Strategic (MIS)FIT: The Implementation of TQM in Manufacturing Organizations

This paper explores how fit with the organization's strategic orientation relates to performance following total quality management (TQM) implementation. Conceptualizing the organization as a system of interrelated activities, we propose that TQM is an ‘elaborating element’ that achieves internal fit when the core elements of the activity system are orientated toward a ‘cost leadership’ rather than ‘differentiation’ strategic position. When internal fit occurs, TQM drives tighter interactions among core elements in the activity system, resulting in greater performance. Using longitudinal data from a sample of 780 manufacturing organizations, we find that TQM is positively related to performance for cost leaders, but negatively related to performance for differentiators. Our findings support the contingency perspective whereby internal fit serves as an overarching contextual factor influencing TQM success. Copyright © 2012 John Wiley & Sons, Ltd.     

An SAO‐based text‐mining approach for technology roadmapping using patent information

A technology roadmap (TRM) links technologies with a company's strategic objectives and so supports acquisition of required technologies in advance of needs. It is a powerful tool for strategic planning and technology management. Because technology is changing rapidly and market competition is fierce, the role of a TRM is becoming increasingly important. To support the role of a TRM, many firms and governments that use roadmapping are becoming interested in reducing costs while retaining objectivity during TRM development. One suggestion to achieve these goals is to use the keyword‐based quantitative approach to creating a TRM, but the information provided by the approach is limited because of the characteristics of keyword information. To solve this limitation, this research uses the concept of ‘function’ to support quantitative analysis for developing a TRM. The concept of function can provide information on the uses and purposes of a technology. To represent a function, a subject–action–object structure is commonly used. The suggested approach allows research and development (R&D) managers to extend the views of product and technology during development of a TRM. In addition, by reducing the time required to develop a TRM, the proposed approach supports quick and accurate decision‐making by R&D managers.     

Measuring strategic performance

This paper demonstrates the inadequacy of traditional measures, that are based on a firm's profitability, for evaluating its strategic performance. Two other measures, one that attempts to assess the quality of a firm's transformations (and not merely its outcomes) and the other that attempts to measure the satisfaction of all of the firm's stakeholders (and not merely its stockholders), are shown here to be important discriminators of strategic performance. The performances of seven ‘excellent’ firms from the computer industry, featured in the recent book by Peters and Waterman, are contrasted with that of seven ‘non-excellent’ firms from the same industry, to develop a framework for measuring strategic performance.     

Generic manufacturing strategies: A conceptual synthesis

This paper provides a conceptual framework that links manufacturing to business unit strategy and focuses on developing the notion of ‘generic manufacturing strategies’ at the strategic business unit (SBU) level. Specifically, an explicit conceptual link is drawn between ‘generic’ business unit strategies and ‘generic’ functional structures in manufacturing. It is proposed that the alternate manufacturing structures implicitly represent ‘generic manufacturing strategies’. Drawing on ideas and concepts from the business strategy literature and manufacturing literature the paper links Porter's generic strategy framework to a complementary manufacturing structure framework that uses three dimensions: process structure complexity, product line complexity, and organizational scope. Viewed from different perspectives, the ‘manufacturing contingency theory’ concepts presented implicitly in the paper can be viewed as an extension of classic research on the interdependence between strategy and structure. The frameworks developed here provide a partial synthesis of knowledge in the broader disciplines of engineering and management without sacrificing academic rigor and practitioner relevance.     

The Layering of Meso‐Level Institutional Effects on Employment Systems in Japan

Japan's corporate governance and employment relations systems have been under considerable pressures to reform towards a more Anglo‐American model, against a back‐drop of intensified global competition and slow economic growth over two ‘lost’ decades. But what is the relationship between these systems, and specifically, how does corporate governance structure condition employment relations practice? This paper adopts the ‘Systems, Society, Dominance and Corporate (SSDC) effects’ framework in order to contextualize and evaluate the outcomes of these pressures, particularly in the period following the 2007–2008 global financial crisis. It reports case study data from various parts of the Japanese economy drawn from a series of firm‐based interviews and a variety of secondary sources. It is argued that there has been a strong degree of continuity in certain employment practices, such as lifetime employment, even in relatively new high technology firms, but that the pattern for other practices, such as seniority‐based pay, is more mixed with increasing differentiation between industries and individual organizations. We articulate a layered assessment of the varying SSDC effects at play in corporate Japan. This differentiation across industries and organizations is a function both of strategic choice (corporate effects) and also the increasing variation in the meso‐level institutional pressures that are experienced at organizational level; that is, the differentiation in the sources and nature of dominance effects that are relevant.     

