Strategic Intent, Capabilities and Financial Performance: A Study of the Pharmaceutical Industry

Strategic intent represents an organization’s vision and its aspired direction of growth. Organizations that lack a serious strategic intent suffer from “scarcity of ambition” that inhibits them from compiling the resource stocks that may lead to future success. Despite being almost three decades old, there has been a dearth of empirical papers testing strategic intent theory and, therefore, there is little precedent in operationalizing this construct. This study empirically tested two separate theories prevalent in the management field. First tested was strategic intent theory, something that has only been done once (Doving and Gooderham 2008) in the decades since its founding. Secondly, the paper tested capabilities theory to provide additional empirical evidence for the relationship between capabilities and financial performance. In both cases, the results of the study not only add to the empirical evidence in the literature but also contribute to current theory.