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| Author: | Sorenson, O. (et al.) |
| Title: | Niche width revisited: organizational scope, behavior and performance |
| Journal: | Strategic Management Journal
2006 : OCT, VOL. 27:10, p. 915-936 |
| Index terms: | organizational behaviour companies markets diversification products strategy |
| Freeterms: | niche width |
| Language: | eng |
| Abstract: | In this study, it is proposed that broad contemporary scope also provides insight into the routines governing firm behaviour. To get a broad scope, firms must repeatedly explore outside the boundaries of their current niche. Niche expansions, e.g. new market segments, however, involve risky organizational changes, behaviour disadvantaging generalists (hereafter as: gens.) relative to specialists, despite the positional value of broad scope. Empirical analyses of machine tool and computer workstation manufacturers support this conjecture: i. gens. introduce new products at a higher than optimal rate, and ii. gens. launch more frequently new models with novel features or targeted at new consumer segments etc., further accelerating their odds of failure. After adjusting for these behavioral differences, broad niche widths reduce exit rates. It is discussed how this phenomenon may help to explain the diversification and multi-nationality discounts. |
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