Perceived Organisational Alignment

368 Pages·2017·3.54 MB·English

by  Floris Johannes Burger

An organisational alignment framework
to improve South African mining
companies

FJ Burger
24140732

Thesis submitted for the degree Philosophiae Doctor in
Business Administration at the Potchefstroom Campus of the
North-West University

Promoter: Prof T Pelser
Co-promoter: Prof S Ellis

October 2016
ABSTRACT

South African mining organisations are facing numerous challenges: decreasing
commodity prices, policy uncertainty, rising input costs and increasing stakeholder
expectations. In order to successfully address these challenges, each mining
organisation needs to respond in a unified, aligned way.

This study strived to determine the degree of perceived organisational alignment
among managers within South African based mining organisations and to uncover the
key enablers of organisational alignment. Based on a literature review and extensive
dialogue with relevant role-players within the South African mining industry, first, a
multidimensional construct of perceived organisational alignment was conceived and
second, within the context of perceived organisational alignment, enablers of
organisational alignment were postulated. Measureable variables of the
aforementioned were subsequently developed.

An online questionnaire-approach was followed to collect data from 286 managers
from a selection of all the major South African mining commodity sectors on their
perceptions of the degree of organisational alignment as well as on the enablers of
organisational alignment. Using exploratory factor analysis, the validity and reliability
of the proposed organisational alignment construct and organisational alignment
enabling factors were examined.

Six factors explained the organisational alignment construct whereas the posited
enablers of organisational alignment were explained by eleven factors. Spearman’s
rank order correlation analysis followed and indicated statistically significant positive
correlations between the eleven enabling factors and perceived organisational
alignment.

Applying structural equation modelling, five of the eleven organisational alignment
enabling factors indicated a unique influence of practical importance on perceived
organisational alignment. Three data-model fit tests confirmed that the pattern of
ii
variances and covariance in the data was consistent with the hypothesised framework
of organisational alignment specified in this study.

The outcomes and practical value of this study were the following: a conceptual
framework of organisational alignment; a validated and reliable measurement
instrument of perceived organisational alignment and its enabling factors; and a range
of recommendations on how South African mining organisations may improve
organisational alignment.

Taking a largely sociological perspective of organisational functioning within the South
African mining industry’s fast-changing internal and external stakeholder environment,
this study contributed to the discipline of strategy planning and execution in general
and in particular to the subject area of organisational alignment.

Key words: value creation; open systems; organisational purpose; stakeholders;
strategy execution; and organisational alignment.

iii
ACKNOWLEDGEMENTS

I would like to express my heartfelt appreciation to the following individuals:
 Prof. Theuns Pelser, as my promoter for his professional guidance and calming
influence throughout the course of this study;
 Prof. Suria Ellis, as my co-promoter for her professional guidance and belief in
me;
 Ms. Christine Bronkhorst, for the speed and accuracy of sources during the
review on literature;
 The managers within South African mining organisations that took the time to
participate in the empirical stage of the study;
 Ms. Antoinette Bisschoff for her thorough language, technical and typographical
editing; and
 Ms. Laetitia Oosthuizen and my two sisters, Marina and Susan, for their
understanding and unconditional patience.

iv
TABLE OF CONTENTS

Page
ABSTRACT ii
ACKNOWLEDGEMENTS iv
LIST OF FIGURES xiii
LIST OF TABLES xv
LIST OF HISTOGRAMS xix
LIST OF ACRONYMS AND ABBREVIATIONS xx

CHAPTER 1: NATURE AND SCOPE OF THE STUDY 1
1.1 Introduction 1
1.2 The South African mining industry – contribution and challenges 2
1.3 Responding to the challenges 5
1.4 Research problem statement 7
1.5 Research objectives 7
1.6 Research design and methodology 7
1.7 Division of the study 11
1.8 Chapter summary 12

CHAPTER 2: ORGANISATIONAL CONTEXT 13
2.1 Introduction 13
2.2 Systems view of an organisation 13
2.2.1 Introduction 13
2.2.2 Input-process-output perspective of an organisation 15
2.3 Organisations as value-creating entities 21
2.4 Organisational purpose 23
v
2.5 Defining organisational purpose from a stakeholder theory
perspective 28
2.5.1 Introduction 28
2.5.2 Stakeholder identification 31
2.5.3 Prioritising stakeholders 34
2.5.4 Management of the organisation’s stakeholders – an internal
perspective 37
2.5.5 Addressing agency concerns 39
2.6 Chapter summary 41

