THE EFFECTS OF LTL MOTOR CARRIER SIZE ON STRATEGY AND PERFORMANCE

Abstract

In a regulated environment firm size had no significant impact on strategy selection or on firm performance. However, the pattern of strategies followed by large, medium, and small firms differed significantly under deregulation. In a deregulated setting firm size and firm strategy have a statistically significant independent as well as combined effect on firm performance. In this deregulated environment, small firms are outperformed by medium and large firms. When the effects of firm size are coupled with strategy selection, the disadvantage of small size in the deregulated environment is even more striking. Overall, there is no strategy that results in significantly better performance for small firms. The results also show that medium-sized firms perform close to the level achieved by large firms. In fact, medium-sized firms pursuing a differentiation strategy outperform large firms pursuing any individual strategy. These results do not support the contention that only the very largest motor carriers can succeed in the deregulated environment.