STRATEGIC TYPES, DISTINCTIVE MARKETING COMPETENCIES AND ORGANIZATIONAL PERFORMANCE: A MULTIPLE MEASURES-BASED STUDY

Strategic Management Journal, Vol. 11, 365-383 (1990) STRATEGIC TYPES, DISTINCTIVE MARKETING COMPETENCIES AND ORGANIZATIONAL PERFORMANCE: A MULTIPLE MEASURES-BASED STUDY JEFFREY S. CONANT College of Business Administration, Texas A&M University, College Station, Texas, U.S.A. MICHAEL P. MOKWA College of Business, Arizona State University, Tempe, Arizona, U.S.A. P. RAJAN VARADARAJAN College of Business Administration, Texas A&M University, College Station, Texas, U.S.A. A new, multi-item scale for operationalizing Miles and Snow's (1978) strategic typology defenders, prospectors, analyzers, and reactors is proposed and field-tested in this paper. Relatively pure strategic types, identified as those organizations classified similarly using both the newly developed, multi-item scale and the traditionally employed paragraph approach, are used to analyze the relationship between strategic types, distinctive marketing competencies, and organizational performance. Results of analysis suggest that while the marketing competencies of prospector organizations are superior to those of analyzer, defender, and reactor organizations, all three stable archetypes perform equally well in terms of profitability and outperform reactors. The newly developed strategic types scale performs well and appears to possess significant managerial and research potential. It is theoretically anchored, easily administered, and possesses diagnostic value to both strategists and their organizations. The Miles and Snow (1978) strategic typology defenders, prospectors, analyzers, and reactors has generated a comparatively large amount of interest, investigation and support (Hambrick, 1979, 1983; McDaniel and Kolari, 1987; Meyer, 1982; Ruekert and Walker, 1987; Snow and Hambrick, 1980; Snow and Hrebiniak, 1980; Zahra, 1987). Although these studies have contributed significantly to the body of knowledge on strategic archetypes, there is nevertheless a need for further research. For instance, a review of strategy literature reveals an increasing level of interest in the operationalization and measurement of strategy constructs (Bourgeois, 1981; Flamholtz, 1979; Ginsberg, 1984; Hambrick, 1980; Montgomery, 1982; Ramanujam and Venkatraman, 1985; Snow and Hambrick, 1980; Venkatraman and Grant, 1986; Venkatraman and Ramanujam, 1986, 1987). In this context the paragraph approach to measuring Miles and Snow's strategic types employed in a number of the previously referenced studies reveals a tendency to oversimplify the multi-dimensionality of archetype constructs. Typically, only two or three of the strategic dimensions explicated in Miles and Snow's adaptive cycle model are considered and evaluated in this approach. Furthermore, most previous research has tended to exclude the reactor type from the scope of analysis. 0143-2095/90/060365-19$09.50 1990 by John Wiley & Sons, Ltd. Received 18 January 1989 Revised 6 October 1989

366 /. 5. Conant, M. P. Mokwa and P. R. Varadarajan Against this backdrop, the purposes of this study are to: (1) enhance the operationahzation of the Miles and Snow (1978) strategic typology by proposing a multi-item scale for measuring all four strategic types; and (2) illustrate the role the proposed multi-item measure can play in identifying relatively pure archetypes, and examining the relationship between strategic types, distinctive marketing competencies, and organizational performance. The remainder of the paper is organized as follows. First, literature on the Miles and Snow strategic typology and distinctive competencies is briefly reviewed. This is followed by a discussion of the research design and methods. Next, research findings are presented and evaluated. Managerial implications and directions for future research are explored in the discussion section. AN OVERVIEW OF RELEVANT LITERATURE The Miles and Snow strategic typology Miles and Snow (1978) proposed a relatively complex strategic typology interrelating organizational strategy, structure, and process variables within a theoretical framework of co-alignment. The theoretical foundations of the Miles and Snow typology can be traced to Child's (1972) classic conceptualization of 'strategic choice.' Miles and Snow proposed that organizations develop relatively enduring patterns of strategic behavior that actively co-align the organization with its environment. They viewed the 'adaptive cycle' characterizing this process as involving three imperative strategic 'problem and solution' sets: (1) an entrepreneurial problem set centering on the definition of an organization's productmarket domain; (2) an engineering problem set focusing on the choice of technologies and processes to be used for production and distribution; and (3) an administrative problem set involving the selection, rationalization, and development of organizational structure and policy processes. Each of the three problem sets involves multiple dimensions. A comprehensive and detailed analysis of Miles and Snow's descriptions of the four strategic types defenders, prospectors, analyzers, and reactors (1978: 13-93), reveals that eleven distinctive strategic dimensions comprise the adaptive cycle. Table 1 provides a summary of the distinctive characteristics of Miles and Snow's strategic archetypes along these dimensions. Overall, archetypal prospectors devote more resources to entrepreneurial tasks, monitoring evolving trends in the marketplace, and new product development, and are led by a dominant coalition that possesses an expertise in marketing and R&D. In contrast, defender organizations focus on engineering tasks, place a high priority on improvements in efficiency, and are led by a dominant coalition composed of finance and production personnel. Analyzers, given their hybrid nature, are more complex and balanced functionally. In stable product-market domains, analyzers emphasize production and strive for improved efficiency. In more turbulent productmarkets they closely monitor key competitors and adopt only those innovations which appear to have strong market potential. Reactors respond to the challenges of the adaptive cycle in uneven and transient ways; they tend to be short-term oriented and environmentally dependent (Miles and Snow, 1978). Distinctive competencies and relative performance of strategic types Distinctive competence refers to those things that an organization does especially well in comparison to its competitors (Selznick, 1957) and has been the focus of numerous studies (Bourgeois, 1980; Day and Wensley, 1988; Hitt and Ireland, 1984, 1985, 1986). The relationship between strategic types, distinctive competencies, and organizational performance has been examined in a number of prior studies (Hambrick, 1983; McDaniel and Kolari, 1987; Miles and Snow, 1978; Smith, Guthrie, and Chen, 1986; Snow and Hrebiniak, 1980). These studies suggest that the strategic types differ in functional strategy expertise, competencies, and performance. Snow and Hrebiniak (1980) found that top managers in prospector organizations perceived marketing and marketing-related competencies to be among their four highest-rated strengths to a greater degree than the other strategy types. Hambrick (1982) found the frequency of, interest in, and hours of entrepreneurial scanning to be significantly greater in prospector organizations than in defender organizations. McDaniel and Kolari's (1987) study of the banking industry

