· Gagnon, M. A., Jansen, K. J., & Michael, J. H. (2008). Employee .docx

· Gagnon, M. A., Jansen, K. J., & Michael, J. H. (2008).
Employee alignment with strategic change: A study of strategy-
supportive behavior among blue-collar employees. Journal of
Managerial Issues, 20(4), 425–443. (EBSCO AN:
http://libproxy.edmc.edu/login?url=http://search.ebscohost.com/
login
.aspx?direct=true&db=pbh&AN=36099317&site=ehost-live
JOURNAL OF MANAGERIAL ISSUES
Vol. XX Number 4 Winter 2008: 425-443
Employee Alignment with Strategic Change: A Study of
Strategy-supportive Behavior among Blue-collar Employees
Mark A. Gagnon
Director of Business Development
Bay Tree Technologies
Karen J. Jansen
Assistant Professor of Management
University of Virginia
Judd H. Michael
Associate Professor of Sustainable Enterprises
The Pennsylvania State University
It may not be surprising that poor organizational strategies
often fail, but research in strategy implementation demonstrates
that even good strategies fail during implementation (Bonoma,
1984; Huff and Reger, 1987; Wooldridge and Floyd, 1989).
Failure of a new strategy or a strategic innovation is often due
to the inability or resistance of individual employees to commit
to a strategy and adopt the necessary behaviors for
accomplishment of strategic objectives (e.g., Heracleous and
Barrett, 2001). Failures in this process of strategic commitment
lead to strategic misalignment, or individuals failing to engage
in behavior that supports the organi-zation’s strategic goals

(Boswell and
Boudreau, 2001). Because strategy implementation is
predominantly goal-directed (Barney, 1998) and teleological in
nature (Van de Ven and Poole, 1995), strategic misalignment
reflects the absence of goal-directed behavior.
The problem of strategic misalign-ment has a considerable
history in the management discipline and has been described
under numerous labels such as the problem of achieving
coordinated action, goal incongruence and non-alignment
(Barnard, 1938; Boswell et al., 2006; Labovitz and Ro-sansky,
1997; March and Simon, 1958). This body of research has
provided considerable insight into the challenges that impede
collective
(
(425)
)JOURNAL OF MANAGERIAL ISSUES Vol. XX Number 4
Winter 2008
(
426
E
MPLOYEE
A
LIGNMENT WITH
S
TRATEGIC
C
HANGE
)alignment with strategies. However, little is understood about
the mechanisms by which individuals come to be aligned with
strategies.
The purpose of this study is to understand the antecedents of
alignment by examining the role an indi-vidual’s strategic
knowledge and commitment play in subsequent engagement in

strategy-supportive behavior. Strategic knowledge represents an
individual’s global understanding of a strategy being pursued by
his or her organization; individuals who agree with statements
such as “I understand what strategy X is all about”are
demonstrating strategic knowledge as we define it. We propose
that strategic knowledge and several individual characteristics
influence strategic commitment, which we define as an
individual’s willingness to support a strategy. Three questions
guided our research: (1) how does individual knowledge of the
organization’s strategy influence commitment to the strategy,
(2) what additional antecedents contribute to strategic
commitment, and (3) does strategic commitment predict
strategy-supportive behavior? For this research we adopt a
definition of strategy that reflects what many multi-unit
manufacturing firms would call an operating strategy. For
example, this definition would include strategic initiatives that
are somewhat narrow in scope and yet help to guide the
operating units within an organization.
We believe our research contributes to management scholarship
in several ways. First, we explore a subcomponent of
generalized commitment, namely commitment to a particular
strategic initiative (cf. Jansen, 2004; Neubert and Cady, 2001).
Such a focus seems especially relevant today, given the
increasingly short-term
bonds between individuals and organizations (Rousseau, 1997).
Second, the framework proposed broadens the strategic
perspective to include individual actors rather than focus on the
organizational level and associated outcomes. Similar strategy-
individual linkages have led to breakthroughs in strategic
human resource management (Barney and Wright, 1998; Schuler
and Jackson, 1987; Wright and Snell, 1998) and the upper
echelons perspective (Finkelstein and Hambrick, 1996;
Hambrick and Mason, 1984). Third, we test the theory in a lean
transformation setting, providing greater contextual insight into
how commitment to a strategy may be facilitated and its ability

to predict strategy-specific behavior. We chose to study an
organization that was adopting a strategy built on lean
manufacturing in large part because a successful lean strategy
necessitates both understanding and involvement from
production employees (e.g., Mehta and Shah, 2005). Finally,
results provide important managerial implications regarding
design, training and communication issues associated with
strategic change processes.
(
JOURNAL OF MANAGERIAL ISSUES Vol. XX Number 4
Winter
2008
)Achieving Strategic Alignment
Individuals are strategically aligned when their behaviors
correspond with their organization’s strategy. For example, an
organization may require its members to support an intensive
customer service strategy by engaging in what we term
“strategic supportive behaviors.”In this instance, an employee
who is strategically aligned will engage in behaviors that
proactively reach out to customers (e.g., courtesy calling,
promptly responding to requests, detecting/
GAGNON, JANSEN AND MICHAEL 427
preventing future problems). Similar to management by
objective (Drucker, 1954), strategic alignment requires
individuals within an organization to behave in a contributory
manner in order to support the strategic goals of the
organization.
The term strategic alignment has recently been used to describe
individual strategic contributory behavior in both academic
(e.g., Wooldridge and Floyd, 1989; Boswell and Boudreau,
2001) and practitioner (Labovitz and Rosansky, 1997) contexts.
However, the problem of individuals being misaligned with
organizational strategies (i.e., not behaving to support a
strategy or objective) has an extensive history in management

science. Barnard (1938) highlighted the need for organizational
member contribution to higher-order organizational goals. In
their classic text Organizations, March and Simon (1958)
discuss the need for employees to contribute to the goals of the
firm. Drucker (1954) augmented these works by developing
management by objective. Management by objective established
a hierarchy of objectives for employees within an organization
with the ultimate purpose being the strategic goals of the
organization. The balanced scorecard approach (Kaplan and
Norton, 1992) is perhaps the most recent conceptualization of
management by objective and involves more metrics. A common
theme to all these approaches is the need for employees to
behaviorally contribute in order to support organizational
strategies. Overall, these works highlight the challenge of
ensuring that employees engage in strategically supportive
behaviors.
Commitment within Organizations
(
Winter
2008
)Commitment research provides insight into the challenge of
aligning people with organizational strategies. The commitment
literature offers an extensive inventory of studies that
demonstrate relationships between organizational commitment,
work attitudes and behavioral outcomes (Meyer et al., 2002).
Mowday, Porter and Steers (1982) define organizational
commitment as an individual’s attachment and willingness to
support his or her organization. Although the concept of
organizational commitment has demonstrated its utility for
explaining organizational phenomena, several researchers have
unpacked the concept of commitment to include additional
dimensions such as intensity and focus.
O’Reilly and Chatman (1986) drew upon Kelman’s (1958) work
to explain the varying levels of commitment intensity within

individuals. Becker and colleagues advanced the argument by
asserting that unpacking commitment involves two major
dimensions, the basis of commitment and the foci of
commitment. Basis represented the individual intensity of
affiliation and foci represented the object to which individuals
commit (Becker, 1992; Becker and Billings, 1993). Our review
is limited to foci of commitment since our work focuses on
application of the commitment to organizational strategy.
However, we see a need for future research that investigates the
intensity to which individuals commit to various objects.
Several authors have argued that individuals within an
organizational context suffer from competing commitments,
which has implications for overall organizational commitment
(
428
E
MPLOYEE
A
LIGNMENT WITH
S
TRATEGIC
C
HANGE
)(Becker, 1992; Reichers, 1985). For example, if organizational
commitment is a multifaceted phenomena, then facets (e.g., peer
group commitment, role commitment) that compose
organizational commitment could interact in certain ways to
alter overall organizational commitment depending on certain
contexts. A considerable number of commitment types based on
varying foci have been identified in the organizational literature
(Becker and Billings, 1993; Bridges and Harrison, 2003;
Neubert and Cady, 2001; Reichers, 1985).
Exploring more specific forms of commitment such as goal and
program commitment provides additional understanding into the
problem of strategic misalignment. Locke, Latham and Erez

(1988) defined goal commitment as an individual’s at-tachment
and determination to reach a goal. Goal commitment research in
organizations has been conducted primarily on work group and
unit level goals (Locke and Latham, 1990). Goal commitment
has been identified as a necessary component of goal
achievement (Locke et al., 1988), which presumes goal
supportive behavior. Since strategy is primarily goal directed, it
is likely that the concept of goal commitment can be extended
to encompass strategic goals.
A concept similar to goal commitment is program commitment.
Program commitment is an individual’s attachment to an
organizational program (Neubert and Cady, 2001). Program
commitment is focused on the specific scope for an
organizational program that may, or may not, be strategic in
nature. For example, a program could be non-strategic such as a
“keep your work area clean”pro-gram or strategic such as
meeting ISO
9000 quality standards. Program commitment has been linked to
program supportive behavior and attitudes (Neubert and Cady,
2001). Drawing from the logics of goal and program
commitment, one can argue that the focus of commitment can be
applied to an organizational strategy.
(
Winter
2008
)Wooldridge and Floyd (1989) and Noble and Mokwa (1999)
have introduced the concept of strategic commitment.
Wooldridge and Floyd (1989) mention the need for managers to
be strategically committed, but go no further than highlighting
the need for strategic commitment. Noble and Mokwa (1999)
operation-alized the concept of strategic commitment by
examining middle managers’ commitment to a marketing
strategy and found that managers’ self-reported commitment to
their or-ganization’s marketing strategies was correlated with

role performance. Noble and Mokwa’s (1999) work is indeed
helpful, as it appears to be the first work to empirically examine
employee commitment to a strategy and associated outcomes. In
summary, the studies above reveal opportunities to focus the
concept of commitment on strategic phenomena and evaluate the
impact of potential antecedents and outcomes in additional
contexts.
Knowledge within Organizations
Numerous definitions have been offered for conceptualizing
knowledge within an organizational context. However, a widely
agreed upon understanding of knowledge within organizational
settings is problematic (Nonaka and Takeuchi, 1995). The
challenge is exacerbated when one seeks to define individual
knowledge of organizational strategy. We have
chosen to view strategic knowledge as individuals’ global
understanding of their organization’s strategy. Our knowledge
definition contains both explicit and tacit aspects. The explicit
aspect of strategic knowledge is certain facts that are easily
transferable to organizational members (Polanyi, 1967).
Examples of explicit strategic knowledge include production
targets and documented work procedures. The tacit aspect of
knowledge requires the individual to personalize knowledge
(Polanyi, 1967), meaning that individuals form their own
linkages based on what they know and have experienced. Tacit
knowledge is described as being difficult to explain or separate
from context (Nonaka and Takeuchi, 1995; Polanyi, 1967) and
plays a key role in decision-making processes in top
management teams (Brockman and Anthony, 1998). Both these
aspects of strategic knowledge allow individuals to make sense
of their social context and frame their behavior to interact with
the environment.
Generally, the strategic implementation process requires
establishing a common body of strategic knowledge. This has

