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http://jht.sagepub.com/ Strategy Implementation Success: The Moderating Effects of Size and Environmental Complexity and the Mediating Effects of Involvement
Robert J. Harrington and K. W. Kendall Journal of Hospitality & Tourism Research 2006 30: 207 DOI: 10.1177/1096348005285917 The online version of this article can be found at: http://jht.sagepub.com/content/30/2/207
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JOURNAL OF 10.1177/1096348005285917 Harrington, Kendall HOSPIT / STRA ALITY TEGY & TOURISM IMPLEMENT RESEARCH ATION SUCCESS
STRATEGY IMPLEMENTATION SUCCESS: THE MODERATING EFFECTS OF SIZE AND ENVIRONMENTAL COMPLEXITY AND THE MEDIATING EFFECTS OF INVOLVEMENT
Robert J. Harrington University of Guelph K. W. Kendall Washington State University
This study examines the importance of foodservice managers’ and organizational members’involvement in the implementation of strategy. The study assesses the direct and moderating effects of managers’perception of environmental complexity and firm size on level of involvement during strategy implementation. Findings indicate that firms operating in an environment of greater complexity bring more organizational members into the implementation process. Firm size interacted with complexity to drive higher involvement levels for small and large firms. Furthermore, foodservice firms that utilized implementation processes that involved more organizational members across the hierarchy achieved greater success in strategy implementation. Level of involvement was shown to mediate the relationship between external complexity and implementation success. KEYWORDS: strategy implementation; organizational involvement; foodservice; environmental complexity; firm size
Past research indicates that involvement by managers and other organizational members in strategy implementation and other organizational processes can affect a variety of firm outcomes. Many authors have suggested a relationship between organizational processes and the internal or external context of a firm (Ashmos, Duchon, McDaniel, & Huonker, 2002; Harrington, 2004; Nutt, 1989; Okumus, 2001; Schmelzer & Olsen, 1994). In particular, researchers have indicated a relationship between involvement and participation in the strategyimplementation process and manager-implementation preferences (Nutt, 1989), organizational size (Schmelzer & Olsen, 1994), environmental complexity (Harrington, 2004), and environmental uncertainty (Okumus, 2001). This study draws on this research stream from the hospitality and general business literature
Journal of Hospitality & Tourism Research, Vol. 30, No. 2, May 2006, 207-230 DOI: 10.1177/1096348005285917 © 2006 International Council on Hotel, Restaurant and Institutional Education
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1984. the impact of these constructs on strategy implementation success in the foodservice environment.. and number of foodservice units on the level of organizational member involvement during the implementation of strategy (e. 1993. Schmelzer & Olsen. and Nutt (1989) provide descriptions of generic types of implementation processes or tactics used by manufacturing and health care organizations. 1994. case studies (Chorengel & Teare. The primary goal is to examine these relationships in the foodservice industry to determine the importance of the direct. 2005.. Therefore. organizational structure. Previous research on these issues is based on theoretical models (Ashmos et al. and action plans across the organization” (Harrington. 2005. Implementation research has been predominantly qualitative using naturally occurring groups (e. moderating and mediating effects of the environment.com at Jomo Kenyatta University of on February 28. firm size. Harrington. particularly in the areas of Downloaded from jht. Harrington. Costa. & Eccles. 2004). 2003). INVOLVEMENT IN STRATEGY IMPLEMENTATION For the purposes of this study. 2002. strategy implementation is defined as “the process used to implement specific firm policies. firm size. This study tests proposed moderating and mediating relationships in a theoretical framework of strategy implementation proposed by Harrington (2005). 1994. programs. 1998). tests are performed assessing the mediating effects of involvement on environmental complexity and implementation success. Involvement has generally been operationalized in two dimensions: breadth of involvement and depth of involvement (Harrington. involvement levels. or small sample sizes (Harrington. Additional empirical research needs to be done to triangulate previous research studies and enhance the external validity of earlier findings. 1994). Schmelzer & Olsen.208 JOURNAL OF HOSPITALITY & TOURISM RESEARCH to examine relationships between the external environment. this study extends previous research using an empirical approach and a foodservice sample. Studies by Schmelzer and Olsen (1994). Bryson & Bromiley. 1989).g.g. Second. Teare. First. 2004). and number of units on organizational member involvement in the implementation of strategy. The concept of involvement by various organizational members in the strategic process has been a frequent area of discussion. 2014 . 2004. Harrington (2004). ultimately.. Nonaka (1988). Okumus. tests are performed to examine hypothesized direct and moderating effects of environmental complexity. 321). This situation indicates that this area of research remains in the hypothesis generation stage and is much less developed than the strategic planning and formulation areas of research. The limited research is particularly evident for the restaurant and foodservice industry. Nutt. p. Bourgeois & Brodwin. Earlier work in the general business literature by Bourgeois and Brodwin (1984). This study follows the latter conceptualization and defines depth of involvement as the extent to which organizational members from different hierarchical levels of a firm are involved in the strategy-implementation process. and Parsa (1999) provide discussions on the implementation process used in hotel and restaurant situations.sagepub. and. Okumus (2001).
