CHAPTER ONE
INTRODUCTION
1.0 Introduction
With the development and growth of strategic management research, the nature of the problems addressed and methodologies employed to address them have increased in complexity. Empirical research in recent years had made significant contributions to the strategic management field. These efforts, however, have not provided complete answers to many of core strategic dilemmas faced by academics and top executives (Hambrick & Fredrickson, 2001; Parnell, 2003). One of these dilemmas is the traditional distinction between strategy process and strategy content (Richter & Schmidt, 2005; Sorge & Brussing, 2003). This distinction between strategy process and content has perhaps limited the ability of strategic management research to explain the determinants of organizational performance.
The author of this thesis aims to define and run a study to examine the extent to which synergies between strategy process, content, and context explained the performance. This chapter will lead the reader through the background of the thesis to the specific questions the study wants to answer. It should provide the reader with an interest for the problem discussed and give some information about how the study is designed.
1.1Background
Early research in strategic management has emanated from a variety of research streams, each employing different paradigms and unit of analysis, causal presumption, and research biases (Jemison, 1981, p.601). This research has produced four concepts on which theory in the area rests:-
These four concepts are depicted as components of a broader process-an organizational- environment adaptation cycle (Segev, 1987). For example, Miller (1986) and Chandler (1962) discussed the relationship between strategy and structure. Mintzberg (1973) discussed the relationship between strategy-making modes and environment. Porter (1980) identified the relationship between strategy and environment. Miller，et al. (1988) discussed the relationship between strategy- making, strategy, environment, and structure.
Despite the growing body of research that suggests a relationship between these four concepts, it had been customary in the field of strategic management to distinguish strategy process research from the better-established and more voluminous subfield of strategy content research (Pettigrew, 1992, p.6). The discussion on the formal distinction between strategy process and content research can be traced back to Andrews (1971), Ansoff (1965), Chandler (1962), and Schendel and Hofer (1979). In their account of the history of the field, Rumelt, et al. (1994) note that the content-process dichotomy began to develop in the 1970s as some scholars began to take more positivist between strategy and performance (Rumelt, et al., 1994, p.79). That work has developed into the content side of strategy research, while more descriptive studies of how strategies are formed and implemented have developed into the process side. This development of parallel, separate streams of work was also encouraged by changes in business schools around the same time that “forced those interested in strategic management to “take sides” and adopt a discipline” (Rumelt, et al., 1994, p.545), with process research being based primarily on behavioural theories and content research being based on economic theories. As a result, researchers in business strategy area have established a dichotomy: “research study content, or study process” (Lewis & Slack, 2003; Janczak, 2005).
Helfat, et al. (2007) argues that strategy process research differs from content research in at least three aspects: disciplinary base, methodology, and focus.
Discipline base:while strategy process and strategy content both drew on multiple discipline base, they are distinguished by where the emphasis is placed. Historically, the disciplinary divide between content and process was fairly stark. Research on the content side drew heavily from economics (Rasche, 2007). This cluster of research is based on industrial organization theory (IO). Scholars concerned with industrial organization theory focus their efforts on identifying a viable co-alignment between the prevailing environmental conditions and the firm's competences. They focused on how the industry in which a firm operates constrains the firm's potential strategic options (Porter, 1981), identify differences in firms' strategic orientations given an existing set of environmental conditions, study of the causes, consequences and features of the strategic options followed by the firms' managers, and, belonging these strategies to the corporate (growth and development strategies), business (competitive strategies) or functional levels. This stream of research has generally been related to strategy content issues. In contrast, a second cluster of topics which in called strategy process research is based on administrative behaviour theory (AB). Administrative behaviour scholars focus either their efforts on understanding the management of organizations (administrative), or the actions of the members of those organizations (behaviour) (Jemison, 1981).
Methodology: methodologically, the divide between strategy process and content can be characterized in several ways. Research in strategy content domain often relies more on deductive methods and employ empirical tools associated with economics. Thus, there is heavy reliance in the content domain on econometric studies , using large sample archival data. In contrast, research in the process domain makes greater use of interviews and surveys, often qualitative date ( Helfat, et al., 2007, p.24).
