PARTICIPATIVE MANAGEMENT'S INFLUENCE ON EFFECTIVE STRATEGIC DIFFUSION John A. Parnell University of North Carolina at Pembroke Pembroke, NC Shawn Carraher Texas A&M University-Commerce Commerce, TX Kenneth Holt Union University Jackson, TN Abstract Recent research has highlighted the importance of middle and lower level managers in strategy formulation in ensuring that the strategy effectively "dIf- fuses" throughout the organization. However, the question remains as to whether prevailing participative management styles in an organization can enhance this process. The present study suggests that the propensity of managers to employ participative management styles wasfound to positively influence the degree to which strategies were perceived as part of the organization. Introduction Strategic diffusion refers to the degree to which a strategy is effectively implemented and becomes an accepted part of the organization. Whereas much of the current research is based on the notion that strategy should "fit" with a variety of organizational and environmental constructs in order to lead to supe- rior performance (e.g., Barney, 1986; Brouthers & Arens, 1999; Hamilton & Shergill, 1992; Neilsen, 1992; Zajac, Kraatz, & Bresser, 2000), researchers have not fully considered behavioral factors in the organization that influence strate- gic diffusion. This paper considers whether or not the prevailing participative management styles in an organization influence top management's ability to "diffuse" the strategy throughout the organization. Strategic Diffusion Three dimensions of strategic diffusion - involvement, understanding, and commitment - have been elaborated in the literature (Parnell & Crandall, 1995). The first dimension - involvement - concerns the degree to which middle and lower level managers were involved in the strategy-making process. 162 Journal of Business Strategies Vol. 19, No.2 Involvement can encompass numerous processes and techniques as long as it reflects top management's active consultation with other managers in the orga- nization. Researchers have consistently found that individuals tend to work harder at attaining a goal when they were involved in setting it (Locke, Latham & Erez, 1988; Roberson, Moye, & Locke, 1999). Since strategy formulation encompasses some degree of implicit or explicit goal setting, greater involve- ment in formulation enhances efforts at implementation. Although the concept of non-conceptual management involvement in strat- egy is not a recent phenomenon, the last decade has produced evidence to suggest that strategy formulation and implementation can reflect a diverse array oftop and middle management inputs (Antonio, 1999; Barney, 1986; Burgelman, 1983; Currie, 1999; Thakur, 1998). Mintzberg and Waters' (1985) notion of deliberate and emergent strategies acknowledges the significant role of top and middle managers in the strategic management process. Paralleling the work of Burgelman (1983) and Hiam (1993), Nichol (1992) observed that top manage- ment simply cannot effectively develop a strategy and plan for its implementa- tion without assistance from middle managers. Wooldridge and Floyd (1990) conducted the most comprehensi ve empirical analysis of middle management strategic involvement. Not only did they find that middle management involvement in strategy formulation improved perfor- mance, they also noted that most organizations in the sample deliberately in- volved middle managers in the process. Although their study reflects a culmina- tion of thought acknowledging involvement beyond the top manager and even the top management team (for example, see Barker & Patterson, 1996; Schilit, 1987), most published studies utilizing perceptual data continued to rely solely on the perceptions of the top manager (Goll & Johnson, 1996). Wessel (1993) identified numerous individual barriers to effective imple- mentation associated with management involvement, including conflicting mana- gerial priorities, a top-down management approach (Le., lack of non-conceptual manager involvement in strategy formulation), and poor communication. Oth- ers have focused on the need for "selling" the strategy to non-conceptual man- agers (Coulson-Thomas, 1992; Hambrick & Cannella, 1989), but complete strategy permeation also may suggest non-conceptual manager involvement at the front end. The problem could be so acute that Brache (1992) even suggested that organizations consider adopting a system-oriented organizational structure to improve cross-functional communication, teamwork across functions, and a focus on system-wide goals instead of functional ones. The second dimension - understanding - suggests that it is much easier to implement a strategy when middle and lower level managers thoroughly comprehend its component parts. Recent research has emphasized the need for a clear understanding of the organization's strategy among all managers in constructing the superior performing organization (Athanassiou & Nigh, 2000; Meyer, 2000; Wright, Kroll, Pringle, & Johnson, 1990). However, much