Size, differentiation and the performance of Dutch daily newspapers

Abstract

We demonstrate how organizational ecology can contribute to strategic management and managerial practice by using resource-partitioning theory to make predictions with respect to: (i) the short-run performance (i.e. growth and profitability) consequences of broad (generalist) vis-à-vis focus (specialist) strategies; (ii) the detrimental performance implications of a particular instance of being strategically ‘stuck in the middle’; and (iii) the performance consequences of organizational size differences. We hypothesize that these effects depend on the position of the organization in resource space. These predictions are tested by estimating models of growth and profitability, using data on Dutch generalist (national) and specialist (regional) newspapers from 1968 to 1994. The findings show that resource-partitioning theory provides a dynamic backbone to understand the performance consequences of different generic strategies and organizational size positions.