ROLESHARING IN THE MANAGERIAL WORKPLACE: MANAGERS PERCEPTIONS OF THEIR ROLES AND OF EXTERNAL CONSULTANTS HELPFULNESS IN STRATEGY PROJECTS
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1 ROLESHARING IN THE MANAGERIAL WORKPLACE: MANAGERS PERCEPTIONS OF THEIR ROLES AND OF EXTERNAL CONSULTANTS HELPFULNESS IN STRATEGY PROJECTS ROLAND HARSTE EUROPEAN BUSINESS SCHOOL Oestrich-Winkel, Germany ANSGAR RICHTER EUROPEAN BUSINESS SCHOOL INTRODUCTION In the context of the growth of the consulting industry, a substantial literature on the roles of management consultants has evolved (e.g. Schein, 1999; Maister, 1993; Nees & Greiner, 1985). Despite the differences between the approaches of these authors, all of them investigate the roles of consultants from their own (the consultants ) perspective. In contrast to this literature, our objective in this paper is to understand how consultants share in managers roles through the lens of the latter party. Doing so requires us to first analyze the roles of managers themselves. In a first step, we address the question which factors drive the perceived importance of managerial roles in the context of strategy projects. Specifically, we explore the relative importance of managers characteristics, the strategic situation at hand, the organizational and the wider environmental context as antecedents of managerial role perception. As a second step, we examine to what extent managers perceive external consultants as helpful for the execution of their roles. Similar to the analysis performed in the first step, we again address the question of which factors help explain why managers perceive consultants as helpful for the execution of some roles, but less so for others. REVIEW Literature on managerial roles In this paper, we draw on the seminal work of Mintzberg (1975). His approach was to observe managers in the process of their work, in order to distill the observed characteristics inductively into ten roles that describe managers jobs. Mintzberg defined a role to be an organized set of behaviors. These sets of behaviors comprise certain tasks which are immanent in managers' jobs. McCall and Segrist (1980) further reduced Mintzberg's ten managerial roles to six (the Leader, Monitor, Entrepreneur, Resource Allocator, Liaison, and Spokesperson roles). They argued that the other four roles (the Figurehead, Information Disseminator, Disturbance Handler, and Negotiator roles) were comprised in these six central roles. Following Mintzberg (1975), a number of studies have re-examined his typology of managerial roles. They found the relative importance of these roles to vary by functional area (Alexander, 1979; McCall & Segrist, 1980; Pavett & Lau, 1983) and hierarchical level (Alexander, 1979; Allen, 1981; Grover, Jeong, William, & Lee, 1993; Karlsen, Gottschalk, & Andersen, 2002; Lau, Pavett, & Newman, 1980; Paolillo, 1981; Pavett & Lau, 1983).
2 Antecedents of managerial role perception Similar to the literature on job design (Parker & Wall, 1998), the empirical research on managerial roles has used perceptual measures of managers own activities, rather than independent ratings by third parties. The behavioral literature (Robbins, 2003) established that such perceptual measures of role importance may vary due to factors relating to the individual making the perception, to the context in which the perception is being made, or to the object being perceived. Perceiver (individual-level factors): When asked to describe task perceptions, individuals are likely to draw on a variety of information sources. On the level of the perceiver these sources may be categorized as either personal or social (Griffin, 1983). Personal information sources (individual-level factors) relate to the individual's position, experience, and education. Most empirical studies based on Mintzberg's managerial roles focus on the influence of the individual s level in the organizational hierarchy (Alexander, 1979; Allen, 1981; Gibbs, 1994; Grover, Jeong, William, & Lee, 1993; Karlsen, Gottschalk, & Andersen, 2002; Paolillo, 1981; Pavett & Lau, 1983). Alexander (1979) concludes that the extent to which individuals are expected to play particular managerial roles increases as managers move up in the hierarchy. Gibbs (1994) includes job tenure as a control variable in his study, finding it to be a significant predictor of managerial role perception. However, other personal sources that may influence role perception such as professional experience, academic background, age, and gender have not been investigated in the literature on managerial role perception so far. Context / situation in which the perception is made: The perceived importance of managerial roles may vary with the context in which the perception is made. We distinguish between strategic context, organizational context, and environmental context. With respect to the strategic context, several empirical studies support Mintzberg's contention that a manager s functional situation has a major effect on the perception of his/her roles (Alexander, 1979; Grover, Jeong, William, & Lee, 1993; McCall & Segrist, 1980; Pavett & Lau, 1983). Furthermore, Karlsen and Gottschalk (2006) investigate the importance of Mintzberg's managerial roles in the context of IT outsourcing project types. However, the applicability of Mintzberg's typology for the specific case of the roles of managers in strategy projects has not been addressed so far. The strategy process