Strategy formation by business leaders - CiteSeerX

File nameg:/EJM (Q)/2000_Vol_34/1_2/Harris/Harris.3d 12:40 ± 14/1/00 ± Total page(s) 17

The research register for this journal is available at http://www.mcbup.com/research_registers/mkt.asp

European Journal of Marketing 34,1/2 126 Received January 1998 Revised March 1998

The current issue and full text archive of this journal is available at http://www.emerald-library.com

Strategy formation by business leaders

Exploring the influence of national values Simon Harris

University of Stirling, Scotland, UK, and

Pervez Ghauri

Faculty of Management and Organisation, University of GroÈningen, The Netherlands Keywords Business strategy, International marketing, National cultures, Small to mediumsized enterprises, Globalization Abstract The internationalization of small and medium-sized businesses typically involves negotiation, agreement and exchange between business leaders from different national cultural values and traditions. Explores whether, and how, national values affect the strategic aims of business leaders, the content of their strategic deliberations, and the processes they follow to develop those ways of thinking into enacted strategies. The two business leaders studied were operating within the Standard Industrial Code 33.20/1, developing and combining electronic hardware and software technologies to address the needs of industrial customers world-wide, but were from countries with different national values. The aims of the business leaders, and the processes they used to develop strategies differed, in ways which reflected their national backgrounds. The contents of the strategic issues they considered, however, were more similar, largely reflecting industry norms and demands, in these cases expressed on a global scale.

Introduction Linkages with firms in other countries, possibly through networks of business relationships, help small and medium-sized businesses which are addressing international markets to overcome hurdles of market and cultural differences (Axelsson and Easton, 1992; Buckley and Casson, 1997; Child et al., 1997; Johanson and Mattsson, 1992). In comparison with larger firms, however, the implications of internationalization and of the development of these linkages for management processes within smaller businesses have received little attention. The more important the international linkages between firms, the more that strategy formation involves negotiation, agreement and exchange between business leaders from different national cultural values and traditions. Such international business strategy formation requires effective interaction between individuals from different national backgrounds, each with their own aims and goals, over complex issues. The high quality interaction needed to generate appropriate levels of trust requires shared language, beliefs and understandings (Ghauri and Usunier, 1996; Griffin, 1967; Powell, 1996; European Journal of Marketing, Vol. 34 No. 1/2, 2000, pp. 126-142. # MCB University Press, 0309-0566

This research was supported by UK-Dutch Joint Scientific Research Grant JRP324 from the British Council and the NWO.


Worchel, 1979). Successful cross-border alliances, for example, require Strategy fundamental behavioural and cognitive learning, and the formation of formation by appropriate trust, power, co-operation and social relationships on an business leaders international scale (Doz, 1996; Grabher, 1993; Hakansson, 1987). This strategy formation process is increasingly seen as the interplay and adaptation of individual ``perceptions'', ``cognitions'', or ``ways of thinking'' 127 through `àrgumentation'' within an industry environment, an organisational setting, or an informal international network (Calori et al., 1992; Eden, 1992; Hellegren and Melin, 1993; Sillince, 1995). From an in-depth longitudinal study of business leaders, Hellgren and Melin (1993, p. 66) conclude: Whether [strategic] change is initiated or not is a matter of the degree of similarity (or difference) between a top leader's way-of-thinking and the dominating opinions and values expressed in other cognitively loaded spheres of importance. . .(Hellgren and Melin, 1993).

Ways of thinking appear to be stable over time and impervious to pressure or change. They influence both the purposes and content of strategic discussion, and the backdrop against which argumentation with others takes place. Influences on strategic thinking Hellgren and Melin found the main ``spheres of influence'' affecting business leaders' ways of thinking to be their individual personalities, their core beliefs, and their early industrial experiences. Other influences are also associated with strategic perceptions (Sims and Gioia, 1986; Huff, 1990; Reger and Huff, 1993; Eden, 1992; Ghauri and Prasad, 1995). These include the organisational culture (Johnson, 1987; Daniels et al., 1994), functional experience (Bowman and Daniels, 1995), and professional background (Hodgkinson and Johnson, 1994). Membership of an industry or of a competitive group, however, has consistently been identified by strategic cognitions research as a strong influence on individual perceptions (Huff, 1982; Porac et al., 1989), by presenting an `ìndustrial wisdom'' or `ìndustry recipe'' (Gordon, 1991; Hellgren et al., 1993; Spender, 1989). In industries with global competition, technical standards, and technologies, assumptions with regard to practices of management, and therefore about strategy formation, might be shared wordwide. Helped by the use of English as a global technical language, and the ``normative strategy'' approach disseminated by business schools, it has been argued that managerial cultures and perceptual bases in international sectors are becoming increasingly alike (Burrell and Morgan, 1979; Cohen, 1988; Lammers and Hickson, 1979; Lammers, 1990). Two studies, by accident, have found national values influencing strategy formation. In an examination of managers' perceptions within France and the UK, Calori et al. (1992) found industry, organisational and national influences to be significant. They note: This research did not set out avowedly as a study in comparative management from a cultural point of view [. . .] It is therefore the more interesting to note that, even given the


European Journal of Marketing 34,1/2 128

individual manager as the unit of analysis, systematic differences between French and British managers are found: and these differences bear out many of the observations of researchers in comparative management. . . (Calori et al., 1992, p. 72).

