Corporate Strategy, Strategic Leadership, and Organisational Performance
Name
Liberty University - Lynchburg, VA
BUSI 101 - Introduction to Business
2022
1
Corporate Strategy, Strategic Leadership, and Organisational Performance
Compelling or fairly effective leadership includes rebuilding the organizational design in a
way that propels employees with the correct knowledge to set off value upgrading
recommendations (Kouzes and Posner, 2010). Anyango (2013) in her work examined
strategic leadership and organizational performance. Anyango (2013) contends that, strategic
leadership must guarantee that culture and qualities in an organization are suitable for
maintaining key achievement factors. This should monitor Environmental Value Resources
(E-V-R) similarity. Nonetheless, she additionally noticed that leadership isn't included
persistently in the corporate strategy process in light of the numerous different occasions
included which have been substituted. Therefore, limited leadership participation investment
could loosen up the accomplishment of corporate strategy in an organization.
Kouzes and Posner (2010) highlights that, to actualize strategy successfully, the senior
officials/top administration must not underestimate the lower level administrators since they
have comparative impression of the corporate strategy and its execution, its key justification,
and its urgency. As an option, Kouzes and Posner, (2010) contend that senior
administrators/top administration must expect bring down level directors don't, so high
officials/top administration must persuade workers regarding the legitimacy of their thoughts.
Marginson (2012), argues that an honest commitment by leaders includes a devotion to the
full and methodical process of strategic planning which must end in implementing programs
and services and commit allocations to achieve the objectives of the strategic plan at a point
that is achievable for the organization and more so the level of activity.
Research has established that a corporate strategy entails competitive moves and tactics
management has confirmed to entice and satisfy customers, conduct processes, grow the
business and accomplish performance objectives. Strategic choices are ill-structured, non-
routine and significant to the firm in which top management habitually plays an essential role.
Strategic decision making is incremental and symbiotic, molded by an assortment of
contextual drives arising from previous events, contemporary situations and viewpoints of the
future.
2
Corporate Strategy, Organisational Structure, Strategic Leadership, and Organisational
Performance
As indicated by Johnson (2012), in harmonizing organization structure to the strategy, the
resulting five-succession process acts as a helpful guide for fitting structure to strategy: that is,
consider how the problematic capacities to the strategy and organisational procedures identify
with those that are unsurprising and to those that offer staff bolster, recognize the key features
and responsibilities necessary for useful strategy accomplishment, make serious business units
for strategy the main organizational building blocks, establish the degrees of authority needed
to manage each organizational unit, considering both the benefits and costs of devolved
decision making and lastly, provide for coordination amid the various organizational groups.
Organizational structures, corporate strategy, strategic leadership, and performance are
discussed in the extant literature concerning two key factors; formalization and centralization
(Bucic & Gudergan, 2004).
Organization structure incorporates the idea of layers of hierarchy, combination of authority,
and horizontal integration. It is a multi-dimensional build in which concerns: work division
particularly roles or obligation including specialization, differentiation or departmentalization,
centralization or decentralization, multifaceted nature, and correspondence or coordination
systems including institutionalization, formalization, and adaptability. The primary element of
new organizational structures is the adaptability and the capacity to adjust to the evolving
condition (Lenz, 1980). Oyewobi et al., (2013), an investigation on the effect of
organizational structure and strategies on organizational performance, found that
organizational structure had no immediate impact on both monetary and non-money related
performance.
Organizational structure describes a way by which obligation and power are apportioned, and
work procedures are carried out among corporate individuals. Robbin and DeCenzo (2005)
contend that the hierarchical structure plays out a noteworthy part in the accomplishment of
the association's set destinations and achievement of its vital objectives and bearing. The
organizational structure turns out to be more pertinent when it is in congruity with the genuine
mission, competitive advantage and resources of the organization. The conviction "one cap
fits all" is non-existence in an organizational structure design as no two firms are entirely
similar and as such faces different challenges from its environment.
