Antecedents and temporal dynamics of strategic divergence in multinational corporations: Evidence from Europe

Coordinating consistent strategy implementation has been identified a key challenge for multi-national corporations. Based on intraorganizational evolutionary models of strategy formation, this paper thus empirically investigates the antecedents and temporal dynamics of strategic divergence. Strategic divergence is the deviation of a firm's resource allocation decisions with its articulated concept of corporate strategy. Large-scale empirical analysis of 11,406 resource allocation decisions of twenty-five publicly listed, multi-national and multi-business European firms indicates that decision type, operational and divisional manager involvement in decision making and structural context changes exert a significant influence on strategic divergence. Importantly, results further suggest that firms’ levels of strategic divergence tend to increase over time and that the antecedents of strategic divergence have a differential impact as time passes.