The role of cognitive load in effective strategic issue management

Firms have different ways of addressing issues emerging from outside their regular calendar-driven strategy processes. These practices tend to be unstructured, organization specific, and highly dependent on the characteristics of the strategic issues themselves. Building on three dimensions of cognitive load—intrinsic, germane, and extraneous cognitive load—we extend existing research on strategic issue management by showing how different team-level choices in strategic issue processing and organizational congestion interact in their effects on a firm's strategic issue management performance. Based on an in-depth analysis of all 92 strategic issue decisions in a large multinational firm during a three-year period, we find that organizational disturbances influence strategic issue initiation by top management, which in turn influences the quality of strategic issue management practices and subsequent performance outcomes. We conclude by providing recommendations for managers on how they can decrease the sensitivity of their companies' strategic issue systems to external disturbances.     

Developing strategic thinking

This paper looks at the problem of getting managers to contribute effectively to strategic planning, and focuses on the role of management development approaches in ensuring that this happens. A number of formal, and less formal, management development techniques are discussed in the light of their relevance for developing strategic awareness. The importance of providing exposure to strategic issues at an early stage in managers' careers is stressed, and also the need to encourage managers to take initiatives in obtaining their own development. Some of the most fruitful techniques involve taking full advantage of the ‘natural learning’ that takes place on the job, and those which provide a close integration between management development and the planning process—such as projects and ‘task forces’. Finally the role of senior managers in helping to create and maintain a climate in which strategic abilities can develop is discussed.     

Information for more effective strategic planning

This paper illustrates how an entity—called a ‘strategic data base’ (SDB)—can be developed to provide important information in a form which makes it directly useful in various phases of a strategic planning process. The strategic data bases are concise statements of the organizational and environmental situations which define the organization's most salient problems, opportunities, and constraints. These SDBs may be developed through a participative process involving tasks forces which are made up of managers representing the diverse interests of the organization. The strategic data bases thereby become important informational inputs to planning which can directly serve to enhance the quality of planning decisions. Moreover, the process of developing SDBs can be an important learning device for those middle managers who can become involved in such a process at a much earlier point in their career than that at which they might normally engage substantively in the organization's overall strategic choice process.     

Strategy restoration

Discussions of strategic change generally assume that managers strive to break free from the constraints of their organization's past so that they can forge ahead into the future. However, some organizations instead opt to reinterpret and reenact abandoned strategies drawn from their own history. Such actions are largely unaccounted for in the literature on strategic change. Accordingly, we propose here a conceptualization of a distinct type of strategic change that we call “strategy restoration.” We first outline how strategy restoration fills a gap in current understandings of strategic change. We then elaborate conditions that motivate and enable organizations to pursue strategy restoration rather than other types of strategic change. Two components of the framework—organizational traditionality and memory—characterize the organization itself, and two—nostalgia and perceptions of the organization's authenticity—characterize the market in which the organization operates. The proposed conceptualization of strategy restoration and discussion of its underlying mechanisms carry implications for researchers and managers.     

The Case for Managerial Ruthlessness1

This paper summarizes relevant literature and reports on a study which has examined the behaviour and attributes of managers in British mid-sized companies in which growth is a strategic objective. The study used a grounded, interpretive methodology, which allowed the development of theoretical propositions which have not been subject to previous empirical examination. This paper deals with one aspect of the findings, namely ruthlessness on the part of managers in dismissing or otherwise dealing with poorly performing members of staff. This aspect of management was an important factor in the subject organizations' ability to achieve their chosen strategy, and is a phenomenon which does not appear to have been developed in any previous models of effective managerial behaviour. Managerial ruthlessness influences strategic implementation in a number of ways – it affects control of the organization, team building and the ability to respond to changes in the environment or undo mistakes in appointments. This paper also outlines attributes and characteristics of both the individual manager and the organization which allows ruthlessness to be developed and used effectively, for example self-confidence; the ability to ensure that criticism or dismissal is not seen as personal; the separation of work and social life; and the ability to focus on objectives rather than the person. Organizational support and training in such behaviour also appeared to be helpful contributors to the development of such behaviour.     

Was müssen Führungskräfte können?

Ethics Education complements business administration only if it teaches strategic competencies that help managers to become better leaders. To this end, this article sketches an ordonomic approach to an economic ethics for competitive markets, to a business ethics for firms (corporate citizens), and to a process ethics for new governance. The core idea of this ordonomic approach is the win-win concept of mutually beneficial value creation. Thus, ordonomics is compatible with the market economy and at the same time supplements the management education in business schools: This approach systematically identifies strategic competencies that enable managers to display the kind of entrepreneurial leadership that is necessary for firms to fulfill their social function of value creation—by making use of moral commitments as a factor of production.     