of the strategy research in the 1970s and early 1980s followed Ansoff (1965) and Fall 2002 Parnell, et at.: Participative Management 163 others (Andrews (1971; Schendel & Hofer, 1979), relying on the understanding of the top manager for insight into an organization's strategic intentions. However, the belief that top management's clear understanding of strategy is all that matters is myopic. Strategic management helps organizations cope with uncer- tainty by helping shape the competiti ve environment (Das, Handfield, Calantone, & Ghosh, 2000; Guth, 1976; Jauch & Kraft, 1986; Katz, Zarzeski, & Hall, 2000). The strategy selected by each organization determines the means by which it intends to successfully meet competitive challenges (Porter, 1980). Better information and certainty about the internal and external environments- including competition - tends to translate into superior performance (Katz et a\., 2000). If the management of uncertainty is the primary challenge of top management (Thompson, 1967), then effective implementation must reflect common perceptions of the strategy at all levels of management (Engdahl, Keating, & Aupperle, 2000). Understanding, however, is not sufficient. The third dimension - commitment - reflects the degree to which managers determine to see the strategy effectively implemented and become part of the organization. In the behavioral literature, commitment has been measured effectively through surveys. Theory and empirical research suggest a relationship between commitment and implementation (Locke et a\., 1988). Whereas most of the emphasis on organizational commitment has been placed on gaining commitment to how things are done, little management emphasis has been focused on the issue of gaining commitment to what is done - the strategic dimension of the organization (Engdahl et aI., 2000). In sum, strategic diffusion is a function of management involvement in strategy development, management understanding of the strategy, and management's commitment to its effective implementation. The Propensity for Participative Management Research has suggested that the factors associated with strategic diffusion (i.e., involvement, understanding, commitment) tend to be enhanced through participative management styles (Yuki, 1989). However, not all managers pos- sess the same desire to utilize participative management processes (Mudacumura, 2000). Parnell, Bell and Taylor (1992) identified three dimensions - organiza- tional culture, organizational effectiveness, and power - that comprise a manager's propensity for employing participative management techniques. The first two are further examined in this study. First, a manager's propensity for participative management is influenced by the prevailing culture ofthe organization. Individuals, as members of an organi- zation, are likely to share common values, attitudes, and behaviors (Bennett, 1999; Oliver, 1999; Pettigrew, 1979). As such, managers in organizations where participation is prevalent are more likely to encourage their own subordinates to participate in decisions (Parnell et a\., 1992). On the other hand, managers operating in organizations where decisions tend to be made autocratically are less likely to encourage their subordinates to participate. Thus, one's propensity 164 Journal of Business Strategies Vol. 19, No.2 for participative management may be affected by the degree to which such behavior is encouraged or discouraged by the organization. Second, if a manager believes that participative decision making (POM) enhances organizational effectiveness, he or she may be more likely to employ the technique. This belief may be reflected in the assertion that participation leads to higher quality decisions and greater productivity. Further, there may be a greater tendency to promote participation as a means of obtaining higher quality decisions when it is believed that subordinates prefer the added involve- ment. This notion has received considerable support in the literature. In addition to quality, one's propensity for POM (PPDM) is also influenced by a second factor - the perceived correlation between participation and pro- ductivity. In other words, a manager would likely employ PPDM if he or she believes that it will improve the productivity of the subordinates or the depart- ment as a whole. Indeed, much of the literature suggests a positive correlation between PDM and productivity (Dickson, 1982; Hennestad, 2000; Lovrich, 1985; Oradat, 1998). For example, Latham and Steele (1983) concluded that an acute positive relationship exists when participation involves the setting of employee goals. Likert and Araki (1986) proposed a "system five" consensus approach, citing the relationship between PDM and productivity. Lovrich (1985) investigated alleged participative management failures in the public sector and found little evidence to support the most typical managerial objections to par- ticipation. Managers who expect that POM positively influences productivity are less likely to object to its utilization. Likewise, managers