Validating and Enhancing a Strategy Transformation Model Using Case Study

Introduction Over the last four decades, there have been conflicting views in the literature with regard to the most effective means of creating strategy (e.g., Andrews, 1971; Armstrong, 1982; Brews and Hunt, 1999; Grant, 2003; Mintzberg, 1972; Vancil & Lorange, 1975). One group supports the virtues of formal deliberate strategic planning while another maintains that strategy simply evolves over time as a firm responds to its environment (Boyd, 1991; Brews & Hunt, 1999; Greenley, 1994; Holloway, 2004; Miller and Cardinal, 1994; Mintzberg, 1977; Schaffer & Willauer, 2003). In recent years, many in the field have adopted the more realistic view that planned strategies evolve during their execution through an emergent strategy process (Andersen, 2004; Grant, 2003; Harrington et al., 2004; Landrum, 2008; Mintzberg and Waters, 1985). A fundamental gap in the strategy literature is a paucity of theory, especially relating to the identification of contextual factors (Bamberger, 2008) and their influence on the transformation of strategy during implementation (Peng et al., 2009). Although the process theory of strategy creation acknowledges the transformation from intended (i.e. planned) to realized (i.e. implemented) strategy (Sminia, 2009), there has been a lack of rigorous research into the identification and quantification of the factors which influence this change. Using variables identified in the literature, drawn mainly from strategic planning versus performance studies, a model has been developed to provide a more accurate picture of the relationship between deliberate strategy and how it transforms during implementation into an actual implemented strategy. The model is an initial step toward addressing the lack of theory to explain the nature of strategy formation and is an extension of a conceptual model developed by Mintzberg and Waters (1985). This research involved two phases. Phase I is a qualitative case study consisting of interviews and the validation / further development of a model. Phase II, the quantitative segment, will test the model by means of a survey. This paper will discuss Phase I, the qualitative case study portion of the research. The interviews utilized open-ended qualitative methods which allowed in-depth examination and analyses to obtain an enhanced understanding of the phenomenon involved (Lee et al., 1999). In this case, the phenomenon is the transformation of intended strategy that occurs during implementation to produce realized strategy. The model was developed by reviewing the literature to determine variables which may affect strategy transformation during execution. The Phase I qualitative study was not executed to test the literature based model but to validate the factors included based on the literature. In addition, a qualitative approach provided the opportunity to ensure the model was complete and reflected actual practice by identifying any additional factors and indicators which might be appropriate to add to the model prior to quantitative testing. Each of the factors is a latent construct made up of a number of indicators or test items used to operationalize the factor for measurement in a future study. The unit of analysis, or case, for this research is the individual strategy that was executed by a for-profit organization at a previous time. The strategy implementations had to have been concluded to ascertain the level of transformation of the strategy during execution. The required information was gained from interviews with executives who were intimately involved in each strategy and understood the objectives, implementation processes and results. The eight contextual factors and the variables which make up each of these factors were developed through a search of the strategy literature for any papers which mention contextual variables which caused strategies to change during their implementations. Although the subject has not been previously pursued in a rigorous fashion, various studies were forced to deal with the issue of contextual impact on strategies in trying to explain their results. …

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