Multi-item Scales to Measure Organizational Performance 367 Table 1. Dimensions of the Adaptive Cycle and Strategic Type Characteristics" Adaptive cycle components Dimensions Defenders Prospectors Strategic Types Analyzers Reactors'' Entrepreneurial problems and solutions Product-market domain Success posture Surveillance Growth Narrow and carefully focused Prominence in 'their' product market(s) Domain dominated and cautious/strong organizational monitoring Cautious penetration and advances in productivity Broad and continuously expanding Active initiation of change Segmented and carefully adjusted Calculated followers of change Market and Competitive environmentally' oriented and oriented/ thorough aggressive search Enacting product Assertive market penetration development and careful and product diversification market development Uneven and transient Opportunistic thrusts and coping puaiui cb Sporadic and issue dominated Hasty change Engineering problems and solutions Technological goal Technological breadth Technological buffers Cost-efficiencies Focal, core technology/ basic expertise Standardization. maintenance programs Flexibility and innovation Multiple technologies/ 'pushing the edge' Technical personnel skills/diversity Technological synergism Interrelated technologies/ 'at the edge' Incrementalism and synergism Project development and completion Shifting technological applications/ fluidity Ability to experiment and 'rig solutions' Administrative problems and solutions Dominant coalition Planning Structure Control Finance and production Inside/out... control dominated Functional/line authority Centralized and formal/ financially anchored Marketing and R&D Problem and opportunity finding/ campaign (program) perspective Product and/or market centered Market performance/ sales volumes Planning staffs Comprehensive with incremental changes Staff dominated/ matrix oriented Multiple methods/ careful risk calculations... sales contributions Trouble-shooters Crisis oriented and disjointed Tight formal authority/ loose operating design Avoid problems/ handle problems... remain solvent " Constructed by the authors based on a formative review of Miles and Snow (1978). For an overview of the adaptive cycle and the eleven underlying dimensions see pages 13-93 of Miles and Snow (1978). '' Conventionally, reactors have been presented as a 'residual' type lacking consistent response characteristics.

368 /. S. Conant, M. P. Mokwa and P. R. Varadarajan revealed that prospectors and analyzers perceived marketing research and computerized customer information systems to be a more important component of organizational strategy than did defenders. In reference to the relative thrusts along the product, price, promotion, and distribution components of the marketing mix, it has been noted that defenders lag the rest of the industry in innovative behavior, prospectors are the most innovative, and analyzers place a priority on being 'second-in' with more cost-effective or value-oriented product or service offerings (Miles and Snow, 1978). Hambrick (1983), in a study utilizing PIMS (profit impact of market strategy) data, confirmed that prospectors have a strong entrepreneurial orientation (high product R&D expenses and high marketing expenses). Meyer (1982) found that, compared to the analyzer and prospector, the scope of services provided is narrower in the defender organization. Along similar lines, McDaniel and Kolari (1987) report that prospectors and analyzers perceive new product development to be a more important component of organizational strategy than do defenders. In terms of performance. Miles and Snow (1978) proposed that any of the three more stable archetypal styles (defenders, prospectors, and analyzers) are equally likely to perform well, given that they respond to the challenges of the adaptive cycle in a consistent fashion. Moreover, they stated that 'reactors, due to their inconsistent pattern of adaptation, frequently fall into an unpleasant cycle of responding inappropriately to environmental change and uncertainty, performing poorly as a result, and then being reluctant to act aggressively in the future' (Miles and Snow, 1978: 93). Although some studies have reported conflicting findings (e.g. Hambrick, 1983), overall, a number of empirical studies have confirmed this proposition (e.g. Snow and Hrebiniak, 1980; Smith et al., 1986). Prior operationalizations of Miles and Snow's strategic types Snow and Hambrick (1980) distinguish between four broad approaches for identifying and measuring strategies: (1) self-typing; (2) objective indicators; (3) external assessment; and (4) investigator inference. As summarized in Table 2, all four of these approaches have been employed in previous operationalizations of Miles and Snow's strategic typology. A closer examination of Table 2 reveals that: (1) some studies have relied on single-item scales when operationalizing what is recognized to be a multi-dimensional construct; (2) the paragraph approach has been the most widely employed method to operationalize Miles and Snow's strategic typology; (3) recent attempts have been made to operationalize and measure Miles and Snow's strategic types using multi-item scales; and (4) although a number of researchers have advocated the use of multiple approaches to operationalize and measure key organizational constructs (Ramanujam and Venkatraman, 1985; Snow and Hambrick, 1980; Venkatraman and Grant, 1986), few studies have employed multiple approaches to operationalize and measure the Miles and Snow strategic typology. The use of single-item scales is generally viewed as defensible, when they relate to a simple unidimensional construct, and can be measured with minimal measurement error. However, such scales are of limited value when they cannot adequately capture the broader concept being measured (Nunnally, 1978). Hambrick's (1983) use of unidimensional measures to operationalize the Miles and Snow typology was perhaps necessitated by the limitations of the PIMS data base. His recognition of the limitations of a unidimensional operationalization of strategic types is evidenced in his characterization of the paragraph approach to operationalization of the Miles and Snow strategic typology as an endeavor to capture both the comprehensiveness and integrative nature of strategy, and as a move away from a unidimensional conceptualization of strategy (Hambrick, 1980: 572). The paragraph approach requires that respondents read short paragraph-length descriptions of each of the four strategic types, and then select that one description which best characterizes their organization. Among the merits of the paragraph approach which has been used most widely are that it can be completed quickly by respondents and that categorization decisions can be made easily by researchers. However, this approach has only limited content validity in that only two or three of the 11 strategic dimensions which are explicated in the adaptive cycle model (see Table

Multi-item Scales to Measure Organizational Performance 369 Table 2. Previous operationalizations of the Miles and Snow typology: Approaches, illustrative studies, strengths, and limitations Measurement approach(es)" Measurement description Illustrative study(ies) Strengths Limitations la. Self-typing IB. Self-typing, complemented by investigatorspecified decision rules IC. Self-typing, complemented by investigatorspecified decision rules 2. Objective indicators Respondents are asked to classify their organization as defender, prospector. analyzer, or reactor. based on paragraph descriptions of the four strategic types Multi-item, close-ended scale: The overall degrees to which a firm's strategy conformed to the defender, prospector. analyzer, and reactor types are inferred based on multi-item (Likerttype) scales developed to measure each of the four strategy types Multi-item close-ended scale: The scale is composed of Likert-type scale items relating to the entrepreneurial and engineering components of the adaptive cycle. Cluster analysis is used to classify firms into four strategic groups. The clusters are then ordinally arrayed based on summated score of 11 scale items. The cluster with highest summed score is defined as prospector. second highest as analyzer, third highest as defender, and lowest as reactor Percentage of sales derived from new products. Interval measure transformed into ordinal measure Snow and Hrebiniak (1980) McDaniel and Kolari (1987) Segev (1987a) Zahra (1987) Segev (1987b) Smith et al. (1986) Hambrick (1983) Easy to complete and interpret All four types can be captured Useful with large samples Multi-item scale All four types captured Useful with large samples Multi-item scale All four types captured Conceptually anchored Useful with large samples Easy to interpret Single-item scale Over-simplification of archetypes paragraph descriptions of the strategic archetypes capture only two or three of the 11 adaptive cycle dimension constructs Reactor-descripton bias Simplification of archetype constructs scale items do not capture all 11 of the adaptive cycle dimensions Scale inconsistencies number of items varies by strategic type (nine for defenders, eight for prospectors, seven for analyzers, four for reactors) Interpretation challenges Strategic typing based on responses to scale items relating to the entrepreneurial and engineering components only Unidimensional conceptualization of a multi-dimensional construct Only prospectors and defenders can be identified using the proposed decision rule Continued.

