The Impact of the Alignment of Strategy by Montserrat Entrialgo - Article Example

 The Impact of the Alignment of Strategy by Montserrat Entrialgo The Context The article under examination was written by Montserrat Entrialgo with the title ‘The impact of the alignment of strategy and managerial characteristics on Spanish SMEs’. It was published in the Journal of Small Business Management in 2002 and the central context of the article deals with three areas of business studies i.e. the characteristics of managers, the strategy followed by a business and the level of success attained by a company (Entrialgo, 2002). While these three things would certainly make the horizon of such a study to be quite expansive, Entrialgo makes the study more manageable by using two limiters. The first limiter is the use of looking at the characteristics in the scope of Small and Medium Enterprises (SMEs) and the second limiter comes from the examination of examples coming from Spain. Additionally, the study also proposes at the outset that the three points under examination would turn out to be complimentary (Entrialgo, 2002). The value of the study is greatly helped by the evidence given regarding the previous literature which shows that a study of this exact nature is not there in our present body of knowledge. The Literature Review The examples of previous studies given in the paper are quite useful since they do two things which add to the overall credibility of the article. First of all, the examination of previous research shows that there is a large body of material which deals with the relationship between the influence of individual managers and the results gained by an organization. The research done by Gupta and Govindarajan (1984), Miller, de Vries and Toulouse (1982) as well as the paper published by Sturdivant, Ginter and Sawer (1985) serve to establish this as a primary fact (Entrialgo, 2002). Additionally, other research work such as the papers published by Kerr (1982) and Child (1974) show that there are certain links which can be established between the characteristics of a manager and the strategic direction a company takes under the management of that individual. However, the article under discussion is clear on the point that in the opinion of the writer, the two areas can be combined since they are complimentary to each other and can work together as one unit for subjective analysis (Entrialgo, 2002). While the literature review taken by the author is sufficiently extensive and broad ranging it does seem to be limited to rather older information which had been published some time ago. In fact, the latest year used by the writer as a source for the references seems to be 2000. Considering that the article was published in 2002, there is a two year gap between the time research materials on the topic were gathered and the time it was published. It is possible that more recent research could be added to the article before submission for review. Moreover, this objection can also be mitigated by the fact that research on the topic was started in 1997 (Entrialgo, 2002). The Research Hypotheses With the literature review showing clearly that earlier research has been focused on the influence of managerial characteristics on either the success of a company or the strategy taken by an enterprise, the article proposes that there are ways in which the two approaches can be integrated. The hypothesis of the writer is to show that the two methods are complimentary and can be examined together to better understand the real influence a particular type of manager would have on an SME (Entrialgo, 2002). Additionally, the paper seeks to explain the process by which leaders and managers can influence the outcome of business ventures using a theoretical model which uses the two approaches mentioned above. While no direct hypothesis was given as a point of clarification, it was easy to understand that Entrialgo expected links to be formed between the success of an SME, the strategy adopted by the SME and the individual characteristics of the manager who is placed at the head of the company (Entrialgo, 2002). The hypothesis is certainly a valuable contribution since earlier studies looked at the three items in separation while the study combines the three for a better understanding of the bigger picture surrounding the field of business management. Additionally, the theoretical model created with the use of the hypothesis allows other researchers to conduct similar studies and bring more depth to the ideas presented by Entrialgo (2002). Deliberations on Findings The most surprising finding of the article seems to be the presentation that neither age nor tenure in a given managerial post can explain the type of strategic behavior which a company will follow. This is shown to be contradictory to the findings of other researchers but a deeper evaluation of this contradiction was not made which means that other researchers will have to evaluate both studies to come to a final conclusion about the age of the manager and the strategy adopted by the company (Entrialgo, 2002). A second finding made by the research agrees with previous research on the topic that shows how entrepreneurial managers were likely to have marketing experience while conservative mangers were likely to have finance related experience (Entrialgo, 2002). This is certainly in line with my own expectations and gives a person an appreciation of how finance, entrepreneurship and marketing must be studied by managers to make them truly well rounded managers/leaders. Finally and most importantly, the study makes the discovery that lower alignments between ideal and observed managerial attributes leads to lower organizational success (Entrialgo, 2002). The implication for any organization which wishes to be successful is clearly that managers