an intervention-managed process seemed highly desirable and when implementation tactics matched the internal context of the firm. Schmelzer and Olsen (1994) suggested that involvement by organizational members facilitated gathering support. participation and involvement are required throughout the organization. 2001. Ritchie & Riley.. 2014 . Because the implementation process involves a variety of facets. 2004. In the typology. commitment and information and increased the likelihood of properly allocating resources. level of strategy or tactic. Harrington suggested that firms adapt these dimensions in the strategy-making process to the external environment and indicated that complexity was a primary driver of the individualisticcollective dimension. level of analysis. Peng & Litteljohn. and institutional factors to create a hybrid type fit of the strategic process as a whole. 1999). Lioukas. he illustrated the need for appropriate choices of strategy-making process models for firms in the foodservice industry based on an “it depends” thought process. 2004. Kendall / STRATEGY IMPLEMENTATION SUCCESS 209 strategic decision making and strategy formulation. Schmelzer & Olsen. Although Nutt did not consider the external environment in his study. culture. and proactive behaviors across the organization (Barringer & Bluedorn. 1989).. the level and style of involvement by organizational members has generally been suggested to be dependent on the organizational context (Bradach. research indicates a variety of relationships between external complexity or uncertainty and the internal complexity of organizational processes (Ashmos et al. implementation success increased significantly. Nutt.. Nutt (1989) found that managers (generally) preferred low-involvement tactics due to the ease of application but that for most situations. A predominately individualistic approach can be generically described as “top-down” and a predominately collective as “bottom-up” or participative (e. & Chambers. several studies have suggested a relationship between higher involvement of organizational members and higher firm success (Chorengel & Teare.sagepub. firm size. innovative. 1998). 2001. Harrington (2005) presented a strategy-making process typology of ideal types. Teare et al. Mintzberg. Downloaded from jht. 1997. In the hospitality literature. 1998). Furthermore. 1994. CONTINGENCY THEORY AND THE IMPLEMENTATION PROCESS Based on a literature review from general business and hospitality literatures. Papadakis. High levels of employee involvement in strategy implementation seem to increase risk taking.Harrington. Ashmos et al. 2004. (2002) argue that for implementation to be successful in today’s complex. They propose “complexifying” internal processes as a managerial rule of thumb to match an increasingly complex business environment. business environment. 1994). he proposed two main dimensions described as deliberateemergent and individualistic-collective approaches. Harrington’s model expresses the need for researchers and managers to consider the degree and type of dynamism and complexity. 1973. In the implementation literature. Harrington. Harrington.com at Jomo Kenyatta University of on February 28. 2002. Other researchers studying the strategy-implementation process have utilized a contingency approach.g.
