CORPORATE IDEOLOGY, DIVERSIFICATION AND FIRM PERFORMANCE

The literature suggests that the fit between corporate culture and strategy influences firm performance. The present study examines the moderating effect of diversification strategy on the link between corporate ideology, a component of culture, and firm performance. A cross-sectional survey of the largest manufacturing firms in the United States was conducted measuring corporate ideology and diversification strategy. A moderated regression analysis was conducted and it was found that the interaction between ideology and diversification exerts a significant effect on firm performance thus supporting the importance of strategic fit.