STRATEGY FORMULATION AND IMPLEMENTATION IN ZIMBABWE FOOD Essay
STRATEGY FORMULATION AND IMPLEMENTATION IN ZIMBABWE FOOD
A key preoccupation of strategic management for competitive advantage as a field of study is the identification of sources of heterogeneous performance among food manufacturing firms in Zimbabwe in terms of their competitiveness. The main theories of the study of strategy formulation and implementation in the Zimbabwe’s food manufacturing sector includes contingency theory, Porter’s positioning theory, resource-based view and its derivatives and environmental theories and offer varying views explaining the potential reasons for deriving superior rent. Empirical studies in the field of strategic management have mainly focused on two main streams of research: (i) the relationship between how strategy is formulated in a firm and firm performance and (ii) the relationship between the content of strategy and firm performance. A third area of interest is strategy implementation, but unlike the other two areas, strategy implementation in the food manufacturing organisations has not received much empirical interest.
The results of the previous studies examining the relationship between strategy formulation and corporate performance and marketing strategy content and performance have been inconclusive. Some studies have reported positive relationships, while others found no relationship. The previous studies also suffered from a number of methodological inadequacies such as inconsistent operationalization of the constructs, unclear definition of industry sectors and small sample size. Only a few studies have focused on Zimbabwean based organizations. In addition there is a dearth of empirical research using Zimbabwean based food manufacturing organizations. Based on the literature review a conceptual model of strategy formulation and implementation in food manufacturing organizations in Zimbabwe was proposed and the hypotheses to be tested were derived. These hypotheses were classified into two groups namely (i) hypotheses for validating the findings of previous studies and (ii) hypotheses which have not been tested in previous studies. Hypotheses in the first group have examined the impact of strategy formulation, business-level strategy and strategy implementation on organizational competitive performance in the manufacturing sector. Hypotheses in the second group have examined the interrelationships between strategy formulation, business-level strategy and strategy implementation.
2.NEED FOR THE STUDY
Key reasons for the need to study the present study are stated here: a)Study has Practical significance.
Variable like business strategy, objective fulfilment, competitive implementation performance, implementation strategy, cost-related, differentiation variables, focus variables and environment variables are increasingly recognised as important form of food manufacturing industry in Zimbabwe as sources of competitive advantage. b)To apply key strategic management concept to food manufacturing industry. The issue of strategy formulation and implementation towards competitive advantage in the food manufacturing industry in Zimbabwe has received considerable attention in the strategic management literature. It is thought that some of these key strategy formulation and implementation concepts could be applied to any sector of the economy for competitive advantage. c)Study addresses methodological shortcomings of the previous studies This study also addresses some of the methodological shortcomings of the previous studies by clearly defining the industry sectors, using a good sample size and by using properly validated constructs.
It gains significance mainly due to its focus on Zimbabwean based organizations and helps theory development because a robust theory is crucially dependent on empirical studies representing the food manufacturing industry in different geographical regions. d)Knowledge transfer to Zimbabwe’s food manufacturing sector Knowledge transfer to Zimbabwe’s food manufacturing sector from countries with best practice such as Japan, India, China and the United States. This study helps in the promoting of the industrialization drive and the promotion of import substitution, policy consistency, an audit of the skills, innovation and development on technology and machinery to match competition and value addition e)To overview the performance of the manufacturing sector during 2006 and 2013 and asses whether there are differences in strategy formulation and implementation in the food manufacturing sectors and whether the difference in constructs lead to superior performance and competitive advantage. f)To establish whether competitive performance heterogeneity in organisations in the food manufacturing industries in Zimbabwe be explained in terms of their emphasis on rational strategy formulation? g)Does the environment have a moderating effect on the relationship between business-level strategy implementation and competitive performance in the food manufacturing industry in Zimbabwe? h)Is there a relationship between the type of organisational structure and business strategy?
If strategic types are associated with structure types, then does this association explain performance heterogeneity? i)To evaluate government policy on provision of ground rules, to set directions and strategy and support the activity of business and other institutions in their creative endeavours. The present study thus, endeavours to fill the gap in the strategy formulation and implementation literature (and particularly in manufacturing industry literature) by reporting insights obtained in an extensive investigation.
