Revisiting the fit-performance thesis half a century later: a historical financial analysis of Chandler's own matched and mismatched firms

This study revisits Chandler's seminal work <italic>Strategy and Structure</italic> (1962) empirically. This work helped fashion the notion of strategic fit as well as the need for new organisational forms. Chandler's fit-performance thesis proposes that firms which match structure to their strategy will become economically more efficient than mismatched firms. The very same firms Chandler studied are analysed financially as their structure evolves through successive phases of being matched to their strategy, mismatched, and then finally matched again. Over 70 longitudinal tests are performed, yielding mostly statistically significant results. These tests surprisingly suggest that mismatched firms generally outperform firms that match structure to strategy. Such results matter in light of new conceptual approaches being introduced on the subject of 'fit'; novel plausible explanations are provided for this apparent theoretical paradox.