Competitive strategy, decision-making style and organisational performance: a contingency approach

Abstract

he choice of decision-making style and the competitive strategy of an organisation play a significant role in gaining competitive advantage and achieving superior performance. The relationship between strategy and organisational performance is a -making processes. The objective of this paper is to examine and analyse the influence of strategic decision-making style and the competitive strategy on organisational performance based on contingency theory. The study focuses on large construction organisations in South Africa using a quantitative questionnaire survey to elicit information. Competitive strategy and decision-making style attributes cannot be measured objectively, thus subjective data were used using opinion scales. The data collected were analysed using regression, correlation and descriptive statistics. The results indicate that organisations adopted decision-making style in their day-to-day operational activities. The findings also show thatdirective style of decision-making shows negative but significant association with the overall performance of organisation while differentiation strategy is negatively but significantly associated with objective performance measure. The findings cannot be generalised to other smaller construction organisations as it was limited to large organisations. Knowledge of the relationship among the variables measured in this paper will be beneficial to both owners and managers of construction organisations because it provides necessary information on how strategic decision-making influences strategy adopted and in turn organisational performance.