3.REVIEW OF LITERATURE
The concept of strategy formulation and implementation in the food manufacturing industries in Zimbabwe is central to the competitiveness of this sector. The operationalisation of strategy process requires multidimensional models because of the complexities associated with the process. Rajagopalan, Rasheed & Datta (1993), Hart (1992) and Bailey, Johnson & Daniels (2000) have made significant contributions to the literature by developing integrative models of strategy making encompassing a multitude of factors which affect the strategy process. Huff & Reger (1987) had identified nine different streams of strategy process research. However, none of the strategy making models has taken into consideration the theoretical roots of strategy process while defining the strategy making modes. Gregory G. Dess and Nancy K. Origer (2009) conducted a study on (Environment, Structure, and Consensus in Strategy Formulation: A Conceptual Integration) Their findings suggested an integrative framework for research on consensus in strategy formulation—performance relationships.
Their proposed model has two components. First, a descriptive component explores the environment—consensus relationship in which the environment is conceptualized along the dimensions of munificence, complexity, and dynamism. Second, a normative component investigates the role that the match between environment, consensus, and integrating structure plays in explaining differences in organizational performance. Hannu Salmela, And Ton A.M. Spil et al (2010) conducted a study on “Dynamic and emergent information systems strategy formulation and implementation” The thrust of their study was an early attempts to formulate information systems (IS) strategies concentrated on the analytical task of deriving IS strategies from business plans. The limitations of the static plans that often resulted from these formal studies were, however, soon discovered. The critics suggested informal and incremental planning to ensure flexibility, creativity and strategic thinking to comprise emergent strategies as well as
K.W. Platts et al., 2012 conducted a study on “Characteristics of methodologies for manufacturing strategy formulation” Findings were that although the need for companies to develop competitive manufacturing strategies is widely accepted, the processes or methodologies by which such strategies are developed are not well understood. The research described identities and describes four common characteristics of methodologies used successfully in the formulation of strategy. The results of this research can be applied by both industrialists and academics. Industrialists thinking of reformulating their manufacturing strategy could use the characteristics as a ‘checklist’ to help them in determining the methodology to be used; and academics could use the work as a framework to aid further research into manufacturing strategy formulation. Charles C. Snow and Donald C. Hambrick of Pennsylvania State University and Columbia University (2008) respectively conducted a research on “Measuring Organizational Strategies: Some Theoretical and Methodological Problems” In their findings they addressed the major theoretical and methodological problems encountered in attempts to arrive at valid and reliable measures of organizational strategy. Their discussions were based on a series of empirical studies of the strategic behaviors of nearly 200 organizations in ten industries. In these studies, four different approaches for measuring strategy have been employed and they described each approach and discussed the advantages and disadvantages.
Muhittin Oral et al., (2009) conducted a research on “A methodology for competitiveness analysis and strategy formulation in glass industry ” The study noted the increasingly important role of global competition in shaping long-term strategies of industrial firms has been recognized by managers, planners, politicians and academicians alike. This has prompted recently an increase in the number of studies explicitly dealing with competitiveness analysis. The practice experience gained with this approach indicates that mathematical models can provide an analytical framework for the analysis of industrial competitiveness and can yield useful insight for competitive strategy formulation. Rainer Feurer, Kazem Chaharbaghi, (1995) “Strategy formulation: a learning methodology”, Benchmarking for Quality Management & Technology noted that strategy formulation can no longer be based on a process of conception, as the underlying conditions change before a formulated strategy can be implemented.
It should be based on a continuous learning process which involves, inter alia, learning about the organization’s goals, the effect of different actions towards these goals and the way in which these actions should be implemented. First, highlights the importance of an organization’s knowledge base by demonstrating the relationship that exists between strategy formulation and organization learning. Then presents the role of performance measurement systems in stimulating cognitive and behavioural learning. Places the concept of organization learning in a strategy formulation context in order to show the effect of the nature and speed of environmental changes on the organization’s learning processes. Petri Aaltonen, (Helsinki University of Technology, Helsinki, Finland), Heini Ikävalko, (Helsinki University of Technology, Helsinki, Finland) (2012) conducted a study on “Implementing strategies successfully” with the key findings of the study giving a qualitative study of 298 interviews which was conducted in 12 service organizations. In the study, the key findings were introduced, and the challenges of strategic communication and action, the identification of and support for strategic actors, and structure and systems aligned with strategy, are discussed. Gregory G. Dess (2006) conducted a study on the “Consensus on strategy formulation and organizational performance: Competitors in a fragmented industry”.