been termed by some as sensemaking (Weick, 1995), sen-
segiving (Gioia and Chittipeddi, 1991) and line-of-sight
(Boswell and Boudreau, 2001). We argue that strategic
knowledge is a necessary precondition for effectively
committing to the organization’s strategic goals. Individuals
must possess a global understanding of their organization’s
strategy that is similar to those who created the strategy. An
organization high in aggregate individual strategic knowledge
will have a shared interpretation among its members as to the
nature of the strategy, its goals,
and how each member can contribute to accomplishing the
goals.
(
Winter
2008
)Labovitz and Rosansky (1997) and Wooldridge and Floyd
(1989) appear to be the first to mention the role of strategic
knowledge for supporting employee strategic alignment.
Labovitz and Rosansky (1997) offer a series of practitioner
accounts of how firms such as Fed-Ex have achieved strategic
alignment with employees and have reaped the rewards of high
performance. Wooldridge and Floyd (1989) argue that the role
of the manager is to facilitate strategic understanding in order
to help reinforce employee commitment. Further, they extend
the idea that strategic knowledge needs to be explored at lower
levels within the organization. However, neither of these works
empirically examines how individual strategic knowledge
contributes to strategic alignment within organizations.
More recently, Boswell and Boudreau (2001) introduced the
concept of line-of-sight, a combination of employees’ strategic
understanding and knowing how to behaviorally contribute to
their organization’s strategy. In a hospital setting with clerical
workers, they found that individual knowledge of the
organization’s strategy was related to strategically congruent

behavior (i.e., behaviors supportive of the strategy). Another
recent exploratory study in a health maintenance organization
examined the role of a communication program for developing
individual knowledge of strategic goals (Enriquez et al., 2001).
The study found a relationship between high personal
involvement in achieving strategic goals and high knowledge of
the organization’s goals. In addition, respondents demonstrated
better strategic knowledge
(
430
E
MPLOYEE
A
LIGNMENT WITH
S
TRATEGIC
C
HANGE
)after a strategic goal communication program. However, this
work did not examine subsequent employee attitudes and
behavior. Finally, Pappas and colleagues (2004) studied middle-
manager strategic knowledge and social network characteristics.
They found that both middle-manager strategic knowledge and
network position characteristics were important factors
determining strategically congruent behavior (e.g.,
championing, facilitating, synthesizing and implementing).
A Commitment-based Framework for Strategic Alignment
Combined, the studies reviewed indicate that further evaluation
of the concept of commitment to organizational strategy is
likely to provide new insight. Initial evidence suggests that
strategic commitment can be developed within organizations
and has the potential to contribute to strategic alignment. In our
study, we examine the popular initiative of transforming to lean
manufacturing. In addition, we build on past commitment
research by further exploring the process by which knowledge

of a strategy influences commitment to the strategy. Our
proposed model is illustrated in Figure I and explicated in
greater detail below.
Strategic Knowledge —~ Strategic Commitment
Strategic knowledge works as the raw material for individuals’
judgments about their organization’s strategy. Cognitive theory
indicates that knowledge serves as the medium for the formation
and maintenance of schemas. Schemas are cognitive structures
that individuals create and
use to make order of the world. Increased knowledge helps
make sche-mas more content rich (Fiske and Taylor, 1991; Lord
and Foti, 1986). The more knowledge individuals possess about
a strategy the better the quality of their schemas about the
strategy.
(
Winter
2008
)This is especially the case with a lean manufacturing initiative,
which mandates that employees have a clear understanding of
its benefits and core principles, are empowered with more
decision-making abilities, and are engaged in cross-training
(Mehta and Shah, 2005; Womack and Jones, 1996). We refer to
this type of strategic knowledge as requisite knowledge, where
employees have access to the widest variety of strategy-
supportive information relevant to the initiative (Nonaka and
Takeuchi, 1995). There are several types of strategic initiatives
that require such requisite knowledge, including six sigma, total
quality management, and balanced scorecard (e.g., Buch and
Tolentino, 2006; Choo et al., 2007; Kaplan and Norton, 1992).
We recognize that not all knowledge gained about a strategy
will uni-laterally lead to commitment. In fact, there are likely to
be circumstances where increased knowledge about a strategic
initiative leads to a decrease in commitment, such as when that
knowledge is perceived to have negative implications for the

company or its employees. We therefore bound our prediction
about the relationship with knowledge and commitment to
requisite knowledge, such as that described above. Thus,
knowledge becomes the means by which individuals gain a
greater understanding of the strategic initiative. We therefore
predict that individuals who possess
Figure I
A Model of Strategic Commitment Predicting Strategically-
aligned Behavior
(
Strategic Knowledge
) (
H1: +
)
(
Openness To
Experience
) (
H2a: +
H2b: +
) (
Strategic
Commitment
) (
Perceived
Company
Trust
) (
H3: +
)Alignment: Strategic Supportive Behavior
(
H2c: +

) (
Company Tenure
)
(
Winter
2008
)more strategic knowledge are more likely to commit to a
strategy.
Hypothesis 1: Requisite knowledge about a strategic change
initiative will positively predict strategic commitment.
In keeping with the more traditional commitment literature, we
ex-pect that certain individual characteristics will influence the
likelihood of becoming committed to a particular strategic
initiative. After reviewing recent research on commitment and
strategic change, we focus on three such antecedents in the
present study: openness to experience, perceived organizational
trust, and or-
ganizational tenure. First, individual openness to experience is
argued to be positively related to strategic commitment.
Individuals who are open to experience tend to be broadminded,
curious, learning-oriented and willing to face new challenges
(Barrick and Mount, 1991). Lepine, Colquitt and Erez (2000)
found that individuals who were open to experience were better
able to deal with changing rules in a decision-making
simulation. Therefore, we argue that individuals high in
openness to experience will be better able to commit to a
strategic change since most
(
432
E
MPLOYEE
A

LIGNMENT WITH
S
TRATEGIC
C
HANGE
)strategies involve setting new objectives and learning new
means to accomplish the objectives.
Hypothesis 2a: Openness to experience will be positively
related to strategic commitment.
Employee trust in their leaders and organizations has been
shown to have a positive relationship with organizational
commitment and desired work attitudes (Dirks and Ferrin, 2001;
Costigan et al., 1998). Trust is defined as an individual’s
willingness to be vulnerable to another in exchange for a
mutually beneficial outcome (Dirks and Ferrin, 2002). Trust has
the ability to increase over time as a result of past successful
trust-based investments. If employees have experienced success
with past strategic initiatives, it has likely facilitated higher
trust in the leaders responsible for those initiatives.
Subsequently, new initiatives are likely to garner commitment
due to those prior experiences.
The importance of trust would seem to be especially relevant
for hourly employees faced with a new strategy. Blue-collar
workers are known to be different from white collar employees
on a number of facets (e.g., Tierney and Farmer, 2002), not the
least of which is their education level related to business topics.
Whereas white-collar professionals may have had education or
training that allows them to use their own judgment with
regards to a strategic initiative, blue-collar workers in a typical
manufacturing environment are likely to have had neither.
These persons have a more limited set of information sources
upon which to rely when forming their attitudes about a given
strategy. Therefore, trust in the organization’s leaders becomes
a
proxy for supporting the strategic initiative and building

commitment.
(
Winter
2008
)Hypothesis 2b: Perceived organizational trust will be positively
related to strategic commitment.
Tenure represents a structural aspect of individuals’
involvement with their organization, capturing the degree of
embeddedness an individual has within an organization’s
structure. Mitchell and colleagues (2001) found that individual
embeddedness within an organization was positively related to
organizational commitment. However, strategic commitment
differs from organizational commitment in that it has more to
do with supporting change. Highly tenured individuals are
likely to embody the very rituals and routines that help define
the structure of the organization. We argue this to be especially
true given a union context where additional incentives are
provided to tenured employees. As a result, we propose that
organizational tenure will be negatively related to strategic
commitment since individuals who have been in the
organization longer are likely to be more committed to the
status quo.
Hypothesis 2c: Organizational tenure will be negatively related
to strategic commitment.
Strategic Commitment —~ Strategic Alignment
As mentioned earlier, several studies within the organizational
commitment literature have demonstrated associated behavioral
outcomes with commitment (Meyer et al., 2002; Mowday et al.,
1982). Following the same logic used with other commitment-
behavior relationships, we predict that individuals who are
committed to a strategy will be more likely to
(
G
AGNON

, J
ANSEN AND
M
ICHAEL
433
)behave in a strategically supportive manner (i.e., have
alignment with the lean strategy).
The theoretical underpinnings of the relationship between
commitment and commitment-congruent behavior are likely to
be a combination of affect and cognition. Affective events
theory (Weiss and Cropan-zano, 1996) provides support for the
emotive linkages between commitment and commitment-
congruent behavior. Affective events theory asserts that a
precipitating work event will trigger emotional and cognitive
processing within individuals; this processing is termed an
affective reaction. The individual’s affective reaction is an
induced state (usually viewed as positive or negative) that acts
to frame attitudes and behavior. We theorize that during a
strategic change, individual affective reactions influence
strategic commitment, which ultimately impacts individual
engagement in strategy-supportive behaviors.
Examining the cognitive aspect of the relationship between
commitment and commitment-congruent behavior, cognitive
consistency theory indicates that individuals will reinforce their
existing beliefs with congruent behavior (Fiske and Taylor,
1991). A specific example is that of cognitive dissonance
theory. Cognitive dissonance theory asserts that in-dividuals
will behave in a manner that supports their attitudes and beliefs
to avoid the dissonance (negative stimulation) that is caused by
an inconsistency between opposed beliefs and behavior
(Festinger, 1957). Therefore, both affective and cognitive
theories suggest that individuals who commit to a strategy are
likely to be predisposed to behaviorally support their
commitment. We thus opera-
tionalize an individual’s alignment by measuring the degree to

which their behavior supports the lean strategy.
(
Winter
2008
)Hypothesis 3: Strategic commitment will be positively related
to engagement in strategy-supportive behavior.
METHODS
Sample and Organizational Context
Longitudinal survey data were collected at two points in time
approximately one year apart from production employees in
three plants of a manufacturing organization in the mid-Atlantic
region of the United States. The organization was a relatively
large, unionized manufacturer of semi-custom kitchen cabinets.
Two of the manufacturing facilities were located in a rural
industrial park, while the other was located several hours away
at the outskirts of a large urban area. The operations were
structured such that the primary raw material (e.g., rough
lumber) would receive primary processing in one plant, which
would then transfer the semi-finished goods for further
processing, finishing, and assembly at the other locations.
The organization chosen was ideal for evaluating employee
knowledge and commitment to an organizational strategy since
the manufacturer had recently begun the implementation of an
organizational-wide lean manufacturing strategy. Lean
manufacturing is a strategy requiring significant employee
involvement to change from traditional mass manufacturing to
just-in-time manufacturing, and requires employees to adopt a
series of lean-congruent behaviors. Specifically, employees
must change their behavior and thinking to successfully
contribute to a lean system. Examples of lean-congruent behav-
(
434
E
MPLOYEE