literature addresses the different managerial challenges involved in major phases of strategy projects, most importantly in the strategy formulation phase as compared to the strategy implementation phase (Galbraith C. & D., 1983). Strategy implementation processes are said to involve different skills and behaviors than the more analytical strategy formulation phase (Hutzschenreuter & Kleindienst, 2006). Moreover, some authors in the research stream on strategy content have argued that strategy projects focusing on the revenue generation side of a firm s business (e.g. new business development projects, growth strategies) require different skills than strategic projects aimed at cost reduction and process efficiency (Miller, 1988). Miller found that cost-cutting projects benefit from managers using formal control mechanisms, which might be associated with the Leader and the Resource Allocator roles. In contrast, growth projects may require managers to engage in collaborative activities to lobby for their ideas, thus emphasizing the Liaison role. Moreover, in business building projects managers may have to play entrepreneurial roles to be successful. According Rajagopolan et al. (1993; 1997), organizational and environmental factors also influence strategic decision-making processes although to a much smaller extent than decisionspecific factors (Richter & Schmidt, 2005) and may therefore also affect managerial role perception in strategy situations. More generally speaking, the organizational and the wider
3 external environment constitute social sources of information which may influence the roles managers play (Griffin, 1983). For instance, Gibbs (1994) shows that environmental dimensions such as dynamism and complexity provide additional predictive power for managerial role perception. However, the effects of other factors such as organizational size, performance, and industry affiliation on managerial role perception have received little attention so far. Object or target being perceived: Perceptual measures of role importance may also vary with the object being perceived, e.g. the task that belongs to a particular role (Griffin, 1983). Managers' jobs are characterized by task-related dimensions such as variety, autonomy, complexity, and uncertainty. Several studies demonstrate that these job dimensions influence task perception (Umstot, Bell, & Mitchell, 1976; White & Mitchell, 1979). However, Salancik and Pfeffer (1978) argue that these task-related dimensions lack meaning until they are interpreted in a social context. In our study, we take the object being perceived into account by investigating whether the antecedents of managerial role perception differ between the six roles introduced above. Roles of consultants Within the literature on consultants roles, several interrelated streams can be distinguished. The first stream goes back to the 1980s and deals with the development of consultation role models from the perspective of consultants (Lippitt, 1978; Maister, 1986; Margulies & Raia, 1972; Nees & Greiner, 1985; Schein, 1978). A second group of authors investigates the expertise and specific skill sets that enable consultants to support managerial roles (Armbruester & Kipping, 2001; Creplet, Dupouet, Kern, Mehmanpazir, & Munier, 2001; Richter & Schmidt, 2006). However, these first two streams of literature analyze the roles of consultants largely from a supply-side (i.e., from the consultants own) perspective. In contrast, our focus in this paper is on managers perceptions of consultants helpfulness. In this respect, the third stream of literature which focuses on the consultant-client relationship, is more informative (Fincham, 1999; Furusten & Werr, 2005; Kitay & Wright, 2004). Central to this literature is the notion that the value of consulting services is not the result of the consultant s activity alone, but is inherently tied to the relationship between the client and the consultant (Werr & Styhre, 2002). The empirical work in this research stream largely based on interviews and case studies suggests that clients expect consultants to support them primarily in their roles as Monitors, Entrepreneurs and Leaders. In contrast, clients appear to regard consultants as less helpful in their Liaison and Spokesperson roles (in particular with respect to external communication). However, some managers regard the transfer of roles to consultants as problematic: You have to be aware, that when you hire management consultants, in a sense you disavow your own management and problem-solving capability (Furusten & Werr, 2005, p. 96). Similarly, Kitay & Wright (2004) emphasize the difficulties involved in drawing clear lines between managers and consultants. Overall, this literature suggests that the boundaries between core managerial roles and those of consultants may become easily blurred. DATA AND METHODS To evaluate how managers perceive the general importance and the helpfulness of external consultants for different managerial roles in strategic projects, we conducted a quantitative questionnaire survey during the period June until August The basic sample of our questionnaire consisted of 5,475 managers who were involved in or had at least partial
