THE APPLICATION OF CLUSTER ANALYSIS IN STRATEGIC MANAGEMENT RESEARCH: AN ANALYSIS AND CRITIQUE

Cluster analysis is a statistical technique that sorts observations into similar sets or groups. The use of cluster analysis presents a complex challenge because it requires several methodological choices that determine the quality of a cluster solution. This paper chronicles the application of cluster analysis in strategic management research, where the technique has been used since the late 1970s to investigate issues of central importance. Analysis of 45 published strategy studies reveals that the implementation of cluster analysis has been often less than ideal, perhaps detracting from the ability of studies to generate knowledge. Given these findings, suggestions are offered for improving the application of cluster analysis in future inquiry.

[1]  James D. Thompson.  Organizations in Action , 1967 .

[2]  K. Andrews.  The Concept of Corporate Strategy , 1971 .

[3]  J. Hair.  Multivariate data analysis , 1972 .

[4]  Michael Hunt.  Competition in the major home appliance industry, 1960-1970 , 1972 .

[5]  Robert Whallon,et al.  A New Approach to Pottery Typology , 1972, American Antiquity.

[6]  Michael R. Anderberg,et al.  Cluster Analysis for Applications , 1973 .

[7]  Howard B. Lee,et al.  Foundations of Behavioral Research , 1973 .

[8]  K. Hatten.  Strategic models in the brewing industry , 1974 .

[9]  P. Arabie,et al.  An algorithm for clustering relational data with applications to social network analysis and comparison with multidimensional scaling , 1975 .

[10]  John A. Hartigan,et al.  Clustering Algorithms , 1975 .

[11]  D. Schendel,et al.  Heterogeneity within an Industry: Firm Conduct in the U.S. Brewing Industry, 1952-71 , 1977 .

[12]  D. Schendel,et al.  A Strategic Model of the U.S. Brewing Industry: 1952-1971 , 1978 .

[13]  B. McKelvey.  Organizational Systematics: Taxonomic Lessons from Biology , 1978 .

[14]  N. Denzin,et al.  The Research Act , 1978 .

[15]  P. H. Friesen,et al.  Archetypes of Strategy Formulation , 1978 .

[16]  R E Miles,et al.  Organizational strategy, structure, and process. , 1978, Academy of management review. Academy of Management.

[17]  T. Jick.  Mixing Qualitative and Quantitative Methods: Triangulation in Action. , 1979 .

[18]  T. Cook,et al.  Quasi-experimentation: Design & analysis issues for field settings , 1979 .

[19]  G. W. Milligan,et al.  An examination of the effect of six types of error perturbation on fifteen clustering algorithms , 1980 .

[20]  Carolyn Y. Woo,et al.  Strategies of effective low share businesses , 1981 .

[21]  B. Everitt,et al.  Cluster Analysis (2nd ed). , 1982 .

[22]  D. Hambrick.  An Empirical Typology of Mature Industrial-Product Environments , 1983 .

[23]  Liam Fahey,et al.  Toward understanding strategic issue diagnosis , 1983 .

[24]  D. Schendel,et al.  An empirical analysis of strategy types , 1983 .

[25]  Girish N. Punj,et al.  Cluster Analysis in Marketing Research: Review and Suggestions for Application , 1983 .

[26]  M. Aldenderfer.  Cluster Analysis , 1984 .

[27]  Gregory G. Dess,et al.  Porter's (1980) Generic Strategies as Determinants of Strategic Group Membership and Organizational Performance , 1984 .

[28]  Jon M. Hawes,et al.  A taxonomy of competitive retailing strategies , 1984 .

[29]  Donald C. Hambrick,et al.  Taxonomic Approaches to Studying Strategy: Some Conceptual and Methodological Issues , 1984 .

[30]  K. R. Harrigan.  An Application of Clustering for Strategic Group Analysis , 1985 .

[31]  L. G. Hrebiniak,et al.  Organizational Adaptation: Strategic Choice and Environmental Determinism. , 1985 .

[32]  G. W. Milligan,et al.  An examination of procedures for determining the number of clusters in a data set , 1985 .

[33]  Peter J. Frost,et al.  Publishing in the Organizational Sciences , 1985 .

[34]  R. MacCallum,et al.  THE APPLICATION OF EXPLORATORY FACTOR ANALYSIS IN APPLIED PSYCHOLOGY: A CRITICAL REVIEW AND ANALYSIS , 1986 .

[35]  L. Vogel,et al.  Strategy and Structure , 1986 .

[36]  Briance Mascarenhas.  International Strategies of Non-Dominant Firms , 1986 .

[37]  Ken G. Smith,et al.  ENVIRONMENTAL VARIATION, STRATEGIC CHANGE AND FIRM PERFORMANCE: A STUDY OF RAILROAD DEREGULATION , 1987 .

[38]  Mary Louise Hatten,et al.  Strategic groups, asymmetrical mobility barriers and contestability , 1987 .

[39]  C. Fombrun,et al.  Structural and Perceptual Influences on Intraindustry Stratification , 1987 .

[40]  Phipps Arabie,et al.  Three-way scaling and clustering. , 1987 .

[41]  Karel Cool,et al.  Strategic Group Formation and Performance: The Case of the U.S. Pharmaceutical Industry, 1963-1982 , 1987 .