3
Mansoor et al., (2012) asserted that performance effect of organizational structure is
moderated by changes in the environment and hence, conclude that to attain desired superior
performance by an organization, adequate attention is required to have an organizational
structure that can match the prevailing environment dynamism in place. These structures are
characterized by different attributes such as control, communication, corporate knowledge,
task, prestige, governance, and values. Hajipour, et al., (2011) studied the relationship
between industry structure, strategy type, organizational characteristics, and performance. The
results indicated that industry structure determines corporate characteristics. Mansoor et al.,
(2012) contended that ideal organizational structure is a recipe for superior performance.
Knowledge Gaps
Literature has uncovered conceptual, contextual and methodological gaps in the influence of
corporate strategy, organizational structure, strategic leadership, and performance in the
research problem found in the previous chapter. The conceptual holes comprise of those
obtained in the literature review regarding the association between the concepts being studied.
The contextual gaps relate to the Kenya state corporations while the methodological gaps
include those in the population, sample size, research design as well as data analysis gaps. All
the identified gaps are summarized in Table 2.1
4
Table 2.1: Summary of Knowledge Gaps
STUDY FOCUS OF THE
STUDY
METHODOLOGY STUDY FINDINGS KOWLEDGE GAPS HOW CURRENT
STUDY ADDRESS
GAPS
Siew &
Kelvin
(2004)
Correlation between
firm culture and
performance among
firms in Singapore.
Factor Analysis, ANOVA
and correlation
Culture was found to
impact a variety of firm
performance but not in all
sectors.
The study was limited
to Singapore which is a
developed economy.
The current study sought
to establish the joint
effect of Corporate
strategy,
organizational
structure and
strategic leadership
on the performance
of state corporations
in the Kenyan Context.
Martynez &
Poole (2004)
Linkages between
strategy, performance,
management structure
and culture in the
Spanish Fresh
Produce Industry in
Spain
Factor Analysis, ANOVA There is limited
commercial future for
small Spanish firm with
strong family leadership,
rigid structure with limited
managerial skills, and
doubtful prospects for a
smooth generational
succession.
The study focused on
Spanish firms and also
did not look at the as a
moderating variable of
the relationship
between corporate
strategy and
performance
The current study looked
at effect of
organizational
structure as a
moderating variable of
the relationship between
corporate strategy and
performance in the
Kenyan context.
Yesil and
Keya (2013)
Organizational culture
and firm financial
performance in a
developing country.
Cross sectional survey and
factor analysis
Organizational culture has
no significant effect on
firm’s financial
performance (Sales growth
and ROA).
The study focused on
the direct relationship
of organizational and
firms financial
performance
The study looked at the
indirect effect of
strategic leadership
on the relationship
between corporate
strategy and
performance.
Murgor
(2014)
External environment,
firm capabilities,
strategic response and
performance of large
manufacturing firms
in Kenya.
Cross sectional survey using
regression analysis.
There was a statistically
significant relationship
between strategic
responses on external
environment and firm
performance
The study looked at
external environment
as independent variable
while strategic
responses as the
intervening variable
The current study sought
to determine the
influence of strategic
leadership on
relationship between
corporate strategy and
performance.
Karlsson &
Tavassoli
(2015)
Innovation strategies
and Firm performance
in Sweden
Longitudinal survey Firms that choose and
afford to have a complex
innovation strategies affect
the future productivity
The study looked at
direct relationship of
innovative strategies
and firm performance
The current study sought
to establish the influence
of organizational
structure on relationship
5
STUDY FOCUS OF THE
STUDY
METHODOLOGY STUDY FINDINGS KOWLEDGE GAPS HOW CURRENT
STUDY ADDRESS
GAPS
but did into look at its
indirect relationships
of firm capabilities and
organizational culture.
between corporate
strategy and
performance.
Conceptual Model
The Conceptual model in this study integrates the knowledge gaps found in the literature review. Figure 2.1 shows the associations
between the key study variables. The variables include corporate strategy and organizational performance, which represent the
independent and dependent variables respectively, while the organization structure and strategic leadership are both moderating
variables. Lastly, it shows the joint effect of corporate strategy, organizational structure and strategic leadership on the performance
of Kenya State Corporations is different from the total of the independent effects of the variables on the performance of Kenya
State Corporations.
