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Internal Corporate Communication on Strategy

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Internal corporate communication on strategy and employee commitment International Business Communication Master’s thesis Michele Fenech 2013 Department of Communication Aalto University School of Business Powered by TCPDF (www. tcpdf. org) Internal corporate communication on strategy A CRITICAL COMPARISON OF and employee commitment EUROPEAN DOCUMENTARY EVIDENCES IN THE CONTEXT OF INTRA-COMMUNITY SUPPLIES Master? s Thesis Master’s thesis Katharina ele Fenech ? MichWeber 26. 09. 2012 2013 Spring International Business International Business Communication

Approved by the head of the Department of Management and International Business __. __. 20__ and awarded the grade ___________________ Approved in the Department of Communication / / 20 and awarded the grade AALTO UNIVERSITY SCHOOL OF BUSINESS International Business Communication Mater’s Thesis Mich? le Fenech e ABSTRACT 02-02-2013 Internal corporate communication on strategy and employee commitment Objectives of the study This Master’s thesis had three objectives.

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The ? rst objective was to examine the employees’ needs and preferences of the case company’s internal communication channels, speci? ally internal corporate communication channels that convey the company’s corporate strategy. The second was to investigate success of the internal strategy (corporate) communication by analysing the employees’ perception of their strategy knowledge. The third was to research the relation between internal strategy (corporate) communication (ISCC) and employee commitment. Methodology and theoretical framework The research method was a single-case study and the data was collected using a background study, semi-structured interviews and a survey. The qualitative data was analysed and emerging patterns were identi? d, whereas the quantitative data was statistically analysed using the R programming environment. The theoretical framework presents how internal corporate communication conveys corporate strategy messages via rich and lean media, how the channel attributes affect employee preference and choice, and how the communication and interpretation of the strategy eventually result in commitment. Findings and conclusions of the study In the case company, top-down and primarily one-way internal corporate communication conveying strategy (ISCC) met the employees’ needs better than lateral and two-way internal strategy communication.

The needs were recognised to include gaining strategy knowledge, gaining ability to use the knowledge, and reducing equivocality and uncertainty. Apart from the needs, the employees’ communication channel preferences and satisfaction seemed to be affected more with the channel accessibility and information quality attributes than with the richness of the channel. Internal strategy (corporate) communication (ISCC) was successful because the employees perceived to have corporate strategy knowledge. This strategy knowledge had a strong relationship with employee commitment, especially affective commitment.

The main implication of this study was the recommendation that companies invest resources in internal strategy corporate communication (ISCC), because it was preferred by the employees at the case company, it corresponded to their needs and it contributed to their affective commitment. Key words: international business communication, internal communication, internal corporate communication, strategy communication, communication channels, communication channel attributes, media richness, corporate strategy, employee commitment I AALTO-YLIOPISTON KAUPPAKORKEAKOULU Kansainv? lisen yritysviestinn? pro gradu -tutkielma a a Mich? le Fenech e Sis? inen strategiaviestint? ja ty? ntekij? iden sitoutuminen a a o o ? TIIVISTELMA 02. 02. 2013 Tutkimuksen tavoitteet T? ll? pro gradu -tutkielmalla oli kolme tavoitetta. Ensimm? inen tavoite oli tutkia ty? ntekij? iden a a a o o tarpeita ja n? kemyksi? sis? isen viestinn? n v? lineist? eritoten sellaisista sis? isen yritysviestinn? n a a a a a a a a v? lineist? , jotka v? litt? v? t yrityksen strategiaa. Toinen tavoite oli selvitt? a sis? isen strategiaa a a a a a? a viestinn? n (ISCC) onnistuminen analysoimalla ty? ntekij? iden n? kemys heid? n strategiatiedosa o o a a taan.

