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THE LEADERS‟ LIVED EXPERIENCE OF A TENSION BETWEEN STRATEGIC

PLANNING AND A RAPIDLY CHANGING ENVIRONMENT

Nurhusein A. Mohammed

A Dissertation Presented in Partial Fulfillment

of the Requirements for the Degree

Doctor of Business Administration

UNIVERSITY OF PHOENIX

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iii

ABSTRACT

This phenomenological dissertation research study explored leaders‟ lived experience

of a tension between strategic planning and responding to a rapidly changing

environment. Twenty senior leaders from 10 large companies with a global or national

headquarters location in a single, metropolitan city in the United States participated in

the study. Six themes, including strategic planning process, environmental change,

experiences of personal tensions, response to environmental change, leadership style,

and effects of the response approach emerged. All participants stated that they followed

a goal- or vision-based strategic planning process and successfully responded to

environmental changes. It is noted in the literature reviewed that in a fast-changing

business environment executives need to adopt a dynamic approach to strategy and

practice proactive behavior; nevertheless, the companies participating in this study had

each taken a reactive approach and did not show evidence of either a dynamic approach

or proactive behavior. It is also noted in the literature that leaders report less stress than

non-leaders because leaders have better control over what happens in their workplace

than non-leaders do; yet the executives participating in this study openly expressed

their strong feelings of stress. The findings suggest that future research be conducted to

study companies that have successfully integrated a long-term view, a dynamic

approach, proactive behavior and practicing reactive flexibility to further examine the

tension between strategic planning and responding to a rapidly changing environment.

The findings also indicate that the entire topic of stress faced by executives merits

exploration.

DEDICATION

This dissertation is dedicated to my wife, my sons, and my daughter for the support

and sacrifices they have made in the past five years. My wife Munira, thank you for your

patience and selflessness. My sons, Ramadan and Kalid, and my daughter, Hanan, thank

you for your invaluable love and understanding. You all sacrificed family time so that I

could concentrate on my studies. I am so blessed to have such a wonderful family. I thank

you my Lord for giving me strength and courage to get through this most demanding

academic journey.

ACKNOWLEDGMENTS

First and foremost, I offer my sincerest gratitude to my dissertation committee chair

Dr. Lynne Devnew for her guidance and feedback, which made me work harder and

produce a better dissertation. Dr. Devnew, without you this might have never happened. I

am also deeply grateful to my committee members, Dr. Joseph Baugh and Dr. Kathleen

Dominick who have given so generously of their time to read my dissertation and give me

insightful feedback and advice.

TABLE OF CONTENTS

List of Tables ....................................................................................................................... xii

List of Figures ..................................................................................................................... xiii

Chapter 1: Introduction ...........................................................................................................1

Background of the Problem ........................................................................................3

Problem Statement ..................................................................................................................6

Purpose Statement ...................................................................................................................7

Significance of the Study ........................................................................................................8

Nature of the Study .................................................................................................................9

Research Question ................................................................................................................11

Theoretical Framework .........................................................................................................12

Definitions of Terms .............................................................................................................17

Assumptions ..........................................................................................................................19

Limitations and Delimitation……………………………………………………………….21

Summary ...............................................................................................................................21

Chapter 2: Review of the Literature ......................................................................................24

Strategy and Strategic Planning: Content and Process .............................................25

Strategy as Content .......................................................................................25

Strategy as a Process .....................................................................................27

Evolution of Strategic Planning ....................................................................28

The Course of Strategic Planning .................................................................31

Theories Relating to External Environment .............................................................44

Evolutionary Environmental Change ............................................................45

vii

Revolutionary Environmental Change ..........................................................47

Punctuated Equilibrium Theory ....................................................................50

Implications of Changes in the External Environment .............................................51

Organizational Responses to Changes in the External Environment........................53

Incremental Change ......................................................................................53

Radical Change .............................................................................................54

Midrange Change…………………………………………………………..56

Punctuated Equilibrium………………………………………………….. ..56

Robust Transformation…………………………………………………….57

Major Schools of Thought about Strategy Formulation ...........................................57

Miles and Snow‟s Four Categories of Firms ................................................59

Whittington‟s Four Perspectives on Strategy ...............................................60

Rouleau and Séguin‟s Four Types of Strategic Disclosure ..........................62

Mintzberg et al.‟s Ten Schools of Thought of Strategy ................................63

Attempts Made to Integrate Schools of Thought about Strategy Formation ............69

The Boundary School ...................................................................................70

The Configuration School .............................................................................70

Dynamic Capability Schools.........................................................................71

Integrating Strategic Planning and Responding to the Rapidly Changing

Environment………………………………………………………………..............72

Adapting Theory of Self-Referential Systems ..............................................73

Leading on the Edge of Chaos ......................................................................74

viii

Moving Strategic Planning Towards Strategic Foresight .............................75

Aligning Strategy, Organizational Design, and External Opportunity .........76

Agility and Speed of Response, Holistic Approach, and

Effective Change Management .....................................................................76

The Gaps in the Literature... .....................................................................................77

Summary ...................................................................................................................78

Chapter 3: Research Methods ...............................................................................................80

Types of Research Methods ......................................................................................80

Qualitative Research Approaches .............................................................................83

Biography ......................................................................................................83

Ethnography ..................................................................................................83

Grounded Theory ..........................................................................................84

Case Study ....................................................................................................85

Phenomenology.............................................................................................85

Population and Sampling ..........................................................................................88

Population .....................................................................................................88

Sampling .......................................................................................................88

Data Collection .........................................................................................................93

Gaining Entry ................................................................................................95

Interview Instrument Development ..............................................................96

Face Validation .............................................................................................98

Conducting Interviews ..................................................................................98

Data Analysis Methods and Processes ......................................................................99

Bracketing or Phenomenological Reduction ..............................................100

Delineating Units of Meaning………………………………………. 101

Clustering of Units of Meaning and Forming Themes…………………...101

Validation ................................................................................................…101

Summarizing Each Interview .....................................................................102

Extracting General and Unique Themes for All Interviews ......................102

Making a Composite Summary .................................................................102

Credibility (Reliability and Validity) of the Study .................................................102

Data Storage Methods and Retention .....................................................................104

Summary .................................................................................................................105

Chapter 4: Presentation and Explication of Data ................................................................106

Profile of the Study Participants .............................................................................106

Pilot Study ...............................................................................................................109

Data Collection .......................................................................................................109

Data Explication......................................................................................................110

Stage 1: Bracketing and Phenomenological Reduction ..............................111

Stage 2: Delineating meaning Units ...........................................................111

Stage 3: Clustering of Units of Meaning to Form Themes .........................112

Stage 4: Validation and Summary of Each Interview .................................113

Stage 5: Themes for All Interviews ............................................................128

Outlier Position .......................................................................................................151

Summary .................................................................................................................152

Chapter 5: Conclusions and Recommendations ................................................................154

Summary of the Research Study .............................................................................154

Literature .................................................................................................................155

The Study Findings .................................................................................................156

Interpretation of Findings .......................................................................................157

Strategic Planning Process ..........................................................................158

Environmental Changes ..............................................................................161

Responses to Evolutionary Changes ...........................................................162

Experiences of Personal Tension ................................................................165

Leadership Styles ........................................................................................166

Effectiveness of the Response Approach ....................................................168

Implications for Theory ..........................................................................................169

Implications for Practice .........................................................................................170

Recommendations for Participating Companies .....................................................171

Recommendations for Further Study ......................................................................172

Summary and Conclusions .....................................................................................174

Reflections ..............................................................................................................175

References ...........................................................................................................................178

Appendix A: Permission to Use the Premises ....................................................................243

Appendix B: Referral Form ................................................................................................244

Appendix C: Informed Consent ..........................................................................................245

Appendix D: Interview Questions ......................................................................................248

Appendix E: Letter of Invitation to Participate in the Study ..............................................249

Appendix F: Data Explication Process ...............................................................................250

Appendix G: Significant Statements from Each Interview .................................................251

Appendix H: Scrutinized Significant Statements from All Interviews ...............................285

Appendix I: Clustering Scrutinized Significant Statements of All

Interviews to Form Themes ................................................................................................295

Appendix J: Interview Data Verification Request Letter ...................................................301

Appendix K: The Most Recent Environmental Changes ....................................................302

Appendix L: The Participants‟ Leadership Styles ..............................................................303

xii

LIST OF TABLES

Table 1: Participant Demographics Summary ....................................................................108

xiii

LIST OF FIGURES

Figure 1: Theoretical Framework: Categories and Interlink of Theories .............................16

Figure 2: Literature Review Process .....................................................................................24

Figure 3: The Roadmap of Chapter 3 ...................................................................................80

Chapter 1

Introduction

In today‟s complex and fast-changing environment it is becoming difficult to

depend on the traditional strategic planning tools alone. The success of organizations is

now more frequently associated with a holistic approach that combines judgmental

designing, intuitive visioning, emergent learning, individual cognition, social interaction,

a long-term view, flexibility, and responsiveness (Ursic, Nikl, Mulej, & Cestar, 2006).

Business leaders need to be willing to take advantage of complexity and uncertainty and

to integrate strategic planning and responding to their rapidly changing environment to

enhance organizational performance on a continuing basis (Hitt, Keats, & DeMarie,

1998). The challenge is to strike a balance between planning based on a long-term view

and having the flexibility to respond to emerging challenges and opportunities (Fantazy,

Kumar, & Kumar, 2009). This research sought to examine the lived experience of

business leaders to understand what they had tried to do in attempts to integrate long-term

strategic planning and responding to a rapidly changing environment, to understand what

happened when they tried whatever they tried, and then to derive general lessons from the

experiences shared in their stories.

Accordingly, this study explored the lived experience of a tension between

strategic planning and responding to the rapidly changing business environments of 20

leaders from 10 large companies with national or global headquarters located in a single,

large metropolitan area in the United States. Specific criteria for identification of a large

company differ from nation to nation and study to study. The common identification

criteria used include sales, assets, number of employees, international operation,

ownership, geographic coverage, and access to the capital markets.

Erginel (2010) noted that a firm is considered large if it has more than 200

employees. Mohd, Shah, and Baharom (2010) described a large firm as one with 150 or

more full-time employees for manufacturing firms and 50 or more full-time employees

for service firms. Dagiliene (2009) pointed out that large companies are firms listed on

the stock market. Palia, Ravid, and Wang (2008) suggested that a company can be

defined as large if its annual revenue is $8257.75 million or more. CNN Money (2011,

2012) defined a large company as a firm that has more than 10,000 employees.

According to the North American Industry Classification System (NAICS) Code (2007) a

company is considered large if it has 500 employees (for manufacturing and mining

industry) or generates more than $14 million (for other industries).

For this particular research, the size standards are set according to the NAICS

Code and are based on either number of employees or revenues. To be more precise, in

the 10 large companies that participated in this research, the number of employees ranged

from 5,000 to 60,332 and the companies generated annual revenues ranging from $609.6

million to $13.97 billion in 2011. The research followed the qualitative method and

implemented a phenomenological design. Chapter 1 is comprised of sections providing

the background of the problem, problem statement, purpose, significance of the study,

nature of the study, research questions, theoretical framework, operational definitions,

assumptions, and chapter summary.

Background of the Problem

Strategic planning is a series of decisions and actions about intended future

results, ways of accomplishing these results, and mechanisms for measuring and

evaluating success (Johnson, Scholes, & Whittington, 2008; Porter, 1996). The strategic

planning process is a tool that shapes an organization and guides its actions (Staton-

Reinstein, 2003). Strategic planning is also a master plan that shows where the

organization is, where it wants to go, and how it wants to get there (Bryson, 2005).

Strategic thoughts and actions inherent in these strategic processes and plans improve

decision-making, enhance an organization‟s responsiveness, and improve its performance

(Bryson, 2005).

Business strategy emerged as a distinct discipline in the mid-1960s (Johnson, et

al., 2008). In the 1970s, the focus within the discipline was on medium- and long-term

forecasting (Cooper, Edgett, & Kleinschmidt, 2001). In the1980s, the center of interest

moved to the external environment (Grant, 2003). In the early 1990s, the concentration

was around sources of competitive advantage, adding emphasis to a firm‟s capabilities

and core competences (Hamel & Prahalad, 1989). Since early 1990, the predominant

strategic themes have been organizational innovation or knowledge, flexibility and

responsiveness to complexity, corporate social responsibility, and ethics (Christensen,

Roth, & Anthony, 2004; Werhane & Freeman, 1999).

For more than four decades, business organizations have used linear strategic

planning as a major management process to develop and maintain competitive advantage,

to create a sense of mission, direction, and consistency, and to strengthen survival and

growth (Boguslauskas & Kvedaraviciene, 2009). Linear strategic planning is a

mechanistic planning approach that relies on thinking inside the lines, which means

determining the company‟s mission, vision, values, purposes and visionary goals; then

environmental scanning, strategy formulation, strategy implementation, evaluation and

control (Bradford, Duncan, & Tracy, 2000).

This linear approach to strategic planning presupposes the competence to forecast,

develop, and implement appropriate plans to dominate in the future (Mintzberg, 1994).

The linear approach also assumes the static nature of the environment or oversimplifies

the complex and dynamic nature of the environment (Mintzberg, 1994).

In today‟s complex and fast-changing business environment, it is difficult to

forecast the future and the swift rate of change in the business environment increases the

uncertainty in the outcomes of management decisions (Carvens, Piercy, & Baldauf, 2009;

Hamel & Prahalad, 1989; Mintzberg, 1994; Singh, 2010; Stacey, 1993, 2003). This does

not necessarily mean that strategic planning is obsolete. It rather means that strategic

planning should follow strategic thinking, focusing on taking long-term views and a

holistic approach while also remembering the need to be dynamic, adaptive, flexible, and

able to change as the environment changes or time passes (Abel, 1999; Bryson, 2005;

Conway & Voros, 2003; Hamel & Prahalad, 1989, 1994; Liedtka, 1998a; Markides,

1999a; Mintzberg, 1994; Roberts & Stockport, 2009). The strategic planning process and

plan are still critical for establishing and communicating the organization‟s strategic

direction and integrating all functions and resources of an organization to achieve the

desired goals. Without strategic planning it is difficult to operationalize strategic

thinking and strategic decisions (Carvens, et al., 2009; Liedtka, 1998b).

Focusing on the ever-changing environment, leaders of many organizations

concentrate on responding to immediate changes in the environment and pay little

attention to having long-term strategic plans. These organizations suffer from loss of

direction (Hagel & Seely, 2005; McHann & Frost, 2010). Other organizations‟ leaders

focus on long-term plans with little attention to the inevitable new developments in the

external environment and, therefore, fail to exploit market opportunities effectively

(Lewis, Goodman, & Fandt, 2001; Ruhanen, 2010; Siemens, 2010). Still other

organizations are said to lack strategic purity, to be stuck in the middle while their leaders

use hybrid strategies. These organizations experience confusion, loss of direction, and

poor performance (Raynor, 2007; Thornhill & White, 2007).

Khalifa (2008), Liedtka (1998a), Markides (1999a), Smit and Trigeorgis (2006),

and Trigeorgis (1996) asserted that business organizations may create and maintain

sustainable competitive advantages and develop superior performance by integrating

long-term strategic planning and responding to immediate changes in the environment

with the right speed and flexibility. The successful integration of strategic planning and

flexibility may promote strategic thoughts and actions, improve decision-making, and

enhance performance; however, responding to the volatile, dynamic, and ever-changing

environment and implementing continuous transformation without permanently

damaging the business or losing the long term view is a complex strategic undertaking

(Agarwal & Sambamurthy, 2002; Heracleous, 1998; Jennings & Haughton 2002;

Mattsson, 2008; Murphy, 2002).

Problem Statement

The general problem is that in a complex and fast-changing business environment

it is difficult to forecast an outcome with any accuracy or confidence and the advantages

built based on strategic position and a long-term strategic plan may erode rapidly

(Eisenhardt, 1989; Elenkov, 1997; Jennings & Haughton, 2002; Lewis, et al., 2001;

Ruhanen, 2010; Siemens, 2010; Stacey, 1993). Lack of due consideration for immediate

changes in the environment can erode the ability to exploit market opportunities

(Abel,1999; Finlay, 2000; Gibson, 1998; Hagel & Seely, 2005; Hamel & Prahalad, 1989;

Lewis, et al., 2001; McHann & Frost, 2010; Smit & Trigeorgis, 2006; Trigeorgis, 1996),

yet attempting simultaneously to react to multiple opportunities and the associated

frequent shifts in strategy without having a long-term view can rapidly degenerate into

random motions and may lead to loss of direction, insufficient resource allocation, and

mediocre performance (Markides, 1999b; Raynor, 2007; Porter, 1996; Thornhill &

White, 2007).

Some business leaders focus on developing long-term strategic plans as a means

to occupy or secure strategic positions with little concern for immediate changes in the

environment. Other leaders focus on responding to new developments in the external

environment with little planning for the long-term future (Hagel & Seely, 2005). Still

others lack strategic purity, are stuck in the middle of hybrid strategies, and experience

confusion (Thornhill & White, 2007). Both long-term view and strategic flexibility must

be achieved for organizations to be successful (Eisenhardt, 1989; Elenkov, 1997; Grewal

& Tansuhaj, 2001; Hitt, et al., 1998; Johnson, Lee, Saini, & Grohmann, 2003; Nadkarni

& Narayanan, 2007; Singh, 2010; Worren, Moore, & Cardona, 2002; Yasai & Ralph,

1997).

The specific problem is that in spite of continuous studies for over three decades,

several gaps remain in scholars‟ understanding of strategic planning (Grant, 2003;

Kargar, 1996; London & Hart, 2004). One particularly prominent gap relates to the lack

of empirical research on the leaders‟ lived experience of the tension between strategic

planning (persistence and stability) and responding to the rapidly changing environment

(flexibility). The prior research that has examined strategic planning and flexibility has

given little attention to the leaders‟ lived experience of the tension between strategic

planning and flexibility and their perceived experiences seeking to integrate the two

approaches (Nadkarni & Herrmann, 2010; Sanchez, 1995; Worren, et al., 2002; Young-

Ybarra & Wiersema, 1999). Given this gap in the literature, this research sought to

address the tension between strategic planning and responding to a rapidly changing

environment from the perspective of 20 leaders in large companies with global or

national headquarters in a single, large metropolitan area in the United States and their

lived experiences of trying to integrate these concepts.

Purpose Statement

The purpose of the study was to understand the nature of a tension between

strategic planning and responding to a rapidly changing environment, to describe how

leaders in large companies have tried to integrate long-term view and flexibility, and to

produce credible empirical knowledge that may add value to the existing knowledge and

practice in the field of strategic planning and management. To this end the study

explored the lived experience of a tension between strategic planning and responding to a

rapidly changing environment of 20 leaders in 10 large companies with global or national

headquarters location in a single, large metropolitan area in the United States.

Qualitative method and phenomenological design were used to collect data, analyze data,

and communicate the participants‟ stories.

Significance of the Study

Today‟s complex and fast-changing business environment is causing many

company leaders to focus on short-term actions (Kakabadse & Kakabadse, 2005; Lewis,

et al., 2001; Lynch, 2000). Focusing on short-term actions without also having a long-

term view often results in the loss of direction and poor performance (Gibson, 1998;

Hagel & Seely, 2005; McHann & Frost, 2010; Mintzberg, 1994). On the other hand, not

responding immediately to changes in the environment or focusing on long-term plans

with little attention to the inevitable developments in the external environment can erode

the ability to exploit market opportunities (Abel, 1999; Hamel & Prahalad, 1989; Lewis,

et al., 2001; Markides, 1999b; Ruhanen, 2010; Siemens, 2010). Given these problems,

strategic management researchers are increasingly recognizing the need for a better

understanding of ways and mechanisms to integrate long-term strategic planning,

responding to the ever-changing environment, and providing support for the contention

that strategic flexibility drives firm performance (Grewal & Tansuhaj, 2001; Nadkarni &

Narayanan, 2007; Worren, et al., 2002). With the aim of addressing this issue, this author

explored the lived experience of the tension between strategic planning and responding to

the rapidly changing environment of 20 business leaders in large companies with global

or national headquarters in a single, large metropolitan area in the United States.

This research is relevant to the field of leadership and is of important social

concern and theoretical interest because it addresses a major challenge facing business

leaders and academics. The findings may help business leaders to understand better how

other leaders are managing this tension between two seemingly conflicting formulae for

success, which might help them manage the tension more successfully, prevent failure,

optimize organizational objectives, and meet or exceed stakeholder expectations

effectively (Abel, 1999; Markides, 1999a). In addition, the findings of this research

might help professionals and academics to understand better how the two conflicting

directions coexist and thus help future practitioners design and conduct more effective

consulting services and educational programs. This research will be beneficial for

business students and professionals who need information on applied ways of combining

strategic planning and responding to a rapidly changing business environment.

Furthermore, this research will be useful as baseline information for future researchers.

Nature of the Study

A researcher‟s epistemology is his or her world view or the basic set of beliefs

that guides his or her theory of knowledge and decisions about how social phenomena are

to be studied (Creswell, 1994, 2007; Holloway, 1997; Mason, 1996). The

epistemological position behind this study includes the following:

1. Data about the tension between strategic planning and responding to a rapidly

changing business environment are contained within the perspectives of

leaders in business organizations.

2. Because of this it is necessary to engage with business leaders to collect the

data.

3. The qualitative method and a phenomenological design, purposive sampling

coupled with snowball sampling techniques, and semi-structured interviewing

data collection methods are the best means for executing this study

effectively.

This research used the qualitative method because the qualitative method provides

in-depth, descriptive data and allows the flexibility to examine initial participant

responses thoroughly using open-ended questions (Trochim, 2000; Zawawi, 2007).

Unlike the quantitative method, which forces participants to choose from fixed responses,

open-ended questions may elicit rich and explanatory responses from participants

(Creswell, 1994, 2007). In addition, semi-structured interviewing was appropriate for

this research because it helped the researcher explore a topic broadly, using some guiding

questions and freely moving the conversation in any direction (Gubrium & Holstein,

2002; Kvale, 1996; Zawawi, 2007).

Phenomenological research design was appropriate for this study because it

provided comprehensive descriptions of the phenomenon through open-ended questions.

It also helped the researcher to describe the structure of the business leaders‟ lived

experience through analysis and interpretation of their stories and to derive general

meanings (Groenewald, 2004, Moustakas, 1994). Accordingly, this study followed a

seven steps process based on Hycner‟s five phases explication process (Hein & Austin,

2001): collecting data through open discussion, using a semi-structured interview;

examining descriptions provided by the research participants; thematizing the

descriptions; developing exhaustive situational structural descriptions for each

participant‟s experience, comparing the descriptions in order to identify shared themes;

synthesizing or interpreting general structural descriptions; and deriving general

meanings. In the data analysis process the focus was on the actual words of the

participants, bracketing or setting aside personal preconceptions and focusing on

communality, verifiability, and replicability of the findings (DeWalt & DeWalt, 2002;

Fay & Riot, 2007; Hein & Austin, 2001; Trochim, 2006; Walker, 2007).

Research Question

The high degree of complexity and the unpredictability of the business

environment have made old models and the old assumptions of strategic planning

ineffective (Carvens, et al., 2009; Gibson, 1998; Hamel & Prahalad, 1989; Hussey &

Hussey, 1997; Kakabadse & Kakabadse, 2005; Lewis, et al., 2001; Mintzberg, 1994;

Mockler, 1997; Singh, 2010; Stacey, 2003). Meanwhile, previous studies in the field of

strategic planning and management have provided valuable information about the

necessity and advantages of integrating strategic planning and responding to challenges

from the external environment. These earlier studies, however, give little information

about the leaders‟ lived experience of the tension between strategic planning and

responding to a rapidly changing environment. The lack of research focusing on the

lived experience of leaders charged with long-term view and flexibility suggests that the

tension between strategic planning (long-term view) and responding to a rapidly

changing environment (flexibility) is still understudied. This qualitative study aimed at

contributing to filling this gap.

The one overriding research question was as follows: What are the experiences of

business leaders as they seek to integrate strategic planning and responding to a rapidly

changing business environment? This basic question raised two sub-questions: What is

the nature of the tension between strategic planning and responding to a rapidly changing

business environment? What factors are perceived to be responsible for success or

failure in aligning strategic planning and responding to a rapidly changing environment?

To answer these questions, the focus of this study was capturing stories and anecdotes

that describe the lived experiences of the participants as they have sought to integrate

strategic planning and responding to a rapidly changing business environment,

identifying the underlying themes or communality of their descriptions, interpreting these

descriptions, and deriving meanings from them.

Theoretical Framework

A theoretical framework is a structure that encompasses a theory that clarifies the

problem under study (Bacharach, 1989; Chan, 1998; Swanson, Watkins, & Marsick,

1997; Tashakkori & Teddlie, 2003). Accordingly, the theoretical framework guiding this

study encompasses three blocks of theories: environmental change theories, theories

related to organizational responses to changes in the environment, and strategic

management theories. These theories have been selected from multiple academic fields

with competing schools of thought and different basic assumptions about what strategy

theories should try to clarify, how the environment changes, and what capabilities an

organization must have to respond effectively to the ever-changing environment

(Chalmers, 1982; Khun, 1996; Mintzberg, 1990; Mintzberg, Ahlstrand, & Lampel, 1998;

Rumelt, Schendel, & Teece, 1994; Schendel, 1994).

Environmental change theories

Three environmental change theories, namely, evolutionary change theory,

revolutionary change theory, and punctuated equilibrium theory are relevant to this study.

According to evolutionary change theory organizational change is governed by the

variation and selection principle. This means various external environmental factors such

as economic conditions, sociocultural forces, technology, political and legal factors

determine the survival and growth of an organization (Novak, 2006). Revolutionary

change theory describes the dramatic alteration in the economic, social, technological,

and political features of the environment (Greenwood & Hinings, 1996). Punctuated

equilibrium theory states that evolutionary environmental change and revolutionary

environmental change do not exclude each other (Greiner, 1998; Hamel, 2001).

Organizational change theories

Two theories, namely incremental change and radical change describe how

organizations respond to environmental changes. According to the theory of natural

selection, organizations evolve over time as a consequence of the generic principles of

variation, selection, and retention (Aldrich & Ruef, 2006; Stoelhorst, 2008). This implies

that organizations respond to evolutionary environmental changes through small

adjustments (adaptations) or incremental changes in their processes or products within

the already existing paradigm (Nadler & Tushman, 1989; Quinn, 1999; Weick & Quinn,

1999; Runciman, 1997, Sircar, Nerur, & Mahapatra, 2001, Kirschner & Gerhart, 2005).

Since the environment determines the selection process, plans can do little to influence

the environment (Hannan & Freeman, 1984).

According to radical organizational change theory organizations undertake radical

transformational change actions that aim at changing the paradigm when they anticipate

or experience revolutionary environmental changes (Kezar, 2001). Accordingly,

organizations develop and implement plans quickly and flexibly to replace old policies,

strategies, structures, values, assumptions, habits, practices, and products or services with

new ones (Gersick, 1991, Tushman & O‟Reilly, 1996, Henderson & Clark, 1990; Kanter,

1983; Nicholson, 2000). Since evolutionary changes and revolutionary changes are not

contradictory, organization may address both evolutionary and revolutionary changes in

complementary ways (Hamel, 2001; Tushman & O‟Reilly, 1996). There are three

organizational change approaches that consider organizational change as the interplay

between incremental and radical transformation: midrange organizational change (Reger,

Mullane, Gustafson, & DeMarie, 1994), punctuated equilibrium (Romanelli & Tushman,

1994; Hilmer & Donaldson, 1996; Graetz, Rimmer, Lawrence, & Smith 2002; Hamel,

2001), and robust transformation (Koch, 2004).

Strategic management theories

People with different backgrounds have described strategic management in

different ways and developed partly competitive and partly supplementary schools of

thought regarding strategic management (Rumelt et al., 1994; Dean, Brown, & Bamford,

1998). Among these various schools of thought Elfring and Volberda‟s (2001) four

schools of thought that are common in the strategic management literature are relevant

for this study.: Miles and Snow‟s (1978) three categories of strategic behaviors

(defenders, prospectors, and analyzers); Whittington‟s (1993) four approaches to strategy

formulation (classical, evolutionary, systemic, and processual); Rouleau and Séguin‟s

(1995) four approaches to strategy (classical approach, contingency approach,

sociopolitical approach, and socio-cognitive approach); and Mintzberg, Ahlstrand, et al.‟s

(1998a) ten schools of thought of strategy, including the classical school (design,

planning, and the position school), the entrepreneurial school, the cognitive school, the

learning school, the power school, the cultural school, the environment school, and the

configurational school.

Figure 1 portrays the categories of and interrelationships among the theories on

which this study was based: environmental change theories, organizational change

theories, and strategic management theories. These theories are important to understand

the tension between strategic planning and responding to a rapidly changing environment

and ways of integrating long-term view and flexibility. The theories will be discussed in

Chapter 2.

Figure 1. Theoretical framework: Categories and interlink of theories on which the study

was based.

Strategy & Strategic Planning Environmental Change Theories - Strategy as a result and process - Evolutionary theory - Evolution of strategic planning - Revolutionary theory - The course of strategic planning - Punctuated equilibrium

Implications of changes in the

external environment to business

organizations

Organizational Responses to changes

in the environment

- Incremental change, radical change,

midrange change, punctuated

equilibrium, robust transformation

-The nature of of schools of thought of strategy: Fragmentation & Integration - Major Schools of Thought of Strategy * Miles & Snow‟s (1978) strategic behaviors * Whitington‟s (1993) approaches to strategy formulation * Rouleau and Séguin‟s (1995) four approaches to strategy * Mintzberg et al.‟s (1998) ten schools of thoughts of strategy

Integrating schools of thought of strategy

• Attempts made to integrate schools of thought of strategy

The new paradigm

• Theories to integrate strategic planning and responding to rapidly changing environment

Definitions of Terms

The following list of operational definitions of basic terms is intended to eliminate

confusion about the meaning of these terms in this research study.

Business environment: Business environment comprises a set of remote aspects of

the general environment such as the political, economic, social, technological,

environmental, and legal forces and the close task environment, composed of

competitors, customers, suppliers, the labor market, and financial resources that can

influence the business both positively and negatively (Grant, 1999).

Complexity: Complexity occurs when a given system is formed by several distinct

but tightly connected components (Edmonds, 1996). While the difference between

components leads to disorder, chaos, or entropy, the connection between components

gives rise to the collective behaviors of a system (Chu, Strand, & Fjelland, 2003;

Holland, 2006; Finlay, 2000).

Core competencies: Core competencies are fundamental capabilities that give a

business an advantage over its competitors (Leonard-Barton, 1995).

Dynamism: Dynamism is the quality of being characterized by continuous change,

vigorous activity, or progress. Dynamism can be understood through faster analysis

(Finlay, 2000).

Flexibility: Flexibility means the ability to react quickly to environmental changes

(Zhou & Wu, 2010).

Framework: A framework is a structure comprising a set of theories widely

enough accepted to serve as guiding principles (Botha, 1989).

Large company: Firms in manufacturing and mining industries qualify as large if

they have more than 500 employees and firms in other industries qualify as large if they

generate more than $14 million in annual revenue (NAICS, 2007).

Paradigm: A paradigm is a pattern or a model or way of thinking or a theory

(Davis, 1978).

System model: A system model is the conceptual pattern that represents the nature

of a system (Botha, 1989).

Strategic flexibility: Strategic flexibility is the ability of an organization to

respond to unforeseen events and the unanticipated consequences of foreseen events

(Evans, 1991).

Strategic planning: Strategic planning is a road map to lead an organization from

where it is now to where it would like to be in the long-term: three, five, or ten years

hence (Haines, 2004).

Strategic planning process: A strategic planning process is a series of systematic

decisions and actions to determine a company‟s long-term goals and identify the best

approach for achieving those goals (Haines, 2004).

Strategic thinking: Strategic thinking is an integrated perspective or the vision that

will drive the direction, nature, and focus of the business. Strategic thinking consists of

five major attributes that resemble competencies: a systems perspective, focused intent,

thinking in time, being hypothesis-driven, and using intelligent opportunism (Liedtka,

1998a; Mintzberg, 1994).

Theory: A theory is a particular conception or view of something to be done or of

the method of doing it (Botha, 1989).

Turbulence: Turbulence refers to a state or a condition of chaotic, highly irregular,

rapidly changing, violent disturbance and disorder (Finlay, 2000).

Assumptions

This qualitative phenomenological study was based on seven basic assumptions.

The first assumption was that the lived experience of a tension between strategic planning

and a rapidly changing environment is subjective and multiple. This was a reasonable

assumption as the lived experience of a tension between strategic planning and a rapidly

changing environment was displayed by participants in the study. The second assumption

was that meaning is embedded in the participants‟ experiences, not in the researcher‟s

perceptions. Therefore, the researcher interacted with the study participants being

concerned primarily with process rather than the outcome. This was a reasonable

assumption because understanding and describing the leaders‟ lived experience from the

participants' perspectives, not from the researcher‟s view point had enhanced the

objectivity of research.

The third assumption was that participants had relevant knowledge and

experience of the tension between strategic planning and responding to a rapidly

changing business environment. This was a reasonable assumption because in most cases

people in senior positions have previously passed through different levels on the career

development ladder. At each career level they experience strategic challenges, including

the tension between strategic planning and responding to a rapidly changing environment.

The fourth assumption was that enough participants would volunteer to participate

in this study because an adequate, clear, and concise explanation of the validity and

relevance of the research would be provided to gain the participants‟ confidence

(Lindberg, Jones, McComas, & Thomas, 2001). In addition, trust and rapport would be

established with the participants by demonstrating professional integrity and by creating

convenience for participants (Miller, Rosenstein, & DeRenzo, 1998); moreover, potential

participants would be approached using a variety of approach methods until a response

was achieved (Miller et al., 1998).

The fifth assumption was that the participants would be truthful. This was also a

reasonable assumption because once they understood the purpose of the research,

received assurance of confidentiality, and developed an interest in the research the

participants could openly and freely discuss their experiences. Above all, as educated,

experienced, ethical, and responsible role models, leaders are morally responsible to

speak the truth within the framework of the confidentiality statement that commands and

requests them to not use or disclose some information. Issues related to ethics in research

are discussed in Chapter 3.

The sixth assumption was that the researcher would set aside personal

preconceptions and rely on the actual words of the participants to describe the lived

experience of the participants. This was a reasonable assumption because the researcher

would be aware that if he were biased, the research findings would not be reliable, valid,

and successful. Conducting an unreliable and invalid study would be a waste of

resources. In addition, the researcher bracketed himself consciously during each

interview and during the transcription of the interview; moreover, participants received a

copy of the verbatim transcripts of their interviews, allowing them the opportunity to

ensure that their words were captured accurately.

The seventh assumption was that the findings from this study would be relevant

for leadership and contemporary business administration practices. This was a

reasonable assumption because the data and findings in this research would be based on

the lived experience of senior leaders who have led businesses in a rapidly changing

environment. In addition, the participants had 12- 25 relevant leadership experience in

various companies.

Limitations and Delimitations

The study was limited to 10 large companies located in a single, large

metropolitan area in the United States. It was also delimited to two participants from each

company. The lived experiences of leaders who participated in this phenomenological

study are not generalizable.

Summary

For decades scholars have concluded that in order to be successful organizations

need to set goals, analyze the environment, formulate strategy, implement strategy, and

monitor and evaluate performance (Mintzberg, 1994). The associated strategic

management theories are based on the hypothesis that the future is predictable and

rational long-term plans are reliable; however, for almost two decades, scholars have also

been warning that the complex and fast-changing business environment has eroded the

role of long-term strategic planning (Liedtka, 1998b; Mintzberg, 1994; Mintzberg,

Ahlstrand, et al., 1998; Mintzberg, Quinn, & Ghoshal, 1998; Stacey, 2003).