This study examines the relationship between organizational performance and consensus (or agreement) within top management teams on company objectives and competitive methods for a sample of nineteen firms competing within a highly fragmented industry—paints and allied products (SIC 2851). It was hypothesized that intense competitive pressures and the resultant low industry profitability would constrain organizational resources and augment the need for consensus on both objectives and methods. However, findings indicate that consensus on either objectives or methods is positively related to organizational performance. Philip James, Abby Ghobadian, Howard Viney, Jonathan Liu, (1999) conducted a study on “Addressing the divergence between environmental strategy formulation and implementation”. The findings concluded that, despite growing evidence that large UK organisations are increasingly incorporating the environment into corporate strategy, there continues to be considerable scepticism as to whether this is leading to any meaningful action to reduce industry’s environmental impact.
One possible explanation is the existence of a “gap” between policy formulation and implementation, and the authors suggest that this may be due to a failure on the part of business to ensure congruence between organisational context, values and capability. Utilising data drawn from a recent survey of corporate environmental policies and practices, the authors explore the interaction of external and internal factors with regard to policy development, and search for evidence of congruence. They conclude that very often policy formulation takes little consideration of the organisation’s capability to implement environmental strategies, and suggest that until this question is taken seriously, a gulf will always exist between what companies aim to do, and what they actually achieve. Paul M. Swamidass of Graduate School of Business, Indiana University, Bloomington, Indiana 47405 and William T. Newell of Graduate School of Business Administration, University of Washington, Seattle, Washington 98195, (1987) conducted a study on “Manufacturing Strategy, Environmental Uncertainty and Performance: A Path Analytic Model”. The study concluded that in recent years, researchers and practitioners are paying increasing attention to the phenomenon of manufacturing strategy. However, there exists no formal theory of manufacturing strategy to explain the phenomenon. There is a real need for empirical studies for the development of such a theory.
Findings of the study takes a step in that direction by clarifying, organizing and integrating terms and concepts relevant to manufacturing strategy in the process of conducting an empirical investigation of key manufacturing strategy variables. The empirical section of the study based on data gathered from 35 manufacturers found that environmental uncertainty influenced manufacturing strategy variables such as Manufacturing Flexibility, and the Role of Manufacturing Managers in Strategic Decision Making. The manufacturing strategy variables, in turn, influenced business performance. Ann Marucheck, Ronald Pannesi, Carl Anderson (2007) conducted a study on “An exploratory study of the manufacturing strategy process in practice”. This study presents an exploratory empirical study of the process of formulating and implementing manufacturing strategy within the framework of overall corporate strategy, as practiced by a cross-sectional representation of leading-edge firms. The study shows that these firms’ processes of formulating manufacturing strategy seem to follow the general conceptual models developed in the academic literature.
However, the executives indicated that the real benefits of strategy come from implementation, which is a less structured and behaviorally oriented process. Future research must address infrastructural issues including culture, performance measurement, and managerial style. Ireland, R. D., Hitt, M. A., Bettis, R. A. and De Porras, D. A. (1987), conducted a study on “Strategy formulation processes: Differences in perceptions of strength and weaknesses indicators and environmental uncertainty by managerial level”. The conclusion of the study noted that some literature suggests that managers’ perceptions of strengths and weaknesses indicators vary by management level. Differences likely result because of individuals’ cognitive schemes, which include their cognitive biases. In turn, systematic errors may occur in managerial decisions. Results from the research reported herein support the notion that managers’ perceptions of the indicators of a firm’s strengths and weaknesses, and of environmental uncertainty, vary by managerial level. Differences in these perceptions were discovered to be more significant within each firm. Implications of these results are examined, including the impact on the deployment of firms’ strategy formulation processes.
