statistic literacy

7/27/2019 Statistic Literacy

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18th

EGOS COLLOQUIUM

Barcelona, July 4-6, 2002

Sub-Theme 26 : Making and executing strategy

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Strategic Literacy : The great question

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Christophe Torset

CREPAUniversity Paris Dauphine

Place du Marechal de Lattre de Tassigny75 775 Paris cedex 16

E-mail : christophe.torset@dauphine [email protected]

Abstract : The literature on strategy formation has moved from the single rational decision-maker perspective towards organizational approaches of strategy processes, embedding them

into contexts. If the process perspective on strategy allows a more realistic and a morecomplete view of how strategies emerge in organizations, it may not take enough into account

the individual level of analysis. The concept of strategic thinking may help to do so, byhighlighting the interrelations between individual and organizational levels of strategydevelopment. Questioning the concept of individual strategic thinking implies to pay attention

to individuals ability to think strategically, i.e. their degree of strategic literacy. Defined asthe ability to read and write strategy, strategic literacy is here seen as bi-dimensional,

incorporating the knowledge individuals have of the strategic orientations of theirorganization and their consciousness of environmental dynamics.

An exploratory analysis of the strategic literacy of 58 managers shows that higher-level

managers are globally more literate whereas internal communication on strategy may haveperverse effects on the individual ability to think strategically.

Eight types of individual strategic literacy emerge, from limited-centred to extensive-systemic, while five organizational configurations of strategic literacy are highlighted,according to the link between the two dimensions of literacy and hierarchical level.


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STRATEGIC LITERACY : THE GREAT QUESTION

Introduction

The title of this paper may appear quite strange. In fact, it is the exact transcription of some

managers perception about strategy. Several managers who were interviewed for the study

presented here had this spontaneous answer to the question what are the main strategic

orientations of your company ? : Our strategy ? What a great question !.

This was too much curious not to be investigated

More and more scholars call for integrative approaches of strategic management, especially

for the problematics raised by strategy formation (Mintzberg & Lampel 1999, Chakravarthy

& White 2002).

But what does strategy formation mean ?

It is of course linked to decision-making, to strategic analysis, to individual cognitive

processes and political/social organizational processes. It is complex and multiform, often

centralized, sometimes due to local initiatives, always rationalized by top management. It canbe studied through many lenses, from cognitive mapping to change or innovation processes,

and all these approaches have brought much to our understanding of this organizational

mystery.

In fact, strategy development meets a large success in research on organizations because it

gives us the opportunity to question fundamental issues : how ideas emerge, how one David

(the individual strategist) can change the view of one Goliath (the organization), why and how

people do best when they collaborate and, maybe more important, the question asked byRomelaer : what is freedom in a system of constraints ? (2002 : 5).

The interrelations between individuals and groups are often at the heart of strategy formation

and Chakravarthy & White (2002) or Romelaer & Lambert (2002) show how much

individual, organizational and even societal levels of analysis are intertwined and therefore

needed for integrative works.

This paper aims at questioning these interrelations, by focusing on the ability of individuals to

insert themselves in an organizational dynamic of strategic thinking. To do so, they have to be


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able to understand and give sense to the heterogeneous and complex information they are

given. This depends on their degree of strategic literacy.

In order to explore strategic literacy, we will first briefly review the main limits addressed to

the decision-making literature, and the corresponding improvements brought by the processliterature. The second part of this first section is intended to explain how the conceptualisation

of strategic thinking can enrich the process literature by focusing on the determinants of the

bridging between individual and organizational aspects of strategy formation. Individual

strategic thinking is strongly linked to the concept of strategic literacy which is then explored

and defined.

The second section of the paper explains the methodology used to evaluate the strategic

literacy of 58 managers in 12 large French firms.

Results are then presented and discussed in the third section, regarding several organizational

and individual aspects of strategic literacy.

1- Theoretical context

For twenty years now, academics have aimed at developing a holistic and synthetic approach

of strategy processes. Numerous articles have tried to summarize, characterize, classify the

different perspectives on strategy formation (Langley & al. 1995, Laroche 1995, Mintzberg &

al. 1998, Chakravarthy & White 2002). Most of these extensive reviews have concluded that

the strategic decision perspective is probably not fully relevant to catch the

multidimensional nature of the strategic process. From a decision-making perspective,

literature evolved towards a processual and contextual approach of strategy formation.

1.1. New perspectives on strategy formation.

Strategic decision-making and strategy process : these two expressions may appear to be quite

similar to many practitioners and to some researches as well. In fact, most of the synthetic

works on strategy formation have put the stress on the distinction between these approaches.


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Strategic decision-making : rational, analyti cal, and indi vidual.

An amazing amount of work has been done on strategic decision-making in organizations and

many syntheses have been written about it (Allison 1971 ; March 1981, Nutt 1984 ;

Fredrickson 1985 ; Schwenck 1984, 1988 ; Huff & Reger 1987 ; Chaffee 1985 ; Hickson &al. 1986 ; Chakravarthy & Doz 1992 ; Langley & al. 1995, Laroche 1995, Chakravarthy &

White 2002). If the decision-making perspective has greatly improved our knowledge of

organizational processes (March 1981), many researchers have highlighted the inherent

limits of this approach of strategy formation.

The first limit lies in the very concept of decision (Allison 1971, Meyer 1990, Butler 1990,

Laroche 1995, Chakravarthy & White 2002). Langley et al. (1995) call this reification. It

assumes that decision exists and can be clearly analysed. Decisions are then defined as

discrete events, characterized by a moment and a place. They are materialized by meeting

minutes, announcement by the CEO or top managers. This view of decisions as discrete

events has been criticized by many authors. Laroche argues that more and more theorists are

reluctant to use the concepts of decision and decision-making or allow them only a minor role

in their propositions about organizations (1995 : 62). In fact, many studies have shown the

difficulty to establish a direct and causal link between decision and action (Quinn 1980 ;

Starbuck 1983, 1985 ; Brunsson 1982, 1985). Strategic actions can be initiated without anydecision, and many decisions are not followed by action. Moreover, the use of the concept of

decision may be the result of ideological biases (Langley et al. 1995 : 267) and the cause of

methodological biases (Chakravarthy & Doz 1992, Laroche 1995). Strategic decision and

decision-making process are then a construct of researchers mind (Langley et al. 1995 :

266) and the more accurate problem resides in that this view of strategy formation prevents

researchers from taking into account and studying strategic orientations and actions that have

not been preceded and characterized by a decision moment (Hickson et al. 1986).

The second limit which is often associated with the literature on strategic decision-making is

the analytical and rational view of the process. Allison (1971), opposing analytical rational,

organizational and political modes of strategy formation, shows the difficulty to observe in

organizations processes that match the characteristics of analytical rational models of

decision-making. Langley et al. describe works on strategic decision-making as being driven

by the view of decision-making as a boundedly rational process converging sequentially

from the stage of problem definition towards that of final choice (1995 : 262). The strategic

decision-making literature indeed built on the sequential choice model of Simon (1960),


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enriching it with iterative characteristics (Mintzberg et al. 1976) or more precisely defined

steps and routines (Lyles 1981, Nutt 1984). Johnson (1987) considers that most of the

integrative works on strategy process have close links with the rational decision-making

model, Laroche noticing that the main sponsor of the cognitive perspective on decision-

making (Schwenck) puts cognitive processes in the category of the rational model, as an

enrichment and revitalization of this model (1995 : 65). Langley et al. (1995) call this limit

dehumanisation whereas March argues that cutting organizational processes into

successive discrete events called decisions seems to hinder analysis or at least, to introduce a

bias (1988 : 4). Moreover, studies of decision processes seem sometimes disconnected from

strategy and strategic actions (Maritan & Schendel 1997, Regner 2001, Chakravarthy &

White 2002). This emphasis on the rational and sequential characteristics of the process leads

to normative analyses which are focused on discrete decisions rather than on a long sequence

of decisions and actions that culminates in a strategy (Chakravarthy & White 2002 : 183).