Consequently, strategic planning and responding to the rapidly changing

environment are widely seen as both contradictory and critical. Many leaders appear to

be focused on reacting to immediate environmental change with little attention to having

long-term strategic plans and, therefore, their organizations suffer from their reactive

actions and loss of direction (Hagel & Seely, 2005; McHann & Frost, 2010). Some

leaders focus on long-term plans with little attention to new developments in the external

environment and, therefore, their companies fail to exploit market opportunities

effectively (Lewis et al., 2001; Ruhanen, 2010; Siemens, 2010). Others who have tried to

address the contradictory guidance appear to have been stuck in the middle of hybrid

strategies and have experienced confusion, loss of direction, and poor performance

(Thornhill & White, 2007), yet researchers continue to assert that if appropriately

integrated, addressing both strategic planning and responding to the fast-changing

environment can produce superior performance (Burnes, 2004; Liedtka, 1998b;

Markides, 1999b; Prahalad & Ramaswamy, 2000, 2004; Ramaswamy & Gouillart, 2010).

Prior researchers have provided valuable information about the importance of

strategic flexibility (Hamel & Prahalad, 1994; Kotter, 1999, 2008; Kouzes & Posner,

2002; Senge, 1990, 1994; Senge, et al., 1999; Teece, 2006; Todorova & Durisin, 2007;

Volberda, 1996; Yasai & Ralph, 1997); however, these researchers have provided little

information about the leaders‟ lived experience of a tension between strategic planning

and responding to a rapidly changing environment. In order to fill this gap, this research

explored the lived experience of a tension between strategic planning and responding to a

rapidly changing environment of 20 leaders in large companies with global or national

headquarters in a single, large metropolitan area in the United States.

Three sets of theories, namely environmental change theories, organizational

change theories, and strategic management theories, were used to explore the leaders‟

lived experience of the tension between strategic planning and responding to the rapidly

changing environment. In addition, this study used the qualitative research approach and

a phenomenological design. The qualitative research method and phenomenological

design allowed the researcher to immerse himself in the data, probe initial participant

responses using open-ended questions, evoke rich and explanatory responses, and capture

experiences of the research participants as lived.

This study was conducted using a purposive sampling technique and a semi-

structured interview data collection approach. Verbatim transcripts of 20 interviews‟ data

were prepared and analyzed, using Hycner‟s (1999) explication process. Finally, the

research participants‟ stories were interpreted and general meanings were derived. The

following chapter is a literature review that focuses on analyzing the fundamental

theories in the theoretical framework and other relevant topics.

Chapter 2

Review of the Literature

Theories related to the tension between strategic planning and responding to a

rapidly changing environment can be classified into three blocks: environmental change

theories, organizational change theories, and strategy theories. The nature of strategy and

strategic planning is described and the evolution of strategic planning is discussed before

the theories in each of the three categories are reviewed. Figure 2 portrays the process

used for the review of the literature.

Figure 2. Literature review process.

Introduction

Strategy and strategic

planning

Strategy as content

Strategy as a process

Evolution of strategic

planning

The course of

Strategic planning

Changes in the

environment

Evolutionary change

Revolutionary change

Punctuated equilibrium

Implications to

organization

Organizational responses to changes

in the Environment

Increemntal change, radical change,

midrange change, punctuated

equilibrium, robust transformation

Major schools of thought of strategy

Miles and Snow‟s three categories of

firms

Whitington‟s four perspectives on

strategy

Rouleau and Séguin‟s four types of

strategic disclosure

Mintzberg‟s ten schools of thought

of strategy

Attempts made to integrate

schools of thought about

strategy

boundary school,

configurational school, and

dynamic capability school

Theories on

integrating

strategic

planning and

responding to

rapidly

changing

environment:

Self-

referential

system,

leading at the

edge of

chaos,

strategic

foresight,

alignment,

agility, and

speed

- Linking

theory and

the leaders‟

lived

experience

Summary

Strategy and Strategic Planning: Content and Process

Researchers and practitioners have described strategy in different ways. Some see

it as content. Many have described it as a process. Others seek to combine both (Van de

Ven, 1992). As the content, strategy is the selected course of action taken to achieve

organizational visionary aims and objectives. As a process, strategy is a sequence or

series of stages of activities undertaken to formulate and implement a plan. As a

combination of process and content, strategy is intended to move an organization from a

given present state or point to a subsequent end point by altering or fitting the

environment (Nag, Hambrick, & Chen, 2007).

Strategy as Content

Focusing on content, Dunkan (1972) and Miles, Snow, and Pfeffer (1974)

delineated strategy as a way of interacting with the environment. Considering strategy as

a means to achieve organizational goals, Glueck and Jauch (1984) defined strategy as a

coordinated plan to achieve the objectives of an organization. Viewing strategy as a

means of adaptation, Gupta (1987) described strategy as the organization‟s chosen mode

for interacting with the environment. Taking strategy as the result of a management

process, Stahl and Grigsby (1992) explained strategy as a collection of management

decisions and activities that decide the long-term accomplishments of an organization.

Reflecting on strategy as a decision making tool, Roberts and Sergesketter (1993)

depicted strategy as a decision about products and services to offer and the customers or

market to serve. Dwelling on strategy as a leadership skill and competence, Mintzberg,

Quinn, et al. (1998) described strategy as a collection of behaviors, a position, a

perspective, and a ploy to outsmart competitors.

Strategy as content includes three different levels of organizational strategies:

corporate strategies, business unit strategies, and functional strategies (Mintzberg,

Ahlstrand, et al., 1998). Corporate strategies describe the entire long-term strategic

direction of the organization. Corporate strategies address issues related to the following:

diversification, acquisition, divestment, strategic alliances, new business ventures,

industries or markets in which to compete, geographic regions in which to operate,

resource allocation among strategic businesses, product or service portfolios, and

organizational structure (Ansoff, 1965; Johnson et al., 2008).

Business unit strategies (e.g., low cost, diversification, and focus) describe how a

firm competes in a single industry or market and creates sustainable competitive

advantage for products, services, or both (Johnson & Scholes, 2002). The business unit-

level strategy is focused on positioning the business to have a competitive advantage

relative to its competitors using methods such as vertical integration and lobbying

(Grunig, Kuhin, & Clark, 2006). Business unit-level strategies focus on achieving

synergy by integrating unit activities so that strategies fit the needs of the environment.

Porter‟s (1996) generic strategies (cost leadership, differentiation, and focus) are most

commonly used to build and sustain a competitive advantage against the five forces of

competition: new entrants, suppliers, substitutes, buyers, and industry competitors.

Functional strategies such as marketing, finance, operations, human resource, and

R&D are aimed at developing and coordinating organizational resources to execute

business unit-level and corporate-level strategies effectively, efficiently, and flexibly

(Hill & Jones, 2001). The functional units of an organization play a major role in the

development of corporate strategies and business unit-level strategies, providing

information and other resources (Sehgal, 2010). They also play a determining role in the

implementation of corporate and business unit-level strategies (Hill & Jones, 2009).

Functional strategies are primarily concerned with efficiently utilizing resources,

integrating activities within the functional area, and aligning functional strategies with

business unit-level strategies and corporate-level strategies (Andrews, 1987).

Strategy as a Process

Focusing on the process approach, Chandler (1962) asserted that strategy is about

determining long-term objectives, adopting a course of action, and allocating the

necessary resources to attain these objectives. Giving attention to organizational policy,

Hart (1967) defined strategy as a means to fulfill the ends of policy. Emphasizing the

vision and long-term goals of an organization, Andrews (1987), Mintzberg and Quinn

(1996), Steiner (1979), Thompson, Strickland, and Gamble (2005), Tregoe and

Zimmerman (1980), and Van der Heijden (1996) characterized strategy as the pattern and

approach to achieve vision and long-term goals. Highlighting operational excellence,

Treacy and Wiersema (1995) illustrated strategy as the means for operational excellence,

customer intimacy, and product leadership. Accentuating competition and survival to the

fittest, Shona and Eisenhardt (1998) and D‟Aveni (1994) presented strategy as the means

of creating one‟s own competitive advantage and destroying the opponent‟s advantage.

Stressing the need for differentiation, Porter (1996) defined strategy as selecting a

distinctive, important, unique, and valuable position imbedded in systems of activities in

such a way that it would become difficult to copy. Underscoring the need to orchestrate

various functions and resources, Johnson and Scholes (2002) explained strategy as the

way of establishing direction and configuring resources to achieve advantage by meeting

the needs of markets and fulfilling stakeholder expectations. Drawing attention to

leadership skills and competence, O‟Regan and Ghobadian (2004) defined strategy as an

instrument by which intentions of organization leaders are converted into capability.

This becomes clearer when the term strategic planning is used instead of strategy

when the intent is to discuss strategy as a process. Strategic planning is a systematic

process that encompasses strategic issue identification, strategy development, strategy

implementation, and monitoring and evaluation (Bradford, et al., 2000; Johnson &

Scholes, 2002). Strategic planning is often approached by first defining where the

organization wants to be in a specific period of time and then working backward to where

the organization is now (Mintzberg, Ahlstrand, et al., 1998). Important considerations in

the strategic planning process are determining the most important strategic issues and

checking the appropriateness of timing and resource availability (Ansoff, 1980). The

most common timeframe for strategic planning is three to five years (Bradford et al.,

2000).

Evolution of Strategic Planning

According to Grant (1999), the term strategy came from the Greek term strategia,

meaning generalship. Strategia itself came from two Greek words: stratos, which means

army and ago, meaning leading. Before 490 BC, ancient Greeks annually elected a

strategos whose main duties were advising the political ruler on managing battles to win

wars and performing civil magisterial duties (Hamel, 1998). In addition, books such as

The Art of War, written around 500 BC by Sun Tzu (Foo, 2009), and Vom Kreige (On

War) by Carl von Clausewitz (Heuser, 2007; Echevarria, 2009; Sheppard, 1990) have

been major sources of military strategy. Vom Kreige, a systematic and philosophical

examination of war in all its aspects, was unfinished at the death of von Clausewitz in

1831; the complete German version was originally published in 1832 and the English

translation in 1873. Quotations from Chairman Mao Tse-Tung, which was published in

1964 and has become commonly known in the West as The Little Red Book (Terrill,

2006; Mao, 2008), further expanded approaches to military strategy. Owens (2007)

defined military strategy as the overall plan to put forces in a war with the goal of

winning the war and military tactics as specific actions in individual engagements or

maneuvers necessary to win battles.

From these military roots, strategic planning grew to include civil duties,

including business management (Grant, 2003). In both the military and business

environments, strategy describes the way resources (means) are orchestrated to achieve

the end. The major difference between the two types of strategy is the objective: while

the objective of war is to defeat the enemy, most business enterprises attempt coexistence

rather than the termination of competitors (Blackerby, 1994).

Until the 19th century, the application of strategic thinking to business situations

was limited because prior to the 19th century, there was no strong competition that

required individual firms to develop the ability to influence competitive outcomes

(Chandler, 1990). In the1850s, the building of railroads and access to capital and credit

enhanced large-scale investment and expanded markets in the United States.

Consequently, the need for business strategy as a means to succeed against competitors

became clearer (Davidson, 1996).

In the 1920s, the focus of strategic planning was on formulating organizational

policy and structure that could improve organizational performance. This approach was

based on the strategic planning model that was developed by Harvard Business School

for private businesses in the early 1920s (Rue & Holland, 1986). According to this

model, strategy defines the company, unites company resources, determines

organizational structure, and improves performance (Chandler, 1962).

In the 1940s, the challenges of World War II were a vital stimulus to strategic

thinking. Accordingly, important planning tools such as linear programming, game

theory, and learning curves were developed to help organizations allocate scarce

resources effectively and efficiently (Panagiotou, 2003). After World War II, formal

planning received little attention for a decade, mainly due to excess demand and limited

competition (Panagiotou, 2003). In the late 1950s, when attention was again given to

formal planning, the main theme was budgetary planning and control. The principal

techniques of planning and control were financial budgeting, investment planning, and

project appraisal (Ansoff, 1965).

In the 1960s, business strategy emerged as a distinct discipline (Johnson et al.,

2008). In the 1960s and early 1970s, strategy was largely equated with corporate

planning and the main issues were diversification and portfolio planning, medium- and

long-range forecasting, and synergy (Ansoff, 1965; Chandler, 1962; Learned,

Christensen, Andrews, & Guth, 1965). In the late 1970s and early 1980s, the focus was

on the external environment and strategic planning was dominated by strategic

positioning (Grundy, 2006). During these periods, Porter‟s five forces model, which

consisted of new entrants, suppliers, substitutes, buyers, and industry competitors and

three generic strategic options, namely cost leadership, product differentiation, and

market segmentation (or focus), were the major tools to design strategic plans (Porter,

1979).

In late 1980s and early 1990s, the focus was on sources of competitive advantage

and the dynamic aspects of strategy, such as shareholder value, resources and

capabilities, knowledge management, information technology, speed, responsiveness, and

first mover advantage. Accordingly, firm capabilities and core competences, things a

company can do better than its competitors, became the focus of business strategic

planning (Boguslauskas & Kvedaraviciene, 2009; Edgar & Lookwood, 2011; Hafeez,

Zhang,, & Malak, 2002; Prahalad & Hamel, 1990). Since 2000, the predominant themes

have been strategic and organizational innovation, reconciling size with flexibility and

responsiveness, complexity, cooperative strategy (new alliances), corporate social

responsibility, and ethics (Christensen, et al., 2004).

The Course of Strategic Planning

There are various strategic planning models that show the path or steps over

which strategic planning actions move (Liedtka, 1998a; Bradford, et al., 2000; Staton-

Reinstein, 2003):

1. Vision-based or goal-based strategic planning that works from the future to

the present.

2. Issues-based planning that starts from the present and works to the future.

3. An alignment model that focuses on ensuring the integration between the

organization‟s mission and its resources.

4. Scenario planning that makes flexible long-term plans by combining known

facts and trends.

5. Organic or self-organizing planning that is based on common values.

6. Real-time planning that aims at fitting a rapidly changing environment.

In addition, there is a wide range of strategic planning tools available, including

strengths, weaknesses, opportunities, and threats (SWOT) analysis; the Boston

Consulting Group (BCG) matrix; the General Electric(GE) business screen; the 7-S

model; capital planning and budgeting; value chain analysis; activity mapping;

benchmarking; game theory modeling; strategic group analysis (SGA); stakeholder

analysis; competitor analysis; segmentation; Porter‟s five forces analysis; Porter‟s

generic strategies; Ansoff‟s matrix; gap analysis; force field analysis; decision analysis;

and balanced scorecard (Wall, Robert, & Mark, 1992; Kaplan & Norton, 1996; Tweed,

1990). The descriptions of these strategic planning tools follow:

SWOT analysis: SWOT (Strengths, weaknesses, opportunities, and threats)

analysis involves analyzing external and internal environmental factors that affect the

attainment of an organization‟s mission and objectives (David, 1993). External

environment scanning helps identify opportunities and threats. Analysis of the

organization‟s internal environment reveals an organization‟s strengths and weaknesses

(Hill & Westbrook, 1997). Organizations perform SWOT analysis to determine how to

allocate resources, improve operations, and get a picture of how the company should

position itself against competitors. The data from the SWOT analysis will give the

management team a big picture perspective to start the strategic planning process.

The Boston Consulting Group (BCG) matrix: BCG matrix is used to categorize a

company‟s business units or products as "Stars", "Cash Cows", "Question Marks", and

"Dogs" based on cash use and cash generation (market share). Stars grow rapidly, use

huge amounts of cash, and generate large amount of cash. Cash cows have high market

share, generate a large amount of cash, and use a low amount of cash. Dogs have low

market share and generate low cash. Question marks have high growth, consume a huge

amount of cash, and generate very low cash (Armstrong & Brodie, 1994; Hedley, 1977;

Hofer & Schendel, 1978). The balanced portfolio has stars, cash cows, and question

marks (Henderson, 1970). The BCG matrix is used to help companies analyze their

business units or products and decide how they can make their portfolios more efficient,

dispositioning “dogs” i.e. divesting (Armstrong & Brodie, 1994).

The GE business screen: The GE business screen matrix is derived from the BCG

matrix. It is based on two factors: market attractiveness (market growth rate, market size,

potential barriers and size of competitors) and business position (ability to mobilize the

resources, and design and develop a product). Three values (high, medium and low) are

used to measure each factor (Coyne, 2008). The aim of the portfolio analysis is to decide

which strategic business unit should receive more or less investment, to help develop

growth strategies or determine whether to add new products to the portfolio, and to

decide which businesses or products should no longer be retained (Collis, Campbell, &

Goold, 1999).

The 7-S model: For an organization to perform well, continuously improve

performance and achieve its objectives, seven sub-systems including strategy, structure,

systems, style, skills, staff, and shared values need to be aligned and mutually

reinforcing. The 7-S model is used to analyze how these organizational sub-systems are

interrelated or aligned. Since these sub-systems are interdependent, a success in

organizational change can be achieved if and only if the leaders consider all of the seven

elements simultaneously and focused on getting them in alignment (Robert, Waterman,

Peters, & Philips, 1980). If the sub-systems are out of alignment, the focus should be on

getting them back into alignment.

Capital planning and budgeting: Capital planning is used to determine whether

an organization's long term investments are worth the funding. Many methods are used in

capital planning, including techniques such as payback period, internal rate of return, net

present value (Arthur & Sheffrin, 2003; Harvey & Gray, 1997; Ignacio, 2008). Capital

budgeting is the process of allocating resources annually for major investment projects in

combination with the operating budget (Arthur & Sheffrin, 2003). To be realistic and

affordable, plans should be crafted within budget constraints. On the other hand, scarce

budgetary resources should be allocated to the priorities articulated in an organization‟s

plans (Black, 1993).

Value chain analysis: Value chain comprises all activities a company undertakes

to develop, manufacture, promote, and distribute goods (Porter, 1985). Shank &

Govindarajan (1993) described value chain as the value-creating functions all the way

from the supply of raw materials to delivering a product to customers. The value chain

framework categorizes the organization‟s activities into primary activities and secondary

activities. Primary activities deal directly with the production and distribution of a

product. Secondary activities are support functions. Value chain analysis consists of

activity analysis, value analysis, and evaluation and planning (Porter, 1985). Value chain

analysis helps organizations identify their value-creating processes and the links among

these processes, understand the cost of their activities, identify sources of profitability,

and differentiate segments and activities yield them the greatest competitive advantage

(Shank & Govindarajan, 1993; Normann & Ramirez, 1993). In the final analysis value

chain analysis helps organizations figure out ways and mechanisms to create more value

for their customers. The more value the organization creates the more people will keep

on buying (Kaplinsky & Morris, 2001).

Activity (business process) mapping: This tool facilitates the decision making and

execution process. It is used to help identify activities, define standards, and assign

responsible people for each activity. It is also used to assist organizations in the

measurement and comparison of activities to make sure that all processes are aligned

with the organization‟s values, objectives and capabilities; and to improve the efficiency

of its current processes (Jack & Keller, 2011). There are four major steps of process

mapping namely process identification, information gathering, developing actual maps

and analysis to identify how to improve the process (Sousa, Van Aken, & Groesbeck,

2002).

Benchmarking: This tool is used to compare an organization‟s performance with

the best performing organization‟s performance to learn from the business processes that

contributed to the success of the best performers. Performance metrics such as quality,

time and cost are used in the comparison process. The major steps in benchmarking

include identifying the best firms, collecting information, and comparing the results and

processes (Bogan & English, 1994). Benchmarking enables organizations to continually

improve their practices and increase performance (Boxwell, 1994).

Game theory modeling: This model is used to understand conflicts and

cooperation between decision-makers. The model specifies the players, the information

and actions available to each player, and the payoffs for each outcome. These three

elements are used to determine equilibrium strategies for each player (Myerson, 1991).

When the goals of the two sides are precisely opposed, game theory would indicate the

competition between players should approximate zero-sum games. In contrast, when

both sides accept strategic cooperation and negotiate an equitable resolution the

competition between players should approximate a non-zero-sum. Game theory can be

used to help organizations find equilibrium quickly and enhance their strategic positions

(Morton, 1983; Martin, 1982).

Strategic group analysis (SGA): This tool is used to identify group of

organizations within an industry that follow similar strategies. Hunt (1972) coined the

term strategic group. Porter (1980) applied the concept strategic group in strategy

analysis in terms of what he called "mobility barriers". The SGA includes identification

of strategic resources, identification of strategic groups, identification of networks, power

ranking, and identification of coalition and conflicts. The results of SGA could be used

for setting competitive product quality and price (Porter, 1980). SGA helps organizations

differentiate direct competitors and their basis of competition, understand how and why

competitors move from one strategic group to another, and identify opportunities and

strategic problems (Segar & Grover, 1994; Hodgkinson 1997).

Stakeholder analysis: This framework is used to identify individuals, groups or

organizations that are likely to affect or be affected by the organization (Mitchell, Agle,

& Wood, 1997). Stakeholders can be classified into primary stakeholders and secondary

stakeholders. Primary stakeholders engage in direct economic transactions with the

organization. Secondary stakeholders do not engage in direct economic exchange with

the organization (Freeman & Reed, 1983). Stakeholder analysis is used to identify

stakeholders, their interests, their means of influence, and the effects of their influence on

the organization. Based on this information stakeholders are sorted and ranked according

to the level of the impact of their influence (Savage, Whitehead & Blair, 1991). The goal

of Stakeholder analysis is to develop a strategic view of stakeholders (Fletcher. et al.,

2003).

Competitor analysis: This tool is used to identify and compile all of the relevant

information about competitors. Major aspects of competitive analysis include defining

competitors, analysis of competitors‟ strengths and weaknesses, analysis of customer

needs and wants, studying impediments to the company and its competitors, and building

strategic plans to improve market place position (Abrams, 1993). Clearly identified and

well analyzed information about competitors may reveal opportunities and threats. Based

on this information the leaders develop and implement effective strategy (Fleisher &

Bensoussan, 2007; Harari, 1994).

Segmentation: The market segmentation process involves dividing a broad target

market into subsets of customers who have common needs, determining which segments

are viable targets, and then designing and implementing strategies to target the needs of

these targeted customer subsets (Robert & David, 2009). Methods for segmenting

customer markets include geographic segmentation, behavioral segmentation,

segmentation by occasions, and segmentation by benefits, and price discrimination

(Kotler, Keller, Brady, Goodman, & Hansen, 2009). The marketing objectives of

segmentation are to create product differentiation strategies; identify where, when, how,

and to whom a product, service, or brand will be marketed; and increase marketing

efficiency by directing resources toward the designated segment (Philip & Keller, 2009).

Porter’s five forces analysis: This is a framework for industry analysis and

business strategy development. Porter's five forces include the threat of substitute

products or services, the threat of established rivals, the threat of new entrants, the

bargaining power of suppliers, and the bargaining power of customers. These five forces

determine the intensity of the competition and the attractiveness (potential profitability)

of a market (Porter, 2008). Porter‟s five forces analysis can help leaders better

understand the potential opportunities and threats within the industry, and make better

strategic decisions as a result (Porter, 2008).

Porter’s generic strategies: Porter‟s generic strategies (cost leadership, product

differentiation, and market segmentation) can be applied to products or services in all

industries, and can help gain market share while maintaining profitability through

reducing costs and lowering prices or offering unique features that are valued by

customers (Porter, 1980). Porter suggested that the combination of a market

segmentation strategy and a product differentiation strategy is an effective approach.

Nevertheless, he emphasized that adopting more than one strategy at the same time would

result in a “stuck in the middle” scenario.

Ansoff’s matrix: This tool offers four main categories of growth strategies: (a)

Market penetration (existing products to existing customers), (b) Market development

(existing product to new customers), (c) Product development (new product to existing

customers), and (d) Diversification (new products to new customers). There are two

types of diversifications: related diversification, where an organization remains in a

previous market or industry and unrelated diversification, where the organization moves

out of the previous market or industry (Ansoff, 1957; Porter, 1987). Ansoff‟s Matrix

helps business leaders determine their product and market growth strategy by focusing on

determining whether the products to be offered are new or existing and whether the

market is new or existing. It is a quick and simple way of thinking about growth and

choosing better growth ideas out of many potential options (Porter, 1987).

Gap analysis: This tool is used to analyze the gaps between current performance

and potential performance. The gaps can be used to establish new goals. The leaders

allocate the necessary resource to achieve these goals (Encyclopedia of management,

2009). A gap analysis helps a company identify its potential and what needs to be done

to achieve that potential (Addagada, 2012).

Force-field analysis: This framework is used to identify forces that influence the

achievement of goals. These forces could be helping forces or hindering forces. After

identifying the forces the analyst weighs the positive effects and the negative effects, and

develops strategies to minimize the effects of opposing forces and utilize the supporting

forces (Lewin, 1943). In reality the force-field is dynamic ((Lewin, 1997).

Decision analysis: This tool is used for identifying and assessing important

aspects of a decision, to recommend a course of action, and to translate decisions into

actions (Clemen & Reilly, 2004). There are six basic elements of decision analysis:

action, chance of occurrence, probabilities, additional information, final outcomes, and

decision (Goodwin &Wright, 2004). If it is used appropriately decision analysis can

improve the decision making process and resulting decisions. Critics argue that over-

reliance on decision analysis may lead to paralysis by analysis (Winkler, 2003).

The balanced scorecard (BSC): This tool is used to monitor strategy execution

(Wall, et al., 1992; Kaplan & Norton, 1996; Tweed, 1990). The design of a balanced

scorecard is focused on linking the vision, operational goals, business plans, and

individual goals. In strategy execution, the most important issues are setting individual

goals, identification of measures, reviewing performance, identifying the gap between

current performance and goals, feedback and learning, and adjusting the strategy (Malina

& Selto, 2001; Maisel, 1992; Norreklit, 2000).

Many of these strategic planning tools have overlapping functions (Wall, et al.,

1992; Kaplan & Norton, 1996; Tweed, 1990). Therefore, it is not necessary to use all of

them. Planners select the strategic planning tools with which they are familiar, those

chosen by the organization, or the ones they deem most appropriate for the situation

(Grant, 2003; Hoffman, 2007; Lusthaus, Adrien, Anderson, Carden, & Montolvan, 2002).

Prior to the descriptions of strategic planning tools was a list of the six strategic

planning models. The next section presents the explanation of vision-based or goal-based

strategic planning process. Among six strategic planning models the vision-based or

goal-based strategic planning process is the most commonly used model and includes

seven major courses of action or steps (Bradford, et al., 2000; Staton-Reinstein, 2003):

mission and vision (where are we going?); establishing objectives; environment analysis;

identifying opportunities and threats; identifying, evaluating, and selecting strategies and

writing a strategic plan; implementing strategy, including budgets (what is our blueprint

for actions?); and monitoring and evaluating (how do we know when we get there?).

Mission statements and vision statements. Leaders create and use mission

statements and vision statements to convey the direction of their organizations clearly and

concisely and to motivate their teams, employees, and other stakeholders (Nanus, 1992).

A mission statement defines a company‟s purpose and main objectives, the key measures

of success, what a company currently does, key business drivers, how the company

competes, and some corporate values, including meeting customer expectations,

innovation, adherence to moral principles and ethics, and social responsibility (Haschak,

1998; Hill & Jones, 2008). A mission statement includes the winning idea that

distinguishes an organization from its competitors and gives the reason for customers to

be loyal to the organization. It mainly looks from the present out and may involve some

stretch. Once the mission statement has been created, the next step is to move on to

create the vision statement (Campbell & Yeung, 1991).

Nanus (1992) defined a vision as a realistic, credible (believable), and attractive

(inspiring and motivating) future for an organization. Oren (2006) defined vision as a big

picture of the future. A vision statement looks into the future and defines a desired future

state that does not exist and may not even seem possible today (Campbell & Yeung,

1991; Collins & Porras, 1996). For employees, the vision statement provides a road map

of expectations and behavioral standards. For customers, the vision statement clarifies

the benefits of cooperating with the organization (Angelica, 2001). In order to create a

vision statement, a leader needs to develop the firm‟s mission statement, identify the core

beliefs and values, and combine the mission and values in such a way that they inspire,

energize, and motivate stakeholders (Campbell & Yeung, 1991; Collins & Porras, 1996).

Aims and visionary objectives. An aim is a purpose or intention toward which

the organization‟s planned actions are directed (e.g., to increase revenue). A visionary

objective is a specific target that must be met to achieve the aim (e.g., increase sales by

20%, increase market share by 10%). Visionary objectives translate the mission into

concrete terms and are expressed in quality, quantity, and time, meeting the SMART test:

specific, measurable, achievable, relevant, and time-bounded (Collins & Porras, 1991;

O‟Neill & Conzemius, 2005).

Environment analysis. Environment analysis includes far environment

scanning, near environment (industry structure) analysis, and internal environment

assessment. The far environment comprises political, economic, social, technological,

and legal factors that can affect the performance of the organization either positively or

negatively (Kahaner, 1997; Oxford University, 2007). Far environment scanning is a

rigorous collection, analysis, and communication of data about the far environment that

can affect the organization (Choo, 2001; Kahaner, 1997; March & Simon, 1993a;

Subramanian, Fernandes, & Harper, 1993).

The near environment (the industry structure) consists of stakeholders such as

competitors, suppliers, and buyers (Porter, 2008). Porter‟s five forces framework, which

is comprised of the threat of new entrants, threat of substitutes, bargaining power of

suppliers, bargaining power of buyers, and rivalry among competing forces is the primary

model used to conduct near environment or industry structure analysis (Porter, 2008).

Internal environment analysis includes the detailed examination of internal resources and

capabilities such as people, polices, strategies, systems, procedures, culture, structure,

and physical resources (Barney, 1991; Mintzberg, Ahlstrand, et al., 1998; Mintzberg,

Lampel, Quinn, & Ghoshal, 2002).

One of the tools addressed earlier (SWOT analysis) is often used by organizations

to structure their analysis of the internal environment (strengths and weaknesses) and the

external environment (opportunities and threats). A scan of the external environment (far

environment and near environment) reveals opportunities that the firm needs to utilize

and threats that the firm needs to overcome. Internal environment analysis (where is the

firm now?) reveals strengths and weaknesses to exploit opportunities and overcome

threats created by the external environment (Amit & Shoemaker, 1993; Collis &

Montgomery, 1995; De Kluyer & Pearce, 2009). Therefore, SWOT analysis provides

information that is helpful in strengthening internal talents to effectively respond to

forces in the external environment including competition.

Developing alternative strategies: How are we going to get there?

Management should develop alternative strategies that can address four different

situations identified using the SWOT analysis matrix: strength and opportunity, strength

and threats, weakness and opportunity, and weakness and threats (Bradford et al., 2000).

Porter‟s (1996) generic strategies of cost leadership, differentiation, and focus model are

among the many tools to be considered. The Ansoff‟s matrix is another tool that can be

used as a guide to make the underlying explicit choices of core strategies: market

penetration, product development, market development, and diversification. If the

company has several products or services, the choice of product portfolio, including

decisions related to which products or services to start, grow, maintain, or terminate, can

be determined by using BCG: the Boston Consulting Group matrix. Once the alternative

strategies have been enumerated and appraised, one will be selected.

Implementing strategy. Once the strategy has been determined, it must be

incorporated into the daily operations of the organization though budgets and procedures

(Allio, 2005; Heracleous, 2000). Strategy implementation requires the orchestration of

all organizational resources, including structure, control systems, and culture (Gumbus &

Lussier, 2006). Organizational structure describes functions and allocates jobs to

employees. An organizational control system facilitates incentives for employees and

feedback on employee performance and organizational performance. Organizational

culture refers to the collective behavior (values, attitudes, norms, and beliefs) of members

of an organization (Gumbus & Lussier, 2006).

Monitoring & evaluating (M&E): How will we know when we have gotten

there? Monitoring is the ongoing checking of progress against the plan to make

adjustments as needed (Mintzberg et al., 2002). Evaluation is an assessment of the

results of an ongoing or completed plan, using predefined standards. If the evaluation is

ongoing, the focus will be on adjusting the plan. If evaluation is ex-post, the focus will

be on taking the experience into account for the next plan (Barney, 1991; Mintzberg,

Ahlstrand, et al., 1998).

Thus far in this literature review, the focus has been on the nature of strategy and

strategic planning and on the evolution and course of strategic planning. This discussion

is the cornerstone of this research, because a clear picture of strategy and strategic

planning is needed to understand the meaning of the leaders‟ lived experience of a

tension between engaging in strategic planning and responding to the rapidly changing

environment. In the following section, theories relating to the external environment are

briefly discussed.

Theories Relating to External Environment

Evolutionary change and revolutionary change are always happening in political,

economic, social, technological, and legal systems (Alford & Hibbing, 2004; Gould,

2002; Kallio & Nordberg, 2006; Liedtka, 1998a; Nelson & Winter, 2002; Novak, 2006;

Richerson & Boyd, 2005). Evolutionary change is incremental and takes place gradually

and continuously (Greiner, 1998). Evolutionary change necessitates changes in how firms

do business but not what business they do (Durand, 2006).

Revolutionary change is a sudden, fundamental, dramatic, and radical shift that

often produces the need for complete overhaul, renovation or reconstruction (Greiner,

1998). Revolutionary change necessitates changes in what the firms do and often requires

a new strategy, a new structure, a new culture, new products or services, and retooling the

entire firm because what the company does is no longer relevant (Gersick, 1991).

Evolutionary change and revolutionary change are not contradictory, but complementary

(Eldridge and Gould, 1972). Punctuated equilibrium theory describes the complementary

nature of evolutionary changes and revolutionary changes (Eldridge and Gould, 1972).

Evolutionary Environmental Change

Many authors, such as Dawkins (1999), Hull (1988), Liedtka (1998b), Nelson and

Winter (1982), Novak (2006), Runciman (1997), and Toulmin (1972), have noted that the

pattern of variation and selection can be abstracted from evolutionary biology to any

domain, including organizations. In a biological sense, variations take place randomly;

the environment selects some variants to succeed through the process called natural

selection and some organisms fit the environment (Kirschner & Gerhart, 2005). From an

evolutionary organizational change theory point of view, organizational change is

governed by the variation and selection principle, whereby the environment (economic,

social, technological, and political environment) determines the survival and growth of

the organization (Liedtka, 1998b; Runciman, 1997). According to Milliken (1990),

Weick (1987), and Wick (1995), organizations must adapt to changes in the environment

or die.

The economy is always in the evolutionary process of change and the market is

the primary selection mechanism (Aldrich et al., 2008; Friedman, 1953; Hodgson, 2002;

Nelson & Winter, 1982; Shiozawa, 2004). A variety of firms compete to match their

products or services against the market. Successful firms that meet the demands of the

market effectively grow and develop. Competitors that fail to gain a sufficient market

share become financially insolvent and must exit (Friedman, 1953).

The interaction among population, production, and the environment directs the

course of evolution of socio-cultural systems (Elwell, 2009; Mitchell, 1966; Parsons,

1975). According to Lenski (1975), population growth, expansion of humans into new

territories, the use of information and energy, and an increase in the production of goods

and services have been attributed to technological improvements. The example used is

the transition of society from small, undifferentiated hunting and gathering societies with

homogeneous cultures to pastoral and horticultural societies, to agricultural societies, and

to large industrial societies with different kinds of cultures (social norms), long social

layers (the hierarchical arrangement of social classes and strata within a society), big

organizations, money, and markets (Lenski, 1975; Lenski, Lenski, & Nolan, 1991;

Parsons, 1975). The survival and growth of an organization depends, among other

things, on its ability to fit well within a complex, changing society.

