A Large-scale Second-order Structural Equation Model of the Influence of Management Participation on Organizational Planning Benefits

Analysis of the relationship between management participation in strategy formation and organizational planning benefits with the construction and subsequent empirical validation of a large-scale structural equation model suggests that management participation enhances the effectiveness of the strategy process.

Abstract

This study analyzes the relationship between management participation in strategy formation and organizational planning benefits with the construction and subsequent empirical validation of a large-scale structural equation model with 57 items. This model simultaneously considered first-order and second-order measurement models as well as the structural model. Methodological emphasis was placed on developing expanded conceptualizations of these strategy constructs by modeling them as second-order factors and expressing their defining constituent domains of content as first-order factors. Results indicate a strong causal linkage between management participation and two classes of strategic benefits, suggesting that management participation enhances the effectiveness of the strategy process.