The strategy formation approach embedded in the literature on strategic decision-making is

then more interested in the description of programmatic steps of decision than in the analysis

of the way strategies really develop. It is often far from human and political aspects of the

process and adopts a rational, technical view rather than a social perspective, this being

potentially explained by the focus on strategic investment decisions observed in this literature.

Finally, the last set of criticisms addressed to the decision-making perspective lies in its

technocratic and centralized approach of the process. Chakravarthy & White note that it fails

to see the process from multiple levels and perspectives (2002 : 183). Indeed, since these

works on strategic decisions adopted more or less the rational model of decision-making, they

also inherited from one of its underlying assumption : the single decision-maker. Langley et

al. note that conventional notions of decision-making have neglected key human faculties

and individual characteristics that combine to determine organizational outcomes (1995 :

266). Romelaer & Lambert, constructing a holistic approach of the rationalities of decision-

making, embed it in complex social cognitive processes : Decisions taken by organizations

often have nothing in common with decisions which would have been taken by any of the

individuals involved. Nor are they a kind of average of individual decision (2002 : 79). The

word strategist is widely used, but often in a quite narrow sense : the strategist is used as an

umbrella concept to focus the human actor(s) who could be expected to play a crucial role in

strategy processes (if any single human actor really does), such as the CEO, the president, the

owner-manager, the managerial elite, the upper echelon top manager(s), the top management


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team, etc. (Ericson et al. 2001). In most of the literature on strategic decisions, decision-

makers are supposed to be the top management team, if not the CEO himself. This is coherent

with the focus put on the decision process, but it is far from the strategy formation realities.

Many researchers have shown that strategy is not the private domain of top management

(Lyles 1981, Floyd & Wooldridge 1994, Dean & Sharfman 1996, Dougherty & Hardy 1996,

Quy Nguyen 2001) and that strategic initiatives and bottom-up processes were crucial as well

to develop unique strategic positions (Bower 1970 ; Burgelman 1983, 1991 ; Noda & Bower

1996).

The strategic decision perspective does not take into account all these emergent processes that

enrich the formal strategy process. The process perspective answers some of these conceptual

questions.

Strategy process : some renewal from change and innovation

Mintzberg & Waters argue that the process of strategy formation cannot be analysed solely

as a decision-making activity (1990 : 8). Indeed, strategy formation needs to be seen as a

social activity, which one step is decision-making. As Bartlett & Goshal (1997), Bower

(1970) or Burgelman (1983) showed, strategy formation is a complex process, involving

multiple organizational levels. Chakravarthy & White propose an integrative definition of the

strategy formation process : Strategy process can span long periods of time and traverse

multiple levels, bridging the cognitive processes of individual decision makers, the social

psychological and /or political processes within groups of individuals, the organizational rules

and routines that guide and constrain the decisions and actions of organizational members,

and ecological considerations that affect the survival and success of firms (2002 : 183).

Works on the strategy process do not use extensively the term decision. The focus is on

social processes that build strategies over time, not only on the technical steps leading to an

agreement by the board. Strategy process literature has built upon three different problematics

: decision-making, innovation, and change. From a view of the lonely rational decision-

maker, literature has come to use the expression organizational decision-making (Langley

et. al. 1995) before using terms such as strategy formation or strategy development

(Bowman & Kakabadse 1997). These semantic distinctions could appear trivial. Nevertheless,

they are important because they show the evolution of the perspectives on the strategy process

and therefore allow to adopt a shared vocabulary and a global paradigm on strategy over time.


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Strategy process literature has benefited from the sequential aspects of decision-making, the

social processes of strategic and organizational change and the bottom-up and emergent

perspectives brought by works on innovation and intrapreneurship. Bower (1970)

conceptualised the roles played by operational and middle managers in the strategic

investment process. His model, confirmed in other contexts (Bower & Doz 1979) has been

enriched by Burgelmans view on internal selection processes (1983a, 1983b, 1991) and Noda

& Bower (1996). Strategy process literature institutionalised the existence of bottom-up

processes in strategy formulation and formation, rationalizing the idea that middle and

operational managers could play a central role by highlighting new perspectives and

opportunities or by developing innovations.

Strategy process literature avoids limits attributed to the decision-making literature. It does

not use the concept of decision as an end in itself, suggesting that implementation and

experimentation are fully part of strategy. Observed from an organizational point of view,

strategy formation is not analysed on the basis of the single decision process, and

methodological biases due to the use of material data (Hickson et al. 1986) are partly

avoided. Thinking and acting, decision and action, formation and implementation are not seen

as totally distinct aspects of the process. Each of these elements is continuous and iterative,

action preceding formal decision in many cases (Burgelman 1983). Decisions and actions

need not follow an orderly precedence (Chakravarthy & White 2002 : 193) and the

normative distinction between action and decision is not used anymore, allowing an analysis

closer to reality : making a decision is only a step towards action Practitioners get things

done, act and induce others to act. An action perspective makes it easier and important to

observe that both decisions without actions and actions without decisions can exist

(Brunsson, 1982 : 32)

The second set of criticisms addressed to the decision-making literature may not be totally

avoided by the process perspective. Langley et al. consider that Bower or Burgelman have

[used the Simons model] to develop some sequential models for some particular types of

decisions (1995 : 261). In the same vein, Laroche (1995) argues that the garbage can model

(Cohen et al. 1972) still depends on the surroundings of the rational sequential model and

Whittington (2001) considers that the Carnegie School leading researchers (Cyert, March and

Simon) are the first builders of the process perspective. These views seem reductive : process

models of strategy formation do not propose a fundamentally sequential perspective, they

emphasize its iterative nature and show that the sequence is totally different according to the


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type of process studied (Burgelman 1983a). Moreover, and it may be the main difference

between the decision-making school and the strategy process approach, the subjects studied

are different. The decision-making perspective studies the decision process in itself, whereas

the strategy process school is interested in the result of the process : investment, innovation or

any business strategies. The aim is not to build the best rational process, it is to find the

process characteristics that lead to successful strategies.

Finally, one of the most important contribution of the strategy process literature lies in the

recognition of the role of multiple levels in the organization. As Hart & Banbury argue

strategy-making is framed as a process involving the total organization (1994 : 253). The

lonely strategist is abandoned, which does not mean that strategic decisions are made on a

participative basis. The development of strategic orientations owes a lot to operational

managers (Bower 1970), R&D departments (Burgelman 1983a), Boundary spanning

managers (Floyd & Wooldridge 1997) or functional managers (Bowman & Kakabadse 1997),

but the decision still depends on the board or on top management. Ideas are developed

throughout the organization, some are tested, many are abandoned, some are championed in

an internal selection process and they change the strategic paradigm of the firm. When

presenting the firm as a portfolio of processes, Goshal & Bartlett (1997) are attentive to

understand the role each hierarchical level plays in each process. Top managers, middle

managers and field managers, all have impact on the three processes identified (renewal,

integration, entrepreneurial). From a semantic, but purposeful, point of view, we can also note

that Burgelman (1983b) does not use the terms top managers or decision-makers, but

analyses the roles played by organizational participants in the process.

