Strategic Choice, Organizational Learning, Top Management Team Processes and Firm Performance: A Critical Literature Review

Abstract

Organizations are in a constant search for ways of distinguishing themselves from rivals and competitors in a bid to outperform them and secure sustained competitive advantage. It has been argued that organizations that will truly excel in the future will be those that discover how to tap people’s commitment and develop the capacity to learn at all levels in an organization. The advantage maybe seen as resting in the strategic choices that these organizations make including the choice to engage in organizational learning and to ultimately transform into learning organizations. Strategists (TMTs) within a strategic group must share commonalities in determining strategic direction of their firms and in nurturing and deploying resources to realize chosen strategies. It is explicit that organizational outcomes including organizational culture, organizational learning and performance are a function of the strategic choices that organizations make. These strategic choices have been termed by population ecologists as response strategies to environmental opportunities and threats. Other researchers have taken the stance that strategic choices are constrained by the environment in the environment dependence and determinacy framework. It has been separately argued and determined that strategic choices are to a great extent influenced by leadership, goal agreement, the level of cohesion and the collective vision of TMTs. These TMT processes have a bearing on organizational learning and consequently performance. Various conceptual linkage shave been identified between the variables of the study. However, these linkages have neither been concretized nor integrated. This paper seeks to verify the conceptual linkages between the variables and to develop a conceptual framework for interrogating the joint influence of Organizational Learning (OL) and TMT processes on the relationship between strategic choices and firm performance.