In this study we argue that the approach to strategy formation reflects organizational and individual influences. The study, based on questionnaire responses from 359 firms, examines a number of organizational and individual factors influencing the type of strategy formation process adopted. The constructs of strategic posture, organization structure, management ownership, and Chief Executive Officer (CEO) experience are measured. Three models predicting strategy formation approaches are explored. First, an organizational model emphasizing the impact of strategic posture and organization structure is analyzed. Second, a model is tested dealing with CEO and top management team characteristics reflecting the effects of agency costs and experience base. Finally, an integrative model combining both organizational and individual factors is evaluated. The results highlight the importance of organizational factors and show, for instance, that entrepreneurial firms tend to adopt more formal strategic planning approaches, while conservative firms adopt more incremental approaches. In addition, both management shareholding and CEO experience are negatively related to formal strategic planning activities. IntroductionStrategy development has received renewed attention from both practitioners and scholars as environments become more competitive (Bettis and Hitt 1995) and as academics and consultants advocate the necessity of enhancing strategic thinking within firms (for example, Hamel and Prahalad 1994). One specific modality of strategy development, namely strategic planning, has received significant research attention.Dr. Gibbons is Jefferson Smurfit Professor of Corporate Planning at University College Dublin in Ireland. Current areas of research interest include strategy processes, firm-level technology policy, and corporate entrepreneurship.Dr. O'Connor is management consultant in the areas of strategy and operations management and also lectures at University College Dublin in these topics. Current areas of research interest include the strategy formation process, technology policy, entrepreneurship, and the strategic objectives adopted by high technology startup operations. *The authors thank the National Institute of Technology Management for assistance in making this research possible and Colm O'Gorman for helpful comments on an earlier version of this paper.The evaluation of the performance effects of strategic planning has been a central concern of researchers over the past three decades (for example, Brews and Hunt 1999;Bracker, Keats, and Pearson 1988;Robinson and Pearce 1984). While results have varied, evidence suggests that formal strategic planning is related to superior performance. For example, Schwenk and Schrader (1993) conducted a metaanalysis of studies into the effects of formal strategic planning on the financial performance of small firms and concluded that strategic planning has a significant, positive association with financial performance. Brews and Hunt (1999), in a sample survey among relativel...
Drawing from signalling theory, this study examines how the stock market reacts to the public announcement of the hiring of management consultants and whether it differentially values clients on the basis of their financial profitability and the brand-name of the engaged consultant. An event study analysis of 118 client firms that publicly announced the hiring of management consulting firms finds that the stock market, on average, responded positively and significantly to the engagement news. Regression analysis further reveals that the stock market reaction tended to be the highest for client firms that had the highest profitability levels. In addition, the stock market reaction to the hiring announcement was not related to the consultant's brand-name reputation; clients engaging the most reputable consultants (e.g.McKinsey & Company, Bain, Boston Consulting Group, Booz-Allen Hamilton) did not realize any different market response than those clients that employed the other consultants. Overall, most client firms that publicly announced the hiring of management consultants experienced a rise in their market value and those that had the highest financial profitability realized the highest increase. Further, the findings imply that there may be boundaries to reputational spillover benefits in partnering relationships.
Social capital has been identified as crucial to the fostering of resilience in rapidly expanding cities of the Global South. The purpose of this article is to better understand the complexities of urban social interaction and how such interaction can constitute 'capital' in achieving urban resilience. A concept analysis was conducted to establish what constitutes social capital, its relevance to vulnerable urban settings and how it can be measured. Social capital is considered to be constituted of three forms of interaction: bonds, bridges and linkages. The characteristics of these forms of interaction may vary according to the social, political, cultural and economic diversity to be found within vulnerable urban settings. A framework is outlined to explore the complex nature of social capital in urban settings. On the basis of an illustrative case study, indicators are established to indicate how culturally specific indicators are required to measure social capital that are sensitive to multiple levels of analysis and the development of a multidimensional framework. The framework outlined ought to be adapted to context and validated by future research.
A theoretical model of managerial careers in organizations was tested by questionnaire. Respondents were 200 managers attending management courses. The model incorporated traditional structural predictors of objective and subjective indices of managers' career progress. It also introduced perceptions of the career management practices of an organization as a predictor, together with career progress, of satisfaction with career management. Results indicated that an organization's structure was a powerful predictor of its perceived career management practices; these in turn were more powerful predictors of satisfaction with career management than was career progress; of particular power was the perceived fairness of career management practices. Regression analysis indicated that the model was generally supported. It was concluded that perceived equity is a powerful determinant of satisfaction, and that therefore an organizational model of career management as part of a psychological contract is likely to be more effective than one based on the prescriptions of human resource management ideology.Since the pioneering work of Schein (1978), it has been realized that careers within organizations can be viewed from two perspectives: that of the organization and that of the employee. There have been repeated recommendations that both parties' interests and aspirations should be taken into account (e.g. London and Stumpf, 1982;Arthur and Kram, 1989) when career moves are chosen. However, there has been little empirical research which incorporates both perspectives. What research has been conducted has mainly focused on structural features of organizations and their effects on objective career variables and managerial level. The principal objective of the present research is to test a model of managerial careers in organizations which incorporates:organizations' perceived career management practices as well as structural data; Address for correspondence: Sundridge Park Management Centre, Plaistow Lane, Bromley, Kent BRI 3TP, UK.individuals' subjective career timetable and satisfaction with career management as well as objective progress.The model is presented in Figure 1, and the following review of the literature will proceed from left-to-right of the model.The relationships of organization structure, managers' career history and personal data to career progress have been thoroughly investigated. In the UK, Nicholson and West (1988) found that the more inter-organizationally mobile managers had been, the higher their managerial level. In the USA, Rosenbaum (1979Rosenbaum ( ,1989) discovered a significant negative relationship between the time individuals spent in their first job in an organization and the level they ultimately achieved. He based a tournament theory of careers on these results, suggesting that if individuals failed to win a promotion in an early round of the tournament, they are less likely to progress through later rounds. Veiga (1983) repeated this finding in three more organizations, also large in size ...
Despite its theoretical and managerial significance, subsidiary entrepreneurship and its effects on subsidiary contribution remain underexplored in the literature. We propose that subsidiary entrepreneurship encourages more creative strategic responses to escalating environmental change. We explore the direct and mediating effects of subsidiary entrepreneurship on subsidiary contribution to the MNC, particularly subsidiary strategy creativity. We use structural equation modelling to test our propositions on data generated from surveying the population of Irish subsidiaries of foreign MNCs, and find strong support for our theoretical predictions. The managerial implications of subsidiary entrepreneurship in generating creative strategy, prompting strategic initiatives and improving performance are discussed.
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