Palladan AA

Research Article

Austin J Bus Adm Manage. 2018; 2(3): 1032.

Toward Effective Strategy Implementation: the Role of Strategic Leadership Organizational Innovativeness and Information Technology Capability. Empirical Evidence

Palladan AA*

School of Business Education, Federal College of Education, Nigeria

*Corresponding author: Ahmad A. Palladan, School of Business Education, Federal College of Education, Ashaka Road, PMB 60, Gombe, Nigeria

Received: April 12, 2018; Accepted: May 22, 2018; Published: May 29, 2018

Abstract

This study investigates the determinants of perceived organizational strategy implementation among public tertiary institutions in Nigeria. Primarily, the study explored the effects of Strategic Leadership (SL), Organizational Innovativeness (OI) and Information Technology Capability (ITC) on Effective Strategy Implementation (ESI). More precisely the direct effect of SL, OI and ITC on ESI was assessed. The study also examines the moderating effect of ITC on SL and OI on ESI. Thirteen public tertiary institutions were considered by the research. One hundred and four deans who serve as the research respondents were sampled out of the population total of 143 deans from the institutions. Hand delivery of questionnaires was used to solicit information from the respondents. Partial Least Squares Method (PLS 2) algorithm and bootstrap techniques were used to test the study hypotheses. The results provided support for most of the hypothesized relationship for the study. Specifically, SL, OI and ITC are found to be significant and positively affect organizational ESI. Additionally, ITC has been found to significantly moderate the relationship between SI and perceive ESI. While negative moderating effect of ITC was found between OI and perceive ESI. PIIT theory as well as Diffusion of Innovation Theory was partly considered as probable reasons for the negative finding. Therefore, significant positive effects of SL, OI and ITC suggest that the variables are important in facilitating ESI. As such, public tertiary institutions in Nigeria should be encouraged to demonstrate these behaviors for enhanced success of organizational strategy implementation. Enhanced success of effective strategy implementation could improve the overall effective function of the organizations.

Keywords: Strategic leadership; Organizational innovativeness; IT capability; Effective strategy implementation; Tertiary institutions

Introduction

In today’s world, strategic management is gaining more ground as a tool for managing public tertiary institutions for better results [1]. The need for strategic management practices in Nigerian public tertiary institutions grew when the organizations shifted from relatively stable environment to environment that is characterized by increasing competition and shortages of resources [2]. For these institutions, adoption of strategic management practices at this moment is very timely. Strategic management practices are needed in an environment where new forms of influence are imaging and where norms and values as well as social utility of organizations is being challenged and redefined [3].

Ali and Hadi argued that the main challenge in strategic management process is associated with strategy implementation. A good strategic plan if effectively executed will certainly give an institution superior competitive advantage [4]. Revealing (Figure 1) from [5] suggest that less than 10% of well-formulated strategies are effectively executed. Additionally, [6,7] reported a similar result of just 10% of strategies being effectively executed. Correspondingly, it was reported that strategy implementation in Chinese firms has become a subject of discussion, with survey indicating that 83% organizations failed, and only 17% organizations were successful [8].

It has been documented in the extent literature that Nigerian tertiary institutions have formulated strategies, missions and visions aimed at excellence [9]. However, these strategies are still far from been realized [10]. The reason for this unhealthy situation is lack of effective strategy implementation that resulted in their deficient performance [11]; [1]. The issue of performance in Nigerian public tertiary institutions has continued to attract the attention of government and the public. This issue of performance is pushing more and more students to opt for other countries outside Nigeria for furtherance of their education [12]. Presently the expenses of Nigerian students abroad are said to be more than 2 Billion dollars annually [13].

In Nigerian context, we argued that strategic leadership and organizational innovativeness are the top variables that affect strategy implementation in public tertiary institutions. Quite number of literatures had affirmed that lack of effective leadership is the most influential factor that retards effective strategy implementation in Nigerian for profit and non-profit organizations [14-17]; while innovation has been recommended as the single factor desirable to promote institutional performance in Nigerian public tertiary institutions [18-20].

Numerous strategy literatures heavily emphasize the superiority of internal organizational competencies when it comes to seeking of competitive advantages [21-24]. One of the most essential organizational internal competitive superiorities is leadership style. Substantial number of strategic researchers and practitioners are on the agreement that strategic leaders are the backbone for any meaningful strategy implementation and organizational efficiency [25-27]. On the other hand, organizational innovation ability (innovativeness) has been regarded as integral part of organizational competitive advantage and effective instrument for effective strategy implementation [21,28].

