Research methodology

The methodology of the study specifies how the study was carried out to research the stated objective of determining how strategic leadership has a direct impact on operational strategy and organisational performance in business organisations in South Africa. A detailed exposition of the research design and methodology is presented in Chapter 5. However, the following section provides a brief description of the research methodology.

1.6.1 SECONDARY RESEARCH

Saunders, Lewis & Thornhill, (1997:38-42) recommended that during the secondary research process, the foundation of the study should be built on a critical literature review. Perry (1998) recommends that most PhD studies should follow a deductive approach. In this approach the literature is used to help the researcher identify theories and ideas to be tested through the use of data. In this way a theoretical framework can be developed.

An extensive literature review has been conducted in Chapters 2, 3 and 4 where previous research published in books, journals, articles and relevant sources on the internet, other working papers, government documents and web pages have been analysed.

1.6.2 PRIMARY EMPIRICAL RESEARCH

Empirical research, also known as primary research, refers to sources of information that have originated directly as a result of a particular problem under investigation (Mc Danliel & Gates, 2001:25). As proposed by a number of authors (Tull & Hawkins, 1993:51-197; Saunders, Lewis & Thornhill, 1997; Hair, Bush &

Ortinau, 2000:34-44; Welman & Kruger, 2002:32-170) the methodology section of the primary research section should address the following decision stages:

specifying the type of study, defining the target population and sample size, describing the data collection method, determining the research instruments to be used and specifying how the collected data will be analysed.

An empirical study and a survey of the target sample have been conducted. A survey design allows for the collection of a large amount of data from a sizeable sample in a highly economical way, but a common problem of email surveys is the low response rate (Tull & Hawkins, 1993:188). Since the possible low response rate was one of the main concerns of the researcher, telephone interviews, as data collection method, have been done (for full explanation see section 5.3).

1.6.3 THE STUDY POPULATION AND SAMPLE

The sample selected for this study consisted of the top 200 performing organisations that were part of the Financial Mail survey of 2008.

All 200 top performing organisations in South Africa for 2008, as published in the Financial Mail survey, were part of the sample. In this survey, the performance of these organisations was measured over a five year period to ensure consistency in their performance. The respondents in the Financial Mail survey have been the chief executive officers (CEOs) or a member of the senior executive group. They have been treated as key informants (Seidler, 1974). Their responsibilities in their organisations give them a unique and comprehensive view of strategic leadership activities. Zahra (1991:206) argues that CEOs and directors responsible for strategy formulation and implementation, are familiar with the organisation’s environment, strategy and structure and are able to see their organisation

“holistically”. As the top ranking individual responsible for strategic direction in an organisation, they are often called upon to evaluate major new ventures, to approve financial support for projects and are involved in evaluating ongoing activities.

A total of 118 valid responses were received with a response rate of 59 percent.

This response rate was relatively good when compared to similar studies. In a series of surveys of Fortune 1000 companies in 1990, 1993 and 1996 the Center for Effective Organisations had response rates of 32, 28 and 22 percent (Lawler, Albers Mohrman, & Ledford, 1998). The organisations represent all major industry groups. Financial and industry performance information has been used from the 2008 Financial Mail survey.

1.6.4 DATA COLLECTION METHOD

The data for the empirical study were collected with the structured telephone interview method. The advantages of telephone interviews include the collection of a large volume of data from a sizable population in a highly economical way,

higher response rates than mail surveys and few non-response errors (Tull &

Hawkins, 1993:188).

1.6.5 SPECIFIC RESEARCH INSTRUMENTS

The structured telephone interviews were based on a questionnaire measuring the impact of strategic leadership on the operational strategy and organisational performance in business organisations in South Africa (see Appendix B).

The questionnaire consisted of 48 structured questions and was tested and refined after a pilot study had been done with 51 organisations. These organisations were represented by individuals who were enrolled with the Senior Management Development Programme (SMP) at the University of Stellenbosch Business School Executive Development (USB-ED). The purpose of the pilot study was to ensure that respondents had no difficulties in answering the questions, and that there were no problems in recording the data (Saunders, Lewis & Thornhill, 1997).

To measure strategy in the sample companies the two scales of strategy creation and strategy execution were used based on Treacy and Wiersema’s (1995) strategy model. Organisations were asked: “To what extent do the following statements best describe your workplace’s competitive strategy”?

Organisational performance was measured using the two financial based measurements of ROA en EPS, as published in the Financial Mail (2009) survey, listing the 200 top performers in South Africa in 2008. Although these top 200 organisations have been ranked in this survey according to their internal rate of return (IRR), this measure has not been used as a performance indicator as there is no direct correlation between the IRR and strategic leadership practices of the organisation (Buzzell et al., 1987). Since return on assets (ROA) is the most commonly used to date in strategy research (Lee & Miller, 1999), it was used in this study. Earnings per share (EPS), is another highly used measure and was also used as an organisational performance measurement (McDonald, 1999).

Although there are some concerns for researchers using self reported performance measures (see Rosenzweig, 2007), it is still widely used by many researchers to measure the performance of organisations. In addition to financial measures, self-reported performance measures were used in this study.

Organisations were asked to indicate their current level of performance relative to their competitors for each of the six performance measures. As described in Chapter 5, these performance measures were adaptive leadership, autonomy, communication, processes and systems, knowledge and values.

1.6.6 ANALYSIS OF DATA

The data were analysed by using the Statistica (Stratsoft, 2006; 2007) programme. The results of the data analysed are presented in Chapter 6. Tests of reliability were conducted, using the Cronbach’s Alpha coefficients, presented in Section 5.6.1. Exploratory data analysis (EDA) was used to assess individual variables, and descriptive statistics – such as means and standard deviations – were used to describe the data. Additionally, inferential statistics were employed to determine the relationships between the constructs of strategic leadership and operational strategy as well as organisational performance.