Fit

Conceptual Overview

The concept of fit has a long tradition in the field of organization studies. As a result, it has been employed in many uses. While it is generally employed to describe a state of consistency among various elements, the nature of these elements can differ. Consequently, it is helpful to distinguish between two broad classes of fit: internal fit—the fit among [Page 506]various elements under the control of an organization—and external fit—the appropriateness of an organization's chosen elements given the organization's environment. Both types of fit will be discussed in turn.

Internal fit has been discussed at various levels of aggregation. At a high level, organizations need to seek, for instance, fit between their strategy and structure. At a lower level, organizations need to seek fit between their strategy and the various activities they put in place. At an even lower level, organizations need to seek fit among their various policies or organizational design elements. At each level, one can identify various combinations of elements that are internally consistent, or that form configurations.

At the heart of fit is the concept of interaction. Two elements interact when the value of one element is influenced by another element. For instance, the value of flexible manufacturing equipment is influenced by the breadth of products that are offered by a firm: The broader the product range, the more valuable the flexibility afforded by the equipment (and the more valuable is an increase in flexibility). As a result, the combinations of high flexibility and broad product range, and low flexibility and narrow product range, are both consistent—each pair of choices concerning equipment and product range displays internal fit.

A number of studies have conceptualized fit as such pairwise consistency, or complementarity. However, the concept of configuration usually goes one step further by identifying a whole set of elements that all fit with each other. Such a systemic viewpoint is particularly important if interactions exist across more than two elements and if interactions themselves are affected by other choices that an organization has taken.

A helpful visualization tool for the notion of fit is a performance landscape consisting of “horizontal” dimensions representing the various choice elements of an organization and a “vertical” dimension representing the resulting performance associated with each combination of choices. Interactions create multiple peaks on these landscapes, with each peak representing an internally consistent set of choices—a configuration that displays high internal fit. This visualization also suggests one precise definition of internal fit: A set of choices has internal fit if no incremental change can be found that would be performance enhancing.

The notion of external fit has played a prominent role in the work on contingency theory. For instance, various mappings between different organizational structures and different environmental conditions (e.g., volatility, complexity) have been proposed. Here, fit denotes a consistency between an organization's choice—for instance, with respect to its structure—and its environment. Again, the landscape visualization is helpful in this context. Given that the performance values of the landscape take into account all performancerelevant attributes (e.g., customer tastes, competitors' positions, available technology), the height of the landscape at a particular configuration represents the appropriateness of this configuration—that is, its external fit.

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