Does being different from others increase extremeness and volatility in restaurant firm performance?

Considering the sensitivity of the restaurant industry – its volatility to economic changes and its competitive environment – it is imperative for restaurant operators to manage business risk. Based on a risk management perspective, this paper seeks to draw performance implications from firms’ strategic disconformity, which can help explain the inherent nature of uncertainty and volatility. The results of the study indicate that restaurant firms’ strategic disconformity is positively associated with performance extremeness and performance volatility. Moreover, the relationship between a restaurant firm's strategic disconformity and extremeness and volatility of firm performance is negatively moderated by environmental complexity. The findings of this study enrich the restaurant literature by incorporating this important aspect of the risky nature of strategic disconformity in understanding a firm's performance extremeness and volatility. This study also implies that restaurant operators need to engage in strategic disconformity with care, depending on their current environmental conditions.