Research Article: 2021 Vol: 20 Issue: 6S
Ahmed Hashem Alsaqal, AL-Iraqia University
Hameed Ali Ahmed, AL-Iraqia University
Ali Jooda Abdullah, AL-Iraqia University
This study aims to analyze the role of strategic physiognomy in avoiding strategic drift in a sample of private commercial banks in the province of Baghdad the importance of the study lies in the scarcity of research that dealt with strategic physiognomy and its role in avoiding strategic drift in banks, the research sample. Therefore, this study is one of the first studies that dealt with these variables This study addresses a real problem that affects organizations, which is strategic drift The questionnaire was used to collect information by 155 of the administrative leaders working in banks, the research sample The results confirmed the existence of an effect of strategic physiognomy in avoiding strategic drift. The study concluded that there is an inverse correlation between strategic physiognomy and strategic drift Also, there is an effect of strategic physiognomy in strategic drift. The study recommended that the administrative leaders in the banks should pay attention to strategic physiognomy and adopt it as a philosophy that enables them to avoid strategic drift.
Strategic Physiognomy, Strategic Drift, Environment, Strategic Physiognomy
Business organizations seek to survive and compete in the light of the highly volatile environment, and this requires developing strategies in innovative ways that anticipate the changes that will occur in the environment. This is what commercial banks must do, as they must extrapolate events and behaviors and produce individuals who have the ability to anticipate events. That is, they have a strategic Physiognomy that enables them to detect weak signals of changes and enables them to respond and adapt to these changes, i.e., they have anticipation and speed of reaction. Commercial banks may be exposed to stagnation and the inability to keep pace with the rapid changes occurring in their environment which leads them to fall into a strategic drift, which means that the researched banks fail their environment, which ultimately leads them to failure, deterioration of their performance and declining profits. This requires the departments of commercial banks to strengthen strategic Physiognomy, knowledge of what is happening, and intelligence in anticipating changes, as well as planting strategic Physiognomy in individuals working within the surveyed banks.
Strategic Physiognomy
The Concept of Strategic Physiognomy
Physiognomy refers to observing the personal characteristics of individuals the origin of this strategy goes back to the ancient Greek era it is used in the decision-making and judgment-making process. Organizations depend on the nature of the strategies that are formulated and dealt with in the context of changes Organizations are always looking for ways and means to achieve success in strategy and work to build a personality with strategic Physiognomy (Zhang et al., 2017). That physiognomy crystallized in the phenomenon of the individual characteristics of the person they are alerted to something others do not understand him did not realize, It is synonymous with intelligence and the science that studies the features of the face or body. In addition to being a means of distinguishing between individuals, The Oxford Dictionary defines it as “the supposed and imagined art of judging an individual’s personality by the characteristics of the face and other features” (Mohammed & Saaed, 2021). Strategic physiognomy includes the act of observing an individual's personality traits of facial appearances or traits; Strategic physiognomy is popular in making decisions and judgments. Each facial feature may indicate a meaning, such as conscientiousness, assertiveness and self-esteem. Through strategic physiognomy it can intelligently predict individuals and changes in the behavior of individuals and changes in the behavior of organizations (Muhemmed, 2018). It represents a tool that organizations use continuously in the past years, as a result of the rapid changes that occur in competition if the strategy physiognomy working to strengthen the competitiveness of the organization lost in the highly competitive environments (Hussain, 2018). Has indicated (Kashkol, 2020) that strategic physiognomy means that the organization is heading towards its goals through a good reading of the competitive environment in which it operates, and this is done by empowering and inspiring individuals to the point of reaching a deep understanding. Researchers point out that the strategy physiognomy means the organization to go proactive in its activities its activities and implanting the concepts of physiognomy in its members so that they can read the future changes that will occur in the competitive environment of the organization.
The Importance of Strategic Physiognomy
The importance of strategic physiognomy for the organization is highlighted through its contribution to the organization’s survival and continuity within the competition through the possession of its members by intuition and the possibility of detecting changes and familiarity with environmental variables. Also, leaders' possession of strategic physiognomy will lead to the formulation and implementation of strategies in a flexible manner in line with the changing environment, as well as contributing to predicting the behavior of individuals working in the organization. The importance of strategic physiognomy lies in the following: (Weber & Tarba, 2014)
• Strategic physiognomy includes a mixture of actions carried out by the leadership of an organization that operates in a dynamic environment that is volatile and whose changes cannot be expected. Through strategic physiognomy, organizations adapt to turbulent environments.
