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.     

A PROFILE OF DOCTORAL DISSERTATIONS IN STRATEGIC MANAGEMENT: A NOTE*

A study of 88 randomly selected strategy-related dissertations was conducted to develop a statistical profile of dissertations in the strategic management field. This study also provides some empirical evidence supporting the criticism that the field is fragmented.     

INFORMATION IN THE YIELD CURVE: A MACRO‐FINANCE APPROACH

We use a macro‐finance model, incorporating macroeconomic and financial factors, to study the term premium in the US bond market. Estimating the model using Bayesian techniques, we find that a single factor explains most of the variation in bond risk premiums. Furthermore, the model‐implied risk premiums account for up to 40% of the variability of one‐ and two‐year excess returns. Using the model to decompose yield spreads into an expectations and a term premium component, we find that, although this decomposition does not seem important to forecast economic activity, it is crucial to forecast inflation for most forecasting horizons. Copyright © 2012 John Wiley & Sons, Ltd.     

PROCEDURAL RATIONALITY IN THE STRATEGIC DECISION-MAKING PROCESS*

Despite the central place of rationality in the organization theory, strategic management, and decision-making literatures, we know relatively little about why some strategic decision-making procedures are more rational than others. This question was addressed in a study of 57 strategic decisions in 24 companies, using a multiple-informant, structured interview protocol. Results indicate that environmental competitive threat, perceived external control of the organization, and the uncertainty of the strategic issues being addressed are related to procedural rationality. Surprisingly, some of these relationships were in the opposite direction from our predictions. These results are interpreted within a framework that emphasizes the link between procedural rationality and managerial discretion.     

STRATEGIC PLANNING AND FINANCIAL PERFORMANCE: A META-ANALYTIC REVIEW*

After two decades of research, the effect of strategic planning on a firm's performance is still unclear. While some studies have found significant benefits from planning, others have found no relationship, or even small negative effects. Interpretation of these findings is confounded by the fact that many of these studies base their findings on a small number of firms. This article uses meta-analysis to aggregate the results of 29 samples on a total of 2496 organizations. Cumulation of previous studies found modest correlations between planning and nine performance measures. Extensive measurement problems suggest that these findings underestimate the true relationship between planning and performance.     

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.     

COGNITIVE TRAILS IN STRATEGIC DECISION-MAKING: LINKING THEORIES OF PERSONALITIES AND COGNITIONS*

This article attempts to reveal Jungian personality types' cognitive biases through a strategic management framework. The four personality types seem to use distinct heuristics to gather data, to generate and to evaluate alternatives. The connected heuristics appear as cognitive trails. We propose that different personality types habitually use certain cognitive trails; consequently, they can fall prey to biases that lurk in these trails. Cognitive trails may include linked input, output, and operational biases. We present the results from a pilot study to illustrate some connections between personality types and biases. We also explore some implications for future research and for management practice.     

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.     

INTERPRETATIONS ON AUTOMATIC: A DIFFERENT VIEW OF STRATEGIC ISSUE DIAGNOSIS*

Models of strategic decision-making and environmental scanning typically assume that decision-makers diagnose issues actively, using conscious and intentional effort to identify and to interpret potentially significant events, developments and trends. This article establishes that conditions in organizations put decision-makers ‘on automatic’in their diagnosis of strategic issues, with direct implications for the process and content of strategic action. Implications for theory and practice are established.     

STRATEGIC MANAGEMENT AND DETERMINISM: SUSTAINING THE CONVERSATION*

This article suggests that strategy research should concern itself with continuing the conversation of the field rather than insisting upon a place for universal methodological criteria within that conversation. It attempts to sustain the dialogue begun by Bourgeois, Bowman, Jemison, Huff, and others, who recommend the pragmatic approach of methodological and theoretical pluralism as the best way forward in increasing empirical content. the article draws heavily on the philosophical writings of Dewey, Kaplan, and Rorty and the methodological essays of economists such as Boland, Caldwell, and McCloskey in an effort to persuade others in the strategy field that ‘good science is good conversation’. … once or twice she had peeped into the book her sister was reading, but it had no pictures or conversation in it, ‘and what is the use of a book,’thought Alice, ‘without pictures or conversation?’ Lewis Carroll (1865, p. 5)     

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.     

STRATEGIC INVESTMENT DECISION-MAKING: COMPLEXITIES, POLITICS AND PROCESSES*

This article is a preliminary report on an investigation into the processes of investment decision-making. Three case studies from three firms are presented which show disparities in a number of aspects of process, for example, the length of time taken to arrive at a decision, the number and intensity of disagreements and uncertainties encountered. Data were collected for these cases through semi-structured interviewing from multiple informants in the three organizations, thereby permitting the use of analysis of variance techniques of the different perspectives given by informants. Perceptions of the effectiveness of the decisions were also gathered. One finding from the study is that the decisions with the lowest perceived effectiveness (in firm HE) also lost support from those involved in making the decision during the process, although the decision was eventually implemented. This decision also had the least agreement amongst informants as to the main sources of disagreements. Informants of all three decisions saw effect upon product quality and productivity, fit with business strategy and competitive position of the company as the most important factors to take into account in evaluating the decisions. In firm CG, however, there were disagreements as to how the investment should be evaluated. In the conclusions to the article a disucssion is given as to the nature of evaluation procedures in relation to the developing theory of information systems.