Payne, G. Tyge (author)
Davis, Justin L. (author)
Blair, John D. (author)
Blair, John D. (editor)
Fottler, Myron D. (editor)
Ford, Eric W. (editor)
Payne, G. Tyge (editor)

Strategic thinking and entrepreneurial action in the health care industry

1474-8231

2007

Series: Advances in health care management v.6

2007 by Elsevier Ltd.

Many researchers and executives have viewed fit as a key to organizational survival and high performance ( Summer et al., 1990). However, the type of fit and how it can be best achieved may often be in question. The current study empirically examines both external and infernal fit as predictors of firm performance where: ( 1) external fit is the alignment of or congruence between, the organization's strategy and/or structure and the task environment, and (2) internal fit is the multidimensional matching of strategy with structure. The argument presented here is that both internal and external fit can, and do, occur simultaneously. Further, the presence of one type of fit may compensate for deficiencies in the other. Using fit in terms of both matching and moderation, hypotheses are tested to determine the nature of both internal and external fit of strategy and structure. Testing of the hypotheses is conducted using data from the medical group industry. Findings support the influence of individual strategy and structure variables on medical group performance. However, fit found between strategy and structure, be it as matching or moderation, shows little influence on performance. Implications for medical groups and the broader health care industry are discussed.