Hofstede et al. (1990, p. 301) studied organisational culture and behaviour in two culturally close nations and noted: all in all, having gone out to study organisational value differences and having done this in two countries for reasons of convenience, we seem to have mainly caught national value differences.

Strategic management research has paid little attention, however, to the potential influence of national, rather than industry background on strategic management processes, even though strategic cognition's research indicates that it could be an equivalent influence as industry background, as hypothesised diagrammatically in Figure 1. The potential influence of national values on strategy formation `Àrtefacts and norms'' have been distinguished from more fundamental shared ``values and basic assumptions'' in societies (Hofstede, 1980; Lundberg, 1985; Schein, 1985). Artefacts and norms include behaviours (such as rituals) and observable tangible manifestations such as business practices (Lundberg, 1985; Hofstede 1991). These may respond to new environmental and organisational contexts, strategies and interventions, and may be learned at the workplace (Schein, 1985; Isabella, 1990). Business practices may therefore be influenced by dominating ways of thinking in individuals' environments, such as industry norms and ``recipes'', professional practices, and organizational traditions. By contrast, values and basic assumptions, normally unconsciously, govern how realities are perceived and how behaviour is assessed. They lie at the core of behaviour. As Hofstede et al. (1990, p. 291) note: The core of culture . . . is formed by values, in the sense of broad, non-specific feelings of good and evil, beautiful and ugly, normal and abnormal, rational and irrational ± feelings that are often unconscious and rarely discussible, that can't be observed as such but are manifested in alternatives of behaviour.

These values originate from individuals' learning during their earliest years, and the physical, social, and emotional environment within which it takes place

Figure 1. Influences on business leaders' ``ways of thinking''


(Lundberg, 1985). Unlike norms and artefacts, these underlying beliefs and Strategy values, the ``software of their minds'' are resistant to change (Schein, 1985). formation by They have been found to differ between nations, and to be stable within nations business leaders (Hofstede, 1980, 1991). Business leaders of different national backgrounds can be expected to hold different underpinning values, different assumptions regarding the environment, and different expectations about relationships 129 among people (Schein, 1985). How, in detail, these different values will influence strategy formation depends on the values of the individuals involved. Overall, however, national values might be expected to influence three aspects of their strategic management processes: their strategic aims, the content of their strategic deliberations, and their strategic processes. These are considered in turn. Strategic management has long been seen as a process which sets the direction of the business to meet the underlying expectations or purposes of stakeholders, which might be expressed as visions or goals. The individual business leader may be viewed as the primary stakeholder in entrepreneurial organizations, though such a leader may regard others as stakeholders as well, depending on his or her beliefs and expectations about relationships with others in society. The purposes pursued will reflect values in life itself, whether concerned with, for example, wealth, love and friendship, or religious values. The first aim of the study, therefore, is to explore how national values of business leaders may influence the overall aims business leaders have for their businesses. Strategic management thinking involves the consideration of issues which the individuals involved have not only become aware of, but also consider to be important for the future of their businesses. Different groups have been shown by cognitions research to consider different issues in their strategy formation processes. Different values about what is of worth in life and what is not, and different assumptions regarding the environment, may be expected to result in a different range of issues when considering strategies, and to influence what business leaders believe is important and unimportant to consider. The second aim of this study is to explore how national values of business leaders may influence the content of their strategic deliberations. Strategic management research has shown different processes which may be used by individuals and organizations to formulate strategies, for example, rational analysis by individuals, and political negotiation between interest groups. Different individuals can be involved in the strategy formation process, different roles may be played by individuals, and those involved may hold different models or paradigms when considering and discussing strategic issues. Different expectations about relationships among people in different nations may be expected, therefore, to influence what is believed to be the appropriate process for forming strategies, for example, who might and might not be involved in the strategy formation process, and how. The third aim of this study is to explore how value differences between nations may affect the processes by which these business leaders develop strategies, in particular, whom they involve in them and how they involve others in them.