Strategic Assessment Model (SAM): A Multiple Criteria Decision Support System for Evaluation of Strategic Alternatives*

The evaluation of strategic alternatives is a particularly difficult task. This difficulty is due to the complexities inherent in the evaluation process and the lack of structured information. The evaluation process must consider a multitude of relevant information from both the internal and external environments of the organization. Various analytical and normative models have helped decision makers utilize large volumes of information in strategic evaluation; however, most of these models have some limitations. We present a multiple criteria decision support system, called strategic assessment model (SAM), that addresses some of the limitations inherent in the existing models. SAM captures the decision maker's beliefs through a series of sequential, rational, and analytical processes. The environmental forces—decomposed into internal, task, general opportunities, and threats—are used along with the analytic hierarchy process (AHP), subjective probabilities, the entropy concept, and utility theory to enhance the decision maker's intuition in evaluating a set of strategic alternatives.     

A strategic perspective for make or buy decisions

Make or buy decisions have typically been relegated to purchasing departments. While this is not totally unjustified, top management must consider the strategic implications. In essence, operative decisions are made here which influence the strategic thrust of the organization. Make or buy decisions have substantial strategic implications in the entire planning process. They can affect a firm's competitive advantage, and alter the types of alternatives considered in the planning process.

It is argued that strategic considerations should outweigh technical and conventional approaches to make or buy decisions. Top management needs to put these decisions back on their strategic agenda.     

Planning for a professional association

Strategic planning for non-profit organizations presents special problems, both in concept and in application. The problems are particularly acute when the organization is a voluntary one, with highly heterogenous membership. This paper describes a multi-year effort to develop a member-needs based strategic long-range planning system for National Association of Realtors in the U.S.—a complex organization of 700,000 members, which combines the traditional functions of a trade association, an educational system, and of several professional societies. Problems, approach, and special techniques are described and discussed, with implications for senior managers and planners in both the public and private sector.     

Innovation in Strategic Human Resource Management: Building Capacity in the Age of Globalization

This article addresses innovation as a strategic instrument in human resource management capacity building in the age of globalization. To meet the challenges of globalization—negative as well as positive—capacity building is needed in areas of organization, management, governance, and public administration all over the world. Innovation is defined, strategic innovations and innovative strategies are explained, capacity building is delineated, and over 22 areas or realms of innovation are identified, explained, and emphasized as strategic instruments of capacity building. Viewing human resources as human capital and beyond, the article argues that without human resources nothing can be accomplished, and without a well-trained, well-developed, well-appreciated, and well-managed human resources, modern organizations of government and business cannot meet the challenges of the globalization age, which demands a new generation of future-oriented, anticipatory managers who can develop effective visions and manage organizations by riding the high waves of change in the turbulent world.     

United we stand: HR and line managers’ shared views on HR strategic integration

Based on strategic consensus literature and the strategic integration of HRM, this study hypothesizes that HR and line managers’ shared views on HR strategic integration (i.e., strategic congruence) lead to beneficial organizational outcomes. Drawing on a dyadic sample of 102 organizations, we examine the strategic congruence of line management (LM) and HRM, its joint impact on HRM value, and, in turn, the influence on internal efficiency. In this context, HRM value refers to the perceived importance of the HR function to the organization. Structural equation modeling, polynomial regressions, and response surface methodology show that there is, in fact, a non-linear relationship between strategic congruence and HRM value. Thus, only when the views of the line managers and HR managers are congruent (i.e., in agreement) does the HRM value increase, which, in turn, mediates the effect on internal efficiency. Thereby, we offer new insights into the mechanisms of strategic congruence, the mediating role of HRM value, and firm-level outcomes. Implications for theory and practice are discussed.     

Strategic benchmarking at ICI Fibres

Learning from comparison has two generic forms in business, at the strategic or business level, and at the level of individual processess. Most literature has discussed the ‘micro’ form—focused on specific practices or processes. The case of ICI Fibres shows that:

• 1.1. business performance benchmarks are just as measurable as those for processes,
• 2.2. there is a clear hierarchy of strategic/operating/ micro-process benchmarks which managers need to understand,
• 3.3. effective strategic management brings together benchmarks for business strengths and benchmarks for process capabilities,
• 4.4. you cannot benchmark your way to profit with the wrong strategy.