• The strategic physiognomy gives organizations high flexibility in light of the continuous differences in the services provided and the structures of the organization that are experiencing intense changes.
• Strategic physiognomy gives the speed to sense and respond to environmental changes well by investing in resources and maintaining the flexibility and agility needed to respond to environmental opportunities and threats.
The Dimensions of Strategic Physiognomy
Empowerment
Empowerment is often described as feeling aware of one's surroundings and being able to control outcomes or achieve goals Empowerment gives employees the power to act and make decisions for them (Bergquist, 2018). It means giving authority or power to a person to perform a particular role. Empowerment focuses on giving higher administrative power and confidence to working individuals to carry out their tasks and roles freely. Which makes them feel comfortable and increases their responsibilities and creates a positive feeling among them, It enables them to control work and performance through delegation of authority (Al-Dulaimi, 2019). Empowerment represents the value of sharing power and employing strategies that create a positive work environment that includes enhancing employee independence and decision- making (Hall, 2021). Empowerment is closely related to job satisfaction, This means that the higher the level of administrative empowerment, the greater the feeling of job satisfaction among individuals This emphasizes the importance of administrative empowerment and its role in achieving high levels of job satisfaction Through participation in decision-making instead of individual responsibility in its making, which would contribute to increasing job satisfaction (Hussain, 2018).
Inspiration
Inspiration is a motivational state that motivates people to create ideas Inspiration is important for strategic physiognomy, and understanding inspiration is the biological basis that creates creative ideas if individuals develop their ideas into products and services (Spinou, 2020). Inspiration is one of the most important factors in how the creative process works. Inspiration is generally concerned with the question of how new ideas reach people. Despite its importance, it is only a step in the creative process (Hussain, 2018). Inspiration drives individuals to creativity and this indicates its importance. The creative individual is considered a wealth greater than any wealth. Investing in the development of the human element is the most successful source of investment and human resources are one of the most important factors that contribute to the survival and continuity of organizations through achieving the competitive advantage of sustainability due to creative capabilities (Lin, 2017).
Deep Understanding
Organizations are beginning to realize the importance of deep strategic understanding and are beginning to meet their needs for this type of intelligence As it sought to match the patterns of intelligence (emotional, competitive and commercial) and train its leadership to develop its elements and manage them effectively. Develop a strategic understanding of organizational leaders, As well as preparing to provide information to decision makers and formulate strategies and plans in organizations Decision making in the business organization must be based on a scientific methodology and on a number of technical tools and techniques that rationalize decisions to reach the best results that guarantee the organization's distinction, This depends on a deep understanding of any of them (Muhemmed, 2018). Determining the strategy depends entirely on the organization's mission, capabilities, challenges and external opportunities, Future decisions should be based on an in-depth understanding of the organization's capabilities and should reflect appropriate awareness to suit the organization and its environment (Hussain, 2018). Deep understanding encourages thinking and learning and helps people and organizations Failure to understand and contain this concept reduces the individual's ability to deal in depth with complex concepts, This deep understanding is not only related to the specific field of knowledge, but is related to the processes of solving the same problem, And the individuals’ understanding of the thought processes that he has, and the capabilities he possesses. A deep and good understanding of what he can do and implement from them (Abdel-Hassan, 2016).
