PORTERS GENERIC STRATEGIES, DISCONTINUOUS ENVIRONMENTS, AND PERFORMANCE - A LONGITUDINAL-STUDY OF CHANGING STRATEGIES IN THE HOSPITAL INDUSTRY

Objective. Changes in generic strategies in response to discontinuous environments have been relatively ignored in the management literature . This study reports an examination of the relationships between Porte r's (1980) generic strategies, discontinuous environments, and perform ance. Data Sources. Archival data for 1984 and 1988 were collected for 172 acute care hospitals in Florida in order to test these relationsh ips. Study Design. To examine fully the performance impact of changes in strategy in a discontinuous environment, a longitudinal research de sign that identified a firm's strategy at two points in time, 1984 and 1988, was used. Principal Findings. Results indicate that firms with a proper strategy environment fit performed the highest, firms that di d not change their strategy had no change in performance, and firms th at changed their strategy toward a proper strategy environment showed an increase in performance. Conclusion. Findings support the notion th at hospitals with appropriate strategy-environment combinations will e xhibit higher performance.