Research methodology As this study is exploratory, in-depth case examination and analysis of relevant comparable business leaders were considered to be the best way to enable development hypotheses, and refinement of conceptual linkages which might be then subject to empirical testing. Indicative in-depth case study research provides `à means of generalising about processes managers get involved in'' (Watson, 1994, p. 7), where generalization comes from the theoretical developments enabled by the study (Yin, 1994). Data collection Data were gathered by means of structured interviews of two founders and chief executives of medium-sized businesses, one Dutch (NL) and one Scottish (SC). A significant problem in research in larger businesses is identifying and accessing strategic actors (Pettigrew, 1985), but this is avoided in studying entrepreneurial leaders. Organisational culture has been found to be a major influence on managers' thinking processes (Hofstede et al., 1990; Johnson, 1987; Daniels et al., 1994), but this is also directly linked to the underlying beliefs and values of the founder (Hofstede et al., 1990). The interviewees were considered to be the prime architects of the strategies, the organisation, and the culture of their respective businesses. In order to distinguish between the influences of national values, the focus of this study, and industry influences (Figure 1), the businesses selected operate in industry sub-segments which, though different, are technologically and globally determined. Both are within the Standard Industrial Code 33.20/1, developing and combining electronic hardware and software technologies to address the needs of industrial customers world-wide, with a small proportion of their sales in their own national markets. The use of directed questions derived from strategy theory, as employed by Schneider and de Meyer (1991), would preclude access to underlying beliefs and perceptions. Instead, the interviews followed Calori et al. (1992; 1994), in using in-depth conversations based around non-directive questions to access the interviewees underlying considerations and beliefs, and uncover influences of a consistent national nature. To avoid, as much as possible, the researcher's own a priori hypotheses, framed within a particular culture, influencing the data, the interview structure attempted to access the interviewees' own ``native categories'' of data by enabling the respondents to express their own underlying beliefs (Buckley and Chapman, 1997). To do this, no prompts were used to pursue issues not raised by the interviewee, and no clue was given as to the areas of interest of the interviewer (Strauss and Corbin, 1991). The danger of misunderstandings from different interpretations of complex ideas in different national settings was minimised by the use of straightforward, everyday language. The overt focus for the discussion was ``the future of the business''. The words ``strategy'', ``strategic'', and other management jargon were never used by the interviewer. Interviews were conducted in English at the interviewees' business premises, and they were tape recorded and transcribed. A reassurance of full confidentiality was given with each interview.


To enable comparison, a strict interview regimen was followed in which the Strategy interviewee addressed the same questions in the same order, diverting from formation by this regimen only to obtain clarification or explanation of an issue raised by the business leaders interviewee. Any perceived pressure to rationalise responses was reduced by an explicit declaration that reasons for perceptions or processes would not be explored (Ericsson and Simon, 1985). To assess the interviewee's frame of 131 reference more accurately, the study used four criteria: spontaneity, priority, length of discussion on theme, and explicit mention of importance to record the importance of each answer from the perspective of the interviewee (Calori et al., 1992). Data analysis Protocol analysis was used as a means of analysing the transcribed interviews of the two case companies (Ericsson and Simon, 1985). Previous research by Hofstede (1980, 1991) has differentiated between national values in a large number of countries, based on socio-psychological research among IBM employees. Table I shows Hofstede's five discriminating criteria of culture, and the index values and world ranks (from Hofstede's study of 44 countries) for the UK and The Netherlands. Though subject to some criticism (Tayeb, 1988; Whitley, 1992), this research provides the most widely used basis for standardised examination of national values, and has received substantial corroboration (Sondergaard, 1994). From it, criteria can be drawn for evaluating the transcribed data. In the ``power distance'' and `ìndividualism/collectivism'' criteria, individuals in the two nations appear to share similar values, and in `ùncertainty avoidance''; while the UK welcome of uncertainty is not fully shared in The Netherlands, the differences are not great. Individuals in The Netherlands, however, show one of the strongest orientations, worldwide, to values consistent with what Hofstede (1980, 1991) calls a ``feminine'' society, whereas individuals in the UK show strong values associated with ``masculine'' societies. The masculinity and femininity dimension is a label which encompasses a range of social and interpersonal interactions and values. In ``feminine'' societies, people are expected to be concerned with people and relationships, and work for life in its widest sense, whereas in ``masculine'' societies, value is

Dimension of values Masculinity/feminity Uncertainty avoidance Power distance Individualism/collectivism Long-term/short-term (study of 22 countries

The Netherlands Index score Rank

The UK Index score Rank

14 53 38 80

51 35 40 4/5

66 35 35 89

9/10 47/48 42/44 3

44

10

25

18

Table I. Index scores and values ascribed by Hofstede (1991) to The Netherlands and the UK



placed on ambition, performance, and achievement, specifically of money and things. Business leaders in ``masculine'' nations might be expected to be goal focused, and seek material success. Feminine societies emphasise equality between people and consensus through negotiation and compromise. This can be expected to lead to more participative and inclusive strategy formation processes than in ``masculine'' societies, where managers are expected to be decisive, assertive, ambitious and tough. They are also more likely to reflect broader and more intuitive approaches than in ``masculine'' societies, where decisive ``logical'' approaches, perhaps akin to the ``normative'' strategy model, may be more favoured. The short-term and long-term orientation dimension was discovered in later work by researchers working with managers in South East Asia. The data set includes few data for European countries. The Netherlands, however, displayed the longest-term orientation within Europe (though not worldwide), whereas the UK displayed the most ``short-term'' values within Europe, and one of the most short term of orientations world-wide. An outcome focus and the speedy achievement of wealth would be the ``shorter-term'' orientation, this achieved through radical change, requiring external finance and, if possible, the securing of good deals with other businesses. ``Longer-term'' goals reflect a desire for personal growth in its broadest sense, the fostering of valuable relationships, and an aversion to radical change. Business development reflects patience, and is through the gradual and steady acquisition of internal skills, capabilities and resources. The different values found by Hofstede (1980, 1991) might therefore be expected to lead to differences in the strategic aims, strategic content and strategy formation processes of the two business leaders. Hypotheses can be derived from Hofstede's research summarised above, concerning the strategic aims of business leaders, the content of their strategy deliberations, and their strategy formation processes, and these are presented in Table II. These can be viewed as ``national typologies'' for the two nations, and become the criteria used to analyse the data and explore each of the three research questions within the businesses examined. Findings Overall, the Dutch business leader (NL) yielded data on nine of the 12 evaluative criteria shown in Table II, six corresponding to the ``Dutch'' typology, one to the `ÙK'' typology, and three to both typologies. The Scottish business leader (SC) yielded data on ten criteria, six corresponding to the UK typology, and four to both typologies. Correspondence between the national typologies, however, differed between the aims, the content, and the processes of strategy. Strategic aims SC first emphasised his goals and aspirations for the business, and these were directly and explicitly related to his own ambitions for himself (Table III).