The second important contribution of the strategy process literature is to have put the stress on

the contexts in which strategy formation takes place. From the work of Hamel & Prahalad on

strategic intent (1989) to the individualized corporation (Goshal & Bartlett 1997) much

conceptual and sometimes prescriptive research is about conceiving contexts that facilitate the

development of an open-minded, integrative strategy process (Goshal & Bartlett 1997). As

Pettigrew noted, the irreducible purpose of a processual analysis remains to account for and

explain the what, why and how of links between context, processes and outcomes (1997 :

340). Most of the conceptualisations of the strategy process embed it in two main contexts :

the administrative (Williamson 1975, Quinn 1980), organizational or structural (Burgelman

1991, Noda & Bower 1996) context, and the strategic (Burgelman 1991) or business

(Chakravarthy & White 2002) context. Organizational context can be defined as the


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structural, but also managerial characteristics which shape communication and interrelations

between departments, individuals and hierarchical levels. It includes the structural context of

Noda & Bower (various administrative and organizational mechanisms, such as

organizational architecture, information and management systems, and reward and punishing

system, 1996 : 160), but in a broader sense, incorporating attributes of what Johnson (1987)

calls the organizational paradigm. It is closed to the organizational code (March 1991) and

is composed with two dimensions : administrative and cultural systems (Burgelman 1988).

The strategic context refers to two elements : the strategic orientations and competitive

postures of the firm and the strategic code, which corresponds to the strategic philosophy of

top management and decision-makers. The plasticity of the strategic code, as Burgelman

(1983a) showed, is a key determinant of strategic renewal. This strategic code can be a sort of

strict strategic orthodoxy (as we will never diversify) or, on the contrary, it can evolve

according to the circumstances (strategic opportunism).

If the process perspective on strategy formation brings a lot to our understanding of this

complex subject, it may seem to remain unachieved. Adopting a strict organizational

perspective, it can not take into account the individual aspects of strategy formation. The role

played by multiple hierarchical and functional levels of the organization is recognized andconceptualised, but individuals are nearly absent of this approach. Strategic thinking, as an

enrichment of the strategy process perspective, may help to establish links between individual

and organizational elements and processes of strategy formation.

1.2. Strategic Literacy : a prerequisite for strategic thinking

Strategic management, as an academic field, is in search of integrative conceptualisations

(Pettigrew 1992, Laroche & Nioche 1998, Mintzberg et al. 1998, Chakravarthy & White

2002) which could link the different theoretical perspectives that fragment our knowledge.

At the same time strategy process literature develops, subjects like knowledge management,

learning or cognition become more and more pregnant in the studies of strategy formation.

Cognitive perspectives on strategy and studies of the links between individual and


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description of formal processes in the organization. The aim is to understand where strategic

ideas are born and how they eventually become institutionalised organizational strategies.

This perspective owes a lot to the process perspective on strategy formation and to analyses of

innovation and change processes.

Between individual and organizational strategic thinking, one point deserves attention : how

and why do individuals participate in strategic thinking ? The contexts developed by the

process literature are then very useful.

I proposed (Torset 2001, 2002) an exploratory model of organizational strategic thinking

which is synthesized in figure 1 above.

Figure 1 : an organizational model of strategic thinking (from Torset 2001, 2002)

This perspective on the links between individual and organizational aspects of strategic

thinking can be promptly explained as follow.

Individual strategic

thinking

Organizational

strategic thinking

Strategic

literacy

Will

Capacity

Cognitive stock, Academic

and professional background

----------Individual motivation

criteria, needs and

attempts from work

Individual

context

Motivation, reward &

punishing sys tems

----------Information circulation,

management styles(directive, participative),

attention to ideas

Organizational

context

Strategic position,

environmental complexity

Plasticity & homogeneity

of the strategic code

----------

Strategic context


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The ability for individuals to think strategically depends on their degree of strategic literacy

which is influenced by the cognitive tools individuals can mobilize to understand and

appropriate the strategic orientations and competitive position of their firm. This is of course

strongly dependent on the information they are given about strategic orientations and

environmental characteristics.

For individuals to be proactively involved in organizational strategic thinking, they must have

the will to do so. This is linked to individual characteristics (such as their voluntary

implication (Schein 1980) or their expectations from work experience (Porter & Lawler

1968)) and to organizational characteristics, as works on managerial creativity or innovation

have shown (Amabile 1988, Bleedorn 1993, Drazin 1999, Ford & Gioia 2000, Romelaer

2002).

Finally, the organization must give individuals the possibility to be involved and make evolve

organizational strategic thinking. This depends on the way top management listens to and

cares for ideas and proposals from middle managers (Nonaka 1988, Goshal & Bartlett 1997)

and on the degree of plasticity of the strategic context, i.e. the degree to which strategic

initiatives can challenge and modify the strategic code of the organization (Burgelman 1983a,

1991).

This exploratory conceptualisation is empirically-based, but has not been tested

quantitatively. Hence, the relations proposed are hypothetical, though observed in 12 large

French firms when analysing the formation of 23 strategic orientations.

We will now question the concept of strategic literacy which is a fundamental individual

characteristic for being able to think strategically.

Strategic li teracy : the background for i ndividual strategic thinki ng

The notion of literacy is mostly used in educational sciences. Organization sciences do not

use it, even if the knowledge perspective and works on the cognitive dimensions of strategy

have implicitly highlighted its importance in employees implication.

In fact, the word literacy is quite rarely used. Its opposite -illiteracy- is probably most

known, sometimes as a shame or as a difficulty for individuals, and as a danger for societies.


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- Ability to think critically, to make decisions, and to solve problems- Ability to use technology to manage complex information- Possession of good work habits : reliability, self-esteem, independence

If most of these elements are probably needed for developing strategic thinking skills

(learning capacity, collaborative aptitudes, ability to prioritise, management of complex

information), they do not directly refer to our questions. More specifically, they do not refer

to the ability of understanding the environment and comprise behavioural dimensions that do

not suit, for now, our aim.

We propose that, to define strategic literacy, we can come back to the beginning : strategic

literacy is the ability to read and write strategy.

To read strategy means to be able to understand the forces that drive the strategic orientations

of the firm. This requires to know and to give sense to the strategic context of the firm. As

Burgelman (1983a), Marsh et al. (1988) or Nonaka & Takeushi (1995) have shown,

individuals who are implied in the strategy process, especially in the case of autonomous or

emergent processes, have to be aware of the strategic context of their organization.

Burgelmans perspective on internal development (1983a, 1988) shows that regeneration

processes emerge from social learning, based on the interactions between cognition and

action, at three organizational levels : operational, middle and corporate. For their perception

of a strategic opportunity to be taken into account by middle-level managers, operational

managers need to impose it. This concept imposition or justification is based, at the

beginning, on the ability of these managers to present their view as being coherent with the

strategic field occupied by their firm. Marsh & al. (1988), studying investment processes,

showed as well the importance of being able to seduce top managers in charge of resource

allocation by adopting their point of view on strategy.

