Principles, policies and performance: an empirical study of strategic orientation, executive values and their impact on organisational performance

Litchenstein, S., Samouel, P. and Higgs, M. (2007) Principles, policies and performance: an empirical study of strategic orientation, executive values and their impact on organisational performance (Henley Working Paper Series, HWP 0706) Henley, UK. University of Reading

Abstract

This paper focuses on measuring executives’ values, their relationship with strategy and their impact on performance. It extends prior strategic leadership research that relied on demographic variables as surrogates for managerial attributes. Using the upper echelon theory as a theoretical framework, several hypotheses are tested to examine the relationship between strategic orientation, executives’ value systems and organisational performance. The Miles and Snow typology was used to measure strategic orientation and a Maslovian theory-driven approach was used to categorise executives’ values. The results show that managers’ strategic choices in an industry context and their values have a significant impact on performance. Moreover, executive values have a greater performance impact than managerial demographic variables. These findings provide evidence that executive values is a more fundamental managerial attribute than managerial characteristics. This finding challenges current conjecture concerning the relationship between executive experiential and psychological characteristics and their consequences on financial and operational performance.

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Contributors

Author: M. Higgs

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