Kolmas tavoite oli tutkia sis? isen strategiaviestinn? n (ISCC) ja ty? ntekij? iden sitoutumia a o o sen v? list? suhdetta. a a Tutkimusmenetelm? t ja teoreettinen viitekehys a Tutkimusmetodi on tapaustutkimus, ja aineisto ker? ttiin taustaselvityksell? , haastatteluilla ja a a kyselyll? . Kvalitatiivinen aineisto analysoitiin ja kategorisoitiin, kun taas kvantitatiivinen aia neisto analysoitiin tilastollisesti R-ohjelmistoymp? rist? ll? . Tutkielman teoreettinen viitekehys a o a n? ytt? a kuinka sis? inen yritysviestint? viestii strategiaa joko rikkaan tai niukan median kauta a? a a ta ty? ntekij? lle, kuinka v? lineiden ominaisuudet vaikuttavat ty? ntekij? iden mieltymyksiin ja o o a o o valintaan, ja kuinka viestint? ja strategian tulkitseminen lopulta johtavat ty? ntekij? iden sitoutua o o miseen. Tutkimuksen tulokset ja johtop? at? kset a? o Tapausyrityksen ty? ntekij? t pitiv? t parhaana vertikaalista ja enimm? kseen yksi-suuntaista sis? ist? o a a a a a yritysviestint? a, joka v? litti strategiaa (ISCC). Se t? ytti heid? n tarpeensa paremmin kuin hoa? a a a risontaalinen ja kaksi-suuntainen sis? inen strategiaviestint? . Tarpeiksi tunnistettiin strategiatiea a don saaminen, strategiatiedon k? tt? minen, ja moniselitteisyyden ja ep? varmuuden v? hent? minen. a a a a a Ty? ntekij? iden viestint? v? lineiden preferenssiin ja tyytyv? isyyteen n? ytti vaikuttavan enemm? n o o a a a a a v? lineiden k? ytett? vyys ja tiedon laatu kuin v? lineiden rikkaus. Sis? inen strategiaviestint? (ISCC) a a a a a a on onnistunut siin? ett? ty? ntekij? t kokevat, ett? he tiet? v? t yrityksen strategian. T? ll? stratea a o a a a a a a giatiedolla on vahva suhde ty? ntekij? iden sitoutumiseen, eritoten affektiiviseen sitoutumiseen. o o T? m? n tutkimuksen johtop? at? ksiin kuuluu, ett? yritysten pit? si investoida resursseja sis? iseen a a a? o a a a strategiaviestint? an (ISCC), sill? se on ty? ntekij? iden suosima, se vastaa heid? n tarpeisiinsa ja a? a o o a se vaikuttaa heid? n affektiiviseen sitoutumiseensa. a Avainsanat: kansainv? linen yritysviestint? , sis? inen viestint? , sis? inen yritysviestint? , stratea a a a a a giaviestint? , viestinn? n v? lineet, viestinn? n v? lineiden ominaisuudet, media rikkaus, yritys straa a a a a tegia, ty? ntekij? n sitoutuminen o a II Contents 1 Introduction 1. 1 Research objectives and questions . . . . . . . . . . . . . . . . . . . . . 1. Terminology of this study . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 3 Structure of the thesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . Review of Literature 2. 1 Internal communication . . . . . . . . . . . . . . 2. 1. 1 Internal communication matrix . . . . . . 2. 1. 2 Internal corporate communication . . . . 2. 2 Corporate strategy . . . . . . . . . . . . . . . . . 2. 2. 1 Strategy formation . . . . . . . . . . . . 2. 2. 2 Strategy implementation . . . . . . . . . 2. 3 Communication channels . . . . . . . . . . . . . 2. 3. 1 Media richness theory . . . . . . . . . . 2. . 2 Channel attributes . . . . . . . . . . . . 2. 4 Commitment . . . . . . . . . . . . . . . . . . . 2. 4. 1 Organisational Commitment . . . . . . . 2. 4. 2 Three-Component Model of Commitment 2. 5 Theoretical framework . . . . . . . . . . . . . . 1 3 6 8 9 9 13 15 18 19 23 30 32 41 43 46 50 55 61 61 62 63 64 66 66 72 80 83 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Methodology 3. 1 Research design . . . . . . . . . . . . . . . . . . . . . . . 3. 1. 1 Exploratory and descriptive research purpose . . . 3. 1. 2 Quantitative and qualitative research strategy . . . 3. 1. 3 Case study method . . . . . . . . . . . . . . . . . 3. 2 Data collection and analysis . . . . . . . . . . . . . . . . 3. 2. 1 Background study, interview and survey techniques 3. 2. 2 Statistical data analysis . . . . . . . . . . . . . . . 3. 3 Reliability and validity of this study . . . . . . . . . . . . Findings and Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 III 4. 1 4. 2 4. 3 4. 4 Description of the case company’s strategy and the internal communication channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 1. 1 Description of the company’s generic corporate strategy . . . . . 4. 1. 2 Description of the company’s internal communication channels . Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 2. 1 Strategy knowledge . . . . . . . . . . . . . . . . . . . . . . . . . 4. 2. Employees’ ability to apply corporate strategy . . . . . . . . . . 4. 2. 3 The quantity of strategy information . . . . . . . . . . . . . . . . Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 3. 1 Media richness . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 3. 2 Preference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 3. 3 Information quality and channel accessibility . . . . . . . . . . . 4. 3. 4 Satisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 3. 5 Channel comparisons . . . . . . . . . . . . . . . . . . . . . . . 4. 3. 6 ICC versus non-ICC . . . . . . . . . . . . . . . . . . . . . . . . 4. 3. 7 ICC channels ful? l the employee needs to varying extent . . . . . Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 4. 1 Affective, normative and continuance commitment . . . . . . . . 4. 4. 2 Strategy knowledge against commitment . . . . . . . . . . . . . 4. 4. 3 ICC channels and commitment . . . . . . . . . . . . . . . . . . . 83 84 86 89 90 93 94 96 97 102 106 107 109 112 113 116 117 119 122 125 125 127 128 129 130 5 Conclusions 5. 1 Research summary . . . . . . . 5. 2 Results . . . . . . . . . . . . . 5. 3 Practical implications . . . . . . 5. 4 Limitations of the study . . . . . 5. 5 Suggestions for further research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV List of Tables 1 2 3 4 5 6 7 8 9 10 11 Important terminology of this study . . . . . . . . . . . . . . . . . . . . Internal Communication Matrix (Welch & Jackson, 2007) . . . . . . . . Adjective-Pairs Used In Evaluating Communication Channels . . . . . Background material from case company . . . . . . . . . . . . . . . . . Interview data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The stages of channel choice for the survey . . . . . . . . . . . . . . . . Case study tactics for Four Design Tests (Adapted from Yin (2009, p. 41)) 7 14 42 67 68 70 81 Selected channels and their dimension of internal communication . . . . . 89 The employee channel preference comparison . . . . . . . . . . . . . . . 103 The top three employee channel preferences in terms of media richness and internal communication dimension . . . . . . . . . . . . . . . . . . 105 The employees’ ranking of channels . . . . . . . . . . . . . . . . . . . . 109 V List of Figures 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 The Shannon-Weaver model of communication (Shannon & Weaver, 1949) Internal Corporate Communication (Welch & Jackson, 2007) . . . . . . . Types of Strategies (Mintzberg, 1978) . . . . . . . . . . . . . . . . . . . Strategy Implementation, a link between planned and realizing strategy . Media Richness Hierarchy (Lengel & Daft, 1988) . . . . . . . . . . . . . Media Selection Framework (Lengel & Daft, 1988) . . . . . . . . . . . A Three-component Model of Organizational Commitment . . . . . . . . The Theoretical Framework . . . . . . . . . . . . . . . . . . . . . . . . . A box plot with annotations . . . . . . . . . . . . . . . . . . . . . . . . . A box plot with outlier . . . . . . . . . . . . . . . . . . . . . . . . . . . Scatter plot without and with jitter . . . . . . . . . . . . . . . . . . . . . Scatter chart with Trend . . . . . . . . . . . . . . . . . . . . . . . . . . . Scatter plot without and without outlier . . . . . . . . . . . . . . . . . . Removal of outliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . The correlation between Affective, Normative and Continuance Commitment Scales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Theoretical Framework (Content) . . . . . . . . . . . . . . . . . The employees’ perception of their strategy knowledge . . . . . . . . Ability to apply strategy against knowledge of the strategy . . . . . . Having enough strategy information against knowledge of the strategy The Theoretical Framework (Media) . . . . . . . . . . . . . . . . . . Media richness attribute scores . . . . . . . . . . . . . . . . . . . . Richness and Richness Adjusted . . . . . . . . . . . . . . . . . . . . Channel preference ranking . . . . . . . . . . . . . . . . . . . . . . . Information quality and channel accessibility scores . . . . . . . . . . The employees’ channel satisfaction scores . . . . . . . . . . . . . . ICC and non-ICC channel attribute comparison . . . . . . . . . . . . The Theoretical Framework (Commitment) . . . . . . . . . . . . . . Overall ACS, NCS and CCS results . . . . . . . . . . . . . . . . . . Commitment scales against Strategy Knowledge . . . . . . . . . . . . Knowledge affect commitment . . . . . . . . . . . . . . . . . . . . VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 16 20 25 34 38 51 56 74 75 76 77 79 80 82 90 91 93 95 96 97 99 102 106 108 112 116 117 120 121 31 32 ACS, Strategy Knowledge and Employees’ perspective . . . . . . . . . . 122 The employees’ ? rst channel preference type with respect to strategy knowledge and ACS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 VII Chapter 1 Introduction In recent years, there has been a growing interest in internal communication in corporate communication research (Vercic, Vercic & Sriramesh, 2012).