Finally. a boundary condition of this study is the focus on the organizational-level implementation process. 2005). p. In addition. firms that co-aligned the level of involvement in the strategic process with the level of complexity in the environment achieved higher financial performance. this study follows an assumption of contingency theory that the best way to organize depends on the nature of the environment in which the firm operates (Scott. 1986). Basic Assumptions and Boundary Conditions This study is based on a number of underlying assumptions and focuses on the organizational-level implementation process. although micro-level decision-making models have important implications for strategic decisions within a firm. 1987) and recent research in the hospitality literature (Harrington & Kendall. Harrington’s (2005) strategy-making process model has a number of elements that are proposed to have direct. we assume managers’ perceptions of the competitive environment and organizational processes are reasonably accurate.sagepub.com at Jomo Kenyatta University of on February 28. This assumption presumes that the environment drives organizational processes rather than the reverse. Explicitly and implicitly. Spector. Moderation and Mediation According to Baron and Kenny (1986). moderating and mediating effects. The type and degree of environmental dynamism is proposed to affect the deliberate or emergent nature of the strategic process with the type and degree of external complexity affecting the individualistic or collective nature of the process. Specifically. A weakness of the study is that the sample contained only nine foodservice firms. Because a major objective of strategic management is to increase firm performance.210 JOURNAL OF HOSPITALITY & TOURISM RESEARCH These studies indicate that greater external complexity should drive internal processes to become more complex with one way of complexifying being increased involvement in strategy implementation. Hence. This conceptualization ties directly to our second assumption. This assumption is supported by research in the general literature (Powell. Second. In his study. 1995. Following this logic. 2014 . Harrington (2004) suggested that firms operating in an environment of high complexity generally utilize more involvement at all hierarchical levels. a variable is regarded as a moderator if the connection between the two variables is affected by the level of the moderator variable. 1992. cognitive and other micro-level decision making or heuristic models are beyond the scope of this study. this assumption suggests that managers in foodservice firms need to increase manager and other organizational member involvement during implementation to increase the likelihood of achieving successful implementation of the desired action plans and. 1998). 213) and mediators are used to explain how external events take on internal significance (Baron & Kenny. increase overall firm performance. Mediation is said to exist when “an antecedent influences a consequence through an intervening variable” (Saks. a moderator is a variable that affects the direction and/or strength of the connection between an independent variable and a dependent variable. The internal context of the firm is proposed to interact with environmental Downloaded from jht. ultimately.
(b) the process will be developed in such a way as to smooth and/or speed the implementation process. this study tests the effects of environmental complexity and organizational size on level of involvement by members of the organizational hierarchy in the implementation process. the issue of involvement seems particularly relevant. Because of the unique characteristics of the foodservice industry. Nutt. uncertainty (dynamism and complexity) and have an impact on the deliberateemergent and individualistic-collective nature of the strategy-making process. Kendall / STRATEGY IMPLEMENTATION SUCCESS 211 Figure 1 Strategy Implementation Relationships Degree of Environmental Complexity 1 Level of involvement in the strategy implementation process 4 3 Firm Size: number of FTEs and Units (single or multiple units) Level of Implementation Success 2 5 Note: FTEs = full-time equivalent employees.sagepub. 1988). a fit is proposed to affect firm success. This additional expertise is believed to increase the likelihood of successful implementation because (a) better strategies will be the result of additional and diverse input. 2004. Involvement.Harrington. or (c) greater participation will increase the “buy-in” from a variety of stakeholders with vested interests in the outcomes (Bradach. 1997. a mix of ownership structures in the industry illustrates the need to involve those closest to the action to both derive specific knowledge and smooth the process in an environ- Downloaded from jht. and Implementation Success Overall. Environmental Uncertainty. Greater involvement is also believed to allow specific knowledge to be utilized based on specificity in expertise. Internal Context. Using elements of this model as a guide. insights developed through experience. Specifically. Nonaka. Furthermore. 2014 . 1997). and information from those closest to the action. 1989.com at Jomo Kenyatta University of on February 28. a strong rationale is provided in the literature to support the need for increasing involvement across the organization when implementing strategy. Schmelzer & Olsen. Ultimately. 1994). Theorists have suggested the need for greater involvement in situations where information or knowledge is dispersed across and within an organization (Cloudhury & Sampler. These relationships drive our hypotheses and are depicted in Figure 1 based on the explicit and implicit relationships proposed by Harrington (2005) and others (Harrington. we test the direct and mediating effects of level of involvement on strategy implementation success.
