Why and How Do Middle Managers Use Autonomy

Why and How Do Middle Managers Use Autonomy in Strategy Annabel Hana Christie, Andrey Pavlov and Mark Jenkins Cranfield School of Management British Academy of Management Annual Conference September 2020

Motivation • Half of strategies do not get implemented (Nutt, 1999) • Even imperfect strategies should be implemented (Lee and Puranam, 2016) • MMs have primary role of implementing strategy that has been set primarily by TMs (e. g. , Burgelman, 1994 and 1996; Wooldridge and Floyd, 1990; Floyd and Wooldridge, 2000; Huy, 2002) • But MMs also well known for not always implementing strategy as intended by TMs (Ates et al. 2020) • Divergence from intended strategy can often be a major problem for organisations by not meeting financial and other targets set by TMs (e. g. , Ahearne, Lam and Kraus, 2014) 2

Various Reasons for Strategy Divergence by MMs often have different views of strategy than TMs and frequently engage in counterproductive efforts or sabotaging of strategy implementation: • “counterproductive actions” (Meyer, 2006), “opportunism and linguistic influencing of strategic initiatives” (Sillince and Mueller, 2007) • “foot-dragging” and “sabotage of the strategy” (Guth and Mac. Millan, 1986). • On the other hand, MMs can also give a positive impetus to the intended strategy (e. g. , Hopkins, Mallette and Hopkins, 2013) 3

Research Gap • Wang, Gibbons and Heavey (2017) points out that, so far, the efforts to study MMs’ strategic role flexibility have been limited. • Some studies focus on MM “flexibility” in strategy as primarily MMs finding different ways to perform strategic tasks and achieve strategic goals as given by TMs (e. g. , Shimizu and Hitt, 2004; Ahearne. Lam and Kraus, 2014; Wang, Gibbons and Heavey, 2017) • Other studies of “autonomous strategic behaviour” initially peripheral to the central intended strategy (Bourgeois and Brodwin, 1984; Ahearne, Lam and Kraus, 2014; Mirabeau and Maguire, 2014) • Few studies on why and how MMs divert the strategy from what TMs intend

My Research Question MM autonomy in strategy seems to go beyond flexibility to explicitly and directly challenge and change assigned strategic tasks and goals Why and how do middle managers (MMs) use autonomy in strategy? 5

No Consistent Definition of Middle Managers • May be more useful to take a relative view of location. Hence a middle manager position is relative to the level of the organisation. • My suggested solution to the definition issue is to focus is on the role rather than the absolute position: An executive acts in a middle manager role (in relation to strategy) when given primary responsibility for implementing a strategy that was formulated primarily at a higher level. 6

Defining Strategy Treating as “strategy” what managers are told is strategy or interpret as strategic • sensegiving and sensemaking (Gioia and Chittipeddi, 1991; Balogun and Johnson, 2004; Fiss and Zajac, 2006; and Luscher and Lewis, 2008), • “emic” definition (Morris et al. , 1999) 7

Research Method Systematic literature review that found 130 relevant articles, then 1. choice of interpretivism as my philosophical position 2. selection of MMs as units of analysis and hence MMs as the informants 3. choice of qualitative method 4. decision to study MMs across multiple organisations 5. development of the interview guide/questions 6. choice of analytical method as a hybrid method based on both King’s template analysis (King, 2012) and the Gioia methodology (Gioia, Corley and Hamilton, 2012). 7. choice of only large multinational companies as the source of informants 8. recruitment of 40 informants from 31 companies 9. conducting personal semi-structured interviews 10. coding of interview transcripts 11. developing first-order informant centric concepts, second-order researcher-centric themes, and data structures 12. developing propositions 8

Summary of Findings of MM Autonomy in Strategy 9

Data Structure – Why Avoid, Delay or Change Strategy 10

First Order Concept – MM sees strategy as not doable “I can say to management “I will do it” but in actual I will not do. I remember some strategy has been set and it is not implemented because it is not doable. And for me as a leader I can convince management it is not doable, then they try to change and do something else. Yes, I am leader. ” (MM 05) “We agree with 92% to 100% but there about 10% that we don’t. Sometimes they don’t seem feasible to us. They’re not actually with us in the department so sometimes they miss out a few things and then we would go back to them and say this is not applicable to us and this is not good for the company and we have justification and there comes a little bit of discussion and yeah, at the end we submit the elements of the discussion to the vice president basically and the case is closed. ” (MM 29) 11

