Modeling and measuring strategic alignment
Journal of Strategy and Management, 2023
Abstract
This paper presents an analytical framework for modeling and measuring strategic alignment. The resource-product-market (RPM) model is introduced as a means of representing the alignment of the firm’s internal resources with its product lines and external markets. A strategic alignment index is defined to measure the degree of alignment represented by a model. The RPM model is derived as an extension of prior research on diversification indexes. The strategic alignment index is mathematically defined, and the properties of the model are characterized using graph theory. The approach is illustrated for two example firms. The RPM model is flexible and can be used with different types and measures of resources, products, and markets. It is a vertical form of alignment which represents strategy in a structural manner. The index ranges continuously from 0 to 1.0 providing a useful scale for measurement and comparison. Practitioners may use RPM modelling to assess their firm’s current alignment and to identify strategic alternatives which increase alignment through a taxonomy of 13 strategic moves. The results of applying the model to ten firms are summarized. The paper contributes to the literature by providing a new method for modeling firm strategy which integrates resource and industry views, thereby enabling a measurement of their alignment. It is also novel in the application of graph theory to management.
Journal of Strategy and Management, 2023
Abstract
This paper presents an analytical framework for modeling and measuring strategic alignment. The resource-product-market (RPM) model is introduced as a means of representing the alignment of the firm’s internal resources with its product lines and external markets. A strategic alignment index is defined to measure the degree of alignment represented by a model. The RPM model is derived as an extension of prior research on diversification indexes. The strategic alignment index is mathematically defined, and the properties of the model are characterized using graph theory. The approach is illustrated for two example firms. The RPM model is flexible and can be used with different types and measures of resources, products, and markets. It is a vertical form of alignment which represents strategy in a structural manner. The index ranges continuously from 0 to 1.0 providing a useful scale for measurement and comparison. Practitioners may use RPM modelling to assess their firm’s current alignment and to identify strategic alternatives which increase alignment through a taxonomy of 13 strategic moves. The results of applying the model to ten firms are summarized. The paper contributes to the literature by providing a new method for modeling firm strategy which integrates resource and industry views, thereby enabling a measurement of their alignment. It is also novel in the application of graph theory to management.
Linear methods for estimating schedule time earned: theory and application
Journal of Management in Engineering, 2023
Abstract
This study introduces the term earned time (ET) for the class of linear methods which estimate the amount of project schedule time earned. Existing methods such as planned value (PV) rate, earned duration, and earned schedule are shown to be specific cases of earned time which use different linear rates to convert schedule variance in units of cost to units of time. An additional PV segment method is proposed which uses the linear rate of only the segment of the PV curve responsible for the schedule variance. The ET methods are examined theoretically and applied to three example projects to clarify their underlying assumptions. Five factors are found to guide the selection of a method for a given application: linearity, adherency, parallelism, stage, and status. The study contributes to theory by generalizing the concept of earned time and providing a new method for its estimation. The study is useful for practitioners seeking to apply ET methods and interpret their results.
Journal of Management in Engineering, 2023
Abstract
This study introduces the term earned time (ET) for the class of linear methods which estimate the amount of project schedule time earned. Existing methods such as planned value (PV) rate, earned duration, and earned schedule are shown to be specific cases of earned time which use different linear rates to convert schedule variance in units of cost to units of time. An additional PV segment method is proposed which uses the linear rate of only the segment of the PV curve responsible for the schedule variance. The ET methods are examined theoretically and applied to three example projects to clarify their underlying assumptions. Five factors are found to guide the selection of a method for a given application: linearity, adherency, parallelism, stage, and status. The study contributes to theory by generalizing the concept of earned time and providing a new method for its estimation. The study is useful for practitioners seeking to apply ET methods and interpret their results.