Works on cognitive maps and cognition (Hall 1984, Huff & Schwenck 1990, Barr et al. 1992)

have also demonstrated the importance of this knowledge of the strategic context. It can lead

to numerous biases (Schwenck 1985, 1988) and can prevent the organization from

understanding changes (Daft & Weick 1984), but this constitutes the basis on which strategy

develops. Kiesler & Sproull (1982) argue that, to improve problem sensing process,

organizations should develop planning processes that highlight clear goals and indicators,

focusing managers attention on the key elements of the strategic context. For individuals to

be able to read (and write) strategy, they need to build their own distinction tree (Von Krogh


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et al. 1994), which will help them to isolate relevant information from their environment. This

creation-oriented perspective on strategy-making seems to be implicitly built on the

assumption that knowing the main strategic orientations of the firm is a prerequisite for

people to get involved in the strategic thinking process.

Therefore, the first dimension of strategic literacy, the ability to read strategy, depends on two

elements : the understanding of the main strategic orientations of the organization, and the

individual cognitive stocks and processes which give meaning to this knowledge of the

strategic context.

The second dimension of strategic literacy is the ability to write strategy. This dimension

relies on the ability of individuals to give sense to the strategic elements they read, in order to

develop their own strategic agenda through their distinction tree (Von krogh et al. 1994). It

implies a more accurate cognitive process, using both single loop and double loop learning

approaches (Argyris 1992) and corresponds to the functional part of literacy defined by

Wallendorf as the use of text and possession of higher-order decoding and reasoning skills

(2001 : 505).

Literature on knowledge creation or managerial creativity could help to understand how

strategists get from the reading of a situation to propositions for improving this state. The

constructionist perspective highlighted by Von Krogh (1998) establishes a distinction between

tacit and explicit knowledge, arguing that knowledge has to be made explicit to be shared and

therefore potentially used in the organization. As strategies do not grow in vitro, but are fully

embedded in social and political processes (Allison 1971, Crozier & fridberg 1977, Pettigrew

1985, Romelaer & lambert 2002), we can reasonably assume that communication skills may

be as important as analysis skills in writing strategy, and that strategic conversations (Von

Krogh & Roos 1995, Liedtka & Rosenblum 1996) could be a central element in the

development of strategic literacy.

To define strategic literacy, we can rest on these two main dimensions : being able to read and

to write strategy. This can be put together with traditional strategic analysis, which often splits

into the analysis of internal and external dimensions of strategy. Doing this, we can assume

that reading and writing strategy implies to be able to read both internal and external contexts.

In this view, reading strategy means understanding the strategic context of the organization, in


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term of its main strategic orientations and of its strategic paradigm, but also understanding the

environmental dynamics that constrain this strategy. Writing strategy implies to be able to

connect organizational resources and environmental opportunities in order to create or reveal

new strategic issues.

This can lead to the following definition :

Strategic literacy is the ability to read and to write strategy. It is made up of two main

dimensions : the knowledge and understanding of the strategic context of the organization,

and the consciousness of the main environmental dynamics that constrain strategy.

2- Methodological elements

Analysing strategic literacy presents many difficulties : how can we measure the

appropriation of strategy by managers ? How can we estimate their capacity to think with a

systemic approach, linking organizational resources and environmental ones ? How can we

evaluate their potential ability to write strategy ?

Many researchers have tried to take a picture of individuals cognitive stocks, and the most

used methodology is probably cognitive mapping, which consists in analysing individuals

perceptions of their environment on the basis of predetermined dimensions, to understand

actions. This mapping aims at representing the managers structure of knowledge or mental

models (Johnson-Laird 1983, Senge 1992). If Huff (1990) shows that many methods can be

used, the basic material is always managerial language, whereas it is written (Huff &

Schwenck 1990, Barr et al. 1992, Crouch & Basch 1997) or oral (Cossette & Audet 1994,

Calori et al. 1992).

The analysis of managerial language, though potentially biased, is now well established as a

method for understanding cognitive and social processes (Daft & Wiginton 1979, Daft 1980,

Shotter 1993-Crouch).

Our aim in this study is to question the concept of strategic literacy. As we discussed, it can

be understood as being structured by the ability to read and the ability to write strategy.


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As Many empirical studies have shown, one point is determinant for the ability of individuals

to get involved in a strategic thinking process : they have to know the strategic orientations of

their organization. Our goal is then to evaluate the fit between managers perception of the

strategic orientations of their firm and the official orientations defined and announced in

official statements.

The other dimension of strategic literacy -consciousness of the environment- is tested as well.

2.1.Data Collection

Data collection was done using two sources : interviews with 58 managers in 12 firms and

analysis of the strategic orientations announced in official documents (exclusively board

messages and annual reports).

F ir st step : I nterviews

58 managers were interviewed in 12 large French firms, employing from 1,500 to 300 000

people with a turnover superior to 200,000 Million Euros.

The interviewees were from three hierarchical levels, as proposed by Burgelman (1985) or

Bartlett & Goshal (1997) :

- Level A : CEOs or top managers (i.e. member of the board, as strategy corporate

manager or financial corporate director)

- Level B : Middle-level managers : in charge of a division or a service (sales director,

Division or subsidiary Financial Director, Quality management director, etc.)

- Level C : Operational managers : project managers, etc.

12 level A managers, 24 level B and 22 level C managers were interviewed following, whenpossible, the same schema in the 12 firms : 1 interview at level A, 2 interviews at level B and

2 interviews at level C.

Table 1 summarizes the main characteristics of data collection 1:

1Companies names have been changed for confidentiality reasons.


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2.2. Data Analysis

Data were analysed through five steps, broadly using Huberman & Miles methods for

organizing qualitative data (1991).

1) The verbatim document

All interviews were fully recorded and transcribed. With this raw material, a verbatim

document was established to recapitulate, for each of the 12 firms, the core elements of

interviewees discourse on strategic orientations and internal communication. For each of the

interviewees, a selected part of the discourse, summarizing his or her ideas, was included at

the head of the verbatim document.

2) The Strategic literacy coding document

For each firm, we established a strategic literacy coding document. This document aims at

coding the perception managers have of the strategic context of their firms, through the

verbatim document. This is based on the degree of convergence between official strategy and

managers discourse about strategy. The coding is made on a scale from 0 to 3, as the coding

process let appear that there were 4 different levels of convergence :

0 : The manager did not mention the strategic orientations written in official reports.

None aspect of his discourse on strategy is coherent with strategy as described by

top management in annual reports.

Ex : For Comtel, one level C manager just said that the strategy followed by the

firm is not really defined, [] it is really empirical, I dont think there is anything

predetermined. In the annual report, strategy was focused on three points :

development of high-value services, development of the multimedia offer through

UMTS and Improvement of the profitability. Other managers of Comtel did mention

these orientations.

1 : The manager only spoke about vague strategic orientations, his general discourse is

consistent with the strategic orientations, but he never explains them or focuses on

one orientation and does not speak about the others.


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Ex : in Radial, one level B manager only mentioned the development of local radios

as a strategic orientation, explaining that it was the main strategic goal.

Nevertheless, the annual report exposed 4 strategic axes : digitalisation,

reorganization of the offer around one brand, reinforcement of the market shares and

technological innovation.

2 : The manager mentioned the main strategic orientations of his firm, but did not

discuss them or forgot some of them. He or she sometimes just spells them without

really knowing what is behind the official words.

