Strategic implementation: Five approaches to an elusive phenomenon

The traditional textbook approach to strategy implementation was to treat ‘implementation’ as an activity following ‘formulation’. Usually, the topic was treated as a question of organization design, where systems and structures were manipulated in concert with strategic goals. More recent views treat implementation either as an issue of gaining prior group commitment through coalitional decision-making, or as a question of total organizational involvement through a strong corporate culture. This paper reviews the evolution of these approaches, developing four models to characterize them, and suggests a fifth one, with strategy emerging in an almost-implemented form from within the firm.     

Inside the black box of the corporate staff: Social networks and the implementation of corporate strategy

In multidivisional firms, the corporate staff is central to the implementation of corporate‐level strategy, but empirical evidence on its function is limited. We examine one corporate staff through e‐mail analysis. We find sharp cross‐sectional differences in communication patterns: staff members have networks that are larger, more integrative, and richer in structural holes. However, much of this difference is attributed to sorting processes, rather than being caused by employment in the corporate staff per se. Further, once people receive the ‘corporate imprimatur,’ they retain aspects of it even when they move back to the line organization. These results imply that the literature's emphasis on structure as a means to achieve coordination undervalues a selection process in which individuals with broad networks match to coordination‐focused jobs in the corporate staff. Copyright © 2013 John Wiley & Sons, Ltd.     

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 dalliances as an enabler for discontinuous innovation in slow clockspeed industries: evidence from the oil and gas industry

The concept of ‘strategic dalliances’– defined as non‐committal relationships that companies can ‘dip in and out of,’ or dally with, while simultaneously maintaining longer‐term strategic partnerships with other firms and suppliers – has emerged as a promising strategy by which organizations can create discontinuous innovations. But does this approach work equally well for every sector? Moreover, how can these links be effectively used to foster the process of discontinuous innovation? Toward assessing the role that industry clockspeed plays in the success or failure of strategic dalliances, we provide case study evidence from Twister BV, an upstream oil and gas technology provider, and show that strategic dalliances can be an enabler for the discontinuous innovation process in slow clockspeed industries. Implications for research and practice are discussed, and conclusions from our findings are drawn.     

Planning perceptions and planning results

The need for planning in business organizations operating in today's complex environment is widely accepted. Implied is an assumption that planning improves performance. However, the empirical evidence for such a claim is thin. Since planning is an integral part of strategy formulation, the facts to confirm or refute an assumed connection between planning and performance invite attention. Our research focuses on new data from 61 companies which test this linkage and, in addition, reviews the conclusions of prior empirical studies.     

Management control systems and their effects on strategy formation at middle‐management levels: evidence from a U.K. organization

The relationship between management control systems (MCS) and the strategy process is a largely unexplored area of strategic management. This paper reports the findings of an in‐depth, longitudinal case study of a major British‐based organization operating within the increasingly globalized telecommunications industry. Informed by Simons' ( 1991 , 1994 , 1995 ) theoretical model of the strategy process–MCS relationship, the study examines the nature and extent of this relationship at middle‐ and lower‐management levels. Of particular interest were the effects that the design and use of three groups of MCS have on the development of new ideas and initiatives. Findings suggest that beliefs systems influence managers' initiation or ‘triggering’ decisions, the use of administrative controls affects the location of strategic initiatives and may lead to the polarization of roles, and simultaneous emphasis on a range of key performance indicators can create a bias towards one set of measures and against another. Copyright © 2002 John Wiley & Sons, Ltd.     

Research notes and communications. Some connections between corporate-level planning and diversity

Two accepted concepts of management literature are (a) increasing diversification as companies progress through ‘stages of growth’, and (b) the responsibility of the corporate level for diversification-type planning. The thrust of this research note is to provide an empirical test of these independently developed concepts; that is, a test that focuses on the relationship between corporate-level planning and diversity.     

Can top managers be strategists?

Given the multiple calls on top excutive time and the increasingly complex and disparate makeup of most large diversified companies today, top management involvement in the strategic planning process in too often limited to little more than the basic allocation of corporate resources among previously selected options. This situation, the author suggests, is for from ideal; it is time to reassess top management's role in and generally orchestrating the diverse human elements of the planning process so as to steer it on a course between advocacy and consensus toward the best possible strategy for the corporation as a whole.     