370 /. 5. Conant, M. P. Mokwa and P. R. Varadarajan Table 2. Continued 3. 4. 5. External assessment Investigator inference Investigator inference, tempered by external assessment, and objective indicators Expert panel assessment and typing Investigator inference based on interviews with company executives Interviews with company executives and industry experts, and review of annual reports. government documents. and press releases Meyer (1982) Ruekert and Walker (1987) Miles and Cameron (1982) Impartial assessments All four types capable of being captured Potentially useful with large samples Somewhat objective All four types capable of being captured All four types captured In-depth analysis Multiple measurement approaches Time consuming Experts must be identified and their involvement secured A process by which classification decisions will be made must be developed Time-consuming Usefulness restricted to small samples Expensive and timeconsuming Usefulness restricted to small samples 6. Objective indicators. external assessment, and investigator inference Quantifiable published data from annual industry source books on product/market additions, assessments by expert panels, and investigator inference based on interviews with CEOs Hambrick (1981) Hambrick (1982) Use of multiple measurement approaches facilitates identification of 'relatively pure' strategic types Unidimensionality of objective indicator Time-consuming Usefulness restricted to small samples Sample attrition final sample likely to be substantially smaller compared to the initial cohort Only prospectors and defenders can be captured using the proposed decision rules " See Snow and Hambrick (1980) for a detailed discussion on the strengths and limitations of alternative approaches to measuring business-level strategy: (1) self-typing; (2) objective indicators; (3) external assessment; and (4) investigator inference. 1) are considered and evaluated in each of the paragraph descriptions. More recently, attempts have been made to operationalize and measure Miles and Snow's strategic types using multi-item scales. Smith et al. (1986) operationalized and measured strategic types using eleven close-ended (Likert-type) questions. Segev (1987b) developed a multi-item measurement approach employing 28 Likert-type questions. Although neither of these multi-item approaches comprehensively operationalizes all three components of the adaptive cycle model in a consistent manner, both represent important advancements. RESEARCH DESIGN AND METHODOLOGY The study reported is cross-sectional and was conducted in a field setting in a single industry. Subjective measures of strategic orientation, marketing competencies, and organizational performance were collected from single informants completing self-reports. The merits and potential shortcomings of these basic design decisions have been discussed and debated for research involving managerial respondents (Dess and Robinson, 1984; Harrigan, 1983; Huber and Power, 1985; Philips, 1981; Snow and Hambrick, 1980).

Multi-item Scales to Measure Organizational Performance 371 Although the generalizability of findings of single-industry-based studies is limited to other industries sharing similar structural characteristics, a desirable feature of such studies is that they provide a greater degree of control over market and environmental peculiarities. Similarly, while for measuring organizational-level constructs the use of the multiple informant approach may be generally preferable, in the face of time and resource constraints the single informant approach allows for a larger number of organizations to be surveyed. Industry setting The American Health Maintenance Organization (HMO) industry was selected as the domain of this study. HMOs are hybrid medical/insurance organizations that provide comprehensive physician and health services to voluntarily enrolled populations for set monthly premiums. The HMO industry is relatively young, most probably in the early growth stage of its industry life cycle. For example, whereas only 9.7 million Americans belonged to an HMO in 1980, that number grew to approximately 29 million in 1987. This number is forecast to increase to 100 million by 1996 (Meyer, 1988; Work and Kyle, 1986). Several distinct types of HMOs exist. Staff model HMOs primarily serve patients with salaried physicians. Independent practice association (IPA) HMOs use independent physicians who practice by themselves or in single-specialty groups. Group model HMOs (which are also sometimes known as network model HMOs) contract with independent, multi-specialty physician group practices. IP A and group model HMOs generally provide enrollees with the greatest flexibility (e.g. choice of physicians). Thus, it is not surprising that as of 1987 over 90 percent of all HMOs were either IPA or group/ network model HMOs (Marion Managed Care Digest/HMO Edition, 1988). Paralleling the increase in the number and proportion of IPA and group model HMOs, there has been a trend toward corporate ownership and management. As of 1987, over one-half of all HMOs were owned and/or managed by corporations, and almost two-thirds were 'for-profit' companies (Marion Managed Care Digest/HMO Edition, 1988). Additionally, even those HMOs that operate on a 'not-for-profit' basis tend to keep track of their profitability and net worth levels so as to meet the reporting requirements of the regulatory agencies that monitor the industry. In summary, most HMOs are managed as businesses. Respondent selection and screening A systematically developed survey research instrument (discussed later) was developed and mailed to marketing directors in the 406 HMOs which existed in the United States at the time this study was undertaken. Although the CEO is generally viewed as the single individual in an organization who is most qualified to provide valid responses to questions pertaining to organizationlevel constructs, marketing directors were used in this study as key informants for a number of reasons. First, pretests indicated that marketing directors often play an active role both in businesslevel and marketing strategy formulation. Second, the CEOs of HMOs (sometimes called administrative directors) were found to have diverse backgrounds (e.g. medicine, finance, accounting) and varied responsibilities (e.g. medical staff supervision, general management). Hence, HMO marketing directors were viewed as distinctively qualified to be used as key informants for this study focusing both on business-level and marketing strategy issues.' Survey procedures A variety of approaches commony used in survey research to enhance response rate and response quality were used in this study. The overall ' Nevertheless, to ensure that marketing directors who responded to the survey possessed an adequate knowledge and awareness of the relationship between their organization and its environment, two screening questions were developed, pretested, and included in the final instrument. One question focused on the degree of confidence the respondent had toward answering questions on the nature of their organization's relationship with the environment. The second question concentrated on the level and nature of involvement which the respondents had in strategic policy-making activities. Respondents who indicated that they had little direct input into the development of organization strategy and possessed a low level of confidence in their ability to evaluate the manner in which their organization develops strategy were excluded from the study.