who believe that participation is an ethical imperative that improves organizational effectiveness tend to promote PDM with subordinates. Participative decision making has been found to increase organizational effectiveness, improve relationships between managers and subordinates, in- crease creativity and productivity, increase company loyalty, and reduce absen- teeism and turnover (eoch & French, 1948; Tannanbaum & Allport, 1956). Indeed, many have suggested that participation is the "right" or ethical approach to leadership (Latham & Steele, 1983; Oradat, 1998; Weiss, 1998). However, there is no consensus on the universal effectiveness of participation (Kittrell & Parnell, 1994). It appears to increase job performance and satisfaction in some situations but not in others. Some top managers have adopted and then aban- doned this practice for various reasons, concluding the participation is not for their organizations. Research has examined possible reasons for the discontinu- ation of participative management: a lack of commitment or interest by manage- ment and employees, failure to properly implement the processes, and a lack of fit between the organization and the participative management processes. Hypotheses The present study tests four hypotheses associated with the PPOM compo- nents of organizational culture and decision effectiveness, and the strategic Fall 2002 Parnell, et al.: Participative Management 165 diffusion components of involvement and understanding. The hypothesized relationships are summarized in figure 1. Figure 1 Strategic Understanding Model H4 First, a positive linkage between a culture's participative nature and man- agement beliefs that participation results in high quality decisions is expected. Individuals tend to believe that their own organizational culture - as they perceive it - is the "right one" (D' Andrade, 1984). Hence, if participation is an integral part of the organizational culture, then managers are more likely to support the idea that participative management will improve decision quality. Previous empirical research has demonstrated a positive relationship between these two dimensions of the PPM construct (Latham & Steele, 1983). Hypothesis I: Managers in organizations with more partici- pative cultures will be more likely to believe that participation improves the quality of decisions. Second, it is believed that organizations that promote participative manage- ment styles are more likely to include managers beyond the top level in strategy formulation. This hypothesis is intuitively appealing, as it simply proposes that organizations that foster participation in routine managerial decisions are also likely to encourage participation in the strategy process. Hypothesis 2: Managers in organizations with more participative cultures will tend to be more involved in strategy formulation. Third, it is believed that managers who value participation the most are more likely to involve themselves in the decision of their superiors, including strategy formulation. In other words, if managers encourage their subordinates to participate in management decisions in part because they perceive a link 166 Journal of Business Strategies Vol. 19, No.2 between participation and effectiveness, one would expect these same managers to seek out opportunities to participate in the decisions that their managers make. Hypothesis 3: Managers who believe that participation en- hances decision quality will tend to be more involved in strat- egy formulation. Finally, it is suggested that those involved in formulating the organization's strategy will have the best understanding of it. Research has suggested a strong correlation between these two dimensions of the strategic diffusion construct (Schilit, 1987). Hypothesis 4: Managers who are more involved in strategy formulation are more likely to possess a greater understand- ing of the implemented strategy. Development of the Strategic Diffusion Scale (SDS) Item Selection In the first stage, items believed to reflect one of the three dimensions of strategic diffusion were developed, utilizing a seven-point Likert scale. A re- sponse of 7 denotes strong agreement (i.e., "strongly agree") with a given statement, while a response of 1 denotes strong disagreement (i.e., "strongly disagree"); responses of 2 through 6 were included to allow the participant to express moderate levels of agreement or disagreement with each item. A 90-item initial survey of 107 practicing lower and middle managers suggested that 47 of the items were vague or conceptually inadequate in word- ing; these items did not justify further consideration. The surviving 43 items were then further scrutinized by the author and an additional management researcher in order to assess content validity. Twenty items were judged to be ambiguous, redundant, or not clearly reflective of the construct. These twenty items were eliminated; 23 remained for further testing. A second survey consisting of the remaining 23 items was administered to 113 practicing lower and