A
LIGNMENT WITH
S
TRATEGIC
C
HANGE
)iors are reducing waste at workstations and taking proactive
actions to improve quality and workflow (Allen et al., 2001;
Hunter et al., 2004; Ohno, 1988; Womack and Jones, 1996).
Management and union leaders had established urgency (Kotter,
1996) by communicating to hourly workers the necessity of this
strategy in order to reduce costs and lead-time, increase quality,
and remain competitive with overseas manufacturers. Thus, the
lean manufacturing strategy was highly relevant to the workers,
an important element for generating buy-in and facilitating
behavior change.
Data Collection
The employee questionnaire was reviewed by an expert panel
and pretested at a similar manufacturing organization. The first
employee questionnaire (Time 1) was administered at one plant,
with 162 out of 167 production employees responding (97%).
The second survey (Time 2) was administered one year later at
three plants within the organization, with 692 of 723 employees
responding (95.7%). A year was chosen be-tween data
collections to allow for sufficient achievement of strategic
transformation goals and to better suit our client’s production
cycle. In both cases, employees completed the surveys during
their work shift in groups of approximately 50 employees. The
surveys were administered in lunch or break rooms with no
supervisory or management personnel present. The researchers
took great care to reassure respondents of confidentiality and
promptly removed completed surveys from the premises.
To match the data across time periods, employees were asked to
provide either their name or employee
number on a tear-away sheet. They were assured that all

identifying information would be separated from their responses
and eliminated from the data once matching was complete. To
reduce single-source bias, tenure information was obtained from
the company’s human resource database and strategic
supportive be-havior was rated by the immediate supervisor at
Time 2. Because the Time
(
Winter
2008
)1 data were limited to one plant, the matched sample across
Times 1 and
2 was 99 employees (60.7% of total Time 1 respondents) used to
test Hypotheses 1 and 2. Fifty-five percent of the matched
sample was female and 79.2% had completed high school. The
mean company tenure was 5.6 years and the average employee
age was 40.8 years. The larger Time 2 sample was matched with
supervisor data to test Hypothesis 3, resulting in 555 employees
(80% of total Time 2 respondents). Fifty-six percent of this
sample was female and 78.8% had completed high school. The
mean company tenure was 6.5 years and the average employee
age was 41.6 years.
Measures
Dependent Variables. The engagement in strategy-supportive
behavior scale was built in line with Boswell and Boudreau’s
(2001) line-of-sight action scale, but modified using input from
upper- and plant-level management at the company to highlight
behaviors specifically relevant to supporting a lean initiative.
This variable was measured at Time 2 by asking immediate
supervisors to rate subordinates using four items on a five-point
agreement scale (a = 0.83). Supervisor ratings were used to
reduce single-source bias and to help mitigate social
desirability. Sample items from
(
G

AGNON
, J
ANSEN AND
M
ICHAEL
435
)the scale include, “This employee continues to look for new
ways to improve the effectiveness of his or her work.”and “This
employee encourages others to try new and more effective ways
of doing their jobs.”The four items used in this scale were
developed from interviews with com-pany management and
were based on their opinions of behaviors the hourly workers
should engage in to support the lean strategy. The items were
also reviewed with a sample of production supervisors prior to
inclusion in the survey.
Strategic commitment served as both a dependent variable for
the 99 employees who completed both Time 1 and Time 2
surveys, and as an independent variable predicting behaviors of
the 555 employees who were rated by their supervisors. This
variable was measured at Time 2 using a modified version of
Neubert and Cady’s (2001) six-item program commitment scale
(a = 0.86). Item wording was changed to describe commitment
to the lean manufacturing strategy rather than general program
commitment. A sample item is “I am convinced that we need the
lean
transformation here at company Y.”Items were measured on a
five-point
agreement scale.
Independent Variables. Four independent measures were
collected at Time 1. Strategic knowledge measures an
individual’s knowledge about his or her organization’s strategy
by asking factual questions about the strategy. This scale was
modeled from the line-of-sight knowledge scale developed by
Boswell and Boudreau (2001) using input from interviews with
plant managers and company documents to develop strategy-
specific items. Strategic knowledge was measured with six

items on a seven-
point agreement scale (a = 0.74). A sample item from the scale
is “Lean manufacturing is about reducing sev-
(
Winter
2008
)eral forms of waste.”Openness to experience was meas-
ured using a standardized scale (International Personality Item
Pool, 2001) of ten items on a five-point agreement scale (a =
0.77). Perceived organizational trust was measured using a four-
item measure adapted from Robinson (1996) on a seven-point
agreement scale (a = 0.89). Company tenure was collected from
the participating company’s human resource database.
RESULTS
A summary of descriptive statistics and correlations among the
variables in our study are provided in Table 1. We examined the
relationships between strategic commitment, its antecedents,
and the outcome of strategic supportive behavior using AMOS
5.0 structural equation modeling software (Arbuckle, 2003).
The aggregate evaluation of model fit statistics indicates that
the model is indeed a plausible representation of the proposed
relationships. First, the model chi-square is low (x2 = 36.8, df =
10). Acceptable models will have a chi-square statistic that is
close to zero and non-significant (Maruy-ama, 1997). However,
most structural equation models will have significant chi-
squares, especially if the models have a large sample size. In
addition, the confirmatory fit index (CFI = 0.99) and the
normative fit index (NFI = 0.99) demonstrated acceptable fit
values that were above 0.95 (Bentler, 1990). The CFI and NFI
indices are more suitable for larger size samples and are not
affected by sample size as much as the chi-square sta-
(
436

E
MPLOYEE
A
LIGNMENT WITH
S
TRATEGIC
C
HANGE
)Figure II
Structural Equation Modeling Results of Strategic Alignment
Frameworka
(
Company Tenure
) (
Strategic Knowledge
) (
H1:
R
= 0.51*
) (
R
2
= 0.02*
) (
Alignment:
Strategic Supportive Behavior
) (
Openness To
Experience
) (
R
= 0.05
) (
H2a:
) (
R

2
= 0.29*
) (
H2b:
) (
Strategic
Commitment
) (
R
= 0.15*
) (
Perceived
Company
Trust
) (
H2c:
R
= 0.01
) (
Time 1 and 2 N = 99
) (
H3:
R
= 0.12*
) (
Time 2
) (
N = 555
)aUnsupported relationships are depicted in lighter font.
*Significant at p < 0.05.
tistic. Finally, the root mean square error of approximation
(RMSEA = 0.07) indicated that the model also demonstrated
acceptable fit (Steiger, 1998). In summary, the model fit results
indicated a sufficient match be-tween the proposed relationships
and

the observed relationships within the data.
(
Winter
2008
)The strategic alignment framework with standardized path
coefficients is presented in Figure II. Beginning at the far left,
strategic knowledge positively contributes to strategic commit
(
G
AGNON
, J
ANSEN AND
M
ICHAEL
) (
437
) (
3.50 0.69 .13* --
) (
3.53 0.56 .16 .22* .32* --
) (
3.23
0.76
--
) (
11.72 12.04 -.11 -.04 -.03 -.32* .03 --
) (
5. 1 2
0.87
.25*
.53*
--
) (

4.63
1.11
.09
.33*
.29*
.04
--
) (
a
N
= 99 for Time 1 antecedents, N = 555 for Time 2.
b
Items
were measured on a five-point scale unless noted otherwise.
*p < 0.05.
) (
Table 1
Descriptive Statistics and
Correlations
a
) (
Variable
Mean
s.d
. 1 2 3 4 5 6
) (
1 .
Engagement in Lean
Behaviors
b
(Time 2, supervisor-rated)
) (
6. Organizational Tenure
(Time 1, in years)
) (

Strategic Knowledge (Time 1, seven-point scale)
) (
5. Perceived Organizational Trust
(Time 1, seven-point scale)
) (
2. Strategic Commitment (Time 2)
) (
Openness to Experience (Time 1)
) (
Winter
2008
)
(
438
E
MPLOYEE
A
LIGNMENT WITH
S
TRATEGIC
C
HANGE
)ment, supporting Hypothesis 1. We found mixed results for
Hypothesis 2. Openness to experience and company tenure were
not significantly related to strategic commitment. However,
perceived trust was significant and positively related to
strategic commitment as hypothesized. Thus, Hypothesis 2b was
supported and 2a and 2c were not. Finally, the relationship
between strategic commitment and engagement in strategic
supportive behavior was positive and significant, supporting
Hypothesis 3.
DISCUSSION
This study has added to the literature on strategy
implementation in several ways. While past works have

investigated commitment and implementation in middle-
management (Noble and Mokwa, 1999) and upper-echelons
contexts such as strategic decision-making teams (Dooley and
Fryxell, 1999) and “strategic consen-sus”(Lindman et al., 2001),
we have applied some of the same issues to the bottom of the
organizational pyramid. Our results reinforce that strategic
knowledge is indeed important (Boswell et al., 2006), and
emphasize the role it plays in fostering individual strategic
commitment. Our findings also demonstrate that the concept of
strategic commitment has utility for addressing the problem of
strategic misalignment. The results suggest that strategically
committed individuals are predisposed to engage in strategic-
supportive behavior, and that development of individual
commitment to strategic initiatives is likely to assist the
enactment of strategic transformation. Finally, our research
follows in the footsteps of strategic human resources research
(e.g., Wright and Snell, 1998) and of the
upper-echelons perspective (e.g., Hambrick and Mason, 1984)
by spanning micro-level individual behavior and macro-level
strategy.
(
Winter
2008
)Our results provide evidence that individual trust for the
organization positively influences strategic commitment.
Leadership research suggests that supervisors are a central
contributor to positive employee work attitudes (Dirks and
Ferrin, 2002). However, more investigation is needed to
determine whether trust in organizational leaders only acts as a
proxy when knowledge is lacking or if it is necessary for
commitment. Similarly, it is possible that strategic knowledge
mediates the relationship between individual characteristics
(e.g., openness to experience) and commitment. We were not
able to test this causal link in our structural model given the

