STRATEGIC DIVERSITY: A MECHANISM FOR EXAMINING THE STRATEGY/STRUCTURE FIT IN MULTINATIONAL COMPANIES

This study introduces and tests strategic diversity as a mechanism for examining the strategy/structure fit in multinational corporations (MNCs). Strategic diversity is operationalized based on Galbraith and Kazanjian's (1986) framework that used a modified value‐added chain and center of gravity concept to explain diversity as a measure of the firm's movement from and around its original center of gravity. The results indicate that strategic diversity is a valid predictor of MNC organizational structure and may be more relevant for issues of strategy/structure fit in firms with international interests than the traditional measures of diversification. Future research in this area must consider the implications of strategic diversity for issues of strategy/structure fit by examining the effect of strategic diversity on both specific measures of strategy implementation and broad measures of overall economic performance.