372 /. 5. Conant, M. P. Mokwa and P. R. Varadarajan procedure can be best described as a modified version of Dillman's (1978) 'total design method.' The measurement instrument was pretested twice. The questionnaire, while in draft form, underwent a pretest in select HMOs in two states. A second pretest of the actual instrument was conducted 1 month after the initial pretest and 2 weeks prior to project mailings. A three-wave mailing was employed. The first mailing included a cover letter, questionnaire, and postage-paid return envelope. One week later all potential respondents were sent a reminder postcard. The third mailing, sent out 2 weeks after the postcard reminder, included another cover letter, questionnaire, and postage-paid return envelope. This last mailing was sent only to those HMO marketing directors who had not responded as of the follow-up mailing date. Operationalization and measurement of strategic types In this study the paragraph approach, the most widely used of the operationalizations proposed to date, and a newly developed multi-item scale are used for operationalizing the Miles and Snow strategic typology. Snow and Hrebiniak's (1980) paragraph descriptions of the strategic archetypes were adapted for the purpose of this study. Developing a multi-item scale for measuring Miles and Snow's strategic types entailed the following key steps. First, two questions were developed for each of the 11 strategic dimensions explicated in Miles and Snow's adaptive-cycle model (see Table 1). Next, four distinct response options were developed for each question. Each of these response options characterized a specific distinctive archetypal 'adaptive stance/activity' relative to the dimension. Respondents were asked to answer each question by circling the response option which they perceived best characterized their organization. This 'self-reporting' approach has been acknowledged as an appropriate method to employ when conducting strategy research (Snow and Hambrick, 1980; Harrigan, 1983; Huber and Power, 1985), and has been frequently utilized in strategy research (Dess and Davis, 1984; Smith et al., 1986; Snow and Hrebiniak, 1980). In general, the paragraph descriptor used to operationalize classification of the reactor emits a tone that might generate a response bias, particularly in self-reporting situations. Hence, extensive care was taken to improve the conceptualization, operationalization, and measurement of the reactor archetype in this study. Specifically, a critical review of Miles and Snow's original framework, including their industry studies, was undertaken. This was supplemented with case studies of organizations that were identified as reactor types by a panel of four strategy researchers, each of whom possessed an in-depth knowledge of the Miles and Snow typology. Reactors were found to be short-term dominated, environmentally dependent, and easily directed by fluctuating market and environmental problems or opportunities. They coped on a situational basis confronting each situation as it unfolded. As such, the reactor appeared to be a relatively enduring archetype, albeit potentially 'less stable' and certainly 'inconsistent' on the surface. However, deeper examination suggested that the reactor does possess consistent differentiating characteristics it is steadfastly unassertive and varied in strategic orientation. Therefore, it was decided to operationalize the reactor archetype in terms of its short-term and unassertive orientations, its dependency on fluctuating environmental trends, and its consistently inconsistent response behavior pattern. This complex operationalization remains compatible with the original theoretical framework, but above all it facilitates more accurate measurement of the reactor archetype specifically, and the entire typology more generally. Validity checks Careful attention was directed to developing questions and response options that were meaningful to strategic managers and were relatively exclusive and exhaustive within the domain of each adaptive cycle dimension (See Table 1). The content validity of the operationalization of the Miles and Snow typology was assessed "by a panel of organization theory and strategy researchers. Questions and response-options were revised, in an iterative manner, until all judges concurred that each question and each response option accurately reflected the appropriate adaptive cycle dimension and archetypal characteristics, respectively.

Multi-item Scales to Measure Organizational Performance 373 Measurement reliability and scale purification To enhance the quality of the categorization decision and assess the reliability of the multiitem scale used to measure strategic types, a test-retest procedure was employed. The retest was sent to the first 102 respondents. The mailing included a new cover letter, slightly modified questionnaire cover, and postage-paid return envelope. One week following the initial retest mailing a reminder postcard was sent to all retest participants. Responses were received from 50 of the retest participants for an overall response rate of 49% (50/102). However, three of the surveys could not be used due to missing data. Thus, the 47 complete responses produced a usable retest response rate of 46% (47/102). The test-retest reliability coefficients for the 22 multiple-option questions ranged from 0.50 to 0.82, with a mean reliability of 0.63. While this overall mean is encouraging, it is slightly below the 0.70 level recommended by Nunnally (1978) for measurement instruments which are in their developmental stage. Based on thesefindings,and following the guidelines developed by Churchill (1979), refinements were made to purify the scale. Specifically, pairs of questions representing the 11 strategic dimensions were carefully evaluated and compared. The question possessing the highest reliability coefficient in each pair was retained in the scale used to categorize organizations. The 11 questions and their adaptive cycle dimensions are presented in the Appendix. The reliability coefficients for these 11 questions ranged from 0.56 to 0.82, with a mean reliability of 0.69. This value parallels Nunnally's 0.70 guideline. Classification procedure The nominal scale level of the data produced by the new multiple-option questions (see Appendix) required that categorization be based on a 'majority-rule' decision structure. Thus, organizations were classified as defenders, prospectors, analyzers, or reactors, depending on the archetypal response option that was selected most often. In the case of ties two separate, but related, decision rules were employed. Specifically, ties between defender, prospector, and/or analyzer response options resulted in the organization being classified as an analyzer, while any ties involving reactor response options resulted in the organization being categorized as a reactor. Both of the decision rules involving ties are theoretically anchored in Miles and Snow's original conceptualization of the four archetypes. Analyzers, according to Miles and Snow (1978), are 'hybrid' organizations and, as such, emerge possessing both defender and prospector characteristics. In contrast, reactors respond inconsistently to the challenges of the adaptive cycle, perhaps behaving like defenders when conducting environmental surveillance, prospectors when developing new products, and analyzers when controlling and evaluating their performance. These theoretically anchored decision rules also ensure that valuablefielddata are not prematurely discarded. Operationalization and measurement of distinctive marketing competencies No established scale exists to measure distinctive marketing competencies. Thus it was necessary to generate one. A 20-item competencies scale (see Table 3) was designed after conducting an extensive literature review including articles or texts which have: (1) investigated the functional activities that marketing managers perform; (2) proposed comprehensive theories of marketing management; and (3) investigated the conceptualization and measurement of strategic marketing effort. The distinctive marketing competencies scale was carefully designed to focus on functional-level marketing competencies to clearly differentiate it from the 'strategic types' scale which focused on business-level processes. Some of the scale items were developed to focus on organizational activities designed to derive and facilitate the implementation of strategies (i.e. planning process variables Robinson and Pearce, 1988), while other scale items were designed to relate to realized marketing effectiveness. Distinctive competency scales employed by other researchers (Hitt and Ireland, 1985; Snow and Hrebiniak, 1980) also reveal this dual focus. The scale required respondents to evaluate how well or poorly they perceive their organization performs specific marketing activities relative to their competitors. Consistent with the positive relationship found to exist between the number of scale points and reliability in a meta-analytic

