Purpose
This study aims to investigate the relationship between task environment, organizational agility, perceived managerial discretion and strategy implementation on unit performance.
Design/methodology/approach
Based on the literature review, a structural model was developed. A 74-item questionnaire was circulated among middle managers in sales and marketing. The data collection method used purposive sampling. A total of 228 valid responses were obtained. This study was conducted in a leading pharmaceutical company in Indonesia. The data were analyzed using structural equation modeling.
Findings
Based on the data analysis, this study shows that task environment and organizational agility act as antecedents of perceived managerial discretion, which drives strategy implementation resulting in unit performance.
Originality/value
Different from previous studies that examined the linkage of inertial forces and discretion, this research scrutinized the effects of organizational agility on perceived managerial discretion and the direct role of perceived managerial discretion on internal strategy implementation.
The rapidly changing and disruptive environment makes the business competition more hypercompetitive. The fundamental challenge that companies often face is not in the strategic planning process, but rather on how to ensure the formulated strategy can be well-implemented. Currently, the literature is still dominated by theories and practical advice on planning and strategy formulation, and there is only limited studies on the role of discretion on strategy implementation. Therefore, this study aimed to find out what is the role of perceived managerial discretion in the process of strategy implementation and its implications on organization performance. By reviewing the literatures, this study examined whether task environment, organizational agility and cognitive complexity influence the managerial discretion, and whether strategy implementation mediates perceived discretion of middle manager and organization performance. This paper presented a proposed research model, four propositions that need to empirically be tested, proposed research method, and a conclusion.
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