, pp. 20–24). Looking at the research results more closely, we notice that performance — which is usually measured in terms of RoA, RoI, or the development of turnover — is modeled both as a dependent as well as an independent variable, depending on the aim of the research. One question addressed is how the undertaking of a strategic change can be explained by the development of a firm’s economic situation. In such a case, corporate performance is considered to be an independent variable. Another issue being analyzed is how the economic situation of a business is influenced by a strategic change. In this case, corporate performance is considered to be a dependent variable.