How Managers' everyday decisions create or destroy your company's strategy

Area of Science:

• Business Strategy
• Organizational Behavior
• Resource Management

Background:

• Senior executives often face a disconnect between strategic plans and managerial actions.
• Managerial resource allocation decisions significantly impact a company's strategic alignment.

Purpose of the Study:

• To explore the gap between formulated strategy and realized strategy.
• To propose a shift in focus from formal strategy to resource allocation processes.

Main Methods:

• Case study analysis (Intel's exit from the memory business).
• Examination of how resource allocation decisions influence strategic outcomes.
• Analysis of the role of middle and operational managers.

Main Results:

• Managerial decisions, not just top-level directives, shape realized strategy.
• Intel's strategic shift was driven by lower-level managers' resource allocation, despite ongoing research funding.
• Formal strategy may not reflect the actual business activities.

Conclusions:

• Senior management should prioritize understanding and influencing resource allocation processes.
• Effective strategy realization requires attention to the track record of resource allocators and the framing of resource questions.
• Creating adaptive processes for resource allocation is crucial for strategic success.