Strategic Drift
The Concept of Strategic Drift
The idea of strategic drift appeared in 1988 and the first to use the term strategic drift was (Johnson) If he refers to strategic drift as the incompatibility between changes in the organization's strategy and changes in its environment, especially changes in markets (Johnson, 1988). This explains why some organizations succeed while others fail, And what action should you take when the organization fails or is in distress, Which is what most international organizations such as (Shell) and (KODAK) and other organizations have gone through (IKPE- ADEGWU, 2015). As the organization is subject to strategic drift because it gradually adapts to environmental change in the context of change that requires more than just adaptation, As a result, the organization's strategy moves away imperceptibly from its appropriate strategy to confront the new environmental forces at work, which leads to an increasing gap between its actual place and where it should be (White, 2004). Strategic drift occurs, which is the gradual failure of existing strategies to address the competitive position of the organization there is a tendency to develop strategies incrementally based on history and culture but it fails to maintain an upward pace in the changing business setting (MAOSA, 2015). Strategic drift is referred to as small, imperceptible changes in strategies in the course of implementation, which are initially invisible to managers, but gradually accumulate and become apparent when it is too late to change anything (Sidunova & Shokhnekh, 2019). It represents a situation where leadership and management fail to timely identify subtle changes in the business environment, appropriate response and late response, which leads to the escalation of the problem (Alshebli, 2016). Researchers see the shortcomings that occur in the organization's strategy, its weak response, and its inability to keep pace with environmental changes which leads to its failure and weak competitive advantage and deterioration of its performance.
The Reasons for the Strategic Drift
The root cause of strategic drift is the inability to adapt to changing conditions in the sector in which the organization operates which leads to a shift in the external environment and the emergence of new demands for consumers and thus the loss of competitive advantage (Sidunova & Shokhnekh, 2019). This occurs as a result of weak leadership at the management level, which leads to reorganization and requires a change in the management style or the leadership structure as a whole, on this basis, strategic drift is the sole responsibility of leadership failure (IKPE-ADEGWU, 2015). (Johnson) identified a number of reasons that lead organizations to strategic drift: (Okuyemi, 2018).
• The problem of hindsight: Managers may be overly wary of change, and what they may bet is a winning strategy based on what they may feel is an innovative business in the market.
• Building on the familiar: A manager may see a change in the environment but poor ability to understand unseen and unfamiliar changes in these circumstances managers tend to follow strategies that have outperformed the past.
• Core Rigidities: The organization was built on unique capabilities and gained a competitive advantage through the inability of others to achieve its capabilities, So it is difficult to change these unique abilities.
• Relationship become shackles: The organization has succeeded in building an excellent relationship with customers, suppliers and employees and this relationship is key and effective for the organization, which means that the change in the organization's strategy requires changes in its relations.
The Dimensions of Strategic Drift
The Lack of Communication
Organizations are built on people, Relationships between people cannot exist without communication, All organizations are created and organized through a process of communication and are maintained by the people who communicate with each other (Tankosic et al., 2017). No organization can achieve its goals without a network Communication is the beating heart of the organization, as there is no organization without the presence of types of communication through which information is transmitted inside and outside the organization (Haddah & Bougrab, 2014). Communication is the means by which organizations are created, designed and sustained, Organizations are dynamic groups. They are jointly shaped by the continuous interactions carried out by the communication function (Johansson et al., 2019). As a result of the important role played by communication, any weakness in communication leads to a clear defect in the performance of the organization, Weak communication is indicated as being among the most important sources of strategic drift because of its overall importance and its implicit impact on each of the causes that lead to the occurrence of strategic drift (Fichet & Giraud, 2007).
The Lack of Strategic Flexibility
Strategic flexibility is the main key to the organization through which it can manage changes and bridge the gap between changes in the organization's strategy and changes in its environment (Fichet & Giraud, 2007). And formulating a strict strategy is not effective; therefore, organizations must inject clarity and flexibility into their strategic and operational processes in order to avoid inertia that leads the organization to strategic drift (Alshebli, 2016). Signs of strategic drift begin to appear as a result of weak strategic flexibility and due to lack of renewal in the strategy although there is a cumulative change in the environment (Danciu, 2010). The lack of flexibility means a weak organization's ability to make changes in strategy and structure in order to adapt to the changes that occur in its environment The reason for this weakness is due to the leadership’s reliance on the same strategies and structures that succeeded in the past without modifying or renewing them (Al-Obaidi, 2017). The weakness of strategic flexibility does not cause a lack of response to change, but rather makes the response slow, which leads to the organization not keeping pace with the changes taking place in its environment (Al-Anzi, 2016).