Xavier Gimbert, Josep Bisbe, and Xavier Mendoza (2010) conducted a study on “The Role of Performance Measurement Systems in Strategy Formulation Processes” and concluded that most studies have focused on the role of strategic performance measurement systems (SPMSs) in communicating the firm’s strategy and facilitating its execution and control, little is known about the role they might potentially play in shaping strategy (re)formulation processes. Findings suggest that the use of SPMSs (as opposed to other forms of PMS) by an organisation’s top management team translates into a more comprehensive strategic agenda. Prior studies have shown that strategic agendas shape the extent and direction of corporate strategic change. M.K. Nandakumar, Abby Ghobadian, Nicholas O’Regan, (2010) conducted a study on “Business-level strategy and performance: The moderating effects of environment and structure”. Findings indicate that environmental dynamism and hostility act as moderators in the relationship between business-level strategy and relative competitive performance.
In low-hostility environments a cost-leadership strategy and in high-hostility environments a differentiation strategy lead to better performance compared with competitors. In highly dynamic environments a cost-leadership strategy and in low dynamism environments a differentiation strategy are more helpful in improving financial performance. Organisational structure moderates the relationship of both the strategic types with ROS. However, in the case of ROA, the moderating effect of structure was found only in its relationship with cost-leadership strategy. A mechanistic structure is helpful in improving the financial performance of organisations adopting either a cost-leadership or a differentiation strategy.
4.OVERVIEW OF CHAPTERS
Chapter scheme for the study is given below.
Chapter 1: Introduction- Chapter 1 contains a brief about the food manufacturing sector in Zimbabwe for period between 2006 and 2013 and an introduction to the concepts and variables investigated in the study. After the topic is introduced, the need and scope for the present study is put forward. Chapter 2: Literature Review- In this section, selected strategy formulation and implementation literature related to rationality of strategy formulation, cost-related, differentiation, degree of emphasis given to strategy formulation while implementing strategies, dynamism, hostility organic structure, mechanistic structure, objective fulfilment and relative competitive implementation performance are cited. Chapter 3: Methodology – Chapter 3 details the methodology adopted for the present study. Operational definitions, statement of the problem, variables under investigations, research model adopted, hypotheses,, sample size, sampling techniques, tools employed for data collection, description of the tools, pilot study results, administration of the questionnaire and statistical techniques employed are discussed.
Chapter 4: Analysis of Data and Interpretation – Chapter 4 provides the analysis of data which was subjected to certain statistical tools. Further, the research findings and its interpretation are explained. Chapter 5: Conclusion and Summary – Chapter 5 contains the summary of the findings, conclusions and implications of the study. In this chapter, limitations of this research are highlighted and recommendations for future research are made. Finally, the thesis ends with detailed bibliography and appendices.
5.TITLE OF THE STUDY
Strategy Formulation and Implementation in Zimbabwe Food Manufacturing Sector (2006 -2013).
Competitive advantage refers to an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. It is the combination of elements in the business model which enables a business to better satisfy the needs in its environment, earning economic rents in the process. Food Manufacturing is the transformation of raw ingredients into food, or of food into other forms. Manufactured foods have been altered from their natural state for safety reasons and for convenience. The methods used for processing foods include canning, freezing, refrigeration, dehydration and aseptic processing A strategy in this study means a business’ road map or a broad plan developed by an organization to take it from where it is to where it wants to be. A well-designed strategy will help an organization reach its maximum level of effectiveness in reaching its goals while constantly allowing it to monitor its environment to adapt the strategy as necessary. Strategy Formulation involves answering a key question from a portfolio perspective: “What business should a manufacturing firm be in and what creativity of unique and valuable market position can the same firm have?”.
Strategic Formulation provides overall direction to the enterprise and involves specifying the organization’s objectives, developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Strategy Implementation involves answering the question: “How shall we compete in this business making trade-offs by choosing “what not to do”, and creating “fit” by aligning company activities to with one another to support the chosen strategy.? In implementation theory and practice, a further distinction is often made primarily with improving efficiency and controlling costs within the boundaries set by the organization’s strategy. Strategic implementation in the context of this study means the process that puts plans and strategies into action to reach goals. A strategic plan is a written document that lays out the plans of the business to reach goals, but will sit forgotten without strategic implementation. The implementation makes the company’s plans happen. Considering manufacturing strategy in its larger strategic context has been thematic in conceptual literature in operations but relatively neglected in empirical studies, thus leaving predominant conceptual models of manufacturing strategy largely untested.