survey timing. Future research examining the temporal links
between knowledge, trust, and commitment may offer further
insight into the dynamics of strategic commitment formation.
Openness to experience and tenure were not significant
predictors of strategic commitment in this study, perhaps due to
the small matched sample. However, the small negative
correlation between tenure and strategic commitment lends
preliminary support for Hypothesis 2c. In the context studied
we knew that long-term employees were less than enthused
about the lean changes because they thought it would disrupt
the status quo to which they had become accustomed. Other
individual differences such as positive affectivity or
agreeableness may have an impact on strategic commitment.
Future research in this vein can address the question of whether
certain individual characteristics are more strategically neces-
sary than others for fostering strategic alignment.
Another potential limitation to our study is that in working with
blue-collar employees, we may have introduced threats to
validity, such as appropriate comprehension of survey items and
social desirability responses. We were careful to pretest items
with a similar group of workers, and we were careful to provide
a nonthreatening setting for employees. However, it is possible
that blue-collar samples differ from white-collar samples in
either measurement or substantive ways. We were careful to
bound our theory development around the change context we
were exploring, but additional research is needed to determine
the extent to which trust and knowledge are strategy- or sample-
specific.
Implications for Practice
Practitioners are likely to benefit by developing strategic
knowledge and commitment with their employees. Our research
suggests that managers seeking to improve employee strategic
alignment should increase levels of both strategic knowledge

and trust within the workforce. As mentioned earlier, it is likely
that other antecedents will also influence strategic commitment;
the role of leadership for facilitating employee trust is one
obvious source (Costigan et al., 2004; Dirks and Ferrin, 2002).
Managers can also improve employee strategic commitment by
providing employees with strategic knowledge via both oral
(e.g., team meetings) and written forms. In this organization and
for this strategy, there was substantial effort made to
communicate in both
forms (e.g., bi-weekly newsletters, team meetings).
(
Winter
2008
)Managers would be well advised to consider the critical role of
human capital during strategic change program design and
implementation (e.g., Hitt et al., 2007). During the strategy
design stage training programs and communication plans should
be established to facilitate knowledge and commitment. A
training program providing knowledge about the strategy can
develop positive employee attitudes such as strategic
commitment. In tandem with training is the implementation of a
sound change communication program that deals with employee
misperceptions and opens a dialogue between management and
employees. Open communication with employees during a
strategic change is likely to develop trust and commitment that
will lead to strategically aligned behavior.
Examining the behavioral linkage with strategic commitment
demonstrates promise for improving individual alignment with
strategy. In aggregate, improved individual strategic alignment
is likely to lead to improved strategic implementation. Overall,
if conditions can be influenced to improve individual
commitment and facilitate strategically congruent behavior,
great progress can be made to mitigate the problem of strategic
misalignment. In summary, managers and organizational

scientists will benefit from facilitating and investigating the
linkages between individual psychology and organizational
strategy. By juxtaposing these concepts, a critical element will
be brought forth to address the problem of strategic failure—the
individual.
(
440
E
MPLOYEE
A
LIGNMENT WITH
S
TRATEGIC
C
HANGE
)References
Allen, J., C. Robinson and D. Stewart. 2001. Lean
Manufacturing: A Plant Floor Guide. Dearborn, MI: Society of
Manufacturing Engineers.
Arbuckle, J. L. 2003. Amos Version 5.0. Chicago, IL:
SmallWaters Corporation. Barnard, C. I. 1938. The Functions of
the Executive. Cambridge, MA: Harvard University Press.
Barney, J. B. 1998. Strategic Management. Boston, MA: Irwin.
and P. M. Wright. 1998. “On Becoming a Strategic
Partner: The Role
of Human Resources in Gaining Competitive
Advantage.”Human Resource Management 37 (1): 31-46.
Barrick, M. R. and M. K. Mount. 1991. “The Big Five
Personality Dimensions and Job Performance: A Meta-
analysis.”Personnel Psychology 44: 1-26.
Becker, T. E. 1992. “Foci and Bases of Commitment: Are They
Distinctions Worth Making?”Academy of Management Journal
35 (1): 232-244.
and R. S. Billings. 1993. “Profiles of Commitment: An
Empirical Test.”Journal of Organizational Behavior 14: 177-

190.
Bentler, P. M. 1990. “Comparative Fit Indexes in Structural
Models.”Psycholog-ical Bulletin 107: 238-246.
Bonoma, T. V. 1984. “Making Good Strategy Work.”Harvard
Business Review 62 (2): 69-77.
Boswell, W. R. and J. W. Boudreau. 2001. “How Leading
Companies Create, Measure and Achieve Strategic Results
Through ‘Line of Sight’.”Management Decision 39 (10): 851-
859.
, J. B. Bingham and A. J. S. Colvin. 2006. “Aligning
Employees Through
‘Line of Sight’.”Business Horizons 49: 499-509.
Bridges, S. and J. K. Harrison. 2003. “Employee Perceptions of
Stakeholder Focus and Commitment to the
Organization.”Journal of Managerial Issues 15 (4): 498-509.
Brockman, E. N. and W. P. Anthony. 1998. “The Influence of
Tacit Knowledge and Collective Mind on Strategic
Planning.”Journal of Managerial Issues 10 (2): 204-222.
Buch, K. K. and A. Tolentino. 2006. “Employee Expectancies
for Six Sigma Suc-cess.”Leadership and Organization
Development Journal 27 (1): 28-37.
Choo, A. S., K. W. Linderman and R. G. Schroeder. 2007.
“Method and Psychological Effects on Learning Behaviors and
Knowledge Creation in Quality Improvement
Projects.”Management Science 53 (3): 437-451.
Costigan, R. D., S. S. Ilter and J. J. Berman. 1998. “A Multi-
dimensional Study of Trust in Organizations.”Journal of
Managerial Issues 10 (3): 303-317.
, R. C. Insinga, G. Kranas, V. A. Kureshov and S. S. Ilter.
2004. “Predic-
tors of Employee Trust in Their CEO: A Three-country
Study.”Journal of Managerial Issues 16 (2): 197-216.
Dirks, K. T. and D. L. Ferrin. 2002. “The Role of Trust in
Organizational Set-tings.”Organization Science 12: 450-467.
and . 2001. “Trust in Leadership: Meta-analytic Findings
and

Implications for Research and Practice.”Journal of Applied
Psychology 87: 611628.
Winter 2008
(
G
AGNON
, J
ANSEN AND
M
ICHAEL
441
) (
Winter
2008
)Dooley, R. S. and G. E. Fryxell. 1999. “Attaining Decision
Quality and Commitment from Dissent: The Moderating Effects
of Loyalty and Competence in Strategic Decision-making
Teams.”Academy of Management Journal 42 (4): 389403.
Drucker, P. 1954. The Practice of Management. New York, NY:
Harper.
Enriquez, V., J. McBride and L. Paxton. 2001. “Improving
Knowledge of Strategic Goals and the Impact on Organizational
Commitment.”Health Marketing Quarterly 18: 119-132.
Festinger, L. 1957. A Theory of Cognitive Dissonance. Palo
Alto, CA: Stanford University Press.
Finkelstein, S. and D. C. Hambrick. 1996. Strategic Leadership:
Top Executives and their Effects on Organizations. New York,
NY: West Publishing Company.
Fiske, S. T. and S. E. Taylor. 1991. Social Cognition. New
York, NY: McGraw-Hill. Gioia, D. A. and K. Chittipeddi. 1991.
“Sensemaking and Sensegiving in Strategic Change
Initiation.”Strategic Management Journal 12: 433-448.
Hambrick, D. C. and P. A. Mason. 1984. “Upper Echelons: The

Organization as a Reflection of its Top Managers.”Academy of
Management Review 9 (2): 193206.
Heracleous, L. and M. Barrett. 2001. “Organizational Change as
Discourse: Communicative Actions and Deep Structures in the
Context of Information Technology Implementation.”Academy
of Management Journal 44: 755-778.
Hitt, M. A., L. Bierman and J. D. Collins. 2007. “The Strategic
Evolution of Large U.S. Law Firms.”Business Horizons 50: 17-
29.
Huff, A. S. and R. K. Reger. 1987. “A Review of Strategic
Process Research.”Journal of Management 13 (2): 211-236.
Hunter, S. L., S. Bullard and P. H. Steele. 2004. “Lean
Production in the Furniture Industry: The Double D Assembly
Cell.”Forest Products Journal 54 (4): 32-38.
International Personality Item Pool. 2001. “A Scientific
Collaboratory for the Development of Advanced Measures of
Personality Traits and Other Individual
Differences.”http://ipip.ori.org/
Jansen, K. J. 2004. “From Persistence to Pursuit: A
Longitudinal Examination of Momentum During the Early
Stages of Strategic Change.”Organization Science 15 (3): 276-
294.
Kaplan, R. S. and D. P. Norton. 1992. “Using the Balanced
Scorecard—Measures
that Drive Performance.”Harvard Business Review (January-
February): 71-79. Kelman, H. C. 1958. “Compliance,
Identification, and Internalization: Three
Processes of Attitude Change.”Conflict Resolution 2 (1): 51-60.
Kotter, J. P. 1996. Leading Change. Boston, MA: Harvard
Business School Press. Labovitz, G. and V. Rosansky. 1997.
The Power of Alignment: How Great Companies
Stay Centered and Accomplish Extraordinary Things. New
York, NY: John Wiley
and Sons.
Lepine, J. A., J. A. Colquitt and M. Erez. 2000. “Adaptability to
Changing Task Contexts: Effects of General Cognitive Ability,

Conscientiousness, and Openness to Experience.”Personnel
Psychology 53 (3): 563-593.
Lindman, F. T., T. E. Callarman, K. L. Fowler and C. A.
McClatchey. 2001. “Strategic Consensus and Manufacturing
Performance.”Journal of Managerial Issues 13 (1): 45-64.
(
442
E
MPLOYEE
A
LIGNMENT WITH
S
TRATEGIC
C
HANGE
)Locke, E. A. and G. P. Latham. 1990. A Theory of Goal Setting
and Task Performance. Englewood Cliffs, NJ: Prentice Hall.
, and M. Erez. 1988. “The Determinants of Goal
Commitment.”
Academy of Management Review 13 (1): 23-39.
Lord, R. G. and R. J. Foti. 1986. “Schema Theories, Information
Processing and Organizational Behavior.”In The Thinking
Organization. Eds. H. P. Sims, Jr. and D. A. Gioia. San
Francisco, CA: Jossey-Bass. pp. 20-48.
March, J. G. and H. A. Simon. 1958. Organizations. New York,
NY: Wiley.
Maruyama, G. M. 1997. Basics of Structural Equation
Modeling. Thousand Oaks, CA: Sage Publications.
Mehta, V. and H. Shah. 2005. “Characteristics of a Work
Organization from a Lean Perspective.”Engineering
Management Journal 17: 14-20.
Meyer, J. P., D. J. Stanley, L. Herscovitch and L. Topolnytsky.
2002. “Affective, Continuance, and Normative Commitment to
the Organization: A Meta-anal-ysis of Antecedents, Correlates,
and Consequences.”Journal of Vocational Behavior 61: 20-52.