Focus:strategy process and content differ with respect to their core issues. the field of administrative behaviour has focused primarily on the processes by which strategies are developed and implemented, the analysis of internal organizational process differences, how these processes are affected by external conditions and internal polices, the analysis of how a decision is made, the activities involved in a decision making process, and the potential implications of the characteristics of the process followed. Some of these implications are the influence that the decision making process may have over strategy content (Segev, 1987), or the efficiency of the decision taken (Dean & Sharfman, 1996). Other studies have considered that the process constitutes a foundation of strategic competitiveness (McGrath, et al., 1995), defending that the ability to display several kinds of decision making processes to face different environments or decisions provide an essential capability of the firm (Hart & Banbury, 1994). Thus, process research looks at the activities leading to and supporting strategic decisions (Huff & Reger, 1987). By another meaning, process research examines “how” strategy is formed. In other words, the contributions to strategic management by “administrative behaviour” scholars can be grouped into three primary categories:
In contrast, content research focus on the subject of strategic decision (i.e., “what” is decided) and therefore, is concerned with the competitive strategy of corporate or their business units (Fahey & Christensen, 1986; Parnell, 2007, 2008).
A significant group of researchers (e.g., Chakravarthy & Doz, 1992; Porter, 1980; Chakravarthy, et al, 2002) supports and defends the distinction between content and process research by arguing that it facilities the analysis of two distinct and therefore separable phenomena. However, other significant representatives of the scientific community argue against the distinction between strategy process and content research, since it artificially separates phenomena that are intertwined in the practical business environment (Lechner, 2006).
The main point of the critique of the process/content distinction is the artificial separation of interlinked elements. As Schendel (1992) has argued, “the dichotomy is not real because strategy process is itself an integral part of content; the two cannot be separated” (Schendel, 1992, p.2). Thus, making such distinction may impede progress toward understanding the relationship between strategy and performance ( Ketchen, et al., 1996). As long as the two sides remain separate, the false dichotomy between process and content is perpetuated, along with the development of separate streams of research. More importantly, “it misses the opportunity to combine insights and to provide complementary views of phenomena of interest to both sides. Combining process and content research can create a more holistic view of strategy issue” (Helfat, at al, 2007, p.53).
There have been repeated calls for integration of process and content research (Mellahi & Saminia, 2009; Saminia, 2009; Helfat, at al., 2007; Lechner, 2006; Richter & Schmidt, 2005; Wilkinson & Young, 2005; Pettigrew, 1992; Pettigrew, at al., 2002). For example, Pettigrew et al. (2002) and Pettigrew (1992) offer the evidence that the overall coherence between process and content is a critical influence on organizational performance. In addition, their inquiry suggested that the role of the context (both internal and external of the organization) in which process and content exist must be considered. Pettigrew (1992) notes:” it should be clear that in the conduct of strategy process research, the what and how, the content and the process, are best regarded as inseparables...the sharp distinction between process and content appears more of an analytical hindrance than a help” (Pettigrew, 1992, p.7) . Therefore, the process and content streams of research provide only limited understanding of the nature of the effects of each on performance. The growing recognition of the interplay between process and content suggests that understanding the performance implications of the alignment of process and content is an important concern.
Several authors have developed conceptual schemes relating to the content-process dilemma (Bourgeois, 1980; Camillus, 1981; Jemison, 1981; Venkatraman & Camillus, 1984). Today, the emerging schools of thought of strategic management also support this idea. For example, the rise of the resource- based theory of the firm offered new opportunities to bring more organizational theory into the strategy domain to help disentangle the origins and development of socially complex competitive resources such as change, choice, capability, and creativity (Barney, 1991). This can be an indicator of a narrowing of the dichotomy between economic theory and behavioural science (Furrer, et al., 2008; Pitelis, 2007). According to a resource-based view and dynamic capabilities perspectives (e.g., Barney, 1991; Prahalad & Hamel, 1990; Teece, et al., 1997; Lockett, et al., 2009; Ambrosini & Bowman, 2009), the potential uses, and thus the strategies value of a resource depend on the way a firm combines, co-ordinates and deploys the resource with other firm-specific and firm-addressable resources. Thus, these emerging perspectives jointly examines the affects of a firm's processes for co-ordinating deployments of resources ( a “process” variable) on the strategic advantages that firm can obtain from specific endowments of resources ( a “content variable).