However, most of previous strategic leadership studies on strategy implementation are based on the single-actor or ‘hero’ leader. This notion seems to be erroneous especially in the context of Nigerian tertiary institutions. In this paper, we conceptualized strategic leadership to consist of several of actors; something similar to distributed leadership. Thus, head of departments, deans and directors in the institutions are regarded as part of strategic leaders due their enormous contribution in any meaningful strategy implementation.

This study also proposes IT capability to moderate the relationship between strategic leadership and organizational innovativeness on effective implementation of strategies in Nigerian public institution. IT capability as argued [29] is organizational ability to mobilize and deploy IT based resources combined with other resources and capabilities to achieve competitive advantages. Information technology capability is found to be a popular factor that wields considerable influence on several organizational intangible resources [30,31].

Additionally, scholars argued that there is need to comprehend the essentiality of information technology in the operations of Nigerian public tertiary institutions [32]. This is very timely as maximization of IT capability in the institutions has the potential of enhancing quality of policies, as well as leading to greater and proper implementation of institutional strategies and monitoring [33,34].

Resource Based View [35] is the theory underpinning this study. Organizational resources consist of all organizational assets tangible and intangible, as well as human and nonhuman that are owned or controlled by the organization [35,36]. Distinctively, intangible organizational resources such as strategic leadership, knowledge, innovation ability, permit organization to add up value to incoming factors of production [37]. And they represent competitive advantages for an organization [38,41].

Conceptual framework

Based on the previous discussions and theoretical gaps highlighted above, a conceptual framework for this study was developed demonstrating the role of IT capability as moderating variable on the relationship between (1) strategic leadership; (2) organizational innovativeness and effective strategy implementation.

Methodology

Strategic leadership is defined as “the leader’s ability to anticipate, envision, and maintain flexibility and to empower others to create strategic change as necessary” [42]. The measures for this construct ware measured employing the methodological approach presented by Baum, Locke and Kirkpatrick [43] in collaboration with Bass and [44] Multifactor Leadership Questionnaire (MLQ) – Form 6S. The MLQ questionnaire was found to be among the best instruments as well as one of the most utilized set of measures for all leadership researches. The MLQ instruments consist of three broad segments that represent transformational, transactional and laissez- faire leadership behaviors. However, laissez- faire behaviour segment in the MLQ questionnaire was not used, because as argued Elenkov, Judge and [45], laissez- faire leadership behaviors defy the very essence of strategic leadership. Thus, the researchers adapted sixteen items from the MLQ. The visionary aspect of strategic leadership was measured using three essential attributes proposed by [46]. According to Hurley and [47], organizational innovativeness is the notion of openness to new ideas as a characteristic of organization’s culture. Thus, innovativeness is a gauge of an organization’s orientation toward innovation. Ten indicators were adapted from [48] and Hurley and [47] to measure this construct. IT capability construct is use as a onedimensional construct in this study. It will be measured using three dimensions. The measurements for these dimensions were adapted from [49]. It contains seventeen measurable items. The respondents are required to assess their organization on the perceived application of IT capability measured in three dimensions; knowledge, object and operation. All the constructs were measured using six Likert scale.

A total of 124 questionnaires were administered to chief executives, deans and head of departments of thirteen public tertiary institutions located in Kaduna state of Nigeria. Strategic scholars argued that taking several informed and knowledgeable respondents from an organization to serve as respondents limit the potentiality of measurement error [50-54] sampling techniques was used to determine the sample size. In the end, 112 questionnaires were duly completed and returned. This represent 91.1% percent response rate. In the end, 108 questionnaires were finally considered for analysis. The PLS SEM 2 software was used for the analysis due to its flexibility for statistical model building as well as prediction [55].

Results

Individual item reliability

The reliability of individual items was ascertained by looking the outer loadings of every construct’s measure [56]. Adhering to the rule of thumb for keeping items with loadings that ranges between .40 and .70 [56], it was discovered that out of 48 items, 5 items were deleted because their loading fall short below the threshold of 0.40. Hence, in the whole model, only 43 items were retained because their loadings are above 0.50.