and senior executives of the organization should display and express managerial attributes which are closer to the ideal set and if they do not, they should be trained and developed as human capital to ensure that they do. Type of Study The data gathering tools and the analysis made on the respondent’s answers to survey questions show this to be an inductive study with certain deduction and logical conclusions being made from previously accepted facts. For example, the finding which states that neither age nor tenure in a given managerial post can explain the type of strategic behavior which a company will follow can remain true only as long as other evidence which either supports or refutes this claim is not found anywhere else (Entrialgo, 2002). The approach to data collection is certainly a very well trod path since many other studies of similar types use the survey and interview method for understanding the connections between management, strategy and the success of a given company. By contacting more than 2,500 companies to get relevant results for the survey, the research process certainly took a good start and further established the seriousness of the research with telephone interviews to fill in the blanks where surveys were returned with some results missing on the part of the participants (Entrialgo, 2002). The study also is a statistical analysis of what factors within the persona of the managers can be seen as direct connects to the strategy and success of a company. For example, a statistical significance of 0.003 for finance experience as well as a t-test value of 4.62 for conservative managers as opposed to a value of 2.31 for entrepreneurial managers shows that finance experience makes a manager more likely to take a conservative approach rather than a risk filled entrepreneurial strategy for the company (Entrialgo, 2002). Judgments on Sampling While the overall process of sampling seems to be very well carried out and provides a lot of results for analysis and evaluation, there are two limitations which I think are important for a study of this nature. Firstly, there is the question of the number of companies which were included in the survey, i.e. 233. This shows a less than 10% response rate and also is a rather low number on which to safely base a claim which suggests that the age and tenure of a manager have no bearing on the strategic path taken by a company (Entrialgo, 2002). It is certainly possible that a study with a larger base or one which is extended over a longer period of time could come up with different results. It seems unreasonable to expect that a management guru like Jack Welch, who successfully ran GE for many years, could have very little strategic influence on how the company is run as compared to a person who has just come into the role of a manger at an SME. In fact, considering that the paper focuses primarily on the position of managers in SMEs it would be interesting to see how managers influence the strategy as well as the success of the business in larger, more diverse organizations. Second, the paper looks at SMEs in the Spanish market alone which is certainly a limiting factor for the sample as well the paper as a whole (Entrialgo, 2002). Admittedly, significant cultural differences could exist between management styles and the company strategy adopted at various locations around the world. For example, the management style of a medium sized farm in Indiana could be quite different from a local bank operating in Hawaii. In fact, cultural differences certainly affect management styles which would have a definite connection with the metrics presented by Entrialgo. Finally, if the sample size were to be expanded to include larger companies, there would be some additional factors which the researchers would have to be aware of. There would be concerns about the influences of diversity and how a socially/ethnically diverse company could have a very different strategy for success as compared to others which may not be as diverse. At the same time, the researchers might need to conduct case studies and use examples from the past with regard to the strategy adopted by larger companies to better understand the management style used by their leaders. The Overall Findings and Justifications The hypothesis and the main ideas presented by the writer were shown to be true in the findings section of the paper as there is a definite link between the individual characteristics of a manager, the strategy adopted by the company and the success of the company as a whole. Despite the various limitations and questions which can be asked of the study, the central point of a connection between the three items is shown to be true without doubt (Entrialgo, 2002). After reading the study in detail it seems like an exercise in common sense to understand that the connection between the three items is a forgone conclusion. Even a stereotypically pessimistic approach to the examination of a company’s connections with the strategy it follows would suggest that the will of the person at the head of the company will go a long way in showing how the company decides to progress down a path. The justifications given by the author agree with the data collected as per the survey conducted for SMEs in Spain and the conclusions made in the paper come from numerical analysis which is a mathematical proof of the theory. Overall, it is a very interesting study and I expect that similar studies would be conducted over time in many different areas of the world with future researchers also looking at other factors which influence the strategic positions taken by SMEs around the world. Works Cited Entrialgo, M. (2002) ‘The impact of the alignment of strategy and managerial characteristics on Spanish SMEs’, Journal of Small Business Management, 49(3), pp. 260-270. Read More