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The rejection of strategy tools.

Hodari, AD and Roper, A The rejection of strategy tools. In: 26th EGOS Colloquium, 2010-07-01 - 2010-07-03, Lisbon.

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Abstract

The rejection of Strategy Tools Introduction One way to better understand how strategy is actually rather than theoretically practiced, and how contextual factors influence this practice, is by studying the way that practitioners use strategy tools. Surprisingly there have been few empirical studies conducted that examine this issue, even though the question is regularly raised at conferences and in special editions of academic journals. In order to begin to address this gap, a study was undertaken which aimed to examine the key overarching question, ‘why and how do practitioners use strategy tools when strategising?’ In doing so it also responded to calls within the strategy-as-practice literature for single industry studies (Whittington, 2006) and investigations specifically within the service sector (Dougherty, 2004) and for studies across multiple organisations (Johnson et al, 2003). Strategy tools are created to assist with the strategic management process and most classical tools are intended for the processes’ strategy analysis phase of strategy formulation. Past studies of tool use have found that it is here that more tools are often used. This study found, however, that strategy tools are often rejected for use, specifically, during strategy analysis and formulation. It is therefore the analysis of findings related to the non use of strategy tools which will be the focus of this paper. Previous findings about the lack of strategy tool use The most commonly suggested reason why practitioners reject existing tools is, quite simply, that existing research and its associated knowledge artefacts do not meet their needs. This gap may be due to a misunderstanding of practitioner needs and thus a creation of irrelevant research (Shrivastava, 1987) and/or the continued lack of pragmatically valid research neither supported nor shaped by practitioners (e.g., Balogun et al., 2003; Ghemawat, 2000). All this helps explain why Bettis (1991) believes that a “normal science straitjacket” (p.315) is the key reason that strategy research has limited influence on management practices. Jarzabkowski and Wilson (2006) argue that dissatisfaction with certain tools could arise because the practitioner’s organisation may compete within different environmental conditions than those for which the concept was originally intended. More specifically, they refer to the fact that today’s level of knowledge intensity and environmental velocity affect organisations in more drastic and important ways than when the tools that are already institutionalised in the strategy field were first created and popularised. Practitioners, consultants and researchers often attempt this transference nonetheless, resulting in less than expected and desired results and a sense that tools are useless or irrelevant. Dunbar et al. (1996) also believe that because the environment is changing more radically and rapidly than ever before, the use of strategy frames is especially dangerous. Tools may thus have limited utility due to the fact that they were usually developed in order to answer very particular questions or to analyse very specific situations (Furrer & Thomas, 2000) or industrial and economic contexts (Narayanan & Fahey, 2005). Thus, even though strategy tools may be rejected by practitioners, understanding the personal, organisational and extra-organisational reasons for this is an important issue for strategy-as-practice scholars and practitioners. According to Carter et el (2008): ‘Analysing strategy is not merely reporting what it is that is done but also what is not done . . . Thus, strategy conceived in research terms as practices that focus solely on that which strategists said and did will miss the strategic spaces within which strategy is constituted. What is necessary is to explore not only what is done but what is not done, that which is not practised, and which is not said, using external stakeholder articulations as signs of what might be but is not.’ (p.94) Stenfors and Tanner (2006) argue that evaluating the usefulness of a tool is not possible through traditional evaluation means since most strategic situations are unique, and because “the context in which the tool is used becomes of great importance and cannot be separated from the tool in the process of evaluation” (p.22). It is this belief, that industry contexts are important variables affecting strategy tools and their use (Whittington, 2006) or non-use, which influenced this study and led to a further research question being posed: ‘how do contextual factors influence the non-use of strategy tools?’ Research Design Proponents in the strategy-as-practice domain have often employed the use of qualitative case studies in their research (e.g., Jarzabkowski, 2000; Maitlis & Lawrence, 2003; Regnér, 2003). Since the use of tools cannot be separated from the real-life context and ‘situatedness’ and because this was an exploratory and descriptive study focusing on how and why tools are used and not used, the case study method using qualitative research was seen as an appropriate research strategy choice. Three cases were selected which met the criteria of being primarily in the business of the operation of hotels; had an ongoing strategic issue for which generic strategic tools have been created by academics/consultants; were large enough to have an organisation structure with corporate, middle and unit managers; and (perhaps the most difficult) were willing to participate in the study. The three selected companies between them owned, managed and franchised hotels; were based in the USA, Europe and UK respectively; and were all publicly listed accept for one. Whilst one company operated ten brands in over 50 countries, another company operated only two hotel brands in 20 countries. The third case operated two brands in a domestic setting. The assigned ‘gatekeepers’ were all senior executives. Whilst there was no precedence for the most appropriate data collection tools for the specific focus of this study, the decision was made to rely on documents, interviews and observations since, in part, these are the multiple methods most often employed in strategy-as-practice studies (Balogun et al., 2003; Johnson et al., 2007). A wide range of company documents were evaluated; 53 in-depth interviews in total were conducted, most often ‘on-site’ within the three cases; and the main researcher spent time within the organisations in an observer capacity (which included the observation of strategy meetings, workshops and presentations). The data collected was reduced and coded using thematic categorisation (King, 1998). As a result of within-case and cross-case analysis, a variety of themes, patterns, concepts, relationships and overall impressions were identified (Eisenhardt, 1989). In line