The technological development (innovation) process consists of two fundamental

parts of evolution: variation and selection (Edquist, 2005; Kline & Rosenberg, 1986;

Luecke & Katz, 2003; Seifoddin, Salimi, & Seyed Esfahani, 2008; Sircar, Nerur, &

Mahapatra, 2001). Variation denotes inventions or incremental changes in technology

(product, processor, service) in response to needs. The selection process, adoption of

new technology by organizations or users, reduces variation and increases organizational

change, fitness, and overall performance (Di Maggio & Powell, 1983; Morone, 1993;

Schroeder & Benbasat, 1975; Wolfe, 1994).

Evolutionary political change theory emphasizes the dynamic and interactive

relationships among institutions, individuals, and populations (Johnson, 2002). In

political change theory, the important unit of variation is the individual action rather than

the institution itself. First, the actors (individuals or groups) occasionally deviate from

the institutionalized expectations, behaving in unexpected ways. Some of these

behavioral deviations from the norm are then adopted by others across the relevant

population, leading to disagreement and change. Evolutionary change in the political

environment may cause change in organizational goals, strategies, and tactics (Berman,

1998, 2001; Modelski & Devezas, 2007; Hacker, 2004; Hall & Thelen, 2009; Thelen,

2004).

Revolutionary Environmental Change

Revolutionary environmental changes are fundamental, radical, dramatic and

sudden alterations in the economic, social, technological, and political features of the

environment. Revolutionary environmental changes necessitate complete overhaul or

transformation of the organization, including reshaping and realigning strategic goals and

radical changes to behaviors and products or services (Pasternack & Viscio, 1999).

Revolutionary environmental changes that are relevant to this dissertation research study

include economic crisis, globalization, technological advances, rapidly changing

consumer preferences, and regulatory and political requirements.

Economic crisis. Economic crisis is a manifestation of a sudden crash of the

economy followed by sharp decrease in people‟s life and organizational activities

(Fullbrook, 2003). There are different views regarding the causes of the 2008 economic

crisis. According to the conservative view the crisis was caused by the United States

government law known as the Community Reinvestment Act (CRA) that requires banks

to offer credit and mortgage loan to people who couldn‟t afford them (Husock, 2000;

Kroszner, 2008; Edsall, 2011).

There are three liberal views regarding the causes of the 2008 global economic

crisis: The first perspective is the hardcore neoliberal position, which argues that the

crisis was caused by the failure of government to develop appropriate monetary policy

and intervene in the housing market. The second perspective is the soft-core neoliberal

position which believes that the 2008 economic crisis was the result of market failure,

especially inadequate financial regulation. The third perspective is the progressive

position which argues that the crisis is rooted in the destruction of shared prosperity

(Palley, 2012). The 2008 economic crisis has eroded the income and purchasing power of

consumers, which in return have affected consumer preferences and the companies‟

performance (Lichtenstein & Slovic, 2006).

Globalization. With improvements in transportation and communication

technology economic, social and political integration among countries (globalization)

grew very rapidly (Martin & Eking, 1990). Economic integration created a worldwide

approach to markets and production, where a company operates in more than one

country, and special economic zones with low or no taxes (Mohan, 2009). Culturally,

globalization has enhanced interactions among various cultures and expanded market size

(Tyler, 2002). Politically, globalization has eroded nationwide laws and increased the

importance of supranational institutions. On the other hand, low-cost market entrants,

political stalemate in some markets, and unrest in others are the challenges of

globalization that need prediction, preparation and response with agility (Jan-Aart, 2005).

Technology. Technological innovation at the leading edge of technological

progress can be a discontinuous event leading to fundamental change. In most cases

technological innovation emerges from individual scientists and engineers, private firms,

research universities, and government and industrial laboratories (Ruttan, 2001). The

technological revolution can occur when the new system is accepted by a relevant

community as a new normal practice (Constant, 1980). It is impossible to have

revolutionary technological change (completely new technology) that creates new

markets and growth opportunities just by improving the already existing technologies

(Freeman, 1984; Freeman & Perez, 1988). There must be a radical change or a new

finding, something different from the existing technology. The discovery of nylon after

rayon or wool and the invention of nuclear power after coal or the oil-fired power station

are examples of revolutionary change in technology (Freeman & Perez, 1988). Perhaps,

the more powerful example of revolutionary change in the technology area is the rise of

the Internet that has brought about profound transformation to organizations and society,

advancing computing and communication systems, improving speed, access to

information, and efficiency; and leading to the restructuring of many industries.

Changing consumer preferences. Customer preferences are changing rapidly.

Social media networks and technologies are allowing customers to voice demands

(Lichtenstein & Slovic, 2006). The survey conducted by Accenture consulting firm with

600 executives and 10,000 consumers in 10 countries revealed that customers‟ preference

is rapidly changing in 10 dimensions that might be categorized in to three areas- network,

independence, and cooperation. (Accenture, 2013). The networked consumers prefer (a)

connected- always check e-mails and channels (b) social- interaction (c) co-productive-

help design products. Independent consumers are (a) Individual- They want tailored

offerings (b) experiential- They like visiting new places and experiencing live events (c)

resourceful- They participate in online auctions (d) disconnected-They want products and

services that distance themselves from the digital world. Cooperative consumers are (a)

communal- They devote resources for social causes (b) conscientious- They frequently

buy local, and consider the environmental impact (c) minimalist- They prefer reusing and

sharing products.

Regulatory and political requirements. Companies are facing changing

regulatory pressures that led to increasing scrutiny, tax and trade requirements. New rules

represent significant adjustments for firms (e.g. healthcare reform and financial

regulation), which could contribute to higher operation costs as companies struggle to

implement new policies (Abubakar, 2010). In addition, political stalemate in some

markets, and unrest in others are shrinking job markets and income generation

activities (Lowenthal, 2013).

Punctuated Equilibrium Theory

Punctuated equilibrium theory states that evolutionary changes and revolutionary

changes do not conflict with one another (Eldredge & Gould, 1972). The theory also

explains that a system is composed of deep structures, equilibrium periods or stases, and

revolutionary periods or punctuation (Romanelli & Tushman, 1994; Gersick, 1991).

Deep structure is the set of existing fundamental parts into which components of a system

are organized and the basic methods of actions that affirm the survival of that system.

Equilibrium periods or stases refer to long-term periods of relatively unvaried mode or

small incremental changes. Punctuated or revolutionary change is a fundamental change

within a shorter period of time (Gould, 2002; Gersick, 1991; Greiner, 1998; Greenwood

& Hinings, 1996). For example, technological innovation is one of the key

environmental factors that can interrupt the existing stases or deep structure and lead to a

new business paradigm (Lyytinen & Rose, 2003; Philip & Tushman, 1990; Romanelli &

Tushman, 1994).

Implications of Changes in the External Environment for Business Organizations

The external environment (made up of political, economic, social, technological

and legal factors) has an effect on the organization (Dev, 1989; Majid & Khoo, 2009;

McKiernan, 1997; Mintzberg, Quinn, et al., 1998; Olarewaju & Folarin, 2012). Political

and legal factors such as tax policies, trade regulations, employment laws, environmental

regulations, trade restrictions and tariffs, and political stability decide the legal limit or

boundary within which an organization is allowed to function (Bixby, Beck-Dudley, &

Cihon, 2008; Morris, 2007). Economic conditions such as economic growth, exchange

rates, interest rates, inflation, unemployment rates, and gross national product affect the

consumers‟ purchasing power and the firm‟s cost of capital (Hagmayer & Sloman, 2009;

Mulhearn, Vane, & Eden, 2010).

The socio-cultural forces such as demographics (e.g., age distribution, gender,

income, health consciousness, population growth rate, etc.) and social values or beliefs

determine the type and quality of goods and services (Giddens, 2009). The level and type

of technology determine the quantity and quality of inputs and outputs (Clemons, Reddi,

& Row, 1993). In general, today‟s complex, dynamic, and fast-changing environment

coupled with globalization generates uncertainty, unpredictability, global

interdependence, hyper- competition, shorter product and service life cycles, fast-

changing technology, and more aggressive customers (Hough, 2004). These powerful

forces in the environment pressure firms constantly to change their purpose, policies,

cultures, structures, and processes (Albright, 2004; Hough, 2004; Senge et al., 1999).

In this section, the focus of the review was on the nature of changes in the

external environment and the implications of these changes for business organizations.

This review has revealed that the survival and growth of an organization largely depends

on its ability to influence or fit the environment. The discussion about the external

environment is important to this study because an understanding of the external

environment is the foundation for understanding how organizations respond to changes in

the environment.

Some practitioners such as Mankins (2004) and Mankins and Steele (2006) have

boldly stated that strategic planning does not matter in today‟s complex and fast-changing

environment. According to these practitioners, because the future environment is so

difficult to forecast with accuracy strategic planning should be more continuous and

issue-driven; however, there is a lack of experience-based literature about the complexity

coming from the tension between the rapidly changing environment and the practice of

strategic planning. The following section presents an overview of the work that has been

done addressing organizational responses to environmental changes.

Organizational Responses to Environmental Change

In order to survive and grow, organizations often respond to evolutionary

environmental changes by making incremental changes in their processes or products

while the organization‟s architecture remains unchanged (Greiner, 2000; Sircar, et al.,

2001). In contrast, organizations undertake radical fundamental transformation

(revolutionary change) when they either anticipate changes or challenged by

revolutionary environmental changes. Tushman and O‟Reilly (1996) pointed out that

organizations evolve through evolutionary change coupled with revolutionary change.

There are three organizational change approaches beyond either incremental change or

radical change: midrange change (Reger, et al., 1994), punctuated equilibrium (Romanelli

& Tushman, 1994; Hilmer & Donaldson, 1996; Graetz, et. al., 2002; Hamel, 2001), and

robust transformation (Koch, 2004).

Incremental Change

Incremental or evolutionary change involves minor improvements or small step-

by- step adjustments (adaptations) through continuous learning and alterations in

organizational functions and actions within the already existing paradigm (Nadler &

Tushman, 1989; Quinn, 1999; Weick & Quinn, 1999; Kezar, 2001). Incremental changes

are designed to support organizational continuity and order (Henry & Jespersen, 2002).

Incremental changes are either fine-tuning or adaptive. Fine-tuning incremental changes

occur when the leaders anticipate changes in the environment and make modifications

that help the organization fit the anticipated environmental changes. Adaptive

incremental changes are designed to react to changes that have already taken place

(Nadler &Tushman, 1995). Incremental actions bring about evolutionary change through

a process of continuous improvement and help organizations keep up with changes in the

environment (Greenwood & Hinings, 2006; Siggelkow, 2002); however, it is rarely

adequate to bring fundamental changes in the way business is done (Dewar & Dutton

1986).

Radical change

Dramatically altering complex environmental changes (e.g. political, economic,

regulatory, technological changes) often take place. The need to cope with these

dramatically altering revolutionary environmental changes forces organizations to make

radical or fundamental changes (Daveni, 1994; Hamel, 2001). In addition, leaders

proactively undertake transformational change when they decide to move from start-up to

professional private or public company, revitalize (rebuild) already established

companies, and change a vision or the business (Flamholtz & Randle, 1998). Radical or

transformational changes (such as downsizing, restructuring, and reengineering) are

intended to substitute old policies, strategy, structure, values, assumptions, habits, and

practices and products or services with new ones so as to fundamentally alter the nature

of the organization and how the business is conducted (Kanter, 1983; Nicholson, 2000;

Tushman & O‟Reilly, 1996). Revolutionary change involves a paradigm shift or

restructuring the underlying principles and takes place at a time when incremental shifts

are not sufficient to transform the business (Kuhn, 2012).

Nadler and Tushman (1995) distinguished between two forms of transformational

changes: reorientation and recreation. Reorientation occurs when the leaders anticipate

radical changes that require major adjustments. Examples of reorientation include

changing functional units, leadership, values, or strategy. Re-creation is reactive and

occurs following a major upheaval to recreate the organization by redefining its scope,

and breaking past directions, strategy, practices, and operations.

Martin and Siehl (1983) noted that corporations respond to changes in the

environment by using four options: wait and see, do the minimum to comply with the

requirements and play the game, implement best practices, or perform proactively to

change the rules of the game and maximize competitive opportunity. According to

organizational behavior theory, this fourth option, proactivity refers to thinking and doing

ahead of future circumstances instead of just reacting to situations (Bateman & Crant,

1993; Grant, 1996). A proactive standpoint is based on aggressive intelligence and the

imagination to realize beforehand the future situation and to create meaningful new ideas

and interpretations of the future situation as an advantageous circumstance (Martin, 1983;

Grant & Ashford, 2008; Parker & Collins, 2010).

Successful proactive organizations actively influence the environment, create

opportunities, change the rules of the game, and overcome potential threats rather than

merely responding to them after they become reality (Epstein, 1969; Martin, 2007; Parks,

2007; Kezar, 2001; Salamon & Siegfried, 1977; Vogel, 1996; Yoffie & Bergenstein,

1985). For example, Apple has succeeded in creating the iPod and the iPhone, mobile

devices that changed the way of interacting with software and weakened the stickiness of

the personal computer. A similar argument could be made about Amazon‟s Kindle. It

successfully influenced many people to give up paper for e-books. Proactive companies

implement a massive recall of a product instead of waiting for the customer to complain.

Some companies also work proactively (lobby) to influence the law and policymaking

process or introduce new products that totally change the industry. The implication of this

is that organizations that aggressively influence their environment can become industry

leaders that define how products or services are used and set standards within the industry

that others then seek to follow.

Effective radical change depends on the leader‟s ability to perceive change in the

environment, accept the need to respond to changes in the environment, and develop and

implement a response strategy and plan (Brill & Worth, 1997; Burnes, 1996; Carnall,

1995; Collins, 1998). Radical change or transformation is characterized by startingly high

ambition, the integration of different functions and prolonged effort. Studies attest that

most of the leaders do not successfully complete transformational changes. For example,

62% of the global executives who participated on McKinsey‟s 2006 survey reported that

they failed to complete transformational change due to the lack of resources, ambition,

and focus (Isern & Pung, 2007).

Midrange Change

Reger, et al. (1994) stated that rather than drawing attention to minor

incremental change or radical change, leaders can take midrange or tectonic changes that

are large enough to produce meaningful change while preventing the consequences of

violent upheaval (Gurin, 1998). Midrange changes aim at getting rid of activities and

segments that are no longer productive while maintaining still productive components

(Hamel, 2001). Midrange changes help modifying the company without destroying

employee loyalty and other positive company attributes (Graetz, et. al., 2002).

Punctuated Equilibrium

This approach to organizational change is an alternative to considering either

small incremental change or radical change. It considers change as the interplay between

incremental and transformational change. Romanelli and Tushman (1994) noted that

organizations evolve through long periods of stability (equilibrium periods) that are

punctuated by short periods of transformational change (revolutionary periods). Periods

of transformational change break apart old functions, systems and behaviors to establish

foundations for new equilibrium periods (Hilmer &Donaldson, 1996).

Robust Transformation

This approach to change suggests that since environmental conditions may be

temporary, or undergoing continuous change, it is important to evaluate the type of

environmental shift that is occurring. Clear understanding of the nature of environmental

change helps leaders identify the right approach (reinforce established practices, achieve

an adaptive fit or develop capabilities). Then the leaders respond to temporary or

continuously changing environmental conditions (Koch, 2004).

In this part of the literature review, the reactive approach and proactive approach

to respond to changes in the external environment were discussed. It was suggested that

success depends on the ability to effectively react to environmental changes and take

proactive actions. The discussion was important for this study because it provided a clear

picture of the potential ways organizations respond to the external environment. The

following section presents four major schools of thoughts about strategy.

Major Schools of Thought about Strategy Formation

Strategic management as a field of study has been established based on

fundamental principles or underlying concepts from various other fields of study such as

economics, finance, sociology, political science, and psychology that have each

continued to grow along their own distinct path (Dean, Brown, & Bamford, 1998). In

addition, diverse participants such as managers, leaders, and consultants with different

backgrounds have described strategic management in different ways and have developed

different theories and practices of strategic management (Rumelt et al., 1994). The

involvement of various sources and participants has resulted in partly competitive and

partly supplementary schools of thought regarding strategic management (Rumelt et al.,

1994).

Critics say that the field of strategic management is extremely fragmented and

lacks consistency, coherence, underlying theoretical dimensions or grand theory, and an

employable methodological approach (Camerer, 1985). Bowman (1990) and Volberda

(1992) argued that it is difficult to develop a central paradigm in strategic management

mainly due to the difference between theory-oriented analytical schools of thought (e.g.,

positioning, cognitive, and environmental schools) and more practically problem-oriented

clinical schools (e.g., design and planning schools). The analytical schools focus on

problems and indirect measuring techniques that are not directly applicable and supply

knowledge that has little significance or value for practitioners (Schön, 1984; Thomas &

Tymon, 1982; Weick, 1989). The clinical schools emphasize practicability and

feasibility of techniques and models. Often these schools lack explicit criteria and

methodological considerations by which knowledge may be evaluated. This often leads

to opportunistic research behavior that is based on commonly applied but seldom-tested

tools, yet some scholars have pointed out that the development of various schools of

thought of strategy shows the increase in and improvement of research within the field of

strategy. They do not see fragmentation as a restraining element for progress (Mahoney

& Mahoney, 1993).

Elfring and Volberda (2001) identified four schools of thought that are common

in the strategic management literature: (a) Miles and Snow‟s (1978) three categories of

firms, (b) Whittington‟s (1993) four perspectives on strategy, (c) Rouleau and Séguin‟s

(1995) four types of strategic discourse, and (d) Mintzberg, Ahlstrand, et al.‟s (1998) ten

schools of thought about strategy. These schools of thought about strategy are important

to this study because they present various views concerning organization-environment

relations and express the idea that strategy formulation is contingent upon circumstances

including environment, organizational structure, the size of the organization, stage of the

life cycle, and top management‟s mindset (Brown, 2005; Lines, 2007; Miles & Snow,

1978).

Miles and Snow’s Four Categories of Firms

Miles and Snow (1978) identified four types of organizations based on their

leaders‟ strategic behavior: defenders, prospectors, analyzers, and reactors. Defenders

focus on narrow and stable product-market domains with the primary concern of

enhancing the efficiency of the current operation. Defenders do not search for new

opportunities outside of their domain; hence, they make little effort to make

technological, structural, and methods adjustments. According to Hambrick (1983) in

spite of their unwillingness to take risk and employ opportunities in new environments,

defenders prevail in a stable environment.

Prospectors search for opportunities continually, create change and uncertainty,

and constantly produce innovations; however, since they are preoccupied with

innovation, prospectors are not efficient. According to Hambrick (1983), prospectors

grow vigorously in an innovative and dynamic environment.

Analyzers operate in both stable and volatile product-market domains. In their

stable domain, analyzers operate using formal structures and processes. In their volatile

domain, analyzers rapidly adopt their competitors‟ new ideas if they seem to indicate an

increased probability of success. Further, the analyzer combines the strengths of both the

prospector and the defender and, therefore, is associated with superior performance (Lou

& Park, 2001); however, leaders of an organization with an analyzer strategy have

challenges maintaining efficiency and aggressively developing new businesses (Moore,

2005).

Reactors perceive alterations in their environments, but they rarely respond to

these changes until the environment compels them to do so. Reactors‟ inability or

unwillingness to respond promptly and effectively to environmental changes often

emanates from a lack of compatibility between their strategy, technology, structure, and

process (Miles & Snow, 1978).

In general, the firm leaders‟ strategic orientations are predictive of their

environmental responses (Judge & Fowler, 1996). The integration of defender, analyzer,

and prospector strategies on the part of the leaders may enable organizations to compete

effectively (Miles & Snow, 1978; Parnell & Wright, 1993; Richard & Borge, 2001; Zahra

& Pearce, 1990); however, incompatibility between strategy and structure can lead to

reactive behavior and ineffective performance.

Whittington’s Four Perspectives on Strategy

Whittington (1993) presented four generic approaches to strategy development on

an X-axis (processes by which strategy is made) and Y-axis (outcomes of strategy). The

top dimension and the lower dimension of the Y-axis represent profit maximization

(outcome) and minimum profit (pluralistic approach) respectively. The left dimension of

the X-axis shows a deliberate approach to strategy, whereas the right dimension of the X-

axis represents an emergent approach to strategy. The top left-hand quadrant (classical

approach) portrays a combination of high profit maximization and a rational planning

approach to strategy formulation. The top right-hand quadrant (evolutionary approach)

shows the combination of high profit maximization and an emergent approach to strategy

formation. The lower left-hand quadrant (systemic approach) represents a combination

of the planned and deliberate approaches to strategy and a minimum profit maximization

(pluralistic) approach to strategy formation. The lower right-hand quadrant (processual

approach) is the combination of minimum profit maximization (pluralistic) and an

emergent approach to strategy formation.

The classical approach to strategy formulation suggests that profit maximization

is the outcome of strategy and the strategy making process is deliberate, meaning that

strategy development is based on rational planning methods, a top-down (hierarchical)

planning process, and objective decision-making processes. The classical approach

leaves strategy formulation to top-level managers and the implementation issues to

lower-level managers (Legge, 1995; Miller & Dess, 1993; Purcell, 1989). The classical

approach assumes clear organizational objectives and goals, a stable environment,

reliable information about the environment, and competent decision-makers who can

analyze the information and make the best possible selection (Ansoff, 1965; Chandler,

1962; Porter, 1980, 1985).

The evolutionary approach to strategy formulation perceives profit maximizing as

the outcome of strategy and strategy as emergent. The emergent strategy is a strategy

that was not intended from the beginning and evolves over time as the organization

incrementally adapts and learns from environmental developments and interactions

(Mitzberg & Walters, 1985). The evolutionary approach to strategy assumes that it is

impossible to follow a rational planning process. This seems to be an abstraction of the

evolutionary theory of natural selection which suggests that the environment determines

survival and growth and fit cannot be deliberately planned (Novak, 2006; Lundy &

Cowling, 1996).

The processual approach sees other possible outcomes of strategy beyond profit

and perceives strategy as emergent. According to the processual approach, which

includes the now widely known resource-based view and the theory of core competence,

strategy emerges through irregular, incremental processes of learning, negotiating, and

compromising (Grant 1991; Hamel & Prahalad, 1994; Peteraf, 1993; Quinn, 1980; Senge,

1994; Wernerfelt, 1984). This process generates a variety of simultaneously occurring

factors. The outcome is a set of strategies that aims at aligning the needs of different

stakeholders (Legge, 1995). The processual school suggests that the bottom-up approach,

in which strategy is developed at the operational level, is more sensible.

The systemic approach also sees other possible outcomes beyond profit and

perceives strategy as emergent. The systemic approach argues that social system factors

such as national culture, national business systems, the dominant institutions, and the

demographic composition of the society can force firms to go beyond profit and fit local

criteria, cultural norms, and social contexts. The systemic approach values planning, but

it emphasizes the need to focus on external social issues beyond the corporate boundary

(Granovetter, 1985).

Rouleau and Séquin’s Four Types of Strategic Discourse

Rouleau and Séguin (1995) provided four different approaches to strategy:

classical (traditional), contingency, sociopolitical, and socio-cognitive. Rouleau and

Séguin believed that these approaches are based on open system theory and followed the

pattern suggested by Whittington (1993).

Mintzberg et al.’s Ten Schools of Thoughts

Mintzberg, Ahlstrand, et al. (1998) proposed ten schools of thought on strategy

formation: the classical school of thought (which includes the design school of strategy,

the planning school of strategy, and the positioning school of strategy), the

entrepreneurial school, the cognitive school, the learning school, the power school, the

cultural school, the environmental school, and the configural school. The first three

schools are prescriptive in nature and address how strategies should be formulated. Six

of the remaining schools are concerned less with prescribing an ideal strategy-making

process and more with describing specific processes of strategy formation. The

configural school combines components of six schools, describing how the combination

of different strategies helps leaders see the whole picture, take a wider perspective, and

transform their organizations (Elfring & Volberda, 2001). Many characteristics of the ten

schools of thought have also been discussed in prior sections of the chapter.

According to the design school, strategy formulation is a process of conception

i.e., selecting a particular type of scheme and using the classic model of SWOT analysis

(Mintzberg, Ahlstrand, et al., 1998). The fundamental idea of this school is that

personnel at the top of the organizational ladder assess the external environment to

discover threats and opportunities, audit the internal environment to identify strengths

and weaknesses, carefully select strategies based on compelling reasoning and conditions

unique to an individual firm, and communicate these strategies to the staff so that

everyone can understand and implement them (Chandler, 1962; Mintzberg, Ahlstrand, et

al., 1998; Selznick, 1957). The design school approach works well in an enduring

environment and supports leaders with a visionary leadership style; however, the design

theory is criticized for its lack of flexibility, its inability to fit a fast-changing

environment, and for bypassing learning, creating a high risk of resistance, and

simplifying and distorting reality (Rue & Holland, 1986).

The planning school sees strategy formulation as a formal process. It took and

divided the basic SWOT model into steps, check lists, and techniques that integrate the

planning and budgeting process of all functions and levels of the organization (Andrews,

1971; Ansoff, 1965). The planning school sees the strategy-development process as a

planning activity that involves extensive data-collection and analysis. It concerns the

development of detailed specific objectives, budgets, and operating plans and the

implementation of plans following the specifications (Mintzberg, 1994). Though it was

strongly criticized in the 1980s, the planning school has continued to have an effect on

the strategic planning processes of many organizations (Hax & Majluf, 1996; Mintzberg,

1994).

The positioning school perceives strategic planning as an analytical process that

aims at choosing an attractive industry, analyzing situations of the industry, and

selecting a good position within that particular industry by making tradeoffs or carefully

picking out a strategy from among the “generic” strategies: low-cost, differentiation, or

focus (Porter, 1980, 1985). The positioning school‟s industry structure analysis is based

on Porter‟s (1980) five forces model and consists of the threat of new entrants, the

bargaining power of suppliers, the bargaining power of buyers, the threat of substitutes,

and the intensity of rivalry. Exit barriers were later accepted as the sixth driving force

(Harrigan, 1981). Porter‟s five forces model asserts that the stronger the driving forces

are in the industry, the lower the profits in the industry will be. Critics underscore that

Porter‟s five forces were focused on value appropriation, which means capturing and

maintaining competitive advantage by increasing barriers to market entry (Gulati &

Wang, 2003), rather than on value creation (i.e., common benefits to all parties in the

industry) (Ghoshal, Barlett, & Moran, 1999; Lavie, 2007).

Those in the entrepreneurial school see strategy as the vision, intuition, judgment,

wisdom, experience, and insight of the charismatic leader (Baron, 1998; Chen, Greene, &

Crick, 1998; McCraw, 2007; Mintzberg, Ahlstrand, et al., 1998). According to the

entrepreneurial school, the environment does not determine the organization‟s fate. On

the contrary, it is the visionary entrepreneurs who influence, manipulate, and establish the

environment and define opportunities, set a direction, develop criteria, and chart progress

(Brockhaus, 1980; Campbell, 1992; Hamel & Prahalad, 1989; Michalowicz, 2008);

however, this theory has been criticized for advocating the strict following of a

predetermined course of action, possibly inhibiting its followers from viewing potential

dangers and alternatives. In addition, entrepreneurial and visionary leaders, who are at

the center of this theory, have a tendency to take unnecessary risks (Bell, 1982;

Brouthers, Andriessen, & Nicolaes, 1998).

The cognitive school considers strategy formulation as a systematic series of

thoughts in the mind of the strategist. According to the cognitive school, strategy is a

subjective, interpretive, analytical, and creative mental or cognitive process that takes

place at the level of the individual, typically in the mind of the strategist (Cyert & March,

1963; March & Simon, 1993a; Mintzberg, Ahlstrand, et al., 1998; Simon, 1976).

According to this school, strategy is not about planning per se; it incrementally emerges

as concepts, maps, or a mental image that a strategist has of an environment or reality;

however, theories of the cognitive school are seen as not practical, not useful to guide

collective strategy processes (March & Simon, 1958; Simon, 1976).

The learning school assumes that strategy formation is an emergent process. It

posits that in a constantly-changing environment, it is difficult to develop strategies all at

once and, therefore, leaders learn through time what works and what does not work and

develop strategy in small steps of adaptation processes (Child, 1972; Cyert & March,

1963; Lindblom, 1959; Wrapp, 1967). According to the learning school, strategy options

come from different functional areas of the organization and the highest ranking

executives use these options to identify and decide strategies, covering a wide scope yet

leaving to functional area managers the power or freedom to choose detailed actions

(Noda & Bower, 1996; Quinn, 1980). Critics say that taking many sensible small steps

may end up in tactical maneuvering or strategic drift and could erode the ability to

develop a sound total strategy (Langeler, 1992).

The power school views strategy as a move and counter-move approach using

power and coalitions to select and protect one‟s own position (Allison, 1971; Perrow,

1970; Thompson, et al., 2005). According to the power school, strategy is the process of

negotiation or a discussion intended to produce an agreement between different forces

within the organization or between the organization and its external stakeholders

(Campbell & Mark, 2006; Freeman, 1984). Competing expectations or goals may lead to

conflict between the organization and its stakeholders (Mintzberg & Waters, 1985;

Porter, 1980); therefore, business leaders should consider cooperation as a necessary

means to achieve their ends (Astley & Fombrun, 1983).

The power school lets the strong people make decisions in the organization. It

also opens up opportunities for full debate over the issues and helps to reduce resistance

during the implementation phase (Allison, 1971; Astley & Fombrun, 1983; Pfeffer, 1981;

Pfeffer & Salancik, 1978). Critics argue that since politics focuses on self-interest and

fragmentation, the power school can be divisive, causes wastage and distortion, takes a

lot of energy, and forces parties to focus on tactical maneuvering at the expense of total

strategy (Mintzberg & Waters, 1985; Pettigrew, 1977).

The cultural school views strategy development as a cooperative social process or

a reflection of collective beliefs, values, and insights that have deep connections with the

organizational culture (Elfring & Volberda, 2001; Normann, 1977; Rhenman, 1973).

Critics argue that cultural school concepts are vague, give few clues on how things

should happen, and encourage resistance. Critics also say that these concepts can be

incorrectly used to prove the validity of the existing condition (Mintzberg, Ahlstrand, et

al., 1998).

The environmental school perceives strategy as a reaction to challenges of the

environment. The most noticeable environmental school theory is population ecology,

which sees an organization as analogous to the variation-selection-retention model of

biology (Hannan & Freeman, 1977, 1984). According to this view, a firm‟s position or

strategy is determined by its environment. If the favorable environmental conditions

that facilitated survival and growth of the firm cease to exist, the firm will collapse

(Romanelli, 1989; Stearns, Carter, Reynolds, & Williams, 1995). Another important

environmental theory is the contingency theory. According to contingency theory, the

type of organizational response depends on a particular environmental condition

(Bloodgood & Morrow, 2003; Scott, 2001). The third important theory related to the

environmental school is the institutional theory, which states that in order to survive and

grow, organizations need to conform to the values, beliefs, and rules prevailing in the

environment (Meyer & Richard, 1992; Scott, 2001). In general, the environmental

school is exceedingly deterministic in the sense that there is no room available for

management to formulate strategies (Hannan & Freeman, 1977).

The configuration school sees the organization as a configuration or a bundle of

coherent characteristics or behaviors (Mintzberg, et al., 1998). Organizational

development is characterized by periods of stability and periods of transformation

(Romanelli & Tushman, 1994). In periods of stability, organizations portray a permanent

configuration of characteristics that cause new strategies to emerge. Periods of

transformation interrupt periods of stability and cause strategic change (Romanelli &

Tushman, 1994). The basic tenets of the configuration school (periods of stability and

periods of transformation) fit the punctuated equilibrium theory in the sense that periods

of stability are equilibrium periods or stases that refer to long-term periods of relatively

unvaried mode or small incremental changes (Gould, 2002). Periods of transformation

fits punctuated, revolutionary or fundamental change within a shorter period of time

(Gersick, 1991; Greenwood & Hinings, 1996). The configuration school emphasizes the

importance of integrating or reconciling strategy and organizational development and

sees strategy design as a process of transforming the organization (Fiegenbaum, Hart, &

Schendel, 1996; Mintzberg, 1990).

In this section of the literature review, the nature of schools of thought regarding

strategic management, critics of the field of strategic management, and four schools of

thought about strategy formulation were discussed. These discussions have revealed that

schools of thought regarding strategic management are partly competitive and partly

supplementary, it is difficult to develop a central paradigm in strategic management, and

strategy formulation is contingent upon circumstances. These findings are crucial to

understand different approaches to strategy formulation and the meaning of the leaders‟

lived experience of a tension between strategic planning and responding to a rapidly

changing environment.

The theories of strategic management reviewed so far are inclined to be either too

narrow in focus to guide an organization as it develops its strategy or too broad to be

applicable to a particular set of circumstances (Hamel, 2000). Careful assessment of the

leaders‟ lived experience will contribute to overcoming this gap by revealing how leaders

develop a strategy customized or tailored to each specific condition in the ever-changing

environment. The following section presents attempts made to integrate schools of

thought about strategy formation.

Attempts Made to Integrate Schools of Thought about Strategy Formation

Various attempts have been made to integrate the many schools of thought

identified as strategic management (Bowman & Hurry, 1993; Chakravarthy & Doz, 1992;

Schendel, 1994; Schoemaker, 1993; Volberda, 1996, 1998). The most notable emerging

integrating schools of thought include the boundary school, the dynamic capability

school, and the configurational school.

The Boundary School

The boundaries of the firm refer to the choice between interacting within a firm or

with other organizations in the market and are defined in terms of ownership (Hart,

1995). The issues of diversification, outsourcing, partnering, strategic alliances, virtual

corporations, and serving foreign markets have forced the boundaries of organization to

become increasingly complex and inexplicit (Jarillo, 1988; Mahoney & Pandian, 1992;

Powell, 1992). Exponents of the boundary school suggest that the core decisions in the

strategy formulation process are those decisions related to setting organizational

boundaries or defining ownership (Hart, 1995); thus decisions related to two basic

questions: (a) where to draw the boundaries of organizations involved in outsourcing,

partnering, alliances, diversification, and virtual networks and (b) how to manage the

indistinct boundaries between the organizations and their environment (Foss, 1997; Foss

& Knudsen, 1996; Hart, 1992, 1995; Hart & Banbury, 1994; Jarillo, 1988; Mahoney &

Pandian, 1992; Pfeffer & Salancik, 1978; Powell, 1992). Issues related to the boundaries

of the firm are expected to be crucial to this study because they are central to corporate

strategy, business strategy, and functional strategy (Hart, 1995). A firm‟s boundaries tell

us something about how it organizes its resources to influence the environment (Bengt &

Roberts, 1998).

The Configurational School

The configurational school considers strategic management as a process divided

into a series of loosely connected episodes in which certain strategy arrangements guide

organizational performance within the context of the environment. Mintzberg (1990)

considered the configuration school as the aggregate of all 10 separate schools of strategy

in his categorization. As each school represents a partial picture of what strategy is,

leaders need to work with all 10 schools.

Dynamic Capability Schools

In a resource-based view of the firm (RBV), resources and capabilities of an

organization are the center of interest. RBV suggests that a firm‟s valuable resources are

sources of competitive advantage and provide the basis for strategy (Barney, 1991;

Wernerfelt, 1995). According to Hamel (1994) and Prahalad and Hamel (1990),

resources and capabilities generate competitive advantage if and only if they are superior,

scarce, profit-generating, and meet customers‟ needs.

RBV is a static theory that fits a stable environment and is limited in its

applicability to a rapidly-changing volatile environment (Wade & Hulland, 2004). It is

difficult to achieve strategic fit (matching resources and capabilities with opportunities in

the external environment) when the business environment is continually and rapidly

changing, necessitating frequent changes in organizational strategy (Galliers, 2004). The

resource-based view is also criticized for its insufficient connection to the market (Peteraf

& Bergen, 2003). To address this issue, the dynamic capability model was developed

(Eisenhardt & Martin, 2000; Teece, Pisano, & Shuen, 1997).