middle managers. An exploratory factor analysis and a scree test was applied and factor loadings were generated at what appeared to be a "natural cutoff' in eigenvalues (7.40, 2.63, and 1.95). The resulting three factors accounted for 52.1 percent of the variance (Bollen, 1989). Eight items did not sufficiently load on one of the factors and were eliminated. A final theoretical scrutinization of the remaining items resulted in the elimination of two others in order to improve both parsimony and construct validity. The resulting instrument consisted of the strategic diffusion scale (SDS) as well as questions concerning age, gender, and managerial level. The scale was then administered to 177 employees of eleven firms located in the Southeastern United States. Firms included both small entrepreneurial Fall 2002 Parnell, et al.: Participative Management 167 organizations and large multinational organizations with both the service sector and production sectors represented. The sample was 51 percent male and distrib- uted almost evenly among lower [those managing workers] (47%) and middle [those managing managers] (53%) managerial levels. The ages of the respon- dents ranged from 22 to 68 with an average age of 37.1. The principal components (Harman & Jones, 1966) factor extraction tech- nique resulted in each item loading significantly on only one of the three factors. The loadings supported the existence of three dimensions of the construct. Eigenvalues were 6.26, 1.56, and 1.00, with the three factors accounting for 67.9 percent of the variance. Hyperplane counts supported an oblique (oblimin) rotation method (Gorsuch, 1983). While other methods of rotation are available in factor analysis, this type of oblique rotation is preferable because of its ability to "obtain theoretically meaningful dimensions" (Kumar & Beyerlein, 1991, p. 621). Table 1 lists the loadings of the three factors, along with their correspond- ing eigenvalues and percentage explained by each factor. Table 1 Factor Loadings for the SDS Corrected Alpha Factor Item-Total If Item Variable Item Wording Loading Correlation Deleted COM I I am committed to seeing that our organizational strategy is effectively implemented .836 .784 .894 COM2 I don't worry about implementing strategy; I just do my job .753 .691 .899 COM3 I don't concern myself with implementing strategies if they are not beneficial to my department .719 .643 .901 COM4 Departments in our company tend to be less concerned with working together and more concerned with competing for resources .715 .651 .901 COM5 Our organization is most successful when everyone works to implement a common strategy .781 .723 .897 COM6 Developing our company strategy is often a waste of time .771 .700 .898 UNOI I fully understand the strategy my organization is attempting to implement .730 .667 .900 UN02 [ know how our present strategy differs from that which was developed last year .610 .546 .905 UN03 Strategy is top management's problem I don't have time to understand all of the details .653 .590 .903 UND4 [ know where our company intends to be in five years .671 .6D6 .902 [NYI My superiors frequently ask for my input concerning the direction of the company .487 .425 .909 INY2 When strategic or policy decisions are handed down to me, they often come as a surprise .523 .462 .908 INY3 Our strategies would be more effective if I had a greater opportunity to contribute my opinions .686 .624 .902 168 Journal of Business Strategies Vol. 19, No.2 The first dimension (in the order of factor loadings) - understanding - is measured with four items. UND 1 directly assesses the belief that the manager understands the organization's strategy. UND2 measures the extent to which the respondent can differentiate between the present strategy and the previous one. UND3 addresses the perception that understanding is not important at middle and lower management levels. UND4 concerns knowledge about strategy in a specified time frame. The second dimension - involvement - is measured by three items. INV 1 directly assesses the degree to which superiors ask for inputs into the strategy making process. INV2 concerns the degree to which strategies appear to reflect the input. INV3 (reverse coded) assesses one's beliefs concerning the value of his or her involvement in strategy formulation. The third dimension - commitment - is measured with six items. COM 1 directly assesses the commitment to effective implementation. COM2 (reverse coded) concerns the perception that strategy implementation is not a primary concern of the respondent. COM3 (reverse coded) addresses the perception that some strategies may benefit some departments or members of the organization more than others. COM4 (reverse coded) addresses competitiveness among departments in the organization. COM5 concerns the need for cohesion in the organization. COM6 (reverse coded) addresses the perceived value of strategy formulation. The use of limited information factor analysis (Sethi & Carraher, 1993) supported the unidimensionality of each of the scales. Reliability