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COPYRIGHT 2002 Center for Business and Economic Research
Abstract
Recent research has highlighted the importance of middle and lower level managers in strategy formulation in ensuring that the strategy effectively "diffuses" throughout the organization. However, the question remains as to whether prevailing participative management styles in an organization can enhance this process. The present study suggests that the propensity of managers to employ participative management styles was found to positively influence the degree to which strategies were perceived as part of the organization.
Introduction
Strategic diffusion refers to the degree to which a strategy is effectively implemented and becomes an accepted part of the organization. Whereas much of the current research is based on the notion that strategy should "fit" with a variety of organizational and environmental constructs in order to lead to superior performance (e.g., Barney, 1986; Brouthers & Arens, 1999; Hamilton & Shergill, 1992; Neilsen, 1992; Zajac, Kraatz, & Bresser, 2000), researchers have not fully considered behavioral factors in the organization that influence strategic diffusion. This paper considers whether or not the prevailing participative management styles in an organization influence top management's ability to "diffuse" the strategy throughout the organization.
Strategic Diffusion
Three dimensions of strategic diffusion--involvement, understanding, and commitment--have been elaborated in the literature (Parnell & Crandall, 1995). The first dimension--involvement--concerns the degree to which middle and lower level managers were involved in the strategy-making process. Involvement can encompass numerous processes and techniques as long as it reflects top management's active consultation with other managers in the organization. Researchers have consistently found that individuals tend to work harder at attaining a goal when they were involved in setting it (Locke, Latham & Erez, 1988; Roberson, Moye, & Locke, 1999). Since strategy formulation encompasses some degree of implicit or explicit goal setting, greater involvement in formulation enhances efforts at implementation. (1)
Although the concept of non-conceptual management involvement in strategy is not a recent phenomenon, the last decade has produced evidence to suggest that strategy formulation and implementation can reflect a diverse array of top and middle management inputs (Antonio. 1999; Barney, 1986: Burgelman, 1983; Currie, 1999; Thakur, 1998). Mintzberg and Waters' (1985) notion of deliberate and emergent strategies acknowledges the significant role of top and middle managers in the strategic management process. Paralleling the work of Burgelman (1983) and Hiam (1993), Nichol (1992) observed that top management simply cannot effectively develop a strategy and plan for its implementation without assistance from middle managers.
Wooldridge and Floyd (1990) conducted the most comprehensive empirical analysis of middle management strategic involvement. Not only did they find that middle management involvement in strategy formulation improved performance, they also noted that most organizations in the sample deliberately involved middle managers in the process. Although their study reflects a culmination of thought acknowledging involvement beyond the top manager and even the top management team (for example, see Barker & Patterson, 1996; Schilit. 1987), most published studies utilizing perceptual data continued to rely solely on the perceptions of the top manager (Goll & Johnson, 1996).
Wessel (1993) identified numerous individual barriers to effective implementation associated with management involvement, including conflicting managerial priorities, a top-down management approach (i.e., lack of non-conceptual manager involvement in strategy formulation), and poor communication. Others have focused on the need for "selling" the strategy to non-conceptual managers (Coulson-Thomas, 1992; Hambrick & Cannella, 1989), but complete strategy permeation also may suggest non-conceptual manager involvement at the front end. The problem could be so acute that Brache (1992) even suggested that organizations consider adopting a system-oriented organizational structure to improve cross-functional communication, teamwork across functions, and a focus on system-wide goals instead of functional ones.
The second dimension--understanding--suggests that it is much easier to implement a strategy when middle and lower level managers thoroughly comprehend its component parts. Recent research hats emphasized the need for a clear understanding of the organization's strategy among all managers in constructing the superior performing organization (Athanassiou & Nigh, 2000; Meyer, 2000; Wright, Kroll, Pringle, & Johnson, 1990). However, much of the strategy research in the 1970s and early 1980s followed Ansoff (1965) and others (Andrews (1971; Schendel & Hofer, 1979), relying on the understanding of the top manager for insight into an organization's strategic intentions.
However, the belief that top management's clear understanding of strategy is all that matters is myopic. Strategic management helps organizations cope with uncertainty by helping shape the competitive environment (Das, Handfield, Calantone, & Ghosh, 2000; Guth, 1976; Jauch & Kraft, 1986; Katz, Zarzeski, & Hall, 2000). The strategy selected by each organization determines the means by which it intends to successfully meet competitive challenges (Porter, 1980). Better information and certainty about the internal and external environments--including competition--tends to translate into superior performance (Katz et al., 2000). If the
management of uncertainty is the primary challenge of top management (Thompson, 1967), then effective implementation must reflect common perceptions of the strategy at all levels of management (Engdahl, Keating, & Aupperle, 2000).
Understanding, however, is not sufficient. The third dimension--commitment --reflects the degree to which managers determine to see the strategy effectively implemented and become part of the organization. In the behavioral literature, commitment has been measured effectively through surveys. Theory and empirical research suggest a relationship between commitment and implementation (Locke et al., 1988). Whereas most of the emphasis on organizational commitment has been placed on gaining commitment to how things are done, little management emphasis has been focused on the issue of gaining commitment to what is done--the strategic dimension of the organization (Engdahl et al., 2000).
In sum, strategic diffusion is a function of management involvement in strategy development, management understanding of the strategy, and management's commitment to its effective implementation.
The Propensity for Participative Management
Research has suggested that the factors associated with strategic diffusion (i.e., involvement, understanding, commitment) tend to be enhanced through participative management styles (Yukl, 1989). However, not all managers possess the same desire to utilize...
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