Decentralized post-bureaucratic organizations are deemed to display superior performance in dynamic environments, but recent evidence indicates that centralized integrative cross-functional processes may be equally critical. Accordingly, this paper hypothesizes that organizational performance can be ascribed to the simultaneous emphasis on decentralized strategy making and strategic planning processes. This is investigated in a study of 185 manufacturing organizations operating in diverse industries spanning food processing and computer products. The study shows that both decentralized decision structure and planning activities are associated with higher performance in dynamic environments. These findings confirm that effective organizations engage in more complex strategy formation processes that complement the decentralized post-bureaucratic form with formal mechanisms of rational analyses and operational integration. The paper highlights a need to extend our understanding of the duality between decentralization and planning. Copyright Blackwell Publishing Ltd 2004.
One of the most enduring puzzles in the strategy literature is the negative association between risk and return known as the Bowman paradox. This paper formalizes a model of strategic conduct based on the concept of strategic fit and the heterogeneity of firm strategic capabilities. This model is shown mathematically to yield the negative association of the Bowman paradox. Furthermore, the model makes several other testable predictions. To examine these predictions, simulated data from the model are compared with a large empirical study of 45 industries during 1991-2000. The predictions of the model are consistent with the empirical data.
It is generally recognized that strategies can evolve from both intended and emergent actions and this understanding gradually permeates the strategy literature. Yet, the two phenomena are rarely analyzed as complementary processes and, if so, the analyses are usually conducted around case‐based studies. To circumvent this, this paper develops an adaptive strategy‐making model and incorporates measures of emergent and intended strategy modes to underpin quantitative analysis. Structural equation modeling applied on data from 185 business entities then shows that emergence fostered by autonomous and participatory strategy‐making facilitates adaptive behavior, which in turn leads to higher performance outcomes. However, performance is enhanced further when the adaptive initiatives are integrated through strategic planning. These findings indicate that emergence is an essential driver of performance but is more effective if mediated by planning activities. This result has important implications for strategy research and strategic management practice.
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