economics, it assumed significance while developing and testing theories of strategy. One of the well-
accepted theories in strategic management is that strategy involves the matching or the art of
reconciling the various components of the strategy mix (Andrews, 1971). According to this view, the
pattern of matching the different elements ± some within the organizational boundaries (competences
and resources) and others dealing with the environment (opportunities and threats) is viewed as
strategy. This classical view of strategy was consistent with the open system perspective in
organization theory (Katz & Kahn, 1978; Thompson, 1967). Such a view has led strategy to be
conceptualized as a pattern or stream of decisions taken to achieve the most favorable match or
DOLJQPHQWEHWZHHQWKHH[WHUQDOHQYLURQPHQWDQGWKHRUJDQL]DWLRQ¶VVWUXFWXUHDQGSURFHVV(Miles et al.,
1978; Mintzberg, 1978). Other strategy researchers also subscribed to this view of strategy as the
process of matching environment and organization on an ongoing basis (Chakravarthy, 1982; Jauch &
Osborn, 1981; Thorelli, 1977).
Within the strategic management literature there has been some disagreement about the nature of the
relationship between "organizations" and their "environments". Child (1972) emphasized the
importance of strategic choice theory. Child and others (Miles et al., 1978; Montanari, 1978) argued
that organizations can select their environmental domains and that environmental forces are not so
confining that they cannot be outflanked or sometimes even safely ignored. On the contrary, Aldrich
(2007), amongst others (Carroll, 1984; Hannan & Freeman, 1977) maintained that most organizations
flounder helplessly in the grip of environmental forces. Aldrich believed that "environments" are
relentlessly efficient in weeding out any organization that does not closely align itself with
environmental demands. Most researchers seem to place themselves somewhere between these polar
views (see Figure 5.1).
Figure 5-1: Organization – Environment dichotomySimilarly, de Wit & Meyer (2010) described the perspective of managers who argue that market
opportunities should be leading, while implying that the organization should adapt itself to the market
SRVLWLRQ DV WKH μRXWVLGH-LQ SHUVSHFWLYH¶ ,Q FRQWUDVW WKH\ DUJXHGthat many managers believe that
competition eventually revolves around rival resource bases and that firms must focus on the
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SHUVSHFWLYH¶(p.255).