374 J. S. Conant, M. P. Mokwa and P. R. Varadarajan Table 3. Results of analysis of variance: Strategic types and distinctive marketing competencies Distinctive marketing pomnf^tf nr*v cuiiil/ciciicy Defender (D) Strategic type Prospector (P) Analyzer (A) Reactor (R) Univariate f-value Tukey-Kramer paired comparison 1. Knowledge of customers 2 Knowledge of competitors 3 4 5 6 17. 18. 19. 20.. Knowledge of industry trends. Accuracy of profitability and revenue forecasting Awareness of organizational marketing strengths. Awareness of organizational marketing weaknesses 7. Marketing planning process 8. Allocation of marketing department resources 9. Integration of marketing activities 10. Skill to segment and target markets 11. Ability to differentiate service offerings 12. New service development process 13. Quality of service and offerings 14,. Effectiveness of pricing program(s) 15., Advertising effectiveness 16., Effectiveness of public relations Image Locations of facilities Effectiveness of cost containment Control and evaluation of marketing activities 6.00 4.87 4.40 4.87 5.00 4.93 4.13 3.87 4.47 4.53 5.33 2.93 5.87 4.87 3.87 5.13 5.60 5.80 5.80 4.33 5.69 5.46 5.57 5.09 5.80 5.71 5.37 5.51 5.51 5.34 5.43 5.46 6.03 5.20 5.40 5.17 5.74 5.74 5.09 5.37 5.66 5.52 5.48 5.34 5.55 5.00 5.10 4.83 5.18 4.93 5.14 4.45 6.03 4.55 4.86 4.62 5.52 5.22 5.66 4.66 4.50 5.50 4.25 2.75 4.25 4.75 3.25 4.00 3.50 3.50 3.25 4.00 5.75 3.25 5.00 3.75 6.00 5.00 3.50 2.75 2.2041 1.0747 4.9624** 4.4900** 3.4302* 2.5718t 6.2803*** 7.0045*** 5.4205** 3.7748* 4.4052** 15.1404*** 0.1956 2.6818t 4.0463** 1.8212 0.3055 0.9375 4.0340* 9.5212*** _ P>D; A>D P>R; A>R; D>R P>R P>A P>R; P>D; A>R; A>D P>D; A>D; P>R P>R; P>D; A>R P>R P>R; A>R; D>R P>D; A>D; P>A P>R P>D; A>D A>R; D>R P>R; A>R; P>A; P>D; D>R tp < 0.10; "p < 0.05; **p < 0.01; ***p <0.001. improvement over the three-point distinctive competence scale employed by Snow and Hrebi- niak (1980). The content validity of the operation- alization of the distinctive marketing competen- Study by Churchill and Peter (1984), a sevenpoint scale with values ranging from 'l=much worse' to '7=Much better' was employed. In this respect the proposed scale constitutes an

Multi-item Scales to Measure Organizational Performance 375 cies scale was assessed using a procedure similar to the one employed for assessing the validity of the multi-item strategic types scale. Operationalization and measurement of organizational performance Organizational performance was measured using a subjective self-report instrument made up of two scale items. The first scale item asked respondents to evaluate their organization's general profitability relative to their competitors on a seven-point Likert-type scale. The second scale item asked respondents to evaluate their organization's performance in reference to a specific measure of profitability, namely, return on investment (ROI). The response options for both scales ranged from 1 ('Much worse') to 7 ('Much better'). Responses to the two scale items were summed to arrive at an overall measure of relative organizational performance. As pointed out elsewhere, managerial assessments are generally quite consistent with objective performance measures internal to the organization (Dess and Robinson, 1984), as well as secondary published performance data external to the organization (Venkatraman and Ramanujam, 1986). RESULTS Response rate summary and nonresponse bias checks A three-wave mailing, which employed many of the techniques developed by Dillman (1978), resulted in the return of 150 usable surveys. This represents a response rate of 37 percent (150/406). Informants averaged 10.3 years of experience in marketing, and 7.3 years in health care marketing, specifically. Approximately 65 percent held the position of marketing director, with the remaining 35 percent divided between vice-president marketing, sales director, and administrative director. Their organizations averaged 6.1 years in operation and 54,000 members. To test for nonresponse bias, respondent and nonrespondent organizations were compared along three dimensions that are pervasively used in government and industry information systems. As summarized below, results of chi-square independence of classification analyses conducted to compare respondent and nonrespondent organizations along each of the three dimensions revealed no significant differences between the groups at the a = 0.05 level: 1. Oualification status (federally qualified or not federally qualified; chi-square computed = 1.18; chi-square critical = 3.84). 2. Type of HMO (group, IPA (Independent Practice Association), or staff; chi-square computed = 5.37; chi-square critical = 5.99). 3. Geographical distribution (north, south, east or west; chi-square computed = 2.69; chisquare critical = 7.81). Thus, it can be assumed that nonresponse bias was negligible and that the results may be generally extended to the HMOs that did not respond. Sample composition by strategic types The use of the paragraph approach resulted in a distribution of 30 defenders, 61 prospectors, 48 analyzers, and 9 reactors. The use of the multiitem scale resulted in a distribution of 35 defenders, 46 prospectors, 56 analyzers, and 13 reactors. The percentage of organizations classified similarly during both the initial test and follow-up retest of the first 102 respondents for the paragraph and multi-item approaches were 0.75 and 0.74, respectively. Given the developmental nature of the multi-item measurement approach, it is encouraging to find that the reliability of strategic type categorization exceeds Nunnally's (1978) guideline. The use of both measures to identify, borrowing a term used by Hambrick (1982: 162), 'relatively pure' strategic archetypes resulted in the following distribution: 14 defenders, 36 prospectors, 29 analyzers, and 4 reactors. An indicator of the degree of measure convergence, the percentage offirmsclassified similarly using the two measurement approaches for the four strategic types and the total sample, are as follows: defenders 47 percent; prospectors 59 percent; analyzers 61 percent; reactors 44 percent; total sample 56 percent. Although these figures are somewhat higher than the degree of convergence across methods reported in a previous study employing multiple measures to operationalize Miles and Snow's strategic types (Hambrick, 1981), a brief discussion on the factors underlying the degree