Mitchell, T. R., B. C. Holtom, T. W. Lee, C. J. Sablynski and
M. Erez. 2001. “Why People Stay: Using Job Embeddedness to
Predict Voluntary Turnover.”Acad-emy of Management Journal
44: 1102-1121.
Mowday, R. T., L. W. Porter and R. M. Steers. 1982. Employee
Organization Linkages: The Psychology of Commitment,
Absenteeism and Turnover. New York, NY: Academic Press.
Neubert, M. J. and S. H. Cady. 2001. “Program Commitment: A
Multi-study Longitudinal Field Investigation of its Impact and
Antecedents.”Personnel Psychology 54 (2): 421-448.
Neumann, J. E. 1989. “Why People Don’t Participate in
Organizational Change.”In Research in Organizational Change
and Development, Vol. 3. Eds. W. A. Pasmore and R. W.
Woodman. Greenwich, CT: JAI. pp. 181-212.
Noble, C. H. and M. P. Mokwa. 1999. “Implementing Marketing
Strategies: Developing and Testing a Managerial
Theory.”Journal of Marketing 63: 57-73.
Nonaka, I. and H. Takeuchi. 1995. The Knowledge Creating
Company: How Japanese Companies Create the Dynamics of
Innovation. New York, NY: Oxford University Press.
Ohno, T. 1988. Toyota Production System Beyond Large-scale
Production. Cambridge, MA: Productivity Press.
O’Reilly, C. and J. Chatman. 1986. “Organizational
Commitment and Psychological Attachment: The Effects of
Compliance, Identification, and Internalization on Prosocial
Behavior.”Journal of Applied Psychology 71 (3): 492-499.
Pappas, J. M., K. E. Flaherty and B. Wooldridge. 2004.
“Tapping into Hospital Champions: Strategic Middle
Managers.”Health Care Management Review 29: 8-16.
Polanyi, M. 1967. The Tacit Dimension. New York, NY:
Doubleday and Company. Reichers, A. R. 1985. “A Review and
Reconceptualization of Organizational Com-mitment.”Academy
of Management Review 10 (3): 465-476.
Robinson, S. L. 1996. “Trust and Breach of the Psychological
Contract.”Admin-istrative Science Quarterly 41: 574-599.
Rousseau, D. M. 1997. “Organizational Behavior in the New

Organizational Era.”Annual Review of Psychology 48: 515-546.
Winter 2008
(
G
AGNON
, J
ANSEN AND
M
ICHAEL
443
) (
Winter
2008
)Schuler, R. S. and S. E. Jackson. 1987. “Linking Competitive
Strategies with Human Resource Management
Practices.”Academy of Management Executive 1 (3): 207-219.
Steiger, J. H. 1998. “A Note on Multi-sample Extensions of the
RMSEA Fit In-dex.”Structural Equation Modeling 5: 411-419.
Tierney, P. and S.M. Farmer. 2002. “Creative Self-efficacy: Its
Potential Antecedents and Relationship to Creative
Performance.”Academy of ManagementJour-nal 45 (6): 1137-
1150.
Van de Ven, A. H. and M. S. Poole. 1995. “Explaining
Development and Change in Organizations.”Academy of
Management Review 20 (3): 510-540.
Weick, K. E. 1995. Sensemaking in Organizations. Thousand
Oaks, CA: Sage. Weiss, H. M. and R. Cropanzano. 1996.
“Affective Events Theory: A Theoretical
Discussion of the Structure, Causes and Consequences of
Affective Experi-
ences at Work.”Research in Organizational Behavior 18: 17-74.
Womack, J. P. and D. T. Jones. 1996. Lean Thinking. New
York, NY: Simon and Schuster.

Wooldridge, B. and S. W. Floyd. 1989. “Research Notes and
Communications Strategic Process Effects on
Consensus.”Strategic Management Journal 10 (3): 295-302.
Wright, P. M. and S. A. Snell. 1998. “Toward a Unifying
Framework for Exploring Fit and Flexibility in Strategic Human
Resource Management.”Academy of Management Review 23
(4): 756-773.
Copyright of Journal of Managerial Issues is the property of
Journal of Managerial Issues / PSU and its content may not be
copied or emailed to multiple sites or posted to a listserv
without the copyright holder's express written permission.
However, users may print, download, or email articles for
individual use.
· Dobni, B., Dobni, D., & Luffman, G. (2001). Behavioral
approaches to marketing strategy implementation. Marketing
Intelligence & Planning, 19(6/7), 400–408. (ProQuest Document
ID: 213126690)
http://search.proquest.com.libproxy.edmc.edu/docview/2131266
90?accountid=34899
introduction
Modern-day management gurus have attempted to reveal sources
of sustainable competitive advantage by studying organizations
who are top performers. For example, in the book called The
Winning Streak, Goldsmith and Clutterbuck (1984) undertook
extensive analysis of 23 top producing UK companies. By 1996,
only two of these 23 companies, Marks & Spencer and
Sainsbury, remained in the top ten of their respective industries,
40 per cent of the sample were experiencing major difficulties,
and another 30 per cent had been the subject of takeovers. Many
of the companies studied by Peters and Waterman (1982) in In
Search of Excellence have similarly fallen victim to competitive

forces, relegating them to the status of "weakened" or
"troubled". In Pascale's (1990) Managing on the Edge, five
years after publication, two-thirds of the "excellent" companies
had lost this billing. As academics and practitioners alike search
for root causes, the one thing that we can conclude is that many
have experienced difficulty navigating the strategy continuum,
particularly converting plans into action on a sustained basis
(Mintzberg, 1994). Our interest in this article is to address these
issues by defining behavioral structures for strategy
implementation, particularly as it concerns service applications.
This article highlights the outcomes of two recent studies done
by the authors that involved over 600 organizations. In it, we
discuss the derivation and sustainment of context-specific
behaviors to support strategy implementation. These
investigations were based on our desire to define structures for
the implementation of strategy that focus on the relationships
between marketing actions, employee behaviors, and the
competitive environment.
Traditional strategic planning is no longer a panacea
It is important to understand why organizations have failed in
attempts to develop sustainable implementation contexts. For
decades, managers have spent much of their time figuring out
how to position product and service offerings within an
industry. Invariably, most attempt to differentiate offerings
through advertising and promotion, pricing, or being first in the
marketplace with a new or improved offering, to name a few.
These traditional and tangible strategy positioning strategies are
effective, but have yet to provide organizations with sustainable
competitive advantages.
To reconcile our dissatisfaction with traditional implementation
approaches, we concern ourselves with the causes of failure
first. As we see it, there are three primary reasons why
traditional approaches are the Achilles' heel for many
organizations. First, marketing strategies supporting a product
or service focus similar to those identified above are no longer
the differentiators they used to be. In fact, they have become so

generic and easily copied that many of these actions have been
relegated to hygiene status. Second, brilliant strategies do not
always succeed, often succumbing to not so brilliant
implementation processes, processes which still reinforce
traditional organizational boundaries and the calamitous
communication practices they foster. Third, there is often a
failure to recognize the contributions that employees can have
on strategy implementation. Many organizations have not
provided a context for employee behavior; therefore they are
simply not prepared to perform to their potential. This is
especially the case in service organizations where the quality of
service produced is directly related to the behavior of its
employees.
The reality is that traditional implementation approaches have
failed to provide a sufficient operational interface between the
environment and the organization. These approaches have not
adequately focused on intangibles such as the people and
processes necessary to develop ongoing and sustainable
implementation contexts. Very simply, the organization lacks
implementation harmony. This, we believe, can be traced back
to something to which we refer as cerebral strategizing, which
we define as the inability to move strategy out of the boardroom
and into the playing-field. These impediments invariably have
two quite contrasting outcomes: great intentions outlined in an
eloquently written strategic plan supported by a poor,
fragmented or sometimes non-existent implementation plan.
This almost always relegates organizations to default to the
status of reactors, preventing them from progressing to levels of
performance that harmonious organizations are capable of
reaching. As a result, traditional implementation contexts
should be reconsidered, if not abandoned altogether.
These are not new revelations. Many influential authors (Hamel
and Prahalad, 1994; Day, 1990, 1994; Narver and Slater, 1990;
Jaworski and Kohli, 1993) have addressed their dissatisfaction
with traditional strategy approaches, and have offered some
prescriptive advice such as aligning organizational strategies

with the organization's infrastructure and emerging
technologies, building cross-functional taskforces, and
reshaping culture, to name a few. In fact, in a recent edition of
Business Strategy Review, Day (1998) highlighted the
importance of what it meant for an organization to be market-
oriented and market-driven. His conclusions crowned six years
of what can be considered third generation study supporting the
re-emergence of strategy. Almost without exception, this "what
to do" advice falls short in the "how to do" department and
many managers are still left with the feeling of "so what?"
Other new age strategists offer solutions. In fact, the re-
emergence of strategy as the primary catalyst for corporate
growth has been very much fueled by its redesign (Business
Week, 1996). Terms such as value migration, co-evolution,
white space opportunity, strategic intent, stretch goals,
opportunity share, and business ecosystems are being defined
and practiced by some of the industry's greatest, such as Jack
Welsch of General Electric, Lewis E. Platt, Chairman of
Hewlett-Packard, Jorma Ollila, CEO of Nokia, Bill Catucci
(CEO, AT&T Canada) and consultants Gary Hamel (Strategos
Inc.), Adrian Slywotsky (Corporate Decisions) and James
Moore (Geopartners Research). This group of innovative CEOs
and high profile consultants are suggesting that organizations
move away from the mechanistic, traditional and internal
approaches to more revolutionary experiential approaches. We
cannot agree more! We suggest that the answer to how to best
compete now and in the future lies in managing a company's
behavioral profile.
Behavior is culture, culture is strategy
Culture, briefly defined, is the taken-forgranted, out of
conscious pattern of shared values and beliefs that help
employees understand organizational functioning and thus
provide them with norms for behavior in the organization. As a
result, organizational strategy and, subsequently, performance
cannot be understood without an understanding of the culture of
an organization. The marketing culture or collective behaviors