Although resource-based and dynamic capabilities theories represent a distinct view of a firm, it draws from many of the same traditions as the broader perspective of organizational economics (Mellahi & Sminia, 2009). Critics acknowledge the intuitive appeal of a resource- based and dynamic capabilities perspectives, but argue that it does not offer a prescriptive approach (Sheehan & Foss, 2007). As a result, “the jury is still out on the viability and feasibility of a rapprochement between content and process researchers, and most of the strategy research Carried out to date can be placed fairly easily into one of two branches” (Mellahi & Sminia, 2009, p.2). From the literature, then, content and process emerge as two distinct, but related concepts (Segev, 1987). This movement suggests strategy content is something more than a reflection of environment content. Indeed, organizational processes determine what parts of the external environment will be needed and how organizational resources will be allocated to strategic thrusts assuring the firm's attainment of goals and objectives.
While most of the research on process/content match within strategic management has been theoretical in nature (e.g., Pettigrew, 1992; Pettigrew et al., 2002; Burgelman, 2002; Richter & Schmidt, 2005; Sorge & Brussig, 2003; Helfat, et al., 2007; Lechner, 2006), few empirical studies of process/content match have been conducted (e.g., Miller, 1989; Segev, 1987; Ketchen, et al, 1996). Further, the empirical studies that address the performance implications of the alignment of process and content have provided mixed results (Ketchen, et al., 1996). For example, Segev's (1987) study of the match between process and content offers weak evidence that fitting process and content increase performance. Conversely, Miller (1989) found that the match between and content is related to performance for firms following differentiation strategy, but not firms employing a cost leadership or focus strategies. The ambiguous results of previous studies may be driven by focusing on a strategic planning construct rather than a strategy-making process construct, and by insufficient account for the internal and external contexts that impact, and are impacted by, process and content (Pettigrew & Whipp, 1991).
1.2 Definitions of strategy process and content
Strategy-making process are the methods and practices organizations use to interpret opportunities and threats and make decisions about the effective use of skills and resources (Hough & White, 2003; Liedtka, 2001; Pozzebon, 2004; Lumpkin & Dess, 2006). Van de Van and Andrew (1992) argue that scholars tend to adopt very different views of strategy process, and the views they adopt influence the questions they ask, the research methods they employ, and the contributions they make. They noted: “The researchers should be clear about the meaning of process in their researches, should be explicit about theory of process they drew on” (Van de Van & Andrew, 1992, p.196).
This study used the “ process” as a category of concepts of individual and organizational actions, by another meaning, the strategy process in this study considers “ how, who” of strategy- how is strategy be made, analyzed, formulated, implemented, and controlled; and who is involved in the process (i.e. induced vs. autonomous). By other words, the strategy-making process is defined in this study as an organizational- level method of executing the phase of strategic management (i.e., strategy formulation, environmental scanning, implementation, evaluation and control). This process is measured in terms of the deliberate vs. Emergent nature of strategy-making and the induced vs. Autonomous nature of the process within the organization (strategy-making models).
The deliberate versus emergent dimension of the strategy-making process in this study is conceived of as a continuum (Mintzberg & Waters, 1985; Harrington, 2004). Following the definitions of Mintzberg and colleagues (Mintzberg, et al., 1998; Mintzberg & McHugh, 1985; Mintzberg & Waters, 1985), the determination between a deliberate and emergent strategy-making process is essentially the change that occurs between what was intended and what was realized in terms of strategy. Thus, this study argues that the measure of both deliberate and emergent strategies is required to determine the nature of this dimension in the strategy-making process of a firm. this theoretically grounded approach to assessing the deliberate or emergent nature of the strategy-making process has not been used in this area of research to date (e.g., Brews & Hunt, 1999; Harrington, 2004; Hopkins & Hopkins, 1997; Siggelkow, 2001, 2002; Siggelkow & Levinthal, 2003, 2005).
