The Implementation of Authentic Strategy in Service Organisations: The Case of Environmental Strategies
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This study examines the research question: in what ways do service organisations implement green differentiation strategies in a way to ensure internal stakeholders perceive these as authentic strategies? This research question is examined through an analysis of strategy implementation processes for strategies focused on protecting and/or enhancing the natural environment using the Resource-Based Theory as the theoretical perspective. This allows for an examination of the implementation processes of established green differentiation strategies, including their potential as sources of competitive advantage. This study is a cross-industry multiple case study of three firms in the service industry: a sports and recreation firm, an energy firm and a retail firm. Information is gathered using multi-level semi-structured interviews on the perceptions of senior management at the meso level of the firms, as well as middle managers and front-line customer-facing employees at the micro level of individual business sites across the firms. This multi-level analysis allows for a whole organisation approach to analysing the perceptions of strategy implementation processes to identifying generic processes, commonalities and differences between firms, as well as business site-specific differences across each case firm. Thematic analysis of the findings developed three main contributions to strategic management research and managerial practice. The first contribution is to the area of microfoundations research within the strategic management literature by examining how green capabilities develop from the aggregation of green routines. What emerged from this study was that although green routines and green capabilities develop in heterogeneous, path dependent and idiosyncratic ways, these are developed within a firm following identifiable generic processes. First, how green routines develop and are implemented at the micro level of the business site, second, how green routines and capabilities develop at the meso level of the firm, and third, a combined meso and micro level capability development ‘loop’. From these, a framework is developed to classify the different hierarchical levels of green action, routines and capabilities, as well as identifying the boundaries where routines and capabilities are formed. Based on these generic processes a further framework is developed to explain how green routines are aggregated into green capabilities across the whole firm. Whilst previous research has identified the capability development pathway, more work needed to be done to understand the process fully. This study identified three additional pathways: managed aggregation via performance management processes, aggregation by norming via the green organisational culture of a firm, and ultimate aggregation where capabilities are institutionalised beyond their original path dependency. The second contribution of this study is to the construct of authentic strategy. Authentic green strategy is defined in this study where a green strategy is perceived by internal stakeholders as being consistent with the guiding principles of the organisation’s green core values. This study finds the individual organisational members’ use the firm’s core organisational green values as well as their personal green values to evaluate a green strategy’s authenticity. The third contribution of this study is to strategic management literature by developing an understanding of strategy implementation processes, including an authentic green differentiation strategy implementation map to illustrate these processes. This study found green differentiation strategies are implemented at two interdependent levels within an organisation. The meso level of the firm is responsible for the development of green strategies and guiding principles for the firm’s core green values. The micro level of the individual business sites is where green differentiation strategies are found to be implemented in the form of green routines. Variation between business sites is based on personal interest and green values of the middle managers (site managers) and front-line employees, as well as site-specific budgets, facilities, and equipment. Additionally, strategy implementation processes include an interdependent relationship between these meso and micro levels based around formal and informal communication channels that connect the whole organisation vertically and horizontally. This study also has the potential to contribute to managerial practice. During discussions with managers at conferences and interviews, they indicated a desire to find out how other organisations are getting their managers and employees to implement green routines, as well as be proactively involved in the green strategy processes. The findings of this research have been distilled into a business report in language suitable for managers, with key action points that could be of interest to the practitioner literature.