IDEAS home Printed from https://ideas.repec.org/a/sae/sajbmc/v10y2021i1p21-34.html
   My bibliography  Save this article

The Role of Trust in the Strategic Management Process: A Case Study of Finnish Grocery Retail Company Kesko Ltd

Author

Listed:
  • Kirsti Malkamäki
  • Esa Hiltunen
  • Eeva Aromaa

Abstract

Previous strategy management studies have devoted scant attention to the role of trust in the strategic management process (SMP). The purpose of this study is to investigate trust in the management of a grocery trade business. Prior literature was reviewed to deepen the current understanding of trust in the SMP, and then explored through a case study on a Finnish grocery retail company, Kesko Ltd. The study was conducted by employing a qualitative research methodology and is based on an interview with the president of Kesko, who is intensively involved in the SMP. This study stresses the consideration of trust development in strategy work. The findings indicate that trust considerations in the strategic choices of the top management team can provide efficiency, innovation, and engagement in strategy implementation. Research Questions In this article, we ask how trust develops during three phases of the strategy process: strategy formulation, strategic choices, and strategy implementation. Links to Theory Our analysis of trust development focuses on the five most operationalized dimensions of trust: (a) ability and competence, (b) benevolence, (c) integrity, (d) affective-based trust, and (e) cognitive-based trust (McEvily & Tortoriello, 2011). Strategic management is separated into three interlinked phases: strategic formulation, strategic choice making, and strategy implementation (Johnson et al., 2008). Phenomenon Studied The case focuses on trust development in the strategy management process. Case Context The context of the case is a participatory strategic management process in a large Finnish grocery retail chain in a highly competitive and concentrated market. The role of trust development was studied in the case company between the K-retailers, who are independent entrepreneurs, and Kesko management staff and actors responsible for management and constant development of the business model. Findings This study shows how trust emerged as a result of participatory practices and dialogue between actors from different levels of organization in the strategy formulation phase. Increased understanding and contribution to strategy empowered top management to make new and brave strategic choices. This study illustrates how consistency between the strategic choices and actions for implementation enhanced trust among the organizational actors, who felt a sense of enhanced engagement in the implementation of the new strategy in their everyday work. Discussions This study highlights the role of trust in strategy formulation, strategic choices, and strategy implementation. It contributes to the understanding of trust in the SMP, which has not been widely researched in previous literature. Based on our results, we suggest that trust between parties is earned and evolves at each of the three stages of the SMP.