The dynamic capability school argues that sustainable competitive advantage is

based on the organization‟s ability to build firm-specific capabilities that are difficult to

imitate and to align these resources and capabilities to the fast-changing environment

(Amit & Shoemaker, 1993; Barney, 1991; Markides, 1999b; Prahalad & Hamel, 1990;

Teece, 2007, 2010; Teece & Pisano, 1994; Teece, Pisano, & Shuen, 1990, 1997).

According to the dynamic capability model, leaders need to enhance their strategic

leadership and managerial capabilities continuously so as to fit the changing environment

in which they compete (Sabherwal, Hirschheim, & Goles, 2001). The literature review of

attempts made to integrate schools of thought regarding strategy depicted the complex

and dynamic nature of today‟s business environment and some ways and mechanisms to

configure partly competitive and partly complementary schools of thought (Jarvidan,

1984); however, this literature does not exhaustively address the application of these

approaches in a dynamic environment. This gap can be reduced by considering the

leaders‟ lived experience of a tension between strategic planning and responding to a

rapidly changing environment. The following section discusses integrating strategic

planning and responding to a rapidly changing business environment.

Integrating Strategic Planning and Responding to the Rapidly Changing

Environment

Today organizations exist in a volatile, chaotic, complex, and dynamic

environment that is driven by globalization, global competition, and rampant change

from the faster flow of information, new technological advances, regulatory changes, and

increasing customer expectations (Kotter & Heskett, 1992). Critics argue that traditional

strategic planning models address past and present information, but miss strategic

thinking and information about the future (Mintzberg, 1994). Consequently, traditional

strategic planning does not deliver strategy that enables an organization to respond

effectively or to anticipate the complex, volatile, dynamic, and fast-changing

environment (Hitt, Ireland, & Hoskisson, 2006; Mintzberg, 1994). The challenge is to

integrate strategic thinking into the planning processes with careful thought given to the

separate, but interrelated domains of strategic thinking, strategic decision-making, and

strategic planning (Slaughter, 2004).

Critics also say conventional strategic planning models do not effectively align

the organization and environment because they appear to lean on the environment

(externally oriented) or to be internally focused (Leonard-Barton, 1995; Prahalad, 1993;

Prahalad & Hamel, 1990). In addition, traditional strategic management conceptual

models and theories are criticized for being overly rational and failing to contend with the

fast-changing business environment (Barry & Elmes, 1997; Calori, 1998; Rajagopalan &

Spreitzer, 1996; Stacey, 2003).

Hamel (2000) claimed that building innovative and flexible strategic competence

is the crucial element for securing future organizational success. Approaches such as the

following may serve this purpose: self-referential systems; leading at the edge of chaos;

strategic foresight; aligning strategy, organizational design, external opportunity; and

agility and speed of response. These approaches are important for this study because

they contribute to addressing the shortcomings of traditional planning and the relaxation

of the tension between strategic planning and responding to a rapidly changing

environment.

Adapting Theory of Self-Referential Systems

Self-reference is used to denote any situation in which someone or something

refers to itself (Raymond, 1994). In self-referential systems individuals make choices

following their own ways of thinking. Although the choices made by individual agents

seem to have little impact on collective outcomes, the mix of possible strategies co-

evolves incessantly over time (Batton, 2000; Arthur, 1994).

Liedtka (2000) and Graetz (2002) stated that in order to seek innovation and

redefine their organizations‟ strategies leaders make choices based on the sense of

strategic intent and purpose embedded in their minds (strategic thinking). Then, they

integrate strategic thinking back in to the business using strategic planning. Finally, they

assert control both accurately and quickly through measurement systems.

Following the theory of self-referential systems, Vos (2002) suggested that since

systems and their environments are exclusive, leaders need to act from both an agency

(organization) perspective and structure (environment) perspective. From an agency

viewpoint leaders need to act independently and make their own choices according to the

needs of their companies, whereas from a structure perspective, leaders need to act

according to the environment that seems to limit or influence their performance

(Bandura, 2001; Nasehi, 2005; Drago & Clements, 1999).

Leading on the Edge of Chaos

Today‟s business environment is characterized by faster flows of information,

pervasive globalization, far-reaching technological advances, and consumers whose

preferences change rapidly (Pasternack & Viscio, 1999). In this fast-changing

environment, leaders must be comfortable with leading at the edge of chaos (surprises,

nonlinear, complex and unpredictable phenomena or situation) by carefully analyzing

strategic-level concerns, anticipating, reaching out, building good relations with

stakeholders, acting boldly, integrating moving targets, and altering strategies as needed,

thus leading their organizations to bright futures (Murphy & Murphy, 2002). The

implication of leading at the edge of chaos for this study is that the tension between

strategic planning and responding to a rapidly changing environment is partly a reflection

of how leaders seek to align the plan and execution of organizational transition demands

with the changes displayed in the environment (Conner, 1998).

Moving Strategic Planning Towards Strategic Foresight

In order to cope with the unpredictable, leaders must build an enormous amount

of flexibility into their organizations by moving from strategic planning towards strategic

foresight and developing strategic foresight as a core organizational capacity (Conway &

Voros, 2003; Liedtka, 1998a; Mintzberg, 1994; Senge, et al., 1999; Voros, 2003). As an

aspect of strategic thinking, strategic foresight refers to creating and continuing to update

a quality, consistent, orderly, and practical shared view of the future (Slaughter, 1999).

Such a shared forward view expands the range of strategic options and enhances the

organization‟s ability to detect threats, explore opportunities, and design and implement

enriched strategy (Conway & Voros, 2002).

Developing strategic planning into strategic foresight requires conceptualizing

strategic thinking, strategic decision-making, and strategic planning as distinct but

complementary activities (Liedtka, 1998a; Mintzberg, 1994; Wilson, 2004). Voros

(2003) indicated that in order to build strategic foresight, an organization needs to change

individual thinking to collective thinking, implicit thinking to explicit thinking, and

unconscious thinking to conscious thinking. Unlike a conventional perspective, where

strategic thinking occurs in the mind of the leader and then is taken to the staff for

consultation and implementation, strategic foresight is based on the assumption that all

employees have the ability required for strategic thinking. Strategic foresight is relevant

for this study because by moving beyond optimizing plans, overcoming a myopic short-

term focus, and avoiding looking into the future only in terms of past experience, it

contributes to a clearer understanding of the tension between strategic planning and

responding to the rapidly changing environment.

Aligning Strategy, Organizational Design, and External Opportunity

A good fit between external opportunities, strategy, and design elements such as

structure, people, systems, processes, and procedures enhances the learning capabilities

and flexibility that boost competitive advantage (Quinn, Anderson, & Finkelstein, 1997;

Galbraith, 1993, 1994, 1995; Mohrman, Cohen, & Mohrman, 1995; Tushman, Newman,

& Romanelli, 1997). The classic bureaucratic structural form fits a stable environment

with low complexity. On the contrary, a more organic structural form that focuses on

team-based and competency-based organizations fits a dynamic, complex, and volatile

environment (Burns & Stalker, 1961; D‟Aveni, 1994; Galbraith 1973, 1994; Hall, 1962).

Agility and Speed of Response, Holistic Approach, and Effective Change

Management

In today‟s ever-changing environment, survival, growth, and long-term advantage

depend on the organization‟s ability to understand the environment as a whole, constantly

adapt to change, look beyond market share, and focus on fundamental questions of

survival and sustainability (Collins & Porras, 1997). Excessive concern with the

competition and market share in a time of extreme turbulence can be a short-sighted view

(Peteraf & Bergen, 2003). The key to long-term survival and growth in a constantly

changing environment is to think and plan strategically, to act creatively and flexibly with

agility, minimum inertia, and short response times, and to communicate effectively

(TenHaken & Cohen, 2007).

In this section, some best practices of integrating strategic planning and

responding to a rapidly changing environment were identified. These best practices are

relevant to overcoming the limits of the traditional planning approach, relaxing a tension

between strategic planning and responding to a rapidly changing environment, and

understanding the meaning of the leaders‟ lived experience. Theories integrating

strategic planning and responding to a rapidly changing environment highlight that the

strategic planning process needs to be a continuous activity, an emergent and issue-driven

approach (Mankins, 2004; Mankins & Steele, 2006); however, these integrating theories

lack observation-based evidence about the actual strategic planning process and how

companies deal with the complex and rapidly changing environment.

The Gaps in the Literature

In the previous sections of the literature review, the most important studies that

have been done on the strategic planning and the business environment were identified.

Much of the literature on strategic planning has been focused on the nature of the

business environment, the wide variety of models of business strategy, and the effects of

strategic planning on performance. Several researchers such as Armstrong (1982), Hofer

and Schendel (1978), Lyles, Baird, Orris, and Kuratko (1993), Porter (1996), and

Veliyath and Shortell (1993) have suggested that effective strategic planning improves

firm performance. Mintzberg (1994) noted that in a fast-changing environment, it is

difficult to implement the traditional strategic planning approach; however, the literature

is limited regarding alternatives. Research on strategic planning and its relationship to

the environment lacks empirical evidence that reveals the realities of strategic planning in

current business organizations, addressing the complexity coming from the external

environment, and the leaders‟ lived experience of a tension between strategic planning

and responding to the ever-changing complex environment. This is a gap in the literature

(Nadkarni & Herrmann, 2010; Sanchez, 1995; Worren et al., 2002; Young-Ybarra &

Wiersema, 1999).

In order to fill the gap, this study explores the lived experiences of a tension

between strategic planning and responding to a rapidly changing environment of 20

business leaders in 10 large companies with global and national headquarters location in

a single, large metropolitan area in the United States. Data were collected using a semi-

structured phenomenological in-depth interviewing method and Hycner‟s (1999)

explication process was used to analyze the phenomenological data. Finally, the

meanings of the leaders‟ lived experience were assessed in line with the literature review.

Summary

Survival and growth of an organization is decided by the nature and degree of its

interaction with its environment. In this regard, strategy is concerned with ways and

mechanisms for fitting with the ever-changing environment (Romme, 1992). The current

literature on strategy provides different views and assumptions (Zegveld, 2002) and

numerous classifications of schools of thought in strategic management (Fiegenbaum et

al., 1996; Mintzberg, 1990). These assumptions are divided into two dimensions: a

spatial orientation (internal resources and capabilities versus the external environment)

and a time orientation (static versus dynamic). This literature review focused on both

aspects of spatial orientation and on the dynamic time orientation. Little attention was

given to static views that consider the environment as an unchanging surrounding

because the real world in general and the business environment in particular are not at all

static and the purpose of this study is to explore the lived experience of leaders who can

navigate the real world, which is dynamic.

In this review, attempts were made to describe strategy and strategic planning as a

content and process. In addition, the evolution and the course of strategic planning were

discussed; moreover, evolutionary environmental change theories, revolutionary

environmental change theories, punctuated equilibrium theory, implications of

environmental change on an organization, and organizational responses to changes in the

external environment were examined. Finally, four major schools of thought about

strategy, attempts made to integrate schools of thought about strategy, and four

complementary ways of integrating strategic planning and responding to the rapidly-

changing environment were assessed. The following chapter focuses on methods and the

plan for this study.

Chapter 3

Research Methods

Chapter 3 is devoted to the methods and the plan for this study. Accordingly, the

research method and design, sampling technique, and phenomenological data collection

and analysis methods used and processes followed in this study are discussed. Figure 3

portrays the roadmap of Chapter 3.

Figure 3. The roadmap of Chapter 3.

Types of Research Methods

There are three generally accepted research methods: The quantitative method,

qualitative method, and mixed method (Creswell, 2003). The quantitative research

method depends on the collection and analysis of quantitative data, using statistical tools

Types of research

design

Qualitative

Research Design

Phenomenology

Sampling

Technique

- maximum

variation sampling

- snowball sampling

Data collection and Storing Method

- Phenomenological

Semi-structured In-

depth Interview

Data Analysis

Hycner‟s

(1999) five

phases

explication

process

Summary

to explain and predict occurrences (Elliott, 2004). Quantitative research focuses on

testing hypotheses and is useful for answering the “what?” questions. Once adequate

quantitative data is collected to give strength to a hypothesis, a premise concerning the

characteristics of that data can be devised, making it generalizable to related conditions

(Trochim, 2000). In a quantitative study, there is no personal connection between the

researcher, the research, and the research participants (Trochim, 2000).

Qualitative research is based on the collection and analysis of qualitative data,

such as value systems, attitudes, and behavior (Creswell, 2003; Marshall, 1996). It

concentrates on clarifying complex social issues and is more concerned with the process

than the outcome (Munhall & Boyd, 1993). The researcher can learn the most about a

situation by participating (Babbie, 2004; Glesne, 2010; Zawawi, 2007). The qualitative

research method yields results based on non-quantitative measures and a research

hypothesis is not needed to begin a qualitative research study (Creswell, 1994, 1998,

2003, 2007, 2009; Denzin & Lincoln, 2005; Ehrich, 2005; Hill, Thompson, & Williams,

1997; Holloway, 1997). The qualitative method allows the flexibility to probe initial

participant responses and evoke explanatory responses about the participants‟ experience

(Zawawi, 2007, Yin, 2011).

The mixed research method merges quantitative and qualitative methods in a

single research project (Rocco, Bliss, Gallagher, & Perez-Prado, 2003). The mixed

research design incorporates the strengths of quantitative and qualitative design;

therefore, it has a great potential to improve research quality, leading to richer, more

reliable, and more valid research results (Johnson & Onwuegbuzie, 2004; Mingers,

2001).

The type of the research method appropriate for a specific study is in part

determined by the research question (Amaratunga, Baldry, Sarshar, & Newton, 2002;

Creswell, 1994; Holloway, 1997; Mason, 1996). The “what?” (causal relationship

between variables) and the “how many?” research questions are best addressed using the

quantitative research method. The mixed research method is appropriate to answer a

broader and more complete range of research questions because the implementation of

mixed methods creates an opportunity to add meaning to numbers by using words,

pictures, and narrative. Qualitative research design is appropriate if (a) the researcher‟s

aim is to answer questions such as “How?” “Why?” “What is this?” or “What is

happening here?”; (b) the concern is more with the process than outcome; (c) the

phenomenon varies across people, place, and time; (d) there is a belief that the

respondents may not tell the truth on a survey or in an experiment; or (e) the goal is to

generalize and understand the target population‟s lived experiences (Munhall & Boyd,

1993).

The research question answered in this study was as follows: what are the

experiences of business leaders as they seek to integrate strategic planning and

responding to a rapidly changing business environment? There were two sub-questions:

(a) what is the nature of the tension between strategic planning and responding to a

rapidly changing business environment? And (b) what factors are perceived to be

responsible for success or failure in aligning strategic planning and responding to a

rapidly changing environment? These research questions were aimed at understanding

the lived experience of leaders and were too complicated to identify and define variables

using a survey; therefore, the qualitative method was appropriate for this study.

Qualitative Research Approaches

There are five major qualitative research approaches: biography, ethnography,

grounded theory, case study, and phenomenology (Creswell, 2012; Fischer, 2005;

Holliday, 2007; Morse, 1994; Munhall & Boyd, 1993; Norman, 1989; Shank, 2006;

Streubert & Carpenter, 1995; Tesch, 1990). It is important for the researcher to select the

qualitative research approach that would best answer the research question. To this end,

the purpose and methods associated with each qualitative research approach and their

relevance for answering the research questions are discussed briefly in the following

sections.

Biography

The biographical approach deals with the decisive moments in a person‟s

life (Norman, 1989). This approach requires the collection and use of documents

of life such as autobiographies, biographies, diaries, and letters (Norman, 1989).

According to McCaslin and Wilson (2003), biography is a preferred approach when

the purpose of the research is to discover the meaning of one person‟s lived

experience. Since the purpose of this approach was not to report one person‟s

experience, the biographical approach was not appropriate to this study.

Ethnography

The ethnographic research approach aims to understand cultural phenomena that

guide the life of a cultural group or organization (Germain, 1993; Spradley, 1979). In

ethnography the ethnographers are involved in culture-sharing with research participants

to study the meaning of their socio-economic system over a longer period of time, using

participant observation or in-depth interviewing techniques and then describing and

interpreting their shared and learned behavior, beliefs, values, language, and other

cultural patterns (Germain, 1993; Murtagh, 2007; Spradley, 1979).

Ethnography is a preferred approach when the researcher chooses to experience a

different culture by living or observing it. In addition, the ethnographer needs to

participate in the participant‟s social world (Hammersley, 1992; McCaslin & Wilson

2003). Ethnography was not appropriate for this study because the researcher could not

stay with the participants while they lived through the tension between strategic planning

and responding to a rapidly changing environment.

Grounded Theory

Steps in the grounded theory approach include developing generative questions,

collecting data, analyzing the data using coding (categorizing data and describing

categories), memoing (recording the thoughts of the researcher) and diagramming

sessions to pull all of the details together, identifying core theoretical concepts,

developing linkages between theoretical core concepts and the data, and developing one

core or central category that leads to the development of a theory (Clarke, 2005; Strauss

& Corbin, 1990). As one approaches a theory, new observations emerge and lead to new

linkages and revisions of a theory. Essentially, the grounded theory process has no

ending point. The study ends when the researcher decides to end it, having gained a

thorough explanation for the phenomenon (Charmaz, 2009; Mills, Bonner, & Francis,

2006). McCaslin and Wilson (2003) argued that grounded theory is a preferred approach

when the objective of the research is to discover a theory for a single phenomenon of

living as shared by others; however, theoretical sampling and the constant comparative

process with no ending point did not fit the limited timeframe of this study.

Case Study

The case study research method is used to study a phenomenon within its real-life

context to explain a situation, build upon theory, challenge a theory, or produce new

theory (Denzin & Lincoln, 2005; Tellis, 1997; Yin, 1984, 2009). The case study method

utilizes a combination of data-collection methods, such as unstructured interviewing and

direct observation (Yin, 2009).

A major advantage of the case study method is its applicability to real life;

however, the intense exposure to the issue of the case may bias the investigator‟s

elucidation of the findings (Stake, 1995). According to McCaslin and Wilson (2003),

case study is a preferred approach when the purpose of a study is to discover what

actually occurred and was experienced in a single lived event; therefore, the case study

approach could not be appropriate to this study, which was aimed at exploring the shared

lived experience of many leaders in different industries and multiple lived events.

Phenomenology

The term phenomenology can be traced back to the philosophical works of

Christian Wolff, Immanuel Kant, Georg Wilhelm, and Friedrich Hegel, among others;

however, Edmund Husserl was the first to formalize phenomenology into a science of the

structures of consciousness and phenomena (Vandenberg, 1997; Zahavi, 2003).

Phenomenology, in Husserl‟s philosophical conception, is the study of the structure of the

relationship between the mind and the world with which it interacts (consciousness) and

any observable occurrence (phenomenon) that appears in acts of consciousness (Zahavi,

2003).

The objective of phenomenology is to reveal the ultimate nature of the

phenomenon (Strandmark & Hedelin, 2002). Phenomenological design helps the

researcher develop a comprehensive picture of the lived experiences of the research

participants through open-ended questions based interviews to describe and interpret the

research participants‟ stories, and derive general meanings (Ehrich, 2005; Groenewald,

2004; Jackson, Drummond, & Camara, 2007; Klein & Westcott, 1994; Laverty, 2003;

Lofland & Lofland, 1995; Miles & Huberman, 1994). Accordingly, descriptions of the

essence and the commonality of participants‟ lived experiences of a phenomenon are

used to overcome the researcher‟s bias about the phenomenon (Vandenberg, 1997).

Phenomenological study also takes a dualistic ontology in which the object and

the subject are considered separately and independently (Giorgi, 1997; Marton, 1981). In

this context the subjects in this study are 20 leaders of large companies with global or

national headquarters in a single, large metropolitan area in the United States. The

research objects are the work objects that facilitate the operation of the research study

process, including the investigator; the research question; the design of the investigation;

the ethical approval, governance, and support for the research from the University of

Phoenix; the population studied; the steps used to transform the data into results; the

results; and the finished documents about the results.

In order to achieve phenomenological research objectives, data (composite

descriptions of participants‟ lived experience) are gathered from research participants,

mostly using in-depth interviews, and analyzed to identify shared meanings (Groenewald,

2004; Hein & Austin, 2001; Marton, 1981; Moustakas, 1994; Van Manen, 1990). In

phenomenological studies, the researcher is considered a primary instrument of data

collection (Groenewald, 2004; Denzin & Lincoln, 2005; Wimpenny & Gass, 2000). This

means that data are managed through the researcher, instead of through inventories,

questionnaires, or machines. The researcher determines the phenomenon; selects

appropriate models, frameworks, and theories to guide data collection; interviews the

participants (asks probing questions to get into deep conversations); brackets his own

experiences; writes descriptions that fully describe the participants‟ experiences; reduces

the participants‟ descriptions to themes; reduces themes to statements that summarize the

essential meaning; and determines what the experiences mean for the people who have

had the experiences (Akerlind, 2005; Greene, 1997; Groenewald, 2004; Hein & Austin,

2001; Holloway, 1997; Kruger, 1988; Kvale, 1996; Marton, 1981; Maypole & Davies,

2001; Robinson & Reed, 1998; Shank, 2006; Uljens, 1996).

Phenomenological design was selected for this study because it is the best

approach to collect data and describe what all participants have in common as they

experience a tension between strategic planning and responding to a rapidly changing

environment. It also facilitated the use of open-ended questions that elicited rich and

explanatory responses from the participants (Creswell, 1998). In addition, it was iterative

and enabled the development of an understanding of the business leaders‟ lived

experiences through analyzing and interpreting their descriptions of their experiences

(Groenewald, 2004). Moreover, phenomenological design helped to develop exhaustive

contextual and structural descriptions for each participant‟s experience, summarize

shared experiences, and derive general meanings (Davidson & Jacobs, 2008; McCaslin &

Wilson, 2003). Furthermore, the phenomenological design enabled the researcher to

learn the most about the leaders‟ lived experiences of a tension between strategic

planning and responding to a rapidly changing environment, and describe them as they

were initially experienced by the participants (Groenewald, 2004; Laverty, 2003;

Hathaway, 1995; Moustakas, 1994;).

Population and Sampling

Population

Population is all people or items with the characteristics a researcher wants to

understand (Moore & McCabe, 2005; Smith, 1993). Within the context of this definition,

the target population of this study was leaders from the 94 large companies with global or

national headquarters located in a single, large metropolitan area in the United States.

According to the NAICS Code (2007), firms in manufacturing and mining industries

qualify as large if they have more than 500 employees and firms in other industries

qualify as large if they generate more than $14 million annual revenue. Since gathering

data from all leaders in the target population was impossible and would have consumed

more time, money, and effort than were available, a group of representative leaders (a

sample) was selected from these large companies as defined by the NAICS and were

headquartered in a single, large metropolitan area in the United States.

Sampling

Sampling is the process of selecting a subset of a population that is representative

enough to estimate the characteristics of the whole population of a study (Moore &

McCabe, 2005; Stockburger, 2007; Stuart, 1962). A representative sample helps provide

the richest possible information to answer the research question (Babbie, 1995; Creswell,

2009; Gall, Gall, & Borg, 2003; Greig & Taylor, 1999; Kruger, 1988; Schwandt, 1997).

Purposive sampling techniques that are used in phenomenological design include

convenience sampling, quota sampling, informant sampling, homogeneous sampling,

critical case sampling, extreme case sampling, criterion sampling, stratified purposeful

sampling (samples within samples), maximum variation sampling, and snowball

sampling (Babbie, 1995; Bamberger, Rugh, & Mabry, 2006; Coyne, 1997; Crabtree &

Miller, 1992; Given, 2008; Marshall, 1996; Miles & Huberman, 1994; Morse, 1994;

Patton, 2001). To select participants, using purposive maximum variation sampling

technique, a researcher has to make a list of characteristics which participants should

have, identify those in the population that meet the criteria, determine sample size, and

select participants (Meltzer & Childress, 2009). Snowball sampling technique uses

recommendations to find people with the specific skills and increase the number of

participants (Salganik & Heckathorn, 2004; Heckathorn, 2002; Heckathorn, 1997).

Marshall (1996), Munhall (1994), and Patton (1990) reported that there is no

generally accepted sample size or magic number of participants for a qualitative

phenomenological study. The concept of saturation is the leading principle used to

determine sample size in qualitative research (Crouch & McKenzie, 2006; Guest, Bunce,

& Johnson, 2006), which means samples must be large enough to ensure that most or all

of the important perceptions are uncovered. At the same time, the sample needs to be the

right size to avoid repetitive and unnecessary data (Charmaz, 2006; Ritchie, Lewis, &

Elam, 2003).

Charmaz (2006) noted that 25 participants can provide an adequate sample for

smaller research projects. Ritchie, Lewis, and Elam (2003) suggested that qualitative

samples often have fewer than 50. Green and Thorogood (2009) stated that 20 people are

sufficient. Creswell (1998) suggested samples of from five to 25 participants. Boyd

(2001) considered two to 10 participants as an adequate sample. Morse (1994) pointed

out that at least six people in a sample are necessary in phenomenology.

In this phenomenological study, the sample design was based on the purposive

maximum variation sampling technique, whereby representativeness was sought by

including companies from a broad range of industries instead of through equal probability

(Welman & Kruger, 1999). In addition, since senior leaders are populations which are

difficult for the researcher to access the researcher supplemented the purposive sampling

technique with the snowballing technique. Accordingly, the selection of organizations

participating in the study and the gathering of the permission to use the premises forms

followed the following procedure.

1. The characteristics to be fulfilled to participate in the research were defined and

the target population was identified. The target population was large companies

with global or regional headquarters in a single, large metropolitan area in the

United States (see the definition of a large company).

2. A list of 94 large companies with global and national headquarters in a single,

large metropolitan area in the United States was prepared.

3. Based on the suggested sample sizes and with the purpose of getting 10

companies from at least five different industries, the researcher sent a letter of

invitation to participate in the study to 30 large companies with global and

national headquarters location in a single, large metropolitan area in the United

States (Appendix E).

4. The researcher built up the sample with the help of a CEO he has known for more

than a decade. The CEO introduced him to three other CEOs from among his

networks and those three CEOs introduced him to other CEOs. The researcher

finally managed to gain consent from 10 large companies in nine industries

(manufacturing, restaurant or food service, financial services, semiconductors,

radiotelephone communications, retailing, healthcare, personal care, and

entertainment) that agreed to participate in the study. Five of these sample

companies are global (have operations in many countries), three of them are

international (operate in at least three countries), and two companies are national.

The sample companies generated annual revenues ranging from U.S. $600 million

to U.S. just under $14 billion and had employees ranging in number from 5,000 to

60,000 at the end of 2011 fiscal year.

Multiple visits and phone calls were required to obtain these agreements and to

gain the permission to use the premises form signed from each company. The requests

for the permission to use the premises were not considered part of the actual data-

collection process and were completed prior to receiving approval from the Institutional

Review Board for the University of Phoenix (IRB). Working on the permission to use

the premises at the early stage of the research process helped in developing a relationship

with the organizations participating.

After the proposed study was approved by the IRB, the researcher sought two

participants from each of the 10 companies (Appendix B). Accordingly, the individuals

who had signed the permission to use premises forms were asked to identify one or two

participants who had the qualities sought in the participants (Babbie, 1995; Crabtree &

Miller, 1992; Marshall, 1996). When a person who signed the permission to use the

premises forms was personally qualified to participate in the study, only one additional

participant was needed. Twenty responses were obtained from the initial sampling and

no solicited participant declined to participate in the study. Participants took part in this

research voluntarily because an adequate, clear, and concise explanation of the validity

and relevance of the research was provided to gain the participants‟ confidence

(Lindberg, Jones, McComas, & Thomas, 2001). In addition, trust and rapport were

established with the participants by demonstrating professional integrity and attention to

the convenience of the participants (Miller, Rosenstein, & DeRenzo, 1998).

The sample of 20 was believed to be adequate and the researcher did not check

for data saturation after 20 interviews because he believed that the purposive sampling

technique selected to identify the companies and executives to be represented in this

study had enhanced the quality of the sample (it consists of participants relevant to

criteria that fit the research questions), which was more important than the number of

individuals in the sample (Morse, 1994). The researcher also believed that the search for

data saturation could lead to a large sample and superfluous data that might be

impractical to analyze all of the possible contingencies (Crouch & McKenzie, 2006;

Green & Thorogood, 2009). Moreover, the researcher agreed with Crouch and

McKenzie (2006), who stated that frequencies are rarely important in qualitative research

in the sense that one occurrence of the data is potentially as useful as many in

understanding the phenomenon (Crouch & McKenzie, 2006). Furthermore, the

researcher agreed with authors, including Green and Thorogood (2009), who suggested

that 20 people are sufficient.

Data Collection

Three major data-collection methods are used in phenomenological research

designs: focus groups, observation (participant observation, direct observation), and in-

depth interviews (Bogdan & Biklen, 2003; Craig & Douglas, 2001; Kvale, 1996; Morse,

1994; Rubin & Rubin, 1995), yet many scholars argue that the focus group method of

data collection is not compatible with phenomenological research (Webb, 2001);

therefore, a focus group was not used in this study. In addition, the participant

observation technique (DeWalt & DeWalt, 2002; Gubrium & Holstein, 2002) and the

direct observation technique (DeWalt & DeWalt, 2002; Lofland & Lofland, 1995) were

not appropriate for this research because both observation techniques focus on collecting

data about what is happening during the observation period, not about the lived

experience of the research participants. In-depth interviews were determined to be

appropriate for data collection.

Interview protocols can be structured, semi-structured, or unstructured (Campion,

Campion, & Hudson, 1994; Shank, 2006; Whitley, 2002). Unstructured interviews and

structured interviews were not appropriate for this study because extreme flexibility

would make it more difficult to analyze unstructured interview data (Morse, 1994; Shank,

2006; Whitley, 2002), and the extreme rigidity of structured interviews would limit the

responses of participants.

In this research, a semi-structured in-depth interview format was used to gain the

advantages of both the structured and unstructured interview methods. Like unstructured

interviews, semi-structured interviews provide rich data and allow participants freedom

to narrate their experiences without being limited to specific answers (Minichiello, Aroni,

Timewell, & Alexander, 1995). Like structured interviews, semi-structured interviews

provide the ability to compare across interviews because some of the questions are

standard (Minichiello, et al., 1995).

As suggested by Rubin and Rubin (1995) and Macquarie and McIntyre (1990),

the researcher selected one most important question (guiding question) and started with

that one for each interview he conducted. The guiding question was “please describe

times when you faced a tension between strategic planning and responding to a rapidly

changing environment.” He used the rest of the list as a checklist to move the

conversation freely in any direction as areas of interest emerged (Appendix D). The data

collection was conducted following a four-step process: gaining entry, interview

instrument development, face validation, and conducting semi-structured interviews

(Arksey & Knight, 1999; Bailey, 1996; Bless & Higson-Smith, 2000; Kvale & Brinkman,

2009; Street, 1998).

Gaining Entry

Permission to use the premises. The researcher had obtained the consent of

leaders in 10 companies to use the premises to conduct phenomenological in-depth

interviews with two participants from their companies about their lived experience of a

tension between strategic planning and responding to the rapidly changing environment.

In order to gain signatures for the permission to use premises forms (Appendix A) the

researcher committed to confidentiality regarding both the companies participating and

the individual participants (Bailey, 1996; Holloway, 1997; Kvale, 1996). This means the

researcher agreed to collect and store data in anonymous form, using a combination of a

numeral and a letter code, and agreed not to disclose any information that could identify

the participants.

Informed consent. In order to ensure ethical research, increase insights,

encourage genuine responses, reduce mistrust, and guarantee the participants‟ right to

withdraw at any time (Bailey, 1996), the researcher explained the contents of the

informed consent agreement form to the participants before conducting the interview and

the participants gave their consent by signing the informed consent agreement (Appendix

C). Informed consent consists of four major elements: providing adequate information,

understanding of information, ability of participants to make a rational decision, and

voluntariness (Titus & Keane, 1996).

This research will be published; however, the research participants‟ identities will

be kept confidential. In order to maintain confidentiality regarding individual

participants, the researcher gave the research participants a pseudonym and all identifying

information and specific contextual details that could reveal the identity of the

participants were deleted from the report. Interview audio cassettes, transcripts, essays,

and all other communications with the research participants were labeled with the code

comprised of a Roman numeral, I-IX for the industry; followed by a letter, A-K for the

company; then a number, 01-20 for the individual so that it would not be possible to

associate names of participants with any given set of responses. The letter “I” was

intentionally left out to avoid confusion with the Roman numeral for the industry.

Electronic and physical data storage devices were kept in a safe, secure location away

from public access in a locked file cabinet in the researcher‟s residence and in a personal

computer with an updated antivirus, intrusion detection software, unique user IDs, and

passwords that adhere to strong password protection principles. This topic will be

covered in detail under data storage and retention.

Interview Instrument Development

According to Bentz and Shapiro (1998), Guest, Bunce, and Johnson (2006),

Kensit (2000), Kvale (1996), and Kvale and Brinkman (2009), there is a distinction and

interdependence between research questions and interview questions in the sense that the

interview questions are more specific and the answers to the interview questions should

contribute to the researcher‟s ability to answer the research questions. Based on the

research questions of this study and Campion, Campion, and Hudson‟s (1994) eight key

steps to developing a structured or semi-structured interview, the researcher developed

one guiding question and started with that question for each interview he conducted. He

used the rest of the list as a checklist to move the conversation freely in any direction as

areas of interest emerged (Appendix D). The responses to these interview questions

helped to answer the research question and the sub-questions by influencing the

participants to focus on how they experienced the tension between strategic planning and

responding to the rapidly changing environment and to tell stories about times when they

faced the challenge of integrating taking a long-term view with maintaining

organizational flexibility.

According to Denzin and Lincoln (2005) and Marshall and Rossman (1995) the

researcher as one of the research instruments is central to conducting qualitative research.

This means the researcher plays a key role in the data collection process. He or she

facilitates the condition for participants to describe their lived experience and sets

participants at ease. The researcher also asks the questions and determines when to ask

follow-up questions. Further, the researcher analyzes and interprets data generated from

the participants to develop meaningful information.

In line with this description the researcher who conducted this phenomenological

study determined the sample size and developed appropriate interview questions to guide

data collection. He selected participants, interviewed the participants, wrote descriptions

that fully described the participants‟ experience, and explicated the data. He then

summarized the essential meaning and determined what the experience meant for the

people who had the experience. The researcher acknowledged that there was a possibility

that his values and beliefs might have influenced this research studies (Porter, 1993).

Therefore, he tried to reduce the effects of his influence through bracketing and

reflexivity (Jootun, McGhee, & Marland, 2009).

Bracketing is a process for suspending one‟s various beliefs, judgements or biases

(van Manen, 1990). In line with this definition the researcher tried not to allow his

personal views, preconceptions and interpretations to enter the participants‟ description

of their lived experiences. The researcher used data collection and data analysis processes

to reduce the element of bias and ensure the credibility of the data. Accordingly, he

recorded all interviews on audiotape and memo. He then used the audiotape records and

memo of all face-to-face interviews to transcribe the interviews. During data analysis

(delineating significant statements, clustering significant statements, and establishing

themes) the researcher listened repeatedly to the audio records of each interview to

become familiar with the words of the participants, and read all the transcripts repeatedly

to develop a holistic sense. Throughout the entire research process the researcher

remained open to the participants‟ description of their lived experiences, joining in an

ongoing discussion without taking position either for or against.

Face Validation

Two pilot interviews were conducted to test the clarity and the appropriateness of

the interview questions. Two participants from the target population (not research

participants) were selected randomly to participate in the pilot test and were asked

whether the interview questions were clear. Based on the result of face validation the

researcher decided that the research questions were relevant for determining answers to

the research questions. The two individuals who participated in the pilot test and the

participants‟ data were not part of the actual study.

