The Impact Of Organizational Capacity And Material Capacity On Stock Price Performance

Abstract

Chakravarthy (1982) contends that a firm’s adaptive ability depends upon its material capacity and its organizational capacity and its adaptive fit. This study identifies the material and organizational capacities of 18 publicly-held corporations and relates each firm’s state of adaptation and adaptive fit to a measure of its stock price performance. A significant relationship is found between state of adaptation and stock price performance.