376 /. 5. Conant, M. P. Mokwa and P. R. Varadarajan of non-convergence (44 percent for the total sample) is in order.^ Two very plausible factors underlying the observed degree of non-convergence are: 1. Systematic differences in the content of the two measures (see Nunnally, 1978). While the paragraph measure classifies firms into strategic types based on only two or three of the 11 dimensions explicated in Miles and Snow's (1978) adaptive cycle, the multi-item measure considers all 11 dimensions. 2. Differences in the approach employed to identify strategic types (see Snow and Hambrick, 1980). While the paragraph measure classifies firms into strategy types based on self-typing, the multi-item measure relies on self-typing complemented by investigatorspecified decision rules to classify firms into strategy types. Content validity is a function of the adequacy of items included to reflect the domain of the construct (Nunnally, 1978). In this respect the multi-item measure reflecting all 11 dimensions underlying the theoretical construct is an important improvement over the paragraph measure. However, the multi-item measure is still in its formative stages, and in need of additional field testing and measure refinement. In light of the above considerations it seems prudent to restrict the analysis to firms classified similarly using the two measurement approaches. As noted by Ramanujam and Venkatraman (1985), Snow and Hambrick (1980), and Venkatraman and Grant (1986) among others, greater confidence can be based on results based on multiple measures.^ ^ The correlations between the two measures employed by Hambrick (1981) published quantified data on product/ market additions and expert panel assessments were 0.56, 0.46, and 0.41, respectively, for the samples of colleges, hospitals, and life insurance firms studied. ' The use of multiple operational measures to identify relatively pure strategic archetypes is generally preferable to exclusive reliance on a single measure. However, certain situations may warrant use of a single measurement instrument. In cases where the proposed multi-item scale alone is used for purposes of classification, it might be desirable to slightly modify the decision rule, especially if the intent is to focus on relatively pure strategic archetypes. It is recommended that only those cases for which the responses are consistent with the archetypal response option in respect of at least six scale items (out of the 11) be considered for further analysis and classified as defenders, prospectors. Strategic types and distinctive marketing competencies Theoretical considerations and empirical studies reported to date investigating the relationship between strategic types and distinctive marketing competencies (discussed in the literature review section) suggest that marketing competencies of prospector organizations will be superior to those of their competitors along a greater number of dimensions than of analyzer, defender, and reactor organizations. This relationship was reexamined using ANOVA for the sample of firms classified similarly using both the paragraph approach and the multi-item approach." In those cases where significant differences between types were detected, Tukey-Kramer pairwise comparisons were computed. Table 3 summarizes the results of this analysis. As the findings in Table 3 indicate, the ANOVA F-statistic is significant for 14 of the 20 distinctive marketing competency dimensions. An examination of the results of Tukey-Kramer pairwise comparisons suggest that Miles and Snow's strategic types can be ordinally arrayed in terms of their relative degree of marketingrelated competencies as: prospector > analyzer > defender > reactor. As summarized below, the number of marketing dimensions along which the various strategy types perceive their competencies to be significantly greater than those of other archetypes portray a clearly discernible pattern: 1. Prospector evaluations are significantly greater than those of analyzers on three dimensions, defenders on seven dimensions and reactors on nine dimensions. 2. Analyzer evaluations are significantly greater analyzers or reactors. The desirable features of this modified decision rule are: (a) it is less complex in that it does away with the decision rules for handling ties; and (b) it helps identify relatively pure archetypes. An obvious disadvantage of this decision rule is that firms that cannot be classified on the basis of at least six responses consistent with the archetypal response option are excluded from further analysis. ' While the use of multiple measures enabled us to identify relatively pure strategic archetypes, restricting analysis to the subsample of firms classified similarly using the two approaches led,to only four firms being classified as reactors. Hence the limitations of the study findings arising from the small number of firms in the reactor category should be borne in mind.

Multi-item Scales to Measure Organizational Performance 377 than those of defenders on five dimensions and reactors on six dimensions. 3. Defender evaluations are significantly greater than those of reactors on four dimensions. 4. (i) Reactor evaluations are never significantly greater than those of defenders, prospectors, or analyzers; (ii) defender evaluations are never significantly greater than those of prospectors or analyzers; and (iii) analyzer evaluations are never significantly greater than those of prospectors. The strong marketing orientation of prospector organizations is affirmed by the results of this analysis. Especially noteworthy are the evaluations of prospector managers in reference to the 'new service development process' dimension. The findings confirm one of Miles and Snow's major propositions concerning the distinctive competence of prospectors. As they state, 'the Prospector's prime capability is that of finding and exploiting new product and market opportunities' (Miles and Snow, 1978: 55). Along similar lines, Hambrick (1983) noted that the significantly higher product R&D effort and marketing effort expended by prospectors is supportive of their image as organizations that: (1) attend closely to the output task; and (2) devote more resources than defenders toward developing more new products. Although the evaluations of defender managers exceed those of prospector and analyzer managers on two dimensions, defenders are thought to possess as distinctive competencies, 'knowledge of customers,' and 'effectiveness of cost containment;' contrary to a priori expectations, the differences are not statistically significant.^ Nevertheless, evidence that defenders do possess some degree of competence in marketing-related activities is provided by the significant differences that exist between the evaluations of defender and reactor managers on four of the 20 dimensions. ' Perhaps the differences between strategic archetypes would have been pronounced, if two distinct constructs (a) knowledge of present customers/markets; and (b) knowledge of potential (new) customers/markets were used in place of a single construct. Consistent with the Miles and Snow typology it can be hypothesized that; (a) defenders will perceive their knowledge of present customers to be superior to those of other archetypes; and (b) prospectors and analyzers will perceive their knowledge of potential (new) customers to be superior to those of defenders and reactors. Specifically, the perceptions of defender managers are significantly greater than those of reactor managers on 'accuracy of profitability and revenue forecasting,' 'ability to differentiate service offerings,' 'effectiveness of cost containment,' and 'control and evaluation of marketing activities.' Strategic types and organizational performance A large number of studies examining the relationship between strategic types and performance suggest that organizational performance will be (a) equal in defender, prospector, and analyzer organizations; and (b) higher than in reactor organizations. This relationship was re-examined for the sample of firms classified similarly using the two measurement approaches. The results of ANOVA indicated that the subjective profitability evaluations of managers in defender, prospector, and analyzer organizations were not significantly different among themselves, but each was significantly greater than the evaluations of _rnanagers_ in reactor organizations (D=10.62; P=9.88; ^4=9.89; ^=5.50; F=2.92; p=0.04). Overall, these results are consistent with previous research findings. DISCUSSION AND SUGGESTIONS FOR FUTURE RESEARCH Overall, the findings of this study based on analysis of relatively pure archetypes corroborates previous findings and accentuates the different strategic orientations and distinctive marketing competencies of the organizations. The competency dimension which appeared to differentiate the defender, analyzer, and prospector strategic types the most was the 'new service development' dimension. Defenders, despite evaluating their marketing competencies as comparatively weak, evaluated their overall performance to be comparatively favorable. This is in line with the concept of equifinality which suggests that the same outcomes can be achieved in multiple ways with different resources, diverse transformation processes, and various methods or means (Hrebiniak and Joyce, 1985). The prospect of compensatory strategic strengths such as the financial and operations competencies of the defenders, appears to be a viable explanation that requires further investigation. Both marketing