of employees drive marketing strategy in an organization. In
this sense, behavior is culture and culture is strategy; therefore,
one needs to manage culture to manage strategy. The reality is
that people make a difference; therefore management has to
create an environment that connects employees to the
organization's mission, and motivates their creativity,
commitment and passion. This reality is easily understood - the
challenge of how to do it is not. For some time now, we have
been interested in addressing this challenge, and we are now
suggesting that culture should no longer be taken for granted.
Although culture has been defined as a panacea for organization
success, it has not been conceptualized to the point where it has
benefits for managers. For example, there has been little
elaboration concerning how, why and under what circumstances
it affects performance. Specifically, to use culture effectively,
managers must understand what behaviors they are trying to
develop and reinforce with respect to the goals of the
organization and the competitive realities. All too often,
managers lack this understanding. What is new is that, through
our investigative work, we have put culture and the environment
into context.
The theory of "culture coalignment" has already been identified
by Walker and Ruekert (1987), Ruekert et al. (1985), McKee et
al. (1989), and McDaniel and Kolari (1987). Further,
coalignment research has provided strong evidence to support
the view that successful organizations are those that most
efficiently interact with their environments, and that the actions
adopted by organizations are related to several factors including
the values, vision, objectives and resources held (Venkatraman
and Prescott, 1990).
The investigative research
Study one: behavioral repertoires
Behavioral repertoires are specific combinations of high impact
behaviors that comprise employee roles, and are designed to
focus on the relevant, non-trivial behavior modes that are
pivotal to job performance and organizational success.

The first study involved 415 respondents representing 95
service organizations in western Canada (Dobni, 1996), and
focused on behavioral contexts at a macro-organization or
industry level. This investigation identified the existence of
four behavioral repertoires that might be used as conceptual
models for reinforcing behaviors necessary to remain nimble in
specific industries. Table I describes each repertoire and the
situation in which it is most appropriate in efforts to maximize
performance.
The repertoire chosen is highly dependent upon the competitive
landscape and service application. As an example, organizations
seeking to maximize growth and performance in high
technology industries such as software development,
biotechnology, or other emerging industries will want to adopt
an entrepreneurial repertoire. The behavioral characteristics
inherent in this repertoire include a high degree of creative and
innovative work behavior, high tolerance for unpredictability, a
high degree of risk taking, an onus to initiate work
improvements, and a propensity to get things done.
Alternatively, in service applications requiring consistency and
conformity such as banking, legal, medical, aircraft
manufacturing and other professional services, an industrial or
ultrareliable repertoire might be the proper focus.
The premise is that the behaviors of all organizational members,
regardless of their position, are responsible for the design and
implementation of operational strategies to support the goals of
the organization. The gamut of outcomes includes everything
from how employees deal with customers, with one another, and
how they react to changes in the internal and external
environments. For managers, these repertoires are powerful
determinants of the conduct and outcome of quality, and the
customers' perceptions that follow. This is especially the case in
service organizations.
Behavioral repertoires can be applied at any level of the
organization, and are relevant to both front-line and back-room
employees alike. In using the repertoire, the intention is to

match the stock of behaviors needed from employees with the
goals of the organization and the requirements of the
competitive environment. In a more specific sense, the
repertoire is a tool for diagnosing, identifying and
communicating these behaviors. More generally, it can be
viewed as a linchpin that links organizational aspirations with
employee performance.
Behavioral repertoires not only give employees critical
guidelines on how to behave, but also provide a yardstick for
defining and measuring how well they have performed.
Similarly, they can be used very effectively as learning devices,
especially for training new employees. They can also be used to
transmit desired work behaviors, and the discussion and
rehearsal of the repertoire content is an ideal method for
personnel to learn and remember how these behaviors can be
operationalized. This contextual approach also works to reduce
role ambiguity often suffered by employees, ambiguities which
affect employees' health, effectiveness and wellbeing.
In most cases, only the highest impact behaviors need to be
targeted. The repertoire has to consider the product/service
quality standards set by the organization, the needs of the target
customer group, and the positional advantages being sought by
the organization. It should also be kept in mind that success in
using behavioral repertoires will depend not only on the
identification of appropriate behaviors, but also on the extent to
which organizational members accept and are committed to this
concept.
Study two: market-orientation profiling
A market orientation is essentially a behavioral culture that
dictates how an organization's members think and act. It has
been defined as:
... the organization-wide generation of market intelligence
pertaining to current and future needs of the customers,
dissemination of intelligence horizontally and vertically within
the organization, and organizationwide action or responsiveness
to it (Jaworski and Kohli, 1993, p. 54).

The second study focused on specific marketoriented employee
behaviors and their relationship to the marketing practices of
the organization. This micro-level study involved 234
respondents from the US telecommunications industry (Dobni,
1998). This industry was chosen because of its diversity in
competitive environments resulting from sustained deregulation,
yet it provided a single industry context on which to base this
investigation. From this analysis we concluded that an
organization's marketoriented behavior can be profiled, and that
there are ideal behavioral profiles depending on the competitive
landscape in which an organization must compete. This
investigation identified seven marketoriented factors that
collectively represented 61 employee behaviors related to the
design and implementation of strategy, and then measured these
factors relative to performance in different competitive
environments. The underlying items supporting the factors were
highly reliable. The behavioral factors and brief descriptions are
outlined in Table II.
To facilitate this investigation, competitive contexts were
derived and each organization was assigned to one of the three
distinct contexts. The contexts were characterized by levels of
competitive intensity, technological dynamics, and
products/services dynamics. Within each context, high
performers were separated from average and low performers
using relative return on investment as the benchmark. Behaviors
of the two groups in each context were then profiled and
compared. Only those behaviors that were significantly
different from a statistical viewpoint were considered in the
ideal profile.
The results are interesting. For example, in an environment of
competitive intensity, characterized by extreme price
competition, new competitors, and abundant advertising and
promotion, behaviors underlying formal intelligence generation,
response design and implementation, and customer orientation
were significantly related to performance. Alternatively, in a
context where products/ services obsolescence is high, where a

high degree of research and development is ongoing, and the
introduction rate of new products and services is brisk, a
customer orientation takes on less significance, while response
design and implementation and formal intelligence generation
become even more pivotal in determining performance. Without
exception, the results indicated that there are ideal market
orientation profiles corresponding to distinct competitive
contexts. Equally compelling is the realization that deviations
from ideal behaviors will almost always lead to less than
optimal business performance.
Across the three contexts explored it was also interesting to
discover behavioral factors of lesser significance. For example,
neither informal intelligence generation nor long-term planning
(beyond five years) figured as significant behavioral factors in
consideration of performance. It might not come as a surprise
that formalized long-term business planning is sacrificed for
other factors, given the ever increasing complexity of business
environments and the need to take advantage of emergent
opportunities. However, this factor should not be confused with
strategic intent or, alternatively, the competitive positioning
that the organization hopes to build over the coming decade.
This investigation also revealed important relationships between
market orientation and marketing strategy. On this point,
organizations that displayed high market orientations had
significant positive relationships with the marketing strategies
of being first in with new products/services and technologies,
being at the leading edge of industry developments, market
segmentation, and product/service customization, undertaking
research and development, advertising, promotion and image
management, emphasizing company brand name/reputation,
penetrating new markets with existing products/services,
prestige pricing, and market sensing/ research. In a sense, they
could be considered to be preoccupied with anticipating and
meeting the needs of the customer, and intently focused on
promoting and managing their image. These cultures understood
the environment in which they operate, and made efforts to

connect to the customer, through market segmentation, more
than likely at the expense of internal efficiency. The return on
investment for these efforts comes in the form of market share,
market retention, loyal customers, and the ability to charge
higher prices.
Conversely, those organizations whose employees displayed low
levels of marketoriented behavior displayed positive
correlations with penetrating new markets with existing
products/services, charging lower prices than competitors, and
discounting prices. In contrast, these organizations were
negatively correlated with market sensing/research, being first
in with new products/services and technologies, providing high
levels of customer service, market segmentation,
product/service customization, and developing new
products/services for existing markets. These organizations
were generally unable to sustain concerted marketing efforts.
This culture is less likely to provide the ongoing efforts
required to differentiate themselves from the competition, for
example, by providing ongoing customer service or supporting
efforts with market research. As a result, their performance was
consistently below average.
How to leverage behaviors -- an agenda for management
Before considering the prudence of these approaches to
managing strategy, it is significant to note that deliberate
engendering of behavioral profiles is possible, and in some
cases even necessary. There are two considerations here. First,
managers can attempt to change their culture to suit the context,
if indeed there is a perceived gap between actual and desired
orientations - this can be achieved through profiling.
Alternatively, it may be possible to engage competitive contexts
or industries that suit the organization's current behavioral
orientation. The presumption here is that they (the
manager/strategist) are aware of the fit between behavior and
the competitive environment, and that they have a pulse on their
organizational culture. Consider an organization that possesses
a culture that supports proficient segmentation of the

marketplace, and customizing products or services for these
segments, strategies which are supported by diligent market
sensing behaviors. Such organizations, when considering growth
alternatives, might pursue markets, acquisitions or alliances in
competitive contexts where such an orientation has proven to be
successful, even though it might be unrelated to their
principally served market segments. Accordingly, the ability to
profile market orientation will reduce some of the risk
associated with this type of strategic maneuvering. Finally
being aware of ideal profiles may prevent managers from
making unfocused or unnecessary changes to current
organizational cultures.
For a start, managers have to appreciate three things. First,
behaviors and processes are closely entwined, and it is the
collective behavior of employees that makes possible the
activities which allow a business process to be carried out. The
requirement for organizational processes merely provides a
context to affect behavior. Flushing out these behaviors is no
easy task, and the degree of success in these efforts will be tied
to the desire of management to use these approaches. Second,
this appreciation must be combined with a solid understanding
of both the industry and the competitive environment in which
the organization resides. Third, managers must begin to think
strategically. Thinking strategically involves developing an
appreciation of what is possible in your own organization in an
integrative and collective sense. It also requires management to
form strategic intentions based on this appreciation combined
with their understanding of the present and their foresight for
the future (Drucker, 1992).
With this understanding we suggest the following prescriptive
steps:
1 Management sensitization sessions involving exposure to
organizational issues and processes. It is important to identify
prevailing cultural issues and related road-blocks, and then
conclude with a prescriptive plan of action and commitment to
proceed.

