Strategic Planning as an Integrative Device

Abstract

While alleviating the adverse effects of employees’ pursuit of their subgroups’ goals over organizational goals is important, finding ways to avoid them may be even more important. In this paper, we investigate whether strategic planning can be used to reduce organizational members’ position bias, or the extent to which they direct their attention toward the immediate goals and priorities attached to their position. We examine the hypothesis that involving employees in the strategic planning process and communicating the agreed-upon priorities to them afterwards enhance goal convergence by attenuating position bias. We examine these questions in a sample of 164 manufacturing plants from five countries and three industries, where we asked middle-level managers to assess the importance of various organizational goals. We find that participation and communication function as complements to jointly reduce managerial position bias.

Keywords: goals, planning, integration, organizational design, convergence

JEL Classification: D21, L21