The failure of strategic initiatives: perceptions of leaders, managers & employees

Strategic initiatives fail for many reasons. We examine such failure in a major UK-based single site case. We discover the influence of differing perceptions of the strategic initiatives across hierarchical levels, from leaders on the executive board to operational managers and frontline staff, on an organization’s dynamic capability. Adopting an issue management perspective, we present data from a single case study in which differing views between leaders triggering the strategic initiatives and those close to operationalizing them, resulted in a lack of dynamic capability. This is explained by an absence of procedural rationality – a concept reflecting the extent to which a decision-making process and its results are perceived as sensible and relevant. We argue that procedural rationality, enabled by social interaction between hierarchical levels, is vital to building employee commitment to purposeful change and organizational dynamic capability.