The contextual meaning of this research, implementation of strategy involves developing a conceptual model of manufacturing strategy from the literature and tests the model using data from a sample of manufacturers in Zimbabwe. Objective fulfillment: The nature of the multivariate relationship between six characteristics of strategy formulation an implementation systems in the food manufacturing industries and three different conceptualizations of planning effectiveness using canonical correlation analysis while linking to the set targets. Competitive Implementation Performance: This study examines the performance implications of implementing generic competitive strategies, and whether the implementation of a combination competitive strategy yields an incremental performance benefit over a single generic competitive strategy using data from the food manufacturing industry in Zimbabwe.
7.OBJECTIVES OF THE STUDY
The main objectives of the study are:
1)To test a proposed structural model of the relationship among the nine variables: business strategy, objective fulfilment, competitive implementation performance, implementation strategy, cost-related, differentiation variables, focus variables and environment variables in strategy formulation and implementation.
2)To examine the influence of external and internal environment dynamism on strategy formulation and implementation in the food manufacturing industry.
3)To test whether performance heterogeneity in food manufacturing organisations in Zimbabwe can be explained in terms of their emphasis on rational strategy formulation and implementation?
4)To find out on factors which affect the success of strategy formulation and implementation
5)To examine on whether the environment have a moderating effect on the relationship between business-level strategy and whether there is a relationship between the type of organisational structure and business strategy? If strategic types are associated with structure types, then does this association explain performance heterogeneity? 6)To expose and evaluate government policy which provides ground rules, to set directions and strategy and support the activity of business and other institutions in their creative endeavours.
7)To recommend a model which lays bare the rationale behind strategy formulation and implementation in the food manufacturing industry in Zimbabwe.
8.VARIABLES OF THE STUDY
The variables under investigation in this study are:
(i)Business Strategy –Dependent Variable (Endogenous Variables) (ii)Objective Fulfilment – Dependent Variable (Endogenous Variables) (iii)Competitive Implementation Performance – Dependent Variable (Endogenous Variables) (iv)Implementation Strategy – Dependent Variable (Endogenous Variables) Independent Variables –(Cost-Related, Differentiation Variables, Focus Variables and Environment Variables) a)Cost –Related Variables
(i)Production capacity utilisation – Independent Variable (Exogenous Variable) (ii)Operating efficiency – Independent Variable (Exogenous Variable) (iii)Cost reduction – Independent Variable (Exogenous Variable) (iv)Efficiency of securing raw materials- Independent Variable (Exogenous Variable) (v)Administrative expenses – Independent Variable (Exogenous Variable) (vi)Price competition – Independent Variable (Exogenous Variable) b)Differentiation Variables
(vii)Rate of new product introduction to market- Independent Variable (Exogenous Variable) (viii)Emphasis on the number of new products offered to the market- Independent Variable (Exogenous Variable) (ix)Emphasis on new product development or existing product adaptation to better serve customers- Independent Variable (Exogenous Variable) (x)Intensity of a business’s advertising and marketing- Independent Variable (Exogenous Variable) (xi)Emphasis on building strong brand identification- Independent Variable (Exogenous Variable) (xii)Developing and utilising sales force- Independent Variable (Exogenous Variable) (xiii)Emphasis on producing high quality products – Independent Variable (Exogenous Variable) (xiv)Prompt response to customer enquiries and orders – Independent Variable (Exogenous Variable) c)Focus Variables
(xv)Targeting identified segments in the food manufacturing sector – Independent Variable (Exogenous Variable) (xvi)Offering specialty products – Independent Variable (Exogenous Variable) (xvii)Uniqueness of the form’s products – Independent Variable (Exogenous Variable) d)Environment Variables
(xviii)Rate of innovation – Independent Variable (Exogenous Variable) (xix)Research and development (R&D) activity in the food manufacturing industry – Independent Variable (Exogenous Variable) (xx)Competitor activity in the market – Independent Variable (Exogenous Variable) (xxi)Growth opportunities in the overall food manufacturing industry – Independent Variable (Exogenous Variable) (xxii)Legal, political and economic constraints – Independent Variable (Exogenous Variable)
Strategy FormulationExtent of Rationality in Strategy FormulationMean of the Summarized scale consisting of the variables namely sf1, sf3, sf4, sf5, sf6, sf7,and sf80.839 0.884 0.525 Strategy ImplementationDegree of emphasis given to planning while implementing strategiesMean of the Summarised scale consisting of the first eight items in the scale0.908 0.926 0.609 StructureOrganic Structure and Mechanic StructureMean of Summarised scale consisting all of the variables excluding st5 and st70.660 Organizational Performance1. Objective fulfilmentMean of the Summarised scale consisting of variables namely Performance of 3, performance of 4,
Performance of 6 and performance of 70.693 0.814 0.523
2.Relative Competitive PerformanceMean of the Summarised scale consisting of all the variables used to measure relative competitive performance0.916 0.929 0.594
According to Sharma, Durand and Gur-Arie (1981) there are two types of moderator variables. One type of moderator variable influences the strength of relationship between the predictor variables and the criterion variable and the other type modifies the form of relationship (e.g. changing the sign of the slope). Sharma et al (1981) developed a typology of specification variables using two dimensions namely the relationship with the criterion variable and interaction with the predictor variable. If the specification variable is related to the criterion or predictor variable or both but does not interact with the predictor variable, the variable is referred to as an intervening, exogenous, antecedent, suppressor or additional predictor variable depending on its other characteristics.