Ex : In Radial, a level A manager mentioned the development of the market shares,

the reorganization of local radios and the development of new products. His

discourse on strategy is close to the official strategic orientations presented in the

annual report (see above) but he forgot an important one and was vague on the

development of a single brand.

3 : The manager mentioned all the strategic orientations of his firm, and explained and

discussed them.

Ex : Still in Radial, one level B manager mentioned, with his own words, the four

strategic orientations presented in the annual report. He discussed them and

sometimes even did not agree with them.

Once this coding was done, the other part of strategic literacy, the ability to link strategy and

environmental dynamics was tested. This dimension is exploratory because managers were

not explicitly asked to speak about their competitive environment. Nevertheless, it seems

interesting, for evaluating strategic literacy, to notice whereas managers have spontaneously

mentioned the environment or not. This lead to a binary coding (0 : the manager never

mentioned the environment ; 1 : he or she mentioned the environment, often to explain or

justify his view on the strategy of his organization).

All these elements were summarized in the strategic literacy coding document, which

comprises, for each firm :

- the strategic orientations presented in the annual report;


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- for each manager interviewed in the firm : an evaluation of the degree of convergence

between his discourse on strategy and official orientations (0 to 3) and the coding of

the mention of the environment (0 or 1)

This allowed to get, for each firm, an average strategic literacy coefficient (/2)and the average

mention of the environment (/1).

3) The Strategic literacy synthesis document Firms :

This document aims at synthesizing all the dimensions of the study for the 12 firms. Based on

the average knowledge score and on the average environment score described above, it isenriched with :

- The coding of the capital structure : 1 for private capital, 2 for public firms. This coding

is based on the following rule : is private any firm which capital is 50% owned by

private investors. Idem for public firms.

- The coding of the level of internal communication on strategy. Based on the answers to

the questions How does top management communicate internally on strategy ? With

which intensity ?, this coding aims at evaluating an average degree of internal

communication on strategy. We did not use separately managers answers. For this

coding, a core answer was established : in each firm, only similar answers on

communication were taken into account with the following rule : on 5 answers, 4 had to

be coherent for the coding to be made. This did not pose any problem, since managers

seemed to have globally the same perception on how intensive internal communication

on strategy is in their organization. This level of the intensity of internal communication

on strategy was coded as follows :

1 : Internal communication on strategy does not exist or is very limited (one formal

written communication for global tendencies per year for example) Ex : In

Comtel, the CEO said we grew very rapidly and we did not follow in terms of

communication. The internal osmosis does not exist anymore, whereas a level

B manager explained that there is no detailed communication on strategy.

Theres an orientation committee, but it is up to each manager to explain it. We

only have, once a year, a speech from the big bosses.


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2 : Internal communication on strategy exists but is rarely formalized. Ex : in

Energial, communication on strategy is mostly let to middle managers, on the

basis of a cascade communication as explained by a level B manager : We

need to communicate locally, taking into account local characteristics. Therefore,

communication on strategy mainly rests on managers shoulders, even if we try

to formalize it with the Intranet and internal journals.

3 : Internal communication on strategy is formalized and uses multiple canals :

Intranet, internal journals, speeches, cascade, or even video. Ex : at Postal,

internal communication on strategy is made through : an annual convention with

5,000 managers, a monthly letter to management exposing environmental

changes and strategic goals, a monthly journal to the 300,000 employees with

strategic goals on cover, the diffusion of one 50-pages and three 5-pages

documents explaining to all employees, with comics and drawings, the main

strategic orientations and their justification, and finally a deployment kit sent to

all managers to help them explaining strategy to their subordinates.

All these codings are synthesized in the strategic literacy synthesis document - Firms

above :

Firms

Capital

1 = private2 = public

Intensity of internalcommunication on

strategy

1 to 3

Average degree ofknowledge of the strategic

orientations

0 to 3

Average degree ofmention of theenvironment

0 to 1

Inform 2 3 2.4 1

Energial 1 2 2 0.5

Distribual 1 3 1.6 0.4

Telcom 1 1 1.6 0.8

Comtel 1 1 2 1

Credial 1 3 2.25 0.5

Transmial 2 1 1.75 0.75

Postal 2 3 2.8 0.4

Diversal 1 1 1.6 0.4

Radial 2 1 2 0.6

Transportal 2 3 2.4 0.4

Transportex 2 3 2 0.2

Table 2 : Strategic literacy synthesis document - Firms


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4) Strategic literacy synthesis document Actors (see appendix A) :

This synthesis document classifies all individuals, independently from their organization,

according to :

- first, their level of knowledge of the strategic orientations,

- second, the fact that they mentioned or not the environment.

By taking into account the hierarchical level of managers (coded 1 for level C to 3 for level

A), this document allows an analysis of correlations between hierarchal level and the

dimensions of strategic literacy studied.

5) Strategic literacy synthesis document intra-firms (see appendix B) :

This document summarizes, for each firm, the degree of knowledge of the strategic

orientations and the evocation of the environment for each of the individuals interviewed. It

allows to study correlations between hierarchical level and dimensions of strategic literacy

inside each of the 12 firms.

Finally, for data analysis, three synthesis documents can be used :

- Strategic literacy synthesis document Firms which, at a macro level, helps to

understand the potential links between knowledge of the strategic orientations,

evocation of the environment, type of capital, sector and intensity of internal

communication on strategy.

- Strategic literacy synthesis document Actors which allows, independently from the

organizations, to question the links between hierarchical level of individuals and their

knowledge of the firm and mention of the environment.

- Strategic literacy synthesis document Intra-firms which may help to observe, in each

firm, the potential links between hierarchical level, knowledge of the strategic

orientations and evocation of the environment.

We are now going to investigate these potential links.


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3- Results and discussion

We organize this section in four parts : general descriptive results, inter-firms analyses,

individual analyses and intra-firms analyses.

3.1. General descriptive elements.

The average knowledge of the strategic orientations, which is evaluated here taking into

account what managers declared about the strategy of their organization, lets appear non-

surprising results. The average knowledge of the strategic orientations follows hierarchical

levels. For the 58 managers interviewed, the convergence between their view of the strategy

and official descriptions is as follow :

- average knowledge-level A : 2.58 / 3

- average knowledge-level B : 2.04 / 3

- average knowledge-level C : 1.73 / 3

These global results are probably not surprising, following the observations made by Hay &

Williamson (1997) for example. Nevertheless, it should be noted that the methodology used

introduces a bias since we compared official strategic statements and managers evocation of

strategic orientations. Top managers are often largely involved in the writing of official

strategic orientations, it is fully part of their job. Therefore, they are likely to have a higher

degree of convergence with official strategies.

The other element of strategic literacy we studied may not be very surprising as well : top

managers often mention the environment when asked to explain the strategy of their

organization, whereas middle managers and operational managers only mention it half time :

- average environment-level A : 0.83 / 1

- average environment-level B : 0.50 / 1

- average environment-level C : 0.55 / 1

We can note here a slight difference between middle and operational managers, the latter

mentioning a bit more the environment, which is consistent with Floyd & Wooldridges

results (1997). This could be explained by more frequent direct relations with external

environment. Nevertheless, the relatively small size of the sample (n = 58) and the

heterogeneity of the jobs held may not allow to conclude.


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3.2.Inter-firms analyses

This macro level of analysis is based on the strategic literacy synthesis document Firms.