Conducting Interviews

In line with suggestions from Arksey and Knight (1999), Bailey (1996), Kvale

(1996), Lapadat (1999), Lofland and Lofland (1995), Miles and Huberman (1994),

Pietersen (2002), and Rubin and Rubin (1995), the semi-structured in-depth interviews

included the following activities:

1. The interviewer provided the interviewee with an overview of the purpose of

the interview and ways of protecting confidentiality.

2. The interviewer got permission for tape-recording and note-taking.

3. The interviews were audio-recorded; each interview was recorded on a

separate cassette labeled with the code.

4. The interviewer developed good relations and established trust, using both

verbal and non-verbal communications.

5. Open-ended questions were asked.

6. Probes were used to get detailed, thorough responses.

7. The interviewer kept field notes, including writing descriptive notes and

reflective notes.

8. The interviewer ended the interview carefully, asking the interviewee if he or

she had any additional points.

9. Immediately after the interview, the interviewer took time to test his recorder

to see if he had recorded the whole interview. He also filled in the gaps in his

field notes and wrote down his impressions.

10. In order to have comprehensive data (Guest et al., 2006) the researcher kept

interviewing until he had conducted two interviews in each of the 10

companies selected for the study. For all of the reasons discussed under

sampling, the researcher did not check for data saturation.

No participant requested to withdraw from the study after data were collected.

After three years the researcher will destroy the information he collected from the

participants thoroughly and completely by shredding paper records, erasing and

destroying audio-records, deleting electronic records using eraser software, and scrubbing

electronic media used to store data.

Data Analysis Methods and Processes

There are several phenomenological data analysis options including Colaizzi‟s

(1978) six-step phenomenological method, Moustakas‟s (1994) seven-step modified van

Kaam method, and Hycner‟s (1999) five-phase explication process. Colaizzi‟s

phenomenological data analysis process includes reading each transcript, extracting

statements and phrases, formulating meanings, clustering themes, writing descriptions of

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the experience of the participants, and validating the descriptions of the lived experience.

Moustakas‟s modified van Kaam method includes listing and preliminary grouping,

reducing and eliminating, clustering and thematizing, identifying the invariant

constituents and themes, constructing an individual textual description, creating an

individual structural description, and building a textural and structural description of the

meanings and essences of each research participant‟s experience. Hycner‟s explication

process includes bracketing and phenomenological reduction (reading through and

getting a feel for what is being said), delineating units of meaning, grouping units of

meaning to form themes, and summing up each interview, validating it, identifying

general themes, and making a composite summary.

Groenewald (2004) argued that Hycner‟s (1999) explication (investigating the

elements while keeping the setting of the whole) seemed to explain phenomenological

analysis better than the other methods. Since phenomenology is concerned with the

essence of an experience from the perspective of the participant, keeping the whole intact

should be an important part of the research process. This research analysis, therefore,

was conducted following Hycner‟s explication data analysis method. For the purpose of

clarity and simplicity, Hycner‟s steps 4 and 5 are further split into two, increasing the

overall explication steps to seven as shown hereunder:

Bracketing or Phenomenological Reduction

The researcher read verbatim transcripts, field notes, and essays, bracketing

himself or suspending judgment (Creswell, 1998; Fouche, 1993; Holloway, 1997; Lauer,

1958; Moustakas, 1994; Weber, 1990). This means he was as open as possible to what

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the participants wanted to share. He also did not take a position (Hycner, 1999; Klaus,

2004; Sadala & Adorno, 2001; Shank, 2006).

Delineating Units of Meaning

The researcher extracted statements and phrases of relevant meaning (units of

relevant meaning) while bracketing his own presuppositions (Creswell, 1998; Holloway,

1997; Hycner, 1999; Lauer, 1958; Moustakas, 1994; Sadala & Adorno, 2001).

Clustering of Units of Meaning and Forming Themes

Clustering is organizing a meaning unit (words, sentences or paragraphs)

containing aspects related to each other into categories with the same central meanings

(Creswell, 1998). By bracketing himself the researcher rigorously examined the list of

non-redundant units of meaning to elicit the holistic context, and grouped units of

meaning together. Throughout the clustering process the researcher went back to the

recorded interviews, field notes and the list of non-redundant units of meaning to arrive at

clusters of appropriate meanings and then determine the central themes (Creswell, 1998;

Moustakas, 1994; Hycner, 1999; Sadala & Adorno, 2001).

Validation

Using member-checking technique, the researcher returned to the participants

before beginning the interview summaries to determine if the essence of the interview

had been correctly captured and to give participants an opportunity to correct errors

((Hycner, 1999; Angen, 2000). The transcripts the researcher sent the participants

included, verbatim, whatever information they provided in the interview, including

revealing their companies. He gave them a week to get back to him and informed them

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in advance that he would take no response as an approval. The participants trusted the

researcher to conceal their companies‟ identities.

Summarizing Each Interview

The researcher wrote an exhaustive description of each participant‟s explanation

of his or her lived experience of a tension between strategic planning and responding to a

rapidly changing environment (Hycner, 1999). These summaries are included in Chapter

Extracting General and Unique Themes for All Interviews

At this stage the researcher identified the most common themes across interviews

and the individual variations (Hycner, 1999).

Making a Composite Summary

The researcher concluded the explication by writing a composite summary that

showed how the themes emerged (Hycner, 1999; Moustakas, 1994), and how

participants‟ explanations were transformed into expressions appropriate to the scientific

discussion, ideas, and theories that support the research (Coffey & Atkinson, 1996;

Moustakas, 1994; Hycner, 1999; Sadala & Adorno, 2001). To this end the researcher

related the study findings to the literature review and possible future research.

Credibility (Reliability and Validity) of the Study

Qualitative researchers need to ensure and demonstrate the reliability, validity,

robustness, and rigor of their inquiries using generally accepted criteria (Tobin & Begley,

2004). Seale (1999) stated that reliability and validity in qualitative research are called

credibility (trustworthiness). Neutrality or conformability, consistency or dependability,

and trustworthiness or authenticity are crucial criteria to assure credibility (Groenewald,

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2004; Sandelowski, 1986, 1993). Lincoln & Guba (1985) noted that the trustworthiness

of a qualitative study is described in terms of credibility, transferability, dependability,

and conformability. The study is credible if the interpretation of the findings is drawn

from the participants‟ original data. It is transferable if the findings of the inquiry can

apply beyond the bounds of the study. It is dependable if data collection, data analysis,

and data interpretation processes are well integrated; and is confirmable if the inquiry‟s

findings are supported by the data collected. According to (Johnson, 1997) if validity of a

research study is maximized then its finding will be credible and defensible. More

credible results may lead to generalizability, applicability or transferability (Golafshani,

2003; Lincoln & Guba, 1985).

Other experts have suggested that in the qualitative method reliability

(consistency or dependability) is about generating understanding through various steps,

such as reduction and notes (Campbell, 1996; Stenbacka, 2001). Validity is said to be

about creating congruence between a given reality and its description through purifying

sampling data collection methods and minimizing a researcher‟s bias (Lincoln & Guba,

1985; McMillan & Schumacher, 2006; Patton, 2001). Many researchers, such as

McMillan and Schumacher (2006), have recommended triangulation for improving the

reliability and validity of qualitative research. In triangulation, the researcher

investigates the same problem from different angles, using multiple data sources,

theories, methodologies, and researchers (Denzin & Lincoln, 2005). According to

Sarantakos (1998), however, triangulation is not necessarily more important than a single

method and is not appropriate for each and every type of study. Triangulation was not

used in this study.

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In line with these points the researcher tried to ensure the trustworthiness of the

study by drawing interpretations from the participants‟ description of their lived

experience. In addition, he interlinked data collection, data analysis and interpretation

processes. Further, he supported the findings with the data collected from the

participants. Moreover, the study used a well-established research method and design,

and the study's findings were shaped by the respondents and not researcher bias.

Data Storage Methods and Retention

Data were stored in audio recordings, field notes, files of hard-copy documents,

and electronic hard drives. The researcher opened a file for each interview with multiple

divisions including the field notes, any written information and materials submitted by

the participants, interview analysis notes, verbatim transcripts, and any communication

between the researcher and the participants. The informed consent agreement was stored

in a separate file.

The law and the research sponsor require data retention for a certain period of

time (Macrina, 2000). The University of Phoenix requires research data to be retained for

three years (Appendix C). In order to abide by this legal and professional obligation, the

researcher will store electronic data and physical resources properly for three years.

Electronic and physical data storage devices are being kept in a locked file cabinet in the

researcher‟s residence in a safe, secure location away from public access. In addition,

electronic data are encrypted on hard disks of the researcher‟s personal computers with

updated antivirus, intrusion detection software, unique user IDs, and passwords that

cannot be easily guessed.

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After three years the researcher will destroy all physical and electronic data

related to this research thoroughly and completely by shredding paper records, erasing

and destroying audio-records, deleting electronic records using eraser software, and

scrubbing electronic media used to store data. Eraser software is a higher level security

device for Windows to remove data completely from the hard drive by overwriting it

multiple times with carefully chosen patterns (Gutmann, 1996).

Summary

A qualitative method, phenomenological design, purposive maximum variation

sampling, and semi-structured interviewing data collection method were used to explore

the lived experience of a tension between strategic planning and responding to a rapidly

changing environment among 20 leaders in large companies with global and national

headquarters location in a single, large metropolitan area in the United States. Based on a

four-step semi-structured interview design process (Arksey & Knight, 1999; Bailey,

1996; Bless & Higson-Smith, 2000; Street, 1998), the researcher gained entry

(established contact, obtained informed consent, and insured confidentiality), formulated

interview questions, made face validation, conducted semi-structured in-depth interviews

(agreed to place and time of interviews, developed instructions for the interviews,

obtained permission to record and publish the interviews, and developed a picture of the

leaders‟ lived experience of the tension between strategic planning and responding to a

rapidly changing environment. Following Hycner‟s (1999) explication method, the

researcher described the participants‟ stories as they lived them to determine what the

experience meant for the research participants. From there he derived general meanings.

The following chapter focuses on presentation and explication of data.

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Chapter 4

Presentation and Explication of Data

The purpose of this phenomenological study is to explore the leaders‟ lived

experience of a tension between strategic planning and responding to a rapidly changing

environment. Interviews were conducted with 20 leaders in large companies with global

or national headquarters location in a single, large metropolitan area in the United States

to determine common themes that emerged from the personal experience of these leaders.

A pilot study with two leaders was used to test the relevance of the interview

questions. Upon the completion of the pilot study, interviews were conducted from

October 18, 2012 to November 26, 2012 using a semi-structured interview technique.

The data were explicated using Hycner‟s (1999) qualitative data explication process to

develop emerging common themes and the results of the provided explication were

related directly to the research questions.

The overriding research question was what are the experiences of business leaders

as they seek to integrate strategic planning and responding to the rapidly changing

business environment? This basic question raised two other questions: what is the nature

of the tension between strategic planning and responding to a rapidly changing business

environment? What factors are perceived to be responsible for success or failure in

aligning strategic planning and responding to the rapidly changing environment?

Profile of the Study Participants

A total of 20 participants (1 female and 19 male) from 10 large companies with

global or national headquarters in a single, large metropolitan area in the United States

were interviewed. The companies are in nine industries. Participants were from senior

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level positions (nine CEOs and 11 Vice Presidents). The participants‟ years of

experience in senior leadership positions varied from 12-25 years. The participants were

assigned a code so it would not be possible to associate the names of participants or their

companies with any given set of responses. The code was made up of a Roman numeral,

I-IX for the industry, followed by a letter, A-K for the company, then a number, 01-20 for

the individual. The letter “I” was intentionally left out to avoid confusion with the

Roman numeral for the industry. The respondents‟ profiles are presented in Table 1.

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Table 1

Participant Demographics Summary

Participants’

Identification

Number

Position Years of

Experience

Gender

IA01 Executive VP and Chief Financial Officer 17 F

IA02 Chief Executive Officer 25 M

IIB03 Chief Executive Officer 20 M

IIB04 Executive VP, Chief Operating Officer 19 M

IIC05 Chief Executive Officer 22 M

IIC06 Senior VP, Business Development 17 M

IIID07 Chief Executive Officer 25 M

IIID08 Executive VP, Chief Marketing Officer 16 M

IVE09 Senior VP: Product Management 12 M

IVE10 Chairman and Chief Executive Officer 18 M

VF11 Chief Executive Officer 19 M

VF12 Executive VP, Chief Financial Officer 12 M

VIG13 President and Chief Executive Officer 21 M

VIG14 Executive VP and Chief Financial Officer 17 M

VIIH15 Senior VP, Chief Financial Officer 25 M

VIIH16 Senior VP, Chief Marketing Officer 18 M

VIIIJ17 Senior VP and Worldwide Manager 21 M

VIIIJ18 Senior VP, Technology 16 M

IXK19 Chief Executive Officer 23 M

IXK20 Chief Operating Officer. 20 M

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Pilot Study

The pilot interviews were conducted prior to the interviews for the final study to

test the clarity of the interview questions, to test the relevance of the pilot participants‟

responses to the questions for addressing the research questions, and to increase the

quality of the data from the final study. Two business leaders from the target population

(not included in the research study) were selected randomly to participate in the pilot

interviews. The participants were asked to share their opinions concerning the clarity and

the appropriateness of the interview questions after they had shared their lived experience

of a tension between strategic planning and responding to a rapidly changing

environment.

Participant 1 suggested that the interview questions seemed to be understandable

and answerable. Participant 2 said that the interview questions were well refined and the

wording and the questioning techniques were simple and straightforward. From these

pilot interviews the researcher concluded that the interview questions were relevant to

answer the research questions. Data from these pilot interviews were not included in the

actual study.

Data Collection

The researcher conducted interviews with 20 leaders in 10 large companies with

global or national headquarters location in a single, large metropolitan area in the United

States about their lived experience of a tension between strategic planning and

responding to a rapidly changing environment. Each interview was conducted for

approximately one hour in a quiet meeting room at the participating companies‟ facilities.

A semi-structured interview format was selected to take advantage of the strengths of

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both structured and unstructured interviews. The researcher used an audio-recorder and

field notes to record each interview. The researcher recorded each interview on a

separate cassette and labeled each cassette with the assigned interview code. At the end

of the interview, the interviewer ensured the participant had a copy of his or her signed

consent form and requested the participant‟s cooperation if he or she needed additional

information in the future. All of the participants agreed to offer further clarification. At

the end of each interview, the researcher thanked the participant for taking part in the

study. During data collection, no unusual circumstances evolved. The interviews were

engaging with a free flow of thought and expression. Participants appeared to be eager to

share stories.

Data Explication

The data collected from the participants were explicated using Hycner‟s (1999)

qualitative data explication process (Appendix F). The data analysis process was

consistent with that described in Chapter 3. The data analysis was undertaken without

the use of a computer software application. According to Kelle (1995) qualitative

research software packages can be used to ease the laborious task of analyzing text based

data; however, these programs do not help with doing phenomenology because the

understanding of the meaning of phenomena is not an algorithmic process and cannot be

computerized. Barry (1998) noted that in spite of some pros, computer-assisted

qualitative data-analysis software distances people from their data, hijacks the analysis,

and leads to qualitative data being analyzed quantitatively. Coffey and Atkinson (1996)

and King (1994) remarked that though many qualitative studies can be supported by the

software, software cannot replace the analyst.

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Hycner‟s (1999) qualitative data explication process outlined in Appendix G has

five steps and facilitated the analysis of the leaders‟ lived experience of a tension between

strategic planning and responding to a rapidly changing environment. Throughout the

seven steps of capturing the leaders‟ experience, the emphasis was to suspend any

presuppositions that the researcher might have about the phenomenon.

Stage 1: Bracketing and Phenomenological Reduction

The first step in Hycner‟s (1999) explication process is bracketing and

phenomenological reduction, which means not allowing the researcher‟s personal views,

preconceptions, or interpretations to influence the researcher‟s write up of the research

participants‟ explanations of their lived experiences. Subsequent to each interview, the

researcher wrote comprehensive field notes without judgmental evaluation. The

researcher also listened to the audio recording repeatedly to become familiar with the

words of the participant and develop a holistic sense of his or her lived experience.

Further he prepared a verbatim transcription of the interviews as soon as practically

possible after the interviews took place. The verbatim transcripts included information

that would reveal the identity of the participants and their companies. Then the

researcher read and reread the verbatim transcripts, searching for the basic sense of the

whole so that he could arrive at a proper understanding of the participants‟ lived

experience of a tension between strategic planning and responding to a rapidly changing

environment.

Stage 2: Delineating Meaning Units

The second step in Hycner‟s (1999) method calls for the extraction of significant

statements or phrases that are relevant to the researched phenomenon. Accordingly, the

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researcher extracted significant statements that were seen to illuminate the participants‟

experience of a tension between strategic planning and responding to a rapidly changing

environment from each interview (Appendix G). To this end, the researcher was

immersed in the data by reading and rereading each participant‟s description of his or her

lived experience alongside the audiotape and field notes, bracketing his own

presuppositions, and avoiding subjective judgments. The researcher also checked back to

his field notes for any significant non-verbal observations or impressions he had noted at

the time of each interview. The list of units of relevant meaning extracted from each

interview was carefully scrutinized and the clearly redundant statements and those

significant statements that were not relevant to the studied phenomenon were eliminated.

Stage 3: Clustering of Units of Meaning to Form Themes

The third step of Hycner‟s (1999) explication processes is clustering of units of

meaning (significant statements) to form themes. To this end, the researcher rigorously

examined the list of units of meaning of each interview within the holistic context by

going back to the interview transcripts and the recorded interviews and clustered the

statements listed during Stage 2 into six groups that have equal value in the explication

process: strategic planning, environmental change, response to environmental change,

feelings of a tension, leadership style, and effects of the response approach. This

clustering helped to organize the variety of individual experiences without taking away

the uniqueness of what they described. At times, certain experiences included in the

Stage 2 list were applicable to several clusters.

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Stage 4: Validation and Summary of Each Interview

The fourth step of Hycner‟s (1999) explication process is to create a summary of

each interview. In this step the researcher has undertaken validation and developed each

interview summary.

Validation. The researcher returned to the participants before beginning the

interview summaries to determine if the essence of the interview had been correctly

captured. The transcripts the researcher sent the participants included, verbatim,

whatever information they provided in the interview, including revealing their

companies. Appendix J shows interview data verification request letter. This was done to

verify the information. The researcher also asked each participant, “What aspects of your

lived experience of a tension between strategic planning and responding to a rapidly

changing environment have I omitted?” The participants‟ comments included the

following: “this is perfect”, “You have captured it”, “I can identify with this exactly”,

“Oh that is good”, “It characterized the whole experience”, “this is right”, “I agree”, “I

liked it”, “these sums up the experience”, “I really like all parts!”, “It is perfect”, and

“that is so great!” The participants trusted the researcher to conceal their companies‟

identities.

Summary of each interview. A summary incorporates all the themes elicited

from the data (Groenewald, 2004). This summary offers the main concepts or ideas

expressed by each participant in his or her response pertaining to his or her lived

experience of a tension between strategic planning and responding to a rapidly changing

environment. Approximately 120 pages of verbatim transcripts of interviews with 20

participants were analyzed and summaries were prepared. The categorization of the main

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concepts in Stage 3 (clustering of units of meaning to form themes) was used to structure

the summaries.

Participant IA01. Participant IA01 indicated that the company‟s strategy-making

process begins with the vision of the CEO. Then the brand leaders develop ideas to carry

through the CEO‟s direction. She stated that the 2008 recession was the most recent

environmental change that adversely impacted the company, eroding guest incomes and

making competition very violent. She added that trying to address multiple issues in a

changing environment was very stressful.

The participant noted that the leaders responded to changes in the environment by

changing the strategy from a growth focus to a cost focus, offering value for guests, and

putting cash flow management and credit facilities in place. The participant mentioned

that the leaders had chosen a franchising strategy for the international market to free the

company from the adverse effect of the uniqueness of countries. She commented, “There

is a situation when you have to act quickly and a situation when you need to see a trend

and mature a little bit… it is a mix and it is the matter of balancing.” She then said that

the contingency leadership styles followed by the leaders of the company facilitated

effective implementation plans and improved performance.

Participant IA02. Participant IA02 noted that the company‟s senior leaders set

strategic goals and plans based on the CEO‟s suggestions. The branch leaders and their

teams discuss the plan and develop their own plans to attain the company‟s goals. The

participant stated that the 2008 recession was the most recent environmental change that

impacted the company. He added that due to the recession, many people lost income and

stopped dining in restaurants, which in return eroded the company‟s sales revenue and

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forced the leaders to close the doors of some restaurants permanently. He mentioned that

the decline of the company‟s business created frustration, anxiety, and stress on

employees at all levels. The participant then indicated that he worried about his team and

felt pulled in too many directions.

Participant IA02 indicated that the company‟s leaders reacted to the

environmental change by taking quick actions such as multiple cost-cutting measures and

adopting several strategies including training and certification of employees, working

closely with suppliers to ensure consistent quality, developing a franchise network to

diversify the risk in the company‟s portfolio, offering delicious food at a great value, and

introducing a team service strategy. He noted that these strategies and the leaders‟

participative and contingent approaches ultimately resulted in significant reduction in

both labor and food costs, increased the quality of meals, increased the bottom line, and

maintained guest satisfaction.

Participant IIB03. Participant IIB03 noted that the company‟s leadership team

developed a five-year plan and short-term goals as a group. The leadership team also

meets on an annual basis to review the company‟s strategic goals. The participant then

stated that the 2008 economic recession was the most recent environmental change that

impacted the company. He then said that he was upset about the effects of the

environment he could not control and unable to sleep due to the feeling of physical and

mental stress.

Participant IIB03 stated that the leaders responded to the environmental change

by taking pay cuts and eliminating bonuses for leaders. In addition, they implemented

five percent across-the-board pay reductions and layoffs. The leadership team also

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revised the company‟s occupational medicine strategy to include consumer health urgent

care. He then suggested that in an effort to rally the people they led around the plans and

ultimately achieve the organization‟s goals, the leaders communicated the company‟s

mission, vision, and key strategies.

The participant commented that though there was a lot of tension between

delivering results each year and also having long-term vision, a business leader must keep

the balance between long-term plans and short-term results. He then said, “You can‟t go

without a plan and you can‟t spend all of your time dreaming that plan.” The participant

also mentioned the need to balance stakeholder needs. He then said that as a servant

leader he took the traditional pyramid of leadership and turned it upside down and that he

wanted his leadership team to view themselves as equippers.

Participant IIB04. Participant IIB04 stated that the senior leaders develop a five-

year strategic plan following the top-level leaders‟ suggestions and review the plans

annually to make any necessary adjustments. The participant indicated that the 2008

recession, demographic changes, and healthcare reform are the most recent

environmental changes that have impacted his company. He said that as the recession

continued to cloud economic growth he was concerned about the growth of the company.

Nevertheless, the participant saw a demographic change (10,000 Americans turning 65

every day) and healthcare reform coming on January 1, 2014 as opportunities on which to

capitalize.

The participant pointed out that in order to capture a larger market share of elderly

patients and utilize opportunities created by demographic changes and healthcare reform,

the leaders changed the company‟s strategy from occupational medicine and urgent care

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to primary care practice and planned to employ 2,500-3,000 primary care practitioners

and to develop 100 clinic locations within the next five years. He then stated that with

the help of these strategies and a participative leadership approach, the leaders have

managed to increase service level, lower costs, improve service quality, and build healthy

and long-term relationships with the primary stakeholders.

Participant IIC05. Participant IIC05 stated that after he presents issues to be

addressed, the senior leaders identify the goals that must be attained and develop the

company‟s strategic plan. The participant noted that the 2008 recession and healthcare

reform were the most recent environmental changes that adversely impacted his

company. He then said that he worried about the worst scenarios that could happen and

the negative effects of the healthcare reform (such as fluctuating costs and unpredictable

service availability for consumers, decreased service payments, rising costs per

consumer, and a stressed workforce) and could not sleep during those stressful times. He

then said that in spite of these shortcomings, he was encouraged by opportunities created

by the healthcare reform (including expanded coverage, increased consumption of

healthcare services and facilities, and better management systems).

The participant indicated that in response to the environmental changes, the

leaders focused on cost-cutting measures, improving services, and developing a strategic

plan using an outside consultant. He added that he adopted strategies that focused on

buying or building medical centers and entering joint ventures. He then said that these

strategies and the participative leadership approach helped him improve employee

performance and retention, quality of service, relations with stakeholders, and sales

revenue.

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Participant IIC06. In explaining his company‟s strategic planning process,

participant IIC06 said that the leaders identify issues to be addressed, review the

company‟s mission, establish goals, and develop strategies to achieve the goals. The

participant said that the 2008 recession and healthcare reform were the most recent

environmental changes that had adversely impacted his company by eroding sales

revenue, decreasing service quality, and raising costs. He then noted that trying to make

the company fit the changes in the environment has created frustration and stress for

leaders and employees.

The participant stated that in response to the 2008 recession, the leaders focused

on cutting costs and waste in all operations, attracting highly skilled professionals,

growing through selective domestic acquisitions, developing surgical facilities, pursuing

alliances with local health institutions, and enhancing operating efficiencies. He then

indicated that the strategies adopted and the leadership approach followed to respond to

environmental change have enhanced the company‟s credibility in new local markets,

accelerated the growth of the company, helped create a common understanding of the

company‟s goals, and increased employee motivation and performance as well as client

satisfaction and sales revenue.

Participant IIID07. Participant IIID07 stated that senior leaders discuss the

vision of the CEO to set goals and develop strategies. He then mentioned that the senior

leaders review the company‟s strategic plan annually and make adjustments to fit the

environment. The participant noted that the recession of 2008 had negatively affected the

company, causing a dramatic sales revenue decline. He added that issues related to

international trade, the declining of the popularity of malls to generate customer traffic as

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customers have become more comfortable with online shopping and alternative retailing

locations, and stiff competition have greatly influenced the company‟s performance.

The participant indicated that the leaders reacted to the environmental change

with a sense of urgency and that they have managed to keep costs and debt under control,

restructured the company, invested in people strategically, redesigned stores to

differentiate the company‟s brands, optimized merchandise presentation, and improved

customer experience. He mentioned that he has tried to find as many ways as possible to

engage and motivate his team, created a shared vision, provided accurate and timely

information to stakeholders, received a good deal of feedback, and increased

performance. He then said that as a result of these strategies and actions the leaders had

managed to stabilize the business, developed smoother relationships with stakeholders,

and increased sales revenue.

Participant IIID08. Participant IIID08 indicated that the senior leaders set goals

and review or develop the company‟s strategic plan based on the CEO‟s ideas. The

participant stated that the 2008 recession was the most recent environmental change that

adversely impacted the company, making discretionary spending a luxury. He added that

regulations related to international trade and competition also impacted the company. He

admitted that he experienced a high amount of stress when dealing with multiple issues in

an attempt to improve the company‟s performance.

The participant mentioned that in response to the extreme economic challenges

that took place in 2008, the company‟s executives developed a turnaround strategy that

focused on improving the company‟s financial, operational, and organizational

performance. He then commented that as a result of these strategies, the leaders managed

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to increase efficiencies, reduce costs and misconduct, increase sales revenue by satisfying

customers, and attract capital by meeting the expectations of financial institutions and

investors.

Participant IVE09. Participant IVE09 indicated that his strategic planning

process consists of identifying macroeconomic drivers, consumer drivers, market drivers,

business drivers, product drivers, technology drivers, engineering drivers, and operation

drivers of the company. He then stated that the change in the company‟s technology

environment is so rapid that a newly deployed product could be out of date in the next six

months.

The participant noted that the company‟s leaders tried to adjust to the dynamics of

the change by synthesizing analysis (planning based on the causal sequential events in

macro-economics, market, products, technology, engineering, and operation) and

judgment (flexibility). He commented, “It is the synthesis of the long-term view and

flexibility that is important.” The participant believed that the leaders‟ approach, which

focused on innovation, integrating deductive reasoning and human judgment, optimizing

risk, participation, managing flexibly, or adjusting quickly to changing situations, had

helped the company become one of the successful innovators in the industry.

Participant IVE10. Participant IVE10 noted that the senior leaders develop the

company‟s goals and strategic plan in line with the company‟s vision and mission and

assess progress and update the strategic plan on an annual basis. The participant added

that the company‟s board of directors helps develop the plan and provides the final

approval.

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The participant stated that his company was in a highly dynamic technology

industry where competitors suddenly come with new technologies. He then noted that in

order to fit the fast-changing technology environment, the leaders adapted several

strategies, including targeting underserved customer segments in the company‟s markets,

offering low-cost plans, expanding the market the company served, and improving

networks to offer technologically advanced services. He believed that these strategies

and the leaders‟ contingent leadership style and their commitment to inspire teams to get

high results while taking corrective measures have contributed to the company‟s success.

Participant VF11. Participant VF11 indicated that the senior leaders prepare a

three-year strategic plan and meet every six months to evaluate performance. The

participant stated that competition, the 2008 economic downturn, and changes in policies

and regulations of various countries, currency fluctuations, and varying prices have

negatively affected the company‟s performance. He added that he was overwhelmed by

the influence of changes in the environment and stressed by trying to overcome the

challenges and improve the company‟s performance.

The participant noted that in response to the environmental changes, the leaders

cut costs in all operational areas and set strategic goals and plans that focused on

establishing and maintaining leading market positions, improving the quality of service,

expanding in the global market, controlling costs, adapting new technology, and staff

training. He stated that these strategies helped the company acquire or build modern

theaters, invest in modern technology (e.g., digital projection technology), provide better

customer service, mobilize employee participation, build profitability, and maintain

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leading market positions in the industry despite general hard times. He then said that

investors, employees, and the board were happy with the company‟s performance.

Participant VF12. Participant VF12 indicated that the senior leaders develop the

company‟s strategic plan in line with the company‟s vision. The participant stated that

the 2008 recession, competition, and regulations related to international business had

negative impacts on the company‟s performance. He added that he was concerned about

the negative effects of the environment.

The participant noted that the leaders reacted to the recent environmental changes

by quickly cutting costs in all operational areas and developing several strategies

including changing all of the company‟s movie theaters to digital projection technology,

expanding in international markets, enhancing the skills and knowledge of employees at

all levels, and focusing on results while encouraging employee participation. He then

pointed out that guided by these strategies, the leaders managed to enhance efficiency,

adopt new technology, improve service quality and affordability, and generate positive

operating income in spite of the challenges of the economic decline and strong

competition.

Participant VIG13. Participant VIG13 stated that the top-level leaders develop

the company‟s strategic plan and communicate down the line to encourage the

participation of employees at all levels in the planning process. The participant noted

that the 2008 recession and competition were the most recent environmental changes that

eroded the company‟s revenues dramatically and forced the leaders to close some of the

branches. He then said that he was shocked by the deterioration of the company‟s

performance and felt stressed in trying to turn the company around.

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The participant mentioned that in order to respond to changes in the environment

the company‟s leaders took cost-cutting measures followed by growth strategies

including developing new products, increasing Internet-based business, and utilizing

marketing and promotional campaigns to expand market share. He then said that these

strategies and the leaders‟ willingness to address different issues flexibly, allocate the

necessary resources, encourage the participation of all primary constituents, and seek

support whenever it was needed to overcome problems helped build positive relations

with the company‟s constituents, increasing revenue and turning the company around.

Participant VIG14. Participant VIG14 noted that the company‟s senior leaders

develop strategic goals and plans based on what the company‟s leader wants to do.

Participant VIG14 indicated that due to the 2008 recession, demand for the company‟s

products declined dramatically. He added that the company‟s business has shrunk in the

past few years in part due to changes in the regulations of many states.

The participant noted that in spite of these negative consequences, the recession

opened an opportunity for the company to buy precious commodities at a cheaper price

and then resell them at a higher price. Nevertheless, the company ended up with

inventory worth millions of dollars on hand and suffered from liquidity problems. He

added that he experienced considerable stress from dealing with the problem.

The participant then said that in order to address the changes in the environment,

the leaders instituted cost-saving measures and developed growth strategies including

expanding within existing markets and beyond, attracting new customers using new

products, expanding the use of the Internet, conducting marketing campaigns to pursue

new customers, and improving customer service. He then noted that as the result of cost-

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cutting measures and revenue-generating strategies coupled with the participative

leadership approach, sales revenue increased and everyone was encouraged by the

company‟ performance.

Participant VIIH15. Participant VIIH15 stated that following a vision articulated

by the company‟s leader, senior leaders set clear goals and developed a strategic plan.

The participant noted that due to the 2008 recession the company lost many customers,

could not collect account receivables, and did not receive deliveries on time. He added

that increasing dependence on key large-format retailers with greater bargaining power to

negotiate lower prices had reduced the company‟s profitability. He then said that global

political, economic, and legal conditions that vary from country to country were

additional challenges for the leaders of the company. The participant commented that

comprehending multi-dimensional changes and trying to address many issues

simultaneously were stressful.

The participant then listed strategies developed to respond to environmental

changes including acquiring companies or product lines, retaining skilled employees,

focusing on efficiency, targeting specific regions for growth, and exiting some brands and

certain regions. The participant added that as a result of these strategies and the leaders‟

open-minded approach and effort to move very fast, provide direction and support, and

encourage participation and creativity, the company improved product quality, created a

friendly work environment, and increased sales revenue.

Participant VIIH16. Participant VIIH16 noted that the company‟s strategic

planning begins with a senior leader telling his team what he wants to achieve. Then the

senior leaders establish goals and craft a strategic plan. The participant insisted that the

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2008 recession had adversely affected the company‟s business, eroding the purchasing

power of customers, the ability of debtors to pay, and the capability of suppliers to fulfill

orders on time. He added that competition and increasing dependence on key retailers

with strong negotiating capacity for discounts had reduced the company‟s profitability.

He then said that he was shocked by the decline of sales revenue and felt a high amount

of stress from trying to address the challenges.

The participant stated that in response to changes in the environment, the

company‟s leaders developed several strategies including saving labor costs by using

international workers, targeting growth in selected markets, acquiring additional

companies or product lines, exiting some of their manufacturing operations, and

improving the underlying profitability. He mentioned that the leaders increased sales

revenue and job satisfaction with the help of these strategies and by rewarding

compliance and encouraging participation. He then indicated that the leadership team,

employees, board members, customers, and suppliers were happy with the company‟s

performance.

Participant VIIIJ17. Participant VIIIJ17 noted that the company‟s strategic plan

is developed by the strategic planning committee, comprised of five board members and

the management team. He added that the committee meets to reflect on the company‟s

mission and vision, assesses both the challenges and opportunities, sets goals, and

develops the strategic plan. The participant indicated that the 2008 recession,

competition from local and global companies, and unfavorable regulations and security

risks in some countries had negatively affected the company‟s performance and bottom

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line. He then said that he was stressed from undertaking multiple activities

simultaneously to overcome the challenges of the environment.

The participant stated that the leaders reacted to the environment by cutting

operating costs, concluding several acquisitions and divestments to manage the

company‟s portfolio, investing primarily in technology businesses, and focusing on

product innovation and market development. He added that these strategies supported by

team participation helped leaders increase sales revenue and develop a positive

relationship with stakeholders despite strong headwinds from a weak and uncertain

economy.

Participant VIIIJ18. Participant VIIIJ18 stated that the strategic planning

committee sets strategic goals to be achieved in five years and develops strategies to

achieve these goals. The participant noted that his company is in a technology

environment where change is very rapid and competition is fierce and violent. He stated

that the 2008 recession had a negative impact on the company‟s performance, decreasing

customer orders, reducing the availability of materials, and increasing doubtful

receivables. He then indicated that he was stressed from reacting to various external

changes happening simultaneously.

