The effect of compensation program and structure on SBU competitive strategy: A study of technology intensive firms

SMC Author

Gregory B. Merrill

Status

Faculty

School

School of Economics and Business Administration

Department

Accounting

Document Type

Article

Publication Date

1991

Publication / Conference / Sponsorship

Strategic Management Journal

Description/Abstract

In this paper we examine the impact various compensation programs have upon business‐level strategy for technology‐intensive firms. Similarly, we examine the effect of centralization of R&D and non‐R&D decision‐making, formality of procedures, and SBU size on competitive strategy. Analysis of data from 79 SBUs suggest that there is a resource trade‐off between marketing‐oriented strategies and R&D‐oriented strategies, and that managers who operate under certain types of compensation programs will tend to favor R&D/innovation strategies and capital investment over other alternatives. Structure and competitive position also appear to play a significant role in determining technology and investment strategy.

Scholarly

yes

Peer Reviewed

1

DOI

10.1002/smj.4250120503

Volume

12

Issue

2

First Page

353

Last Page

370

Disciplines

Accounting

Original Citation

Galbraith, C., & Merrill, G. B. (1991). The effect of compensation program and structure on SBU competitive strategy: A study of technology intensive firms. Strategic Management Journal, 12 (2), 353-370.

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