DETERMINANTS OF STRATEGIC PLANNING SYSTEMS IN LARGE ORGANIZATIONS: A CONTINGENCY APPROACH*

This study investigates the relationship among four design parameters of planning systems and five different firm and environmental characteristics. The impact of this multivariate relationship on organizational effectiveness is then examined using a sample of 115 large manufacturing firms. The findings show general support for the proposition that, in order to be effective, a strategic planning system should be designed in such a way that the specific situational setting of the firm is reflected in the design. The analysis also indicates that firms adopt a more flexible planning system - captured here by two key variables, planning horizon, and frequency of plan reviews - as the level of environmental complexity increases. Implications for future research are discussed.     

TOWARDS A COMPREHENSIVE SYSTEM OF STRATEGIC CONTROL*

New strategic initiatives often take several years to execute fully and relatively few succeed. Unfortunately, classical control processes have contributed to this situation because they have been designed as feedback systems that detect problems and deviations from planned results only after they have already occurred, and because the standards to which measurements are compared are assumed to be correct or good. Recent conceptual contributors to the strategic control literature have argued for anticipatory feedforward controls, that recognize a rapidly changing and uncertain external environment. These new systems are designed to operate on a continuous basis, checking and critically evaluating assumptions, strategies, and results. This article adds to these conceptual developments by providing and explicit strategic control component to deal with low probability, high impact threatening events, namely, special alert control. In an effort to make all the latest strategic control components operationally useful, mechanisms, methods, and approaches to their efficient implementation are presented and then summarized in tabular form. An overall strategic control process diagram is provided to act as a guide for future strategic control systems. The result is a more comprehensive and workable system of strategic control.     

STRATEGY UNDER THE MICROSCOPE: STRATEGIC MANAGEMENT AND IT IN FINANCIAL SERVICES*

This article subjects the organizational theory literature on corporate strategy to critical scrutiny, arguing that both the ‘rational’and ‘processual’approaches to strategy generate analyses that are ahistorical and theoretically undeveloped. In their place, but focusing specifically on the financial services, we offer an alternative genealogically informed analysis. This indicates how the historical development of strategy discourses and practices are discontinuous and uneven across countries, sectors, companies and specialist spheres. In addition it suggests that corporate strategy has considerable impact on inter-organizational relations and both ‘internal’(i.e. management and employees) and ‘external’(i.e. consumers) members of the organization. the article seeks to illustrate its arguments both at the sectoral level by examining the development of strategic discourse in banks and insurance companies and at the organizational level by providing some case study material on IT strategy in a life insurance company.     

ASSESSING RATIONAL AND INTUITIVE STYLES: A HUMAN INFORMATION PROCESSING METAPHOR

This article has four distinct but related purposes. First, we describe the research setting for assessing human information processing style in terms of the rational-intuitive complementarity. We highlight earlier management study that directly deals with this dimension. Then we review popular instruments for assessing style in rational-intuitive terms. Second, we outline a conceptual model that elaborates the rational—intuitive styles of human information processing into three modes each. There are innovative management studies, and Eastern and Western philosophical bases for this model. We use this background to help synthesize three lines of neurophysiological research to formulate a six-mode human information processing (HIP) metaphor. Third, we use the HIP metaphor to develop an HIP survey with a scale for each mode. This section describes how conceptual definitions are derived from the model with guidance from the rational-intuitive term pairs and the survey item pool. Finally, we describe the statistical analysis of the reliability and validity of the six scales for the HIP survey. We use a criterion-based factor analytic approach for isolating the scale items. Then, the HIP metaphor is used to predict associations among the scales in our study. We use a modified form of the multitrait—multimethod approach to test our predictions. Finally, this section summarizes the results of the predicted relationships among the variables on the self-assessment tools used in this study. The study helps bring the rational—intuitive assessment of human information processing into the mainstream of management research.     

STRATEGIC PLANNING AND FINANCIAL PERFORMANCE: MORE EVIDENCE*

A recently published meta-analysis of the impact of strategic planning on financial performance omitted a major study of corporate planning practice in Fortune 500 manufacturing firms. This article briefly reviews that study in light of the results of the meta-analysis. Additional analysis examines performance and firm survival over a longer time period than in the original work. the overall conclusion is that a small but positive relationship between strategic planning and performance exists, and persists.     

MANAGERIAL COGNITION: A MISSING LINK IN STRATEGIC MANAGEMENT RESEARCH

This article explores the linkages between cognitive science and strategic management research. It begins by noting that Schendel and Hofer, in their classic work Strategic Management: A New View of Business Policy and Planning, implicitly assumed a cognitive basis for much of the strategy-making process but did little to systematize a cognitive approach. Next, the article examines the foundations of modern cognitive science. Several areas of recent research that are particularly relevant to strategic thinking are reviewed. The article concludes with a call for a more explicit cognitive emphasis in strategic management.     