sales.).com at Jomo Kenyatta University of on February 28. etc. and potential challenges from other organizational process variables. 2003). Based on earlier theory and empirical results. Harrington (2005) suggested that higher involvement in the strategic process will be primarily driven by the type and degree of complexity. Harrington & Kendall. 1988). In addition to the proposed main effects of the external environment. 2014 . number of employees. Environmental Complexity and Level of Involvement Using secondary measures. Size has been conceptualized in a variety of ways in the literature (i. This contention is supported in Harrington’s (2004) 18-industry study. 2005) or speed the implementation process in dynamic environments (Nonaka. Harrington (2004) and an earlier study by Slattery and Olsen (1984) indicate that the restaurant industry is highly complex and volatile. moderating and mediating effects as shown in Figure 1. we hypothesize a variety of direct. Links 1 through 5.e. Although these environmental variables have been defined and assessed in a variety of ways. Other researchers have suggested that greater involvement throughout the firm can speed decision making (Forbes. 2005). Firm Size and Level of Involvement Earlier theory and empirical studies have indicated a relationship between firm size and the importance of participation throughout the organizational hierarchy in a variety of processes (Harrington. relative to many other industries. existing communication networks. Nutt. Okumus.212 JOURNAL OF HOSPITALITY & TOURISM RESEARCH ment of diverse vested interests across the organization. Specifically.. we hypothesize that environmental complexity will have a direct impact on the level of involvement by firm hierarchical levels during the implementation process. Harrington (2004) found that size had an impact on the equality of involvement in the strategic process across industries. 1989.sagepub. Schmelzer and Olsen (1994) theorized that the number of units and the number of workers in a restaurant firm created higher levels of perceived environmental uncertainty by organizational managers. indicating that firms matching the level of environmental complexity with level and equality of involvement in the strategic process achieved higher performance. one relatively consistent conceptualization of environmental uncertainty is that it is described as a higher order construct of two lower level environmental constructs: dynamism and complexity (Duncan. Based on arguments by Harrington (2005). 2004. number of business units. Link 1. Harrington (2005) suggested that appropriate involvement levels are driven (in part) by characteristics of the firm such as the distribution of power and knowledge throughout the organization. This proposition and other research indicate possible direct Downloaded from jht. Following Harrington’s (2005) contention. 1972. Hypothesis 1 (H1): Restaurant industry managers who perceive higher levels of environmental complexity will utilize an implementation process with greater involvement across the firm.
2002.sagepub. in many cases. geographically dispersed units and a variety of stakeholders retaining diverse and. Based on Schmelzer and Olsen’s (1994) arguments for the importance of the number of units and the number of employees. Therefore. we also hypothesize the moderating effects of firm size between environmental complexity and level of involvement. In other words. we argue that the impact of the level of environmental complexity on the level of involvement in implementation will be moderated by the size of the firm. 2005). 2005.. Furthermore. In this case. This relationship will be particularly true of foodservice firms with large numbers of workers and multiple units. it appears likely that the external context and internal context interact to achieve appropriate organizational processes. Based on arguments by Harrington (2005) and Okumus (2003). Uncertainty has been conceptualized as closely tied to perceived complexity for more than thre decades (Duncan. Figure 1 (Link 2) indicates a direct relationship between size and the level of involvement in strategy implementation. Okumus.com at Jomo Kenyatta University of on February 28. larger foodservice firms will be made up of multiple. we hypothesize that larger foodservice firms will utilize higher involvement tactics as a general rule in the implementation of strategies based on earlier theory. Although we hypothesize the direct effect of firm size on the need for greater involvement by firm members in strategy implementation (H2a and H2b). geographically dispersed business units. H2c: The number of employees and number of units will interact to create a more complex internal context requiring higher involvement in the strategy implementation process. Link 3. we chose to assess firm size using the number of full-time equivalent employees in the firm and whether the firm is made up of a single unit or multiple units.Harrington. 2014 . Each geographically dispersed unit operates in a slightly different competitive environment. Kendall / STRATEGY IMPLEMENTATION SUCCESS 213 (Harrington. conflicting vested interests. larger foodservice firms are (generally) composed of multiple. Nutt. H2b: Multiunit firms will utilize strategy implementation processes with higher involvement than single-unit firms. Although this relationship has not been fully tested using a foodservice sample. this link (2) indicates a possible interaction between the number of employees and the number of units in a firm as well. 2003). 1972. Harrington (2004) found a direct relationship between high complexity and high involvement but did not test the possible interacting effect of firm size on this relationship. H2a: Larger firms (number of employees) will utilize strategy implementation processes with higher involvement. This type of uncertainty and/or complexity is tied to the internal context of the firm and theorized to affect organizational processes such as employee involvement and engagement (Ashmos et al. whereas we hypothesize that foodservice industry managers “complexify” the strategy-implementation process by becoming more involved and involving others in the process in general. 2004. Harrington & Kendall. Using both measures of size. 1989) and interaction effects between these two measures of firm size. this greater involvement assists in Downloaded from jht. Formally stated. Harrington.