Decline in Performance
Performance degradation is a late signal when it is noticed that damage has already occurred. The deterioration of performance is noted through lower revenues, lower market share, and lower profits at this stage, the organization becomes turbulent as the objectives shift to cost-cutting, the next stage will be to recognize the need to change corporate strategy and initiate transformational change (Sammut-Bonnici, 2015). The effects of strategic drift are evident, when there is a significant deterioration in performance or customer satisfaction, the company has only one option. Transformative change by changing its products and focusing on the market and how it is organized (Andersson & Jansson, 2012). It also shows the decline in performance and strategic drift as a result of the failure to address the important issues surrounding the organization, planning for the selection of tasks to be performed to achieve organizational goals, As a result of the leadership’s weakness in directing the activities of the organization’s members in the direction of organizational goals and controlling the information that measures performance, Comparing current performance with predetermined performance and identifying and taking adjustment actions (Okuyemi, 2018).
The Problem
Organizations seek to achieve profits, continuity, and win the largest number of customers in order to remain in competition in the shadow of highly volatile environments, Therefore, organizations resort to searching for knowledge, resources and skills that enable them to compete, prepare for and respond to sudden changes in their environment Through flexible strategies and familiarity with strategic intuition that enables it to respond to changes and avoid delays in the environment and deterioration of performance Thus, strategic drift is avoided And the question of the problem of the study is “How can the organization of the research sample use strategic physiognomy to avoid strategic drift”
Objectives of the Study
• Identify the availability of strategic dimensions of physiognomy in the study sample organizations.
• Identifying the level of availability of the dimensions of strategic drift in the study sample organizations.
• Identifying the impact of strategic physiognomy in avoiding strategic drift in the study sample organizations.
Hypotheses
• First Hypothesis: There is a significant correlation between strategic physiognomy and strategic drift.
• Second Hypothesis: There is a significant effect of strategic physiognomy on strategic drift.
The Hypothetical Study Model
Study Population and Sample
The study population is represented by eight private commercial banks, each of which are: (Sumer Commercial Bank, Khaleeji Commercial Bank, Ashur International Bank, Babel Bank, Al-Mansour Investment Bank, Trans-Iraq Bank, The United Bank, the National Bank of Iraq), As a result, our study population consists of managers who work in these banks, A simple random sample of 155 people from the administrative leaders working in banks was used. Questionnaires were distributed to them.
Honesty and Constancy
Table (1) shows that the values of Cronbach's alpha coefficient, which ranged between (0.788-0.964) for the variables and dimensions, were found to be greater than (0.70). This indicates that the variables and dimensions have an appropriate internal consistency. As for the internal consistency coefficient of the scale as a whole, its value was (0.874). It enjoyed a high evaluation, and these results indicate that the study scale (resolution) enjoyed a high level of stability. This is evidence of the extent of its internal consistency and the stability of its paragraphs, and evidence of the extent to which the scale can be repeated and give the same results, and therefore other statistical tests can be carried out based on these results.
Table 1 Results Of Consistency Between Components Of The Scale |
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The Scale | Empowerment | Inspiration | Deep understanding | Strategic Physiognomy | The Lack of Communication | The Lack of Strategic Flexibility | Decline in Performance | Strategic Drift | The Questionnaire in General |
Alpha Kornbach coefficient | 0.882 | 0.835 | 0.882 | 0.939 | 0.788 | 0.814 | 0.934 | 0.935 | 0.874 |
Description and Analysis of the Study Variables
Strategic Physiognomy Variable
Table (2) shows the arithmetic mean, standard deviation, coefficient of variation, the order of importance in relation to the dimensions in general, and the direction of the answer to the opinions of the researched sample. Overall, the strategic physiognomy variable achieved an arithmetic mean (2.25), a weak level, a standard deviation (0.59), and a coefficient of difference (26.37). This indicates the lack of dispersion of the sample answers about the existence of strategic physiognomy in banks.
