Chief executive scanning emphases, environmental dynamism, and manufacturing firm performance

• Published in: Strategic management journal Vol. 24; no. 8; pp. 725 - 744
• Main Authors: Garg, Vinay K., Walters, Bruce A., Priem, Richard L.
• Format: Journal Article
• Language: English
• Published: Chichester, UK John Wiley & Sons, Ltd 01.08.2003; John Wiley and Sons; Wiley; Wiley Periodicals Inc
• Subjects: Applied sciences; Business innovation; Business management; Business structures; Business studies; CEO; Chief executive officers; Corporate strategies; Dynamic efficiency; dynamism; Economics; Exact sciences and technology; Executives; External business environments; Firm modelling; Firm theory; General aspects; Inflection points; Management; Manufacturers; Manufacturing; Operational research and scientific management; Operational research. Management science; Organization; Predictions; Product innovation; Sales growth; scanning; Strategic management; Strategic planning; Studies; Technological innovation; United Kingdom > UK; dynamism; manufacturing; performance; CEO; scanning
• ISSN: 0143-2095; 1097-0266
• DOI: 10.1002/smj.335

Chief executives must allocate their scarce time for scanning efforts among relevant domains of their firms' external environment and their firms' internal circumstances. We argue that high-performing CEOs vary their relative scanning emphases on different domains according to the level of dynamism they perceive in their external environments. The concepts of dominant logic and sector importance were used to develop predictions about which external domains and which internal domains should receive relatively more or less scanning emphasis in external environments that, overall, are more dynamic or more stable. A field survey of 105 single-business manufacturing firms evaluated CEOs' scanning emphases and firm performance. Results indicated that, for dynamic external environments, relatively more CEO attention to the task sectors of the external environment and to innovation-related internal functions was associated with high performance. In stable external environments, however, simultaneously increased scanning of the general sectors in the external environment and efficiency-related internal functions produced higher performance. These relationships were strongest between relative scanning emphases among domains and sales growth. We discuss the implications of these results for researchers and practitioners.