and allowing entrepreneurial stakeholders (franchisees) to provide feedback and reduce potential problems due to divergent corporate and franchisee goals (Bradach. 2014 . 1999). In this type of small-business structure. This situation indicates the need for higher involvement in environments with higher complexity. H3: Firm size (number of employees or number of units) is hypothesized to moderate the relationship between the level of complexity and level of implementation involvement.. Mintzberg. 2004.com at Jomo Kenyatta University of on February 28. “traditional”-management style and have a tendency to operate a “flatter” organizational structure.g. Due to geographically dispersed units and vested interests by a variety of stakeholders across the foodservice industry. Higher complexity has been shown to be particularly relevant when the franchisor-franchisee ownership structure is used.214 JOURNAL OF HOSPITALITY & TOURISM RESEARCH reducing environmental complexity by utilizing knowledge dispersed across the organization and makes proper use of firm resources by matching the complexity of internal processes with that of the external context. in general. Downloaded from jht. positive relationship between higher levels of involvement and greater success in strategy implementation (Link 4). Because earlier research has indicated that the restaurant industry is relatively complex (Harrington. 1989). it seems likely that firms utilizing implementation processes with greater involvement will on average have greater success when implementing strategies.sagepub. 1997) have indicated a relationship between the likelihood of implementation success and involvement through the utilization of dispersed knowledge and interests across a more complex organization. our hypothesis supports the propositions of Harrington (2005). (2002) and other theorist’s (Cloudhury & Sampler. Formally stated. smaller firms will be forced to increase hierarchical involvement in strategy implementation in an environment of high complexity. owners or managers have ultimate strategic decision-making authority (i. Parsa. 1997. utilization of dispersed knowledge. Slattery & Olsen. 1973. this hypothesized interaction is based on the speculation that small. and also suggests that larger firms in highly complex environments will need to create implementation processes with greater involvement. Harrington’s (2005) theoretical relationship is conditional by the level of complexity in the internal and external environment. The benefits of allowing greater involvement by franchisees include greater adaptability. position power) and require less involvement to implement action plans as a general rule (e. 1994). Nutt. Level of Involvement and Implementation Success There is conflicting theory on direct and conditional impacts of involvement during strategy implementation on implementation success.or single-unit operators prefer to operate with a lowinvolvement. H4: Restaurant firms utilizing higher (lower) levels of involvement during strategy implementation will achieve higher (lower) levels of implementation success as a whole.. In addition to earlier arguments. Therefore. we hypothesize a direct. Whereas Ashmos et al. Thus.e.
sagepub. Pugh... As size in foodservice is many times derived through operating autonomy of geographically dispersed units. 1988). This contention is supported in earlier research investigating the structure and actions of small and large competitors (Chen & Hambrick.. time. previous research has not tested the mediating effects of involvement on the relationship between size and implementation success. and diversity in stakeholder interests (Cloudhury & Sampler. As with complexity. Kendall / STRATEGY IMPLEMENTATION SUCCESS 215 An implicit assumption of Harrington’s (2005) strategy-making process model is that level of involvement functions as a mediating variable for the effects of environmental complexity on implementation success. This causal ordering is consistent with previous theory on complexity and involvement (Ashmos et al. 1988). however. more dispersed foodservice firms create an internal environment that is more difficult to communicate.e. and performance (Bourgeois. Hickson. a consistent assumption is that larger firms achieve larger market share and economies of scale providing firms with increased market power. average level of involvement) and the mediator has a direct impact on the consequences (i. Link 5. 1974). the average level of involvement across foodservice firms is hypothesized to function as a mediating variable. 1970.com at Jomo Kenyatta University of on February 28. 1995). Research also indicates that larger firms will increase the level of specialization across the firm (Keats & Hitt. 1969). slack resources.. Harrington (2004) found that larger firm size was the most significant predictor of firm performance across 18 industries. 1980. Nutt.Harrington. 2002. we hypothesize that firm size will have a negative relationship with the ability to successfully implement strategies. Previous research. H5: Foodservice firms’ level of implementation involvement is hypothesized to mediate the relationship between environmental complexity and implementation success. Hannan & Freeman. 1989) and leads to the following hypothesis. There- Downloaded from jht. has not tested the mediating effects of involvement on the relationship between complexity and implementation success. Hinings. 1984. we hypothesize a direct relationship between firm size and implementation success. In this study. Because larger. & Turner. The basis for introducing firm size as a direct predictor of performance is derived from more than three decades of research (Blau.e. Finally. Therefore. Although differing theories suggest varying implications of size (Blau. firms with more employees and more units are likely to be less successful in fully implementing strategy. 2014 . 1997). A second implicit relationship in Harrington’s (2005) strategy-making process model and indicated in Figure 1 is that level of involvement functions as a mediating variable for internal context (in this case—size) on implementation success. degree of environmental complexity) precedes and directly affects the mediating variable (i. Formally stated. implementation success).e. Rumelt. 1970. Thus. Keats & Hitt. H6: Larger (smaller) foodservice firms will achieve less (more) success in fully implementing strategies. a causal order is implied in which an antecedent (i. firm size will create greater problems of inertia due to greater difficulty in communicating across space.