National typology: The Netherlands

National typology: the UK

Strategic aims Developing good relationships in and outside the business (f) Developing the business as a whole (f) Broad achievement notion, includes learning and personal growth (lt) Orientation towards patience and thrift (lt)

Strategic aims The achievement of specified goals and visions (m) The benefits of individual(s) (m) The generation of income and wealth (st)

Strategy formation by business leaders 133

Orientation towards speedy achievement (st)

Content of strategy Harmonious working relationships and environments (f) Good quality in working life of staff (f)

Content of strategy Finance (m)

Strategy development process Mainly involves staff within the organisation (f) Varied processes which accept intuitition (f)

Strategy development process Mainly involves strategic ``leader'' and chosen associates in/outside the organisation (m) Decision, logical approaches (m)

Performance, strength, perseverance and assertiveness, hard work of individuals (m) Use of internally generated finance; external Use of external finance ± for speedy finance only from good working relationships development (st) (lt) Adaptation to traditions (lt) Breaking with traditions (st) Product development focused on skills/ Product development focused on outcomes (st) capabilities (lt) Capability developed slowly through learning Capability developed rapidly through and building good relationships (lt) bargains and deals (st)

Notes: f = feminine orientation; m = masculine orientation; lt = long-term orientation; st = short-term orientation

Dutch business leader (NL)

Table II. ``National typologies'' for analysis of the transcript data

Scottish business leader (SC)

[+] Developing the business as a whole (f) [+] Developing the business as a whole (f) [+] Developing good relationships within and [++] Achieving specified goals and visions outside the business (f) (m) [+] Broad achievement notion, includes [++] The benefit of individuals (m) learning and personal growth (lt) [++] Generating income and wealth (st) [+] Orientation to speedy achievement (st) Notes: f = feminine orientation; m = masculine orientation; lt = long-term orientation; st = short-term orientation; [+] = some mention by interviewee; [++] = special emphasis by interviewee

. . . ultimately the business will be very successful when I've made a lot of money and I mean when I've made several million [. . .] then I can retire (SC.A.1.1).

``Masculine'' goal and achievement and ``short-term'' acquisition of wealth orientations are clearly visible:

Table III. Revealed strategic aims according to the national typologies



. . . it will be very valuable for the company itself to be able to raise money on the flotation, no question, that's why you do it [. . .] for the founders and time to get some money back for all their hard work. [. . .] It may be that you can't sell out for two or three years after that because you'll be locked in various ways but that's OK, I can handle that (SC.A.1.3).

SC's main concerns were clearly ``masculine'' and ``short-term'', being for the rapid development of his own, personal, wealth. NL by contrast, in line with a ``feminine'' orientation, made little reference to goals or aspirations, and never in a personal way. NL was concerned with developing good relationships between individuals, and learning and growth of individuals within and outside the organisation, a ``long-term'' orientation: . . . These distributors are very important to us . . . we try to look after them . . . I worry about them [. . .] We take great care to help the distributors do their business. We have got to know them very well, we bring them here to the factory, and entertain them and look after them regularly for periods when they stay here with us (NL.A.2.1).

Although there was little direct reference towards thrift and patience, he made no reference to the need for speed, and the pattern of business growth was steady development. Strategic content Both NL and SC displayed strong ``masculine'' tendencies in their focus on the performance, assertiveness and hard work of their staff. They both expressed disappointment in their staff performance particularly towards the absence of imagination and ``drive''. Addressing equivalent staffing problems, SC considered a more ``masculine'' approach: I try to convince them to look abroad rather than in The Netherlands, to make comparisons between different subcontractors, and to see if things are in control. This is difficult . . . our people do not shift themselves enough . . . they have to be kicked [. . .] The trouble is, they tend to concentrate on the day-to-day business rather than looking around for new opportunities. So, this tends to be initiated by myself. These people always need to be pushed [NL.A.2.2-3.2]. Within the whole team there are some who seem to be impervious to the needs of the business . . . they just want to go on doing their own thing. I am not a charity, I have tried a number of approaches to getting them in line [. . .]. I think that there will be a number of staff changes within the next couple of months. I want people who will work, and who will get results, as well as fitting the overall needs of the business [SC.A.4.2].