Perspective: Changing Product Development Strategy—A Managerial Challenge

By changing its product development strategies to match more closely the wants and needs of the marketplace, a firm can transform product development into a formidable competitive weapon. Just as formidible, however, is the effort that this transformation requires. Established organizational structures and corporate politics present significant barriers to acheiving fundamental changes in product development strategy. Christer Karlsson and Pär Åhlstrom present a case study of one firm's efforts to build capabilities for creating new products quickly and efficiently. Rather than focus on the content of the firm's product development strategies, however, they emphasize the process this electromechanical manufacturing firm used for changing its product development strategy. Drawing on their experiences as clinical researchers in this effort, they describe key lessons learned during the change process, and they offer suggestions for managing the process of changing product development strategy. They highlight five key lessons learned during the strategy development process. First, rather than viewing product development as a line function, a firm should view product development as a key executive area with responsibility for the company's competitive position. Second, market issues are the responsibility, not only of marketing, but also of product development and production. Third, to avoid corporate myopia, management control systems must consider not only time and money, but also acheivement of goals. Fourth, strategic planning flows more smoothly if the participants start by mapping the firm's past and present position before attempting to define the desired position. Finally, formulation of a product development strategy is the responsibility of a multifunctional team of executives. Managers should keep a few rules in mind when devising a process for formulating a product development strategy. First, adopt a learning strategy throughout the change process. Formulation of a product development strategy involves many abstract concepts, and a successful strategy requires cross-functional consensus. Second, combine tangible, direct activities with long-term strategic aims. Third, avoid the pitfall of best practice. The form that the product development organization takes depends, to a great extent, on the type of development work. Finally, before discussing future strategies, the strategy formulation process should focus on analyzing the current situation.     

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.     

Differentiation strategies in ‘stalemate industries’

Empirical studies conducted at the Institut de Recherche de l'Entreprise (Lyon, France) show that, in ‘stalemate industries’ (cf. the BCG's typology, 1981), differentiation strategies are effective and profitable alternatives to the usual strategic recommendations. The knowledge of customers' behavior shows up several opportunities for differentiation, hidden by some kind of ‘strategic presbyopia’. Total quality or ‘zero default’ strategy (product quality regularity, punctuality of deliveries, quick response to unexpected orders, quick and correct answers to requests, short delivery times) is the major opportunity for differentiation. Such strategies are compatible with a low-cost position; excellent companies which succeeded in building this ‘total advantage’ (diferentiation + low cost) over their competitors enjoy the highest market share growth and profitability.     

Planned patterns of strategic behavior and their relationship to business-unit performance

This study examined the moderating role of planning sophistication on the strategy-performance relationship in 97 manufacturing firms representing 60 different industries. Cluster analysis was used to group the firms according to their strategic orientation. Five groups emerged. Significant differences in performance across selected groups were found establishing a ‘baseline’ strategy-performance relationship. Strategic orientations emphasizing product innovation or those incorporating ‘efficiency’ and ‘differentiation’ patterns of strategic behavior were associated with significantly higher performance levels than two other groups. The nature of each firm's planning process was then introduced via a two-way ANOVA procedure to determine if ‘process sophistication’ moderated the strategy-performance ‘baseline’. Level of planning sophistication was found to significantly moderate the previously established strategy-performance baseline.     

Learning to plan and planning to learn: resolving the planning school/learning school debate

This paper resolves the long‐standing debate between the two dominant process schools in strategy. Analysis of the planning practices of 656 firms shows that formal planning and incrementalism both form part of ‘good’ strategic planning, especially in unstable environments. Environment neither moderates the need for formal planning nor the direction of the planning/performance relationship, but does moderate firm planning capabilities and planning flexibility. In unstable environments planning capabilities are far better developed and formal plans more amenable to change. The planning/performance relationship is, however, moderated by planning duration: at least four years of formal planning are required before external performance associations are noted. Copyright © 1999 John Wiley & Sons, Ltd.     

Strategic planning as a complex and enabling managerial tool

Research summary : The role of the strategic planning process in the ongoing generation of innovative knowledge is vital to the survival and growth of a firm, especially when technologies and market conditions are rapidly changing. We analyze data from a survey of firms in high‐technology industries to determine whether it is possible to break the commonly experienced trade‐off between strategic planning's positive influence on firm profitability and its negative influence on firm innovation. We draw on Adler and Borys's (1996) conceptualization of bureaucratic process types to identify several firm characteristics that have the potential to affect whether employees perceive strategic planning as enabling to their creative endeavors. We find that contingent effects between strategic planning and the identified firm characteristics exist that can break the trade‐off. Managerial summary : A tension exits in the literature about whether strategic planning hurts or helps innovative activity. Our analysis of data from 227 business units in high‐technology industries indicates that strategic planning is a complex process that can be perceived by employees as enabling or coercive. Our results confirm that strategic planning negatively affects innovative activity but positively affects profitability for average firms. We find, however, controllable firm characteristics—risk‐taking and knowledge‐based reward systems—affect the trade‐off. Given the higher levels of risk‐taking and knowledge‐based reward systems, firms can use strategic planning to achieve both high returns on investment and a high level of innovative activity. Copyright © 2015 John Wiley & Sons, Ltd.     