     

In search of an optimal cost of quality: an integrated framework of operational efficiency and strategic effectiveness

The literature related to the cost of quality (COQ) and optimal quality level was reviewed and critiqued. The authors have proposed a framework for addressing the optimal COQ within the context of operational efficiency and strategic effectiveness. This proposed framework presents a first step toward providing scholars and practicing managers with a conceptual view of the behavior of the COQ and the interaction between cost categories from both operational and strategic perspectives. The proposed approach is realistic, as it utilizes an open system view of today's modern business organization and the competitive environment in which it operates.     

Internal marketing: A new perspective for HRM

The authors argue that there are trends currently present in industry and management which require human resource (HR) managers to have much higher levels of competence and skills. Concepts and techniques from marketing can provide means by which HR managers can be more effective.It is also pointed out that Chief Executive Officers have failed to recognize the importance of HR managers in their organizations — a weakness for which HR managers must also carry some blame.     

Examining the Antecedents and Consequences of CIO Strategic Decision‐Making Authority: An Empirical Study*

Despite the strategic importance of information technology (IT) to contemporary firms, chief information officers (CIO) often still have varying degrees of strategic decision‐making authority. In this study, we apply the theory of managerial discretion to define CIO strategic decision‐making authority and argue that the CIO's level of strategic decision‐making authority directly influences IT's contribution to organization performance. We also draw on the power and politics perspective in the strategic decision‐making literature to identify the direct antecedents to the CIO's strategic decision‐making authority. A theoretical model is presented and empirically tested using survey data collected from a cross‐industry sample of 174 matched pairs of CIOs and top business executives through structural equation modeling. The results suggest that organizational climate, organizational support for IT, the CIO's structural power, the CIO's level of strategic effectiveness, and a strong partnership between the CIO and top management team directly influence the CIO's level of strategic decision‐making authority within the organization. The results also suggest that the CIO's strategic decision‐making authority in the organization directly influences the contribution of IT to firm performance and that effective CIOs have a greater influence on IT's contribution when provided with strategic decision‐making authority.     

Strategic staircases: planning the capabilities required for success

Creating an adequate supply of the requisite skills and competitive capabilities is a fundamental objective of strategy. Managing this process in an effective and systematic manner is difficult. Employing the strategic staircase is a proven way of overcoming this difficulty. The framework enables managers to break the strategic agenda into bit-sized pieces, it guides the selection of priorities and provides a powerful device for communicating strategy throughout the organization, thereby bridging the gap between strategy and action.     

The sense of it all: Framing and narratives in sensegiving about a strategic change

Managers leading strategic change processes have to be skilled language users in order to convince others of the necessity of change and to shape the interpretations of their followers in a preferred direction. This paper asks how and why managers employ certain forms of language in their sensegiving during strategic change, and when these managers are effective in their language use to change the sensemaking of others in the organization. On the basis of a longitudinal case study of a European multinational corporation, we find that effective sensegiving is about providing organizational members with a pragmatic form – a way of making sense rather than, as previous research suggests, about providing them with pre-packaged meanings. We extend prior research by distinguishing the effects that the different linguistic forms of managerial sensegiving have on organizational sensemaking. Furthermore, the managers we studied were effective in their sensegiving when they combined framing and narratives. These two forms of language supported each other by amplifying the overall effect on organizational sensemaking. This notion of a combined use of framing and narratives complements previous research, which has largely studied them separately.     

Who influences strategic decisions?

Drawing on information provided by 407 European top managers, the results of this study indicate that the influence process varies for different types of strategic decisions. Each of three types of strategic decisions—product-market, technological and administrative—was primarily influenced by a different set of departments. Only the managing director maintained moderate influence over all decisions. The patterns of effective power bases also differed for each type of decision. Environmental scanning was a more important source of departmental influence on product-market decisions while formal position and access to resources proved more important for influencing technological and administrative decisions.     

Organizational implications of CAM

The new competitive conditions of the 1980's have thrown American and European manufacturing into a turmoil. Computerized process technology can help ease the problems through increasing productivity, quality and flexibility. However, its benefits will not be realized unless manufacturing managers attend to the technology's strategic and organizational implications. Issues in specifying the connections between computerized processes and strategic objectives are discussed. A conceptual framework is proposed which identifies some of these connections. Determining the appropriate work organization and compatible systems and procedures are also discussed. Recommendations are made for dealing with these issues.