Research testing these competing theories (deliberate vs. Emergent) on the strategic planning- performance relationship has mixed process results. Generally, empirical studies of the strategy-making process have conceptualized strategy-making process as level of formality, planning horizon or comprehensiveness (Grant, 2007; Johnson, et al., 2008).
In this study, it is argued that one reason for inconsistent findings in the deliberate and emergent debate is a result of ignoring the emergent elements of the process while only assessing the deliberate ones.
One of the main dimensions of the strategy-making process has generally been divided into two main dimensions: deliberate and emergent (Mintzberg & Waters, 1985; Brew & Hunt, 1999). While this represents a main dimension of the strategy-making process, it does not consider who is involved in this process. The literature makes it clear that executives and organizational members can assume a variety of posture and roles in strategy-making process (Grant, 2003; Dutton, et al., 2001; Huy, 2002; Crossan & Berdrow, 2003; Shrivastava & Nachman, 1989).
Top management discretion varies widely from very little to a great deal. A measure of the employee involvement is determined by the categories of actors involved (i.e. Chief executive, top management, middle management, operational- level management, and front line employees), their level of involvement, and the equality of involvement in the phase of strategy- making (i.e., Formulation, scanning, implementation, and evaluation & control) (Burgelman, 2002; Crossan & Berdrow, 2003, Delmar & Shane, 2003; Barringer & Bluedorn, 1999; Papadakis, et al.1998), and the role interrelationships between top managers and organizational members in strategy- making (e.g., Hart, 1992). Therefore, the strategy- making process in this study considers both the:
The second dimension in this study is a strategy content dimension. Bowman and Helfat (2001) found that corporate strategy is an essential management tools and is important to firm performance. Empirical results suggested to study and analysis the content of strategy by exploring two aspects of strategy content:
Breadth of target market refers to the extent to which an organization attempts to serve the entire range of potential customer segments (Zammuto, 1988). However, the method used to develop competitive advantage refers to how organizations compete within its chosen domain.
The assumption that organizations develop competitive advantages either through capitalizing on new opportunities (e.g., continuously offering new products/ services) or exploiting those already available (e.g., maintaining a static product/ service mix) underlies much of the extant strategic management research (e.g., Lumpkin & Dess, 2006; Ready, 2004; Allen & Helms, 2006; Moore, 2005; O'Regan & Ghobadian, 2006; Miles & Snow, 1978; Porter, 1981). Thus, competitive methods could be defined as actions taken or resources used in the overall strategy development process and they are increasingly important to managers seeking to increase the performance of their firms (Porter, 1980; 1985; Day & Wensley, 1988; Bharadwaj, et al. 1993; Campbell-Hunt, 2000).
The competitive methods consist of skills and resources that are available for use by firms in competitive industry (Garrigos-Simon, et al., 2005; Goh, 2006; Nwokah, 2008; Day & Wensley, 1988), and they define superior skills in terms of staff capability, systems. A superior resource is defined in terms of physical resources that are available to help strategic implementation such as operating scale, location, comprehensiveness of the distribution system, brand equity, or manufacturing or processing assets ( Chung, et al, 2006; Foss, 2007).