with Johnson et al.’s (2007) recommendations, findings in the descriptive narrative accounts of the use of strategy tools were compared with the “‘received view’, i.e., with the normative accounts promulgated in practitioner sources and business school teaching” (p.72). The Rejection of Strategy Tools By examining the use of strategy tools across hierarchical levels this study revealed that, contrary to the literature which suggests that top managers are likely to use strategy tools because they have more strategic responsibilities and more strategy-making experience (Hodgkinson et al., 2006; Johnson et al., 2007), these were two reasons why these practitioners actually reject tools. This is because they believed that strategy tools are more the domain of inexperienced executives and middle managers who require a structured and formal analytical approach to strategy analysis since tools are perceived as a substitute for, rather than complement to, the strategic thinking abilities of top leaders with extensive strategy-making experience. Strategy tools are usually recommended and taught as part of a deliberate and rational-linear approach to strategy-making even if this approach has been shown to rarely exist in reality (Mintzberg & Waters, 1985) and/or be detrimental when used (Hayes & Abernathy, 1980). However, the practitioners, many of whom had learnt about strategy tools within an academic context, were found to reject any use of tools since they perceived them as being purely for the rational and analytical decision-making purposes. Therefore, they dismissed the use of tools, and decisions based on them, in favour of institution and experience-based knowledge. Similarly, strategy tools are seen as part of a formal strategy process intended for the creation of deliberate long-term strategies, and the hotel executives were found to be more concerned with fast decisions and immediate solutions and with quantitative rather than qualitative information. These concerns lead them to reject many conceptual strategy tools and specific strategy practices, such as meetings and the writing of reports, during which tools are often used. Thus, while previous research has suggested that hotel executives prefer individual and ‘hands on’ practices to more formal and long-term focused processes (Costa & Teare, 2000), the study demonstrates that this widens to the rejection of strategy tool usage as well. The research results revealed that hotel executives rejected popular and well-known strategy tools for the very reason that they are endorsed by reputable academics and consultants (Seidl, 2007; Whittington, 2003) and they are practices also used by competitors (DiMaggio & Powell, 1983). The findings thus confirm the extant knowledge with regards to the disparity between academic and practitioner expectations of strategy research and theoretical concepts (Gopinath & Hoffman, 1995; Marcus et al., 1995; Rynes et al., 2001) by showing that the rejection of academic tools stems not only from past failures attributed to the use of tools, but also to the practitioners’ exceedingly high expectations of tools. It also extends this knowledge by showing that failures with particular tools leads practitioners to resist using any tools since they associate the concept of such instruments with academics and consultants whom they do not believe understand the complexity involved in making strategy. The findings similarly demonstrate that executives searching for unique strategies are reluctant to use the same strategy practices and tools as their competitors since they believe this will likely lead them to the same decisions. As such these findings begin to demonstrate a link between the perceived relationship between strategy practices and strategy content, something which has been called for in the strategy-as-practice literature (e.g. Johnson et al., 2003). The findings demonstrate that when tools are perceived as purely for deliberate and rational strategising, they are often rejected for use during the strategising activities carried out during the development of strategies which have emerged rather than been deliberately created. Although the literature suggests that the social use of strategy tools can provide alternative benefits, such as facilitating discussions (Morecroft, 1992), fostering debate and alternative viewpoints (Knott, 2006) and bridging departmental and hierarchical communication boundaries (Stenfors & Tanner, 2006), the practitioners did not use tools for these purposes since they perceived strategy tools to be designed only for the rational and analytical formulation of deliberate strategies, for which they rarely engaged in. It is also clear that there are industry-specific reasons for why tools are rejected. One of these is due to the hotel firms’ ownership structure. The hotel industry structure is fragmented, capital intensive, and involves extensive quantities of real estate that is usually owned by investors rather than the hotel companies (Olsen et al., 2008). These ‘asset-light’ characteristics, which often mean that hotel executives are not free to make all the strategic decisions that they might want to make, helped some practitioners rationalise their rejection of specific strategy tools. As this split between management and property owners is relatively unique to the hotel industry, it suggests that studies about why tools are used in other industries may not be relevant for this specific industry, and also serves to extend the findings of previous quantitative studies that have found both similarities and differences of tool use across industries (Frost, 2003; Glaister & Falshaw, 1999) by providing some qualitative explanation for why certain tools may be less used in the service sector. Contributions The study has contributed in four ways to our knowledge about the rejection of strategy tools by practitioners. Firstly, the findings empirically confirm the literature suggesting that strategy tools may restrict the deployment of experience-based knowledge (Grant, 2003) and extends it by demonstrating that the suspicion of this ‘negative’ attribute is one reason why tools are rejected. Secondly, the study suggests that because tools are not used during strategising activities such as strategy presentations and workshops as previous studies have found (Hodgkinson et al., 2006; Schwarz, 2004), and during which the purported social and communicative benefits could be experienced, the view of practitioners that tools are only intended for analytical decision-making purposes is reinforced, and they are not used to develop the details of emergent strategies. 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Item Type: Conference or Workshop Item (UNSPECIFIED)
Authors :
NameEmailORCID
Hodari, ADUNSPECIFIEDUNSPECIFIED
Roper, Aa.roper@surrey.ac.ukUNSPECIFIED
Depositing User : Symplectic Elements
Date Deposited : 16 May 2017 15:09
Last Modified : 17 May 2017 14:32
URI: http://epubs.surrey.ac.uk/id/eprint/817662

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