and validity were assessed to ensure the integrity of the strategic diffusion scale. Coefficient alpha (Cronbach, 1951) for the SDS was.91, indi~ cating that the scale has a high level of internal consistency, an important indication of reliability (Kuratko, Montagno & Hornsby, 1990; Peter, 1979). Coefficient alphas for each of the subscales were .91 for the COM subscale, .84 for the UND subscale, and .67 for the INV subscale. Findings The PPM Scale The principal components (Harman & Jones, 1966) factor extraction tech- nique resulted in each item loading significantly on only one ofthe three factors. The loadings supported the existence of three dimensions of the construct. Eigenvalues were 5.78, 1.34, and 0.78, with three factors accounting for 65.9 percent of the variance. As supported by hyperplane counts, the data were rotated using an oblique (oblimin) rotation method. Table 2 provides factor loadings, coefficient alpha, and alphas following an item deletion routine. The first dimension of the scale - culture - encompasses six items that measure the influence of norms and behaviors on PPM. PPMCULI and PPMCUL2 reflect culture at the department level, whereas PPMCUL3- PPMCUL6 reflect culture at the organizational level. The second dimension - organizational effectiveness - encompasses three items that consider one's Fall 2002 Parnell, et al.: Participative Management 169 beliefs concerning the relationship between participative management and the organizational variables of decision quality (PPMORG I and PPMORG2) and interpersonal relationships (PPMORG3). The third dimension - power - considers the perceived relationship between participation and the superior's power and control (PPMPWRl-PPMPWR3). Reliability and validity were assessed to ensure the integrity of the PPM scale. Coefficient alpha (Cronbach, 1951) for the scale was .90, indicating that the scale has a high level of internal consistency, an important indication of reliability (Kuratkoet aI., 1990; Peter, 1979) and limited information factor analysis supported their unidimensionalities. Hypotheses Having established reliability of the two scales, it was necessary to develop measures for each of the elements in the model. To do so, each of the four subscales utilized in the study (i.e., two from the PPM scale and two from SDS scale) were factor analyzed separately and factor scores (regression method) were computed to serve as composite measures of each dimension. Table 3 provides the factor loadings and coefficient alphas for each analysis. Table 4 provides correlations and significance levels among each of these factors. Table 2 Factor Loadings for the PPM Scale Corrected Alpha Factor Item-Total If Item Variable Item Wording Loading Correlation Deleted PPMCULI My subordinates tend to possess the same organizational goals I have .746 .688 .887 PPMCUL2 My subordinates are generally informed and experienced .762 .689 .888 PPMCUL3 Participative decision making is widely used in my organization .723 .649 .889 PPMCUL4 I am free to make decisions as I wish in my organization .640 .557 .894 PPMCUL5 Participative decision making is promoted in my organization .681 .598 .892 PPMCUL6 My boss frequently solicits my participation in his or her decisions .7tI .634 .890 PPMORGI Many organizational problems disappear when everyone has a chance 10 participate in decision making .726 .656 .889 PPMORG2 Participative decision making usually results in effective decisions .774 .713 .886 PPMORG3 Participative decision making promotes positive relationships at all levels of the organization .762 .687 .887 PPMPWRI Participative decision making requires divulging too much confidential information .559 .502 .896 PPMPWR2 Participative decision making gives too much power to subordinates .580 .523 .895 PPMPWR3 Subordinates often cannot be trusted .593 .531 ,896 170 Journal of Business Strategies Vol. 19, No.2 Correlational analysis lent support to each of the four hypotheses. First, the correlation between the PPM dimensions of organizational culture and decision effectiveness was .52. Second, the correlation between the PPM dimension of organizational culture and the strategic diffusion dimension of involvement was .41. Third, the correlation between the PPM dimension of decision effectiveness and the strategic diffusion dimension of involvement was .35. FinaJ)y, the correlation be- tween the strategic diffusion dimensions of involvement and understanding was .56. Structural Equation Model A structural equation model was developed to test the four hypotheses simulta- neously (see figure 2). For the PPM factors (i.e., organizational culture and decision effectiveness), the best three measures were retained; for the strategic diffusion factors (i.e., involvement and understanding), the best two measures were retained. Saturated models with all construct measures were tested but were rejected because of high covariances among measurement errors across constructs. Table 3 Factor Loadings for Single-Factor Solutions Item FactQr I.oading Strategic Diffusion- Involvement (alpha .67) INVI INV2 INV3 Strategic Diffusion-Understanding (alpha =.84) UNDl UND2 UND3 UND4 Strategic D,ffusion-Commitment (alpha =.9!) COMI COM2 COM3 COM4 CaMS COM6 PPM-Organizational Culture (alpha=.86) PPMCULI PPMCUL2 PPMCUL3 PPMCUL4 PPMCUL5 PPMCUL6 PPM-Decision Effectiveness (alpha =.S!) PPMORGI PPMORG2 PPMORG3 .685 .817 .832 .828 .814 .789 .842 .836 .789 .844 .774 .849 .860 .793 .816 .768 .682 .764 .753 .823 .863 .864 Fall 2002 Parnell, et al.: Participative Management 171 The chi-square statistic was 40.642 (df = 31), with a probability level of .115. The chi-square is the most widely accepted overall measure of fit for a structural equation model. However, three additional measures warrant consid- eration (Arbuckle, 1997). First, the Bentler-Bonett (1980) normed fit index (NFl) compares the proposed model to a baseline model. Bentler and Bonett (1980) suggested that NFl statistics above. 90 suggest that the model cannot be improved substantially. The Nfl for the proposed model was .989. Table 4 Correlations Variable PPM- Organiz. Culture PPM- Organiz. SDS- SDS- Effectiveness Involvement Understanding .74 1.00 P = .00 .4l .35 1.00 P = .00 p = .00 .62 .52 .56 1.00 P = .00 p = ,00 p = .00 Propensity for Participative Management- 1.00 Organizational Culture Propensity for Participative Management- Organizational Effectiveness Strategic Diffusion-Understanding Strategic Diffusion-Involvement Figure 2 Structural Equation Model o. 0, 1 8 PPM Org. Culture o. 0, PPM Decision Effectiveness 0, o. o 0, 172 Journal of Business Strategies Vol. 19, No.2 Second, the comparative fit index (CPI) also compares the proposed model to a baseline model (Bentler, 1980). Scores in the. 90 or .95 range or higher suggest that it would be difficult to substantially improve the model fit. The CPI for the proposed model was. 997. Finally, the "root mean square error of approximation" (RMSEA) statistic attempts to overcome the bias of chi-square by compensating for model com- plexity. Browne and Cudeck (1993) suggested that values of .08 or less represent reasonable errors or approximation, whereas values greater than .10 represent unreasonable errors. The RMSEA for the proposed model was .042. Path esti- mates appear in table 5. Table 5 Path Estimates for Structural Equation Model Path Path Estimate Standard Error PPM Decision Effectiveness - PPM Organizational Culture 0.674 0.081 Str. Diffusion Involvement - PPM Organizational Culture 0.306 0.129 Str. Diffusion Involvement - PPM Dec. Effectiveness 0.087 0.151 Str. Diffusion Understanding - Str. Diffusion Involvement 1.562 0.340 PPMCUL I - PPM Organizational Culture 1.000 PPMCUL2 - PPM Organizational Culture 0.748 0.075 INV I - Str. Diffusion Involvement 1.000 INV2 - Str. Diffusion Involvement 1.131 0.252 PPMORG 1 - PPM Decision Effecti veness 1.000 PPMORG3 - PPM Decision Effectiveness 1.344 0.141 UNDI - Str. Diffusion Understanding 1.000 UND3 - Str. Diffusion Understanding 1.190 0.161 PPMCUL6 - PPM Organizational Culture 0.844 0089 PPMORG2 - PPM Decision Effectiveness 1.156 0.127 Within the model, proposed linkages among the constructs were strong, with the exception of the link between PPM decision effectiveness and strategic diffu- sion involvement. The model was modified to remove the link, but comparisons between the two competing models were inconclusive. In sum, the structural equation model lends strong support for the first, second, and fourth hypotheses, and limited support for the third hypothesis. Discussion, Conclusions, and Future Research This paper considered factors in the organization that may influence strate- gic diffusion. It specifically explored the role that managers' propensity for Fall 2002 Parnell, et af.: Participative Management 173 participative management styles might play in the effective diffusion of strategy throughout the organization. The support found for the second and fourth hy- potheses particularly indicate that a participative organizational culture breeds more involvement in the formulation of strategy and that managers who are more involved in strategy formulation have a greater understanding of the implemented strategy. The lack of support found for the third hypothesis in the structural equation model may be interpreted as implying that managers who believe that participa- tion enhances decision quality will not tend to be more involved in strategy formulation. Instead it may be that the stated hypothesis is true, except that the nature of the culture may modify the relationship. A manager may very well agree that participation enhances decision quality and may prefer more involve- ment in strategy formulation, but if that belief is not accompanied by a partici- pative culture that affords the manager an opportunity to become involved, his or her involvement in strategy formulation may be limited. These findings represent an important first step in the process of examining the organizational factors that may influence the diffusion of strategy. They also create an important bridge between organizational theory, organizational