Considerable research progress has been made over the past three decades in the competitive strategy arena (Capps, et al., 2002; Phelan, et al., 2002; Foss, 2007). Nonetheless, a number of challenges remain (Jarzabkowski, 2003; Kim & Mauborgne, 2005; McDonald, 2006; Van De Van & Johnson, 2006). For example, although Porter's (1981) typology of competitive strategy is the most widely used typology in competitive strategy research (Stringa & Ormanidhi, 2008; Sheehan & Foss, 2007; Lumpkin & Dess, 2006), a body of research suggest that firm-level resources and capabilities, not industry characteristics, are the primary determinants of firms' performance (e.g., resource-based view theory). The resource-based view literature also challenged the idea of Porter's (1981) pure strategy. In many cases , scholars adopting a combination strategy perspective migrated to the resource-based view view because its notion of idiosyncratic resources could help explain the validity of the combination strategy (e.g., Parnell, et al., 2004; Fjeldstad & Haanaes, 2001; Aktouf, et al., 2005). In addition to this, the most recent stream of research in strategy content- typically called the “dynamic capability approach”- criticizes both industrial organization approach ( Porter's model ) and resource-based view for neglecting the tendency of environment within a single strategy (e.g., Eisenhardt & Martin, 2000; Aragon-Correa & Sharma, 2003; Ambrosini & Bowman, 2009).
This study adopts Porter's (1981) model of competitive strategy. However, and following resource-based view perspective, strategies do not conceived of as a continuum. By other words, Porter's generic strategies are not mutually exclusive, that some can be pursued simultaneously. Strategies are really dimensions along which firms can score high or low (Foss, 2007; Chung, et al., 2006; Nwokah, 2008, Miller, 1989). Furthermore, the idea of “stuck in the middle” position (Porter, 1980, 1985) has been excluded in this study, a stuck -in-the-middle position is difficult to identify and prior research may have incorrectly classified hybrid generic strategies and stuck in the middle positions as equivalent (Wagner and Digman, 1997). In addition, a stuck-in-the-middle position seems to be a classification of firms rather than strategies. Furthermore, and following the dynamic capability perspective, this study considers competitive environments as an important dimension to formulate firm's competitive strategy (e.g., Goh, 2006; Garrigos-Simon, et al., 2005).
In contingency theory an assertion of fit implies a relationship between two variables, which in turn predicts a third variable (Schoonhoven, 1981). The assertion studied in this research is:” there is a relationship between strategy-making process and strategy content, and this relationship affects organizational performance.” Therefore, the main purpose of this study is to explore the nature of strategy as “holistically as possible” by examine the extent to which alignment between process, content, and context explains organizational performance. Because of this study attempts to integrate strategy process and content, the analysis of the relationship between strategy-making process, competitive strategies (content), and environment (context) is necessary. In addition, the basic assumptions of the contingency theory are” there is no one best way to organize; any way of organizing is equally effective; and, the best way to organize depends on the nature of the environment in which the organization relates” (Scott, 2006, Donaldson, 2001, Palmer & Dunford, 2002). Traditional variables that have been used to test contingency relationships include environmental state: dynamism, complexity, firm size, technology, structure, and management style (e.g., Miller, 1989, Hart & Banbury, 1994, Hunter & Schmidt, 2004; Priem & Rosenstein, 2000). Pettigrew (1992) suggests that the role of the context (both internal and external to the organization) in which process and content exist must be considered. His study suggests that process, content, and context are key constructs in explaining organizational performance. Additionally, since the early studies of Miller and Friesen (1983), Fredrickson (1983), and Fredrickson and Mitchell (1984), empirical work on the strategy-making process-performance linkage has taken a contingency perspective. This trend has continued to the recent (e.g., Fredrickson, 1984; Miller, 1987; 1989, Lumpkin & Dess, 2006; Ready, 2004). Thus, it is clear that research on the process -performance linkage must examine or control for key contingency factors (Hart & Banbury, 1994). This study follows a contingency approach by examine the effect of one key internal contingency (firm size) and one key external contingency (competitive environment).
The primary research objective in the field of strategic management is explaining and often predicting organizational performance. Indeed, the quest to understand and control performance is an important way to distinguish strategic management from other organizational science (Meyer, 1991; Summer, et al., 1990). Furthermore, there is several contemporary research articles suggested that theory building and studies in strategic management should be undertaken with ultimate objective of developing theory capable of being applied by managers (e.g., Seth & Zinkhan, 1991; Whittington, 1996).