We can first have an overlook on firms average degree of strategic literacy, before analysing

the correlations between strategic literacy and contingency variables, capital and intensity ofthe communication on strategy.

Using average values of knowledge on strategic orientations and evocation of the

environment, the 12 firms can be represented as stated in figure 2 below.

Figure 2 : Mapping of the 12 firms according to average knowledge and environment dimensions of strategic

literacy.

This representation is not enough discriminating to gather firms into groups according to their

average degree of strategic literacy. Nevertheless, one point is worth noticing : 5 of the 6

public-owned companies have an average degree of strategic literacy superior or equal to 2

(on 3).

Correlations between the two dimensions of strategic literacy and contingency variables can

help to investigate the potential reasons of the mapping above.

Correlations between these dimensions are stated in table 3 below :

0

0,25

0,5

0,75

1

1,25

1 1,5 2 2,5 3

Knowledge of strategic orientations

Evocationofenvironment

Transportex

Distribual

Telcom Transmial

Comtel Inform

Radial

Energial

Credial

Transportal Postal


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Table 3 : Inter-firms correlations between strategic literacy dimensions and organizational

characteristics

Two main dimensions are highlighted by these correlations.

First, the capital structure seems to have an influence on communication (.262) and

knowledge of strategic orientations (.533).

Public organizations have a higher intensity of internal communication on strategy. This

is not fully surprising, since most studied public companies operate in the public services

area and have to deal with declining but still influent union activities. Moreover, and this may

be more important in public transports, the European deregulation opens the market to new

competitors. This implies to mobilize people through a solid strategic vision.

Managers evocation of strategic orientations is more coherent with official strategic

statements in public firms than in private ones. The correlation between capital structure

and intensity of communication is high (.262) and can explain the first result mentionedabove.

The second insightful dimension is communication, which is strongly linked to the knowledge

of strategic orientations (.599) and to the evocation of environment (-0.439).

The more strategy is internally communicated, the more managers vision of strategic

orientations is coherent with official strategic statements. This is not a surprising result,

especially given our methodology which leads to compare official written strategies and

managers discourse about strategy. The more managers are told which are the main strategic

orientations, the more they recall them to answer the questions. This probably does not mean

that managers fully understand or approve these strategic orientations, but they are able to

express them.

A more interesting point resides in the correlation between the intensity of internal

communication on strategy and the evocation of environment by managers (-0.439). The

more strategy is communicated, the less managers evoke environment when explaining

Communication Knowledge Environment

Capital 0.262 0.533 -0.085

Communication 0.599 -0.439

Knowledge -0.051

Environment


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the strategy of their organization. This result seems to show that managers perception on

strategy is dominated by what they are told. If communication on strategy is poorly

developed, managers will construct their own personal perspective on strategy, and this

implies to understand the environmental dynamics which constrain strategic actions. When

communication is more organized, managers will be likely to rest on what they are told. Their

vision of strategy is less personal and if they can be considered as being able to read strategy,

their ability to write it may be less developed. As Aristotle noted, Nature abhors a vacuum

(natura abhorret vacuum) and managers mind is either fulfilled with official discourse on

strategy, or develops its own perception of strategy, relying on the analysis of environment.

This is of course a caricatured point of view, and the inexistent correlation between

knowledge and evocation of the environment (-0,051) shows that there is no binary relation

between knowing strategic orientations or evocating the environment, but, for managers who

mention strategic orientations in compliance with official goals, we can note that they are

more likely to take into account the environment when the intensity of internal

communication is lower. Moreover, the non-correlation between type of capital structure and

evocation of the environment (-0.085) seems to strengthen the relation between

communication and environment. The fact that managers mention or not the environment

when explaining the strategy of their organization can not be linked to the public or private-

owned dimension.

3.3.Inter-individual analyses

When looking at the strategic literacy synthesis document Actors (see appendix A), which

classifies individuals according to their knowledge of the strategic orientations and their

approach of the environment, we can note that eight distinct groups of managers emerge.

o Limited-centred : this first group encompasses two managers. None of them was able

to explain the strategic orientations of his/her firm and they never mentioned the

environment in their discourse about strategy. This does not mean that these managers

are not able to think strategically, but they do not seem to be able to position their

eventual strategic ideas in front of official strategic goals. As we argued earlier, this

seems to be problematic for their strategic capacity in the organization. All these

managers are operational (level C) managers.


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o Limited-systemic strategic literacy : Only one manager on the 58 interviewed was not

able to present the strategic orientations of his firm, whereas he often mentioned the

environment as a constraint for development.

o Focused-centred strategic literacy : the four managers of this group had a vision ofthe strategic orientations of their firm which is far limited, compared to the official

goals. The environment was never mentioned when explaining strategy. All these

managers are middle managers (level B). When looking at the discourse of these

managers on strategy, one element appears to be common to all : they all focus on the

strategic orientations in which they are involved and do not mention the others.

o Focused-systemic strategic literacy : the six managers composing this group have also

a very personal vision of the strategy, but they did mention the environment. Their

explanations on strategy were not complete, compared to annual reports, but when

talking about strategy, they naturally evoked the environment. As the preceding group,

most of them focused their analysis of strategy on the dimensions in which they were

involved.

o General-centred strategic literacy : 10 managers compose this group. All of them had

a good knowledge of the strategic orientations of their organization, but forgot some

important ones or were not able to discuss them. Their discourse on strategy does not

include environmental elements. They are operational or middle managers.

Sometimes, some of these managers tried to remember the official strategies presented

by top management, but did not always know what to put behind the official words.

Like some students, they read what they are given to read but forget it rapidly and are

not especially interested in strategy.

o General-systemic strategic literacy : this group is the most important one, with 17

managers, from all hierarchical levels. These managers were able to enumerate the

main strategic orientations, but vaguely, or they forgot some important ones. They

always linked strategic orientations to environmental characteristics.

o Extensive-focused strategic literacy : this group gathers 8 managers, from all

hierarchical levels. All these managers had an extensive knowledge of the strategic

orientations, being able to enumerate, explain and discuss them, but they never

mentioned the environment. Their ability to read strategy is high, but we can question


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their ability to write strategy since they do not have a systemic view of their

ecosystem (Liedtka 1998a).

o Extensive-systemic strategic literacy : With 10 middle-level or top managers, this

group is the most literate on strategy. They know and can discuss the strategicorientations of their firm and are able to insert them in the environment. These

managers seem able to read and write strategy without any problem, according to our

approach of strategic literacy.

The main characteristics of the eight groups are listed in table 4 below, where S.L. stands

for Strategic Literacy:

Mention of the environment

Degree of

knowledge of

strategic

orientations

No Yes

NullLimited-centred S. L.

Nb : 2 managers

Hierarchy : operational managers

Limited-systemic S. L.

Nb : 1

Hierarchy : operational manager

Low

Focused-centred S. L.

Nb : 4

Hierarchy : middle managers

Focused-systemic S. L.

Nb : 6

Hierarchy : operational (4) and middle managers (2)

Medium

General-centred S. L.

Nb : 10

Hierarchy : Operational (4) and middle managers(6)

General-systemic S. L.

Nb : 17

Hierarchy : operational (7), middle (5) and top (5)managers

High

Extensive-centred S. L.

Nb : 8

Hierarchy : operational (4), middle (2) and top (2)managers

Extensive-systemic S.L.

