Matching internal governance mechanisms to strategic process: an agency theory perspective on implementing strategic decisions

Abstract

This dissertation describes theories, develops ideas and examines evidence relating to how strategy implementation is managed in business firms.The relationship between an organization's strategic process orientation, its strategy implementation governance mechanisms, and its performance provide the central focus of my research. A contingency framework is developed which yields hypotheses predicting performance depending on the fit between the strategic process of the organization and the tools the organization uses to manage the implementation of its strategies.Cross-sectional survey methodology is used to gather data on a sample of organizations. The survey assesses the strategic process orientation of each organization, the strategy implementation governance mechanisms used by each organization and the performance of each organization. The data are reduced using predicted item to construct loadings which are confirmed with factor analysis. Hypotheses testing and general data analysis are accomplished with moderated regression analysis.The evidence does not support the central hypotheses of this research that the predicted fit between an organization's strategic management process and its management methods is an important determinant of firm performance. However, many useful findings and insights into the management of strategies in organizations have emerged. The primary finding is that successful firms operate with a deliberate strategic process and employ interest aligning management methods. The implications of the findings are discussed along with limitations of the study and suggestions for future related research.