Assessing the measurement model

Table 1 depicts the results of AVE calculations with resulting coefficients that range from 0.50 to 0.86, signifying that convergence validity has been attained for all the variables. By obtaining the results of the convergence validity that signifies satisfactory item loadings, composite reliability satisfactory AVE coefficients for the individual indicators, it was clearly enough to prove that the items stand for distinct latent constructs, therefore establishing their convergence valid (Table 2).

Table 1: Items loadings, Average Variance Extracted (AVE) and reliabilities.




  
    Variable 
    Code 
    Loadings 
    AVE 
    Composite Reliability 
    Cronbachs Alpha 
  
  
    Effective Strategy Implementation 
    ESI1 
    0.935 
    0.863 
    0.95 
    0.92 
  
  
    
    ESI2 
    0.941 
    
    
    
  
  
    
    ESI3 
    0.91 
    
    
    
  
  
    IT Capability 
    ITK10 
    0.785 
    0.645 
    0.916 
    0.889 
  
  
    
    ITK5 
    0.709 
    
    
    
  
  
    
    ITK6 
    0.764 
    
    
    
  
  
    
    ITK7 
    0.846 
    
    
    
  
  
    
    ITK8 
    0.863 
    
    
    
  
  
    
    ITK9 
    0.843 
    
    
    
  
  
    IT Capability 
    ITO1 
    0.823 
    0.732 
    0.916 
    0.877 
  
  
    
    ITO2 
    0.918 
    
    
    
  
  
    
    ITO3 
    0.836 
    
    
    
  
  
    
    ITO4 
    0.842 
    
    
    
  
  
    IT Capability 
    ITOP11 
    0.801 
    0.649 
    0.928 
    0.908 
  
  
    
    ITOP12 
    0.622 
    
    
    
  
  
    
    ITOP13 
    0.838 
    
    
    
  
  
    
    ITOP14 
    0.811 
    
    
    
  
  
    
    ITOP15 
    0.828 
    
    
    
  
  
    
    ITOP16 
    0.882 
    
    
    
  
  
    
    ITOP17 
    0.832 
    
    
    
  
  
    Organizational Innovativeness 
    OIV1 
    0.788 
    0.601 
    0.93 
    0.914 
  
  
    
    OIV10 
    0.782 
    
    
    
  
  
    
    OIV2 
    0.523 
    
    
    
  
  
    
    OIV3 
    0.786 
    
    
    
  
  
    
    OIV4 
    0.828 
    
    
    
  
  
    
    OIV5 
    0.852 
    
    
    
  
  
    
    OIV6 
    0.719 
    
    
    
  
  
    
    OIV7 
    0.804 
    
    
    
  
  
    
    OIV8 
    0.842



Table 1: Items loadings, Average Variance Extracted (AVE) and reliabilities.

Table 2: Items cross loadings, AVE and Reliabilities.




  
    Items loading, Average Variance    Extracted (AVE) and Reliabilities (Cont.) 
  
  
    Variable 
    Code 
    Loadings 
    AVE 
    Composite Reliability 
    Cronbachs Alpha 
  
  
    Strategic Leadership 
    STLP10 
    0.741 
    0.503 
    0.934 
    0.923 
  
  
    
    STLP11 
    0.77 
    
    
    
  
  
    
    STLP13
    0.707
    
    
    
  
  
    
    STLP14 
    0.778 
    
    
    
  
  
    
    STLP15 
    0.7 
    
    
    
  
  
    
    STLP16 
    0.674 
    
    
    
  
  
    
    STLP17 
    0.685 
    
    
    
  
  
    
    STLP18 
    0.737 
    
    
    
  
  
    
    STLP19 
    0.727 
    
    
    
  
  
    
    STLP4 
    0.589 
    
    
    
  
  
    
    STLP6 
    0.636 
    
    
    
  
  
    
    STLP7 
    0.743 
    
    
    
  
  
    
    STLP8 
    0.618 
    
    
    
  
  
    
    STLP9 
    0.793



Table 2: Items cross loadings, AVE and Reliabilities.

On the other hand, discriminate validity implies that measures that should not be related are not related. To ascertain the discriminate validity, the square root of the AVE for individual construct is used [57]. Diagonally, the table depicts square roots of AVE for all the variables connoting higher square roots of AVE for (0.94), as well as lower AVE for (0.77). Nevertheless, all the square roots of AVE for the constructs on the table are greater than the off-diagonal elements in the corresponding rows and columns, hence, establishing a proof of discriminate validity.

