| Organizational configurations are groupings of firms that are connected by a common theme or profile (Miller & Mintzberg, 1984; Miller, 1996). These themes are found within or across different categories of organizations and have led to debates as to their specific relationship to organizational performance. While Ketchen, et al. (1997) demonstrate that the configuration-performance relationship does exist, previous studies on configurations have been criticized (Barney & Hoskisson, 1990). In addition to other criticisms, configuration research typically fails to account for both strategic and structural elements of organizations (Miller, 1996) and often lacks acceptable statistical power (Ferguson & Ketchen, 1999). Therefore, the actual relationship between organizational configurations and performance may still not be adequately shown. This study tests this relationship by following Miller's (1996) and Miller and Chen's (1996) argument for researching configuration properties by placing specific focus on competitive activities and the complementary structural elements involved. In addition, equifinality and strategy-structure fit arguments are theoretically expanded upon and empirically tested as components of organizational configurations.;Specifically, this study examines explicit configurations that place emphasis on two strategy dimensions based on Porter's (1985) generic strategies---level of differentiation and target scope---and on two structure dimensions---expansiveness and level of linkages. Specific hypotheses are developed and multiple empirical tests follow the conceptual arguments made concerning configurations, strategy and structure relationships, and fit.;Results support the existence and importance of strategy and structure configurations in relation to financial performance. Results also demonstrate the statistical significance of the individual strategy and structure dimensions in relation to financial performance. However, the impact of internal fit, between each of these dimensions, is generally not supported. Conclusions drawn from these results suggest that within a specified segment of an industry, internal fit between strategy and structure is less important to overall financial performance than the individual external dimensions themselves. Further, equifinality between configurational forms seems to be non-existent in such controlled contexts. In summary, perhaps only one or a very few organizational configurations are successful in any given industrial environment---failure to take that strategy or form will result in diminished financial returns. |
