Perfect fit not always best: Improving fit boosts firm performance
The article explores how different types of fit between a company and its environment affect the company's performance. By combining two existing theories, the researchers found that both contingency fit and institutional fit play a role in determining how well a company does. They studied over 1,900 companies in various industries and found that when a company is not perfectly matched to its environment, improving either type of fit can lead to better performance. Companies with good contingency fit are less affected by not perfectly matching their environment, while those with perfect institutional fit may see a slight decrease in performance when trying to improve contingency fit.