A diagnostic tool to determine a strategic improvisation Readiness Index Score (IRIS) to survive,adapt, and thrive in a crisis

Crises for business-to-business (B2B) firms are characterized by unexpected or unanticipated severe threats that are highly uncertain where strategic response times are low in which executives are victim of overwhelming time pressures to action fast strategic responses to these events—as the threats bring to question the viability and survivability of the firm. Consequently, crises provoke a profound impact on executives' sensemaking, as they attempt strategically navigate these events. We bridge thinking around crisis management with theories of strategic decision-making and conclude that strategic improvisation is a vital mechanism that enables effective management interventions to be executed as a means of surviving, adapting, or potentially thriving under challenging circumstances. We derive a theoretically grounded framework of five strategic imperatives underlying our 10C Strategic Imperative Framework for improvisation readiness. First, we develop the Improvisation Readiness Index Score (IRIS) as a means for executives to diagnose their organization's improvisation readiness according to the requisite strategic imperatives. Second, we present a three-step guide for executives to consider for managing through crisis with improvisation and the strategic imperatives at its heart. Third, we illustrate the strategy improvisation challenges. This allows executives to close the strategic improvisation gaps between their ‘actual’ and ‘preferred’ readiness.     

A systematic comparative analysis and synthesis of two business-level strategic typologies

Two important business-level strategic typologies were systematically evaluated, analyzed and compared in this study: Porter'S Overall Cost Leadership, Differentiation, Focus, and ‘Stuck in the Middle’ generic competitive strategies, and Miles and Snow'S Defender, Prospector, Analyzer, and Reactor types of organizational adaptation. On the basis of strategic theory, and following a pilot study, 31 strategic variables were evaluated by judges on a seven-point maximum-minimum scale, for each strategy, within its typology. Analysis of variances and concordance among judges regarding the ranking of the strategies on each variable were examined, and a strategic profile was built for each strategy. Proximities between strategies of the two typologies were analyzed using monotonic multidimensional scaling. The analysis indicated similarities and differences between the two typologies. A synthesis of the two typologies is suggested along two dimensions: internal consistency of the strategy, and level of proactiveness.     

The continuing validity of the strategy‐structure nexus: new findings, 1993–2003

This study analyzes whether a diversification strategy facilitates subsequent divisionalization (and hence that ‘structure follows strategy’), and/or whether the multidivisional structure leads to a diversification strategy (and hence that ‘strategy follows structure’). In theoretical terms, this study is original in that it institutes a debate between the Chandler thesis and other perspectives that challenge the generalizability of the strategy‐structure nexus. Interestingly, this new study with contemporaneous data for the period 1993–2003 sheds light on this contested issue and postulates that despite the criticism of Chandler's contribution, it still works. Our results show that strategic diversification affects structural divisionalization, and in turn, structural divisionalization affects strategic diversification. Copyright © 2009 John Wiley & Sons, Ltd.     