9.CONCEPTUAL EQUATION AND HYPOTHESIS
•Dimension of Findings by Testing the Hypotheses
The hypotheses presented in chapter 1 were tested using various statistical techniques as explained in chapter 3. These hypotheses are grouped into three categories. Hypotheses concerning the relationship between strategy formulation and implementation belong to the first group (sub-section 4.3.1) and those examining the relationship between business-level strategy and other variables belong to the second group (sub-section 4.3.2). The third group (sub-section 4.3.3) includes hypotheses inquiring into the relationship between strategy implementation and other variables.
•Strategy Formulation and Implementation
The following hypotheses examining the relationship between strategy formulation and implementation in the Zimbabwe food manufacturing industries were tested: H1a: Rational-comprehensive strategy formulation will lead to superioror competitive implementation performance in food manufacturing organisations. H1b: Environmental dynamism and hostility moderate the relationship between Strategy formulation and competitive implementation.
It was found that strategy formulation is significantly related to both the competitive implementation measures and hence hypothesis H l a is supported. This finding agrees with the findings of many previous studies discussed in chapter 1. While strategy formulation is strongly related to objective fulfilment, its relationship with relative competitive implementation performance is not very strong. This indicates that even though strategy formulation helps organisations in the food manufacturing to achieve its set objectives, it does not make a huge contribution towards improving organisational implementation performance in comparison to its main competitors. This is an interesting finding and there are a number of explanations for this observation. It shows that strategy formulation does not result in the establishment of market “sweet spots”. There could be some other factors which make a sizable contribution towards improving relative competitive implementation.
Hypothesis Hlb tested using moderated regression analysis, indicated that environmental dynamism and hostility moderate the relationship between strategy formulation and relative competitive performance. However, they do not moderate its relationship with objective fulfilment. Hence hypothesis Hlb is partially supported. It was found that strategy formulation helps organisations to improve its relative competitive implementation performance in highly dynamic environments like in Zimbabwe (2006- 2013). This finding confirms the findings of some previous studies (e.g. Miller & Friesen, 1983; Eisenhardt, 1989; Judge & Miller, 1991; Göll & Rasheed, 1997) which suggested that strategy formulation is helpful in dynamic environments. It contradicts the findings of other studies (e.g. Fredrickson, 1984; Fredrickson & Mitchell, 1984) which found that strategy formulation is harmful in dynamic environments. The results of the analysis also indicated that strategy formulation is strongly associated with relative competitive performance in highly hostile environments. Göll & Rasheed (1997) had found that strategy formulation is helpful in highly munificent environments and harmful in environments with low munificence.
Environments with low munificence are characterised as highly hostile environments and hence there is a disagreement between the findings of this study and that of Göll & Rasheed (1997). The results taken together indicate that strategy formulation and implementation helps organisations to improve their performance. Even though scholars like Mintzberg (1994) have argued that strategy formulation has lost its relevance, the findings of this study indicates a significant positive relationship between strategy formulation and organisational implantation performance. It was also found that strategy formulation is helpful in dynamic as well as hostile environments and this provides further support for strategy formulation. Dynamic environments emphasise growth through technology development and innovation. In such environments there is an overload of information and conflict between situations. Strategy formulation helps organisations to process information using analytical tools and arrive at consensus through participative decision-making. In hostile environments, the surrounding factors are less favourable and the activities of competitors are belligerent. Strategy formulation helps firms to identify the threats arising out of these unfavourable factors through systematic analysis resulting in improved implementation performance.
