Shared purpose outperforms specialization, new study shows
A new study published in the Strategic Management Journal challenges long-standing assumptions about managerial specialization by examining when organizations perform better by having leaders collectively pursue multiple objectives rather than dividing responsibilities among them. Addressing the growing complexity of modern organizations—where financial, social, environmental, and technological goals increasingly coexist—the research introduces what the authors call the “common purpose advantage.”
Drawing on a computational model of multi-manager firms, the study compares performance under two approaches: “objective myopia,” where managers focus on a single goal, and “common purpose,” where all managers are accountable for the full set of organizational objectives. While conventional wisdom favors specialization, the findings reveal that a shared-purpose approach can outperform it—but only under specific conditions.
The results show that a common purpose advantage emerges when managers actively share practices, begin with sufficiently diverse strategies, and operate in stable or moderately turbulent environments. However, the advantage disappears when strategic diversity is too low, environments are highly turbulent, or the organization pursues too many objectives simultaneously. In particular, the benefits break down when firms attempt to manage more than five objectives, as the cognitive and coordination costs overwhelm performance gains.
By clarifying when shared leadership around multiple objectives enhances performance—and when it does not—the study offers important insights for executives and boards grappling with organizational design in an era of heightened stakeholder expectations. The findings underscore that purpose-driven leadership is not universally beneficial, but contingent on strategic diversity, environmental conditions, and the scope of organizational goals.
To read the full study and explore its implications for leadership and organizational design, access the article in the Strategic Management Journal.
About the Strategic Management Society
The Strategic Management Society (SMS) is the leading global member organization fostering and supporting rigorous and practice-engaged strategic management research. SMS enjoys the support of 3,000 members, representing more than 1,100 institutions and companies in more than 70 countries. SMS publishes three leading academic journals in partnership with Wiley: Strategic Management Journal, Strategic Entrepreneurship Journal, and Global Strategy Journal. These journals publish top-quality work applicable to researchers and practitioners with complementary access for all SMS Members. The SMS Explorer offers the latest insights and takeaways from the SMS Journals for business practitioners, consultants, and academics.
Click here to subscribe to the monthly SMS Explorer newsletter.
Click here to learn more about the programs and opportunities SMS has to offer.
Journal
Strategic Management Journal
Article Title
Common purpose advantage: Reviving a managerial theory of the firm?
No comments:
Post a Comment