A new flagship work in the literature on management and strategy, the "Handbook of Middle Management Strategy Process Research", published by Edward Elgar Publishing, sets out the views of Prof. Xavier Castañer (HEC Lausanne) and his co-author Howard Yu (IMD), on the role of middle and top management in strategy development.
An impressive compilation edited by Steven W. Floyd and Bill Wooldridge, the handbook features contributions by several academics on the current research consensus that tends to give middle managers a dominant role in defining and implementing strategies.
Prof. Castañer and Prof. Yu take centre stage with a somewhat unusual stance in the handbook’s first chapter. From the outset, they take a fresh look at this research stream embodied by well-known researchers Bower, Mintzberg and Burgelman, questioning several principles and theories described in the handbook, and sometimes challenging the ideas put forward by Steven W. Floyd and Bill Wooldridge.
By inviting Prof. Castañer and his co-author to express their views, were Steven W. Floyd and Bill Wooldridge seeking to open new doors as a way of developing their thinking in the field? This is what we wanted to explore when we spoke to Prof. Castañer.
Review of the origins of current thinking. The research done between the 1970s and 1990s by the three main thinkers behind this current of opinion – Bower, Mintzberg and Burgelman – all leads to the same conclusion: middle managers play a dominant role in formulating and implementing strategy, compared with senior management. Given the realties they face in the field and at an operational level, middle managers are obliged to take the initiative to fulfil their objectives. If these initiatives subsequently prove effective and are approved by senior managers, they will be incorporated into strategy. The likely consequence is that the initial strategy agreed will take a new direction. This phenomenon is known as the emergence of bottom-up strategy.
For Professor Xavier Castañer, however, a more nuanced view of the role of middle management is needed. “Top managers must exert their influence on strategy when, for example, the business no longer seems to be fulfilling its primary mission,” he explains. In Floyd and Wooldridge’s book, Prof. Castañer and Prof. Yu cite the case of the Common Ground organisation, which they studied in New York, and whose aim is to reduce the number of homeless people in Times Square. Created in 1990, the organisation flourished, and 20 years later was awarded numerous prizes, confirming its reputation at a national and international level.
However, its founder and managing director, Roxanne Haggerty, continued to observe that some people remained homeless and refused to engage with the organisation’s services. For her, the success the organisation had achieved – in both financial and reputational terms – was a secondary consideration; the existence of people described as ‘recalcitrant’ was an unacceptable situation and the challenge to be overcome. As a result, she decided to review how her organisation worked and its procedures, as well as the availability of housing and behavioural norms.
It was in studying this case that Xavier Castañer identified a new kind of motivation within organisations: one that, separately from so-called intrinsic (the pleasure of exercising a leadership role) or extrinsic (financial or reputational recognition) motivations, leads top managers to use their role as leaders to exercise real strategic influence, even if the business achieves or even exceeds its objectives. This form of motivation is linked to a commitment to the business’s mission and its impact on others; one that – as in the case of Steve Jobs, who was viewed as truly obsessive about the ease of use of Apple products – can be found in any business leader, in the public or private sector, and in both for-profit and not-for-profit organisations. “It’s typically in this kind of situation that some top managers will reassume their leadership role in defining and implementing strategy, inverting the bottom-up trend examined in Steven W. Floyd and Bill Wooldridge’s book,” concludes Xavier Castañer.
Finally, why did authors Steven W. Floyd and Bill Wooldridge decide to include an approach that differs from the one they have taken for so many years? “Wooldridge and Floyd have been impressively open-minded,” emphasises Prof. Castañer. “As former middle managers in the 1980s, they decided to join the academic world to put their experience to good use and make the case for the role of middle managers in strategy processes. Over the next 20 years, they really developed thisresearch stream. As they approach retirement, this book leaves a kind of legacy to the academic community and anyone else interested in the subject. What could be nobler than allowing discrepancy in the field?”
For free access to chapter 1, written by Prof. Castañer and his co-author.