Choice and determinism: A test of Hrebiniak and Joyce's framework on strategy‐environment fit

Abstract

Abstract This paper describes the first empirical test of Hrebiniak and Joyce'S innovative model of business‐environment relations. Virtually all the literature prior to their Administrative Science Quarterly article (1985) assumes a zero‐sum relationship between managerial choice and environmental determinism. In the Hrebiniak and Joyce framework the two are orthogonal, and environments where management and environment are both weak or both powerful are possible. We first look for evidence of Hrebiniak and Joyce'S environment typology in 52 manufacturing industries previously specified by Dess and Beard (1984). Next, we test their propositions of strategy‐environment fit by classifying 146 firms into strategic groups, then evaluating each group in each environment. Our tests provide partial support for Hrebiniak and Joyce'S environment typology and for their contingent strategies. However, frequencies of firm location among the environments were highly skewed. These results suggest that strategy‐environment fit may not be as critical as market‐selection in the competitive success of firms.