NL asserted the importance of good working relationships with suppliers and distributors, a ``feminine'' preoccupation, whereas SC made no such reference (see Table IV). Finance was the single subject on which SC talked the most, a ``masculine'' preoccupation, which NL rarely mentioned, even though both businesses faced equivalent financial circumstances. Nearly all of NL's growth had been financed through retained earnings, a longer-term orientation. However, it had recently secured external equity finance from a business with which there was significant business synergy and where good relationships had developed between both the business leaders. Nearly all of SC's growth had been financed




[+]

[++] Finance (m)

[++] [+] [++] [+] [+] [+]

Harmonious relationships and environments (f) Performance, strength, perseverance and assertiveness, hard work of individuals (m) Product development focused on skills and capabilities (lt) Capability developed slowly through learning and building good relationship (lt) Use of internally generated finance, external finance used only from good working relationships (lt) Product development focused on outcomes (st) Capability developed rapidly through bargains and deals (st)

[++] Performance, strength, perseverance and assertiveness, hard work of individuals (m) [+] Product development focused on skills and capabilities (lt) [+] Capability developed slowly through learning and building good relationships (lt) [++] Use of external finance ± for speedy development (st) [+] [+]

Product development focused on outcomes (st) Capability developed rapidly through bargains and deals (st)

Notes: f = feminine orientation; m = masculine orientation; lt = long-term orientation; st = short-term orientation; [+] = some mention by interviewee; [++] = special emphasis by interviewee

through external bank and equity finance: SC had received some finance from an individual who had significant business interests in a similar business (a ``business angel''), but the importance of this was in the personal relationship involved rather than in the finance itself. SC was in a hurry to develop the business and to sell it, and to do this, external equity from any source was sought. Both NL and SC emphasised global price reductions between 15 and 20 per cent per annum. Both explored in depth the similar issues faced in product development, stressing the need for continual development of new and improved products and for developing skills and capabilities in product development, a ``feminine'' orientation. SC saw this achieved through appropriate hiring and dismissal, and NL through better hiring and personnel ``development''. Both also emphasised the outcomes, as well as the inputs to development activities, a ``masculine'' orientation: The thing here is getting sales quickly . . . the time to market. This involves getting the right people . . . it is an overall aim of the product development department. We have been trying to find other companies to work with ± design companies ± in order to get input from outside [NL.A.4.2]. . . . [this] relates to the staffing issues [. . .] I've tried to delegate the actual management of the product itself to another member of the team, which has worked with partial success . . . but [he] isn't prepared to take on the occasional requirement to conflict in order to manage that process [. . . to . . .] say [. . .] that's what's needed, or to challenge somebody . . . [SC.B.4.2].

In the development of international capabilities, the two business leaders were more similar than different. Both leaders learned gradually over time and


Table IV. Revealed strategic issues (content) according to the national typologies



through their industry contacts about international markets and international sources of manufacturing or technical capability. Both were also eagerly seeking appropriate contractual relationships with other firms to secure their international presence, with this being NL's most burning issue. The focus, however, reflected different goal orientations. SC was looking for the deal that would catapult the value of his business quickly, and make him richer, faster. In this, he was actively selling, and looking for other businesses with mutual interests in an appropriate deal. NL saw securing a good international manufacturing deal, reasonably and quickly, as the way to preserve the future integrity of his business. In developing this deal, however, he was more concerned with developing strong long-term relationships by working through his long established distributor relationships. This can be ascribed to a ``longer term'' orientation, but also to previous bad experiences of contractually based relationships with suppliers. Strategy process The two business leaders developed, matured, pursued and enacted their strategic thoughts in different way (see Table V). In particular, the two business leaders emphasised different groups of individuals to be most important for discussion of the most important strategic issues. NL's main counsel for discussion was with the staff involved, in accordance with the expectation from a ``feminine'' orientation: [In product development] . . . I have mainly been dealing with the head of the R&D department, and with the management team in general . . . We have had only little successes . . . (NL.A.1.3). [On new opportunities] . . . I discuss it with the Board of Directors, but also with friends, old school friends, and friends from University, and relatives . . . I am looking for ideas, and knowledge. I am also looking for people who could help . . . (NL.A.2.3 ± 2.4). [On Production] . . . Our distributor in Thailand had met someone from India, and got to know him quite well. He thought that the company he came from might be able to do what we wanted. I talk about it with the production team managers, and especially with the Operations Director. I try to convince them to look abroad rather than in The Netherlands, to make comparisons between different subcontractors, and to see if things are in control . . . (NL.A.3.3).

Table V. Revealed strategic processes according to the value criteria



[++] Mainly involves staff in the organisation (f)

[++] Mainly involves strategic ``leader'' and chosen associates in/outside the organisation (m)

Notes: f = feminine orientation; m = masculine orientation; [++] = special emphasis by interviewee


[On sales and distribution] . . . We have a sales manager, and also have area managers. They, and I talk to the distributors directly, we phone them regularly. We also see them here, at the firm, they are welcomed here and spend time here. We also visit them on their own areas . . . [. . .] Overall I am working through the issues with my own staff . . . (NL.A.4.3).