4 responsibility for making decisions for the execution of strategic management projects and the purchasing of external consulting services. As our primary data source we used a list from a commercial provider of business contacts (Hoppenstedt) containing 5,000 executive board members from 4,671 firms with revenues greater than EUR 100 million in Germany. Furthermore, we included 475 business contacts from our university in order to enlarge the sample size. We used the Grover et al. (1993) instruments (adapted to the context of German managers in strategic projects) as a basis for operationalizing the six core managerial roles identified by Mintzberg. The rationale for choosing these instruments was their high validity and reliability as measures of the respective managerial roles. The main section of our survey contained thirty questions with Likert seven-point response categories. Question by question, we asked the respondents to rate first the importance of a particular task (item) with respect to their job, and second, to assess the helpfulness of external consultants for the execution of each of these tasks. In order to investigate the perception of managerial roles we defined the dependent variable most important role and six dependent variables for the managerial roles. For the categorical variable most important role, we defined six different groups according to which managerial role was emphasized (based on the highest factor score of a respondent), as follows: First, Leader (N=39), second, Resource Allocator (N=42), third, Monitor (N=53), fourth, Entrepreneur (N=46), fifth, Liaison (N=63), and sixth, Spokesperson (N=90). In other analyses, the factor scores of the various roles served as dependent variables. This procedure was also replicated to derive six metrically scaled dependent variables for the perceived helpfulness of consultants for a particular managerial role. To measure the antecedents of managerial role perception, we used a battery of explanatory variables which can be categorized as individual-, strategic-, organizational-, and environmental-context-level variables. On the individual level, we used gender, position, years in position, academic background, age, ex-consultant, experience with consultants, and experience with strategy. On the strategic level, we asked the respondents to identify whether their answers related to alternative types of strategy projects (growth projects versus cost reduction projects), and whether they related to the development phase or to the implementation phase of such projects. On the organizational level, we employed the variables internal consultancy, buying unit, revenues, profit margin, employees. Futhermore, we included country and industry affiliation as environmental-level variables. With regards to our methods, we first used iterated principal factor analyses with promax rotation in order to construct the managerial roles. To assess statistical significance of equal distributions between any two extracted managerial role factor ratings we conducted nonparametric Mann-Whitney U tests (Higgins, 2004). Second, we used maximum-likelihood estimation methods for situations where the dependent variable was of a categorical nature, i.e. multinominal logit (mlogit) regression models. We tested the significance of the coefficients using Likelihood ratio tests. Third, we used OLS regressions for the models where the dependent variable was the metrically scaled factor score of any particular managerial role. This procedure yielded two systems of six OLS regressions, one for the general importance of a role and one for the helpfulness of consultants in carrying out this role. Since the explanatory variables are the same in each system, we used seemingly unrelated regressions (sureg) as our estimation procedure. sureg results are equivalent to OLS estimations, equation by equation, however by estimating the
5 regressions as a system, we gain efficiency since the disturbances in the managerial role equations are contemporaneously correlated (Judge et al., 1988). RESULTS As described in the previous section, we used explorative factor analyses to test the dimensionality of the measures for the managerial roles used in this study. The results showed that the 23 items that we retained loaded on six different factors, which matched Mintzberg's managerial roles of Leader, Resource Allocator, Monitor, Entrepreneur, Liaison, and Spokesperson. The factors applied to both, the general importance and the helpfulness of consultants for managerial roles. The factor loadings ranged between 0.38 and 0.95 for the general importance of the tasks specified in the questionnaire, and from 0.34 to 0.89 for the perceived helpfulness of consultants. Overall, the examination of arithmetic means of these constructs showed that the respondents attributed high importance to the six managerial roles. Furthermore, Mann-Whitney U tests showed that a clear ranking existed between the perceived importance of the six managerial roles, with the Leader and Entrepreneur roles being rated in first and close second place respectively, the Resource Allocator and Spokesperson roles occupying places three and four, and the Monitor and Liaison roles taking places five and six. For the helpfulness of consultants, the respondents rated the Entrepreneur and Monitor roles as most important. Consultants were perceived to be least helpful in the execution of the Spokesperson and Liaison roles. With regards to the antecedents of managerial role perception, the χ 2 values indicate that all regression models are well specified. The McFadden R 2 values for the mlogit regressions and the R 2 values for the OLS models show, that