While there are many researches exploring competitive strategies-environments, process-environment relationships, there is lack of the researches linkages these factors together with performance. This research attempts to examine the relationship between competitive environment, strategy-making process, strategy, and performance. In other words, this study is a:
1.3 Statement of the problem
Since the beginning of strategic management research in 1960s, there has been a distinction between strategy content and process. The literature review of this study has established that the two are not well integrated. To illustrate, although considerable research has been focused on strategy content (e.g., Porter, 1981, Capps, et al., 2002; Barney, 1991; Prahalad & Hamel, 1990; Hazen, 2002; Lockett, et al., 2009), less attention has been devoted to how these structures arise in the first place (Richter & Schmidt, 2005; Sorge & Brussing, 2003; Mellahi & Sminia, 2009; Sminia, 2009). Similarly, while much strategy process research has examined contextual factors, decision making processes, intuitive and analytic aspects (e.g., Mintzberg & waters, 1985; Brews & Hunt, 1999; Hart & Banbury, 1994; Lumpkin & Dess, 2006; Johnson, et al., 2008; Mintzberg, et al., 2003), less study has been done on specific managerial practices and models determining the origins of and the connection to the competitive strategy (Helfat, et al., 2007; Wilkinson & Young, 2005).
While most of the research on process/content match within strategic management has been theoretical in nature (e.g., Mellahi & Saminia, 2009; Saminia, 2009; Helfat, at al., 2007; Lechner, 2006; Richter & Schmidt, 2005; Wilkinson & Young, 2005; Pettigrew, 1992; Pettigrew, at al., 2002), few empirical studies of the process/ content match have been conducted (e.g., Miller, 1989; Segev, 1987; Ketchen, et al, 1996). Further, the previous empirical studies that address the performance implications of the alignment of process and content have provided mixed results (Ketchen, et al., 1996). In brief, the conceptual development at the interface between strategy process and content research is in a preliminary state (Mellahi & Saminia, 2009). This suggests that great potential for a theoretical and empirical contribution resides in conceptually developing the interface between strategy content and strategy process research.
Compounding this lack of conceptual and empirical development at the interface between these two streams of thought is the apparent lack of integration within each of them. The first of the two streams of thought, strategy process research, has seen a number of integrative frameworks (e.g., Hart, 1992; Mintzberg, et al., 1998; Mintzberg, 1973; Chaffee, 1985). However, these frameworks do not seem to be very influential, and much terminological as well as conceptual confusion appears to characterize the field (Saminia, 2009). In particular, it is not all clear what is meant by the term “process”. For example, most of the empirical research in this area has focused on strategic planning construct rather than a strategy-making process construct (Boyd & Reuning-Elliott, 1998; Bromiley & Papenhausen, 2003). Although Mintzberg and Waters' (1985) idea of deliberate and emergent strategy is implicitly or explicitly stated in a majority of previous classification systems considering strategy-making process perspectives (e.g., Ansoff, 1987; Chaffee, 1985; Hendry, 2000; Mintzberg, et al., 2003; Elbanna, 2006; Poole, et al., 2000; HutzSchenreuter & Kleindienst, 2006; Sminia, 2009), the theoretically and empirically grounded approach to assessing the deliberate and emergent nature of the strategy-making process has not been used in this area of research to date ( e.g., Elbanna, 2006, Harrington, 2004). This suggests that great potential for a theoretical contribution resides in integrating the multitude of perspectives in strategy process, particularly with regard to the deliberate and emergent dimension.
The situation seems even more problematic in the case of the second stream of thought, Strategy content research in contrast to strategy process research, this filed has flourished over the last two decades, and has contributed considerably to our understanding of competitive strategy (e.g., Porter, 1980) and resource structure (Barney, 1991, Teece, 2007; Dannels, 2002; Lockett, et al., 2009). However, a cross-fertilization between these groups of research focusing on either industry or resource structures seems virtually absent to date (e.g., parnell, et al., 2004; Ambrosini & Bowman, 2003; Dannels, 2002). In addition to this, the most recent stream of research in strategy content ( typically called the “ dynamic capabilities” approach ) criticizes both the industrial organization (IO) approach as well as the resource-based approach for neglecting the tendency of competitive environment (e.g., Aragon- Correa & Sharma, 2003; Winter, 2003; Ambrosini & Bowman, 2009). This suggests that great potential for a theoretical and empirical contribution resides in conduction integrative work within these perspectives in strategy content.
