The role of personnel commitment to strategy implementation and organisational learning within the relationship between strategic planning and company performance

Abstract

PurposeThe study seeks to add to the existing body of knowledge on the link between strategic planning and company performance by exploring the mediating role of personnel commitment to strategy implementation and organisational learning. To study the indirect link between strategic planning and company performance, the paper aims to introduce a participative strategic planning construct that may enable firms to: commit personnel to strategy implementation; increase organisational learning; and improve company performance.Design/methodology/approachUsing data from 160 small and medium‐sized Finnish IT companies, the authors conduct an Mplus‐analysis.FindingsThe findings indicate that participative strategic planning positively affects personnel commitment to strategy implementation, which thereby increases company performance. However, according to the analysis, participative strategic planning does not impact organisational learning, although organisational learning does have a positive impact on company performance.Research limitations/implicationsThe results of this study are generalisable to a dynamic industry context of small and medium‐sized IT‐firms operating in a small open economy, such as that of Finland.Practical implicationsThe results suggest that managers need to involve personnel in strategic planning to increase personnel commitment to strategy implementation. However, because participative strategic planning does not facilitate organisational learning, managers need to determine other ways to facilitate learning at an organisational level.Originality/valueThe paper highlights the role of participative strategic planning, which facilitates personnel commitment to strategy implementation and thus improves company performance.

Conceptualizing and measuring strategy implementation: A multidimensional view

“…The evidence from the works of Noble () and Okumus (, ) indicate that, predominantly, researchers are interested in understanding only one aspect (or dimension) of strategy implementation and how that related to the performance (Kohtamäki et al, ; Lamont, Williams, & Hoffman, ; Waldersee & Sheather, ). A close look at the studies in Table support the assertion made by Hrebiniak and Joyce () that strategy implementation research has been fragmented as it has been reported in a variety of management disciplines, for example, project management (Bryson & Bromiley, ), organization behavior (Kohtamäki et al, ), and marketing literature (Sashittal & Jassawalla, ). This fragmentation has led to discipline‐specific measurement and subsequently fails to provide a comprehensive approach to concept measurement.…”

“…The value of strategy implementation in strategy research is found in the concept of strategy and the strategic management modelsometimes denoted as the "process" or "framework" (Ackoff, 1970;Andrews, 1971;Ansoff, 1965;Dyson & O'brien, 1998;Espinosa, Reficco, Martínez, & Guzmán, 2015;Kazmi, 2008) and from many decades of strategy planning-performance studies (Grant, 2003;Kohtamäki, Kraus, Mäkelä, & Rönkkö, 2012;Kudla, 1980;Miller & Cardinal, 1994;Pollanen, Abdel-Maksoud, Elbanna, & Mahama, 2017;Thune & House, 1970).…”

A consideration of organisational sustainability in the SME context

“…Assumptions that small firms or SMEs are considered "scaled-down" versions of a large firm have been successfully challenged in the literature, and there is widespread acceptance that small businesses are not just "little big businesses" (Hill et al, 2002). SMEs have their own particular characteristics that affect the way they operate (Doern, 2012;Filley and Aldag, 1988;Kohtamakii et al, 2012;Kwong, Jones-Evans and Thompson, 2012;Roper and Scott, 2009;Tierney et al, 2012). This supports the assertion that the unique characteristics of the SME require existing organisational sustainability models to be revisited to take cognisance of the particular context and circumstances in which such firms operate.…”

The strategic entrepreneurship process – new avenues for research

“…Our first paper emphasizes entrepreneurial leadership (Kansikas et al, 2012). The second paper makes the connection between entrepreneurial leadership and resource management by highlighting the role of commitment in strategy implementation (Kohtamäki et al, 2012), while the third paper emphasizes the role of slack resources in the strategic resource management subprocess (Cassia and Minola, 2012). The fourth paper moves on towards innovation by discussing the contingent role of family firm characteristics on the creation of innovations.…”

“…Strategic resource management is the focus of Kohtamäki et al (2012), who contribute to this process step by focussing on the role of strategic planning (Kraus et al, 2008). The authors begin by suggesting that strategic planning has a positive effect on venture performance.…”