Suggested Citation

  • Kirsti Malkamäki & Esa Hiltunen & Eeva Aromaa, 2021. "The Role of Trust in the Strategic Management Process: A Case Study of Finnish Grocery Retail Company Kesko Ltd," South Asian Journal of Business and Management Cases, , vol. 10(1), pages 21-34, April.
    • Handle: RePEc:sae:sajbmc:v:10:y:2021:i:1:p:21-34
    DOI: 10.1177/22779779211006801
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/22779779211006801
    Download Restriction: no
    File URL: https://libkey.io/10.1177/22779779211006801?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Saku Mantere, 2013. "What Is Organizational Strategy? A Language-Based View," Journal of Management Studies, Wiley Blackwell, vol. 50(8), pages 1408-1426, December.
    2. Andrew C. Inkpen & Steven C. Currall, 2004. "The Coevolution of Trust, Control, and Learning in Joint Ventures," Organization Science, INFORMS, vol. 15(5), pages 586-599, October.
    3. Sascha L. Schmidt & Matthias Brauer, 2006. "Strategic Governance: how to assess board effectiveness in guiding strategy execution," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(1), pages 13-22, January.
    4. Reinhard Bachmann, 2011. "At the crossroads: Future directions in trust research," Journal of Trust Research, Taylor & Francis Journals, vol. 1(2), pages 203-213, June.
    5. Chahrazad Abdallah & Ann Langley, 2014. "The Double Edge of Ambiguity in Strategic Planning," Journal of Management Studies, Wiley Blackwell, vol. 51(2), pages 235-264, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shameen Prashantham & Mark P. Healey, 2022. "Strategy as Practice Research: Reflections on its Rationale, Approach, and Contributions," Journal of Management Studies, Wiley Blackwell, vol. 59(8), pages 1-17, December.
    2. Kari Jalonen & Henri Schildt & Eero Vaara, 2018. "Strategic concepts as micro‐level tools in strategic sensemaking," Strategic Management Journal, Wiley Blackwell, vol. 39(10), pages 2794-2826, October.
    3. Latusek, Dominika & Vlaar, Paul W.L., 2018. "Uncertainty in interorganizational collaboration and the dynamics of trust: A qualitative study," European Management Journal, Elsevier, vol. 36(1), pages 12-27.
    4. Virpi Sorsa & Eero Vaara, 2020. "How Can Pluralistic Organizations Proceed with Strategic Change? A Processual Account of Rhetorical Contestation, Convergence, and Partial Agreement in a Nordic City Organization," Organization Science, INFORMS, vol. 31(4), pages 839-864, July.
    5. Kari Jalonen & Henri A. Schildt & Eero Vaara, 2018. "Strategic concepts as micro‐level tools in strategic sensemaking," Post-Print hal-02312245, HAL.
    6. Julia VINCENT PONROY & Patrick LÊ & Camille PRADIES, 2019. "In a Family Way? A Model of Family Firm Identity Maintenance by Non-Family Members," Working Papers 2019-015, Department of Research, Ipag Business School.
    7. Armin Wiedenegger & Alexander Kern & Maria Rupprechter, 2012. "The Choice of Legal Form and its Effects on Good Governance: A Case Study of an Austrian Professional Soccer Club," Ekonomika a Management, Prague University of Economics and Business, vol. 2012(3), pages 23-43.
    8. Jiang, Shisong & Gong, Limin & Wang, Hua & Kimble, Chris, 2016. "Institution, strategy, and performance: A co-evolution model in transitional China," Journal of Business Research, Elsevier, vol. 69(9), pages 3352-3360.
    9. James K. C. Chen & Thitima Sriphon, 2022. "Authentic Leadership, Trust, and Social Exchange Relationships under the Influence of Leader Behavior," Sustainability, MDPI, vol. 14(10), pages 1-32, May.
    10. Rogerio Morais & José Dirnece Tavares Paes, 2020. "Analysis Of Factors Supporting Swot In Organizational Strategic Planning," Management Strategies Journal, Constantin Brancoveanu University, vol. 48(2), pages 38-51.
    11. Huang, Ming-Chang & Chiu, Ya-Ping, 2020. "A knowledge tension perspective on management control and performance in international joint ventures," Journal of International Management, Elsevier, vol. 26(4).
    12. Boaventura, Joao Mauricio & Carnaúba, A.A.C. & Todeva, Emanuela & Azevedo, A.C. & Armando, Eduardo, 2016. "Governance Structures and Trust: a Study of Real Estate Networks," MPRA Paper 76785, University Library of Munich, Germany.
    13. Turner, Karynne L. & Monti, Alberto & Annosi, Maria Carmela, 2021. "Disentangling the effects of organizational controls on innovation," European Management Journal, Elsevier, vol. 39(1), pages 57-69.
    14. Paul Knott & Chatchai Thnarudee, 2022. "Strategic planning as inter-unit coordination: An in depth case study in Thailand," Asia Pacific Journal of Management, Springer, vol. 39(1), pages 201-224, March.
    15. Bukhvalov, A. & Alekseeva, O., 2016. "International joint venture acquisition by a foreign or local partner," Working Papers 6439, Graduate School of Management, St. Petersburg State University.
    16. Yuan, Yang & Feng, Bo & Lai, Fujun & Collins, Brian J., 2018. "The role of trust, commitment, and learning orientation on logistic service effectiveness," Journal of Business Research, Elsevier, vol. 93(C), pages 37-50.
    17. Holger Patzelt & Dean A. Shepherd, 2008. "The Decision to Persist with Underperforming Alliances: The Role of Trust and Control," Journal of Management Studies, Wiley Blackwell, vol. 45(7), pages 1217-1243, November.
    18. Carole Couper & A. Rebecca Reuber & Shameen Prashantham, 2020. "Lost that lovin’ feeling: The erosion of trust between small, high-distance partners," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(3), pages 326-352, April.
    19. Long, Chris P., 2018. "To control and build trust: How managers use organizational controls and trust-building activities to motivate subordinate cooperation," Accounting, Organizations and Society, Elsevier, vol. 70(C), pages 69-91.
    20. Eric W. K. Tsang, 2020. "Family firms and internationalization: An organizational learning perspective," Asia Pacific Journal of Management, Springer, vol. 37(1), pages 205-225, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:sajbmc:v:10:y:2021:i:1:p:21-34. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.