ORGANIZATIONAL CONFIGURATIONS AND PERFORMANCE - A COMPARISON OF THEORETICAL APPROACHES

Two major approaches to examining the relationship between organizatio nal configurations and performance are found in the strategic manageme nt literature. The first, rooted in the concept of strategic groups, i s inductive and focuses on a posteriori examinations of industry-speci fic configurations and their relative performance. The second, a deduc tive approach, focuses on theory-based predictions. We compared the tw o approaches using a single set of organizations. The two approaches g enerated different configurations to describe the hospital industry. T he deductively defined configurations explained performance better tha n the inductively defined configurations, and the deductive approach a llowed prediction of the performance differences among configurations. We draw theoretical and methodological implications for future resear ch.