Internal communication can be described as any “communication with employees internally within the organization” (Cornelissen, 2011, p. 164). Not only does internal communication enable companies to have information and knowledge sharing between employees (D. Tourish & Hargie, 2004a) but it also satis? es and commits them (D. Tourish & Hargie, 2000), and gives them a voice to speak up (Morrison & Milliken, 2000). Internal communication is important, because it affects the bottom line of a company (Yates, 2006) and, quite simply, is a contributing factor to success (Argenti & Forman, 2002; D. Tourish & Hargie, 2004d).

According to Welch and Jackson (2007), one of the recent internal communication theories is based on a stakeholder approach, where internal communication is divided into four interrelated dimensions according to identi? ed stakeholder groups: internal line manager communication, internal team peer communication, internal project peer communication and internal corporate communication. In their new approach to internal communication, Welch and Jackson (2007) concentrate on the fourth dimension, namely internal corporate communication. It is de? ned as “communication between an organisation’s strategic managers and its in1 ernal stakeholders, designed to promote commitment to the organisation, a sense of belonging to it, awareness of its changing environment and understanding of its evolving aims. ” (Welch & Jackson, 2007, p. 193) The role of internal corporate communication is to convey corporate issues such as goals and objectives (Welch & Jackson, 2007). The internal corporate communication channels are mainly one-way channels, such as newsletters and the intranet. The aim of internal corporate communication is to reach four goals, which are belonging, commitment, awareness and understanding of the business environment.

Welch and Jackson (2007) address speci? cally the formal and managed internal communication as opposed to the informal internal communication. Informal internal communication, also known as “grapevine”, includes the constant chat between people at work. The formal internal communication includes the managed company/work related communication. The new stakeholder approach to internal communication is important, because according to Welch and Jackson (2007), it broadens the previous approaches, which only looked at the employees as a single audience.

The four internal communication dimensions give managers a tool to strategically communicate to different stakeholder groups within the company as well as to all employees at once. One of the corporate issues that internal communication conveys is strategy. Strategy has a multitude of de? nitions. Chandler (1962) created the basics for today’s typical strategy de? nition (Mintzberg, 1978; Mustonen, 2009), which is: “the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals” (Chandler, 1962, p. 3) Corporate strategy is important, because it aids the company to reach its long-term object2 ives and, therefore, affects the company’s long-term wealth (Al-Ghamdi, Roy & Ahmed, 2007). After the corporate strategy has been formulated, it needs to be implemented, hence communicated, to the employees. The better the employees understand, accept and embrace the corporate strategy, the more successful the strategy communication is (Aaltonen & Ik? valko, 2002). Understanding the strategy objectives and the signi? cance a of everyone’s contribution has an effect on the commitment and work motivation of the employees (H? ? l? inen & Maula, 2004). a aa In spite of the wealth of research into strategy and strategy communication, there has been a call for more research on internal communication for more than a decade. For example, Argenti (1996, p. 94) points out that “no other corporate communication subfunction offers more of an opportunity for genuinely sought after research than employee [= internal] communication”. Even today, internal communication still calls for more research (Vercic et al. , 2012; Welch & Jackson, 2007). Welch and Jackson (2007, p. 94) call for further research on “internal stakeholders’ [employees] needs and preferences for communication content and media” to improve internal corporate communication. Since the internal corporate communication concept is new, there has been little if any research in a corporate strategy context. Furthermore, internal corporate communication and its ability to contribute to the four goals, namely belonging, commitment, awareness and understanding of the business environment, hasn’t been studied much either. 1. 1 Research objectives and questions This Master’s thesis has three purposes. The ? st purpose is to examine the employees’ needs and preferences of the company’s internal communication (IC) channels, speci? cally internal corporate communication (ICC) channels that convey the company’s corporate strategy. The second is to investigate the successfulness of the internal strategy communication (ISC), speci? cally internal strategy corporate communication (ISCC), regarding the employees’ perception of their strategy knowledge. The third is to research the relation between internal strategy communication (ISC), focusing on internal strategy corporate communication (ISCC), and the employee’s commitment.

The terminology 3 used in this study is described in Section 1. 2. Even though this study focuses primarily on the internal corporate communication (ICC) dimension, the other three internal communication dimensions, namely internal line manager communication, internal team peer communication and internal project peer communication, as well as the informal communication (non-ICC), are also taken into account in this study. This is because the other three dimensions are interrelated with the ICC dimension (Welch & Jackson, 2007); and, because informal communication adds an often used channel.

This study looks both at the general internal strategy communication (ISC), which includes all four formal internal communication dimensions and informal internal communication, and at Welch and Jackson’s (2007) more speci? c internal corporate communication conveying strategy (ISCC). Hereinafter, the general internal strategy communication (ISC) with the focus on internal strategy corporate communication (ISCC) is referred to as ‘internal strategy (corporate) communication’.

Since, this study requires in-depth knowledge about a company’s internal strategy communication (ISC), it was deemed best to focus only on one company instead of looking at multiple companies. Also, since internal strategy communication (ISC) is con? dential, the case company prefers to stay anonymous. The chosen case company for this study is a Finnish daughter company of an international corporation. The daughter company is spread around Finland and has circa 350 employees. More information on the case company and the single case study method is presented in Section 3. . 3. The purpose of this study is transformed into one main and ? ve sub research questions. All of these research questions relate to the case company. The questions are as follows: Main research question: How does internal strategy communication, speci? cally internal strategy corporate communication, meet the employees’ needs and relate to employee commitment? Sub research questions: 4 1. What are the employees’ internal strategy (corporate) communication channel preferences? 2. How do the channels meet the employees’ needs? 3.