behav- ior, and strategic management. Despite great efforts of management to develop an effective strategy for the organization, without the means to share the strategy throughout the organization its potential successes may not be realized (Engdahl et al., 2000). Two future research directions have been identified. First, the SDS does not take into account organization-specific factors that may affect strategic diffu- sion and ultimately be associated with PPM. Research must inevitably probe more deeply into the impact of organizational culture on the strategy making process (Athanassiou & Nigh, 2000; Harris & Purdy, 1998). Strategic change challenges the taken-for-granted beliefs of all organizational members and typi- cally is not easy to accomplish (Scholes, 1991). For instance, Hennestad (2000) examined attempts for Extrusion Company to transform itselffrom a traditional style of management to a participative style of management and he reported that insufficient attention was paid to the change management process which led to a lack of momentum for the change process. Earlier, Lorenz (1988) demon- strated that General Electric was not able to defend its market positions in many of eighteen businesses studied because sudden changes of any kind tended to be perceived as evidence of poor and inadequate planning rather than as an indica- tion of the volatility of the real world. As a result, GE increased the involvement of line managers in the strategy process and was thus able to better defend its market positions. Longitudinal research designs could be especially effective in answering questions such as whether an organizational culture that values PPM leads to greater strategic understanding, and then whether this understanding influences actual organizational performance (Oliver, 1999) and it also may prove fruitful for future research to examine and compare the results across countries both within a single organization and across organizations. 174 Journal of Business Strategies Vol. 19, No.2 Second, the results of this study implore researchers to more fully integrate behavioral theory into the equation by determining what may lead to strategic diffusion. Specifically, an examination of the processes through which top managers involve subordinates in the strategy making process may provide insight into the genesis of strategic consensus. The intricacies surrounding one specific form of participative management - participation in strategy making and its relationship to strategic consensus - remain tenuous (Crandall & Parnell, 1994). In addition, factors such as personality, cognitive complexity, managerial diversity, experience, and functional background (Carraher & Buckley, 1996; Carraher & Whitely, 1998) may provide insight into why some strategies are more easily diffused than others (Budd & Carraher, 1998). Indeed, this avenue holds the potential for increased dialogue among various managerial disciplines. In sum, this study has demonstrated a linkage between propensity for par- ticipative management and strategic diffusion. Results suggest that perceptions of greater participation may result in more effective dissemination of the organization's strategy and greater decision effectiveness. References Andrews, K. (1971). The concept of corporate strategy. Homewood, II.: Dow Jones. Ansoff, H.I. (1965). 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Strategic Management Journal, 21 (4), 429-453. John A. Parnell (john_parnell@tamu-commerce.edu) earned the Doctor of Philosophy degree in Strategic Management from the University of Memphis. Dr. Parnell presently serves as the William Henry Belk Distinguished Professor of Management at the University of North Carolina at Pembroke. He is the author of over 100 basic and applied research articles, published presentations, and cases. His present research is focused on business strategy and performance, subordinate participation, and management ethics. Shawn Carraher (shawn_carraher@tamu-commerce.edu) received his Ph. D. in Business Administration from the University of Oklahoma. He presently serves as Professor of Management & Global Entrepreneurship at Texas A&M University-Commerce. His primary research interests combine international business. strategic management, human resources, and entrepreneurship in or- der to examine cross-cultural differences in compensation. selection, and staff- ing within entrepreneurial organizations. M. Kenneth Holt (kholt@uu.edu) received the M.S. degree from Louisiana State University and is presently a Ph.D. candidate at the University of Memphis. He also serves as an Associate Professor of Economics and Management and Director of the Center for Business & Economic Development at Union University. Footnotes I This paper is not concerned with which means of involvement are more or less effective, but rather with the perception by middle and lower level managers of the degree to which they were involved in the strategy formulation process. Participative Management's Influence on Effective Strategic Diffusion