378 /. S. Conant, M. P. Mokwa and P. R. Varadarajan competencies and organizational performance were evaluated as comparatively weak in reactor organizations. Clearly, reactor organizations are 'strugglers' which do not exhibit competitively strong strategic orientations, policy thrusts, or decision-making practices. As such their performance suffers. The dynamics of their survival and development requires substantial attention. As always, the generalizability of results should be carefully qualified. Given the characteristics of the HMO industry, generalizability of the findings appears most appropriate to those other health service providers whose tax status resembles HMOs physician practices, nursing homes, home health care services, and independent free-standing surgery centers. To further enhance generalizability, future research is needed in different industries, across different industry environments and longitudinally. Measurement of strategic types, distinctive competencies, and organizational performance The use of the paragraph approach, in conjunction with the multi-item scale, enabled identification of relatively pure strategic archetypes. Viewed in relation to previous studies which typically have relied on a single measurement approach and/or operationalizations with limited content validity, this methodological refinement enhances the validity of the study findings. Nevertheless, the observed degree of non-convergence between the two measures highlights the need for further research in regard to measurement and operationalization of the Miles and Snow (1978) typology. The proposed distinctive marketing competencies scale constitutes an initial attempt towards developing a comprehensive instrument for assessing a firm's marketing competencies. While it shares certain similarities with existing distinctive competency scales (Hitt and Ireland, 1985; Snow and Hrebiniak, 1980), its exclusive focus on marketing competencies allows for a much richer coverage of strategic marketing and planning. Possible biases in management judgements of distinctive competencies and other concerns voiced by Day and Wensley (1988) highlight the need for further refinements and enhancements of the proposed instrument. Performance differences between Miles and Snow's strategic types were examined in this study, from the standpoint of only one dimension of performance, namely profitability. Thus, the general need for examining differences between strategic types from the standpoint of multiple dimensions of performance is acknowledged. Changing strategic orientation The proposed measurement approach, besides being easy to administer and interpret, and costeffective with large as well as small samples, is also of diagnostic value in that it can be used to evaluate the adaptive-cycle consistency of organizations. It complements the diagnostic checklist proposed by Miles and Snow (1978: 109) by facilitating constructive assessment and analysis of an organization's strategy, dimension by dimension. Engaging in a multidimensional diagnostic analysis has the potential to provide managers and organizations with a basis for: (1) improving the degree to which they respond to the challenges of the adaptive cycle in a consistent manner; and/or (2) making, and then enacting, a commitment to change their strategic orientation (e.g. changing from a reactor to defender, prospector, or analyzer). Flamholtz (1979) discusses in depth the merits of organizational measurement systems, such as the one proposed, that can be used to measure the properties of objects, and also have the potential to influence managerial behavior and facilitate organizational change. Flamholtz contends that the primary characteristic that differentiates organizational measurement systems from those in the physical sciences is the degree to which the former are intended to be more than merely a representational process. He notes: In the context of organizations, the role of measurement is not merely a technical role of representation, it has social and psychological dimensions as well.... Accounting measurements are simultaneously intended to facilitate the functions of accountability (stewardship), performance evaluation, and motivation as well as provide information for decision making (Flamholtz, 1979: 74). In this regard the capacity and potential of reactors to: (1) change their archetypal posture, (2) incrementally improve their strategic practices, and (3) find and sustain munificent market and environmental conditions that sufficiently support them are among the questions that

Multi-item Scales to Measure Organizational Performance 379 warrant further research. While these questions cannot be resolved in light of the results of the study reported, they nevertheless merit exploration. CONCLUSION Most organizational constructs including those central to this study (i.e. strategic types, distinctive competencies, and organizational performance) are too complex to be measured effectively with single items, and/or a single measurement approach. Multi-item scales are necessary for appropriate reliability and validity assessment (Peter, 1979). Against this backdrop, the methods employed in this study can be viewed as responsive to the recent calls on strategy researchers to: (1) move away from nominal and single-item scales towards multi-item measures that provide a higher level of discriminatory power and lower levels of measurement error (Venkatraman and Grant, 1986); and (2) employ multiple approaches in the operationalization and measurement of key organizational constructs that would enhance the validity of research findings (Ramanujam and Venkatraman, 1985; Snow and Hambrick, 1980). Nevertheless, there is a need for further progress aiong both the methodological and measurement fronts. For instance, the validity of the research findings couid be further enhanced through use of multiple informants in the measurement of key organizational constructs. Similarly, the reliability of the proposed multi-item strategic types scale and distinctive competency scaie can be further enhanced by improving the clarity of instructions, reducing ambiguity in items, and by adding similar items to the scale (Peter, 1979). More than 10 years have elapsed since Miles and Snow (1978) proposed a relatively complex strategic typology interreiating organizational strategy, structure, and process variables within a theoretical framework of co-alignment. To date, the relationship between Miles and Snow's strategic types, distinctive competencies, and/or performance has been examined in reference to diverse industry settings including air transportation, automotives, banking, book publishing, electronics, food processing, health maintenance organizations, hospitals, insurance, kibbutzowned industrial enterprises in Israel, plastics, and semiconductors. Multi-industry cross-sectional samples of PIMS businesses and simulated industries have also been employed as frames of reference. Clearly a synthesis and critical review of this relatively large body of published research is now needed. In this regard a meta-analysis of empirical research on strategic types, distinctive competence, and organizational performance has the potential to provide valuable insights. ACKNOWLEDGEMENTS The authors thank Professors Richard T. Hise and A. 'Parsu' Parasuraman of Texas A&M University for their insightful comments on earlier drafts of this manuscript, and Professors Barbara W. Keats and John R. Montanari of Arizona State University for their assistance during the data collection and analysis stages of this project. REFERENCES Bourgeois, L. J., III. 'Strategy and environment: A conceptual integration'. Academy of Management Review, 5(1), January 1980, pp. 25-39. Bourgeois, L,. J., III. 'On the measurement of organizational slack'. Academy of Management Review, 6(1), January 1981, pp. 29-39. Child, J. 'Organizational structure, environment and performance the role of strategic choice'. Sociology, 6(1), January 1972, pp. 1-22. Churchill, G. A., Jr. 'A paradigm for developing better measures of marketing constructs'. Journal of Marketing Research, 16(1), February 1979, pp. 64-73. Churchill, G. A., Jr. and J. P. Peter. 'Research design effects on the reliability of rating scales: A metaanalysis'. Journal of Marketing Research, 21(4), November 1984, pp. 360-375. Day, G. S. and R. Wensley. 'Assessing advantage: A framework for diagnosing competitive superiority'. Journal of Marketing, 52(2), April 1988, pp. 1-20. Dess, G. S. and P. S. Davis. 'Porter's (1980) generic strategies as determinants of strategic group membership and organizational performance'. Academy of Management Journal, 27(3), September 1984, pp. 467-488. Dess, G. S. and R. B. Robinson, Jr. 'Measuring organizational performance in the absence of objective measures', Strategic Management Journal, 5(3), July-September 1984, pp. 265-273. Dillman, D. A. Mail and Telephone Surveys: The Total Design Method, John Wiley & Sons, New York, 1978. Flamholtz, E. G. 'Toward a psycho-technical systems paradigm of organizational measurement'. Decision Sciences, 10(1), January 1979, pp. 71-84.

