The Role of Strategy Implementation in the Relationship Between Strategic Planning Systems and Performance

The Role of Strategy Implementation in the Relationship Between Strategic Planning Systems and Performance

Juliana Mulaa Namada
Copyright: © 2020 |Pages: 23
DOI: 10.4018/IJBSA.2020010101
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While substantial research has been done on strategic planning and performance, there is little research on the moderating role of strategy implementation. This study attempts to bridge this gap. The study adopted a descriptive cross-sectional survey with the firm as the unit of analysis. The findings indicate that strategy implementation moderates the relationship between strategic planning systems and market performance as well as internal business process performance but not on return on investment performance. In conclusion, the configuration of planning systems with its theoretical underpinning as resource bundles explain performance variations among firms. The study's implication for practice is that strategic planning systems should be emphasized by business firms as a configuration and not by its domains.
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1. Introduction

Organizations which exist in the twentieth century face a myriad of challenges which require corporate strategic implementation for the organizations to remain competitive. Strategy implementation is a key challenge for today’s organizations and most strategies stagger at the implementation stage (Li, Guohui, & Eppler, 2008; Coulson-Thomas, 2013). Strategy implementation is an integral component of the strategic management process, it is the process which turns strategy into a series of actions. While strategy implementation has attracted immense research interest in the Western world, the topic has not attracted much attention in the Middle East region (Rajasekar, 2014). Thompson and Strickland (2008) noted that strategy implementation focuses on results to ensure that the vision, mission, strategy and strategic objectives of the organization are achieved as planned. About 80% of firms have the right strategies, but only 14% have managed to implement them well (Cater &Pucko, 2010). Strategy leads to change, and about 70% of all change initiatives fail (Beer &Nohria, 2000). Other statistics state that nine out of ten strategies fail to be successfully implemented (Speculand, 2009).

Strategy implementation affects performance in business organizations. It is the ability to translate ideas into actionable assignments that are executed in a manner that fulfills the firm’s objectives (Pearce II & Robinson,2013). Even the most superior strategy will not succeed without effective implementation (Hrebiniak, 2006). A key premise in strategic management research is that managers play a dominant role in the implementation of an organization’s corporate strategy (Westphal & Fredrickson, 2001). Jespersen and Bysted (2016) confirmed that managers play a critical role in determining the outcome of decisions made and the level of success in implementing strategies. Several scholars have noted that, even the most superior strategy is not beneficial and will not succeed without effective implementation (Ikavalko,2002; Hrebiniak, 2006). Akinnubi and Oyeniran (2012) recommended that managers should be more committed to the implementation of strategies to realize better performance.

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