Nb : 10

Hierarchy : middle (5) and top (5) managers

Table 4 : Synthesis of types of strategic literacy

The repartition of the number of managers along a continuum from limited-centred to

extensive-systemic strategic literacy is figured in figure 3.


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0

2

4

6

8

10

12

14

16

18

Limited-Centred S.L.

Limited-Systemic S.L.

Focused-Centred S.L.

Focused-Systemic S.L.

General-Centred S.L.

General-Systemic S.L.

Extensive-Centred S.L.

Extensive-Systemic S.L.

Figure 3 : repartition of managers according to the types of strategic literacy

This distribution shows that most managers (45 on 58) have a good knowledge of the strategic

orientations of their firm (coded 2 or 3) and that a majority evokes the environment (34 on

58). This seems to be quite encouraging for the overall strategic literacy and hence for the

ability of these managers to get involved in the strategic thinking process of their

organization.

These descriptive elements cannot explain why some managers are more literate than others.

The data we collected do not allow to analyse deeply the determinants of strategic literacy,

but one point is worth regarding : the eventual link with hierarchical levels.

One could question why the hierarchical level is here considered so important in the analysis.

To answer this, we can argue that it is linked to our main concern which is the role an

individual can play in the strategy process, and Romelaer & Lambert highlight the importance

of such a dimension : organizations are more structured sets of collective decision units than

spaces where individual rationalities combine freely with each other. Roles, positions and

values have profound influences in organizations (2002 : 79). The hierarchical level, because

it partly determines roles and power, seems to be one of the most interesting individual

dimension to study when investigating the potential determinants of strategic literacy, and

therefore strategic thinking.


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Unsurprisingly, the correlation between knowledge of the strategic orientations and

hierarchical level is quite significant (.372). This strengthens what we observed with the

calculation of means : managers of higher hierarchical levels are more likely to explain the

strategic orientations of their firm.

The correlation between evocation of the environment and hierarchical level is lower (.181)

but interesting as well. It shows that a higher hierarchical level globally leads to a more

systemic strategic literacy, but in a less systematic way. This can be explained by

operational managers daily activities, which are often more directed towards environment

(customers, competitors, etc.) and therefore develop their environmental consciousness.

3.4.Intra-firm analyses

This last step aims at analysing firms, but not in terms of average degrees of knowledge or

evocation of the environment, as we did in the inter-firms analysis. This time, we are looking

at organizations, according to the level of correlations between the two dimensions of

strategic literacy and hierarchical level. We use the strategic literacy synthesis document

Intra-firms (see Appendix B).

This analysis allows to map firms according to their level of correlation between (1)

managers knowledge of strategy and hierarchical level and (2) managers evocation of the

environment and hierarchical level. This should help to test the homogeneity of strategic

literacy in each firm.

The figure 4 above maps firms according to the correlations between each dimension of

strategic literacy (knowledge and environment) and hierarchical level.


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-1

-0,8

-0,6

-0,4

-0,2

0

0,2

0,4

0,6

0,8

1

-1 -0,8 -0,6 -0,4 -0,2 0 0,2 0,4 0,6 0,8 1

Correlations Hierarchical level / Knowledge

CorrelationsHierarchical

level/

Environment

Figure 4 : Mapping of the 12 firms according to the hierarchical configuration of the strategic literacy of their

managers

Due to the very small number of managers interviewed in each firm (4 to 6), this mapping has

to be prudently commented.

Nevertheless, five groups of firms can be highlighted :

o Inversely literate firms : in Postal, lower-levels managers tend to have a higher

degree of knowledge of official strategic orientations (correlation = -.802) whereas

environment is more evocated by higher-levels managers. This corresponds to a

situation in which strategy is so much communicated that it leads to a literal

knowledge about strategy, but prevents people from building their own perception of

the environment. Moreover, the competitive landscape is fuzzy. High-value

activities face a European tough competition whereas historical activities still

beneficiate from a monopolistic situation. Even if they know well strategic

orientations, due to their boundary-spanning position (Floyd & Wooldridge 1997),

lower-level managers have not integrated the new competitive forces that emerge

through deregulation. Higher-level managers have and therefore they focus on

environment to the detriment of current official strategic orientations.

Telcom

DiversalTransportex

DistribualTransportal

Radial

Postal

Credial

Transmial

Energial Comtel

Inform


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o Non-hierarchically literate firms : in Energial, Radial and Transportal, both

correlations are inexistent or too small to be significant. In these firms, there is no

link between knowledge or environment and hierarchical level. Strategic literacy

probably rests on individual characteristics, independently from organizational and

strategic contexts.

o Top literate firms : in Transportex and Diversal, both knowledge and environment

dimensions of individual strategic literacy are linked to hierarchical level. In these

firms, higher-level managers seem globally more literate than lower-level managers.

o Top intent-based literate firms : This group is the most important one, with five

firms (Comtel, Inform, Telcom, Credial and Distribual). In these organizations, the

knowledge of strategic orientations is positively linked to the hierarchical level,

whereas the evocation of the environment is not. Higher-level managers are more

likely to know official strategic orientations, but environment can be mentioned by

all managers, without any link to hierarchical position. This can be linked to the

strategic intent of Hamel & Prahalad (1989) because higher-level managers focus on

their vision of strategic orientations, but do not take environment into account more

than lower-level managers do. This can probably be explained by the type of

environment these firms face : they all are in a B to C configuration and evolve inhighly complex environments. In such environments, strategy is probably more

difficult to decrypt for lower-level managers, but they have to be much attentive to

competitors and customers. This can partly explain this structure of strategic

literacy.

o Bureaucratically literate firms : in Transmial, the knowledge dimension of strategic

literacy is positively linked to the hierarchical level of the interviewee (. 853). On

the contrary, the environment dimension is negatively linked to the hierarchical level(-0.816). This means that in Inform, lower-level managers, though they have a less

extensive knowledge of strategic orientations, do not speak about strategy without

mentioning the environment. As attended in bureaucracies, strategic orientations are

the reserved area of top management, while environmental interrogations are more

likely to come from lower-level managers. This is not surprising as the activity of

Transmial (satellite transmissions and global offers to broadcasting firms) is much

dependent on the attempts of customers. Strategic thinking is much oriented toward

customers, and in this firm, lower-level managers could probably be successfully


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involved in the strategy formulation process. The positive and high correlation

between knowledge and hierarchy can be explained as well by the capital structure.

Transmial is a subsidiary of a leading telecommunication company, which is still

partly public-owned. The strategy of Transmial is hence much influenced by its

principal stakeholder and may appear confuse to some operational managers which

do not see links and synergies between the two organizations.

The mapping of the firms and the five groups are summarized in table 5, where the first

coefficient stands for environment/hierarchical level correlation.

Links between the knowledge dimension of strategic literacy and

hierarchical level

Negatively linked Not linked Posi tively linked

Negatively linked

Transmial (-0.816 ; 0.853)

Not linked

Radial (0.327 ; 0)Tansportal (0.218 ; 0.218)

Energial (0 ; 0)

Comtel (0 ; 0.485)Telcom (-0.134 ; 0.873)

Inform (0 ; 0.764)

Credial (-0.302 ; 0.870)Distribual (0.218 ; 0.535)

Links between

the environment

dimension of

strategic literacy

and hierarchical

levelPositively linked

Postal (0.764 ; -0.802) Transportex (0.802 ; 0.423)Diversal (0.764 ; 0.681)

Table 5 : Intra-firms correlations between dimensions of strategic literacy and hierarchical level

This mapping of firms according to their internal homogeneity of strategic literacy among

hierarchical levels highlights the roles played by organizational and strategic contexts.

