These conditions illustrate how legitimation was a

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Unformatted text preview: e basic means to produce strategic engagement, had to be done thoroughly. These conditions illustrate how legitimation was a result of top and middle sources of influence. Top management did not grant legitimation alone; initiatives had to be assessed favorably by unit level management as well. This assessment was developed through what informants called “scratching on the project”. Scratching was described as the thorough assessment for feasibility, which resulted in unit level managers either believing in the initiative or discarding it. This concept of scratching was used in the sense of digging below the surface, as deep as possible, to evaluate the potential value and feasibility of an initiative, 17 particularly if new capabilities were needed. Once they had scratched on an initiative, unit level managers would typically set goals, timing, an action plan, and pertinent indicators. If new capabilities were considered necessary, the proposal had to include a way to achieve them. The scratching was aimed at finding sufficient arguments for the initiative to acquire legitimation. Top management appraisal, on the other hand, was based on the quality of the arguments derived from the scratching, and the fit of the initiative with strategic intent. Initiatives were presented to the executive committee. The CEO and the unit managers would act as judges, while the unit manager in charge of the initiative would have to argue the case for it. It is at this stage that the four conditions for legitimation mentioned earlier took on a major role. The four conditions were needed in all three groups in order to reach legitimation, yet the sequence for each group was different. Next, we will describe how distinctive features of each group influenced whether legitimation was reached or not. In the ‘flow’ group, scratching was performed regardless of top management direction, yet the objective function was kept as a guiding element. Once the scratching phase was complete, keeping roles rather independent from top management, initiatives were presented in the executive committee. If, at that stage, the assessment was carried out rigorously and objectively, the committee acted as an unbiased judge. Initiatives generated through ‘flow’ often achieved legitimation and were carried out. Strategic initiative number twelve is a good example. This initiative began in reaction to changes emerging from the external environment that demanded a major change in the company’s main business. It involved a major restructuring of the insurance brokerage business. A gradual change in market conditions, after the strategic plan had been set, forced the company to realize that the future of its main business was threatened. As a result of this reflection, a major restructuring of the main business was decided. To respond, top management steered to readjust, first, the business model and, then, the systems, procedures and sales force. The restructuring process demande...
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This document was uploaded on 02/26/2014 for the course BUSINESS Human reso at Silliman Institute.

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