Strategy performance relationship in Europe

Abstract

The present dissertation is composed by three studies that connect the relationship between business strategy and performance of listed companies in Europe in the STOXX index in different ways. Supporting our research on the framework developed by Miles and Snow, which is based on the way companies solve three fundamental problems: entrepreneurial, engineering, and administrative, our investigation aims to verify whether or not this strategic orientation is independent of the national culture, the degree of uncertainty and dynamism and the digital/technological transformation. The first study investigates the importance of strategic orientation and national culture in the performance of listed companies in Europe. Analysing the strategic orientation of the listed companies for the period between 2012 and 2019, there is empirical evidence that strategy impacts significantly on firm performance. Moreover, our results show that national culture has a moderating influence in the strategy-performance linkage. In the second study, we explore the strategic behaviour of the listed companies for the period between 2015 and 2019, in the context of uncertainty and dynamism (national innovation capabilities). The analyses carried out enables a better understanding of the strategic behaviour that better fits to these contexts and at different levels performance. In order to access that different performance levels, we introduced an econometric model with a quantile regression approach, to complement our research with a better understanding strategy-performance linkage, analysing the effect of the explanatory variables at various quantiles of conditional performance distribution at low and high levels. Finally, the third study assess if the business strategy in the context of digital transformation, of high-technology companies listed on the STOXX600 index. Panel data results obtained for the period between 2015 and 2019, shows that prospector strategy impacts significantly on firm performance. Findings also suggest that the presence of digital officer´s (CDO) in the top management team, is significant and impact on market value performance. Since this top manager´s play an important role in the business transformation, acting as enabler´s of digital transformation and helping in exploring new opportunities in the future.