Macro environment moderating Effects on Strategy and Performance

Abstract

Competitive business environment organizations are facing today has prompted them to develop business strategies geared to improve performance in order to sustain competitive advantage. However choice of strategy alone cannot guarantee performance without considering the role of macro environment in that relationship. The study therefore sought to establish the moderating effect of macro environment factors on relationship between combined strategy choices and performance. Over and above the direct effect that moderating factors (macro environment factors) may have on company performance their moderating effects on the relationship between strategic choice and performance were tested. Overall, it can be concluded that the four components of company’s macro environment manifest and affect strategy-performance relationship in varying degrees. The findings imply that companies are environment dependent and to manage this company-environment interface, an appropriate strategy choice is necessary. The study also presents a clear link between environment-strategy-performance such that managers of such companies should consider in enhancing company survival and growth. Keywords: Macro environment, Strategy, Performance, Product Development Strategy, Market Development Strategy, Diversification Strategy, Corporate Social Responsibility.