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Does employee understanding of strategic objectives matter? Effects on culture and performance

Radoslaw Nowak (School of Management, New York Institute of Technology, Old Westbury, New York, USA)

Journal of Strategy and Management

ISSN: 1755-425X

Article publication date: 25 June 2020

Issue publication date: 13 October 2020

1082

Abstract

Purpose

The purpose of this paper is to investigate whether employees' understanding of their organization's strategic objectives could be used by business organizations to develop a desired type of organizational culture that will improve business performance.

Design/methodology/approach

Structural equation modeling (SEM) was conducted on the data collected in 2018 from professionals working in the healthcare industry in the USA.

Findings

SEM revealed the positive effect of employee understanding of their organization's strategic objectives on the development of a serving culture, and the mediating effect of serving culture on the relationship between employee understanding of strategic objectives and performance.

Research limitations/implications

This study emphasizes that having a well-defined mission and strategic goals may not be sufficient. Business organizations must also ensure that all employees clearly understand the meaning of such objectives. Employee understanding can become instrumental, as it could allow business organizations to develop a desired type of organizational culture that will support the implementation of the firm's strategic objectives.

Originality/value

The study is a valuable addition to past research. First, it advances the literature on strategy by exploring the critical role of employee understanding of their organization's strategic objectives in the context of culture and performance. Thus, it allows scholars to better explain how business organizations could more effectively utilize their process of strategic planning. In the domain of organizational culture, the paper contributes by identifying a new antecedent of serving culture. Furthermore, the paper also contributes to the literature on service management by identifying a mechanism that service organizations could use to increase their performance.

Keywords

Acknowledgements

I would like to thank the editor and two anonymous reviewers for very constructive feedback and helpful suggestions. I also want to thank Monica Yang and MaryAnne Hyland from Adelphi University for providing very insightful comments on the previous draft of this paper. Finally, I would like to thank Joanna Nowak for her help and support — dziekuje Joasiu.

Citation

Nowak, R. (2020), "Does employee understanding of strategic objectives matter? Effects on culture and performance", Journal of Strategy and Management, Vol. 13 No. 4, pp. 477-493. https://doi.org/10.1108/JSMA-02-2020-0027

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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