How much knowledge do the employees perceive to have regarding the corporate strategy gained through internal strategy (corporate) communication? 4. How committed are the employees? 5. What is the relation between their commitment and strategy knowledge gained through internal strategy (corporate) communication? The main research question studies how internal (corporate) communication conveying the corporate strategy meets the needs of the employees. Also, it studies whether the communication relates to the employees’ commitment towards the company. The ? e sub research questions are studying this main research problem more thoroughly. The ? rst and second sub research questions aim to identify what the employees’ internal strategy (corporate) communication channel preferences are and how the channels meet the employees’ needs. Internal communication media include different kinds of communication channels. On the one hand, it includes two-way internal communication channels such as performance appraisals, and on the other hand, it includes one-way internal corporate communication channels, such as newsletters and the intranet. The channel related needs will be identi? d from the literature. The emphasis in the ? rst and second sub questions is on the employees’ viewpoint on the channels and their characteristics. The third sub research question studies how much knowledge the employees perceive to have regarding the corporate strategy. It is assumed that strategy knowledge is gained and understood via several different ways, one of them being internal strategy (corporate) communication. The needs of the employees for internal strategy (corporate) communication are to receive the message, understand it, and gain the required strategy knowledge.

The employees’ level of strategy knowledge and their ability to use this knowledge in their everyday work will help to determine whether the internal strategy (corporate) communication is effective and successful. The fourth and ? fth sub research questions investigate the commitment level of the case 5 company employees, and the relation between their commitment and their strategy knowledge. As has been discussed earlier, ICC leads to four goals, which are commitment, belonging, awareness and understanding of the business environment. Due to the scope restrictions in this study, only the ommitment goal is researched. The organisational commitment theory will be used to analyse how committed the employees are to the company. The gained strategy knowledge will be seen as a result of internal strategy (corporate) communication. Therefore, the employees’ strategy knowledge acts as a middleman in determining the relation between internal strategy corporate communication and the employees’ commitment. This Master’s thesis is well positioned in the research ? eld of International Business Communication, because this study is set in an international business setting researching communication.

The Finnish case company is a subsidiary of a multinational company, with subsidiaries all over the world. There is close co-operation between the parent and subsidiary companies, providing an international setting for the business. This study explores internal strategy (corporate) communication in the ? eld of business. The speci? c interest is in the case company’s corporate strategy, how this company communicates the strategy to its employees, how the employees perceive the communication and whether the communication relates to their organisational commitment. 1. 2

Terminology of this study Since the ‘internal communication’, ‘internal corporate communication’ and ‘internal strategy corporate communication’ related concepts and terminology used in this study are very similar to each other, there is the potential for misunderstandings. In order to increase clarity of this study, a summary of the key terminology is provided. The terminology, the abbreviations and their descriptions are presented in Table 1. As can be seen in Table 1, the key terminology used in this study consists of variations about ‘internal communication’ and ‘strategy’.

In each chapter, the ? rst time a term is mentioned, it is spelled out entirely with the abbreviation in brackets as a reminder. After 6 Table 1: Important terminology of this study Abbr. IC Description Terminology Internal communication Internal corporate communication ICC Formal non-ICC Internal line manager communication Internal project peer communication Internal team peer communication Informal Small talk, corridor chats ISC Overall internal communication happening in a company. Could be both one-way or two-way communication.

Includes all four formal internal communication dimensions and informal communication Predominantly one-way communication between an organisation’s strategic managers and its employees on corporate issues Other internal communication that is not ICC. It includes most two-way communication, formal and informal, on work related issues between all the employees (line manager to subordinate, employee to employee, project peer to project peer, team peer to team peer) of the company 7 ISCC Internal strategy communication Internal strategy corporate communication

Formal Internal communication conveying strategy information in a company. Could be both one-way or two-way communication. Includes all four formal internal communication dimensions and informal communication Predominantly one-way communication on precisely the corporate strategy conveyed from the strategic managers to all the employees more or less simultaneously Internal strategy line manager communication Internal strategy project peer communication Internal strategy team peer communication Informal Strategy small talk, corridor chats

Other internal communication on strategy that is not ISCC. It includes non-ISCC most two-way communication, formal or informal, on strategy between all the employees of the company that the abbreviation is usually used. However, in selected places, like Section 2. 1 on internal communication, the term ‘internal communication’ is spelled out instead of using the abbreviation IC in order to make the difference towards ICC more prominent. 1. 3 Structure of the thesis The four main sections in this Master’s thesis are the literature review, the methodology, the ? dings and discussion, and the conclusions. The literature review presents the most relevant literature for this study, including literature on internal communication, strategy, internal communication channels and commitment. The ? nal section of the literature review explains the theoretical framework of this study. The methodology chapter presents the research design, methods and data, and reliability of the study. The ? ndings and discussion chapter explains ? ndings on the internal strategy (corporate) communication channels, employee preferences and need ful? ment, employees’ perception of their strategy knowledge, and employees’ overall organisational commitment and its relation to the gained strategy knowledge. All of the ? ndings are discussed throughout this chapter. Finally, the conclusion chapter reviews the research summary, explains the practical implications of this research, presents the limitations of the study, and proposes suggestions for further research. 8 Chapter 2 Review of Literature This chapter will review literature that is relevant to this Master’s thesis. All of the sections in this chapter ? st review more general literature on the topic at hand and then dive into the more speci? c theory or model that is of relevance to this study. The ? rst section presents research related to internal communication in general and, more speci? cally, to the internal communication matrix and the internal corporate communication (ICC) concept. The second section addresses the formulation and implementation of strategy. The third section highlights communication channels, in general, and then more speci? cally focuses on the media richness theory and communication channel attributes.

The fourth section elaborates on commitment, organisational commitment and the threecomponent model of commitment. The last section presents the theoretical framework of this study. 2. 1 Internal communication The word communication is based on the Latin words “communis” and “communicare” (Wiio, 1977). “Communis” means sharing in common and “communicare” means to make common, hence communication is something that is being done together (Wiio, 9 1977). Wiio (1970) de? nes communication simply as the exchange of information between the sender and the receiver.

One of the earliest ways to describe communication is the Shannon-Weaver model of communication, which includes more elements than just the sender and the receiver (Shannon & Weaver, 1949). This model is presented in Figure 1. Transmitter Information message (Encoder) Source signal Channel Noise Source received signal Receiver (Decoder) message Destination Figure 1: The Shannon-Weaver model of communication (Shannon & Weaver, 1949) In Figure 1 the sender encodes a message, transmits it via a channel to the receiver who decodes the message.