are relatively insensitive to monomethod bias distortions (Dooley & Fryxell. The survey allowed respondents to indicate one of eight categories that best describes the firm’s primary foodservice segment. 18. 1986).com at Jomo Kenyatta University of on February 28. The majority of the items on the survey instrument contained intact scales used in previous studies (Barringer & Bluedorn. 1989.e.e. average level of involvement) and the mediator has a direct impact on the consequences (i. Jogaratnam. Of the respondents reporting complete information. Prior to discussing the results. and were large enough to have all five hierarchical levels within the firm. it is important to acknowledge that the use of entirely perceptual self-reported measures raises the possible concern that the relationships between the predictor and criterion variables could be attributable to common method variance..1% were defined as quick ser- Downloaded from jht. The final instrument received minor changes based on the feedback from these pretests. 2002). 1999. 2004). Members in this sample were mailed a pretested survey instrument that was administered following the Total Design Method (Dillman. implementation success). Nutt. 2014 . 2002. Kerlinger. This causal ordering is consistent with previous theory on internal complexity and involvement (Ashmos et al.216 JOURNAL OF HOSPITALITY & TOURISM RESEARCH fore. 1999.sagepub. This grouping resulted in 324 usable responses for the current study. this procedure resulted in 424 responses (26. METHOD Sample and Procedures The sample was randomly selected from the 2003 members of the Louisiana Restaurant Association (LRA).e.600 LRA members. respondents were only included if they provided complete information. 1999. Comparable to other surveys of this population (Dev & Olsen. 2000). Harrington. Earlier research has supported the claim that comparative relationships and interactions. To assess the impact of new items. The initial mailing went out to 1.. firm size) precedes and directly affects the mediating variable (i.e. 1989) and leads to the following hypothesis. Survey instrument. there are few practical options for obtaining information on firm performance and involvement levels other than self-reported measures. For this study.5% response rate). In addition. H7b: Foodservice firms’level of implementation involvement is hypothesized to mediate the relationship between the number of units and implementation success. a causal order is implied in which an antecedent (i. the inclusion of both public and private organizations).. such as those used in this study. which included a cross section of restaurant industry segments.. were directly involved in the foodservice industry. H7a: Foodservice firms’level of implementation involvement is hypothesized to mediate the relationship between the number of employees and implementation success. due to the nature of the population of interest (i. two pretests using foodservice industry executives were performed. Brews & Hunt. Profile of respondents..
