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Chapter III. Executive Judgment and the ... > Executive Judgment and Strategic Ali...

Executive Judgment and Strategic Alignment

Priem and Cycyota (2000) state that understanding judgements by strategic leaders is essential to determine the role of mental processes in strategy development and how these strategies and processes affect firm performance. They suggest that a number of theoretical platforms commonly found in the strategy literature provide a solid platform from which we can examine strategic judgement. The ’fit’ or ’alignment’ paradigm is perhaps one of the most pervasive in strategy. Good strategy requires, at a minimum, alignment with changing external conditions. In simple terms, the proposition is that there is an organizational structure that fits the level of contingency factor whether it is environmental uncertainty, organizational characteristics, technological characteristics or strategy design interdependence so that an organization in fit creates significant and positive implications for performance. This idea that fit between organization structure and contingency factor leads to superior performance has been empirically supported in both qualitative and quantitative studies (Donaldson, 1995).

The concept of alignment is not only central to strategic management, but is basic to disciplines such as economics, organization theory and marketing, on which strategic management draws. It underpins the thinking of contingency theorists; and it is also a normative concept used by consultants. Given this distinguished history it might reasonably be expected that executives would frequently make decisions based on the principles of organization congruence (Priem, 1994).


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