Along the way there is noise, which refers to any disturbance that could affect the reception of the message (Shannon & Weaver, 1949). What makes this communication successful, according to Al-Ghamdi et al. (2007), is that the information transferred from the sender to the receiver is understood by the receiver. For a long time now, it has been recognised that the Shannon-Weaver model of communication is outdated because it cannot fully grasp the complex process of human communication, nevertheless, it is one of the best known models (Bowman & Targowski, 1987).

It is important to note that communication can be both internal and external (Cornelissen, 2011). Traditionally it was easy to distinguish between the internal communication between the employees in a company and the external communication to, for instance, customers. Nowadays, however, with the arrival of technology and new communication tools (e-mail, intranet, videos, online newsletters) the borders between internal and external communication have become fuzzy (Cornelissen, 2011). For the purpose of this study, it is assumed that internal communication can exist as its own concept separate from external communication.

This study will only focus on the internal aspects of communication. Internal communication is important because it helps to share information and know10 ledge with everyone at the company (D. Tourish & Hargie, 2004a). It informs (Smith, 2008), satis? es and commits the employees (D. Tourish & Hargie, 2000), as well as, engages them (Kress, 2005) and gives them a voice to speak up (Morrison & Milliken, 2000). Especially in today’s rapidly changing business world, with all the downsizing, outsourcing and restructuring, internal communication is important (Vercic et al. 2012). It has emerged as a critical function, because organisational leaders need better management skills in regards to employees (Vercic et al. , 2012). Welch and Jackson (2007) argue that internal communication, speci? cally ICC, explained in Subsection 2. 1. 2, leads to commitment, and commitment leads to better performance (Meyer & Allen, 1991) and, therefore, internal communication is crucial for business success. It is the key to good management (Jay, 2005) and it produces better results (Smith, 2008).

Internal communication affects the bottom line of a company, by decreasing employee turnover and increasing market premiums, shareholder returns and employee engagement (Yates, 2006), therefore, leading to success (Argenti & Forman, 2002; D. Tourish & Hargie, 2004d). The growing importance of internal communication is visible in many initiatives, for instance, the setting up of the Institute of internal communication in the UK, with the aim of understanding and studying the ? eld (Vercic et al. , 2012). Already in the 6th century St.

Benedict said: “Smaller organisational decisions should be taken by senior individuals, but large ones should be decided as a group. Everyone’s voice must be heard to avoid murmurs and back-biting” (Smith, 2008, p. 10), which indicates that internal communication has existed for a long time and it is not only a phenomenon of today’s business world (Smith, 2008). Although the actual practice of internal communication has probably existed for quite some time, the concept itself is relatively new, having started in the US and spread from there to Europe (Vercic et al. , 2012) in the 20th century (Clutterbuck, 1997; Smith, 2008).

Even though internal communication has been studied directly or indirectly by many researchers such as Argenti (1996); J. Grunig and Hunt (1984); Jefkins (1988); Kalla (2005); Quirke (2000); Smith (2008); Stone (1995); D. Tourish and Hargie (2004b); Wiio (1970); Wright (1995); Yates (2006), there has been a considerable gap in the academic research and understanding of internal communication (Welch & Jackson, 2007). This is highlighted with the following quote. “no other corporate communication subfunction offers more of an opportunity for genuinely sought after research than employee [= internal] communic11 ation” (Argenti, 1996, p. 4) It is dif? cult to de? ne internal communication because it has several, often interchangeably used, synonyms such as change management (Smith, 2008), employee communication (Argenti, 1996; Smidts, Pruyn & Van Riel, 2001), employee relations (Argenti, 1996; J. Grunig & Hunt, 1984; Quirke, 2000), integrated internal communications (Kalla, 2005), internal public relations (Jefkins, 1988; Wright, 1995), internal relations (J. Grunig & Hunt, 1984), industrial relations (Smith, 2008), reputation management (Smith, 2008), staff communication (Stone, 1995), staff communications (D. Tourish & Hargie, 2004b) and transformation (Smith, 2008).

These synonyms add to the complexity of de? ning internal communication. The term internal communication has been chosen for this study due to the interest in Welch and Jackson’s (2007) ICC concept; for details see Subsection 2. 1. 2. In addition, the term internal communication is preferred by corporate communication theorists such as Van Riel (1995) and J. Foreman and Argenti (2005). There have been very few useful and appropriate de? nitions of internal communication. De? nitions have either been very simple, for example “communication with employees internally within the organization” (Cornelissen, 2011, p. 64), or describing something else entirely. For example, a very widely used de? nition of internal communication is that of Frank and Brownell (1989), which more accurately seems to be a de? nition of organisational communication instead of internal communication (Welch & Jackson, 2007). “the communications transactions between individuals and/or groups at various levels and in different areas of specialisation that are intended to design and redesign organisations, to implement designs, and to co-ordinate day-today activities” (Frank & Brownell, 1989, p. -6) Appropriately, Welch and Jackson (2007) addressed this gap in the academic research and understanding of internal communication and rede? ned internal communication. Welch and Jackson’s (2007) de? nition is adopted for this study, because of the interest in ICC 12 speci? cally. The de? nition is presented below. “the strategic management of interactions and relationships between stakeholders within organisations across a number of interrelated dimensions including, internal line manager communication, internal team peer communication, internal project peer communication and internal corporate communication” (Welch & Jackson, 2007, p. 84) This section continues by explaining Welch and Jackson’s (2007) internal communication matrix with its four formal internal communication dimensions in Subsection 2. 1. 1. Then, Subsection 2. 1. 2 de? nes the internal corporate communication concept and its four goals (Welch & Jackson, 2007). 2. 1. 1 Internal communication matrix The internal communication matrix created by Welch and Jackson (2007) consists of four formal internal communication dimensions, which are the earlier mentioned internal corporate communication (ICC), internal line manager communication, internal team peer communication and internal project peer communication.

The internal communication matrix helps to separate the ICC dimension from the other internal communication dimensions. Welch and Jackson (2007) take a stakeholder approach to internal communication. This is done in order to address the criticism and recent calls for research. L’Etang (2005, p. 522) criticises that “employees are too often treated as a single public” with respect to internal communication in a company. In addition, Forman and Argenti (2005) call for more research on employees as the target audience of internal communication.

