The strategic management approach emphasizes a high degree of interaction by managers at all levels of the organizational hierachy in the planning and implementation process. As a result, certain behavioral consequences which characteristically accompany participate decision making also result from the strategic management process. Therefore, an accurate assessment of the impact of strategy formulation on organizational performance requires a set of non-financially defined evaluative criteria—measures of behavior-based effects. In fact, it can be argued that the manager who is trained to promote the positive aspects of these behavioral consequences is also well positioned to meet the financial expectations of the firm.
1. Strategy formulation activities should enhance the problem prevention capabilities of the firm. As a consequence of encouraging and rewarding subordinate attention to planning considerations, managers are aided in their monitoring and forecasting responsibilities by workers who are alerted to needs of strategic planning.
2. Group-based strategic decisions are most likely to reflect the best available alternatives. Better decisions can be argued as probable outcomes for two reasons. First, the generation of alternative strategies is facilitated by group interaction. Second, the screening of options is improved by contributing members of the strategizing group who can offer forecasts from their specialized perspectives.
3.A few additional studies, which were not discussed in the chapter, reported mixed results. However, only one piece of research has indicated that strategic management might have a negative impact.
4.Employee motivation should increase as the result of a wider and more in-depth appreciation of the productivity-rewards relationships in¬ herent in every strategic plan. Through their own participation in the strategist process, or that of their representatives, employees come to a better understanding of the priorities and operations of the organization’s reward system, thus adding incentives for their goal-directed behavior.
5.Gaps and overlaps in activities among diverse individuals and groups should be reduced as participation in strategy formulation leads to a clarification of role differentiation. The group meeting format which is characteristic of several stages of a strategy formulation process promotes an understanding of the delineations of individual and subgroup responsibilities.
Resistance to change should be reduced as a consequence of participating in the strategy formulation process. The required participation inherent in the process helps to eliminate the uncertainty in change which is at the root of most resistance. While participants may be no more pleased with their choices than they would be with authoritarian decisions, their acceptance of new plans is more likely when employees are aware of the parameters that limited the available options.