the regressions explained between 11 and 20 per cent of the variance of the respective dependent variables. On a group level, the LR-tests indicated that factors on all levels except environmental context were significant drivers for the explanation of managerial role perception. Among these, the individual-level factors were by far the most important for explaining managerial role perception. More specifically, the individuallevel variables gender, years in position, age, ex-consultant, and experience with strategy were significant in some regressions. Overall, the mlogit and OLS models suggested that individuallevel factors had a particularly strong influence on the perception of the Leader role. We investigated the helpfulness of consultants for the execution of managerial roles from two perspectives. First, with respect to four (Resource Allocator, Monitor, Liaison and Spokesperson) of the six roles there was a significant and positive correlation between the general importance of a managerial role and the perceived helpfulness of consultants for the execution of that role. Second, the individual-level variables gender, age, ex-consultant, and experience with consultants had a significant influence on the helpfulness of consultants for a particular managerial role. Again, these individual-level factors had a particularly high influence on the perceived helpfulness of consultants for the Leader role. On an organizational level, only firm size [as measured by log(employees)] was significant with a negative sign for the Leader role. On a strategic-context level, the variables cost reduction project and development phase were significant for explaining the variance in the perceived helpfulness of consultants with the Resource Allocator role. Furthermore, consultants were being perceived as significantly less helpful in the Liaison role in the implementation phase of strategy projects.
6 DISCUSSION Overall, we find Mintzberg's typology of managerial jobs to be applicable for today's managerial jobs. Our factor analysis distilled the respondents ratings of thirty managerial tasks [adapted from the Grover et. al. (1993) survey instrument] into roles that closely matched Mintzberg s role descriptions. The results suggest that Mintzberg's typology is also applicable for the specific case of strategy projects. Moreover, our data suggest that the overall importance of managerial roles has increased in today's business environment. Average ratings for most of the six managerial roles are higher in our study as compared to previous studies (Gibbs, 1994; Lau, Pavett, & Newman, 1980; Pearson, Chatterjee, & Okachi, 2003). The results indicate that managers emphasize the Leader and Entrepreneur roles in strategy projects. The relative ranking of the roles is similar to previous research, which established that managers perceived the Entrepreneur (Grover, Jeong, William, & Lee, 1993; Karlsen, Gottschalk, & Andersen, 2002), and Leader roles (Pearson, Chatterjee, & Okachi, 2003) as most important. Of these, the Entrepreneur role appears to be particularly important in the context of strategy projects. The results suggest that individual-level factors have the strongest effect on the importance attributed to particular managerial roles. In particular, previous work experience as a consultant has a strong effect on the perception of managerial roles. Managers with consulting experience emphasize the Leader role, yet attribute lower importance to the Monitor role. We would interpret these findings as a result of the exposure to informational, analytical activities that many consulting jobs entail. Managers with previous consulting experience may feel naturally confident in the Monitor role, so that the focus of their perception shifts to more interpersonal roles (e.g. the Leader role). We find that managers perceive consultants as fairly helpful for the execution of all managerial roles, but for some more so than for others. The results indicate that consultants are particularly supportive for managers in the Entrepreneur and Monitor roles. This finding is consistent with the functions of consultants as change agents (Poulfelt & Payne, 1994; Richter & Schmidt, 2006) and as knowledge and information providers (Day, 2004; Kubr, 1996), a function that is particularly important in strategy projects (Sambamurthy & Subramani, 2005). Managers perceive consultants to be somewhat less helpful in the other four roles (Leader, Resource Allocator, Liaison, Spokesperson). We interpret this finding as evidence of managers' desire to own and lead strategic initiatives, and to be in charge of the allocation of crucial resources. Relinquishing control would threaten managerial self-esteem (Werr & Styhre, 2002) and heighten their anxiety to lose power (Fincham & Clark, 2002). A clearer understanding of the antecedents of managerial role perception has important implications for both theory and practice. Successful development and implementation of strategy projects presupposes that managers focus their attention, energy and commitment to those tasks that have the greatest influence on the future course of the organization, without, however, neglecting other activities. Managers need to understand which activities require their own involvement, and which ones can be devolved to consultants or be postponed temporarily. RESULTS TABLES AND REFERENCES AVAILABLE FROM THE AUTHORS
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