NL mainly developed strategy through discussion with staff within the organisation, despite the limitations which he felt they had. He also discussed issues with distributors, with his board of directors, and with his partners in the newly combined business. SC, in line with a strong ``masculine'' orientation, regarded his wife, a long-standing business friend, and external advisers and contacts as serious sources for strategic counsel. He only discussed the implementation of strategy with his staff, the strategies having been already formulated: [on product development] . . . and that in a way becomes a recruitment issue again. [I discuss this with] . . . my wife, primarily. But I talk to people first . . . try to negotiate some kind of structure that's going to actually work within the constraints of the people involved, (pause) I've ceased to try to change human nature. They used to be dealt with by holding meetings but I've stopped doing that on the whole. . ., there's probably some value to them but we have actually stopped doing them . . . (SC.A.4.3). [On product and sales development] . . . in the whole process, my wife has to be the single most important person [. . .] in business development probably [good business friend] is the single most important person and in terms of actually getting to the point to where things are transferred from my head to being concrete realities then my team of staff are the most important people so none of them stand alone . . . (SC.B.2.3).

NL mentioned but did not emphasise friends and family and other `òutsiders'' as a source of strategic discussion, whereas SC emphasised the importance of both his wife and a close relationship with an older, successful business leader: Experience shows me that [this person] is a pretty trustworthy person who I know why he's involved, he's involved with the business partly because he wants to make some money [. . .] and part of it is because he sees there's something that he can contribute [. . .] He's put a lot in, in financial terms but in other terms there's also a lot he can put in [. . .] the trust arises from confidence, from knowing that the motivations are right, those are key issues, I suppose we have a personal rapport that works some of it is down to that [pause] . . . I get on with him (SC.B.1.3).

Discussion The clearest differences between the two business leaders were seen in their overall strategic aims, and these corresponded to a priori expectations of national values. These differences are associated with fundamental beliefs and life purposes. SC showed a clear goal focus towards the acquisition of wealth for his own material gain, whereas NL showed concern for wider, longer-term development of his organization. It is possible that these differences arise not from fundamentally different values, but from different beliefs about what may or may not be outwardly expressed (Hofstede, 1991). For example, NL may well be as materially oriented as SC, but it may not be culturally acceptable in The Netherlands to acknowledge this. Similarly, SC might hold but not feel it appropriate to express ``feminine'' values. While this distinction is important




Table VI. Summary of the Dutch and the Scottish business leaders' orientation

when drawing implications from this research, even differences only in what is considered permissible or not permissible to discuss will influence strategic discussions between individuals from the two countries (see Table VI). In the content of strategy, differences were seen, but overall these were less marked. Both SC and NL placed a ``masculine'' emphasis on the performance of staff, though SC showed a more ``masculine'' stance as to how this might be improved, and NL displayed some ``feminine'' concern for maintaining and developing harmonious working relationships. The creativity and performance of individual staff might be viewed as a global industry imperative within a fast changing technology industry, where the introduction of new ideas can occur from any nation. Substantial differences in the attitudes towards finance for the two businesses reflected the different overall strategic aims of the two business leaders, which did correspond to their national values. In other aspects of the ``content'' of strategy, the differences between the two businesses were slight. Both business leaders shared similar concerns over new product development, and each emphasised both a search for success outcomes, a ``short-term'' orientation, and a longer-term concern for developing their staff's skills and capabilities. Both businesses expressed concern for developing their businesses' international capability (in manufacture and distribution) slowly through the formation of good relationships, as well as through international deals. In all these areas, global industry imperatives may be a forceful influence. The Dutch business leader

The Scottish business leader

Strategic aims No mention of ``masculine'' individual goal achievement; some ``feminine'' orientation towards long-term organisation-wide development over time

Strategic aims Strong ``masculine'' orientation towards goal achievement for individual benefit; strong ``short-term'' orientation towards speedy material gain

Content of strategy Barely any mention of finance; Mainly long-term perspectives on finance; ``masculine'' orientation towards performance of individuals, modified by ``feminine'' concern for harmonious working relationships Long-term concern for skills and capabilities in product development, but short-term focus on outcomes as well International capability developed through forming good long-term relationships, though with short-term ``deals'' as well

Content of strategy Strong ``masculine'' concern over finance; Mainly short-term perspectives on finance; ``masculine'' orientation towards performance of individuals, and an assertive approach to managing it

Strategy development process Through discussion with staff

Long-term concern for skills and capabilities in product development, but short-term focus on outcomes as well International capability developed through forming long-term good relationships, though with short-term ``deals'' as well Strategy development process Through discussion with personal associates and personal external advisers