2 Profile the industry, competitive and customer context and
ascertain key success factors. This can be accomplished through
established investigative methods.
3 Identify desired behaviors that underlie key success factors
necessary to meet your performance expectations. These
behaviors should fall out of the analysis on the industry,
competition and customers. While clearly the behaviors must
reflect the expectations of the competitive context, including
the customers, they should also be based on ideas canvassed
from the employees themselves. When asked (our own research
revealed that employees are seldom asked), most employees can
suggest what new sets of behaviors would be more effective for
achieving higher performance. After all, they are often closer to
the customer and realities of competition. Also, involving them
in the process will give them a clear idea of what is expected of
them and help them buy into any changes that may be required.
4 Measure the actual behavior or culture of your organization
or, where applicable, the strategic business unit. This can be
achieved through a culture/values survey, if the organization is
quite large, or through personal and focus group interviews, if
the organization is smaller. We suggest a combination of both.
What is important here is that the process is as inclusive as
possible - given the time and resources available to conduct it.
This will produce the organization's actual behavioral profile.
5 Determine the behavioral profile that is appropriate for your
organization with respect to the existing values, objectives, and
competitive and customer realities. Conceptualize ideal profiles.
This conceptualization has to balance preservation of core
ideologies, allow for operational autonomy, yet stimulate
progress in the organization.
6 Identify gaps between ideal/desired and actual behaviors. This
involves a comparison of survey results with conceptualized
patterns.
7 Determine/design roles in terms of specific sets of behaviors
to be performed by employees in pursuit of behavioral
repertoires.

8 Communicate roles to employees, so that they have a realistic
perception of how they are expected to behave. This will
involve orientation and training sessions to identify, support
and reinforce the patterns of behavior chosen amongst existing
employees. Appraisal and compensation systems may have to be
altered.
9 Select, train and motivate new employees, so that they can
confidently, competently and enthusiastically adopt desired
behavior profiles.
10 Take steps to manage and refreeze the newly established
behavior patterns. Managers must understand that behavioral
expectations are conveyed to employees in a variety of implicit
and explicit ways, including formal training programs, on-the-
job training, mentorships, organizational manuals, and
performance evaluation systems. It is important that these
mechanisms communicate consistent and appropriate messages.
Behaviors must also be reinforced through human resources,
leadership, the values system, and by example.
11 Provision of feedback, so that employees know how well
they are performing relative to the expectations that have been
set for them. This can be accomplished through legitimate two-
way communication that focuses on getting the employees the
information and reinforcement they need to keep their efforts on
track.
Managerial considerations
Why should managers undertake the effort, costs and risks
associated with such transformations, and will it work? We feel
that, if organizations are truly bent on developing sustainable
competitive advantages through the linking of behaviors to the
requirements of the competitive landscape, then the behavioral
approach is their only option. These profiles become their
primary point of differentiation.
We also believe that these models have application for the
following reasons. First, the conclusions from these
investigations fundamentally contributes to the redefinition of
strategy implementation not only as we know it, but also how it

should be practiced. Second, it is possible to empirically derive
profiles of behaviors in consideration of performance and the
competitive environment. Third, we now know that, as the
competitive environment changes, so do the behaviors that are
significantly related to performance. Specifically, those who are
better performers place an emphasis on different behaviors, and
in fact possess ideal profiles. In an era where the only thing that
is constant is change, being nimble is advantageous. Fourth, the
best way to facilitate a change in strategic orientation is through
a change in culture. Last, a strong market-oriented culture acts
as a good surrogate for poor or transitional leadership, or a lack
of supporting values or vision, variants of which seem to be the
norm as opposed to the exception in this day and age.
Managing operational level marketing behaviors is critical to
the success of organizations, and the linkages provided in these
findings will help managers guide and control appropriate
enactments. Unquestionably, the ability to profile market
orientation opens up a number of possibilities for managers. For
example, it allows managers to identify and categorize
marketing related behaviors, and reinforce behaviors that
manifest desired strategy. Where identifiable gaps exist between
desired and actual behaviors, efforts can be made to customize
employee training and development programs or realign the
compensation and reward system to reinforce desired behaviors
and cull those that are not. Also, these models could be used to
reduce strategy ambiguity suffered by many operational level
employees. This dysfunction exists when employees are
uncertain about what managers or supervisors expect from them
and how to satisfy those expectations (Naylor et al., 1980).
Managing enactments will work to define further expected
behaviors of employees, effectively and covertly directing
strategy initiatives.
Clearly, there are optimal behavioral contexts. The context
pursued by an organization will be tempered by competitive
dynamics, managerial values and goals, and organizational
resources. Because of this, it may not be possible for all

organizations to attain desired or ideal enactments.
Accordingly, managers need to think long and hard about the
levels they should pursue, and to understand the engagements
that can be most impacting for them.
Managers must also quickly realize that progress or decline is
dictated by the unpredictability of the environment and their
ability to respond to it. Preserving the core, while stimulating
progress at the edges, is achieved through the development of
an adaptive behavior-focused system. Managing behaviors of
employees is critical to the success of firms, and the context
that we have provided is offered as a linchpin for developing,
guiding and controlling enactments that will lead to a
sustainable competitive advantage which exceeds all others.
Whether you are AT&T, General Motors, a business school, or a
non-profit organization, the development of behavioral
approaches will be the gateway to transforming your
implementation focus. This transition is crucial for survival in
future economies.
Clearly, leadership for the initiation of this process falls
squarely in the lap of management. In fact, managers of the
future will be differentiated on their ability to affect and sustain
contextual-specific cultures. Assuming that there are top
management support and emphasis for these approaches, the
organization can move ahead; however, if corporate verbiage is
the sole base, then efforts to move in this direction will
undoubtedly fail.
Conclusion
The difference between average and outstanding organizations
lies in the ability of the latter to provide superior customer
value, and to exceed the expectations of other stakeholders on a
continual basis. Value differentiation and superior performance
today and in the future will be defined and sustained through
distinctive capabilities possessed by employees. The
organization's culture will be the interface between the
employees and the environment that will foster the internal
behaviors necessary to develop a continuous cycle of

innovation, and the external relationships necessary to build
sustainable customer loyalty and commitment.
These two studies reinforce the one thing that traditional
strategy paradigms often overlook - that the aggregate behaviors
of the organization's employees are responsible for the
implementation of corporate intentions. However, they go one
step further by providing a context to profile and proactively
manage behaviors. These approaches to strategy implementation
foster a competitive position by leveraging on the distinctive
skills and capabilities of employees and then selectively
directing these competencies as a basis to compete in the
marketplace. This is sustainable in that, when given a level
playing-field, employee behaviors are much harder for the
competition to understand and duplicate than generic marketing
actions, a piece of equipment, location of a plant, or access to a
distribution channel.
References
References
References
Business Week (1996), "Strategic planning", 26 August.
Day, G.S. (1990), Market-driven Strategy: Processes for
Creating Value, The Free Press, New York, NY.
Day, G.S. (1994), "The capabilities of marketdriven
organizations", Journal of Marketing, Vol. 58, October, pp. 37-
52.
Day, G.S. (1998), "What does it mean to be marketdriven?",
Business Strategy Review, Vol. 9 No. 1, London Business
School.
Deng, S. and Dart, J. (1994), "Measuring market
References
orientation: a multi-factor, multi-item approach", Journal of
Marketing Management, Vol. 10, pp. 725-42.
Dobni, C.B. (1998), "Market orientation and market strategy
profiling: an empirical test of environment-behavior-action
coalignment and its performance implications in the
telecommunications industry in the United States", PhD

dissertation, University of Bradford Management Centre,
Bradford.
Dobni, D.M. (1996), "An empirical taxonomy of organizational
cultures in the services sector", PhD dissertation, University of
Calgary, Calgary.
Drucker, P. (1992), Managing for the Future, Penguin Books,
Harmondsworth.
References
Goldsmith, W. and Clutterbuck, D. (1984), The Winning Streak,
Weidenfeld & Nicolson, London.
Hamel, G. and Prahalad, C.K. (1994), Competing for the Future,
Harvard Business School Press, Boston, MA.
Jaworski, B.J. and Kohli, A.K. (1993), "Market orientation:
antecedents and consequences", Journal of Marketing, Vol. 57,
July, pp. 53-70.
Kohli, A.K. and Jaworski, B.J. (1990), "Market orientation: the
construct, research propositions, and managerial implications",
Journal of Marketing, Vol. 54, April, pp. 1-8.
Kohli, A.K., Jaworski, B.J. and Kumar, A. (1993),
References
"MARKOR: a measure of market orientation", Journal of
Marketing Research, Vol. 30, November, pp. 467-77.
McDaniel, S.W. and Kolari, J.W. (1987), "Marketing strategy
implications of the Miles and Snow strategic typology", Journal
of Marketing, Vol. 51, October, pp. 19-30.
McKee, D.O., Varadarajan, P.R. and Pride, W.M. (1989),
"Strategic adaptability and firm performance: a market-
contingent perspective", Journal of Marketing, Vol. 53, July,
pp. 31-5.
Mintzberg, H. (1994), The Rise and Fall of Strategic Planning,
The Free Press, New York, NY.
References
Narver, J.C. and Slater, S.F. (1990), "The effect of a market
orientation on business profitability", Journal of Marketing,
Vol. 20, October,
pp. 20-35.