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Multi-item Scales to Measure Organizational Performance 381 Venkatraman, N. and V. Ramanujam. 'Measurement of business economic performance: An examination of method convergence', Journal of Management, 13(1), Spring 1987, pp. 109-122. Work, C. P. and C. Kyle. 'Have health maintenance organizations delivered? Health, wealth and competition', U.S. News and World Report, 101(19), 10 November 1986, pp. 59-60. Zahra, S. 'Corporate strategic types, environmental perceptions, managerial philosophies, and goals: An empirical study', Akron Business and Economic Review, 18(2), Summer 1987, pp. 64-77. APPENDIX: A MULTI-ITEM SCALE FOR MEASURING STRATEGIC TYPES The 11 scale items comprising the final instrument correspond to the 11 adaptive cycle dimensions in the Miles and Snow typology. The four response options listed under each scale item characterize the distinctive 'adaptive stance activities' of the archetypes relative to the dimension of the adaptive cycle. 1. Entrepreneurial^product market domain''. In comparison to other HMOs, the services which we provide to our members are best characterized as: (a) Services which are more innovative, continually changing and broader in nature throughout the organization and marketplace. (F)'' (b) Services which are fairly stable in certain units/departments and markets while innovative in other units/departments and markets. (.4) (c) Services which are well focused, relatively stable and consistently defined throughout the organization and marketplace. (D) (d) Services which are in a state of transition, and largely based on responding to opportunities or threats from the marketplace or environment. 2. Entrepreneurial success posture. In contrast to other HMOs, my organization has an image in the marketplace as an HMO which: (a) Offers fewer, selective services which are high in quality. (D) (b) Adopts new ideas and innovations, but only after careful analysis. (A) (c) Reacts to opportunities or threats in the marketplace to maintain or enhance our position. (R) (d) Has a reputation for being innovative and creative. (P) 3. Entrepreneurial surveillance. The amount of time my HMO spends on monitoring changes and trends in the marketplace can best be described as: (a) Lengthy: We are continuously monitoring the marketplace. (P) (h) Minimal: We really don't spend much time monitoring the marketplace. (D) (c) Average: We spend a reasonable amount of time monitoring the marketplace. (A) (d) Sporadic: We sometimes spend a great deal of time and at other times spend little time monitoring the marketplace. w 4. Entrepreneurial^growth. In comparison to other HMOs, the increase or losses in demand which we have experienced are due most probably to: (a) Our practice of concentrating on more fully developing those markets which we currently serve. (D) (b) Our practice of responding to the pressures of the marketplace by taking few risks. (/?) (c) Our practice of aggressively entering into new markets with new types of service offerings and programs. (P) (d) Our practice of assertively penetrating more deeply into markets we currently serve, while adopting new services only after a very careful review of their potential. (A) 5. Engineering technological goal. One of the most important goals in this HMO, in comparison to other HMOs, is our dedication and commitment to: (a) Keep costs under control. (D) (b) Analyze our costs and revenues carefully, to keep costs under control and to selectively generate new services or enter new markets. (A) (c) Insure that the people, resources and equipment required to develop new services and new markets are available and accessible. (P)

382 /. 5. Conant, M. P. Mokwa and P. R. Varadarajan (d) Make sure that we guard against critical threats by taking whatever action is necessary. (R) 6. Engineering technological breadth. In contrast to other HMOs, the competencies (skills) which our managerial employees possess can best be characterized as: (a) Analytical: their skills enable them to both identify trends and then develop new service offerings or markets. (A) (b) Specialized: their skills are concentrated into one, or a few, specific areas. (D) (c) Broad and entrepreneurial: their skills are diverse, flexible, and enable change to be created. (P) (d) Fluid: their skills are related to the near-term demands of the marketplace. (R) 7. Engineering technological buffers. The one thing that protects my organization from other HMOs is that we: (a) Are able to carefully analyze emerging trends and adopt only those which have proven potential. (A) (b) Are able to do a limited number of things exceptionally well. (D) (c) Are able to respond to trends even though they may possess only moderate potential as they arise. (R) (d) Are able to consistently develop new services and new markets. (P) 8. Administrative dominant coalition. More so than many other HMOs, our management staff tends to concentrate on: (a) Maintaining a secure financial position through cost and quality control measures. (D) (b) Analyzing opportunities in the marketplace and selecting only those opportunities with proven potential, while protecting a secure financial position. (A) (c) Activities or business functions which most need attention given the opportunities or problems we currently confront. (R) (d) Developing new services and expanding into new markets or market segments. (P) 9. Administrative planning. In contrast to many other HMOs, my organization prepares for the future by: (a) Identifying the best possible solutions to those problems or challenges which require immediate attention. (R) (b) Identifying trends and opportunities in the marketplace which can result in the creation of service offerings or programs which are new to the HMO industry or which reach new markets. (P) (c) Identifying those problems which, if solved, will maintain and then improve our current service offerings and market position. ( )) (d) Identifying those trends in the industry which other HMOs have proven possess long-term potential while also solving problems related to our current service offerings and our current customers' needs. (A) 10. Administrative structure. In comparison to other HMOs, the structure of my organization is: (a) Functional in nature (i.e. organized by department marketing, accounting, personnel, etc.). (D) (b) Service or market oriented (i.e. departments like pediatrics or Ob/ Gyn have marketing or accounting responsibilties). (P) (c) Primarily functional (departmental) in nature; however, a service or market oriented structure does exist in newer or larger service offering areas. (A) (d) Continually changing to enable us to meet opportunities and solve problems as they arise. (R) 11. Administrative control. Unlike many other HMOs, the procedures my organization uses to evaluate our performance are best described as: (a) Decentralized and participatory encouraging many organizational members to be involved. (P) (b) Heavily oriented toward those reporting requirements which demand immediate attention. (/?) (c) Highly centralized and primarily the

Multi-item Scales to Measure Organizational Performance 383 responsibility of senior management. (D) (d) Centralized in more estabished service areas and more participatory in newer service areas. (A) " Not items 1 part of the instrument. 1 to 11 and the overall 2 3 4 5 6 7 Test-retest instrument 8 9 10 reliability of scale are: 11 Overall instrument.63.73.72.62.82.75.67. 70.66.73.56 0.74 " Legend: (D) = Defender, (P) = Prospector, (A) = Analyzer and (/?) = Reactor. Provided for informational purposes only. Not part of the instrument.