Conclusively, (Table 3) suggests that the measures for all the four constructs comprising of strategic leadership, organizational innovativeness, and effective strategy implantation and information technology capability are valid measures of their respective constructs based on their parameter estimates and statistical significance [58].

Table 3: Latent variable correlation.




  
    Variables 
    1 
    2 
    3 
    4 
    5 
    6 
  
  
    1. Effective    Strategy Implementation 
    0.929 
    
    
    
    
    
  
  
    2. ITC    Knowledge 
    0.527 
    0.803 
    
    
    
    
  
  
    3. ITC Object 
    0.578 
    0.732 
    0.856 
    
    
    
  
  
    4. ITC    Operation 
    0.674 
    0.791 
    0.729 
    0.806 
    
    
  
  
    5.    Organizational Innovativeness 
    0.805 
    0.569 
    0.551 
    0.614 
    0.775 
    
  
  
    6. Strategic    Leadership 
    0.771 
    0.604 
    0.596 
    0.641 
    0.541 
    0.709



Table 3: Latent variable correlation.

Table 4: Hypotheses testing.




  
    Relationship 
    Beta value 
    Standard Error 
    t value 
    p value 
    Decision 
  
  
    Strategic Leadership -> Effective Strategy Implementation
    .235
    .126
    1.861
    .033**
    Supported
  
  
    Organizational Innovativeness -> Effective Strategy Implementation
    .495
    .122
    4.051
    .000***
    Supported
  
  
    Information Technology Capability -> Effective Strategy    Implementation
    .181
    .087
    2.083
    .020**
    Supported
  
  
    Organizational Innovativeness * IT Capability -> Effective Strategy    Implementation
    -.153
    .091
    1.682
    .048
    Not supported
  
  
    Strategic Leadership * IT Capability -> Effective Strategy Implementation
    .226
    .102
    2.217
    .014**
    Supported



Table 4: Hypotheses testing.

Assessment of significance of the structural model

The study applied the standard bootstrapping benchmark of 5000 bootstrap samples to examine significance of the path coefficients [56]. (Figure 2) shows the estimates for the compete structural model, which consist of the moderator.

Figure 1: Conceptual framework.

    
    
    Figure 1:  Conceptual framework.

Figure 2: Structural Model with Moderator (Full Model).

    
    
    Figure 2:  Structural Model with Moderator (Full Model).

Discussion and Conclusion

In furtherance of the analysis, the five hypotheses of the study were also discussed. Hypothesis 1 assumed that Strategic Leadership (SLP) is positively related to Effective Strategy Implementation (ESI). The result displayed on (Table 4), indicated that strategic leadership had a significant positive effect with effective strategy implementation at (β = .235, t = 1.861, p < .033). Hence, supporting the Hypothesis.

Hypothesis 2 predicted that Organizational Innovativeness (OIV) has positive effect on Effective Strategy Implementation (ESE). More so, the table suggest the existence of positive effect between organizational innovativeness and effective strategy implementation (β = .495, t = 4.05, p< 0.00), supporting Hypothesis 2. Again, Hypothesis 3 proposed that Information Technology Capability (ITC) is positively related to perceived effective strategy implementation. The result again supported this preposition with value of (β = .181, t= 2.083, p< 0.020). Thus, Hypothesis 3 is supported. On the contrary, the moderating effect of Information Technology Capability (ITC) on Organizational Innovativeness (OI) and Effective Strategy Implementation (ESI) was found to be not supporting Hypothesis 4. The result outcome also shows negative effect of moderation between organizational innovativeness and effective strategy implementation at (β = - .153, t = 1.682, p < .048). On the other hand, Hypothesis 5 predicted that Information Technology Capability (ITC) moderates the effect between Strategic Leadership (SLP) and Effective Strategy Implementation (ESI). Outcomes from the result on (Table 4) suggested positive effect on the moderation of information technology capability on the relationship between strategic leadership and effective strategy implementation (β = .226, t = 2.217, p < .014). This indicated support for Hypothesis 5.