6% onsite foodservice. 5% sales or marketing. 29.8% (2. Validity. These percentages do not indicate any substantive differences in the primary market segment between the LRA membership population and the respondents in our sample. etc.com at Jomo Kenyatta University of on February 28.5% private corporations.2% (18.002. The type of firm ownership for the respondents was 20. and 2.5% partnerships. retail.3% (5. onsite foodservice. purveyors = 6. 14.1% fine dining. respondents were instructed to indicate their current official title.D.6% midscale. 3% food and beverage area.Harrington. The mean was 504 employees with a standard deviation of 4. doctorate.9% had completed some college.5% casual dining.5% private corporations.1%). segment characteristics of the sample were compared with the 2003 LRA membership. Our sample had a slightly higher percentage of public corporations but. casual and/or midscale dining = 30.2% were multiunit company or franchise-operated firms. and interrater reliability. purveyors. Kendall / STRATEGY IMPLEMENTATION SUCCESS 217 vice. 6. 2014 .1% sole proprietorship.6%). or CFO). etc. The other category included a mix of foodservice businesses (catering. fine dining = 15% (14.2% indicated other. Single-unit firms made up 61.). First.1%).2%). casual and/or midscale dining.9% public corporations. the total percentage of corporations was of no practical difference (68.4% sole proprietorship. Although both samples had similar percentages of single or multiple Downloaded from jht. 2.3% food or foodservice purveyor. The type of firm ownership for the 2003 NRA respondents were 17. percentages by ownership type and number of units were compared between our sample and the 2003 National Restaurant Association (NRA) sample for the annual restaurant operations report (National Restaurant Association.. golf clubs.000 employees in the organization. and 3% controller.2% had an associate’s degree.sagepub. 12. and 2.6%). 5.) and unrelated businesses (CPAs. Descriptions in the “other” category included Ph. 12% had master’s degrees. Respondents were asked to indicate their highest level of formal education.5% CEO or president. casinos.5% public corporations. insurance. onsite foodservice = 2. 16. These findings indicate slight differences in the percentage of private and public corporations between the two samples. and other 23. 4. Three checks were performed to assess nonresponse bias. Those determined to be unrelated were removed from the sample. 65. or other. Respondents who listed the “other” category were evaluated by the authors to determine if they were involved in a foodservice operation or an unrelated venture.3% had graduated from a technical program. landscaping. 16% senior executive (VP.2% (22. 15.4% [NRA] and 63% [LRA]). 45. COO.2%). 24.8% of respondents and 38. The size of responding firms used in this study ranged from 56 to 50. 2.5% general manager or director. Finally. This coding resulted in the following percentages by primary segment (respondent percentages are shown in parentheses): QSR = 16. A total of 23% indicated owner or partner. retail = 6.2% retail food business. or juris doctorate. external validity. Two judges categorized the LRA members into primary foodservice segments: quick-serve restaurants (QSRs). 2003). 18.6% other.5% had a bachelor’s degree. A total of 9% had a high school education. when summed.3% (31. 54. and 22.6% partnerships. 20.1% (5. Second. fine dining.1%). and 8.
2%) multiunit firms. The hospitality literature has measured the environment predominately by surveying key informants (e. Correlations were calculated intrafirm. and degree of complexity. lower level management. if these assumptions hold intrafirm correlations should be high. This finding provides strong interrater reliability results. An assumption of this study is that informed managers provide a reliable view of organizational processes and the firm task environment. Overall. intrasegment. and interfirm having the lowest.g. all responding firms) (Powell.67 for this five-item scale. the LRA sample in this study had a slightly higher percentage of multiunit firms and a lower percentage of single-unit firms than the national sample (the LRA sample percentages are in parentheses): 71. and ensure interrater reliability of the environment and organizational processes.97. Measures Average level of involvement.com at Jomo Kenyatta University of on February 28.. A total of 78 firms returned the second copy. 1992). retail.) ranged from r = . fine dining. etc. these findings provide support for minimal effects due to nonresponse bias. In other words.12 to . Therefore..218 JOURNAL OF HOSPITALITY & TOURISM RESEARCH units.2% (38. Respondents rated involvement at each organizational level using a 10-point scale. QSR. For these tests. Duncan (1972) described perceived environmental uncertainty as a higher order construct derived from two dimensions: perceived dynamism and perceived Downloaded from jht. Harrington & Kendall.e. interfirm correlations should be low. The average intrafirm correlation was r = . The profile of respondents to the NRA and LRA sample provides evidence that both surveys had responses by similar types of foodservice organizations.104.195. and intrasegment correlations should be somewhere in between.8% (61. all firms that responded were sent a second copy and asked to have a second informant respond to the survey. Cronbach’s alpha indicated a reliability of . To establish interrater reliability. 2005). whereas interfirm correlation averages were only r = . At the completion of the data collection period described above. the mean correlation was calculated for the variables used in this study: level of implementation success. intrasegment having the next highest. The average intrasegment correlation (i. The measure of involvement was based on the work of Barringer and Bluedorn (1999) and assessed level of involvement in the implementation of strategy across five organizational levels: chief executive officer. level of involvement. 2014 .. and frontline employees. middle management.8%) single unit and 29. firms in similar environments should respond similarly. casual dining. The calculated level of involvement used in this study was the average score across these five levels of the organization. These correlations provide evidence that the relationships are in the expected direction with intrafirm having the highest. increase the external validity beyond the borders of Louisiana. and interfirm (i.41 with an overall average of r = . number of employees.e. top management. we gathered responses from multiple respondents in a subsample of firms. Environmental complexity. A second assumption is that industry segment norms and the nature of the competitive environment will affect survey responses.sagepub.