Strategic reward systems: a contingency model of pay system design

A limited number of studies have addressed the idea of ‘strategic’ reward systems—the matching of compensation systems to a firm's strategy. Prior research on this topic has been confined to U.S. firms, however, and a number of key questions remain unanswered. Using a sample of 917 employees from two large Swiss financial institutions, we found that pay systems are linked with divisional strategic orientation, but in a different form than prior studies. Additionally, we identify hierarchical position as an important variable in the tailoring of reward systems. Hierarchy has a significant main effect on pay plan design, and an interactive effect with strategic orientation. Copyright © 2001 John Wiley & Sons, Ltd.     

Operationalizing strategic planning

This article reports on a study which had the purpose of probing the reality of strategic planning, of highlighting some of its shortcomings then contrasting that reality with the literature-based constructs which are taught in business schools worldwide. In this way it is shown that the benefits of strategic planning are not realized unless the process is totally integrated with current operations. This study shows that only rarely is strategic planning a live process within companies. However, to make an improvement is extremely difficult because frequently the commitment and energy does not exist in companies. As a result, many companies are failing to benefit from their strategic planning efforts and are thus failing to establish appropriate long-term corporate positionings.     

Industry influences on strategy reformulation

This paper emphasizes the contribution of ‘borrowed experience’ to strategy reformulation. The industry group is described as a particularly important arena in which niche-related problems and solutions are identified and tested. Industry-wide mistakes in environmental interpretation and strategic response provide interesting evidence of the importance of this contribution to organizational decision making. An industry oriented view of strategy reformulation requires two kinds of research which are rarely conducted today. We need to know more about the pool of strategic concepts which a group of organizations holds in common at any given time. Spender's study of fork-lift truck rental companies is reviewed as an example of this kind of work. A second kind of needed research involves change in strategic concepts over time. A study of the perceived import threat to the appliance industry from 1950 to 1975 is summarized as an example of this second kind of research.     

Who needs experts most? Board industry expertise and strategic change—a contingency perspective

Research summary: We analyze the effects of board industry expertise on corporate strategic change and the moderating role of institutional quality. We suggest that country‐level contingency factors mitigate the effect of experienced boards on strategy formation by providing alternative sources of information and control in strategic matters. We develop institutional quality as institutional information provision and institutional control provision to test our hypotheses on a sample of firms from MSCI Europe and the S&P 500. Our findings confirm that industry expertise is a salient driver of strategic change across countries. The strength of the effect, however, depends on the institutional quality. We submit that weak institutions require greater board industry expertise as an alternative channel of information and control. Management summary: This study provides new empirical evidence that experience in the firms' industries enables directors to increase strategic change. Our findings show that this effect is even stronger in countries with weak regulatory environments. We hereby provide guidance for multiple stakeholders. First, shareholders seeking a more active adjustment of their firms' strategies may want to compose boards that leverage such experienced directors. Second, directors can use their industry experience to control and to challenge managers better to move beyond the status quo. Third, managers lacking access to information on potential strategic change can use such experienced directors for strategic advice and as a source of information. Overall, we add to the understanding of the corporate board's role in shaping strategy and the influence of weak regulations. Copyright © 2016 John Wiley & Sons, Ltd.     

Applying multiple perspectives to the design of a commercialization process

Most commercialization models begin by taking an idea through some sort of stage‐gate product development process. There is much talk about building market thinking into this process, but this paper argues that much more is required. The research identified three perspectives required to be present at all stages of product development. The first is labelled ‘technical and operational’, the second ‘strategic’ and the third ‘commercial’. The paper argues that each perspective is required at every stage to drive the right activities that lead to successful commercialization. The science, idea and opportunity stage leads onto the technology and feasibility stage, which in turn leads onto the product and market readiness stage. The research applied the grounded theory methodology to categorize and represent data obtained from interviews and desk research. The resulting model was introduced to a New Zealand Crown Research Institute during a consulting assignment in 2004. Three external experts were selected based on their particular perspectives and experience in the area of product development. Each perspective was built into the commercialization process. Applying multiple perspectives has led to a more robust approach to product development and a greater awareness of how multiple tools work together to create a holistic product development process. Each perspective of the commercialization process can be broken down into detailed stages. The technical and operational perspective addresses areas such as opportunity creation, proof of concept and market readiness. The strategic perspective addresses areas such as strategic fit, strategic analysis/choice and pathways to market. Finally, the commercial perspective addresses areas such as opportunity assessment, feasibility study/business planning and launch.After being in place for 18 months, the challenges faced in implementation were discussed with the current commercialization manager and the model was adapted to another institute wishing to develop a design‐led commercialization process. A key finding of the research was the common understanding of language and meaning across three distinct disciplines and the involvement of each discipline in the decision‐making process. All parties accepted the value of each other's contribution once the different perspectives were understood and accepted. The paper provides useful insights for those involved in the design of commercialization processes and establishes a multi‐dimensional framework that assists in facilitating the different perspectives required for successful commercialization.