Eddielogic

– Thoughts on Strategy and Management

Middle management as participant for strategic planning

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When you observe strategic planning processes in different organizations it is possible to find “closed shop” planning processes. In some cases only top manager “develop” the strategy, in other situations they are supported by specialised departments. Various sources in the academic literature have discussed and criticized the disadvantages of this approach.

But why is it so important to involve middle managers in strategic planning. So let us look at some research findings.  Some important tasks can be found in terms of agenda setting, understanding the context, combining old and new strategy, and stressing crucial issues.

Agenda setting. Various sources in the academic literature highlight the role of middle management for agenda setting. FLOYD and WOOLDRIDGE (1992, 1997) see a positive correlation between corporate success and middle management participation due to the improved quality of strategic decisions. Top management can develop strategies that are qualitatively richer in content if it considers knowledge and opinions of middle managers (Note: FLOYD and WOOLDRIDGE (1997) argue that consensus between both management levels and improved implementation processes do not represent success drivers.)

Understand the context.  BOWER (1970) presented in a study about major strategic investment projects similar research results. Only the middle management would be in a position to consider the situational context when assessing strategic projects.

Combining existing strategy and new strategy. BURGELMANN (1983) stresses the impact of middle management to a greater extent, since he describes middle management as the major link between old and new strategy initiatives.

Stressing crucial topics. DUTTON et al (1997) also confirms that middle management participates in agenda setting. Its role is described as “issue selling”: Middle management assesses potential issues in terms of their strategic relevance and tries to attract top management’s attention for appropriate issues.
Are they any factors that support or stop middle managers? A cooperative corporate culture, top management’s ability to listen, and stress of competition are impact factors that support this process. Opposite to this the fear of negative consequences, uncertainty, and reducing business activities represent repressive impact factors. Middle management also considers the thread of a reputation loss.

So what are the lessons learned for strategic planning practice? Middle managers are essential to focus on the relevant issues and to understand the context for strategic decisions. They second major role is to transfer the new or modified strategy to the organization. Hence middle managers should be involved (at least) in the phase of agenda formation.

 

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