Perceptions of competitive strategy : realised strategy, consensus and performance

Abstract

This is a study of managers' perceptions of the strategic priorities in their strategic business unit (SBU). The perceptions managers have of the current competitive strategy of their SBU are used to explore four main research themes. Managers' perceptions are accessed through a brief, standardised questionnaire which contains statements about current strategic priorities. Firstly, the perceptions of managers from the same SBU are used to make inferences about the realised strategy of that business. SBUs in the sample (38) are classified into i3ur realised st:a:egy categories. These are derived from Porter's (1 980) generic strategies. A number of hypotheses concerning the performance implications of these realised strategy categories are developed and tested. Additionally, hypotheses about relationships between consensus (the extent to which managers from the same SBU share the same perceptions of strategic priorities), realised strategy, performance and organizational change are developed and tested. Secondly, the perceptions of managers from rnany different SBUs are used to derive a "mznagerial theory" of competitive strategy. This is developed in the context of a critique zf F'o;:erls generic strategies. Thirdly, the research addresses the sources of influence on managers' perceptions of strategic priorities. Specifically, the influence of the function the manager belongs to, and the industry the SBU conlpetes in are explored. Evidence of functicrnal and industry influence on perceptions is presented. Fourthly, the surfacing of managers' perceptions of current strategic priorities has been used to facilitate strategy debates with managenxnt teams. Examples of the issues raised, and the contributions to management discussion are presented. Finally, the thesis suggests ways in which the approaches taken in the study could be developed to address other issues in the field of strategic management.