SOCIAL SECURITY AND RETIREMENT DECISION: A POSITIVE AND NORMATIVE APPROACH*

Abstract Social insurance for the elderly is judged responsible for the widely observed trend towards early retirement. In a world of laissez‐faire or in a first‐best setting, there would be no such trend. However, when first‐best instruments are not available, because health and productivity are not observable, the optimal social insurance policy may imply a distortion on the retirement decision. The main point we make is that while there is no doubt that retirement systems induce an excessive bias towards early retirement in many countries, a complete elimination of this bias (i.e. a switch to an actuarially fair system) is not the right answer for two reasons. First, some distortions are second‐best optimal. This is the normative argument. Second, and on the positive side, the elimination of the bias might be problematic from a political perspective. Depending on the political process, either it may not be feasible or alternatively it may tend to undermine the political support for the pension system itself.     

HUMAN RESOURCES AS STRATEGIC ASSETS: AN EVOLUTIONARY RESOURCE-BASED THEORY*

The paper proposes an evolutionary approach to strategic human resources. This means that, first of all, truly valuable strategic assets are unlikely to result directly from senior management policies. Rather, what is truly valuable is the ‘social architecture’ that results from ongoing skill formation activities, forms of spontaneous co-operation, the tacit knowledge that accumulates as the unplanned side-effect of intentional corporate behaviour. Thus, corporate prosperity not seldom rests in the social architecture that has emerged slowly and incrementally over time, and may even predate the tenure of current senior management. Given the low visibility of such spontaneous co-operation, it is even more likely to be resistant to easy imitation and therefore a valuable strategic asset.     

STRATEGIC CHOICE: A THEORETICAL ANALYSIS

The problem of which organization structure is most appropriate for current business conditions has perplexed managers for decades. Several management theorists have proposed that modifications of the firm's structural design were in response to changes in the organization's context. Recently, Child² suggested that senior executives in the firm may have the discretion to strongly influence their organization unit's structure. This paper discusses the development of a contingency theory of structural determination which incorporates strengths of past theories, managerial discretion, fourteen dimensions of structure, and organizational effectiveness. It also reports on preliminary research which supports the importance of managerial discretion in the structural determination process.     

A RESEARCH AGENDA FOR STRATEGIC MANAGEMENT IN THE 1990s

The importance of thinking strategically is often glossed over when academics try to apply this concept to themselves. This frequently results in research or articles that are not very insightful or useful either to other academics or to practising managers. To overcome this problem and to explore the future needs of the field of strategic management, this article proposes topics for a research agenda for strategic management in the 1990s that is based on the forecast of ‘experts’ in the field.     

IMPORTANT DIMENSIONS OF STRATEGIC ISSUES: SEPARATING THE WHEAT FROM THE CHAFF*

Decision-makers in organizations use dimensions implicitly or explicitly to sort strategic issues. This article compares the dimensions implied by three literatures and dimensions generated by an empirical study. While some similarities are identified, there are striking differences between what the literature assumes and what dimensions decision-makers in the NY/NJ Port Authority use to sort issues. Implications for theories of decision-making and interpretation in organizations are discussed.     

TRADE INTEGRATION,OUTSOURCING AND EMPLOYMENT IN AUSTRIA: A DECOMPOSITION APPROACH

Outsourcing and trade integration of advanced countries is debated with respect to employment effects, in particular for low educated workers – at least in relative terms. We study the employment effects – differentiated by educational attainment levels – of changes in the patterns of trade integration and outsourcing in the Austrian economy over the periods 1995–2000 and 2000–2005 using hierarchical decomposition analysis based on deflated input–output tables. Outsourcing is modeled as changes in the shares of domestically produced intermediates in total intermediates. A similar decomposition of the final demand vector allows us to draw conclusions on the overall employment effects of trade integration. The results suggest that the expected negative employment effects of outsourcing and rising import penetration have been overcompensated by increasing exports. Thus, the overall employment effects of Austrian trade integration have been positive for all educational attainment groups. However, whereas the total effects have been strongest for medium and high educated workers over the period 1995–2000, employment of low educated workers have been strongest and positively affected over the period 2000–2005. This pattern can be explained by a more sluggish export performance together with stronger negative effects of outsourcing and import penetration in medium and high-skill intensive products.     

STRATEGIC ENTRY DETERRENCE: RECENT DEVELOPMENTS IN THE ECONOMICS OF INDUSTRY

Abstract. This paper reviews the recent developments in the economics of industry with respect to strategic entry deterrence. Starting from Bain's (1956) classical analysis, a simple two-stage game between an incumbent firm and a potential entrant is used to present the general structure of the entry deterrence problem. Commitments, credible threat and sub-game perfection are illustrated in this context. The various strategic variables that an incumbent firm can use to bar entry are discussed. The issue of whether a group of incumbents can non-cooperatively deter entry is taken up and some empirical evidence is reviewed.     

A CULTURAL THEORY OF INFORMATION BIAS IN ORGANIZATIONS

Organizations show an essential cultural pluralism. Taking this into account, we aim at developing a cultural theory of organizations. A central role in this theory is played by information rejection, which can follow any of four different styles: risk absorption, networking, paradigm protection, or expulsion. These can be related to different types of organizational cultures, in particular to markets, hierarchies, and sects. Different kinds of information bias institutionalize different kinds of leadership.