The participant then noted that in response to the environmental changes the

leaders took cost-cutting measures and developed marketing and innovation strategies.

He indicated that the company‟s leaders managed to turn the business around and

increase sales revenue, utilizing the contingency approach. He added that the company‟s

leaders and employees were happy to turn the business around and increase sales

revenue.

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Participant IXK19. Participant IXK19 stated that the senior leadership team

charts the company‟s strategic plan. He added that upon approval by the board the

leaders share the plan with employees at all levels and discuss the implementation

process. The participant noted that due to the 2008 recession, the primary customers

reduced the amount of buying they did from the company. Consequently, sales revenues

from brands that targeted primary customers declined dramatically. He then said that he

was concerned about the declining trend of the company‟s financial performance and

worried about getting back the primary customers.

The participant indicated that the company‟s leaders had tried to respond to

changes in the environment by adopting multiple strategies, including strategies aimed at

improving customer service, customizing products, targeting new consumer groups with

new products, and minimizing loss by cutting costs. He believed that as a result of these

strategies and the leaders‟ approach to balancing efficiency, productivity, and employee

participation (depending on the reality on the ground) the company increased sales

revenue. He then said that the board members and employees were pleased with the

recent performance report.

Participant IXK20. Participant IXK20 noted that the senior leaders prepare the

company‟s five-year goals and strategic plan. The participant stated that the 2008

recession and an increase in raw material costs were the two major environmental factors

that negatively affected his company‟s performance. He added that as a result of the

2008 economic turndown the price of imported raw materials increased sharply and

customers reduced buying the company‟s product, causing the company‟s sales revenue

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to decline dramatically. He then said that he was shocked by the adverse effects of the

environment.

The participant then stated that in order to overcome the negative effects of the

recent recession the leaders cut costs in most areas; developed efficient inventory

management systems; established value-added services such as buying online, free

delivery, and return-at-stores; and adopted a contingency approach to put the company on

track. He then mentioned that he felt a sense of relief when he saw an increase in the

company‟s sales revenue and noticed that everybody was happy about the company‟s

performance.

Stage 5: Themes for All Interviews

At this step the researcher looked for themes common to most or all of the

interviews. Accordingly, the researcher prepared a list of 245 scrutinized significant

statements (Appendix H) from groups of recurrent ideas of each participant identified in

Stage 3. From these groups of recurrent ideas and scrutinized statements, six themes that

all participants described as basic ideas emerged. These common themes are strategic

planning process, environmental change, experiences of personal tensions, response to

environmental change, leadership style, and effects of the response approach (Appendix

I). The themes identified in this step are different from the significant statements and

groups of main ideas discussed in previous steps in the sense that in earlier steps the

focus was on the recurrent ideas of each participant and in this step the focus is on the

main ideas (themes) common to all participants.

Theme 1: Strategic planning process. Strategic planning process emerged as

the most significant theme from all participants‟ descriptions of their lived experience of

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a tension between strategic planning and responding to a rapidly changing environment.

All participants said that they either follow a vision-based or a goal-based strategic

planning approach.

Participants IA01 and VIIIJ17 spoke of their vision-based strategic planning

process:

Participant IA01 said,

In our case [the] strategy-making process begins with the vision of the CEO. The

CEO would say that he wants to double PS in five years or he wants to articulate

to shareholders a value proposition and would ask, “What‟s it going to take to do

that?” The brand leaders come up with the idea that is going drive the CEO‟s

initiative. (Participant IA01, personal communication, October 18, 2012)

Participant VIIIJ17 stated,

The company‟s five-year strategic plan is developed by the strategic planning

committee, including five board members together with the management team.

The committee meets to reflect on the company‟s mission, vision, core values,

and underlying assumption and assesses both the challenges and opportunities the

company is likely to face over the next five years, conducting interviews with

stakeholders and reviewing demographic and market data. (Participant VIIIJ17,

personal communication, November 19, 2012)

Five participants (IA02, VF11, VIG13, VIIIJ18, and IXK19) referred to their

company‟s goal-based strategic planning process. Participant IA02 noted, “Our senior

leaders and experts develop the company‟s strategic goals as a group and managers and

employees in brands discuss on the plan and take all necessary measures to implement

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the plan.” Participant VF11 said, “The leaders prepare three-year goals and meet every

six months to evaluate performance.” Participant VIG13 stated, “The top-level leaders

make the goals and strategies of the company and persistently communicate down the

line to encourage the participation of employees at all levels in this planning process.”

Participant VIIIJ18 commented, “The strategic planning committee picks five years into

the future and then sets specific goals to be achieved by that time.” Participant IXK19

mentioned, “The Company‟s leadership team charts a strategic framework for the

company, involving employees and other stakeholders. The CEO then discusses the

progress and what he wants to implement with the senior leaders who involve in setting

goals.”

Twelve participants (IIB03, IIB04, IIC05, IIC06, IIID07, IIID08, IVE10, VF12,

VIG14, VIIH15, VIIH16, and IXK20) indicated both vision and goals when discussing

their strategic planning process. Participant IIB03 said,

The company‟s leadership team develops a five-year plan and short-term goals as

a group. It also meets on an annual basis to review the company‟s strategic goals.

Every two years we will look at the financial models, we look at the areas we

want to grow and adjust based on what is going on in the market. (Participant

IIB03, personal communication, October 22, 2012)

Participant IIB04 stated, “The Company‟s strategic planning process begins with

the top-level leaders‟ ideas about the company‟s performance. Then the senior leaders

come together to assess the situation and develop the company‟s strategic goals and

plan.” Participant IIC05 noted, “I present core issue[s] to be addressed to the senior

leaders and the senior leadership team identifies the goals that must be attained,

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develop[s] the necessary strategies, and establish [es] the necessary roles and

responsibilities required to implement these strategies.”

Participant IIC06 mentioned, “The Company‟s leaders identify what actions they

have to undertake to achieve the company‟s mission, establish goals, and develop

strategies.” Participant IIID07 said,

The senior leaders discuss the vision and explicitly evaluate the environment and

the company‟s resources to set goals and develop strategies. They review each

strategy annually to determine how the strategies have been implemented and

whether it has succeeded or needs replacement by a new strategy to meet changes.

(Participant IIID07, personal communication, October 31, 2012)

Participant IVE08 stated, “When the CEO presents a new idea for us to work on,

or at the end of each fiscal year, the senior leaders meet to review and develop the

company‟s goals and strategies.” Participant IVE10 noted,

The leaders create reachable goals and strategies in line with the company‟s

vision and mission with active participation of staff. The company‟s board of

directors helps develop the plan and provide final approval. The senior leaders

review and update the strategic plan on an annual basis. (Participant IVE10,

personal communication, November 07, 2012)

Participant VF12 mentioned, “Embracing the company‟s vision, the leaders

develop strategic goals and plans with participation of employees.” Participant VIG14

said, “The Company‟s strategic planning process begins with what our senior leader

wants to do and then the leaders develop goals and strategies.” Participant VIIH15 stated

“Following a vision articulated by the company‟s senior leader, the company‟s leaders

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spend a good deal of time on setting clear goals, scoping out strategic choice, and

defining the roles and responsibilities of teams.”

Participant VIIH16 noted “The Company‟s strategic planning begins with a leader

telling his team what he wants to achieve regarding issues faced by the company.

Embarking on these issues, the senior leaders establish goals and craft strategies.”

Participant IXK20 mentioned, “The Company‟s strategic planning process aims at

realizing the company‟s mission. Company leaders prepare five-year goals and strategies

and break them further into yearly and quarterly plans for implementation.”

Participant IVE09 did not explicitly mention either a vision-based or goal-based

process. This may seem an outlier. However, the participant used phrases such as

“because it is very hard to predict three to five years out… It is really about looking at

macro-economics, market dynamics, the business dynamics, what consumers need, and

so forth”. These phrases may imply a goal-based or vision-based process.

Theme 2: Environmental change. All of the participants perceived

environmental change as a noteworthy theme relating to the leaders‟ lived experience of a

tension between strategic planning and responding to a rapidly changing environment

(Appendix K). Theme 2, environmental change, consisted of five sub-themes: (a) the

recession of 2008, (b) regulation change, (c) technological change, (d) competition, and

(e) social (demographic) change.

The recession of 2008. Seventeen participants (IA01, IA02, IIB03, IIB04, IIC05,

IIC06, IIID08, VF11, VF12, VIG13, VIG14, VIIH15, VIIH16, VIIIJ17, VIIIJ18, IXK19,

and IXK20) said that the 2008 recession (economic decline) was the most recent

environmental change that impacted their companies. Participant IA01 said,

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The 2008 economic downturn has adversely impacted the company in two ways.

First, an increase in the rate of unemployment and decrease in the income forced

individuals to focus on saving more and not spending much. Second, the

crumbling of banks [and] the lack of resources adversely impacted the company‟s

capital market equity and debt. (Participant IA01, personal communication,

October 18, 2012)

Participant VF11 noted, “The decline in the consumers‟ discretionary income as a

result of the 2008 economic downturn has negatively affected our operation.” Participant

VIIH16 indicated, “The 2008 global economic recessions and credit market disruptions

around the world have adversely affected the company‟s business by eroding the ability

of customers to buy, debtors to pay, and suppliers to fulfill orders on time.” Fourteen

participants (IA02, IIB03, IIB04, IIC05, IIC06, IIID08, VF12, VIG13, VIG14, VIIH15,

VIIIJ17, VIIIJ18, IXK19, and IXK20) used somewhat different words but shared very

similar thoughts.

Regulation change. Eight participants (IIC05, IIC06, IIID07, VF11, VF12,

VIG14, VIIH15, and VIIIJ17) stated that regulation change was the most recent

environmental change that impacted their companies. Participant IIC05 mentioned,

“Healthcare reform [was] the major [development] that [has] significantly impacted this

company‟s business.” Participant IIID07 noted, “Since a substantial portion of the

company‟s business is performed in a global market, issues related to international trade

and regulations have had an impact on the company‟s performance.” Participant VF11

stated, “Changes in policies and regulations of various countries have negatively affected

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our operations.” Participants IIC06, VF12, VIG14, VIIH15, and VIIIJ17 gave very

similar descriptions of the recent environmental changes and their effects.

Technological changes. Participants IVE09 and IVE10 stated that the

technological changes were the most recent environmental changes that impacted their

company. Participant IVE09 stated,

The change in the company‟s environment is very rapid, meaning the rate of the

change of the technology as a function of time is so fast that whatever we deploy

is going to become obsolete. The technology is changing so rapidly that our

strategy has to be in a way that we can adaptively adjust to the dynamics of the

change. (Participant IVE09, personal communication, November 07, 2012)

Participant IVE10 used slightly different words but gave much the same explanation.

Competition. Participants IIID07, VF11, VF12, VIIH16, and VIIIJ17 mentioned

that competition was the most recent environmental change that impacted their

companies. Participant IIID07 commented,

The declining of the popularity of malls to generate customer traffic as customers

have become more comfortable with online shopping and alternative retailing

locations and stiff competition have greatly influenced the company‟s

performance… We compete with many large retailers that offer similar goods

with lower prices. (Participant IIID07, personal communication, October 31,

2012)

Participant VF11 stated, “A significant increase in the popularity of these

competing forms of entertainment [among others] negatively affected our operations…

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Nevertheless the high potential market of Latin America can provide incremental growth

opportunities.” Participant VIIH16 noted,

Competition against well-known companies with greater financial resources to

offer a more competitive price has increased pricing and product sales pressure…

Increasing dependence on key retailers has forced us to offer sales discounts

which in the end reduced our profitability. (Participant VIIH16, personal

communication, November 16, 2012)

Participants VF12 and VIIIJ17 shared similar thoughts.

Social (demographic) change. Participants IIB04 and VF11 indicated that

demographic change is the most recent environmental change that impacted their

companies. Participant IIB04 noted, “The Company saw a demographic opportunity with

10,000 Americans turning 65 every day. This is a golden opportunity because the elderly

need far more medical care while the nation is facing a primary-care physician shortage.”

Participant VF11 gave a somewhat similar explanation.

Theme 3: Response to environmental change. Response to environmental

change emerged as a significant theme of the lived experience of all participants. Theme

3, response to environmental change, consisted of sub-themes: (a) prompt response, (b)

reviewing/changing strategic plans, (c) integrating long-term view and flexibility, and (d)

balancing stakeholder expectations. All of the participants perceived prompt response,

strategic review/change, integrating long-term view and flexibility, and balancing

stakeholder expectations as important attributes of the leaders‟ lived experience of a

tension between strategic planning and responding to a rapidly changing environment.

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Prompt response. The participants noted that they quickly reacted to

environmental changes, taking actions such as decreasing all operational costs, cutting

labor costs, and closing unprofitable branches. Participant IA02 stated,

The company‟s leaders had reacted quickly to increase efficiency through

multiple cost-cutting methods such as the decision to sell a majority interest in

one of the company‟s brands and to reduce the costs associated with managing the

restaurants. In addition to cost-cutting measures, the company focused on driving

guest satisfaction, team member engagement, and positive sales. (Participant

IA02, personal communication, October 18, 2012)

Participant IIB03 noted, “People were taking pay cuts, no bonuses, 5% across the

board pay reduction and we went from 7,200 people to 5,900 people in the company.”

Participant IIC06 mentioned, “In responding to this economic decline, we focused on

cutting costs and waste in all operations and on enhancing service quality.” Participant

IIID07 mentioned, “We acted with a sense of urgency and as a result we have managed to

keep costs and debt under control.” Participant VIG13 stated, “In order to respond to the

changes in the environment, the company‟s leaders took cost-cutting measures. These

included such approaches as closing unprofitable centers and layoffs.”

Participant VIG14 said, “In order to address the changes, the leaders instituted

cost-saving measures. These include such measures as closing unprofitable centers and

eliminating nonessential jobs.” Participant VIIIJ17 mentioned, “We cut operating costs

and a wide range of expenditures by canceling or combining multiple functions and by

reducing employment. The company slashed 1,700 jobs.”

Participant VIIIJ18 stated,

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In order to overcome the challenges of the environment, the leaders promoted and

implemented cost-cutting measures, marketing strategy, and innovation

strategies… the company reduced operational costs and expenses by using various

mechanisms such as reducing assets, focusing on core business, closing

unprofitable plants, and reducing labor cost. (Participant VIIIJ18, personal

communication, November 19, 2012)

Participant IXK20 noted, “In order to overcome the negative effects of the recent

recession, the leaders cut costs by freezing hiring, retrenchment, discontinuing poorly

performing brands, and closing unprofitable outlets, whilst developing new products.”

Reviewing/changing the strategic plan. The participants described the

concentrated time and effort dedicated to reviewing or changing long-term goals and

strategies to overcome the challenges or capture the opportunities created by changes in

the environment. Participant IA01 noted,

The company‟s leaders have changed the strategy from that of a growth company

where they would build restaurants [in] various places and grow top-line revenues

to that of a more cost-focused [company] that would provide higher service to

their customers along with reducing their labor cost, changing the service

approach from a one-on-one to a more zoned approach where more servers work

more tables and adding a conveyor technology at the back of the house in the

kitchen. (Participant IA01, personal communication, October 18, 2012)

Participant IA02 said,

The move to a higher franchise mix has helped to diversify the risk in our

company‟s portfolio and has offered an opportunity for us to expand in the global

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marketplace through global franchise partners who share the company‟s spirit of

hospitality within their own communities. (Participant IA02, personal

communication, October 18, 2012)

Participant IIB03 mentioned, “In the 2007 strategic plan, we changed the company‟s

strategy from occupational medicine to consumer health urgent care… patients go on

their own to the company‟s clinics when they are sick instead of being sent by their

employers.”

Participant IIB04 noted, “Before 2012, our company‟s strategy focused on

expanding from occupational medicine to urgent care. Since 2012, company leaders have

pushed into primary care practice to utilize opportunities created by demographic

changes and healthcare reform.” Participant IIC05 said, “The Company‟s growth strategy

in response to the recent environmental changes has focused on buying or building

medical centers and entering joint ventures.” Participant IIC06 conveyed, “Taking into

consideration the healthcare reform coming in 2014, the company‟s leaders focused on

attracting highly skilled professionals, growing through selective domestic acquisitions,

and developing surgical facilities while pursuing alliances with local health institutions

and enhancing operating efficiencies.”

Participant IIID07 mentioned, “We changed the company‟s organizational

structure, invested in people strategically, redesigned stores to differentiate the

company‟s brands, optimized merchandise presentation, and improved customer

experience.” Participant IIID08 mentioned, “Due to the economic decline that occurred

during 2008, significant changes were made to the company‟s executive management

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team. The new executive team developed a multi-year turnaround strategy focusing on

improving the company‟s business financially, operationally, and organizationally.”

Participant IVE09 indicated, “Our leadership approach of focusing on innovation,

optimizing risk, inspiring teams, managing flexibly, or adjusting quickly to changing

situations has helped the company to be successful within a dynamic industry.”

Participant IVE10 noted,

In order to win competition and grow continuously, the company adapted several

strategies, including targeting underserved customer segments in the company‟s

markets, presenting low-cost plans, expanding the market around the metropolitan

areas the company currently serves, and making significant improvements to the

company‟s network to offer technologically-advanced services. (Participant

IVE10, personal communication, November 07, 2012)

Participant VF11 explained,

We cut costs in all operational areas, developed goals, and reviewed the strategic

plan, focusing on six areas: establishing and maintaining leading market

positions; developing high-quality services; controlling costs; expanding globally;

creating technological innovation by, for example, extending mobile ticketing;

and implementing additional staff training. (Participant VF11, personal

communication, November 09, 2012)

Participant VF12 pointed out,

With the purpose of maintaining industry leadership the company‟s leaders

developed several strategies, including transmuting all of the company‟s movie

theatres to digital projection technology, expanding to geographically diverse

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areas, and enhancing the skills and knowledge of employees at all levels. In order

to turn around the company, the leaders aggressively accomplished tasks and

produced results while encouraging employees to play [an] active role with a team

spirit. (Participant VF12, personal communication, November 09, 2012)

Participant VIG13 stated, “In order to respond to the changes in the environment

we followed growth strategies including expanding the lending business, developing new

products, increasing Internet-based cash advance, and utilizing marketing and

promotional campaigns to expand market share.” Participant VIG14 indicated,

In order to address the changes, the leaders focused on developing and

implementing growth strategies including expanding lending within existing

markets and beyond, attracting new customers using new products, expanding the

use of Internet for cash lending, conducting marketing campaigns to pursue new

customers, and improving customer service. (Participant VIG14, personal

communication, November 13, 2012)

Participant VIIH15 explained,

Participant VIIH16 stated, “We targeted growth in selected markets, acquiring

additional companies or product lines, and exiting some of the manufacturing operations,

and improving the underlying profitability.” Participant VIIIJ17 said, “We concluded

several acquisitions and divestments to manage the company‟s portfolio, invested

primarily in technology businesses, and focused on product innovation and market

development.”

Participant VIIIJ18 stated, “The Company promoted innovation by investing in

new product development and modification. We diversified our market by putting in

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place marketing techniques that would help the company get attention from particular

groups and add value to products and services.” Participant IXK19 remarked,

The company‟s leaders have tried to address the impact of the recession and the

change in the consumers‟ buying behavior by adopting multiple strategies

including getting back the primary customer group (men 45+) by using various

marketing techniques, targeting new consumer groups with new products, and

minimizing loss by cutting costs. (Participant IXK19, personal communication,

November 22, 2012)

Participant IXK20 explained,

The leaders focused on protecting gross margin by way of loss prevention and

efficient inventory-management systems. The leaders provided customers with

consistent brand and service offerings throughout their stores, online, at

commerce sites such as Amazon.com and at major retailers‟ websites. The

leaders tried to establish brand loyalty through value-added services such as

buying online, free delivery, and return-at-stores. (Participant IXK20, personal

communication, November 26, 2012)

Meanwhile, 17 participants said that their senior leadership teams participated in

the above-discussed strategic plan review or change process. Two participants (VIIIJ17

and VIIIJ18) both from the same company, said that in addition to the management team

there were five board members on the planning committee responsible for developing the

strategic plan. Participant VIIIJ17 noted, “The Company‟s five-year strategic plan was

developed by the strategic planning committee, including five board members together

with the management team.” Participant VIIIJ18 stated, “The strategic planning

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committee picked five years into the future and then set specific goals to be achieved by

that time.” One participant (IIC05) indicated that he hired an external consultant.

Participant IIC05 said, “in order to assess the impacts of the recent changes objectively

and develop a response strategy, the company‟s leaders hired one of the prominent

consulting firms to develop the company‟s plan, which is now in the midst of

implementation”.

Integrate long-term view and flexibility. All participants mentioned the need to

integrate taking quick actions that address environmental changes while implementing

long-term strategies. Participant IA01 stated,

It is very hard to integrate strategic planning and responding to environmental

change. It is hard because… everywhere relation has a sense of silos. In order to

break silos and react holistically, the strategic planning and responding to the

environmental change must come together in a balanced way. (Participant IA01,

personal communication, October 18, 2012)

She added, “There is a situation when you have to act quickly and a situation when you

need to see a trend and mature a little bit… it is a mix and it is the matter of balancing.”

Participant IIB03 said,

A business leader must keep the balance between long-term plan and having

results… You can‟t go without a plan and you can‟t spend all of your time

dreaming that plan… You got to have a plan and you got to spend a prerequisite

amount of time executing against that plan to be successful. (Participant IIB03,

personal communication, November 22, 2012)

Participant IVE09 commented,

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It is the synthesis of the long-term view and flexibility that is important…

statistically this synthesis approach is much safer to do. If you do not do

reasoning, the process is reckless… the parts that are not quantifiable should just

lead one to make a good judgment. (Participant IVE09, personal communication,

November 07, 2012)

Balance stakeholder expectations. All participants indicated that the secret for

success is the ability to increase the bottom line, meeting stakeholder expectation in a

balanced way. Participant IIB03 commented, “When you focus on five constituents –

your employees, your customers, leaders, people you partnered with and your

shareholders – you will have happy employees, happy customers, happy partners, and

happy shareholders.” Other participants said the same thing, but in slightly different

words.

Theme 4: Experiences of personal tensions. All of the participants noted that

they experienced personal tension from trying to respond to a rapidly changing

environment while addressing long-term strategic plans. Theme 4, experiences of

personal tensions, consisted of two sub-themes: (a) not comprehending the sudden

change and (b) putting too much energy into multiple activities simultaneously.

Not comprehending the sudden change. Ten participants (IA01, IA02, IIB03,

IIB04, IIC05, IVE10, VIIH15, VIIIJ17, IXK19, and IXK20) indicated that they were

stressed from worrying about the negative effects of the environmental change.

Participant IA01 said, “I was stressed from wondering continually what was going to

happen to the company and what strategy to follow and from trying to address multiple

issues simultaneously.” Participant IA02 noted, “The environmental change and the

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response process created frustration, anxiety, and stress on employees at all levels. I

worried about how to motivate my team and at times felt pulled in too many directions.”

Participant IIB03 mentioned,

I was emotional and in disbelief that we lost 20% revenue but still had to pay

bills. I was upset for suffering from the external factor that we could not control.

I was depressed about the whole situation and was unable to sleep. (Participant

IIB03, personal communication, October 22, 2012)

Participant IIB04 said, “As the recession continued to cloud economic growth, I

was concerned about the growth of the company.” Participant IIC05 explained,

I worried about the possible effects of the healthcare reform… I worried that if

we did not adjust our strategy and react quickly, we would be left behind in a very

competitive industry… I couldn‟t sleep during those stressful times, thinking

about the worst scenarios that could happen. (Participant IIC05, personal

communication, October 26, 2012)

Participant IVE10 said, “I was concerned about the company‟s universal ability to

effectively overcome the challenges of the rapidly changing technological environment.”

Participant VIIH15 said, “I worried that these situations could be detrimental to my

business.” Participant VIIIJ17 noted, “As a result of these adverse factors, the company‟s

revenue declined by 12%… I was stressed by the performance results.” Participant

IXK19 explicated, “I was concerned about the declining trend of the company‟s financial

performance and I‟ve worried about the return of our primary customers.” Participant

IXK20 explained, “I was shocked by the erosion of our company‟s financial performance

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and I was concerned about our ability to maintain the current price and customers‟

reactions to any price or quality change.”

Putting too much energy into multiple activities simultaneously. Eleven

participants (IIC06, IIID07, IIID08, IVE09, VF11, VF12, VIG13, VIG14, VIIH15,

VIIH16, and VIIIJ18) pointed out that they felt stress from trying to accomplish multiple

activities simultaneously. Participant IIC06 said, “We have been extremely busy

planning and preparing to fit into the newly evolving healthcare environment. This has

created frustration and stress on leaders and employees.” Participant IIID07noted,

“Along with sales coming under pressure and expenses rising, more than 10 talented

leaders resigned… It was [a] challenging and stressful time.” Participant IIID08

elucidated, “I experienced a high amount of stress when dealing with multiple issues and

the deterioration of the company‟s performance.” Participant IVE09 explained, “In

practice the process is very frustrating; especially leading a technology company where

things change very fast and competitors launch new products every six months is

stressful.” Participant VF11 admitted, “I was overwhelmed by the influence of the

economic meltdown and stressed by trying to find solutions for our company‟s poor

performance.”

Participant VF12 said, “I worried that if we did not react quickly and

appropriately the changes of the environment could have [a] detrimental effect.”

Participant VIG13 stated, “The trend was very scary for me. I was shocked by the

deterioration of [the company‟s] performance and felt stressed in trying to address the

problem.” Participant VIG14 noted, “It was a very challenging and distressing time for

me. I felt like we were losing balance and direction and experienced a considerable stress

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in dealing with the many problems.” Participant VIIH15 said, “Overcoming a 15%

decline in sales was stressful.” Participant VIIH16 discussed, “We were shocked by the

15% decline in our sales revenue and felt a high amount of stress from trying to address

the issues.” Participant VIIIJ18 said, “Because of the level of stress I was experiencing, I

felt my energy level drop during this time and ultimately I was drained. Nevertheless, I

kept on playing an active role to overcome the challenges and fit the environment.”

Theme 5: Leadership style. In this study, all participants discussed their

leadership style (Appendix L).

Theme 5, leadership style, consisted of three sub-themes: (a) servant leadership,

(b) contingency leadership, and (c) participative leadership.

Servant leadership style. Participant IIB03 indicated that he practiced a servant

leadership style. He stated,

I view myself as a servant leader who takes the traditional pyramid of leadership

turn[ed] upside down… I want our people in leadership roles to view themselves

as equippers… So if you work for our company, our goal is to help you reach

your full potential. (Participant IIB03, personal communication, October 22,

2012)

Contingency leadership style. Six participants (IA02, IIID08, IVE10, VIG13,

VIIIJ18, and IXK20) noted that they followed the contingency leadership style.

Participant IA02 stated, “The leaders openly communicate to all stakeholders to involve

them in decision-making processes and change flexibly to fit a specific situation.”

Participant IIID08 noted, “The leaders have adopted a more aggressive approach that fits

various specific situations and different groups.” Participant IVE10 said, “The

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Company‟s leaders make decisions flexibly depending on situations and inspire teams to

participate and innovate. They take corrective measures to get high result[s].”

Participant VIG13 explained, “The leaders‟ willingness to address different issues

flexibly, allocate the necessary resources, and seek support whenever needed to

overcome problems has helped them build positive relations with their constituents and

turn around the company.” Participant VIIIJ18 mentioned, “The leaders tried to address

leadership issues and take actions, considering the specific situation of a country or a

region or a group with which they were dealing.” Participant IXK20 explained, “The

leaders adopted a flexible approach that put the company on track.”

Participative leadership style. Thirteen participants (IA01, IIB04, IIC05, IIC06,

IIID07, IVE09, VF11, VF12, VIG14, VIIH15, VIIH16, VIIIJ17, and IXK19) said that

they followed the participative leadership style. Participant IA01 said, “I believe our

leadership approach is focused on engaging people at all levels.” Participant IIB04

stated, “We are committed to employee participation and development, to lower costs,

deliver quality services, and build healthy long-term relationships with primary

stakeholders.” Participant IIC05 stated, “The leader‟s participative approach [has]

increased employee performance and retention rate, quality of services, relations with

stakeholders, and sales revenue.”

Participant IIC06 noted, “The participative leadership approach followed by

company leaders has helped in creating a common understanding of company goals while

increasing employee motivation and performance as well as client satisfaction and sales

revenue.”

Participant IIID07 mentioned,

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As a leader I have tried to find as many ways as possible to engage and motivate

my team, create a shared vision, increase performance, and provide accurate and

timely information to stakeholders and receive a good deal of feedback.

(Participant IIID07, personal communication, October 31, 2012)

Participant IVE09 stated, “The Company‟s leaders tried to create an environment

that encourages innovation and active participation.” Participant VF11 explained, “I

encouraged my team to actively participate and play the vanguard role in addressing the

changes in the environment.” Participant VF12 pointed out, “The leaders are committed

to engage and empower employees while focusing on the strategic goals.” Participant

VIG14 indicated, “We focused on a participative approach whereby employees at all

levels were involved in the process.” Participant VIIH15 indicated, “The leaders

followed [an] open-minded approach and made [an] effort to move very fast, telling their

teams what to do, engaging them by providing direction and support, and encouraging

creativity.”

Participant VIIH16 mentioned, “We focused on achieving results by rewarding

compliance and encouraging participation and creativity. We developed team members‟

skills and enhanced their job satisfaction. We kept all employees focused on the needs of

customers.” Participant VIIIJ17 stated, “The leaders focused on managing performance,

encouraging team members to actively participate in the company‟s goal setting and

implementation process.” Participant IXK19 remarked, “The leaders‟ approach was to

keep the balance between efficiency, productivity, and employee participation depending

on the reality on the ground.”

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Theme 6: Effects of the response approach. All of the participants mentioned

the positive effects of their response approach as a lived experience. Theme 6, effects of

the response approach, consisted of two sub-themes: (a) effects on the company and (b)

effects on stakeholders and the company.

Effects on the company. Nine participants (IA01, IIB03, IIB04, IIID07, IVE09,

IVE10, VF12, VIG13, and IXK19) indicated that their response approach helped them

improve their company‟s performance. Participant IA01 stated, “We implemented our

plans effectively and improved the performance of the company.” Participant IIB03 said,

“We ended up with a strong company that survived a dramatic environmental effect, the

downturn of the economy.” Participant IIB04 stated, “I noticed positive development

trends in the past three consecutive quarters‟ reports.” Participant IIID07 said, “In 2011

we stabilized the business and attained positive sales. In 2012, we gained revenue growth

of 7.1%, and developed smoother relations with stakeholders.”

Participant IVE09 stated, “The Company became one of the successful innovators

in the industry.” Participant IVE10 said, “I was delighted with implementing the plans

and increasing sales by 9%.” Participant VF12 pointed out, “We enhanced efficiency,

adapted new technology, and improved service quality and affordability. We generated

positive operating income in spite of the challenges of the economic crisis and strong

competition.” Participant VIG13 discussed, “We built positive relations with our

constituents and turned around the company and increased revenue by 15% at the end of

2012.” Participant IXK19 remarked, “The Company reported an 8% increase in revenue

in 2012.”

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Effects on stakeholders and the company. Eleven participants (IA02, IIC05,

IIC06, IIID08, VF11, VIG14, VIIH15, VIIH16, VIIIJ17, VIIIJ18, and IXK20) stated that

their response approach helped them improve their company‟s performance and enhance

stakeholder satisfaction. Participant IA02 noted,

Our strategies have guided the company through this challenging time and

resulted in better employee engagement and motivation, [a] disciplined and strong

leadership team, changes in front- and heart-of-house processes, increased service

quality, positive financial performance, and guest satisfaction. (Participant IA02,

personal communication, October 18, 2012)

Participant IIC05 commented, “These strategies, coupled with the leader‟s

participative approach, have increased the company‟s employee performance, employee

retention rate, quality of services, relations with stakeholders, and sales revenue.”

Participant IIC06 mentioned a “common understanding of company goals, increase in

employee motivation and performance as well as client satisfaction and sales revenue.”

Participant IIID08 elucidated, “The leaders managed to turn around the company by

increasing efficiencies or reducing cost and misconduct, increasing sales revenue by

satisfying customers and attracting capital by meeting the expectations of financial

institutions and investors.” Participant VF11 explained, “We mobilized employee

participation, built profitability, and maintained leading market positions in the industry

with 8% growth despite general hard times… Investors, employees, and the board were

happy with the company‟s performance.”

Participant VIG14 indicated, “We quickly responded and stopped the bleeding…

When the company‟s revenue increased by 15% as the result of cost-cutting and revenue-

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generating strategies, everyone became happy with the company‟ performance and the

leaders felt encouraged.” Participant VIIH15 mentioned,

The company maintained a strong financial position, showing progress with our

targeted growth initiatives, and created value propositions for our stakeholders.

The company exhibited a volume growth in excess of 9% in 2012, improving the

quality of our products and services… [It] created a friendly work environment

with better financial benefits for our employees. (Participant VIIH15, personal

communication, November 16, 2012)

Participant VIIH16 indicated, “The leaders kept all employees focused on the

needs of customers, which through time increased sales revenue by 9%… The leadership

team, employees, board members, customers, and suppliers seem to be happy with the

company‟s performance.” Participant VIIIJ17 stated, “We turned around the company by

generating a 12% sales increase despite strong headwinds from a weak and uncertain

economy. The company‟s response approach and improved performance has helped our

company leaders maintain a positive relationship with stakeholders.” Participant VIIIJ18

remarked, “The Company‟s leaders managed to turn around the business in 2012,

increasing sales by 12%. The leaders and employees were happy about allocating the

necessary resources and putting the necessary effort to bring the envisioned success.”

Participant IXK20 explained, “The Company‟s sales grew by 8%. Everybody was happy

about the company‟s performance.”

Outlier Position

Three responses differed widely from the trends that emerged related to the

environmental changes theme and company responses to those changes. The first two

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were problems resulting from initially not responding effectively to the environmental

changes. Participant IA01 shared that not realizing the early signals of financial crisis

had led to the company having a liquidity problem (lack of cash to run the business).

Participant IA01 also recalled the company‟s losses from acquiring technology that was

soon outdated. The third was a participant who profited from the economic downturn.

Participant VIG14 noted that he felt confident and successful when the recession hit in

2007, because he managed to buy a lot of merchandise from troubled individuals and

businesses and sold them at a higher prices later on. The researcher has omitted these

differing explanations because they did not seem to have an impact on the result of the

research.

Summary

The researcher concluded the explication by writing a composite summary, which

must reflect the context or horizon from which the themes emerged (Hycner, 1999;

Moustakas, 1994). Chapter 4 contains a presentation and explication of data collected

from 20 leaders in large companies with global or national headquarters location in a

single, large metropolitan area in the United States to explore the leaders‟ lived

experience of a tension between strategic planning and responding to a rapidly changing

environment. Hycner‟s (1999) qualitative data explication process was used to explicate

the data.

The researcher listened to the recorded interviews, read and reread his field notes,

prepared interview verbatim transcripts, read and reread interview verbatim transcripts,

verified verbatim transcripts, summarized each interview, selected significant statements,

grouped the significant statements into themes, identified themes common to all of the

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interviews, and explicated the common themes. In a review of the major themes in terms

of the number of participants who described the theme, six themes emerged that all

participants described as core or relevant themes to the leaders‟ lived experience of a

tension between strategic planning and responding to the rapidly changing environment.

These core themes include strategic planning process, environmental change, responses

to environmental change, experiences of personal tensions, leadership style, and the

effects of the response approach. All of the participants followed vision-based or goal-

based strategic planning process.

In response to the short-term disruptions caused by the environmental issues,

companies were forced to make major changes that have made them more competitive in

the long run.