Operational and strategic change during temporary turbulence: evidence from the COVID‑19 pandemic
Operations Management Research, 2022
Abstract
Environmental turbulence is a well-studied contingency of relationships involving firm strategy, structure, and performance. However, it is invariably regarded as a present condition of indeterminate duration. Indeed, some industries are regarded turbulent by their nature with little regard for past, present, or future. What of environmental turbulence which is high in level but short in duration? An empirical study is conducted in the COVID-19 context to investigate how firms respond operationally and strategically to what is perceived to be temporary turbulence. Predictors of both operational and strategic change are found to include the level of turbulence and the firm’s prior experience making changes. The types of operational change associated with performance improvement are adjusting production levels and budgets/spending. The type of strategic change associated with performance improvement is targeting new customers or markets. A conceptual framework
incorporating both the level and duration of turbulence is proposed for future study.
Operations Management Research, 2022
Abstract
Environmental turbulence is a well-studied contingency of relationships involving firm strategy, structure, and performance. However, it is invariably regarded as a present condition of indeterminate duration. Indeed, some industries are regarded turbulent by their nature with little regard for past, present, or future. What of environmental turbulence which is high in level but short in duration? An empirical study is conducted in the COVID-19 context to investigate how firms respond operationally and strategically to what is perceived to be temporary turbulence. Predictors of both operational and strategic change are found to include the level of turbulence and the firm’s prior experience making changes. The types of operational change associated with performance improvement are adjusting production levels and budgets/spending. The type of strategic change associated with performance improvement is targeting new customers or markets. A conceptual framework
incorporating both the level and duration of turbulence is proposed for future study.
Strategic Agility in the SME: Use it before you lose it
Journal of Small Business Strategy, 2021
Abstract
This empirical study investigates strategic agility and its relationships with firm age, firm size, and firm performance in SMEs. The Doz and Kosonen three-factor model of strategic agility is operationalized and tested in 30 firms from multiple industries located in the Space Coast region of Florida. It is found that strategic agility decreases as firms grow older but not as firms grow larger. Strategic agility and firm performance are also found to be related as moderated by environmental turbulence. Specifically, performance increases with strategic agility in high turbulence but decreases with strategic agility in low turbulence. This finding is consistent with the view that dynamic capabilities like strategic agility bear a cost which may be unnecessary in stable environments. Overall, the study suggests that SMEs may benefit from strategic agility if it used while they still have it, that is, when they are young.
Journal of Small Business Strategy, 2021
Abstract
This empirical study investigates strategic agility and its relationships with firm age, firm size, and firm performance in SMEs. The Doz and Kosonen three-factor model of strategic agility is operationalized and tested in 30 firms from multiple industries located in the Space Coast region of Florida. It is found that strategic agility decreases as firms grow older but not as firms grow larger. Strategic agility and firm performance are also found to be related as moderated by environmental turbulence. Specifically, performance increases with strategic agility in high turbulence but decreases with strategic agility in low turbulence. This finding is consistent with the view that dynamic capabilities like strategic agility bear a cost which may be unnecessary in stable environments. Overall, the study suggests that SMEs may benefit from strategic agility if it used while they still have it, that is, when they are young.
Leveraging Strategic Agility in the Pandemic Environment
Global Journal of Entrepreneurship, 2021
Abstract
Strategic agility is defined as the firm’s capability to dynamically change its plan for achieving competitive advantage. Research on strategic agility has blossomed with over a dozen journal articles published during the last three years. Recent empirical research suggests young firms benefit more than older firms from strategic agility, especially when facing environmental turbulence. That is, firm age and environmental turbulence jointly moderate the relationship between strategic agility and firm performance. If the pandemic climate of 2020 represents a high degree of turbulence, then strategic agility may be highly beneficial for young firms struggling to survive if not prosper during pandemic conditions. This applied research article first reviews theory and prior research on strategic agility and environmental turbulence. It is argued the coronavirus pandemic ranks highly on the five components of the environmental turbulence construct, namely, the complexity, rapidity, novelty, visibility, and frequency of environmental change (Ansoff, 1984, 2019). Doz and Kosonen’s (2010) strategic agility framework and Reed’s (2020, 2021) empirical findings operationalizing the framework are reviewed, focusing on the unique value of strategic agility for young firms. A sensitivity analysis is conducted to identify six subfactors of the framework which most influence firm performance in high environmental turbulence. These are, in order, multiple business models, flexible organizational structures, probing the future, reflecting on past/future trajectory, modular systems and processes, and leadership empathy. The article concludes with a discussion of how these strategic agility subfactors may be leveraged by entrepreneurs and small firms during pandemic and other turbulent environments, and directions for future research.
