Objective. Changes in generic strategies in response to discontinuous environments have been relatively ignored in the management literature. This study reports an examination of the relationships between Porter's (1980) generic strategies, discontinuous environments, and performance.
Data Sources. Archival data for 1984 and 1988 were collected for 172 acute care hospitals in Florida in order to test these relationships.
Study Design. To examine fully the performance impact of changes in strategy in a discontinuous environment, a longitudinal research design that identified a firm's strategy at two points in time, 1984 and 1988, was used.
Principal Findings. Results indicate that firms with a proper strategy environment fit performed the highest, firms that did not change their strategy had no change in performance, and firms that changed their strategy toward a proper strategy environment showed an increase in performance.
Conclusion. Findings support the notion that hospitals with appropriate strategy-environment combinations will exhibit higher performance.