Naylor, J.C., Pritchard, R.D. and Ilgen, D.R. (1980), A Theory
of Behavior in Organizations, Academic Press, New York, NY.
Pascale, R.T. (1990), Managing on the Edge, Penguin Books,
London.
Peters, T.J. and Waterman, R.H. Jr (1982), In Search of
Excellence, Harper & Row, New York, NY.
Ruekert, R.W., Walker, O.C. and Roering, K.J.
References
(1985), "The organization of marketing activities: a contingency
theory of structure and performance", Journal of Marketing,
Vol. 49, Winter, pp. 13-25.
Venkatraman, N. and Prescott, J.E. (1990), "Environment-
strategy coalignment: an empirical test of its performance
implications", Strategic Management Journal, Vol. 11, pp. 1-23.
Walker, O.C. and Ruekert, R.W. (1987), "Marketing's role in
the implementation of business strategies: a critical review and
conceptual framework", Journal of Marketing, Vol. 51, July, pp.
15-33.
AuthorAffiliation
Brooke DOW
College of Commerce, University of Saskatchewan, Saskatoon,
Saskatchewan, Canada
Dawn Dobni
College of Commerce, University of Saskatchewan, Saskatoon,
Saskatchewan, Canada
George Luffman
Bradford University School of Management, Bradford, UK
Copyright MCB UP Limited (MCB) 2001
TOYOTA
Toyota a Multinational Company

Origins of Toyota
Toyota’s history of operation (in selected market).
How the company was formed and how it operates today
Origins of Toyota
Toyota originated and began operation in Japan (Toyota Motor
Corporation, 2013). Forbes readers and editors knew Sakichi
Toyoda, born in 1867 and died in 1930, as the 13th most
influential businessman of all time (Forbes.com Staff, 2005).
Why? Because he was one of the most influential and innovators
of his time. He did not start in the automotive industry
immediately, in fact, he was a weaver who invented a loom,
which detected errors within the automatic production, thereby
preventing the creation of defective goods (Forbes.com Staff,
2005). With the selling of his patent, the loom, he obtained
about $150,000, which he used to help his son become the
world’s second-biggest carmaker (Forbes.com Staff, 2005).
Toyota’s History of Operation
In the beginning Sakichi Toyoda established Toyoda Spinning
and Weaving Co., Ltd. in 1918 and later in 1926 Toyoda
Automatic Loom Works, Ltd. was established (Toyota Motor
Corporation, 2013). After his patent was sold to the British he
established an Automobile Department within Toyoda
Automatic Loom Works, Ltd. in 1933(Toyota Motor
Corporation, 2013). What’s impressive about this history, is
that, “Toyoda’s innovation of instilling human judgment on
machines, also known as automation or Jidoka, would be
adopted to his son’s automobile enterprise—and then almost
every industrial enterprise—cutting down on waste, improving
customer relations, revealing problems and conserving
resources (Forbes.com Staff, 2005).” By 1935 the first model
G1 truck is completed, Toyota dealership Precepts is
established, and the first Toyota dealership is established

(Toyota Motor Corporation, 2013).
By 1937 Toyota Motor Co., Ltd. is established (Toyota Motor
Corporation, 2013). By October of 1947 production of model
SA passenger car begins Hotai Motor Col, Ltd. established in
Taiwan; by 1950 Toyota Motor Sales Co., Ltd. is established as
a separate, independent company; by 1955 Abdul Latif Jameel
Import & Distribution Co., Ltd. established in Saudi Arabia;
and it isn’t until 1956 that Toyota enters the industrial vehicle
field with the LA forklift model (Toyota Motor Corporation,
2013). In 1957 the first made-in-Japan passenger car (Crown) is
exported to the United States and by 1959 overseas production
begins in Brazil (Toyota Motor Corporation, 2013). Akio
Toyoda is currently the president of Toyota Motor Corporation.
2
Toyota’s growth in the marketplace responding to the following:
Maintaining current markets
N. America/Europe/China/Middle East/Africa
Latin America/Asia/Oceania/Japan
Specific markets the company is targeting today
Specific markets the company is targeting today
Toyota Motor Corporation now operates in the following
regions; North America, Europe, China, Middle East, Africa,
Latin America, Asia, Oceania, and of course in Japan (Toyoda,
2011). Expectations to regions are; China--A driving force for
future growth, technology base to support the huge market;
Europe—contribute to Toyota’s competitiveness as global
production center for small cars; Asia and Oceania—global
center for product development and preparations for mass

production of IMV/newly developed small cars; Middle East,
Africa, and Latin America—vehicles that win the heart of
customers and can be called “my car” with affection in every
market; North America—greater self-reliance, collaboration
with IT for the future of mobility; and finally, Japan—
monozukuri based on advanced technology and kaizen (Toyoda,
2011).
Currently, sales performance in emerging markets is at 40%
whereas sales performance in industrial nations is at 60%
(Toyoda, 2011). It is more focused on balancing, however,
Toyota Motor Corporations are seeking to achieve an equal
balance in unit sales between these two markets (Toyoda, 2011).
Part of the Corporation’s new business ventures include to,
“participate in ‘smart communities’ worldwide where vehicles
will manifest new kinds of value-added as part of integral
linkages between vehicles, homes, and information networks
through cooperation of IT companies (Toyoda, 2011).”
3
The reporting structure needed for operating in that
marketplace, regulatory requirements, and so on
Federal Regulators/Regulatory Agencies
Safety Regulators such as NHTSA
The company’s major competitors
Ford/General Motors/Honda/Volkswagen
Discuss the company’s growth in the marketplace responding to
the following:
The reporting structure needed for operating in that

marketplace, regulatory requirements, and so on.
Toyota Motor Corporation has always had a long history of
building reputable vehicles that commit to the highest level of
consumer safety and satisfaction (Pressroom.toyota.com, n.d).
All of Toyota’s vehicles are engineered to meet or exceed
Federal regulators and provide information to investigating and
regulatory agencies regarding vehicles involved in accidents as
well as provide complete and accurate information to product
safety regulators (Pressroom.toyota.com, n.d.). Toyota also
adheres to the strict regulations regarding communications with
consumers on safety recall, which is what Toyota did when they
were addressing the cause and reduction of risk of pedal
entrapment (Pressroom.toyota.com, n.d.). Which, by the way,
was proven to be isolated incidents and therefore Toyota was
not deemed to be liable in regards to the recalls, although
Toyota did go further in assuring consumers and redesigning the
plastic trim panel for additional safety measures so as not to
have the pedal “stick” (Pressroom.toyota.com, n.d.).
National Highway Traffic Safety Administration NHTSA falls
under the U.S. Department of Transportation which carries out
the safety programs and carries out consumer programs, above
all NHTSA is responsible for reducing deaths resulting from
motor vehicle crashes via setting and enforcing safety
performance standards for motor vehicles (NHTSA, 2013).
Companies like Toyota must be able to abide by these safety
performance standards and allow NHTSA to conduct
investigations, just like the investigation on pedal entrapment
(NHTSA, 2013).
The company’s major competitors
Toyota’s major competitors include the following:
Ford: An American company with its headquarters in Dearborn,
Michigan (USA). Ford Fiesta, Ford Mustang, Ford Explorer and
the Ford Modeo are in competition with Toyota (Rawal, n.d.).

General Motors: Also an American company with its
headquarters in Detroit, Michigan (USA). Chevrolet, Holden
and the Aveo Optra Commbador are in competition with Toyota
(Rawal, n.d.).
Honda: A Japanese company with its headquarters in Minato,
Tokyo (Japan). Civic Accord CRV is in competition with
Toyota (Rawal, n.d.).
And Volkswagen: A German company with its headquarters in
Wolfsburg, Germany. The Passat Jetta Taureg is in competition
with Toyota (Rawal, n.d.).
4
The unique competitive advantage of the company
Improvement of quality/reduction of inventory cost
Improvement of efficiency
Customer service
Trade pact associated with the marketplace
Political Action Committee (PAC
Discuss the company’s growth in the marketplace responding to
the following:
The unique competitive advantage of the company
The number of competitors in the world economy is increasing
and with that it is creating a more complicated business
environment because companies are finding it difficult to
distinguish their core competencies and thereby obtaining a
competitive advantage (Moran, Palmer, & Borstorff, 2007).
Though there may be many market boundaries changing there
are companies such as Toyota that are able to find opportunities
in a world that is constantly changing in terms of the world

economy (Moran, Palmer, & Borstorff, 2007).
For example, where companies lack the ability to improve
quality, reduce inventory costs and improve efficiency, Toyota
has taken the leading position in becoming the world’s largest
car manufacturer because it has been able to provide low-cost,
quality, style and customer service (Moran, Palmer, &
Borstorff, 2007). Competencies that give Toyota its competitive
advantage include; the kanban inventory system, quality teams
and supplier management systems, and visible resources and
capabilities (Moran, Palmer, & Borstorff, 2007).
Trade pact associated with the marketplace
Toyota formed a political action committee (PAC) which allows
employees, acting together, to support candidates for Congress
who share the company’s interests, this PAC contributes to
lawmakers from both parties, foreign citizens and Americans
working for the company (Landers, 2013). This came after CEO
Akio Toyoda appeared before the House Committee and endured
harsh questioning from U.S. lawmakers about the unintended
acceleration by Toyota cars, something that would later come to
resolution as U.S. government probe later found that driver
error was to blame for most of the mishaps and of course had to
absolve the vehicles’ throttle-control electronics (which most
blamed as the problem of the issue (Landers, 2013).
Toyota has further interest in unfolding U.S. –Japan policy
issues, such as the proposed Trans-Pacific Partnership trade
negotiations, which cold lift the tariffs currently imposed by the
U.S. on cars made in Japan (Landers, 2013). Interestingly
enough and to say the least, a very strategic move on Toyota’s
part, the company named former General Motors (one of it’s top
competitors) executive Mark Hogan to its board, one of three
outsiders on the board of Toyota, a sign that Toyota sees the
importance of the U.S. market (Landers, 2013).

5
International Market Entry Strategies
Companies such as Toyota are expanding into new markets, and
are facing risks and challenges. Toyota Motor Corporation must
not only be able to minimize these risks, but they must also
ensure regulatory compliance, if they want to thrive in these
markets. It is also imperative that research be conducted on
political and economic challenges of market entry.
Toyota’s capitalization in the foreign market
Current capitalization
Operating Income/Marketing Activities & Cost Reduction
Increased sales of vehicles in North America & Asia
Reforming Manufacturing Technologies & Vehicle Development
Processes
Opportunities to tap into new capital in the markets where it
operates
Technologically Advanced, high-value-added products
Optimize Manufacturing Investments
Responding to Growth in Markets & Sales
Toyota’s capitalization
Current Capitalization
TMC (Toyota Motor Corporation) announced on its financial
results for the fiscal year that ended March 31, 2013 at a
conference in Toyota City, Japan on May 8, 2013 (Toyota Motor
Corporation, 2013). The results? Net revenues totaled 22.0
trillion yen, which indicated an increase of 18.7% compared to
the previous year (Toyota Motor Corporation, 2013). Operating
income also increased from the previous fiscal year by 965.2
billion yen, leaving the operating income at a 1.32 trillion yen
(Toyota Motor Corporation, 2013). Positive effects from
marketing activities, cost reduction efforts have been major
factors in offsetting the negative effects of related expenses, a
favorable outcome.

· Gagnon, M. A., Jansen, K. J., & Michael, J. H. (2008). Employee .docx

· Gagnon, M. A., Jansen, K. J., & Michael, J. H. (2008). Employee .docx

Recommended

Recommended

More Related Content

Similar to · Gagnon, M. A., Jansen, K. J., & Michael, J. H. (2008). Employee .docx

Similar to · Gagnon, M. A., Jansen, K. J., & Michael, J. H. (2008). Employee .docx (20)

More from LynellBull52

More from LynellBull52 (20)

Recently uploaded

Recently uploaded (20)

· Gagnon, M. A., Jansen, K. J., & Michael, J. H. (2008). Employee .docx