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Title: An empirical study of medium to large-sized companies in Singapore : environment, competency, strategy types and performance
Author: Tin, Tan Jok
ISNI:       0000 0001 3533 6354
Awarding Body: Brunel University
Current Institution: Henley Business School
Date of Award: 2003
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Abstract:
This empirical research, done in Singapore, contributes to knowledge in the area of business strategy. There is currently a lack of literature concerning the strategy dynamics of successful companies in Singapore. The primary goal of this study is to develop a theoretically based, economical framework for the examination of the relationships between environment, distinctive marketing competency, strategy types and performance. In order to achieve this, prior literature examining the linkages between strategy types, the environment, competency and performance was reviewed and integrated to derive two broad theoretical propositions for the strategic approach taken by companies in aligning themselves to their environment. Broadly, the research addresses the question whether there is one best business strategy based on distinctive marketing competencies for a given competitive environment. My research intends to build on the findings of Parks, Don Morgan (1988) who, in his earlier study of companies in Texas, USA, sought to provide an understanding of the relationship between strategy, environment and performance. This study, along with Parks (1988), is based on the Miles and Snow (1978) strategic typology. Porters (1980) Five Forces framework is similarly adopted as the environment construct. In this effort to replicate and extend the study of Parks (1988) in the Singapore context, I have, however, added a new dimension using Distinctive Marketing Competency as a moderating variable. This competency variable was used by Conant et al (1990) in another study on strategic types and organizational performance in the United States. Three main strategy scholars, namely Miles and Snow (1978), and Michael Porter (1980) will influence my research work. The final survey instrument that I used for gathering data from medium to large-sized companies in Singapore was a combination of survey questionnaire of two major research pieces, based on the prior work of Parks (1988) and Conant et al (1990) and hence could be considered as reasonably well validated. In order to ensure that the questions developed for the survey would be meaningful, exhaustive yet relevant in the local Singapore context to CEOs and Senior Managers, a pilot study of 16 companies representing the four industry types in Singapore wa.s conducted over a three month period. This 'mini' pilot study revealed that 14 out of the 16 participating organizations classified their organizations as either belonging to the Prospector or Defender strategy type. Two organizations classified themselves as Analyzer, and no Reactor type organization was identified. Hence, to test the propositions for the two broad strategy types as adopted by companies in Singapore, the three constructs were operationalized in a multi- dimensional manner. Strategy was conceptualized in terms of the Miles and Snow (1978) strategic typology which delineates comprehensive and internally consistent postures of organizational behaviour encompassing their structures and processes. The environment construct was operationalized using Porter's (1980) Five Forces framework, while distinctive marketing competencies as used by Conant ef al (1990) was adopted as the competency construct. All these had been found significant in previous research. Finally, performance was operationalized using Return on Investment as the construct. The data that I used to perform the empirical test were obtained from objective primary sources. A total of 64 responses from Chief Executive. Officers and Senior .Managers of medium and large-sized companies were received out of a tot~1 of 100 companies invited to participate. The data obtained was subject to a series of statistical analyses. Factor analysis was performed to determine the hidden constructs which could characterize a strategy type. A multiple regression model was developed to explore whether there was any relationship between performance and the firm's competency factor, while cluster and dis~riminant analysis were also attempted with satisfactory results. Approximately 60 per cent of the companies surveyed were found to be of the Prospector type organizations as determined by the characteristics portrayed by these companies. In the factors in which they seemed to excel, they fit the description of the Prospector type strategy as defined by Miles and Snow (1978). As a majority of the companies in the sample are from the service sectors (Which include banking & financial services) and engineering (which includes system solution providers), it is therefore not surprising that the Prospector type strategy is predominant. For the remaining firms that have adopted a Defender type strategy, it may be due to the fact that most of these enterprises are business organizations supporting the multinational corporations (MNCs), and hence they' are reqUired to be more cost-efficient and focused. In the long run, however, these firms may evolve into adopting a more proactive strategy such as the Pros'pector types as the business environment changes. The results of this empirical study are significant for several reasons. Besides offering a replication and an extension of Parks' (1988) study in Texas, USA to a multi-industry organizational sample in a different country (Singapore). the primary contributions of my study to theory includes the testing and validation that there exists a re.lationship between distinctive marketing competencies and organizational performance, and that a strong association exists between strategy types and distinctive marketing competencies of business organizations. Another contributory finding is that the environment in which firms operate has an impact on its performance, and henct9 a firm's distinctive abilities to deal with the environment will have to be developed in consonance with its strategic posture. Besides the above, it was also found in this study that the Miles and Snow (1978) strategic typology is still valid today, perhaps in a less structured form. The compartmentalization into 4 categories as Prospector, Analyzer, Defender and Reactor may become less viable or applicable in today's highly globalize and competitive environment. Such findings first surfaced dUring the pilot study. The contribution of this empirical study to business managers is the finding that most, if not all companies in Singapore adopted strategic posture in congruence with their environments, and that both Prospectors and the Defenders type of organization could perform equally well in terms of profitability, though the Prospector type of organization tends to have more superior marketing competencies. It may also be interesting to note that companies, from .examples in Singapore, do not necessarily stay or belong permanently to a particular strategy-type over its complete operating life. Singapore Telecom, a major provider of telecommunication services in Singapore and the Asia Pacific region as well as in Europe is one of such companies. Because of deregulation and convergence of services that led to significant changes in the burgeoning telecommunications industry of Singapore, and hence undermining its domestic monopolistic position, Singapore Telecom shifted its strategic posture �·from a defender strategy type to that of a prospector and has been actively pursuing a regional growth strategy in recent years. Singapore Airlines is another example of a defender to a prospector strategy type organization. Having moved from its strong base of core businesses which enabled it to achieve profitable growth over the years, it now has a strategic shareholding also in Air New Zealand as well as a 49% stake of Virgin Atlantic. Singapore Airlines with its bold growth initiatives in recent years, apparently has its mind set on further acquisitions in the coming years to build an even larger and more successful as well as profitable group of airlines and airline related companies.
Supervisor: Not available Sponsor: Not available
Qualification Name: Doctor of Business Administration--Brunel University, 2003 Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.486825  DOI: Not available
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