The 2008 recession, regulation change, technological change, and competition are the

most recent environmental changes that affected the companies. In order to overcome the

problem or to attain short-term and long-term goals, the participants took prompt actions

(such as cost cutting and improving customer service), reviewed their strategies, and tried

to integrate taking a long-term view with flexibility to meet stakeholder expectations. All

of the participants reported that they were stressed from putting too much effort into

addressing multiple issues simultaneously. The participants indicated that they crafted a

vision, communicated the vision to a wide audience, involved stakeholders, managed the

company‟s competing priorities, took action flexibly and quickly, and increased bottom

line and stakeholder satisfaction. The following chapter provides the main conclusions

and recommendations that address the research questions.

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Chapter 5

Conclusions and Recommendation

The previous chapter presented each participant‟s description of his or her lived

experience of a tension between strategic planning and responding to a rapidly changing

environment as well as an analysis of six themes that emerged universally for all

participants. Chapter 5 consists of a summary of the research study, the literature

reviewed, the study findings, interpretation of the findings, implications for theory,

implications for practice, recommendations for companies participating in the study,

recommendations for further study, conclusions and summary, and reflections. The

conclusions and recommendations address the basic research question: What are the

experiences of business leaders as they seek to integrate strategic planning and

responding to a rapidly changing business environment? Two other questions related to

this basic question are also addressed: What is the nature of the tension between strategic

planning and responding to a rapidly changing business environment? What factors are

perceived to be responsible for success or failure in aligning strategic planning and

responding to a rapidly changing environment?

Summary of the Research Study

The purpose of this phenomenological study was to explore the lived experience

of a tension between strategic planning and responding to a rapidly changing

environment of 20 leaders (nine chief executive officers and 11 executive vice presidents)

in 10 large companies with global or national headquarters located in a single, large

metropolitan area in the United States. Since gathering data from leaders of all large

companies in the target population would consume huge amounts of resources (including

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time, money, and effort) a group of representative companies (a sample) was selected

from large companies headquartered in a single, large metropolitan area in the United

States. The purposive maximum variation sampling technique was used to select the

companies from the target population. Accordingly, representativeness was sought by

including companies from a broad range of industries instead of through equal probability

(Welman & Kruger, 1999). The researcher employed the phenomenological in-depth

semi-structured interview method to collect the data and followed Hycner‟s (1999)

explication process to explicate the data (bracketing the researcher‟s personal view,

extracting significant statements, putting significant statements in groups to form themes,

validation and summary of each interview, identification and analysis of themes, and

composite summary).

Literature

The literature reviewed presented descriptions of strategy as content and strategy

as a process, evolution of strategic planning, and the course of strategic planning. In

addition, theories related to the external environment were discussed, including

evolutionary environmental change theory, revolutionary environmental change theory,

punctuated equilibrium theory, and implications of changes in the external environment

for business organizations. Moreover, the literature reviewed dealt with organizational

responses to environmental change related theories, including those related to

incremental changes, radical changes, midrange changes, punctuated equilibrium, and

robust transformation. Further, four major schools of thought that are common in the

strategic management literature were examined: (a) Miles and Snow‟s (1978) three

categories of firms, (b) Whittington‟s (1993) four perspectives on strategy, (c) Rouleau

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and Séguin‟s (1995) four types of strategic discourse, and (d) Mintzberg, Ahlstrand, et

al.‟s (1998) ten schools of thought about strategy.

Furthermore, attempts that have been made to integrate schools of thought about

strategy formation were discussed. Accordingly, the most notable emerging integrating

schools of thought including the boundary school, the dynamic capability school, and the

configurational school were discussed. Furthermore, approaches to integrate strategic

planning and the rapidly changing environment including theories of self-referential

systems; leading on the edge of chaos; moving strategic planning towards strategic

foresight; aligning strategy, organizational design, and external opportunity; agility and

speed of response; holistic approach; and effective change management were assessed.

Finally the gap in the literature was identified.

The Study Findings

Six themes were uncovered in the study: strategic planning, environmental

change, responding to environmental change, experiences of personal tensions, leadership

style, and the effects of the response approach. The findings in this study revealed that

all participants followed goal- or vision-based strategic planning processes. The 2008

economic recession, regulation changes, technological changes, competition, and social

(demographic) changes were the most recent environmental changes that impacted the

companies. Because of the disruptions caused by the environmental issues, companies

were forced to make major changes that have made them more competitive in the long

run.

The findings in this study uncovered that integrating quick cost-saving actions,

reviewing strategic plans, and focusing on primary constituents were crucial to

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addressing a tension between strategic planning and responding to a rapidly changing

environment effectively. In addition, the findings showed that companies that

participated in this study successfully integrated reactive flexibility and long-term

planning. They did not, however, show evidence of proactive flexibility. Moreover, the

findings disclosed that the participants felt stress from worrying about the effects of the

environmental changes they could not control and from putting so much effort into trying

to address multiple issues simultaneously. Furthermore, the findings in this study showed

that the participants switched among leadership styles to adopt a leadership style that best

suited the types of business situations to inspire their teams, drive stakeholders in a way

that promoted their loyalty, and produce positive results. Finally, the findings in this

study showed that a shift in strategic goals and strategies and in the activities performed

to address changes in the environment helped improve the companies‟ short-term

performance and are expected to remain beneficial in the in the longer term.

Interpretation of the Findings

A comparison of the research findings and the literature reviewed revealed some

similarities. The similarities between the study findings and the literature reviewed are

found in topics related to strategic planning, environmental change, responses to

environmental change, and leadership style. The research findings related to experiences

of personal tensions were not covered in the literature reviewed in chapter 2, and were

not consistent with the findings of Sherman et al. (2012) that stated leaders report less

anxiety and stress than non-leaders, because leaders have better control over what

happens in their workplace.

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Strategic planning process

The participants stated that they developed corporate strategy, business-level

strategy, and functional strategies. The participants also noted that they followed goal- or

vision-based strategic planning processes. As noted in the literature review, strategy as

content is comprised of three different levels of organizational strategies: corporate

strategies, business-unit strategies, and functional strategies (Mintzberg, Ahlstrand, et al.,

1998). In line with these descriptions, the participants explained their corporate

strategies, including diversification, acquisition, divestment, strategic alliances, markets

in which to compete, and geographic regions in which to operate.

The participants also conveyed their business-unit strategies, which focused on

cost, diversification, and quality. Further, the participants discussed their functional

strategies related to marketing, finance, human resources, and material resources. Most

of the companies‟ flexibility was in business strategies and functional strategies.

Nevertheless, the participants did not discuss the integration between their functional

strategies, business-level strategies, and corporate-level strategies.

It is stated in the literature review that the term strategic planning is used instead

of strategy when the intent is to discuss strategy as a process. Strategic planning is

defined as a systematic process that encompasses strategic issue identification, strategy

development, strategy implementation, and monitoring and evaluation (Mintzberg,

Ahlstrand, et al., 1998, Bradford et al., 2000; Johnson & Scholes, 2002). It is mentioned

in the literature review that there are various strategic planning models including goal- or

vision-based strategic planning, issues-based planning, alignment model, scenario

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planning, organic or self-planning, and real-time planning (Liedtka, 1998b; Senge et al.

1999; Staton-Reinstein, 2003).

In these strategic planning models, a rigorous collection and analysis of data

about the far environment, which consists of political forces, economic forces, social

forces, technological forces, environmental forces, legal forces, industry structure, and

internal environment using a wide range of strategic planning tools such as SWOT

analysis, BCG matrix, portfolio analysis, value chain analysis, stakeholder analysis,

competitor analysis, force field analysis, and balanced scorecard (Grant, 2010; Kaplan &

Notron, 1996; David, 2011) is a necessary step to identify opportunities and strengths that

the firm needs to utilize and threats and weaknesses that the firm needs to overcome

(Choo, 2001; Kahaner, 1997; March & Simon, 1993b; Oxford University, 2007;

Subramanian et al., 1993). Further, an organization needs to monitor and evaluate

progress using predefined standards, make adjustments, or learn from completed plans

(Mintzberg et al., 2002).

In line with these descriptions all participants noted that they followed goal- or

vision-based strategic planning processes. The participants also said that after the recent

environmental changes (e.g., the 2008 recession, regulation changes such as healthcare

reform, technological changes, competition, and demographic changes), they focused on

assessing their environments and monitoring their strategic plans quarterly and yearly.

Some companies established distinct strategic planning units that were totally involved in

designing strategic planning processes and helping the leaders decide how to address big

business issues to improve the performance of their organizations and meet stakeholders‟

expectations. Other companies did not have strong strategic planning units and therefore

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developed their strategic plans by forming task forces or by hiring external consultants.

Participants did not discuss in detail their strategic planning processes and the strategic

planning tool(s) they used. They, however, acknowledged the challenges of today‟s fast

changing environment and the need to move to a proactive paradigm. In relation to the

basic research question, this finding implies that the leaders sought to integrate strategic

planning and responding to a rapidly changing business environment, taking some

reactive actions.

All participants spoke of the company using a top-down conventional approach

where strategic thinking occurs in the mind of the leader and then is taken to the staff for

consultation and implementation. As stated in the literature review, Whittington (1993)

identified four generic approaches to strategy development: the classical approach,

revolutionary approach, systemic approach, and processual approach. Likewise,

Mintzberg, Ahlstrand, et al. (1998) proposed ten schools of thought on strategy

formation: the classical school of thought, which includes the design school of strategy,

the planning school of strategy and the positioning school of strategy; the entrepreneurial

school; the cognitive school; the learning school; the power school; the cultural school;

the environmental school; and the configural school. Grant (1991), Hamel & Prahalad

(1994), Legge (1995), Peteraf (1993), Quinn (1980), Senge (1994), and Wernerfelt

(1984) argued that the processual approach to strategy, in which strategy is developed

through incremental processes of learning, negotiating, and compromising at the

operational level is more sensible.

When compared to these points, the participants‟ approaches to strategic planning

seemed to fit Whittington‟s (1993) and Mintzberg, Ahlstrand, et al.‟s (1998) classical

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approach. Accordingly, leaders at the top of the organization‟s ladder formulate the

strategies and communicate these strategies to the staff so that everyone can implement

them. As argued by Mintzberg (1994), by sticking to the traditional strategic planning

process, the participants may have oversimplified the complex nature of the environment

and assumed the competence to forecast accurately and the ability to formulate a strategic

plan appropriately.

Environmental Changes

The participants stated that they were impacted by evolutionary environmental

change and by one or more revolutionary environmental change(s), including the

economic recession of 2008, regulation change, technological change, competition,

regulation change (e.g., healthcare law), and social (demographic) change. It is pointed

out in the literature review that evolutionary change and revolutionary change are always

happening in political, economic, social, technological, and legal systems (Novak, 2006).

Evolutionary change necessitates changes in how firms do business but not what business

they do (Durand, 2006). Revolutionary change necessitates changes in what the firms do

and often requires retooling the entire firm (Gersick, 1991). In conformity with these

descriptions of environmental change, all participants reported that they were impacted

by evolutionary environmental change. The participants also stated that they were

impacted by one or more revolutionary environmental change(s), including the economic

decline of 2008, fast-changing technology, stiff competition, and social (demographic)

changes.

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Responses to Environmental Changes

The participants said that their companies evolved through evolutionary changes

and revolutionary changes in the environment. As noted in the literature review

evolutionary change is a prolonged, gradual and continuous periods of growth where no

major disturbance occurs in the environment. During this evolutionary period only

incremental adjustments appear necessary for maintaining growth (Durand, 2006;

Greiner, 2000; Greiner, 1998; Sircar, et al., 2001). Revolutionary change is a substantial

change or upheaval in the organization in response to substantial turbulence in the

environment. During this revolutionary period radical change or a new set of organization

practices appears necessary for survival and growth (Kuhn, 2012; Hamel, 2001; Greiner,

1998; Tushman & O‟Reilly, 1996; Gersick, 1991). As described in the variation and

selection principle, adaptive and reactive responses and flexibility help organizations

keep up with changes in the environment (Greenwood & Hinings, 2006; Kirschner &

Gerhart, 2005; Siggelkow, 2002) when the environmental changes are incremental or

substantial.

According to Sircar, et al. (2001), organizations often respond to evolutionary

changes by making minor incremental changes in their processes or products while the

architecture remains unchanged. Durand (2006) stated that revolutionary environmental

change (dramatic alteration in the environment) necessitates radical changes in the

organization‟s policies and strategies. Punctuated equilibrium theory considers

evolutionary changes and revolutionary changes as complementary processes (Eldredge

& Gould, 1972; Hamel, 2001). According to punctuated equilibrium theory, both a long-

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term view and strategic flexibility must be achieved for organizations to be successful

(Singh, 2010).

In conformity with these comments, the participants stated that their companies

evolved through responding to evolutionary changes (designing and implementing long-

term and short-term plans, focusing on realistic incremental goals) and revolutionary

changes, taking quick actions such as cutting costs in most operational areas, establishing

value-added services, customizing products, and targeting new consumer groups with

new products and services. In accordance with the punctuated equilibrium theory, the

participants have tried to integrate pursuing long-term strategic goals (evolutionary

change) and responding to a rapidly changing environment (revolutionary change).

The participants reacted to environmental changes. They did not, however, show

evidence of proactive flexibility. It is stated in the background of the study and problem

description that in order to be successful in today‟s rapidly changing environment,

business organizations must achieve both a long-term view and strategic flexibility

(Conway & Voros, 2003; Grewal & Tansuhaj, 2001; Johnson et al., 2003; Khalifa, 2008;

Liedtka, 1998a; Nadkarni & Narayanan, 2007; Roberts & Stockport, 2009; Singh, 2010;

Smit & Trigeorgis, 2006; Worren et al., 2002). Nevertheless, many organizations focus

on responding to immediate changes in the environment and, as a result, suffer from loss

of direction (Hagel & Seely, 2005; McHann & Frost, 2010). Other organizations

concentrate on long-term strategic plans and, therefore, fail to exploit market

opportunities effectively (Lewis et al., 2001; Ruhanen, 2010; Siemens, 2010). Still other

organizations are said to lack strategic purity and, hence, experience confusion (Raynor,

2007; Thornhil, &White, 2007).

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In relation to these descriptions, the participants in this study stated that before the

environmental changes they focused on long-term plans with little attention to the

inevitable new developments in the external environment. When the environment

compelled them to react, the participants responded quickly by successfully integrating

reactive flexibility (e.g., cutting costs in most operational areas, establishing value-added

services, and customizing products) and developing long-term strategic plans consisting

of hybrid strategies of both cost focus and growth. They did not, however, show

evidence of proactive flexibility, which implies a lack of self-initiation and anticipation to

bring about change.

The participants tried to fit the dynamic environment by taking quick reactive

actions, adopting flexibility, and monitoring and evaluating their plans quarterly and

yearly. It is mentioned in the literature review that business leaders often have to operate

in a dynamic and rapidly changing environment, planning sufficiently fast using real-time

planning to be able to act under real-time conditions (Liedtka, 1998b; Senge et al., 1999;

Staton-Reinstein, 2003). Organizational behavior theory suggests that leaders need to be

proactive, perceive changes in the environment, accept the need to respond to changes in

the environment, develop and implement a response strategy, and plan ahead of future

circumstances (Bateman & Crant, 1993; Brill & Worth, 1997; Burnes, 1996; Carnall,

1995; Collins, 1998; Grant, 1996).

According to the theory of leading at the edge of chaos, leaders need to act

quickly and boldly and alter strategies as needed to fit a rapidly changing environment

(Murphy & Murphy, 2002). TenHaken and Cohen (2007) stated that in today‟s ever-

changing environment, the key to long-term survival and growth is to plan strategically

165

and flexibly, act creatively with agility (prompt response and minimum inertia), and

demonstrate effective communication practices. In line with these suggestions, the

participants tried to address the dynamic environment by taking cost-cutting measures,

improving the quality of services/products, and evaluating their strategic plan yearly

assuming the probability of change.

It is noted in the literature review that in order to cope with the fast-changing and

unpredictable environment, leaders must build an enormous amount of flexibility into

their organizations by moving from strategic planning towards strategic foresight

(Conway & Voros, 2003; Liedtka, 1998a; Mintzberg, 1994; Senge et al., 1999; Voros,

2003). As an aspect of strategic thinking, strategic foresight refers to creating and

carrying on a quality, consistent, orderly, and practical shared view of the future

(Slaughter, 1999). The findings revealed that none of the participants were able to move

from strategic planning to strategic foresight, which requires building firm-specific

capabilities that are difficult to imitate and enhancing strategic leadership continually to

fit the changing environment in which they compete. In relation to the basic research

question, this finding implies that even though they managed to take some reactive

actions to address environmental changes, the participants did not build strategic

leadership and unique capabilities necessary to integrate strategic planning and to

respond to a rapidly changing business environment.

Experience of Personal Tensions

The participants reported physical and mental stress. Experiences of personal

tensions as found in this study were not fully supported by the literature reviewed. In

biology, stress is defined as an organism‟s total response to an environmental condition

166

(Keil, 2004). Stress describes a negative condition that can have an impact on an

organism‟s mental and physical well-being (Koolhaas et al., 2011). Maravelas (2005)

noted that environmental systems are becoming increasingly strained and people are

responding to unprecedented levels of stress and exhaustion. To this extent, the findings

on stress were consistent with the literature. It was, however, noted in the literature that

leaders report less anxiety and stress than non-leaders, because leaders have better control

over what happens in their workplace (Sherman et al., 2012).

Unlike the findings of Sherman et al. (2012), the participating executives in this

study openly expressed their feelings of stress. All participants said that they had felt

stress from worrying about the impact of the environmental changes, searching for ways

and mechanisms to respond effectively to the environmental changes, and huge

responsibility to undertake multiple activities simultaneously to meet their companies‟

objectives, the needs of the people working in their companies, and expectations of other

stakeholders. The participants shared stories of how they had tried to reduce stress by

sharing their feelings, listening to others‟ suggestions, compromising, setting realistic

expectations and deadlines, and asking for help if they needed it. In the context of the

research question, this finding underscores that trying to integrate strategic planning and

responding to a rapidly changing business environment is challenging and stressful.

Leadership Styles

The participants perceived the environmental changes, but rarely responded to

these changes until the environment compelled them to do so. Based on their leaders‟

behavior, Miles and Snow (1978) categorized companies into four types of organizations:

defenders, prospectors, analyzers, or reactors. The participants‟ strategic behavior

167

seemed to fit a mixture of defender and analyzer categories. When they were challenged

by the environmental changes, the participants seemed to integrate a defender strategy

with their previous analyzer strategy orientations. As analyzers they operated in their

stable market, using formal structures and strategic planning. As defenders they focused

on the efficiency of the current operation. In a volatile domain, the participants operated

by rapidly adapting to their competitor‟s new ideas and taking relevant quick actions.

The integration of defender and analyzer orientations helped the participants increase

efficiency and the overall performance of their companies. However, too much focus on

defense might have decreased the participants‟ ability to perform proactively to change

the rules of the game, maximize competitive opportunity, create change, and constantly

produce innovations (Kezar, 2001; Parker & Collins, 2010).

The participants indicated that they switched among leadership styles. Many

different leadership styles, including authoritarian, paternalistic, democratic, laissez-faire,

transactional, and transformational leadership styles have been established by various

researchers (Martindale, 2011). Burnes (2004) noted that the study conducted in 1939 by

researchers led by Kurt Lewin discovered three leadership styles: authoritarian

(autocratic), democratic (participative) and laissez-fair (delegative). Goleman (2000)

established six distinct leadership styles: directive, visionary, affiliative, participative,

pacesetting, and coaching.

The participants indicated that they switched among these leadership styles and

used the style that best suited the type of business situation to produce better results and

to elevate and inspire their teams. They also indicated that the leadership styles they

followed helped them drive stakeholder engagement in a way that promoted stakeholder

168

loyalty and produced positive results. In relation to the research questions, this finding

shows that the participants tried to integrate strategic planning and responding to a

rapidly changing environment by flexibly changing their leadership styles to fit the

dynamic business environment most effectively. The participants believed that there is

no one-size-fits-all leadership style.

Effects of the Response Approach

Leaders need to make sense of changes in the environment and align their

organizations with the environment (Nasehi, 2005). A good fit between external

opportunities, strategy, and design elements such as structure, people, systems, processes,

and procedures boost competitive advantage (Quinn et al., 1997; D‟Aveni, 1994;

Galbraith, 1993, 1994, 1995; Mohrman et al., 1995; Tushman et al., 1997). Porter (1996)

noted that in order to increase the bottom line and achieve sustainable growth, a leader

should integrate various functions of the company and make trade-offs. The integration

of functions involves the coordination and integration of people, tasks among job

positions, activities such as selling, accounting, manufacturing and technology, and

systems, including accounting systems, sales tracking systems, or manufacturing systems

(Schmidt & Lyle, 2010; Barki & Pinsonneault, 2005;). Trade-off implies the

relinquishment of one benefit for another (Audia, Sorenson, & Hage, 2001).

In line with these comments, the participants stated that their response approach

helped them improve their companies‟ performance and stakeholder satisfaction by

increasing operational efficiency and enhancing product/service quality. Nonetheless, the

participants did not clearly convey the degree of integration among their functions and

169

the trade-offs they made, if any. They also did not discuss their companies‟

organizational structures, systems, processes, or procedures.

Implications for Theory

The findings from this study are consistent with the theoretical framework

presented in Chapter 1. It is apparent that the findings from this study support current

theories discussed in Chapter 2, regarding strategic planning, environmental change,

responding to environmental change, and leadership styles. The findings from

experience concerning the personal tensions theme and the effects of a response approach

theme are not supported by the literature review in Chapter 2.

As the companies in this study did not integrate taking a long-term view and

flexibility until after revolutionary changes occurred, it is not yet apparent whether

integrating a long-term view and flexibility will be able to reduce the tension between

strategic planning and responding to a rapidly changing environment. Research might be

conducted on companies that have successfully implemented this approach to determine

the possibility that integrating a long-term view and flexibility reduces the tension

between strategic planning and responding to a rapidly changing environment.

Another theoretical implication of this study is related to experiences of personal

tensions. A recent study revealed that leaders report less anxiety and stress than non-

leaders, because leaders have better control over what happens in their workplace

(Sherman et al., 2012). Conversely, the participants reported their feelings of stress and

tension as a result of responding to environmental changes. The finding in this study did

not support the findings of Sherman et al. (2012). It is not clear whether this is because

when the environment is changing rapidly even senior executives do not believe they

170

have control over what happens in the workplace. This finding would appear to merit

further study. Specially, the effects of the nature of environmental change on the senior

leaders‟ confidence, performance, and stress levels needs investigation.

Implications for Practice

The findings in this study may narrow a critical gap in our understanding of the

leaders‟ lived experience of a tension between strategic planning and responding to a

rapidly changing environment. The first implication of the findings in this study for

practice is that there was no evidence that companies are proactively aligning strategic

planning and responding to environmental changes and that no one-size-fits-all remedy

had been applied to integrate strategic planning proactively and to respond proactively to

a changing environment emerged.

The findings in this study revealed that all of the participants followed

conventional goal- or vision-based strategic planning processes whereby the top level

managers design a long-term strategic plan and send it down to the lower-level

management teams for implementation. This conventional approach may not be quick

and flexible enough to address today‟s rapidly changing environment. The second

implication of the findings is that in order to respond to increasing environmental

turbulence quickly and flexibly, perhaps companies could develop strategic plans in a

more decentralized way for both the long-term and a shorter-term timeframe, develop a

broad decision-making team, implement strategic plans flexibly to fit specific business

situations, and receive valuable feedback to shape their destiny.

The third implication is that in order to build strategic foresight, companies may

have to change from individual thinking to collective thinking (orchestrating different

171

ideas, diverse views, and different work ethics to transform the organization), from

implicit thinking to explicit thinking (creating clearly stated or fully expressed thoughts,

objectives, goals, etc.), and from unconscious thinking to conscious thinking (performing

tasks based on introspective thoughts and an understanding of the external environment);

and to assume that all employees have the ability required for strategic thinking; to move

beyond optimizing plans (going beyond increasing efficiency); to overcome a myopic

short-term focus; and to avoid looking into the future only in terms of past experience

(Liedtka, 1998a; Mintzberg, 1994; Voros, 2003; Wilson, 2004).

Recommendations for Participating Companies

Consider dynamic approaches to strategy

With today‟s complex and ever-changing high-velocity environment, where

strategic planning has become highly decentralized, less rigorous, less specific than a

goal-driven exercise, and shorter in terms of time horizons (Grant, 2003), the participants

could consider dynamic approaches to strategy. Nevertheless, it is worthwhile to note

that it is appropriate for the timing and the process of strategic planning to differ

depending on industry, market pressures, and the size and culture of the business

(Carvens et al., 2009) because although businesses might share the same principles, they

are all different in terms of strategic issues.

Develop a prospector or proactive approach

All participants took quick reactive actions such as cutting costs, improving

product/service quality, and reviewing strategic plans to address environmental changes.

Nevertheless, in today‟s rapidly changing environment, a reactive approach is not

sufficient for the survival and growth of an organization. The participants may develop a

172

prospector or proactive approach, continuously search for opportunities, and create

change to achieve better growth and stakeholder satisfaction by moving strategic

planning towards strategic foresight (Conway & Voros, 2003; Liedtka, 1998a; Mintzberg,

1994; Senge et al, 1999; Voros, 2003) or adopting a scenario planning model (Liedtka,

1998a; Senge et al, 1999; Staton-Reinstein, 2003).

Recommendations for Further Study

Companies that participated in this study focused on developing and

implementing a long-term strategic plan as a means to occupy or secure strategic

positions, while responding quickly when the environment compelled them to react.

Future research could study companies that had taken a proactive approach and were

successfully combining strategic planning and responding to a rapidly changing

environment. Case studies would allow researchers to discover how this process is

implemented and experienced (McCaslin &Wilson, 2003).

Even though the literature reviewed showed that leaders report less anxiety and

stress than non-leaders because leaders have better control over what happens in their

workplaces (Sherman et al., 2012), the executives who participated in this study openly

expressed their feelings of stress. According to Nixon (1982), if stress management is

not applied regularly before the exhaustion point is reached, stress arousal will ultimately

take the performance level down. Therefore, the entire topic of stress faced by senior

executives in today‟s complex and rapidly changing environment merits exploration.

Among the strategic planning process models described in the literature review,

the companies studied used only goal- or vision-based strategic planning processes.

However, there is no one perfect strategic planning model that fits all organizations and

173

each leader‟s lived experience may vary depending, among others, on the type of the

strategic planning model followed (Goodstein, Nolan & Pfeiffer, 1993). Therefore, it

would be valuable to repeat this study with companies that had used a variety of planning

approaches.

Another potential avenue for future research would be to replicate this study in

firms of similar size in different industries or locations to compare the experiences of

other leaders. The other future research might explore how leaders experience

environmental change in smaller firms. Due to the small size of their firms, leaders in

small organizations experience unique problems related to external systems including

governmental policies, competitors, suppliers, inadequate finances, insufficient

customers, short supply of skilled workers, and lack of strategic planning and

management skills. These problems, though they exacerbate the challenges of leading

small firms, may enhance the leaders‟ adaptation skills ((Rigsby, & Greco, 2003).

Therefore, the perceptions and experiences of leaders of small businesses organization is

valuable to the analysis and understanding of the leaders‟ lived experience of a tension

between strategic planning and a rapidly changing environment.

Future study could also explore the similarities and differences between the lived

experience of a tension between strategic planning and responding to a rapidly changing

environment among leaders of global companies and non-global companies. When the

organization goes global the complexity of the business environment and the intensity of

the challenges may increase. With these environmental changes the company‟s‟ response

approach my change and the leaders‟ lived experience may expand. Each of the

suggested future studies would be beneficial in terms of scholarly study because they

174

would contribute in one way or another to understanding of the nature of the tension

between strategic planning and responding to a rapidly changing business environment,

clarifying ways and mechanisms for integrating strategic planning and responding to a

rapidly changing business environment, and identifying factors responsible for success or

failure in aligning strategic planning and responding to a rapidly changing environment.

Summary and Conclusions

This phenomenological study explored the leaders‟ lived experience of a tension

between strategic planning and responding to a rapidly changing environment. The

theoretical framework proposed strategic planning theories, environmental change

theories, and organizational responses important for understanding the tension between

strategic planning and responding to the rapidly changing environment and ways of

taking a long-term view and flexibility. The literature implied that in order to survive and

grow in today‟s fast-changing environment, business leaders need to adopt both reactive

and proactive approaches and demonstrate agility, flexibility, and a long-term view

(Collins & Porras, 1997; TenHaken & Cohen, 2007).

From the analysis of the interviews conducted with 20 leaders of large companies with

global or national headquarters location in a single, large metropolitan area in the United

States, six themes (strategic planning process, environmental change, responding to

environmental change, experiences of personal tensions, leadership style, and effects of

response approach) emerged. Overall, the findings of this study underscore the

complexity of environmental change, the difficulty of responding to environmental

change, and the theory and practice of strategic planning and responding to

environmental change. The findings of this study showed that many internal and external

175

forces can be at work when a leader encounters environmental change and that each

leader‟s experience is different. There are also common attributes of the leaders‟

experience of responding to environmental change and strategic planning. As one reads

through the experiences of the leaders in this study, it is clear that the leaders‟ response

approach helped improving their companies‟ performance, and stakeholder satisfaction.

It seems likely that a leader who creates and communicates vision, adapts a long-

term view, understands his or her environment, proactively searches for emerging

opportunities based on environmental change, responds to environmental change with

agility and flexibility, continuously revises strategy as needed, and forms the necessary

connection with stakeholders may successfully integrate strategic planning and

responding to a rapidly changing environment, reduce the occurrence of the most

stressful situations, reduce the negative effects of environmental changes on company

performance, and enhance stakeholder satisfaction. If lessons are learned from these

leaders‟ lived experiences of a tension between strategic planning and responding to

rapidly changing environment, the struggles that await other leaders may be less

distressing and they might become more consistently productive for their stakeholders.

The list of recommendations drawn from the findings invites leaders to adopt a dynamic

approach and develop proactive behavior.

Reflections

From conducting this research, I learned about and explored the lived experience

of a tension between strategic planning and responding to a rapidly changing

environment of 20 leaders (nine CEOs and 11 Vice presidents) of 10 large companies

from nine industries with global and national headquarters in a single, large metropolitan

176

area in the United States. There were basically three questions (as stated in Chapter 1

and the introduction to Chapter 5) that I was trying to answer. In line with these research

questions, I learned, among other things, the following major lessons through this

dissertation research project. First, in spite of today‟s fast-changing environment, the

participants focused on traditional strategic planning processes and reactive flexibility.

The companies in this study did not integrate taking a long-term view and flexibility until

after revolutionary changes occurred in their environment. They also did not show

evidence of proactive flexibility.

Second, the tension between strategic planning and responding to a rapidly

changing environment is real in the sense that the participants and their companies were

impacted by evolutionary environmental changes and by one or more revolutionary

environmental change(s), including the economic decline of 2008, fast-changing

technology, stiff competition, and social (demographic) changes. The companies quickly

responded to environmental changes and reviewed their strategic plans. The response

approach helped the participants improve the companies‟ performance.

Third, success or failure in integrating long-term strategic planning and

responding to a rapidly changing environment in today‟s ever-changing environment

depends, among other things, on the ability of a leader to create and communicate a

vision and mission; adapt a long-term view and a dynamic approach; develop a proactive

behavior; understand the environment; respond to environmental change with agility,

flexibility and speed; develop the necessary connection with stakeholders; develop and

mobilize internal resources and capabilities; assume risk; and act strategically.

177

Fourth, in today‟s fast-changing environment, a leader may not be successful in

the long run just by focusing on traditional strategic planning processes and reactive

flexibility without proactive flexibility. As the companies in this study did not integrate

taking a long-term view and flexibility until after revolutionary changes occurred, it is not

yet apparent whether integrating a long-term view and flexibility will be able to reduce

the tension between strategic planning and responding to a rapidly changing environment.

178

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Appendix A

Permission to Use the Premises

244

Appendix B

Referral Form

I RECOMMEND ____________________________ AS A CANDIDATE

PARTICIPANT for the study entitled the leaders’ lived experience of a tension between

strategic planning and responding to rapidly changing environment.

Participant Name:

Phone Number:

Email Address:

Nurhusein Mohammed, a doctoral student at the University of Phoenix, is conducting the

study. For the purposes of the study, participants must be leaders or professionals who

have detailed knowledge and experience in the strategic planning and execution process

while they served in a senior management position.

I am referring this candidate participant for the study for the following reasons:

Name of person making this referral: _________________________________

245

Appendix C

Informed Consent

INFORMED CONSENT: PARTICIPANTS 18 YEARS OF AGE AND OLDER

Dear participant,

My name is Nurhusein Mohammed and I am a student at the University of Phoenix

working on a doctor of business administration degree. I am doing a research study

entitled The leaders’ lived experience of a tension between strategic planning and

responding to a rapidly changing environment. This research will use the qualitative

method, phenomenological approach, and semi-structured interviewing technique. The

purpose of the research study is to gain an understanding of the experiences of business

leaders as they seek to integrate strategic planning and responding to the rapidly changing

environment. In addition, the study seeks to discover the nature of the tension between

strategic planning and responding to a rapidly changing environment, and factors that

influence leaders in aligning these seemingly conflicting challenges.

Your participation will involve a semi-structured interview conducted during an

approximately 1-hour long in person session at a place and time that are convenient for

you. The questions focus on sharing your experiences with the tension between strategic

planning and responding to rapidly changing environment.

By signing this form, you permit the researcher to record the interview. You understand

that in order to ensure accuracy of the information and proper representation of your

experiences shared during the interview process, a transcription into a text format of the

information from the recorded interview occurs. You will have the opportunity to review

the transcribed interview to validate the accuracy of the collected data and potentially

participate in an abbreviated follow-up interview.

The researcher commits to maintaining your anonymity throughout the sharing of the

information collected. The researcher will use a structured coding process to assure both

the organization and your anonymity. The special coding schema utilizes numbers and

alphanumeric combinations to ensure no one can ascertain the organization and your

identity.

You can decide to be a part of this study or not. Once you start, you can withdraw from

the study at any time without any penalty. If you choose to withdraw from the study after

providing data you have to inform the researcher through (469)226-2167 or

[email protected] regarding your decision to withdraw from the study. The

researcher will recruit another participant, and the information you provided will not be

used for this study.

mailto:[email protected]

246

The results of the research study may be published but the organization and your identity

will remain confidential and your name and the organization will not be made known to

any outside party.

In this research, there are no foreseeable risks to you. Despite this low-level risk

assessment, all gathered data will be stored in a confidential and locked area. Retention of

all research data is for a period of 3 years, and then destruction of both hard copies and

electronic copies occurs by shredding paper records, erasing and destroying audio-

records, and deleting electronic records, and scrubbing electronic media used to store

data.

Although there may be no direct benefit to you, the findings may help business leaders to

better understand how other leaders are successfully managing the tension between

strategic planning and responding to rapidly changing environment, two seemingly

conflicting formulas for success; to manage the tension more successfully; prevent

failure; optimize organizational objectives; and effectively meet or exceed stakeholder

expectations. In addition, the findings of this research might help professionals and

academics to better understand how the two conflicting directions can coexist and design

and conduct more effective consulting services and educational programs. Moreover, this

research will be beneficial for business students and professionals who need information

on applied ways of combining strategic planning and responding to a rapidly changing

business environment. This research might also be useful as base line information for

future researchers.

If you have any questions about the research study, please call me at 4692262169 or

contact me at [email protected]. For questions about your rights as a study

participant, or any concerns or complaints, please contact the University of Phoenix

Institutional Review Board via email at [email protected].

As a participant in this study, you should understand the following:

1. You may decide not to be part of this study or you may want to withdraw from the study at any time. If you want to withdraw, you can do so without any

problems.