CHAPTER 3: ORGANISATIONAL LEARNING AND LEADERSHIP 43
3.1 Introduction 43
3.2 Change, adaptation and organisational learning 43
3.2.1 Change and adaptation 43
3.2.2 Organisational learning 47
3.3 Organisational governance 51
3.4 Organisational structure and formal interaction 57
3.4.1 Organisational structure 57
3.4.2 Formal interaction between organisational role-players 60
3.5 Organisational leadership 61
3.6 Goal setting 70
3.7 Power, dependency and conflict handling 73
3.8 Organisational culture 77
3.8.1 Alignment between individual and organisational values 79
3.9 Chapter summary 80

vi
CHAPTER 4: ORGANISATIONAL ALIGNMENT – CONCEPTS AND
PROCESSES 82
4.1 Introduction and aims of the chapter 82
4.2 Organisational alignment concepts 83
4.2.1 The value of organisational alignment 83
4.2.2 Strategy and organisational alignment 84
4.2.3 Organisational alignment and the external environment 87
4.2.4 Organisational alignment and the internal environment 88
4.2.5 Alignment from a state and process perspective 92
4.2.6 The dynamic nature of organisational alignment 93
4.2.7 Synopsis of organisational alignment concepts and perspectives 94
4.3 Strategic performance management 97
4.3.1 Strategy planning and strategy implementation 97
4.3.2 Strategy execution perspectives and frameworks 100
4.3.2.1 McKinsey 7-S framework 101
4.3.2.2 Strategic performance measurement systems 102
4.4 Chapter summary 106

CHAPTER 5: RESEARCH DESIGN AND METHODOLOGY 108
5.1 Introduction and aims of the chapter 108
5.2 Research paradigm 109
5.3 Research process 111
5.4 Overall study objective, research problem and research
objectives 112
5.5 Literature review 113
5.6 Conceptualisation and operationalisation of organisational
alignment 113
vii
5.7 Measurement design and development 119
5.8 Sampling 125
5.9 Data collection process 127
5.10 Validity 128
5.11 Reliability 131
5.12 Statistical analysis 132
5.13 Organisational alignment framework validation 134
5.14 Chapter summary 139

CHAPTER 6: INTERPRETATION OF RESULTS 141
6.1 Introduction and aims of the chapter 141
6.2 Organisational and biographical results 142
6.2.1 Ownership status of the respondent’s organisation 142
6.2.2 Commodity sectors of the organisation 143
6.2.3 Number of employees 143
6.2.4 Number of management levels 144
6.2.5 Age of respondents 144
6.2.6 Gender 145
6.2.7 Population group 145
6.2.8 Highest qualification 146
6.2.9 Respondent’s functional department 146
6.2.10 Number of employees reporting directly to the respondent 147
6.2.11 Number of organisations worked for 148
6.2.12 Management level 148
6.2.13 Years with current organisation 149
6.2.14 Number of positions held in the last five years 150
viii
6.2.15 Number of years in current position 150
6.2.16 Intention to stay with current organisation 151
6.2.17 Equity ownership status 151
6.3 Perceived organisational alignment 152
6.3.1 Organisational purpose 152
6.3.1.1 Descriptive statistics 152
6.3.1.2 Exploratory factor analysis 155
6.3.1.3 Correlations between the organisational purpose factors and
organisational and biographical variables 161
6.3.1.4 Review of organisational purpose dimension 165
6.3.2 Stakeholder priorities 165
6.3.2.1 Descriptive statistics 165
6.3.2.2 Exploratory factor analysis 167
6.3.2.3 Correlations between the stakeholder priorities factor and
organisational and biographical variables 170
6.3.2.4 Review of stakeholder priorities dimension 172
6.3.3 Execution focus 173
6.3.3.1 Descriptive statistics 173
6.3.3.2 Exploratory factor analysis 175
6.3.3.3 Correlations between the execution focus factors and organisational
and biographical variables 180
6.3.3.4 Review of execution focus dimension 182
6.3.4 Organisational alignment index 183
6.3.5 Overview of organisational alignment dimensions and factors 184
6.4 Enablers of perceived organisational alignment 186
6.4.1 Culture-related enabler 186
6.4.1.1 Descriptive statistics 186
6.4.1.2 Exploratory factor analysis 190
ix
6.4.1.3 Correlations between the culture-related enabling factors and
organisational alignment factors 196
6.4.1.4 Correlations between the culture-related enabling factors and
organisational and biographical variables 197
6.4.1.5 Single-statement correlations with organisational alignment
factors 201
6.4.1.6 Different-scaled statement and nominal-scaled questions’
correlations with organisational alignment factors 203
6.4.1.7 Review of culture-related enabling factors 203
6.4.2 Strategy-related enabler 204
6.4.2.1 Descriptive statistics 204
6.4.2.2 Exploratory factor analysis 206
6.4.2.3 Correlations between strategy-related enabling factors and
organisational alignment factors 216
6.4.2.4 Correlations between strategy-related factors and organisational
and biographical variables 218
6.4.2.5 Single-statement correlations with organisational alignment factors 221
6.4.2.6 Comparisons of single-statement Q6.3 with nominal-scaled
organisational and biographical variables 221
6.4.2.7 Review of strategy-related enabling factors 222
6.4.3 Structure-related enabler 223
6.4.3.1 Descriptive statistics 223
6.4.3.2 Exploratory factor analysis 225
6.4.3.3 Correlations between enabling organisational
structure factor and organisational alignment factors 230
6.4.3.4 Correlations between the enabling organisational structure
factor and organisational and biographical data 231
6.4.3.5 Single-statements’ correlations with organisational
alignment factors 233
6.4.3.6 Review of the structure-related enabling factor 235
x