Welch and Jackson (2007) address these issues by differentiating stakeholder groups at the company, while at the same time still focusing on communication that reaches all the employees. Hence, Welch and Jackson (2007) take a stakeholder approach to internal communication. 13 According to Freeman (1984, p. 25), a stakeholder is: “any group or individual who can affect or is affected by the achievement of the ? rm’s objectives”. Stakeholder theory, together with internal communication, add to the identi? ation of participants that form stakeholder groups at different organisational levels: all employees, strategic management, day-to-day management, work teams and project teams (Welch & Jackson, 2007). This implies the earlier mentioned four interrelated dimensions of internal communication (Welch & Jackson, 2007). These four internal communication dimensions in a management context form the internal communication matrix, which is visible in Table 2. Table 2: Internal Communication Matrix (Welch & Jackson, 2007) Dimension 1. Internal line management communication 2.

Internal team peer communication 3. Internal project peer communication 4. Internal corporate communication Level Line managers/ supervisors Team colleagues Project group colleagues Strategic managers/ top management Direction Predominantly two-way Two-way Two-way Predominantly one-way Participants Line managersemployees Employeeemployee Employeeemployee Strategic managers-all employees Content Employees’ roles Personal impact, e. g. appraisal discussions, team brie? ngs Team information, e. g. team task discussions Project information, e. g. project issues Organisational/ corporate issues, e. . goals, objectives, new developments, activities and achievements As Table 2 shows, the four dimensions of internal communication are followed by the organisational level, the direction, participants and content of the internal communication, respectively. The level, direction, participants and content of the internal communication differ according to the internal stakeholder group in question. The ? rst dimension, internal line manager communication, is between the line managers and the employees of a company at the line manager/supervisor level.

This communication is mainly two-way, between superior and subordinate with the content being, for instance, about employee roles (Welch & Jackson, 2007). The second dimension, internal team peer communication, is two-way communication between team members, employee to employee, with the content being team information (Welch & Jackson, 2007). The third dimension, internal project peer communication, is two-way communication between project peers, employee to employee, with the content being project informa14 tion.

The difference here between a team and a project is that teams are work teams in departments and divisions while projects have a wider scope with dispersed teams (Welch & Jackson, 2007). The fourth dimension, ICC, is strategic one way communication from the strategic managers/top management of the company to all employees. This communication deals with corporate issues such as goals, objectives and achievements (Welch & Jackson, 2007). Internal line, team peer and project peer communication have been considerably researched by J. Grunig et al. (1992).

Therefore, the focus of this study will be on ICC, which has been largely ignored to date. 2. 1. 2 Internal corporate communication The internal corporate communication (ICC) concept developed by Welch and Jackson (2007) is communication between the strategic top of the company and the rest of the company. It focuses on all the employees and, therefore, ? lls an existing void in research (Forman & Argenti, 2005). Internal corporate communication is predominantly oneway and includes issues such as company goals and objectives. The concept of ICC is presented in Figure 2, with the de? ition of ICC being: “communication between an organisation’s strategic managers and its internal stakeholders, designed to promote commitment to the organisation, a sense of belonging to it, awareness of its changing environment and understanding of its evolving aims” (Welch & Jackson, 2007, p. 186) Figure 2 shows that the strategic managers, who are situated in the circle in the middle of Figure 2, send corporate messages, shown as arrows in Figure 2, to all the company employees, who are situated in the circle depicting internal environment.

Figure 2 also points out that internal corporate communication, where the strategic managers are sending corporate messages to the employees, leads to four goals, which are visible in the thick one-way arrows: commitment, awareness, belonging and understanding. In addition, there are four smaller double headed arrows between the internal environment and the external micro environment. These arrows imply two-way communication, which ex15 External MacroEnvironment Employees Commitment External MicroEnvironment Corporate Messages Understanding Strategic managers Awareness Belonging Employees

Internal Environment Figure 2: Internal Corporate Communication (Welch & Jackson, 2007) ists in the other three internal communication dimensions: internal manager communication, internal team peer communication and internal project peer communication. Finally, there is also an external macro environment in Figure 2. The double headed arrows in Figure 2 show that even though the main messages are predominantly one way, the strategic managers are still getting feedback and information from their employees in other ways, for instance, through internal team peer communication (Welch & Jackson, 2007).

Welch and Jackson (2007) note that the one-wayness of the internal corporate communication concept can be criticised; however, it would be unrealistic to assume that the company could have face-to-face discussion with every single employee on every issue at hand. Therefore, it is important that the messages sent from the top are consistent and this could be done with mediated means of communication (e. g. external news release, corporate television advertisement, corporate web site, internal newsletter).

Internal mediated communication can be considered symmetrical: “if 16 its content meets the employees’ need to know rather than the management’s need to tell” (L. Grunig, Grunig & Dozier, 2002, p. 487). The channels of ICC are a focus in this study, which is to answer the call for further research highlighted in the following quote. “Research into employee preferences for channel and content of internal corporate communication is required to ensure it meets employees’ needs” (Welch & Jackson, 2007, p. 87) The aforementioned goals of the ICC concept are to increase commitment of the employees to the organisation, develop their awareness of the environmental change, increase their belonging to the company and develop their understanding of the changing objectives. Out of these four goals the commitment goal is of speci? c interest to this study. Commitment is like a positive attitude among employees (De Ridder, 2004; Meyer & Allen, 1997; Mowday, Porter & Steers, 1982) and a degree of loyalty towards an organisation (Welch & Jackson, 2007).

It is de? ned as “the relative strength of an individual’s identi? cation with, and involvement in, a particular organisation” (Mowday, Steers & Porter, 1979, p. 226). Meyer and Allen (1997) identify three types of workplace commitment, namely affective, continuance and normative. Since the concept of commitment and Meyer and Allen’s (1991) three types of commitment are relevant for this Master’s thesis, they will be further reviewed in Section 2. 4. Belonging is described by Cornelissen (2004, p. 8) as “a ‘we’ feeling [–] allowing people to identify with their organizations”. Internal communication has an effect on this degree of identi? cation (Smidts et al. , 2001, p. 1052). The need to belong is a strong motivator for people (Baumeister & Leary, 1995). Therefore, it has to be remembered that organisations could use a persuasive strategy to in? uence the employees (Cheney, 1983) or even use internal communication as a tool to try to manipulate employees (Moloney, 2000). Due to this Welch and Jackson (2007) point out that ICC has an ethical aspect.

