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Exploring unanticipated consequences of strategy amongst stakeholder segments: the case of a European revenue service

Exploring unanticipated consequences of strategy amongst stakeholder segments: the case of a European revenue service
Exploring unanticipated consequences of strategy amongst stakeholder segments: the case of a European revenue service
This article applies FIMIX-PLS segmentation methodology to detect and explore unanticipated reactions to organisational strategy among stakeholder segments. For many large organisations today, the tendency to apply a “one-size-fits-all” strategy to members of a stakeholder population, commonly driven by a desire for simplicity, efficiency and fairness, may actually result in unanticipated consequences amongst specific subgroups within the target population. This study argues that it is critical for organisations to understand the varying and potentially harmful effects of strategic actions across differing, and previously unidentified, segments within a stakeholder population. The case of a European revenue service that currently focuses its strategic actions on building trust and compliant behaviour amongst taxpayers is used as the context for this study. FIMIX-PLS analysis is applied to a sample of 501 individual taxpayers, while a novel PLS-based approach for assessing measurement model invariance that can be applied to both reflective and formative measures is also introduced for the purpose of multi-group comparisons. The findings suggest that individual taxpayers can be split into two equal-sized segments with highly differentiated characteristics and reactions to organisational strategy and communications. Compliant behaviour in the first segment (n = 223), labelled “relationships centred on trust,” is mainly driven through positive service experiences and judgements of competence, while judgements of benevolence lead to the unanticipated reaction of increasing distrust among this group. Conversely, compliant behaviour in the second segment (n = 278), labelled “relationships centred on distrust,” is driven by the reduction of fear and scepticism towards the revenue service, which is achieved through signalling benevolence, reduced enforcement and the lower incidence of negative stories. In this segment, the use of enforcement has the unanticipated and counterproductive effect of ultimately reducing compliant behaviour.
0024-6301
395-423
Money, Kevin
a623e17d-2d84-4359-a7b2-ba591e134f55
Hillenbrand, Carola
13a56d7e-dd87-4562-b702-6fa26a02c2b4
Henseler, Jörg
daa08fa1-65f2-4b52-a9b4-dd56fa6b6aba
da Camara, Nuno
30835dd2-a3aa-4ea6-b4fd-8e5fa7c9a40d
Money, Kevin
a623e17d-2d84-4359-a7b2-ba591e134f55
Hillenbrand, Carola
13a56d7e-dd87-4562-b702-6fa26a02c2b4
Henseler, Jörg
daa08fa1-65f2-4b52-a9b4-dd56fa6b6aba
da Camara, Nuno
30835dd2-a3aa-4ea6-b4fd-8e5fa7c9a40d

Money, Kevin, Hillenbrand, Carola, Henseler, Jörg and da Camara, Nuno (2012) Exploring unanticipated consequences of strategy amongst stakeholder segments: the case of a European revenue service. [in special issue: Analytical Approaches to Strategic Management: Partial Least Squares Modeling in Strategy Research] Competition and Change, 45 (5-6), 395-423. (doi:10.1016/j.lrp.2012.09.003).

Record type: Article

Abstract

This article applies FIMIX-PLS segmentation methodology to detect and explore unanticipated reactions to organisational strategy among stakeholder segments. For many large organisations today, the tendency to apply a “one-size-fits-all” strategy to members of a stakeholder population, commonly driven by a desire for simplicity, efficiency and fairness, may actually result in unanticipated consequences amongst specific subgroups within the target population. This study argues that it is critical for organisations to understand the varying and potentially harmful effects of strategic actions across differing, and previously unidentified, segments within a stakeholder population. The case of a European revenue service that currently focuses its strategic actions on building trust and compliant behaviour amongst taxpayers is used as the context for this study. FIMIX-PLS analysis is applied to a sample of 501 individual taxpayers, while a novel PLS-based approach for assessing measurement model invariance that can be applied to both reflective and formative measures is also introduced for the purpose of multi-group comparisons. The findings suggest that individual taxpayers can be split into two equal-sized segments with highly differentiated characteristics and reactions to organisational strategy and communications. Compliant behaviour in the first segment (n = 223), labelled “relationships centred on trust,” is mainly driven through positive service experiences and judgements of competence, while judgements of benevolence lead to the unanticipated reaction of increasing distrust among this group. Conversely, compliant behaviour in the second segment (n = 278), labelled “relationships centred on distrust,” is driven by the reduction of fear and scepticism towards the revenue service, which is achieved through signalling benevolence, reduced enforcement and the lower incidence of negative stories. In this segment, the use of enforcement has the unanticipated and counterproductive effect of ultimately reducing compliant behaviour.

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Published date: October 2012
Organisations: Southampton Business School

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Local EPrints ID: 383442
URI: http://eprints.soton.ac.uk/id/eprint/383442
ISSN: 0024-6301
PURE UUID: 3a83d745-0a3e-4915-9842-ab29a4e8264d

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Date deposited: 28 Oct 2015 15:16
Last modified: 29 Jan 2020 17:27

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Contributors

Author: Kevin Money
Author: Carola Hillenbrand
Author: Jörg Henseler
Author: Nuno da Camara

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