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Strategic management in Australian organizations
(1996)
  • Ingrid Bonn, Swinburne University of Technology
Abstract

This thesis is concerned with one of the central questions in strategic management, namely the essential characteristics for long-term success in the market place. It investigates successful companies from the perspective of survival rather than from a performance perspective as the majority of previous empirical studies have done. The multidimensional and complex nature of company survival was taken into account by examining a complex network of interdependent variables relationships.

The research investigated the 100 largest manufacturers in 1982 and 1993 in Australia. Altogether four research questions were developed. The first research question investigated the characteristics which differentiated survivors from non-survivors in 1982. The second research question examined the changes which survivors have made between 1982 and 1993. The third research question dealt with the differences between survivors and newcomers in 1993, and the fourth research question explored how companies without a formalised planning system in 1993 seek to achieve strategic management.

Probably the most important finding of this research centres around the variables which proved significant for company survival between 1982 and 1993. It was shown that companies with the following characteristics had the greatest likelihood of survival: (1) companies with an above average revenue, (2) companies which used a formalized strategic planning system, (3) companies which showed an explicit corporate direction, (4) companies which spent an above average percentage of their revenue on research and development, and (5) foreign owned subsidiaries.

Between 1982 and 1993 survivors have made a number of significant changes. They have become larger and more capital intensive, and they have improved the flexibility of their planning systems. In addition, they have placed greater emphasis on informal planning. Survivors have decentralised strategic planning to divisions or business units and moved planning responsibility from staff personnel to line managers. Survivors with corporate planning departments have changed the role of the corporate planner from the "doer" of planning to being a coordinator and facilitator and they have increased the accountability of corporate planning personnel. They also strengthened the position of the corporate planner, and involved line personnel to a greater degree. Furthermore, survivors have become more focused in their market and entry strategies and used divestitures more extensively to refocus the business portfolio on core businesses. Finally, survivors have developed a greater orientation towards international markets.

The results on the differences between survivors and newcomers in I993 suggested that newcomers operate in different markets and under different competitive conditions than survivors. Their organisations were smaller and they placed greater emphasis on new products and markets, both in Australia and overseas. Newcomers also spent a higher percentage of their revenue on acquisitions, but used divestitures to a lesser degree. In addition, a higher percentage of newcomers had quality accreditation and required their suppliers to be accredited. Both survivors and newcomers regarded total quality management and organisational culture as management tools of strategic importance and have given them high priority in their strategic management efforts.

The research has also identified some of the problems which both survivors and newcomers faced in 1993, namely (1) lack of leadership and vision, lack of accountability, and lack of competency and commitment from senior management, (2) lack of coordination between divisions or business unit& in the planning approach, and (3) resistance from employees and unions when undergoing major cultural changes.

This research has also shown that the majority of companies in 1993 used formalized planning systems as an integral part of their strategic management efforts. Those companies without a formalised planning system spent considerable time and effort on the development of strategies, goals and objectives. They developed their strategies for a time horizon between one and three and four and ten years, and they used forecasting fairly extensively, companies without a formalised planning system experienced similar problems to companies with formalised planning systems, namely a lack of focus on long-term thinking and a lack of leadership, communication and commitment.

Keywords
  • strategic planning,
  • business enterprises,
  • Australia
Publication Date
January 1, 1996
Comments
This thesis is available from the Swinburne University of Technology Library
Citation Information
Ingrid Bonn. "Strategic management in Australian organizations" (1996)
Available at: http://works.bepress.com/ingrid_bonn/2/