Both businesses discussed ideas widely, facing an industrial need to capture Strategy and enact ideas. The processes for dealing with the most important strategic formation by issues, however, concurred with the national typologies: NL mainly involved business leaders his own staff and his business associates, and SC only involved his in implementing strategies already devised by himself and his advisers. Conclusions Economic globalization in the electronics industry was reflected in the similar content of the strategic issues between the two businesses, with thoughts about industrial issues and market demands subject to global norms and pressures. The strategic aims of the businesses' leaders and their strategic processes appeared to be associated with previously identified national differences in values, though there may be other influences as well. Different national orientations in strategic aims and in strategy formation process hold significant implications for business leaders and managers within global and globalizing industries, especially when exploring new strategic relationships, and when there are managers from different national backgrounds discussing strategy. While the individuals involved may share understanding about important strategic issues, they may not share the same overall aims and purposes, nor the same beliefs about the appropriate processes for successfully negotiating a strategy. These types of differences may become apparent only after considerable discussion and negotiation. While much previous research has noted differences in organisational practices and behaviour in different countries, this study begins an exploration specifically in strategic management processes. It shows that it may be possible to draw links between national values and strategic management behaviour, and indicates where these links may and may not lie. Previous studies tend to explore links between underlying national culture and the content of strategy, instead of the aims and processes involved. Figure 2 relates Lundberg's (1985) `ònion'' representation of the ``levels'' of culture to notions of

139

Figure 2. Levels of culture and levels of strategy



``levels of strategy'' presented first by Pettigrew (1985). In this, underlying beliefs about strategy formation are regarded as the ``back stage'' of decision making. Enacted strategies, and cognitions about competitors, the importance of different costs etc., are regarded as `àrtefacts'' at the ``front stage'' of decision making. This has clear implications for the processes of research which may effectively be employed to investigate these links further. Like other studies which have employed open-ended questions in the context of in-depth interviews, this method produced greater success than direct questioning approaches in accessing the ``back stage'' of decision making. Moreover, the data yielded were also amenable to coding, comparison and analysis. Two developments to the analytical method may well provide a deeper analysis. First, the application of a range of evaluative criteria within specific issue areas of common industry concern might well help more rigorous discrimination between the effects of global industry influences and of national value influences. Second, it may be of value to employ criteria of value differences between countries derived from a wider range of studies. The use of such a research approach across a greater number of subjects may well yield a more penetrating analysis of the influence of national values on strategy formation processes. References Axelsson, B. and Easton, G. (1992), Industrial Networks: A New View of Reality, Routledge, London. Bowman, C. and Daniels, K. (1995), ``The influence of functional experience on perceptions of strategic priorities'', British Journal of Management, Vol. 6 No. 2, pp. 157-67. Buckley, P. and Casson, M. (1997), `Àn economic model of international joint venture strategy'', in Beamish, P. and Killing, J. (Eds), Cooperative Strategies, Lexington Press, San Francisco, CA, pp. 3-32. Buckley, P.J. and Chapman, M. (1997), ``The use of native categories in management research'', British Journal of Management, Vol. 8 No. 6, pp. 283-99. Burrell, G. and Morgan, G. (1979), Sociological Paradigms and Organizational Analysis, Heinemann, London. Calori, R., Johnson, G. and Sarnin, P. (1992), ``French and British top managers' understanding of the structure and dynamics of their industries: a cognitive analysis and comparison'', British Journal of Management, Vol. 3 No. 2, pp. 225-48. Calori, R., Johnson, G. and Sarnin, P. (1994), ``CEO's cognitive maps and the scope of the organisation'', Strategic Management Journal, Vol. 15 No. 6, pp. 437-57. Child, J., Yau, Y. and Lu, H. (1997), `Òwnership and control in Sino-foreign joint ventures'', in Beamish, P. and Killing, J. (Eds), Cooperative Strategies, Lexington, San Francisco, CA, pp. 181-225. Cohen, E., (1988), ``Formation, modeÁles d'action et performance de l'eÂlite industrielle'', Sociologie du Travail, Vol. 4 No. 4, pp. 587-611. Daniels, K., Johnson, G. and de Chernatony, L. (1994), ``Differences in managerial cognitions of competition'', British Journal of Management, Vol. 5, Special Issue, pp. S21-9. Doz, Y.L. (1996), ``The evolution of cooperation in strategic alliances: initial conditions or learning processes?'', Strategic Management Journal, Vol. 17, Special Summer Issue, pp. 55-83.