Figure 2.1 Conceptual Model
6
Moderating
Independent variable
H2
Organizational performance
Non-financial perspective
Customer perspective
Internal process
perspective
Learning and growth
perspective
Organizational Structure
Complexity
Formalization
Standardization
Centralisation
Corporate strategy
Stability
Growth
Retrenchment
H4
Dependent
variable
H1
Strategic leadership
Shared vision
Long term orientation
Concern with making change that
make a difference
Being innovative
2.9 Conceptual Hypotheses
Different relationships between the key study variables have been deduced to attain the
objectives of this study. The following hypotheses are drawn from the conceptual framework and
research objectives. They will guide the study.
H01: Corporate strategy has a significant influence on the performance of Kenya State
Corporations.
H02: Structure has a significant moderating influence on the relationship between corporate
strategy and performance of Kenya State Corporations.
H03: Strategic leadership has a significant moderating influence on the relationship between
corporate strategy and performance of Kenya State Corporations.
H04: The significant joint effect of strategic leadership and organizational structure is different
from the individual effects of corporate strategy and performance of Kenya State
Corporations.
7
REFERENCES
Akinyele, S. T. (2011). The significance of strategic marketing to enterprise performance: An
empirical analysis of the Nigerian oil and gas industry. Global Journal of Management
and Business Research, 10(6), 60-77.
Allison, G. W. (1999) The implications of experimental design for biodiversity manipulations.
American Naturalist 153 (1): 26-45.
Anon, K. (2008). Perspectives on Performance of corporates: five views of polity, Nashville, Tenn:
Broadman & Holman Publishers.
Anyango, R. (2013). Challenges of Strategy Implementation. A Survey of Multinational
Manufacturing Companies in Kenya. Unpublished MBA Project, University of Nairobi.
Arneson, R. J. (2011). The principle of fairness and free-rider problems. Ethics, 616-633.
Awino Z.B. (2015) Organizational Structure and Performance of Large Manufacturing Firms in
Kenya: An Empirical Investigation, Journal of Business and Economics. Vol 6, 1883-1891
Baker, T.L. (1994), Doing Social Research (2nd Edn.), New York: McGraw-Hill Inc.
Barbour R.S. (1998) Mixing qualitative methods: quality assurance or qualitative quagmire?
Beer, M., Voelpel, S.V., Leibold, M. & Tekie, E.B.( 2005). Strategic management as organizational
learning: developing fit and alignment through a disciplined process. Long Range
Planning Journal, 38(5).
Blau, P. M. 1964.Exchange and power in social life. New York: John Wiley
Bolden, M.Y. (2003),. Fielder’s Leadership Contingency Theory. The American Economic Review,
65 (2), 74 – 82.
Bonner, S. E. (1990). Experience effects in auditing: The role of task-specific knowledge.
Accounting Review, 72-92.
Breene, T. & Nunes, P.F. (2008). Going the distance: How the world’s best companies achieve high
performance. High-performance business, Number 3.
Bryman, A. (2004) Social Research Methods (2nd edition). Oxford: Oxford University Press.
Bryman, B. and Bell, E. (2011) Business Research Methods.3rd ed. Oxford: Oxford University Press.
Bucic, T., & Gudergan, S. (2004). The impact of organizational settings on creativity and learning in
alliances. Management, 7, 257-273.
8
Carlo, T.E. (2013). Aligning strategy, leadership, and culture: Keys to competitive advantage.
Pennsylvania: Penn State University in State College.
Cater and Pucko (2010). Upper echelons research revisited: Antecedents, elements, and
consequences of top management team composition. Journal of Management, 30(6), 749-
778.
Coase (1937), A historical comparison of resource-based theory and five schools of thought
Collins, J. (2015). Level 5 leadership: The triumph of humility and fierce resolve.
Collins, N.O. (2015). Organizational Resources, Corporate Governance, and Performance of
Kenyan State Owned Corporations (Unpublished Ph.D. thesis). The University of
Nairobi Competition. Free press.
Eisenhardt & Martin, (2000). The character of corporations: How your company’s culture can make
or break your business. Harper Business, London
Ekpu, R. (2004). Associated gas utilization, Nigeria’s oil and gas, 3(8), 17-18.
Fiedler, M.N (1967) Leadership Contingency Theory.: The implication for Strategy formulation.
California Management Review, 33, 114-135.
Fulmer, R.M. & Bleak, J.L. (2008), Strategic Leadership: Developing strategic leadership with
lessons from the best. Graziadio Business Report, 10(3): 7-13.
