Organizational Behaviour Theories hold that successful strategy implementation is a lot more than plain market facts, figures and competitive advantages. Those quantitative aspects are the outcome of a successful strategy implementation, yet the qualitative, i.e. the cognitive aspects are those that actually make or break a strategy.
This paper emphasizes on the cognitive aspects and their effects on both strategy formulation and strategy implementation. In particular, it investigates the cognitive behaviours of top and middle managers in an effort to conclude that no matter how well structured an organization might be, still, no organizational structure per se guarantees success. On the contrary, successful strategy implementation requires organizational alignment. Moreover, it requires strong strategic consensus as a result of focus on common goals, quality of interaction and quality of information, strategic flexibility and clear communication channels. Integration is the key to effective strategy implementation as it eliminates middle management resistance, X-inefficiency, and shadow organization.
[...] Bridging the Gap - Strategy Evaluation and Control After having identified the strategic gap between the two stages of strategic planning and having explained it by a cause-and-effect analysis I evaluate possible solutions in order to bridge this gap and I provide controlling mechanisms for its possible elimination. In order to facilitate the flow of the paper each cause and effect is presented separately while assessing relevant solutions. Ineffective communication of strategy from top to middle management Strategy success lies in the efforts of both top and middle managers. [...]
[...] This paper identifies organizational culture as the cognitive element of strategy formulation in section 1 and assesses its importance by testing three hypotheses. In section after testing another three hypotheses related to the organizational culture as a cognitive element of strategy implementation, a strategic gap is identified. In section a cause-and- effect analysis is performed aiming to evaluate possible ways to bridge the gap, while controlling mechanisms for its possible elimination are provided in section 4. Conclusions are presented in section while references complete this paper. [...]
[...] Ineffective communication, lack of strategic consensus and information overload during strategy formulation result in ineffective strategy implementation due to middle management resistance, inertia and shadow organization. Action required In order to assess and propose controlling mechanisms which could anticipate the negative causes and effects of the strategic gap is essential to realize that both strategy formulation and strategy implementation are subject to emotionality and as such they involve feelings, more or less intense, durable and consistent depending on organizational culture but also on individual mental maps. [...]
[...] Yet, it explains the strategic gap in strategy implementation. Strategic consensus is subject to different perceptions about the need for change. Knowledge is dispersed within an organization (Bower & Gilbert, 2007) and this is usual in large organizations. Within the organization, the people who craft the strategy might not have the expertise to assess if it would be really successful. This depends on the unsuccessful monitor, interpretation and/or communication of the changing conditions in a given market to the top management because middle managers perceive strategic commitment differently than what top managers do as a result of own interests. [...]
[...] The alignment of top and middle management is crucial for the soft transition from strategy formulation to strategy implementation as a result of strategic consensus. In order to achieve strategic consensus, modern organizations need self reliant, confident, trustworthy and dependable managers (Goleman, 1996), who are there, but most importantly they need clear and consistent guidelines, increased quality of strategic conversations and feedback opportunities. These characteristics portray effective decision making. Rewards are perceived as a measure to enhance employee motivation in modern organizations. [...]
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