In most of these firms (8 on 12), higher-level managers tend to know better the official

strategic orientations. This is not surprising and might be due to the methodology used in this

study.

In three firms, there is no link between strategic literacy and hierarchical level.

Transmial, though knowledge of strategic orientations is better in higher-levels, presents a

singular profile, since lower-level managers are more likely to evoke environment. This is not


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fully surprising and can be explained by external environment and boundary-spanning

positions but is worth noticing.

Postal may be the most particular firm. In this organization, lower-level managers have a

better knowledge of official strategic orientations (this is even more surprising when we notethat one of the top managers met is the strategy VP), but they rarely mention environment,

contrary to higher-level managers. This implies that the strategic literacy of lower-level

managers is unbalanced : they are able to position themselves and their ideas in front of

official strategic goals, but we can wonder if they are able to develop strategic ideas without

taking into account the environment.

Conclusion

Strategy formation processes have been largely studied in the academic and professional

literature. From a decision-perspective, research evolved to a processual and contextual

approach. The concept of strategic thinking, which deals with individual and organizational

processes and characteristics, can be useful to get a more accurate picture of how strategies

emerge and develop inside organizations. But understanding strategic thinking implies to

analyse how and why individuals are able to think strategically.

Strategic literacy has not been defined as a concept in the strategic management field.

However, two main dimensions can be studied : strategic literacy means being able to read

and to write strategy. Strategic analysis tools and methods always distinguish between

internal and external views of the resources and opportunities.

Then, strategic literacy can be approached in terms of knowledge of the strategic orientations

of the firm, and sensibility to environmental forces and evolutions. This distinction is not far

from the reading/writing one. An individual who knows the strategic orientations of his/her

organization is able to read main strategic problematics and this may be the first step to

strategic thinking (Marsh et al 1988, Nonaka & Takeuchi 1995). An individual who takes into

account environment when discussing strategy may have a greater ability to write strategy, i.e.

to decode environmental forces in order to develop strategic initiatives or innovations.

We questioned 58 managers from 12 large French firms to test their level of strategic literacy.


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strategy process if they do not have a minimum consciousness of the ecosystem in

which they evolve. In a prescriptive approach, it would imply for organizations to

communicate on environmental forces as well as on strategic orientations, in order to

develop managers strategic literacy and so their ability to think strategically.

At the inter-individual level of analysis, eight types of strategic literacy emerge, based on the

distinction of four degrees of knowledge of the strategic orientations, and a binary

environment dimension. Correlations confirm that strategic literacy is linked to hierarchical

level, but with differences among the two dimensions. The knowledge dimension of strategic

literacy is strongly linked to the hierarchical level of managers, whereas the environment

dimension is slightly correlated to the hierarchical level.

The intra-firm analysis allows to compare firms in terms of their internal homogeneity

concerning strategic literacy. Five groups emerge from the sample, according to the links

between hierarchical level and the two dimensions of strategic literacy.

These results are interesting in themselves, they show the importance and the dangers of

internal communication on strategy. More important, it is probably the first conceptualisation

of strategic literacy, a prerequisite for strategic thinking in organizations, at the individual and

organizational levels. Different sorts of strategic thinking are highlighted and we can note that

many firms are heterogeneous in term of the strategic literacy of their managers.

We can put the stress on two main research perspectives.

First, this exploratory study has to be reproduced on a larger scale, maybe with different

methodological tools. This should help to strengthen the bi-dimensional conceptualisation of

strategic literacy which is proposed here.

Second, a global effort could be made to go deeper in the analysis of strategic literacy and the

three contexts of strategic thinking (individual, organizational, strategic). This study uses data

collected for a research on strategy processes which are not sufficient to characterize the

contexts of each firm. This link with strategy process literature would probably bring a lot to

our understanding of the crossing between individual and organizational level of strategy

development.


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Appendix A : Strategic Literacy Synthesis Document Actors

K n ow l ed g e o f M en ti on o f t he H ie ra rc h ic a l

S t r a t e g i c O r i e n t a t i o n s E n v i r o n m e n t L e v e l F i rm

0 - 3 0 - 1 1 - 3

0 0 1 D i v e r s a l

0 0 1 T r a n s p o r t e x

0 1 1 C o m t e l

1 0 2 D i s t r i b u a l1 0 2 D i s t r i b u a l

1 0 2 R a d i a l


1 1 2 T r a n s m i a l

1 1 2 D i v e r s a l

1 1 1 D i s t r i b u a l

1 1 1 T e l c o m

1 1 1 T e l c o m

1 1 1 T r a n s m i a l

2 0 2 E n e r g i a l

2 0 2 E n e r g i a l2 0 2 T e l c o m

2 0 2 D i v e r s a l

2 0 2 T r a n s p o r t a l



2 0 1 C r e d i a l2 0 1 D i v e r s a l

2 0 1 R a d i a l

2 1 3 E n e r g i a l

2 1 3 T e l c o m

2 1 3 C o m t e l

2 1 3 P o s t a l

2 1 3 R a d i a l

2 1 2 In f o r m2 1 2 T e l c o m

2 1 2 C o m t e l

2 1 2 C r e d i a l

2 1 2 T r a n s m i a l

2 1 1 In f o r m

2 1 1 In f o r m

2 1 1 E n e r g i a l

2 1 1 C o m t e l2 1 1 C r e d i a l

2 1 1 R a d i a l


3 0 3 C r e d i a l

3 0 3 T r a n s m i a l

3 0 2 P o s t a l


3 0 1 P o s t a l3 0 1 P o s t a l



3 1 3 In f o r m


3 1 3 D i v e r s a l



3 1 2 In f o r m3 1 2 C o m t e l

3 1 2 C o m t e l

3 1 2 P o s t a l

3 1 2 R a d i a l


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Appendix B : Strategic Literacy Synthesis Document Intra-Firms

Firm Hierarchica l Knowledge of Mention of the Correlat ion Corre la tion

Level (H) Strategic Orientations (K ) Environment (E) H / K H / E

1-3 0 - 3 0 - 1

3 3 1

Inform 2 3 1

2 2 1

1 2 1

1 2 1 0,764 0

3 2 1

Energial 2 2 0

2 2 0

1 2 1 0 0

3 3 1

Distribual 2 1 0

2 1 0

1 2 0

1 1 1 0,535 0,218

3 2 1Telcom 2 2 1

2 2 0

1 1 1

1 1 1 0,873 -0,134

3 2 1

Comtel 2 2 1

2 3 1

2 3 1

1 0 1

1 2 1 0,485 0

3 3 0

Credial 2 2 1

1 2 1

1 2 00,870 -0,302

3 3 0

Transmial 2 1 1

2 2 1

1 1 1 0,853 -0,816

3 3 1

Diversal 2 1 1

2 2 0

1 2 01 0 0 0,681 0,764

3 2 1

Postal 2 3 1

2 3 0

1 3 0

1 3 0 -0,802 0,764

3 2 1Radial 2 1 0

2 3 1

1 2 1

1 2 0 0,000 0,327

3 3 1

Transportal 2 2 0

2 2 0

1 3 0

1 2 1 0,218 0,218

3 3 1

Transportex 2 1 0

2 3 0

1 0 0

1 3 0 0,423 0,802


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