Unexpectedly, the present study did not find support for this hypothesis (H5), which says IT capability moderates the relationship between organizational innovativeness and strategy implementation. The beta value for the hypothesis is (β= -.153). Several possible reasons could be attributed to this lack of support for the hypothesized relationship. One of the likely attributable factors is institutional CEOs innovativeness, both in general and on IT specific terms. PIIT refers to Personal Innovativeness in IT, which happens to be a reliable predictor of users’ attitude regarding the simplicity of use and efficiency of modern technologies [59]. Agarwal and [60] argued that PIIT is a major determinant of IT acceptance by moderating in Perceived Usefulness (PU), compatibility and Perceived Ease of Use (PEOU). Thatcher and posited that a highly innovative CEO with superior level of PIIT is more likely to look for thought-provoking experiences, and equally having more confidence in his capability to use IT. Conversely, CEOs with low level of PIIT are more likely to display general computer anxiety, and might have less tolerance for risk. In Nigerian context, studies by Ololube, [61,62] posited that managers of tertiary institution in Nigeria are yet to integrate IT fully into their organizational daily activities. This might partly explain this negative relationship. Innovative CEO would prefer to employ distinctive and risky solutions such as IT that alter the structure in which a problem is generated. Hence, CEOs’ ambition to be more innovative will speed up the process of IT adoption in implementing organizational strategies [63]. Therefore, it can be inferred from the above that ‘stress’ is important in innovativeness in both general terms, and PIIT on CEO perception and system acceptant. Scott and [64] firmly assert that CEO with higher level of PIIT would possess superior cognitive absorption and display higher computer selfefficiency

Implication of the study

The implication of this finding to Nigerian public tertiary institutions is for them to strive hard in making sure that only strategic leaders are appointed at the helm of affairs in the institutions. It does not stop at appointing CEOs alone, appointing people that possess strategic leaders qualities at all level of the institutions e.g. head of departments, deans directors e.t.c., is an important thing. This will certainly go a long way in making sure that the institutional strategies are properly executed [65].

It could also be inferred from the result that, the most significant aspect of strategic leadership that has the highest contribution in the strategy implementation process in the institutions is the strategic leadership process aspect. This could be discerned from the number of items that measured the segment. In another word, out of nineteen items that measured strategic leadership construct, thirteen of them represent process aspect (i.e. normal functions that leaders perform). This is to say that strategic leadership functions like communication, planning, organizing etc. takes the centre stage as top functions that strategic leaders performed in Nigerian tertiary institutions (Ololube, Agbor, & [66,67]. Hence another policy implication for this study is the urgent need for the leadership in Nigerian tertiary institutions to imbibe the behavioral aspect of strategic leadership like doggedness, foresight, and proper utilization of resources as well as other behaviors that strategic leadership stand for. By so doing, the institutions are expected to tremendously record high improvement on their strategy implementation and in intuitional performance in general. The finding suggests that there is need for public tertiary institutions in Nigeria to instill further, the culture of innovation among their employees. This very essential since innovativeness in the organizations have been found to be among the important determinants of effective strategy implementation in the institutions Kwon [68].

Another important issue is the result indicated that the level of achievement in organizational performance on strategy implementation may be dependent to the extent of IT capability. A higher level of IT capability may lead to a higher level of success in organizational strategy implementation. To assess organizational IT capability in terms of competency needed to look beyond specific technology, but three IT dimensions: IT objects, IT knowledge and IT operations. As IT capabilities are resources that facilitate effective collection and utilization of information [29].

Another important practical contribution of this study should do with it economic contribution. Through proper execution of strategic plans by Nigerian public tertiary institutions, their performance will surely improve [69]; and this will attract more and more student both from outside and within Nigeria. Hence this means more revenue to the institutions. Additionally, the out flux of Nigerian students abroad could be curtailed. Presently the expenses of Nigerian students abroad are said to be more than 2 Billion dollars annually [13]. This suggests that the money they spent while they are abroad will now be channeled into the Nigerian economy and subsequently boost the Nigerian Gross Domestic Product (GDP).

Limitations of the Study and Direction for Future Research

This study uses quantitative research design; future research may consider a qualitative approach or a mixed/triangulation design. Precisely, qualitative interview could be carried out with participants who may give a better understanding of the relationships among the constructs under study. Future research may decide to consider larger area like taking Nigeria as whole.

References

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Citation: Palladan AA. Toward Effective Strategy Implementation: the Role of Strategic Leadership Organizational Innovativeness and Information Technology Capability. Empirical Evidence. Austin J Bus Adm Manage. 2018; 2(3): 1032.

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