Overall, based on all above, it appears that strategic management research remains inadequately understood due to three main reasons:
These inadequacies clearly evidence an acute need for a framework for strategic management in order to enhance the conceptual apparatus of strategy in a theoretically integrated and empirically grounded way.
In recognition of the theoretical and empirical background of the problem, this study proposes frameworks for strategy-making process, competitive strategies, and process/content match. These frameworks attempt to fill the identified gaps in the current theoretical debate on strategy process-content interaction. Moreover, this study argues that the ambiguous results of previous studies of process-content interaction may be driven by employing a strategic planning construct rather than a strategy-making process construct in process dimension. Thus, this study takes the logical steps by examining the extent to which alignment between strategy-making process, competitive strategies, and environment explains organizational performance, and testing several specific predictions within the impacts of process/content fit on performance. Therefore, the main purpose of this study is to explore the nature of strategy as “holistically as possible”.
1.4 Research objectives and purposes
The research objectives can be deduced from the research problem. The objective of this study is to contribute to an enhanced understanding of strategic management by way of constructing and empirically validating an integrated framework for strategy-making process, competitive strategies, environment and performance.
In the overall theoretical and empirical parts, therefore, this study will first attempt to build a framework for the process of strategy making by integrating the two main dimensions of the process, namely, Deliberate vs. Emergent dimension, and induced vs. autonomous dimension. Only after this integration into a conceptual framework of strategy process, it will then be possible to propose relationships between strategy-making process, competitive strategy, environment, and firm performance.
This integration between strategy-making process, competitive strategies, environments, and firm performance will lead to the investigation of:
1.5 Research questions
According to research objectives, to understand how strategy-making process and content are related, this study proposes three integrative frameworks on its theoretical part, an integrative framework for strategy-making process, an integrative framework for strategy content, and an integrative framework for process-content interaction. Based on these frameworks, the empirical part of this study endeavours to shed light and validate these frameworks by attempting answering the following formal research questions:
While the first three questions related to the proposed strategy-making process framework, the fourth question is related to the content part of strategy in this study. Based on the previous discussion in the research objectives, only after proposing two frameworks for strategy process and content, it will then be possible to propose relationships between those two streams of research and firm performance. Therefore, the last three questions of this study are related to the main research objective, namely, analyzing strategy process-content interaction.
1.6 Scope of study
This study is not “micro” in scope. Rather than study the performance effects of the planning systems implemented by the firm, or investigate the performance effects of the broad planning behaviours of firms, the focus is “macro” in that the strategy-making process and competitive strategies developed by firms are the variables of interest. In particular, focusing on the impact of the fit between these constructs on firm performance in differing environments.
By advancing the concept of strategy-making process, and integrating this construct to competitive strategies, this study seeks to fill the gaps within the general strategy research.
The scope of this study can be separated into two parts, one is the theoretical part and the other is the empirical part. The theoretical part of this study includes the following aspects:
In the empirical part, this study generates valuable and profound insight related to strategy-making process, competitive strategies, and their interaction by applying a distinctive methodological approach conducted on the basis of quantitative methodologies. The testing of deductively introduced variables was performed by using a distinctive model of regression analysis followed by cluster analysis. Research emphasizing aspects of strategy process and content and their interaction are traditionally conducted based on theoretical model of structural adaption to regain fit (SARFIT). This study, however, developed a model based on a modern variation of configuration theory (Donaldson, 2001), and further progress the model equations to measure a fit/misfit between the strategy process and content by examining the extent to which alignment between process and content explains organizational performance beyond the main affects of each. This approach is different than traditional applied quantitative approach heavily relying on traditional statistical contingency theory of fit approach. In order to do so, the researcher will study the strategy-making process, competitive strategy and their fit in 106 selected Malaysian companies.
