The role of shared mental models of strategic thinking in the development of organisational strategy

The role of shared mental models of strategic thinking in the development of organisational strategy

[Abstract]:
Strategic thinking is a popular research topic in management and business fields and mental models are studied extensively in the area of cognitive psychology. However, there is a dearth of research focused on mental models of strategic thinking. Limited empirical research and paucity in assessment or exploration of mental models of strategic thinking result in a theoretical gap that this study addresses. Although it is well noted in the strategic management theory that finding a competitive strategy is essential in achieving sustainable competitive advantage, few models include strategic thinking as a specific aspect in the strategy development process. Because strategic thinking relies on the mental models of strategic thinking, the cognitive aspects of strategic thinkers need to be investigated. This study specifically addresses the gap in investigating strategy development from a business and psychology perspective. Furthermore, limited research on strategy development in Australian local government and the newly-established regional councils in Queensland creates an opportunity to conduct a study focussing on organisational strategy in these councils to assist councils in achieving the aims of the local government reform. In this context, the aim of this dissertation study is to investigate the role of shared mental models of strategic thinking in the development of organisational strategy.

This investigation of shared mental models includes the content of task mental models and group-functioning mental models of individual group members and also the content of the strategy groups‘ shared mental models of the task of strategic thinking and group-functioning. The levels of agreement of these mental models are investigated within specific strategy groups and among strategy groups on various organisational levels.

Within the three Queensland regional councils which participated in the study, three levels of strategy groups are studied. The first level strategy group includes the mayors, councillors and chief executive officers. The second level strategy group includes the chief executive officers and directors of the council departments. The third level strategy group includes the directors of those departments or directorates that are responsible for developing corporate plans, plus other employees on operational levels involved in strategy development. Nine strategy groups are investigated—three on each level—and the results of the study are presented according to the level of strategy groups and not according to individual regional councils.

Primarily, a qualitative approach is applied, although the survey section of the interview protocol includes a secondary quantitative approach. Multiple sources of data gathering are applied, including the interview protocol, a scenario exercise and documentation. Multiple data analysis methods are incorporated, including qualitative content analysis, scenarios, documentary analysis and Leximancer analysis. Triangulation is applied to compare the results obtained from the different methodologies, to seek for similarities and to integrate the different sets of results.

The results of the study indicate that strategy group members applied strategic thinking in their involvement in developing organisational strategy. The content of their task mental models of strategic thinking includes the four elements of strategic thinking, namely to think about sustainable competitive advantage, thinking holistically, thinking creatively and analytically and thinking long-term about the future when they consider the long-term direction for their organisation. Medium to high levels of agreement about the task of strategic thinking occurs within and across strategy groups but this does not reflect identical mental models because individual characteristics influence individual mental models. High levels of agreement refer to similarity about strategic thinking although individual mental models ensure distinctiveness in thinking. Furthermore, the results indicate that although strategic thinking occurs in all three levels of strategy groups, employees on various levels contribute differently towards strategy development. A high degree of strategic thinking is required for first level strategy groups and this decrease progressively on the second and third level strategy group.

Perceptions of strategy group members about the functioning of their strategy groups are investigated and the findings show that group members share perceptions about the roles and responsibilities of fellow group members and the knowledge and skills of fellow group members, but they do not share perceptions about how the groups interact. When the strategy groups were investigated, they were only recently established and in the initial stages of development. The results suggest that individual mental models develop in the initial phases of group development and that shared mental models only start to develop when groups mature. Regarding the levels of agreement within and among strategy groups about group-functioning mental models, the results indicate varied levels of agreement within strategy groups and overall medium levels of agreement across the groups.

This study predominantly contributes to bridging the gap in the theory between strategic thinking literature and mental models literature by investigating mental models of strategic thinking. It also addresses strategy making within various organisational levels and develops a set of strategic thinking elements that include aspects of sustainability that do not feature prominently in current literature about strategic thinking.

Finally, the study contributes to the development of methodology to investigate mental models of strategic thinking and the research methods was applied to real employees in real organisations, as opposed to studies in laboratory settings. The research methods can be applied in local government to assess strategic thinking as part of their internal analysis of competencies or in selection and assessment processes in the appointment of new staff. More specifically, this study contributes to learning and development of the regional councils that were investigated through the feedback provided to these councils about strategic thinking in their strategy groups.