It is important for the employees to be aware of the environmental change, and understand how it impacts the organisation (Welch & Jackson, 2007), because the organisational environment is dynamic. This dynamic environment has three levels, namely macro, micro 17 and internal (Palmer & Hartley, 2002), which are also shown in Figure 2. These environments are subject to change, and change in the business world has been substantial in the past years for instance due to technology (Cornelissen, 2004).

Due to these environmental changes and the implications they could mean, it is vital for the employees to be aware and understand the change (Welch & Jackson, 2007). In addition, to just plainly communicating the current situation of the organisation to the employees, the organisation should even communicate about the external opportunities and threats of the company. Effective internal corporate communication should enable employees to understand the constant changes the company is going through (Welch & Jackson, 2007), thus reducing employees’ uncertainty. In sum, ICC is of speci? interest in this study, because it hasn’t yet been extensively researched. Internal communication is important for companies, because it contributes to their success (Argenti & Forman, 2002; D. Tourish & Hargie, 2004d). When a stakeholder approach is taken, internal communication can be divided into four interrelated dimensions (Welch & Jackson, 2007). These dimensions together form the internal communication matrix (Welch & Jackson, 2007). Out of these four dimensions ICC is the strategic top addressing all the employees simultaneously about the company goals and objectives (Welch & Jackson, 2007).

The goals of the ICC include giving the employees a feeling of belonging and commitment, as well as raising the employees’ awareness and understanding of the company’s changing environment (Welch & Jackson, 2007). 2. 2 Corporate strategy Corporate strategy is important, because it aids the company to reach its long-term objectives and, therefore, affects the company’s long-term wealth (Al-Ghamdi et al. , 2007). Understanding these objectives and the signi? cance of everyone’s contribution has an effect on the commitment and work motivation of the employees (H? m? l? nen & Maula, 2004), a aa which is a contributing factor to an effective company (Koch, Radvansk? & Sklen? r, y a 2011). 18 The origin of the word strategy comes from the Greek word “strategos”, “a general” (Bracker, 1980, p. 219), referring to skills of warfare (Cummings, 1993; Lahti, 2008). Furthermore, the Greek verb “stratego” stands for ”plan[ning] the destruction of one’s enemies through effective use of resources” (Bracker, 1980, p. 219). The word strategy was originally linked to war and politics, and only after World War II was there a need to link the word to business (Bracker, 1980).

The ? rst ones to connect the strategy concept to business were Von Neumann and Morgenstern with their game theory (Bracker, 1980), where strategy is the set of rules that players follow (Mintzberg, 1978). Chandler (1962) created the basics for today’s typical strategy de? nition (Mintzberg, 1978; Mustonen, 2009): ”the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals” (Chandler, 1962, p. 13) Bracker (1980, p. 221) sums up many of the strategy de? itions to: “entails the analysis of internal and external environments of a ? rm to maximize the utilization of resources in relation to objectives”. Strategy quite simply put is a ”plan” (Mintzberg, 1978, p. 935). This section continues by explaining the strategy formation with Mintzberg’s (1978) theory and a brief review on vision and mission related research in Subsection 2. 2. 1. Then, the strategy implementation is explained in Subsection 2. 2. 2. Issues covered include the importance of the implementation process, the de? nition, Aaltonen and Ik? alko’s (2002) a theory, the importance of managers in the process, some practical issues and the dif? culties of strategy implementation. Finally, the subtle difference between internal strategy communication (ISC) and internal strategy corporate communication (ISCC) is discussed. 2. 2. 1 Strategy formation The strategy process starts with the company’s corporate strategy formation. Mintzberg’s (1978) theory is one of the many theories that explains the theoretical strategy formation. 19 A more practical view of strategy formation is found in research on vision and mission statements. Mintzberg’s (1978) theory

Mintzberg (1978) developed a strategy formation theory, where there are two kinds of strategies, the intended and the realised. According to Mintzberg (1978), in the mainly theoretical strategy formation research, the majority of strategy de? nitions have one thing in common: they are a deliberate set of guidelines that determine future decisions. This type of a strategy is called an intended strategy, and it has the following three characteristics (Mintzberg, 1978). First, it is explicit. Second, it is created purposefully and consciously; and third, it is made in advance to help decision-making.

Opposite to the intended strategy is the realised strategy, which is the actual strategy that is put into action. In order to expand the strategy formation research, Mintzberg (1978, p. 935) de? nes strategy as “a pattern in a stream of decisions”. He then claims that these two kinds of strategies, intended and realised, can be combined in three different ways, resulting in ? ve types of strategies, namely the intended, unrealised, deliberate, emergent and realised. These ? ve types of strategies and their relations are presented in Figure 3. Intended Strategy Unrealized Strategy

Deliberate Strategy Realized Strategy Emergent Strategy Figure 3: Types of Strategies (Mintzberg, 1978) As can be seen in Figure 3, the intended strategy is to the left implying a starting point, and the realised strategy is to the right implying an end result. Mintzberg (1978) reasons that the intended and the realised strategy, at least theoretically, can be combined in the following three ways. First, intended strategies that get realised without anything left 20 out or added are called deliberate strategies. Second, intended strategies that do not get realised are called unrealised strategies.

This could be caused by issues such as unrealistic expectations. Third, unintended strategies that get realised are called emergent strategies. These could develop over time, unintended, out of a pattern of continuous decisional behaviour. Mintzberg and Waters (1985) suggest that for a strategy to realise itself exactly as it was planned, three conditions need to be met. First, the strategy needs to be planned in detail, in a way that it can be communicated clearly. Second, everyone in the company needs to know it. Third, the strategy implementation is not in? uenced from outside of the company (Mintzberg & Waters, 1985).

At least two out of these three conditions need communication, which emphasizes the role that communication plays in the strategy process, especially in the implementation, which is presented in Subsection 2. 2. 2. Vision and mission Vision and mission have been recognised as a part of the more practical view on the strategy formulation process for all types of organisations (Darbi, 2010; David, 1989). However, David (1989) argues that the strategy formulation process consists of not only the creation of the vision and mission statement, but also of the SWOT-analysis (strengths, weaknesses, opportunities and threats) and the identi? ation of the long-term objectives, to name a few. H? m? l? inen and Maula (2004) point out that it is common practice that a aa companies de? ne at least vision, mission, strategy (a more limited concept, not to be confused with the main corporate strategy) and value statements during their strategy process. These four components could be seen as the most central operational guidelines of a company (H? m? l? inen & Maula, 2004). a aa Vision and mission statements are important, because they in? uence strategy and organisational performance (Darbi, 2010).