Table 2 Ranking Of Importance According To The Coefficient Of Variation For The Dimensions Of The Strategic Physiognomy Variable |
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Dimensional order | The direction of the answer | Variation coefficient | standard deviation | Arithmetic mean | Dimensions variable physiognomy strategy | ? |
3 | I do not agree | 30.99 | 0.69 | 2.23 | Empowerment | 1 |
1 | I do not agree | 27.11 | 0.58 | 2.15 | Inspiration | 2 |
2 | I do not agree | 29.42 | 0.7 | 2.37 | Deep understanding | 3 |
26.37 | 0.59 | 2.25 | - strategic physiognomy variable |
As for the order of importance of the dimensions, the results indicate that the dimension (inspiration) came in the first order in terms of importance, with a mean of (2.15), a weak level and a standard deviation of (0.58), Its coefficient of variation was (27.11), which indicates the lack of dispersion and homogeneity of this dimension. While the dimension of empowerment came at the third level in terms of the arrangement of dimensions with an arithmetic mean (2.23) and a weak level and a standard deviation of (0.69), as the coefficient of variation reached (30.99), this means that there is the highest percentage of dispersal in this dimension. We conclude from this that private commercial banks contain creative ideas and that individuals can develop their ideas into products or services, Private commercial banks have strict and centralized decision-making structures and do not delegate some authority to working individuals.
Strategic Drift Variable
Table (3) shows the arithmetic mean, standard deviation, coefficient of variation, the order of importance in relation to the dimensions in general, and the direction of the answer to the opinions of the researched sample, The strategic drift variable overall achieved an arithmetic mean (3.50), a weak level, a standard deviation (0.68) and a coefficient of difference (19.31), Which indicates the lack of dispersion of the sample answers about the presence of strategic drift in the banks of the research sample.
Table 3 Order Of Importance Depending On The Coefficient Of Variation For The Dimensions Of The Strategic Drift Variable |
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Dimensional order | The Direction of The Answer | Variation Coefficient | Standard Deviation | Arithmetic Mean | Dimensions of The Strategic Drift Variable | ? |
2 | neutral | 20.01 | 0.67 | 3.33 | The lack of communication | 1 |
1 | Agreed | 18.69 | 0.66 | 3.54 | The lack of strategic flexibility | 2 |
3 | neutral | 25.45 | 0.92 | 3.62 | Decline in Performance | 3 |
19.31 | 0.68 | 3.5 | Strategic Drift Variable |
As for the order of the importance of the dimensions, the related results showed that the highest value was at the dimension (the lack of strategic flexibility), with a mean (3.54), a mean level, and a standard deviation (0.66), as its coefficient of variation reached (18.69), The achievement of this dimension shows the lowest coefficient of variation, which indicates the lack of dispersion of the sample answers about the presence of strategic drift in banks. As for the lowest value, it came at the dimension (deterioration of performance) with an arithmetic mean (3.62), a weak level, and a standard deviation (0.92), as its coefficient of variation reached (25.45), Where it turns out that there is the largest percentage of dispersal in this dimension. This means that the strategies of private commercial banks are characterized by inertia and the inability to move quickly and respond to environmental changes.
Hypothesis Testing
First: To test the main research hypothesis (first), which states (there is a significant correlation between strategic physiognomy and strategic drift)
The correlation coefficient between strategic physiognomy and strategic drift was (0.399-**) at the significance level (0.000), which is less than the significance level (0.05), This means rejecting the null hypothesis and accepting the alternative hypothesis, which states (there is a significant correlation relationship between strategic physiognomy and strategic drift) i.e., the higher the interest banks physiognomy strategy fell so strategic drift. This means that the researched private commercial banks can give workers some powers and support their participation in decision-making Stimulating their inspiration, creativity, and recommendations for deep understanding, which leads to avoiding stagnation and strategic shortcomings.