Eden, C. (Ed.) (1992), `Òn the nature of cognitive maps'', Journal of Management Studies, Vol. 29 No. 3, pp. 336-54. Ericsson, K. and Simon, H. (1985), Protocol Analysis, Sage, New York, NY. Ghauri, P.N. and Prasad, B. (Eds) (1995), International Business Management: A Reader, Dryden Press, London. Ghauri, P.N. and Usunier, J.-C. (Eds) (1996), International Business Negotiations, Pergamon, Oxford. Gordon, G.G. (1991), `Ìndustry determinants of organisational culture'', Academy of Management Review, Vol. 16 No. 3, pp. 396-415. Grabher, G. (Ed.) (1993), The Embedded Firm: On the Socioeconomics of Industrial Networks, Routledge, London. Griffin, K. (1967), ``The contribution of studies of source credibility to a theory of interpersonal trust in the communication process'', Psychological Bulletin, No. 68. Hakansson, H. (1987), Industrial Technological Development: A Network Approach, Croom Helm, London. Hellegren, B. and Melin, L. (1993), ``The role of strategists' ways-of-thinking in strategic change processes'', in Hendry, J. et al. (Eds), Strategic Thinking: Leadership and the Management of Change, Wiley, Chichester, pp. 161-92. Hellegren, B.L., Melin, L. and Petterson, A. (1993) ``Structure and change in industrial fields ± a contextual approach'', in Cavusgil, S.T. (Ed.), Advances in International Marketing, Vol. 5, JAI press, Greenwich, CT, pp. 55-81. Hodgkinson, G. and Johnson, J. (1994), `Èxploring the mental models of competitive strategists: the case for a processual approach'', Journal of Management Studies, Vol. 31 No. 4, pp. 425-48. Hofstede, G. (1980), Culture's Consequences: International Differences in Work-Related Values, Sage, Beverly Hills, CA. Hofstede, G. (1991), Culture and Organisations, McGraw-Hill, London. Hofstede, G., Neuijen, B., Ohayu, D.D. and Sanders, G. (1990), ``Measuring organizational cultures: a qualitative and quantitative study across 20 cases'', Administrative Science Quarterly, Vol. 35 No. 3, pp. 286-316. Huff, A.S. (1982), `Ìndustry influences on strategy reformulation'', Strategic Management Journal, Vol. 3 No. 1, pp. 119-31. Huff, A. (1990), Mapping Strategic Thought, John Wiley & Sons, Chichester. Isabella, L.A. (1990), `Èvolving interpretations as a change unfolds: how managers construe organizational events'', Academy of Management Journal, Vol. 33 No. 1, pp. 7-41. Johanson, J. and Mattsson, J. (1992), ``Network positions and strategic action ± an analytical framework'', in Axelsson, B. and Easton, G. (Eds), Industrial Networks: A New View of Reality, Routledge, London, pp. 256-82. Johnson, G. (1987), Strategic Change and the Management Process, Blackwell, Oxford. Lammers, C.J. (1990), ``Sociology of organizations around the globe: similarities and differences between American, British, French, German and Dutch brands'', Organization Studies, Vol. 11 No. 2, pp. 179-205. Lammers, C.J. and Hickson, D.J. (Eds) (1979), `Òrganizations alike and unlike'', International and Inter-institutional Studies in the Sociology of Organisations, Routledge, London. Lundberg, C.C. (1985), `Òn the feasibility of cultural intervention in organizations'', in Frost, P.J. et al. (Eds), Organizational Culture, Sage, Beverly Hills, CA, pp. 169-85. Pettigrew, A.M. (1985), The Awakening Giant: Continuity and Change in ICI, Blackwell, London.




Porac, J., Thomas, H. and Baden-Fuller, C. (1989), ``Competitive groups as cognitive communities: the case of Scottish knitwear manufacturers'', Journal of Management Studies, Vol. 26 No. 3, pp. 397-416. Powell, W.W. (1996), ``Trust-based forms of governance'', in Kramer, R.M. and Tyler, T.R. (Eds), Trust in Organizations: Frontiers of Theory and Research, Sage, Thousand Oaks, CA, pp. 152-78. Reger, R. and Huff, A.S. (1993), ``Strategic groups: a cognitive perspective'', Strategic Management Journal, Vol. 14 No. 1, pp. 103-24. Schein, E.H. (1985), Organizational Culture and Leadership, Jossey-Bass, San Francisco, CA. Schneider, S.C. and de Meyer, J. (1991), `Ìnterpreting and responding to strategic issues: the impact of national culture'', Strategic Management Journal, Vol. 12 No. 2, pp. 158-73. Sillince, J.A.A. (1995), `Èxtending the cognitive approach to strategic change in organizations: some theory'', British Journal of Management, Vol. 6 No. 1, pp. 59-76. Sims, H. and Gioia, D. (1986), The Thinking Organisation, Jossey-Bass, San Francisco, CA. Sondergaard, M. (1994), ``Research note: Hofstede's consequences: a study of reviews, citations and replications'', Organization Studies, Vol. 5 No. 3, pp. 447-56. Spender, J.-C. (1989), Industry Recipes: An Enquiry into the Nature and Sources of Management Judgement, Basil Blackwell, Oxford. Strauss, A. and Corbin, J. (1991), Basics of Qualitative Research: Grounded Theory Procedures and Techniques, Sage, London. Tayeb, M. (1988), Organizations and National Culture: A Comparative Analysis, Sage, London. Watson, T.J. (1994), In Search of Management ± Culture, Chaos and Control in Managerial Work, Routledge, London. Whitley, R. (1992), ``The social construction of organisations and markets: the comparative analysis of business recipes'', in Reed, M. and Hughes, M. (Eds), Rethinking Organisation: New Directions in Organisation Theory and Analysis, Sage, London, pp. 125-42. Worchel, P. (1979), ``Trust and mistrust'', in Austin, W.G. and Worchel, P. (Eds), Social Psychology of Intergroup Relations, Brock/Cole, Monterey, CA, pp. 79-92. Yin, R.K. (1994), Case Study Research: Design and Methods, Sage, Thousand Oaks, CA.