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Environmental Uncertainty, Business Strategy, and Financial Performance: an Empirical Study of the U.S. Lodging Industry

Cornell University

Michael D. Olsen

Virginia Polytechnic Institute and State University

A key premise in the normative literature is that an appropriate business strategy will favorably align an organization with its environment (Andrews, 1971; Hofer & Schendel, 1978; Porter, 1980). It is argued that the strategy that will produce the best results is dependent on existing environmental circumstances (Miles & Snow, 1978).

This study investigated the tenet that, for firms in the lodging industry, there exists an optimal pattern or ''fit'' between the environment and the firm's business strategy that separates the more successful operations from the less successful ones.

The findings of this study indicate that a "match" between the state of the environment facing an organization and its business strategy is required for high performance. The results obtained provide an invaluable planning and analysis tool for all levels of management involved in charting a firm's future.

Key Words: Key Words: Uncertainty • Strategy • Performance • Lodging • Fit.

Journal of Hospitality & Tourism Research, Vol. 13, No. 3, 171-186 (1989)
DOI: 10.1177/109634808901300317


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