2. Your identity and the organization will be kept confidential. 3. Nurhusein Mohammed, the researcher, has fully explained the nature of the

research study and has answered all of your questions and concerns.

4. If interviews are done, they may be recorded. If they are recorded, you must give permission for the researcher, Nurhusein Mohammed to record the interviews.

You understand that the information from the recorded interviews may be

transcribed. The researcher will develop a way to code the data to assure that

your name is protected.

5. Data will be kept in a secure and locked area. The data will be kept for three years, and then destroyed.

6. The results of this study may be published.

By signing this form, you agree that you understand the nature of the study, the possible

risks to you as a participant, and how the organization and your identity will be kept

247

confidential. When you sign this form, this means that you are 18 years old or older and

that you give your permission to volunteer as a participant in the study that is described

here. There would be two signed copies of this form and one would remain with the

participants.

( ) I accept the above terms. ( ) I do not accept the above terms.

(CHECK ONE)

Signature of the interviewee ____________________________________ Date

_____________

Signature of the researcher Nurhusein Mohammed Date 08/21/2012

248

Appendix D

Interview Questions

Basic Question: Please describe times when you faced a tension between strategic

planning and responding to rapidly changing environment.

1. Would you please tell me your name, title, years in senior management positions,

and years involved in strategic planning processes?

2. Tell me about your company‟s approach (the process you follow) to do strategic

planning?

3. Tell me about the most recent changes in the business environment that may have

impacts on your company?

4. Explain strategic decisions you made to respond to the environmental change?

5. Tell me stories of times when you recognized a need to change because of the

rapidly changing environment and the strategic plan didn‟t seem to have any

adequate responses to the change?

6. Tell me examples of time when you‟ve tried to handle both strategic planning and

responding to rapidly changing environment?

7. If strategic decisions were made not to respond to environmental changes, explain

why responding to environmental changes was not necessary.

8. What problem, if any, has been derived from not integrating the tension between

strategic planning and responding to rapidly changing environment?

249

Appendix E

Letter of Invitation to Participate in the Study

Date: _________________________

To: __________________________________________________

Dear Sir or Madam:

My name is Nurhusein Mohammed. I am a business administration doctoral student at

University of Phoenix. After having completed all required coursework components I am

conducting a dissertation research on the tension between strategic planning and

responding to rapidly changing environment. The purpose of this research is to fulfill the

partial requirement for the degree of Doctor of Business Administration (DBA).

My research consists of semi-structured interviews with two participants from 10

different companies. Your company is one of the 10 companies selected for this study.

Therefore, I kindly request your permission to use the premises to conduct interviews

with two participants about their lived experience of the tension between strategic

planning and responding to rapidly changing business environment. The interviews will

take one hour. I will use a structured coding process to assure both the organization and

the participants‟ anonymity.

Your cooperation will go a long way towards making this research a success and I have

reason to believe that you will respond positively.

Sincerely,

Nurhusein Mohammed

Doctoral learner

University of Phoenix

(469)226-2167

[email protected]

mailto:[email protected]

250

Appendix F

Data Explication Process

Stage Hycner‟s (1999) Data Explication

Process

How this was undertaken in this study

1 Bracketing and phenomenological

reduction.

Not allowing the researcher‟s personal

views.

2 Delineating units of meaning. Extracting significant statements

3 Clustering of units of meaning to

form themes.

Putting significant statements in groups

to form themes

4 Summarizing each interview,

validating it and where necessary

modifying it.

Before beginning the interview

summaries, the researcher sent the

participants included, verbatim [

whatever information they provided in

the interview, including revealing their

companies] to determine if the essence

of the interview had been correctly

captured. The participants validated the

verbatim and trusted the researcher to

conceal their companies' identities.

5 Extracting general and unique themes

from all the interviews and making a

composite summary.

Identifying themes common to all of

the interviews.

Discussing the common themes

Summary

251

Appendix G

Significant Statements From Each Interview

Interview One

1. Approach to Strategy

2. A five year goal

3. Profit and sales

4. Doing re-mage

5. Multifaceted initiative

6. Leadership team

7. Evaluate strategy

8. Strategy making process

9. The vision of the CEO

10. Strategy meetings

11. Retain employees

12. Drive guest experience

13. Reduce cost

14. Drive revenues

15. Company strategy meeting

16. Value proposition to shareholders.

17. The downturn of the economy

18. Saving more

19. Spending much less

20. Unemployment

252

21. Focus on a value proposition

22. Lack of resources

23. Competition

24. Mobile pay technology

25. Speed

26. Customers

27. Growth of a company

28. Cost focused

29. Provide higher service to customers

30. Reducing our labor cost

31. Internal resources

32. Financial strategy

33. Operations

34. Cash flow

35. Credit facilities

36. Offer the value

37. Conveniently located

38. Marketing

39. Drive guest traffic

40. The company‟s email club

41. International company

42. The uniqueness of countries

43. The franchisees

253

44. Supply chain

45. Drive sale

46. Royalty payment.

47. Dialogue

48. The right peers in a team

49. Having various scenarios

50. Breaking silos

51. Looking things holistically.

52. Project management team

53. React quickly

54. Mature a little bit

55. See what real trend is

56. Balancing

57. Cut a wide range of costs

58. Improve service quality

59. Deliver value for customers.

60. Frustrated

61. Worried

62. Stressed

63. Wondering continually

64. Regret

65. Negative feelings

66. Pleased

254

67. Communicate the initiatives openly

68. Moved very fast

69. Engaged associates

70. The leaders made dialogue

71. The company‟s values

72. Fitting a situation

73. Fitting a specific group

74. Moved very fast

75. Engaged associates

76. Cut a wide range of costs

77. Improved service quality

78. Delivered value for customers

79. Take quick action more flexibly

80. Build a sense of organizational identity

81. Collective understanding of the environment

Interview Two

1. Goals and plans are done in teams

2. The CEO‟s intentions

3. Assess the situation

4. Evaluate the resources

5. Set goals.

6. Attain the goals

7. The company‟s core values

255

8. Vision and their mission

9. Strategic goals

10. The recession of 2008

11. People lost job

12. Income was shrunk

13. Guests stopped visiting the restaurants

14. High cost of commodities

15. The fixed costs of operations,

16. Restructure significantly

17. Permanently close the doors

18. Reacted quickly

19. Increase efficiency

20. Cost cutting methods

21. Reduction in the costs

22. Driving guest satisfaction

23. Team member engagement

24. Positive sales

25. Franchise network

26. International markets

27. Higher franchise mix

28. Diversify the risk

29. Portfolio

30. Opportunity

256

31. Expand in the global marketplace

32. Global franchise partners

33. Satisfy and delight guests

34. Training and certification

35. Suppliers

36. Quality

37. Guests

38. Market place

39. Competitive advantage

40. Brands

41. Shareholders

42. Lower costs

43. Great value

44. Affordable price

45. Streamlining

46. New technology

47. Revitalization of the brand

48. Strategic focus

49. Developing markets

50. Openly communicate

51. Decision making process

52. Change flexibly to fit a specific situation

53. Frustration

257

54. Anxiety

55. Stress

56. Under great pressure

57. Worried and wondered

58. Felt pulled in too many directions

59. The sense of responsibility

60. Team members

61. Drive operational excellence

62. Value for our guests

63. Growth of our company

64. Openly communicate

65. Decision making process

66. Change flexibly

67. Fit a specific situation

68. Increased performance

69. Softened sales

70. Sales revenue

71. Turnaround

72. Financial results

73. Guest satisfaction

74. Labor cost savings

75. Optimize the labor component

76. Increase efficiency

258

77. Increase in the quality of meals

78. Increase team members‟ engagement

79. Produce positive results

80. Maintain guest satisfaction

81. Establishing emotional connections

82. Better employee engagement

83. Motivation

84. Disciplined and strong leadership team

85. Increased service quality

86. Better flexibility

87. Positive financial performance

88. Guest satisfaction.

89. Increased performance.

Interview Three

1. Meets on an annual basis

2. Review the strategic goals

3. Strategic goals

4. Short-term plan

5. Long-term 5 year plans

6. Gaining market share

7. Improve the patient experience

8. Financial models

9. Develop a strategic plan as a group

259

10. Realistic long-term plan

11. Short-term financial plan.

12. Extremely thoughtful

13. Financial model

14. Economic recession

15. External environment

16. Leaders batten down the hatches

17. Preserve the company‟s profitability

18. Improving the company‟s patient experience

19. Have the best patient experience in the country

20. People rally together to keep safe the company

21. People want to know the long-term vision

22. Delivering results each year

23. Having long-term vision.

24. Build a plan that you can execute

25. Deliver results

26. You got to have a plan

27. You got to execute against the plan

28. To be successful.

29. Five constituents

30. Employees, their

31. Customers

32. Leaders

260

33. Partner

34. Shareholders

35. Emotional

36. In disbelief

37. Upset

38. Depressed

39. Encouraged

40. In the crisis mode

41. Leadership team

42. Capable of running larger company

43. Where the company is going

44. Long-term vision

45. Engage

46. Keep the strategies simple

47. A servant leader

48. View themselves as equippers

49. Help you reach your full potential

50. kept the right people

51. A strong company

52. Survived

Interview Four

1. A strategic plan for five years

2. Review every year

261

3. Accommodate changes

4. Planned to expand business

5. Top level leaders‟ idea

6. Economic meltdown of 2008

7. Demographic change

8. Health care reform

9. Higher unemployment rate

10. Lower consumer income

11. Decline in the company‟s sales revenue.

12. Demographic opportunity

13. Utilize opportunities

14. Concerned

15. Build high morale

16. Servant leadership style

17. Help them develop

18. Capture a larger market share

19. Lower costs

20. Quality service

21. Long-term healthy relationships

22. Positive development trends

23. Evidence-based cost-effective protocols

Interview Five

262

1. CEO presents core issue to be addressed

2. Achieve the organization‟s purpose

3. Identify the goals

4. Develop e strategies

5. Establish roles and responsibilities

6. The 2008 recession

7. Health care reform

8. Fluctuating costs

9. Unpredictable service availability

10. Decreased service payments

11. Rising costs per consumer

12. Stressed workforce.

13. Quick reaction

14. Wait and see

15. Partnership

16. Joint venture

17. Acquisition

18. Selective acquisition

19. Development from the beginning

20. Worried

21. Could not sleep

22. Stressful

23. Participative approach

263

24. Increased employee performance

25. Increased retention rate

26. Increased quality of services

27. Better relations with stakeholders

28. Increased sales revenue

Interview Six

1. The mission

2. Identify actions to

3. Strategies to achieve goals

4. Strategic hiring

5. Turnaround plan

6. The 2008 recession

7. Health care reform

8. Decline of financial flows

9. Customer count

10. Sales volumes

11. Decrease in service quality

12. Rising costs

13. Stressful work environment

14. Weak bottom line

15. Expanding coverage

16. Expanding consumption

17. Cutting costs and wastes

264

18. Enhancing service quality

19. Attract and retain skilled people

20. Selective acquisitions

21. Development of facilities

22. Pursue strategic relationships

23. Stressed

24. Concerned

25. Participative leadership approach

26. Common understanding goals

27. Increasing employee motivation

28. Increasing performance

29. Client satisfaction and sales revenue

30. Put the company on the right track

31. Enhance operating efficiencies

32. Enhanced the credibility of the company

33. Improved operating margins

Interview Seven

1. Discus the vision

2. Evaluate the environment

3. Resources

4. Set goals

5. Develop strategies

6. Review each strategy annually

265

7. Determine implementation

8. The 2008 economic downturn

9. Employment and credit availability

10. Sales of discretionary merchandise

11. Consumers tighten their purse strings

12. Consumers spent on essential items

13. The amount of credit available

14. Revenues have been declined

15. Fluctuations in the availability of commodities

16. Fluctuations in price of commodities

17. Competition against big retailers

18. A sense of urgency

19. Accurate and timely information

20. Receive a good deal of feedback

21. Develop a more smooth relations

22. Changes to executive management team

23. Engage and motivate the team

24. Create a shared vision

25. Increase performance

26. Provide accurate and timely information

27. Receive a good deal of feedback

28. Develop a more smooth relations

29. Differentiate the company‟s brands

266

30. Optimize merchandise presentation

31. Enhance the customer experience

32. Keep costs and debt under control

Interview Eight

1. CEO presents new idea to work on

2. The senior leaders develop goals and strategies

3. Multi-year turnaround strategy

4. Improving business

5. The 2008 recession

6. Economy performs poorly

7. Discretionary spending is perceived to be luxuries

8. The availability and pricing of the commodities

9. The political conditions exchange rates

10. Competition

11. Deterioration of the company‟s performance

12. Agreement with various financial institutions

13. Borrowing capacity

14. Having the right product at the right price

15. The right assortment

16. Improving the capabilities of stores team

17. Adding talent when required

18. Sold or franchised brands

19. Closed underperforming locations

267

20. Feeling of a tension

21. Felt stress

22. Calmed his emotions

23. Fit specific situations and specific group

24. Turnaround the company

25. Increasing efficiencies

26. Reducing cost and misconduct

27. Increasing sales revenue

28. Satisfying customers

29. Attracting capital

30. Meeting the expectations

Interview Nine

1. Macro-economic drivers

2. Market drivers

3. Business drivers

4. Technology drivers

5. Engineering drivers

6. Operation drivers

7. Hard to predict 3 to 5 years

8. The future is inherently unpredictable

9. Environmental change

10. Adjust to the dynamics of the change

11. The rate of the change of the technology is rapid

268

12. Products would become perpetual data

13. Deductive reasoning

14. Take reasoning to the limit and they

15. Sample their market

16. Analyze their data

17. Interpret data

18. Come up with prediction

19. Sequential event to follow through

20. Not all algorithmic

21. The human judgment

22. There is no silver bullet out there

23. If you do not do reasoning it will be reckless

24. Probability of failure

25. Make decision without analysis

26. To analyze to analysis paralysis mode

27. Certain things are inherently unpredictable

28. You can‟t quantify certain things

29. Make a good judgment;

30. You should not be reckless

31. Do the right thing statistically

32. Synthesis is important much safer

33. There is a need for balance

34. Risky approach

269

35. A very expensive proposition

36. Biological evolution

37. Very efficient system

38. Stressful

39. Innovation

40. Optimizing risk

41. Inspiring teams

42. Managing flexibly

43. Adjusting to changing situations

44. Adapted to the market very quickly

Interview Ten

1. Create reachable goals and strategies

2. The company‟s vision and mission

3. Active participation of staff

4. Highly dynamic technology industry

5. Opportunities in the future

6. Targeting underserved customer segments

7. Offering predictable, affordable and flexible service plans

8. Remaining one of the lowest cost service providers

9. Expanding market

10. Offer technologically-advanced services

11. Offering nationwide voice, text and web services for a flat rate

12. Simple and straightforward new service plan

270

13. Managing cost

14. The company expanded its service coverage

15. Concerned

16. Delighted

17. Develop the plan

18. Review and update the strategic plan

19. Flexibly make decisions depending on situations

20. Inspire teams to get high result

21. Take corrective measures

22. Meet stakeholder expectations

23. 9% increase in revenue

24. Improved stakeholder satisfaction

Interview Eleven

1. Developed goals

2. Review the strategic plan

3. Strong competition

4. Popularity of competing forms

5. Consumers‟ discretionary income

6. Liquidity disruptions in the financial institutions

7. Result of the 2008 economic downturn

8. Increase in operating costs

9. Acquisitions or expand business

10. Changes in regulations of various countries

271

11. Controls of foreign currency exchange

12. Transfers that have led to currency fluctuations

13. Hard currency shortages

14. Varying prices

15. Economies and population growth

16. Attractive demographics

17. Opportunities

18. Cut costs in all operational areas

19. Reviewed the strategic plan

20. Developed goals focusing on six areas

21. Leading market positions

22. Developing high-quality services

23. Controlling costs

24. Global expansion

25. Technological innovation

26. Staff training

27. Overwhelmed

28. Stressed

29. Encouraged his team to actively participate

30. Influence his team members

31. Make them feel in control of their destiny

32. Motivated to work hard

33. Built profitability

272

34. Maintained leading market positions in the industry

35. 8% growth despite general hard times

36. Investors, employees and the board were happy

Interview Twelve

1. Embracing the company‟s vision

2. Develop strategic goals and plans

3. Participation of as many people as possible

4. Economic decline

5. Global issues

6. Competition

7. The 2008 recession

8. The willingness of consumers to spend

9. Adverse regulations

10. Economic instability

11. Currency exchange risk

12. Insolvency of financial institutions

13. Competition

14. Transmit to digital projection technology

15. Expand to geographically diverse areas

16. Build modern theatre circuit

17. Enhance management‟s ability to control costs

18. Effectively react to changes in the external environment

19. Emotional

273

20. Turnaround the company

21. Accomplishing tasks and producing results while

22. Encouraging participation to develop a team spirit

23. Cut costs in all areas

24. Expanded to different locations

25. Special focus to the south America

26. Enhanced capacity

27. Improved quality of equipment,

28. Customized film show time availability,

29. Improved customer service quality

30. Affordable ticket prices

31. Participative approach

32. Empower employees

33. Help them focused on the company‟s goals

34. Generated positive operating income

Interview Thirteen

1. Make the goals and strategies

2. Communicate down the line

3. Employees participation

4. The 2008 economic

5. Increase in loan defaults

6. Reduced demand and resale value

7. Competition

274

8. Mitigate the risk for the service

9. Cost cutting measures

10. Closing unprofitable centers and layoffs

11. Expanding lending business

12. Developing new products

13. Increasing internet cash advance

14. Utilizing marketing and promotional campaigns

15. Shocked

16. Overwhelmed

17. Stressed by

18. Encouraged the participation

19. Fit different situations

20. Allocate the necessary resources

21. Seek support whenever needed to overcome problems

22. Build positive relation

23. Turnaround the company

24. Cutting costs

25. Increasing revenue

Interview Fourteen

1. Develop goals and strategies

2. Steadily communicate

3. Employees at all levels participated in the process

4. Changes in the regulations

275

5. Due to the 2008 recession

6. Millions of people lost job

7. Economy was contracted significantly

8. Reduced demand for the company‟s products

9. Opportunities

10. Decline of the company‟s revenue

11. Cost saving measures

12. Closing unprofitable centers

13. Eliminating nonessential jobs titles

14. Expanding lending

15. Attracting new customers

16. New products

17. Expanding the use of internet

18. Conducting marketing campaigns

19. Improving customer service

20. Quick response

21. Feel like losing a balance

22. Stress

23. Focusing on the task

24. Helping employees engaged

25. Participative approach

26. Stopped the bleeding

27. Improved the company‟s revenue

276

28. Leaders felt encouraged

29. Better bottom line results

30. Stakeholders were happy

Interview Fifteen

1. Following a vision

2. Setting clear goals

3. Scoping out strategic choice

4. Defining the roles and responsibilities of teams

5. The 2008 recession

6. Shifting consumer purchasing demand and patterns

7. Lower-cost private label products

8. Inflation

9. Fluctuation in currency exchange rates

10. Adverse political, economic, and legal conditions

11. Increase in prices

12. Developing brand recognition and loyalty

13. Product innovation

14. Quality and performance

15. Price

16. Marketing and distribution capabilities

17. Investing in marketing

18. brand-building and product innovation

19. Acquiring companies or product lines.

277

20. Compete to hire, develop and retain

21. Focusing on efficiency

22. Reducing workforce

23. Targeting growth in developing economies

24. Focusing on cost reductions in

25. Streamlining of administrative organization

26. Extending the company‟s portfolio

27. Exiting some brands in some regions

28. Stressful

29. Worried

30. Delighted

31. Engaging team members

32. Providing direction and support

33. Encouraging creativity

34. Open minded approach

35. Effort to move very fast

36. Telling their teams what to do

37. Engaging the team

38. Providing direction and support

39. Encouraging creativity

40. Products softened

41. Maintained strong financial position

42. Showed progress with its target

278

43. Created value propositions

44. Improved the quality of its products and services

45. Created friendly work environment

46. Better financial benefits for employees

Interview Sixteen

1. A leader telling his team what he wants to achieve

2. Senior leaders establish goals and craft strategies

3. The 2008 global economic recessions

4. Credit market disruptions around the world

5. The inability of customers to buy

6. The inability of debtors to pay

7. The inability of suppliers to fulfill orders on time

8. Competition against well-known companies

9. Saving costs

10. Reduce worldwide salaried workforce

11. Reducing material costs

12. Reducing manufacturing waste

13. Reducing distribution costs

14. Targeting growth in selected markets

15. Pursue acquisitions

16. Exit some of the operations

17. Improve the underlying profitability

18. Develop new products

279

19. Shocked

20. Focused on achieving results

21. Rewarding compliance

22. Encouraging participation and creativity

23. Developing team member‟s skills

24. Enhancing job satisfaction

25. Keep employees‟ attention on the needs of shoppers

26. Increased sales revenue by 9%.

27. Everyone is encouraged by the company‟s performance

Interview Seventeen

1. Five years strategic plan

2. Strategic planning committee

3. Assesses challenges and opportunities

4. Sets goals

5. Choosing strategies

6. Submit report to the CEO and the Board

7. The 2008 recession

8. Consumer‟s purchasing power

9. Industrial consumption

10. Unfavorable political and economic laws

11. Security risks

12. Disruptions in energy and transportation

13. Cutting operating costs

280

14. Canceling or combining functions

15. Reducing employment

16. Making acquisitions and divestitures

17. Make investments in private companies

18. Focusing on next-generation technologies

19. Focus on product innovation

20. Focus on market development

21. Stressed by the performance results

22. Focus on managing performance

23. Encouraging participation

24. improved performance

25. Positive relationship with stakeholders

Interview Eighteen

1. The strategic planning committee

2. Set a specific goals to be achieved

3. Develop strategies

4. Competition against its products

5. Strong competition to hire and retain employee

6. The 2008 economic decline

7. Fewer customer orders

8. Instability in the financial markets

9. Could not collect accounts receivable

10. Cost cutting measures

281

11. Marketing strategy

12. Reducing assets

13. Focusing on core business

14. Closing unprofitable plants

15. Reducing labor cost

16. New product development

17. Modification

18. Diversified market

19. Marketing techniques

20. Add value to products and services

21. Direct sales force

22. Distributors

23. Worried about competition and recession

24. Felt stressed from the entire situation

25. Continually wondering how to respond

26. I felt my energy level dropped

27. Ultimately drained

28. Kept on playing active role

29. Specific situation of a country or a region

30. Turnaround the business

31. Increasing sales by 12%

32. The leaders and employees were happy

Interview Nineteen

282

1. The leadership team charts a strategic framework

2. Involving employees and other stakeholders

3. The 2008 and 2009 recession

4. The buying behavior was negatively affected

5. Brands have become less relevant

6. Getting back the primary customer group

7. Targeting new consumer group with new products

8. Pursuing market expansion strategy

9. Minimizing loss by cutting costs

10. Improve the quality of customer service

11. Customize the products to customer needs

12. Concerned about the declining trend

13. Worried about reactions of the primary customers

14. Share the plan to employees

15. Discuss the implementation process

16. Balance efficiency, productivity and participation

17. Depending on the reality on the ground

18. 8% increase in revenue

19. Improving the company‟s performance

20. Board members and the employees were pleased

Interview Twenty

1. Leaders prepare a five year goal

2. Set strategies

283

3. Yearly and quarterly plans

4. 2008 economic decline

5. Increase in the raw material

6. Customers slowed buying

7. Retailers delayed or canceled orders

8. Revenue declined by 11%

9. Cut costs

10. Freezing hiring

11. Retrenchment

12. Discontinuing poorly performing brands

13. Closing unprofitable outlets

14. Developing new products

15. Focused on protecting gross margin

16. Loss prevention

17. Efficient inventory management systems

18. Provide consistent brand and service

19. Multiple outlet

20. Establish brand loyalty

21. Value-added services

22. Shocked

23. Concerned

24. Felt a sense of relief

25. Sales grew

284

26. Adapted a flexible approach

27. Sales grew by 8%

28. Everybody was happy

285

Appendix H

Scrutinized Significant Statements From All Interviews

1. Approach to strategy

2. A five year goal

3. Strategy making process

4. The vision of the CEO

5. Strategy meetings

6. Value proposition to shareholders

7. Assess the situation

8. Evaluate the resources

9. The company‟s core values

10. Vision and mission

11. Meets on an annual basis

12. Review the strategic goals

13. Short-term plan

14. develop a strategic plan as a group

15. Realistic long-term plan

16. Extremely thoughtful

17. Review the strategic plan every year

18. Accommodate changes

19. Planned to expand business

31. Achieve the organization‟s purpose

32. Establish roles and responsibilities

286

33. Turnaround plan

34. Discus the vision

35. Evaluate the environment

36. Develop strategies

37. Determine implementation

38. The future is inherently unpredictable

39. Create reachable goals and strategies

40. Active participation of staff

47. Communicate down the line

48. Scoping out strategic choice

49. strategic planning committee

50. Unemployment

51. Focus on a value proposition

52. The recession of 2008

53. Income was shrunk

54. Guests stopped visiting the restaurants

55. High cost of commodities

56. Demographic change

57. Health care reform

58. Lower consumer income

59. Consumers spent on essential items

60. Fluctuations in the availability of commodities

61. Fluctuations in the price of commodities

287

62. Discretionary spending is perceived to be luxuries

63. Highly dynamic technology industry

64. Liquidity disruptions in the financial institutions

65. Increase in operating costs

66. Changes in regulations of various countries

67. Control of foreign currency exchange

68. Transfers that have led to currency fluctuations

69. Hard currency shortages

70. Attractive demographics

71. Economic instability

72. Increase in loan defaults

73. Reduced demand

74. The inability of debtors to pay

75. The inability of suppliers to fulfill orders on time

76. Competition against well-known companies

77. Security risks

78. Disruptions in energy and transportation

79. Strong competition to hire and retain employee

80. Provide higher service to customers

81. New technology

82. Financial strategy

83. Supporting operations with proper cash flow

84. Getting credit facilities in place

288

85. To be on national media

86. The company‟s email club

87. We pick the franchisees who know the market

88. Cut a wide range of costs

89. Improve service quality

90. Drive sale

91. Dialogue

92. The right peers in a team

93. Having various scenarios

94. Breaking silos

95. Looking things holistically

96. Project management team

97. See what real trend is

98. Balancing

99. Permanently close the doors

100. Reacted quickly

101. Increase efficiency

102. Team member engagement

103. Diversify the risk

104. Expand in the global marketplace

105. Satisfy and delight guests

106. Training and certification

107. Work with suppliers to ensure consistent quality

289

108. Offer great value at an affordable price

109. Streamlining the heart of house

110. Implementation of new technology

111. Competition

112. Mobile pay technology

113. The revitalization of the brand

114. Strategic focus on high potential developing markets

115. Communicate openly

116. Change flexibly to fit a specific situation

117. Leaders batten down the hatches

118. Have the best patient experience in the country

119. People rally together to keep safe the company

120. People want to know the long-term vision

121. Having long-term vision

122. Build a plan that you can execute

123. deliver results

124. Execute against the plan

125. Be successful.

126. Primary constituents

127. Utilize opportunities

128. Joint venture

129. Attract and retain skilled people

130. Selective acquisitions

290

131. Development of facilities

132. Pursue strategic relationships

133. Provide accurate and timely information

134. Receive a good deal of feedback

135. Develop a more smooth relations

136. Increase the company‟s borrowing capacity

137. Having the right product at the right price

138. Having the right assortment

139. Improving the capabilities of stores team

140. Adding talent when required

141. Sold or franchised brands

142. Deductive reasoning

143. Take reasoning to the limit

144. Analyze their data

145. Interpret data

146. Come up with prediction

147. Sequential event to follow through

148. There is no silver bullet out there

149. If you do not do reasoning it will be reckless

150. Probability of failure

151. Making decision without analysis

152. Analysis paralysis mode

153. Certain things are inherently unpredictable

291

154. You can‟t quantify certain things

155. Make a good judgment

156. You should not be reckless

157. Do the right thing statistically

158. Synthesis is much safer

159. There is a need for balance

160. Risky approach

161. A very expensive proposition

162. Biological evolution

163. Very efficient system

164. Targeting underserved customer segments

165. Offering predictable, affordable and flexible service plans

166. Remaining one of the lowest cost service providers

167. Expanding market

168. Offer technologically-advanced services

169. Simple and straightforward new service plan

170. Expand service coverage

171. Leading market positions

172. Developing high-quality services

173. Technological innovation

174. Expand to geographically diverse areas

175. Mitigate the risk

176. Expanding lending business

292

177. Developing new products

178. Utilizing marketing and promotional campaigns

179. Attracting new customers

180. Expanding the use of internet

181. focusing on efficiency

182. Extending the company‟s portfolio

183. pursue acquisitions

184. Focusing on core business

185. Targeting new consumer group with new products

186. Pursuing market expansion strategy

187. Establish brand loyalty

188. Frustrated

189. Worried

190. Stressed

191. Wondered

192. Concerned

193. Emotional

194. Overwhelmed

195. Shocked

196. My energy level dropped

197. Drained

198. Communicate the initiatives openly

199. Fitting a specific situation

293

200. Fitting a specific group

201. Flexibility

202. Keep the strategies simple

203. servant leadership style

204. Participative approach

205. Increasing employee motivation

206. Increasing performance

207. Engage and motivate the team

208. Create a shared vision

209. Provide accurate and timely information

210. Receive a good deal of feedback

211. Develop a more smooth relations

212. Innovation

213. Optimizing risk

214. Adjusting to changing situations

215. review and update the strategic plan

216. Take corrective measures

217. Allocate the necessary resources

218. Seek support whenever needed to overcome problems

219. providing direction and support

220. encouraging creativity

221. open minded approach

222. providing direction and support

294

223. Focused on achieving results

224. Rewarding compliance

225. Developing team member‟s skills

226. Enhancing job satisfaction

227. Focus on managing performance

228. Discuss the implementation process

229. Balance efficiency, productivity and participation

230. Build a sense of organizational identity

231. Collective understanding of the environment

232. Turnaround

233. increase efficiency

234. increased team members‟ engagement

235. Capture a larger market share

236. Long-term healthy relationships

237. increased employee performance

238. Increased retention rate

239. Better relations with stakeholders

240. Enhanced the credibility of the company

241. Improved operating margins

242. Enhance the customer experience

243. Attracting capital

244. Created friendly work environment

245. positive relationship with stakeholders

295

Appendix I

Clustering Scrutinized Significant Statements of All Interviews to Form Themes

Theme 1: Strategic planning Process

1. approach to strategy

2. a five year goal

3. evaluate strategy

4. Strategy making process

5. the vision of the CEO

6. strategy meetings

7. goals and plans are done in teams

8. assess the situation

9. evaluate the resources

10. the company‟s core values

11. vision and mission

12. Review the strategic goals

13. short-term plan

14. develop a strategic plan as a group

15. realistic long-term plan

16. Extremely thoughtful

17. review the strategic plan every year

18. accommodate changes

19. the top level leaders‟ idea

20. achieve the organization‟s purpose

296

21. establish roles and responsibilities

22. turnaround plan

23. discus the vision

24. evaluate the environment

25. determine implementation

26. the future is inherently unpredictable

27. create reachable goals and strategies

28. active participation of staff

29. communicate down the line

30. scoping out strategic choice

31. strategic planning committee

Theme 2: Environmental change

1. the recession of 2008

2. Unemployment

3. lower consumer income

4. Consumer spent much less

5. fluctuations in the availability of commodities

6. fluctuations in the price of commodities

7. liquidity disruptions in the financial institutions

8. increase in operating costs

9. changes in regulations of various countries

10. Currency fluctuations

11. hard currency shortages

297

12. Social (demographic) change

13. Competition

14. the inability of suppliers to fulfill orders on time

15. Change in technology

Theme 3: Response to environmental change

1. cut a wide range of costs

2. drive sale

3. looking things holistically

4. project management team

5. React quickly

6. See what real trend is

7. Balancing

8. increase efficiency

9. team member engagement

10. satisfy and delight consumers

11. training and certification

12. offer great value at an affordable price

13. implementation of new technology

14. change flexibly to fit a specific situation

15. Having long-term vision.

16. deliver results

17. utilize opportunities

18. attract and retain skilled people

298

19. Expanding market

20. Deliver high-quality services

21. developing new products

22. utilizing marketing and promotional campaigns

23. focusing on efficiency

24. focus on market development

25. diversified market

26. establish brand loyalty

Theme 4: Experiences of Personal Tensions

1. frustrated

2. Worried

3. stressed

4. wondered

5. concerned

6. emotional

7. overwhelmed

8. shocked

9. drained

Theme 5: Leadership Styles

1. Communicate openly

2. Long-term vision

3. servant leadership style

4. participative approach

299

5. increasing employee motivation

6. increasing performance

7. create a shared vision

8. provide accurate and timely information

9. receive a good deal of feedback

10. develop a more smooth relations

11. adjusting to changing situations

12. inspire teams to get high result

13. take corrective measures

14. allocate the necessary resources

15. seek support whenever needed

16. providing direction and support

17. open minded approach

18. focused on achieving results

19. rewarding compliance

20. developing team member‟s skills

21. enhancing job satisfaction

22. share the plan to employees

23. discuss the implementation process

24. adapt a flexible approach

Theme 6: Effects of the response approach

1. Cost savings

2. increase efficiency

300

3. improved quality

4. increase team members‟ engagement

5. increased employee motivation

6. positive financial performance

7. Turnaround the company

8. increased employee performance

9. increased employee retention rate

10. better relations with stakeholders

11. created value propositions

12. created friendly work environment

13. positive relationship with stakeholders

14. Consumer satisfaction

301

Appendix J

Interview Data Verification Request Letter

Date: _________________________

To: __________________________________________________

Dear Sir or Madam:

Thank you for taking part in an interview I conducted for my dissertation research and

sharing your experience of a tension between strategic planning and responding to a

rapidly changing environment.

I‟m sending the transcript of the interview with this letter to check if your descriptions

are correctly captured. I kindly request you to review the transcript and get back to me

via my email [email protected] or my contact phone number 469-226-2167 with

your comments within 7 days. If I do not hear from you within 7 days I will take no

response as an approval.

Thank you for cooperation.

Sincerely,

Nurhusein Mohammed

Doctoral learner

University of Phoenix

(469)-226-2167

[email protected]

mailto:[email protected]

302

Appendix K

The Most Recent Environmental Changes

Participants The most Recent Environmental change Remark

IA01 2008 Recession

IA02 2008 Recession

IIB03 2008 Recession

IIB04 2008 Recession, Social (Demographic)

IIC05 2008 Recession, Regulation (Healthcare

reform)

IIC06 2008 Recession, regulation (healthcare)

IIID07 Regulation, competition

IIID08 Recession

IVE09 Technology change

IVE10 Technology change

VF11 Competition, 2008 recession, regulation,

social (demographic)

VF12 2008 Recession, Regulation, competition

VIG13 2008 Recession

VIG14 2008 Recession, Regulation

VIIH15 2008 Recession, Regulation

VIIH16 Recession, competition

VIIIJ17 Recession, competition, Regulation

VIIIJ18 2008 Recession (economic decline)

IXK19 2008 Recession (economic decline)

IXK20 2008 Recession (economic decline)

303

Appendix L

The Participants‟ Leadership Styles

Participa

nts

Participa

tive

Servant/

Affiliati

Continge

ncy

Directiv

Visionar

Pacesetti

Coachin

IA01 X

IA02 X

IIB03 X

IIB04 X

IIC05 X

IIC06 X

IIID07 X

IIID08 X

IVE09 X

IVE10 X

VF11 X

VF12 X

VIG13 X

VIG14 X

VIIH15 X

VIIH16 X

VIIIJ17 X

VIIIJ18 X

IXK19 X