Table 4 Correlation Values Between The Dimensions Of Strategic Physiognomy And Strategic Drift |
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Relationship Strength | Relationship Direction | Correlation Value and Significance Level | Dimensions Variable Physiognomy Strategy | Dependent Variable | |
Acceptable | Negative inverse | 0.385-** | Correlation value | Empowerment | Strategic Drift |
0 | Sig | ||||
Acceptable | Negative inverse | 0.387-** | Correlation value | Inspiration | |
0 | Sig | ||||
Acceptable | Negative inverse | 0.315-** | Correlation value | Deep understanding | |
0 | Sig | ||||
Acceptable | Negative inverse | 0.399-** | Correlation value | physiognomy strategy | |
0 | Sig | ||||
4 | The Number of Accepted Hypotheses | ||||
100% | Percentage | ||||
Correlation is significant at the 0.01 level (2-tailed).** Sample volume =155 |
Second: To test the second main hypothesis, which stipulates the following (There is a significant effect of strategic physiognomy in strategic drift), as the analysis will be done according to the simple linear regression model, as follows:
Strategic drift=4.518 -0.455 (physiognomy strategy)
The value of (F) computed between strategic physiognomy in strategic drift (29.007) was recorded. And it is greater than the tabular (F) value of (3.89) at the level of significance (0.05). Accordingly, we reject the null hypothesis and accept the alternative hypothesis, which states (there is a significant effect of strategic physiognomy in strategic drift) At the level of significance (5%), i.e., with a degree of confidence (95%), and through the value of the coefficient of determination (²R) of (0.159) Is clear that the strategy physiognomy explain the percentage of (15%) of the variables that occur on the strategic drift As for the remaining (85%) percentage, it is due to other variables not included in the research model. It is clear from the value of the marginal slope coefficient (β) of (-0.455) that an increase in strategic intelligence by one unit will lead to a decrease in strategic drift by (45%), The value of the constant (α) was recorded in equation (4.518), meaning when the strategic intuition is equal to zero, the strategic drift will not be less than this value. This means that private commercial banks can use empowerment, inspiration and deep understanding to mitigate the effects of shortfalls in strategies and their deterioration. Any use of strategic physiognomy dimensions to avoid strategic drift.
Table 5 Analysis Of The Dimensions Of Strategic Physiognomy In Strategic Drift |
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Indication | Sig | (t) Computed Value | (F) Computed Value | The coefficient of determination (R2) | The value of the marginal slope coefficient (β) | Constant Limit Value (α) | Dependent Variable | Dimensions variable physiognomy strategy |
Indicative | 0 | -5.155- | 26.574 | 0.148 | 0.376- | 4.334 | Strategic Drift | Empowerment |
Indicative | 0 | -5.184- | 26.87 | 0.149 | 0.449- | 4.459 | Inspiration | |
Indicative | 0 | -4.098- | 16.797 | 0.099 | 0.304- | 4.218 | Deep Understanding | |
Indicative | 0 | -5.386- | 29.007 | 0.159 | 0.455- | 4.518 | Physiognomy Strategy | |
Tabular (F) value=3.89; Tabular (t) value =1.660; Sample volume =155 |
Organizations today are exposed to great challenges in light of the highly volatile environment at various levels, intense competition and rapid changes. This requires organizations to find innovative ways to detect changes, respond quickly to them, and be prepared to adapt to them. Therefore, the attention of the organizations was directed towards the strategic physiognomy, which makes the organizations sense environmental and behavioral changes by producing individuals who have the strategic physiognomy that enables them to anticipate changes in the environment and consumer behavior, This gives the organization a future orientation, flexibility in response, excellence in performance, and as a result, avoiding strategic drift.
The researcher concludes through the results of the study that the banks of the research sample did not give the strategic physiognomy sufficient attention despite its great importance for organizations as it adopts most of the leading organizations of strategic physiognomy important activity that can respond to anticipate environmental changes and rapid response. It was also noted through the results that the banks of the research sample suffer from strategic drift and its negative effects that make them inflexible and lagging behind the changes that occur in their environment.
The study proved through the results that there is an inverse correlation between strategic physiognomy and strategic drift That is, the more interest in strategic physiognomy and its consolidation among individuals, the less strategic drift That is, the increase in strategic physiognomy leads to an increased avoidance of strategic drift in the banks of the research sample, The results of the study also demonstrated the existence of a significant effect of strategic physiognomy on strategic drift That any increase in the strategic physiognomy banks will lead to avoid strategic drift.
The study recommends the necessity of increasing the interest of organizational leaders in banks with the philosophy of strategic physiognomy and the adoption of it by banks Because of its effect on avoiding strategic drift, And the development of strategic physiognomy of the workers through empowerment, inspiration and deep understanding of what they can enhance communication and achieve flexibility in the strategy and the speed of response and achieve outstanding performance.