Strategic planning in a turbulent environment: evidence from the oil majors

The long‐running debate between the ‘rational design’ and ‘emergent process’ schools of strategy formation has involved caricatures of firms' strategic planning processes, but little empirical evidence of whether and how companies plan. Despite the presumption that environmental turbulence renders conventional strategic planning all but impossible, the evidence from the corporate sector suggests that reports of the demise of strategic planning are greatly exaggerated. The goal of this paper is to fill this empirical gap by describing the characteristics of the strategic planning systems of multinational, multibusiness companies faced with volatile, unpredictable business environments. In‐depth case studies of the planning systems of eight of the world's largest oil companies identified fundamental changes in the nature and role of strategic planning since the end of the 1970s. The findings point to a possible reconciliation of ‘design’ and ‘process’ approaches to strategy formulation. The study pointed to a process of planned emergence in which strategic planning systems provided a mechanism for coordinating decentralized strategy formulation within a structure of demanding performance targets and clear corporate guidelines. The study shows that these planning systems fostered adaptation and responsiveness, but showed limited innovation and analytical sophistication. Copyright © 2003 John Wiley & Sons, Ltd.     

Sensemaking and sensegiving in strategic change initiation

This paper reports an ethnographic study of the initiation of a strategic change effort in a large, public university. It develops a new framework for understanding the distinctive character of the beginning stages of strategic change by tracking the first year of the change through four phases (labeled as envisioning, signaling, re-visioning, and energizing). This interpretive approach suggests that the CEO's primary role in instigating the strategic change process might best be understood in terms of the emergent concepts of ‘sensemaking’ and ‘sensegiving’. Relationships between these central concepts and other important theoretical domains are then drawn and implications for understanding strategic change initiation are discussed.     

Emergent patterns of strategy,environment and performance in a transition economy

Insights from the resource dependence approach, dynamic fit, and strategic choice theories are used to explore the strategies adopted by Chinese enterprises, their settings, and the relationship between strategy, environment, and performance. Results from 959 firms indicate that respondents operating under ‘more marketized’ institutional settings tend to locate themselves in more munificent environments and place greater emphasis on meeting customer needs. Firms in China do not trade off one strategic direction against another, and certain strategy/environment coalignments have significant implications for performance. In particular, performance is better in more marketized and munificent environments and amongst firms who adopt an ‘aggressive’ strategic posture. Copyright © 2004 John Wiley & Sons, Ltd.     

Settling up in CEO compensation: The impact of divestiture intensity and contextual factors in refocusing firms

We examine the relationship between strategic change and CEO compensation by studying how a firm's refocusing program influences CEO compensation after completing the change. We contribute to the ‘settling up’ literature by arguing that strategic change is often uncertain for both the CEO and the board of directors responsible for executive compensation. As such the firm is likely to settle up with the CEO by paying for compensation risk and effort undertaken during refocusing after the extent and impact of strategic change are better known. We find that refocusing intensity is positively related to post‐refocusing CEO total compensation, suggesting that ‘settling up’ through post hoc compensation is an important factor in strategic change. We also find that prior firm performance, governance structure and industry dynamism are important moderators of this relationship. © 2013 John Wiley & Sons, Ltd.     

A Management Capacity Constraint? Obstacles to the Development of the Overseas Chinese Family Business

Overseas Chinese family business (OCFBs) have gained a reputation for cost efficiency, responsiveness, and flexibility as original equipment manufacturers (OEMs) and as pioneers of the mainland's industrialization. This success is based upon a relatively simple ‘personally managed’ organization operating within a network of kin and ethnic relations. To what extent are mid-sized OCFBs now able to develop the capacity to compete in new strategic domains and manage more complex value chains? The paper examines competing views of the OCFBs organizational and competitive capabilities. The strategies of 50 mid-sized Hong Kong based manufacturing firms are used to provide insight into the questions of capabilities upgrading and long-term competitiveness in personally managed enterprises. In contrast to prevailing cultural and institutional accounts of OCFB behavior, the paper suggests that current (western) theory of the family firm and of organizational networks provides an alternative explanation of observed investment strategies and organizational structure.     

Strategy making as iterated processes of resource allocation

Capitalizing on the Bower-Burgelman process model of strategy making in a large, complex organization, we investigate the multilevel managerial activities that lead firms facing similar new business opportunities to respond with different strategic commitments. Our field-based data provide evidence on (I) the role of ‘corporate contexts’ that reflects top managers' crude strategic intent in shaping strategic initiatives of business-unit managers; (2) the critical influence of early business development results on increasing or decreasing middle managers' enthusiasm to the new businesses and top managers' confidence in these middle managers in a resource allocation; (3) the escalation or deescalation of a firm's strategic commitment to the new businesses as a consequence of iterations of resource allocation. We conclude that it is useful to conceptualize strategy making in a large, complex firm as an iterated process of resource allocation.     