[42]  Karel Cool,et al.  Performance differences among strategic group members , 1988 .

[43]  Alex Miller.  A taxonomy of technological settings, with related strategies and performance levels , 1988 .

[44]  J. Pearce,et al.  Planned patterns of strategic behavior and their relationship to business-unit performance† , 1988 .

[45]  L. Kim,et al.  Environment, Generic Strategies, and Performance in a Rapidly Developing Country: A Taxonomic Approach , 1988 .

[46]  A. Lafuente,et al.  Types of entrepreneurs and firms: The case of new Spanish firms , 1989 .

[47]  L. Finch,et al.  Choice and determinism: A test of Hrebiniak and Joyce's framework on strategy‐environment fit , 1989 .

[48]  Briance Mascarenhas.  STRATEGIC GROUP DYNAMICS , 1989 .

[49]  W. R. Dillon,et al.  On the Use of Component Scores in the Presence of Group Structure , 1989 .

[50]  Henry Mintzberg.  Mintzberg on management : inside our strange world of organizations , 1989 .

[51]  Lynn A. Isabella,et al.  Strategy, Beliefs about the Environment, and Performance in a Banking Simulation , 1989 .

[52]  D. Aaker,et al.  Strategy over the business cycle , 1989 .

[53]  Samuel B. Bacharach,et al.  Organizational Theories: Some Criteria for Evaluation , 1989 .

[54]  Cynthia A. Montgomery,et al.  Strategy Content and the Research Process: A Critique and Commentary , 1989 .

[55]  H. Thomas,et al.  Taxonomic Mental Models in Competitor Definition , 1990 .

[56]  H. Thomas,et al.  THE LINKAGE BETWEEN STRATEGY, STRATEGIC GROUPS, AND PERFORMANCE IN THE U.K. RETAIL GROCERY INDUSTRY , 1990 .

[57]  H. Thomas,et al.  STRATEGIC GROUPS AND PERFORMANCE: THE U.S. INSURANCE INDUSTRY, 1970-84 , 1990 .

[58]  John H. Grant,et al.  Doctoral Education in the Field of Business Policy and Strategy , 1990 .

[59]  S. Birley,et al.  Growth and performance contrasts between ‘types’ of small firms , 1990 .

[60]  Robert E. Hoskisson,et al.  Strategic groups: Untested assertions and research proposals , 1990 .

[61]  P. P. McDougall,et al.  New venture strategies: An empirical identification of eight ‘archetypes’ of competitive strategies for entry , 1990 .

[62]  N. Nohria,et al.  Global strategic linkages and industry structure , 1991 .

[63]  I. MacMillan.  The emerging forum for business policy scholars , 1991 .

[64]  Beverly B. Tyler,et al.  Strategic decision models: Integrating different perspectives , 1991 .

[65]  A. Meyer.  What Is Strategy's Distinctive Competence? , 1991 .

[66]  S. Finkelstein,et al.  Effects of strategic orientation and environmental change on senior management reward systems , 1992 .

[67]  A. Morrison,et al.  A TAXONOMY OF BUSINESS-LEVEL STRATEGIES IN GLOBAL INDUSTRIES , 1992 .

[68]  F. Manu.  Innovation Orientation, Environment and Performance: A Comparison of U.S. and European Markets , 1992 .

[69]  Kendall Roth,et al.  International Configuration and Coordination Archetypes for Medium-Sized Firms in Global Industries , 1992 .

[70]  Abdul A. Rasheed,et al.  Configuration Research in Strategic Management: Key Issues and Suggestions , 1993 .

[71]  Mark P. Sharfman,et al.  Industry variety and performance , 1993 .

[72]  Dennis A. Gioia,et al.  Strategic Sensemaking and Organizational Performance: Linkages Among Scanning, Interpretation, Action, and Outcomes , 1993 .

[73]  A. Tsui,et al.  Configurational Approaches to Organizational Analysis , 1993 .

[74]  Douglas D. Moesel,et al.  CONSTRUCT VALIDITY OF AN OBJECTIVE (ENTROPY) CATEGORICAL MEASURE OF DIVERSIFICATION STRATEGY , 1993 .

[75]  A. Huff,et al.  STRATEGIC GROUPS: A COGNITIVE PERSPECTIVE , 1993 .

[76]  C. C. Snow,et al.  Organizational Configurations and Performance: A Comparison of Theoretical Approaches , 1993 .

[77]  A. Morrison,et al.  Relating Porter’s Configuration/Coordination Framework to Competitive Strategy and Structural Mechanisms: Analysis and Implications , 1993 .

[78]  Karel Cool,et al.  Rivalry, Strategic Groups and Firm Profitability , 1993 .

[79]  Donald D. Bergh,et al.  Watch the Time Carefully: The Use and Misuse of Time Effects in Management Research , 1993 .

[80]  K. Bailey.  Typologies and taxonomies: An introduction to classification techniques. , 1994 .

[81]  D. Teece,et al.  Fundamental Issues in Strategy: A Research Agenda , 1994 .

[82]  R. Daft.  Why I Recommended That Your Manuscript Be Rejected and What You Can Do about it , 1995 .

[83]  Rolph E. Anderson,et al.  Multivariate data analysis (4th ed.): with readings , 1995 .