Hypotheses H2a, H2b, H2c and H2d examining the relationship between business-level strategy and implementation and hypothesis H3 examining the relationship between strategy formulation and business-level strategy are discussed in this section. H2a: Organisations in the food manufacturing industry having a clear business-level strategy by adopting one of the strategies namely cost-related, differentiation or integrated strategies will perform better than those organisations which are stuck-in-the-middle. H2b: Organisations in the food manufacturing industry following integrated strategies will perform better than those pursuing either a cost-related strategy or a differentiation strategy. (ii)The Moderating Effect of Environment
H2c: Environmental dynamism and hostility moderate the relationship between business-level strategy and organisational competitive implementation performance. The moderating effect of environmental dynamism and hostility on the relationship between business-level strategy and performance was assessed. It was found that there is a moderating effect to some extent. Environmental hostility acts as a moderator in the following relationships: • Cost-related Strategy – Objective Fulfilment;
• Cost-related Strategy – Relative Competitive Performance; and • Differentiation – Relative Competitive Performance.
It was found that in environments with low levels of hostility, cost-related strategy leads to better strategy implementation performance. However, a differentiation strategy can help organisations in improving their relative competitive performance in highly hostile environments. (iii)The Role of Organisational Structure
H2d: Organisational structure moderates the relationship between business-level strategy and organisational competitive implementation performance. The evidence does not support the proposition that organisational structure moderates the relationship between business-level strategy and implementation. However, the results indicated a significant role played by organic structure in this relationship. It was found that within the group of organisations in the food manufacturing industry in Zimbabwe adopting a clear strategy (cost-related, differentiation or integrated strategy); those having organic structure implement better than those firms which nave a mechanistic structure. (iv)Strategy Formulation and Business-level Strategy
H3: Organisationsin the food manufacturing industry in Zimbabwe placing a strong emphasis on strategy formulation will develop a clear business-level strategy by adopting one of the strategies namely cost-related, differentiation or integrated strategies. The relationship between strategy formulation and business-level strategy was examined by testing hypothesis H3. The findings of the logistic regression analysis indicated that strategy formulation significantly increased the probability of having a clear strategy for an organisation in the food manufacturing industry. This finding establishes the link between strategy formulation and business-level strategy. This relationship has not been examined in the previous studies and hence this finding is important. The findings of H l a and H2a suggest that both strategy formulation and clarity in business-level strategy help organisations to improve their implementation performance. .
The results obtained by testing hypotheses H4, H5a and H5b are examined. H4 examines the impact of formulation of strategy implementation on competitive performance, H5a looks into the relationship between strategy formulation and strategy implementation and H5b assesses the relationship between clarity in business-level strategy and formulation of strategy implementation. (vi)Strategy Implementation and Competitive Implementation Performance H4: The degree of formulation of strategy implementation has a significant positive impact on organisational competitive strategy implementation performance The relationship between planning of strategy implementation and both the competitive strategy implementation performance measures were statistically significant. However, the strength of this relationship is much higher in the case of objective fulfilment. Even though its relationship with relative competitive performance is statistically significant, the regression results indicate that the R value is very low. Hence hypothesis H4 is partially supported indicating that emphasis on strategy implementation helps organisations to improve their competitive performance. (vii)Strategy Formulation and Strategy Implementation
H5a; Organisations in the food manufacturing industry in Zimbabwe placing a strong emphasis on strategy formulation will also place a strong emphasis on the formulation of strategy implementation H5b: Organisations in the food manufacturing industry in Zimbabwe having a clear strategy by adopting one of the strategies namely cost-related, differentiation or integrated strategies will give more emphasis to the formulation of strategy implementation than those organisations which are stuck-in-the middle The results of the ANOVA indicated that organisations in the food manufacturing sector in Zimbabwe which have clearly defined their strategy by adopting a dominant strategic orientation (cost-related, differentiation or integrated strategy) give greater emphasis to the formulation of strategy implementation than stuck-in-the-middle companies.