Strategic awareness within top management teams

‘Strategic awareness’ is viewed in two ways: the extent to which an executive's perception of the organization's strategy aligns (a) with the organization's ‘realized’ strategy and (b) with the chief executive's perception. Strategic awareness is positively related to hierarchical level, but differs across the three industries studied. Awareness is greater in organizations that have recently changed their strategies than in those that have not.     

Environmental context,managerial cognition,and strategic action: an integrated view

This study addresses an apparent disconnect between two views of strategic action: the ‘economic view,’ which contends that industry structure is the primary influence on strategic action, and the ‘cognitive view,’ which suggests that managerial cognition drives strategic action. We argue that this disconnect has created artificial boundaries between the two perspectives and has limited our ability to develop holistic explanations of strategic action. In response, we develop an integrated model that answers two questions: 1) Does industry context affect managerial cognition? 2) Does managerial cognition mediate the relationship between industry context and strategic responses to environmental changes? To examine these questions, we study the relationship between industry velocity, the structure of top management's cognitive representation of the environment, and the speed of response to environmental events. We find that industry velocity influences the structure of cognitive representations, which in turn influence the speed of response to environmental events. These results support our contention that both industry and cognition variables are critical in developing explanations of strategic actions. These results have implications for our understanding of the development of top managers' beliefs, the relationship between beliefs and action, and the nature of the complex relationship between industry context, managerial cognition, and strategic action. Copyright © 2008 John Wiley & Sons, Ltd.     

Promoting Effective Consultation? Assessing the Impact of the ICE Regulations

Drawing on evidence from longitudinal case studies in 25 organizations, this article examines whether information and consultation (I&C) bodies established in the context of the UK's Information and Consultation of Employees Regulations 2004 have been the vehicle for effective consultation, based on objective criteria. Assessed against the regulations' default provisions that require I&C concerning strategic business issues and major organizational change, a substantial minority of participating organizations were categorized as ‘active consulters’, while a majority were ‘communicators’. The differing trajectories of I&C primarily reflected internal organizational dynamics, particularly management's approach to consultation. Beyond providing the catalyst for managerial moves to introduce I&C, the influence of the statutory framework proved largely peripheral.     

Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry

This paper uses cointegration analysis to study the competitive interaction among firms within the integrated and minimill groups in the Japanese steel industry. The use of cointegration analysis overcomes some of the limitations associated with prior attempts at modeling firm behavior within groups, and allows us to model strategies that take considerable time to adjust. Results indicate that several strategies displayed slow adjustment characteristics. All of the strategies that displayed these properties were cointegrated within the group. Finally, over the long run, the rate of strategic response to ‘shocks’ in the system varied across members and strategies: some converged, while others diverged from the group relationship. We conclude by discussing the relevance of our findings to research on strategic groups and competitive dynamics among firms. Thus the paper contributes to the literature on strategic groups and competitive dynamics, and illustrates the use of cointegration analyses to study the competitive behavior of firms. Copyright © 2002 John Wiley & Sons, Ltd.     

STRATEGIC REFERENCE POINT THEORY

How can executives achieve a match between expected external environmental conditions and internal organizational capabilities that facilitates improved performance? This paper argues that a firm's choice of ‘reference points’ can help achieve strategic alignment capable of yielding improved performance and potentially even a sustainable competitive advantage. Building upon prospect theory and other relevant theoretical perspectives, the strategic reference point (SRP) matrix is developed. A firm's SRP consists of three dimensions: internal capability, external conditions, and time. A theory is developed which posits an optimal SRP structure, and propositions are offered which articulate the expected relationships between the SRP, strategic choice behavior, and firm performance. The paper closes with some suggestions for using strategic reference points in both research and practice.