Data Structure – Sources of Autonomy 12

First order concept – emergency ‘Very often speed of response is often quite critical. There isn’t necessarily time to consult everyone because that is the downside of working in larger teams. It takes a long time for a decision to be made. So I have to go and decide very, very quickly and it’s often without approval of certain of my line managers or someone else. Equally, sometimes, I have to overrule someone else when someone in my team, whose views are different. So that’s why I would take a lead and make a decision very quickly, more or less on the spot. ’ (MM 31) 13

Data Structure – How Avoid, Delay, Change or Deliver Strategy 14

First Order Concept - power of position “Yes they fall to the bottom of the queue because I had autonomy to do the things that I felt were the most synergistic with what they were interested in, that’s where the sweet spot was for me because I was engaged, I was knowledgeable about it, I could impact the company, I could apply my framework so they let me get on with it and do that. ” (MM 09) 15

Data Structure - Strategy Implementation Outcomes 16

First Order Concept – avoid strategy • “…the strategy, if it is not monitored, I can change it. You know how? I don’t do it, that's it. (MM 05) • “Oh, keep it to [the] side, nobody will ask about it” (MM 02) • “honestly, they can cover it up and that’s the reality of it. It is easy to smile up and to say, ‘yes it’s been done’ and to make things look as though they have been done. ” (MM 01) • “If your heart is not in it then you won’t be able to implement it as well. I think you would have to check a tick box. So, you have to show that you’re doing it…. but this would be just for show. ” (MM 20) • “So, the strategy comes from the top… you have autonomy in implementing it to the point where you don’t need to implement everything. (MM 25) 17

Propositions 1: MMs’ likelihood to use autonomy in strategy depends on strategyspecific conditions—especially if the strategy is perceived to be difficult to implement and the targets are difficult to achieve relative to the resources available to MMs. 2: MMs can, via situational and gained autonomy, dynamically vary their level of autonomy in strategy beyond static inherent job-defined autonomy. 3 a: Perceiving work overload as a threat to MMs’ self-interest is positively related to the likelihood of MMs exercising autonomy to avoid, delay or change the implementation of the strategy. 3 b: Perceiving lack of resources as a threat to MMs’ self-interest is positively related to the likelihood of MMs exercising autonomy to avoid, delay or change the implementation of the strategy. 3 c: Perceiving the risk of poor performance evaluations as a threat to their self-interest is positively related to the likelihood of MMs exercising autonomy to avoid, delay or change the implementation of the strategy. 4: When presented with a new strategy to implement, MMs will respond in one of four ways: deliver the strategy as requested, change the strategy, delay implementing the strategy, or avoid engaging with the strategy on any level. 18

Contributions to Theory (1) four aggregate dimensions that explain, first, from where MMs obtained their autonomy in strategy; second, what the MMs did with their autonomy in strategy; third, why MMs used autonomy in strategy; and fourth, how MMs used their autonomy in strategy. (2) six propositions that use the evidence of my study to build on gaps in the prior literature 19

Contributions to Practice • Identifying the detail on why and how MMs use autonomy in strategy MMs apply a strategy for strategy implementation • MMs benefit from knowing that they have many mechanisms by which to effectively deliver intended strategy, and how they can increase, decrease and use the autonomy in strategy implementation. • Helping TMs better understand what drives MMs to seek to avoid, delay, change, or deliver the intended strategy. • TMs to ensure that MMs understand what the strategy is about and what the benefits are that the implementation of the strategy will bring. • TMs to be aware that MMs are quick to respond when TMs are not paying attention to the strategy • TMs to look out for MM self-interest being triggered by work overload, insufficient resources or the threat of poor evaluation of the MM 20

Limitations • as an inductive study, developed theory rather than tested it • as a qualitative study based on a large volume of text from interview transcripts, the analysis is open to alternative interpretation despite the coding being done systematically • sample specification of MMs from only large, for-profit, primarily Western, multinational operating companies limits the generalisability. • while the unit of analysis is the individual MM, the reliance on single informant interviews means that the data are better considered to be MM perceptions than absolute fact. 21

Opportunities for Further Research • quantitative methods such as content analysis with statistical tests could be applied to the data • each of the 6 propositions can be examined in new studies with larger samples, using hypothesis-testing methods • recruit dyads of MMs and TMs to mutually report on the implementation process of the same strategies. • replicate in other domains such as non-profit organisations, startups, and organisations with non-Western traditions of management • a study that focuses more on how the micro practices identified in SAP affect the how of MM autonomy in strategy. • a process study of the evolution and change over time of the why and how of MM autonomy in strategy within a single organisation. • how to balance TM control and MM autonomy, and how much autonomy TMs should give to MMs for implementing strategy. 22