Vision and mission statements give direction and clarity to the employees; and create a common sense of purpose (Campbell, 1997; Ireland & Hirc, 1992; Klemm, Sanderson & Luffman, 1991; Matejka, Kurke & Gregory, 1993; Mullane, 2002). In addition, these statements also motivate (Ireland & Hirc, 21 1992), shape behaviours (Collins & Porras, 1991), develop commitment (Klemm et al. , 1991) and ? nally in? uence employee performance positively (Mullane, 2002). Vision describes the desired future state of a company (Darbi, 2010; H? m? l? inen & a aa Maula, 2004).

The content and length of this description may differ (Darbi, 2010). In addition, G. Johnson, Scholes and Whittington (2008) argue that the vision should show how the company produces value for its stakeholders. A vision gives strategic direction to a company and, furthermore, is the foundation for the mission and other related goals (Darbi, 2010). “Vision statements are supposed to be challenging and ambitious yet workable enough to evoke employees’ ingenuity as far as its realisation is concerned” (Darbi, 2010, p. 96) A mission is the company’s current purpose (Darbi, 2010; H? m? l? inen & Maula, 2004). aa It answers the question: “what is our business? ” (David, 2009, p. 85), and expresses the corporate strategy in terms of scope and value creation (David, 2009). The mission should convey the company’s strategic direction to the stakeholders (Bartkus, Glassman & McAfee, 2004). Hence the company should identify the most important stakeholders in their mission statement and assure that their needs are met (Mullane, 2002). The mission should speci? cally correspond to the values and expectations of the stakeholders (Darbi, 2010). The last two corporate strategy components presented are values and strategy.

Values refer to the company embraced principles (H? m? l? inen & Maula, 2004). Strategy shows a aa how the company is going to achieve its vision and mission (H? m? l? inen & Maula, 2004). a aa This type of strategy is a more limited concept in the whole big corporate strategy process, and its purpose seems to be to show a practical way to reach the goals. It seems to be rather confusing to have two separate concepts named the same, which de? nitely can be seen as a problem in the strategy implementation phase. This could potentially be solved by renaming the more limited strategy concept as something else.

However, the word strategy has also many other meanings (Jones, 2008), and it has become a synonym for 22 different words. For instance, strategy could refer to a plan, a position, a purpose or a long term view (Jones, 2008) and in the adjective form of “strategic” even important or signi? cant (Alvesson, 2002). There is some criticism in regards to the usefulness and bene? ts of these vision and mission statements (Simpson, 1994). In terms of the content, for instance Simpson (1994) and Goett (1997) note that the majority of these vision and mission statements sound very general and are “rarely useful” (Goett, 1997, p. ). Hussey (1998) notes that there are semantic problems with vision and mission, therefore what someone thinks of as a vision, another one would say is a mission. Jones (2008) points out that the terms vision and mission have as many de? nitions as people want to give them and they are very overused. Collins and Porras (1999) go a step further and indicate that vision is one of the most overused words in the English language; it is also the least understood. In addition to the criticism against the content, there is also criticism against the process of formulating the vision and mission.

Mullane (2002) noted that it is not really the content itself but rather the process of formulating the vision and mission, and how they are then implemented. These statements are seen as top management’s compulsory work that will inevitably end in the employees’ desk drawers or walls, forgotten. So, are the vision and mission statements useful after all? Well, the literature that supports the usefulness and relevance does outweigh the opposite literature (Darbi, 2010), implying that the vision and mission statements are useful.

However, the problem of not everyone knowing and understanding the vision and mission statements remains, and should be addressed with a well thought-out strategy implementation, which takes this into consideration. 2. 2. 2 Strategy implementation It is not enough if only the top management knows about the corporate strategy; it also needs the employees embracing the parts of the strategy that affect their work (H? m? l? inen a aa & Maula, 2004). Therefore, a successful strategy implementation is vital for any com23 pany (Aaltonen & Ik? alko, 2002). Strategy communication, being a major part of a strategy implementation, is important, because it is essential to operational ef? ciency of a company (Kagan, 2004; Roy, 2001). The more successful the strategy communication (Aaltonen & Ik? valko, 2002), the better the employees understand, accept and a embrace the corporate strategy and, hence, the more successful the strategy implementation. H? m? l? inen and Maula (2004) concluded from Juholin’s (1999) work that strategy a aa communication also increases work satisfaction.

Strategy communication does not only affect culture, general well-being and performance, but when it is missing, there might be moral problems and weaker performance (Kazoleas & Wright, 2001). In H? m? l? inen and Maula’s (2004) viewpoint strategy implementation means those cona aa crete choices and decisions that employees do everyday at work. Noble (1999, p. 120) de? nes strategy implementation “as the communication, interpretation, adoption, and enactment of strategic plans”. Communicating strategy to the employees is a central part of strategy implementation (Alexander, 1985; Noble, 1999; Roy, 2001).

Strategy communication, as part of the strategy implementation process, is both written and oral communication about the corporate strategy. It is usually communicated in a top-down direction (Aaltonen & Ik? valko, 2002). The communication is about the responsibilita ies and tasks the employees need to know so that they can ful? l the corporate strategy (Alexander, 1991). Naturally, a strategy might need to be communicated to other stakeholder groups as well, such as customers, suppliers, partners, analysts, media, authorities, local community, NGO’s and competitors (H? m? l? inen & Maula, 2004).

Steckel (2000) even points out a aa that companies commonly communicate the strategy to partners and customers and forget the employees. However, in this study the emphasis is put on internal strategy corporate communication (ISCC) and, therefore, the only receivers considered are the employees of a company. Aaltonen and Ik? valko (2002) developed a strategy implementation theory based on earlier a research (Mintzberg, 1978; Noble, 1999; Pettigrew, 1987). They adopted the strategy formation theory from Mintzberg (1978) and the strategy implementation components from Noble (1999).

Aaltonen and Ik? valko’s (2002) strategy implementation theory is a presented in Figure 4. 24 vision planned strategy Strategy implementation: communication interpretation and adoption actions realizing strategy Figure 4: Strategy Implementation as a link between

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