1.7 Significance of the research
This study is considered significant for academicians and practitioners alike. From a theoretical/academician point of view, the study will shed light on the nature of strategy-making process and competitive strategies. In particular, investigating whether different models of strategy-making process are associated with different types of competitive strategies in different environments. The impact of other process dimensions, namely, Deliberate vs. Emergent dimension on the strategy process will also be investigated. In addition, through the design of the scales used to measure strategic ends and means specificity, the study will also permit testing of whether or not an emergent strategy is preferable in an unstable context, such an investigation is valuable in and of itself. Moreover, a tendency toward too much specialization and microscopic enquiries, lack of integration has been laments by many scholars in strategic management. However, the dichotomy between strategy process (the management part) and strategy content (the strategy part) remains to date (Mellahi & Sminia, 2009). By studying the strategy-making process and its dimensions, competitive strategies, and the impact of fit between them on performance in differing context, it is hopes that a deeper understanding of these important relationships will be achieved.
For practitioners, insight into the degree of strategic ends and means specificity, strategy-making models, deliberate vs. emergent strategies in differing environments is of value. A more sophisticated formulation of theory and study in this vital area must translate into better advice for managers as they consider the challenges of forming strategy. In addition, advice regarding the process of the strategy-making and the competitive strategy which should be developed by firms in their strategic processes is important to managers today. Ultimately, it is hoped that through the operationlization of the strategic ends and means specificity, deliberate vs. emergent perspective, competitive strategies, environmental dynamism and complexity, and firm performance , crisp relevant theory will emerge providing practical insights to practitioners regarding the appropriateness of their firm's strategic processes, given the environment and context they face.
1.8 Outline of the research
The main objective of this study is to construct and empirically validate an integrated framework for strategy-making process, competitive strategies, environment and performance. This is carried out along five chapters, which are briefly outlined in the following paragraphs.
In chapter one (“introduction”) a general description of the research problem is given. The overall research objective is presented and the dissertation's questions are stated. Subsequently, the study scope and significance to both theoretical and practical aspects are illuminated.
Chapter two ( “review of literature”) presents a comprehensive review of the relevant literatures in reference to the dissertation's core concepts of the strategy-making process, competitive strategy, environment, and performance .
In chapter three (“research methodology”) the theoretical framework and research hypotheses are presented and the selection of the dissertation's sample is outlined and justified. Furthermore, the dissertation's data collection is illustrated with regard to primary and secondary data sources. In addition, analytical tools and limitations are depicted.
In Chapter four (“results”) the empirical findings are presented with regard to the dissertation main and sub hypotheses.
Chapter five (“discussion and conclusion”) concludes the dissertation by providing implications of the findings for the realm of the theory and management practice. Moreover, directions for further research are outlined.
1.9 Summary of chapter one
The process and content streams of research provide only limited understanding of the nature of the effects of each on performance. The growing recognition of the interplay between process and content suggests that understanding the performance implications of the alignment of the process and content is an important concern. However, the conceptual development is strategic management appears to suffer from a lack of integration between these two dimensions. In addition, the strategy process realm appears to be characterized by a lack of integration of its main dimensions, namely, Deliberate vs. Emergent dimension, and Induced vs. Autonomous dimension. Therefore, the main objective of this study is to propose and examine relationships between strategy-making process, competitive strategies, environment, and firm performance.
This study is based on a number of underlying assumptions. First, it follows the assumption of the contingency theory to investigate the relationship between strategy-making process and environment. Second, the two proposed strategy-making process dimensions are conceived of as a continuum. The determination between a deliberate and emergent strategy process is essentially the change occurs between what was intended and what was realized in terms of strategy. Finally, this study uses the assumption of configuration theory and the idea of dynamic capabilities approach to examine a “fit” between strategy-making process and competitive strategies.
The next chapter provides an overview of the literature, previous typologies, and theories underpinning this study, and proposed frameworks of strategy-making process, content, and their interaction.