Global Journal of Entrepreneurship, 2021
Abstract
Strategic agility is defined as the firm’s capability to dynamically change its plan for achieving competitive advantage. Research on strategic agility has blossomed with over a dozen journal articles published during the last three years. Recent empirical research suggests young firms benefit more than older firms from strategic agility, especially when facing environmental turbulence. That is, firm age and environmental turbulence jointly moderate the relationship between strategic agility and firm performance. If the pandemic climate of 2020 represents a high degree of turbulence, then strategic agility may be highly beneficial for young firms struggling to survive if not prosper during pandemic conditions. This applied research article first reviews theory and prior research on strategic agility and environmental turbulence. It is argued the coronavirus pandemic ranks highly on the five components of the environmental turbulence construct, namely, the complexity, rapidity, novelty, visibility, and frequency of environmental change (Ansoff, 1984, 2019). Doz and Kosonen’s (2010) strategic agility framework and Reed’s (2020, 2021) empirical findings operationalizing the framework are reviewed, focusing on the unique value of strategic agility for young firms. A sensitivity analysis is conducted to identify six subfactors of the framework which most influence firm performance in high environmental turbulence. These are, in order, multiple business models, flexible organizational structures, probing the future, reflecting on past/future trajectory, modular systems and processes, and leadership empathy. The article concludes with a discussion of how these strategic agility subfactors may be leveraged by entrepreneurs and small firms during pandemic and other turbulent environments, and directions for future research.
Strategic agility and the effects of firm age and environmental turbulence
Journal of Strategy and Management, 2020
Abstract
Purpose – The purpose of this empirical paper is to operationalize the Doz and Kosonen (2010) model of
strategic agility, consisting of three dimensions and 15 subfactors and to test its relationship with firm
performance under multiple contingencies.
Design/methodology/approach – A CEO-level survey is conducted to collect a sample of 73 firms from
three industries in the US state of Florida. Factor analysis and convergence with similar criterion are used to
validate the strategic agility construct. Multiple regression is used to test hypothesized relationships.
Findings – The findings support construct validity of Doz and Kosonen’s model. Moreover, firm age and
environmental turbulence are found to be important contingency factors. Environmental turbulence is found to
moderate the relationship between firm age and strategic agility. Firm age and environmental turbulence are
found to jointly moderate the relationship between strategic agility and firm performance.
Research limitations/implications – It is evident that firms may benefit from strategic agility depending
on their age and environment. The results encourage future longitudinal research addressing causality.
Originality/value – The paper contributes to research by validating a more comprehensive model of strategic
agility and identifying contingency factors that help to explain prior mixed results on the relationship between
strategic agility and performance.
Journal of Strategy and Management, 2020
Abstract
Purpose – The purpose of this empirical paper is to operationalize the Doz and Kosonen (2010) model of
strategic agility, consisting of three dimensions and 15 subfactors and to test its relationship with firm
performance under multiple contingencies.
Design/methodology/approach – A CEO-level survey is conducted to collect a sample of 73 firms from
three industries in the US state of Florida. Factor analysis and convergence with similar criterion are used to
validate the strategic agility construct. Multiple regression is used to test hypothesized relationships.
Findings – The findings support construct validity of Doz and Kosonen’s model. Moreover, firm age and
environmental turbulence are found to be important contingency factors. Environmental turbulence is found to
moderate the relationship between firm age and strategic agility. Firm age and environmental turbulence are
found to jointly moderate the relationship between strategic agility and firm performance.
Research limitations/implications – It is evident that firms may benefit from strategic agility depending
on their age and environment. The results encourage future longitudinal research addressing causality.
Originality/value – The paper contributes to research by validating a more comprehensive model of strategic
agility and identifying contingency factors that help to explain prior mixed results on the relationship between
strategic agility and performance.