Strategy Implementation Requires the Right Executive Style: Evidence from Danish SMEs

We examine how and when executive style affects strategy implementation in Danish Small and Medium Size Enterprises SMEs. We propose a framework that allows a simple diagnosis of executive style and strategy implementation, and we then measure and assess the performance consequences of (mis)alignment between the two. Executive style determines how executives deal with information, i.e., how they delegate, make decisions, and respond to uncertainty. Strategy implementation is the realization of strategy and what the firm does. Analyzing data from 407 small- and medium-sized (SME) Danish manufacturing firms, we show that a failure to align SME executive style and strategy leads to a significant performance loss. Moreover, our findings demonstrate that the alignment of executive style and strategy is especially crucial for SMEs pursuing change and innovation. We conclude with managerial and theoretical implications. © 2012 Elsevier Ltd.

Duke Scholars

Author Richard M. Burton Fuqua School of Business