Government of Kenya. (2013). Report of the presidential taskforce on parastatal reforms. Retrieved
from atwww.apsea.or.ke/.../76-report-of-presidential-taskforce-on-parastatal-reforms.
Grewal, R., & Tansuhaj, P. (2001). Building organizational capabilities for managing the economic
crisis: The role of market orientation and strategic management. Journal of Marketing, 65.
67-80.
Hajipour, B., Mohammad, T., & Arash, S. (2011). An investigation of the relationships between
industry structure, strategy type, organizational characteristics and organizational
performance: A case study of the food and chemical industries of Iran. African Journal of
Business Management, 5(16), 7085-7098. Implementation and Control. 9th edition, McGraw
Hill. Harvard Business Review. 79(1): 66-76.
Haythem, A. (2015). The Role of Strategic Planning in Performance Management. International
Journal of Multi-Disciplinary Research ISSN: 2348 – 2052, Vol. 2, Issue.
Haythem, N.F., (2015). Corporate Governance. South Africa: Emerald Group Publishing limited.
Herath, M.B., (2007),. Implementation of performance contracting in Kenya. International Public
Management Review, 10(2), 67-84.
Herath, Y. (2007). The relationship between organizational culture, leadership behavior, and job
satisfaction. BMC Health Services Research 11(98), 1-9.
9
Hidayat, R., Akhmad, S., Mu’alim. (2015). Effects of environmental factors on corporate strategy
and performance of manufacturing industries in Indonesia. Journal of Industrial Engineering
and Management, Vol. 7, 63-782.
Ireland, R. D., & Hitt, M. A. (2005). Achieving and maintaining strategic competitiveness in the 21st
century: The role of strategic leadership. Academy of Management Executive, 19(4), 63–77.
Ireland, R.D. and Hitt, M.A. ( 1999). Achieving and maintaining strategic competitiveness in the 2Ist
century: The role of strategic leadership. Academy of Management Executive, 12(1), 43-57.
Johnson, P. (2012). The Top Five Reasons Why Strategic Plans Fail. New Delhi.
Journal of Management, 17 (1), 121-154.
Kaplan, R.S, Robert S., and Norton D. P. (1996). The Balanced Scorecard: Translating Strategy into
Action.LBoston:LHarvard Business School Press,L1996.
Kaplan, R.S., (2008). Execution Premium: Linking to operations for competitive advantage. Boston:
Harvard Business School Publishing Co.
Karlsson, C., & Tavassoli, S. (2015). Innovation strategies and firm performance. The Royal Institute
of Technology. Sweden. Center of Excellence for Science and Innovation Studies. 401.
Keith, A. (2006). The application of usability concepts in the built environment, Journal of Facilities
Management, Vol. 4, 262 – 270
Kerlinger, F. N. (1986). Survey Research," In Foundations of Behavioral Research in Education,
New York: Holt, Rinehart, and Winston.
KIPPRA (2014). Kenya economic report 2014. Creating an enabling environment for stimulating
investment for competitive and sustainable Counties.
Kouzes, J. M., & Posner, B. Z. (2010). The Leadership Challenge: How to Keep Getting
Extraordinary Things Done in Organizations. New York: Jossey-Bass Publishers, 2005.
Kyereboah, J.L and Biekpe, N.Y. (2006). The relationship between strategic leadership perception,
strategic alignment, and organizational performance. Published Ph.D. thesis.The University
of Zululand.
Lear, P.T. (2009),. The design school: reconsidering the basic premises of strategic management,
Strategic Management Journal, 11 (3), 175-195.
Lenz, R. T. (1980). Determinants of organizational performance. An interdisciplinary review.
Strategic Management Journal, 2(2), 131-154.
Liu, B. (2011). The relationship between strategic orientation and organizational
Maduenyi et al. (2015). Competitiveness, technology, and skills. UK: Edward Elgar, Cheltenham.
10
Mansoor, N., Aslam, H. D., Barbu, C. M., Capusneanu, S., & Lodhi, M. A. (2012). Organizational
structure as a determinant of organizational performance, uncovering essential facets of the
organic and mechanistic structure. American Journal of Scientific Research, 55, 48-55.
11