83 (Cronbach’s alpha). Size of firm: employees.01). p < . tests of Hypotheses 1.00. one measure of size was operationalized as the natural log of total employment for each firm (the natural log of total employment was used to constrain the range for statistical analysis) (Hart & Banbury.e. The scale contained four items assessing environmental complexity. The measure of complexity (r = . 1986).Harrington. An increase in the number of interrelated issues in the environment makes it more difficult for an individual manager or management team to interpret the impact of all of these issues simultaneously (Harrington. p < . complexity) is related to the hypothesized mediating variable (i. demonstrating that the independent variable (i. Hart & Banbury.47.sagepub. Data Analysis Table 1 presents the means. standard deviations. Because the number of employees should have a direct impact on information processing requirements (which was central to the involvement arguments in this study). Respondents were asked to rate how successful they perceived the most recent strategy-implementation process using a 10-point scale (1 = not at all successful and 10 = very successful). and 3 provide no evidence of variance explained in involvement by the direct effects of LN FTEs or units.01). level of involvement was highly correlated to implementation success (r = . the first two criteria of mediation were not met (Baron & Kenny. Size has been conceptualized in a variety of ways in the literature. The environmental scale had a reliability of .06 and r = . 2002). This correlation satisfies 1 of the 3 requirements for mediation suggested by Baron and Kenny (1986).01) is significantly correlated to the natural log of full-time equivalent employees (LN FTEs). The measures of firm size are highly correlated (r = .05). The measurement instrument used in this study was an intact scale utilized in previous studies and designed to assess dynamism and complexity (Brews & Hunt.. Perceived environmental complexity can be defined as a perception of the number of “things” going on in the general environment. Environmental complexity is significantly correlated to average level of involvement (r = . 2. 2004. Furthermore.e. level of involvement). and intercorrelations of the study variables. 1994). respectively). Downloaded from jht. These choices were coded for hypothesis testing as 1 for single unit firms and 2 for multiunit firms. 2001).15. p < . Therefore. and further tests of H7a and H7b were not completed in this study. 2014 . Implementation success. 1999. Organizations were categorized as single-unit or multipleunit firms. Harrington.. 1994). Kendall / STRATEGY IMPLEMENTATION SUCCESS 219 complexity. p < .21. The correlations did not provide support for the hypothesis (H7a and H7b) that involvement acts as a mediating variable between size and implementation success.37. Last. Size of firm: units.com at Jomo Kenyatta University of on February 28. supporting the idea that firms “complexify” processes as a general rule of thumb to achieve higher performance in the current business environment (Ashmos et al.. LN FTEs and units were not related to involvement (r = .
Due to the nonsignificant effect of LN FTEs in Step 2 (Test 1).220 JOURNAL OF HOSPITALITY & TOURISM RESEARCH Table 1 Correlations and Descriptive Statistics Variable 1 Natural log of employees 2 Units 3 Summed perceived complexity 4 Average overall involvement 5 Implement success *p < . moderating and mediating effects.14* .01.10 . respectively). Finally.45. complexity remained highly significant (ß = .001.67 1. the interaction term between complexity and LN FTEs explained a significant amount of additional variance (∆R2 = . 2014 . and 3.12 1. In Tests 1 and 3. M 3.15 SD 1. To test the direct effects of complexity (Hypothesis 1) as well as the extent to which firm size moderates the relationship between environmental complexity and level of involvement (Hypothesis 3). p < .sagepub. p < . **p < .01.00). and the signifi- Downloaded from jht.3 7. For Test 2.85 1 2 3 4 . units ∆R2 = . p < .01).38 22.07 . Complexity had a significant positive relationship in all steps of the process. Test 2 (H2a.02.02.90 1. There was a significant direct relationship between environmental complexity and implementation involvement.49 7.00 . 1995).07 . we performed a moderated hierarchical regression analysis following the format suggested by Baron and Kenny (1986). average involvement was the dependent variable.37** RESULTS SPSS was used to test all direct. H2b and H2c) was also performed using moderated hierarchical regression to test the interacting effects of our size measures on average involvement. Step 3). utilizing hierarchical regression. For all three tests shown in Table 2. In Step 3 (Test 1) with LN FTEs and the interaction term of complexity and LN FTEs present.15* . and then the interaction term between LN FTEs and units (Steps 1.06 .001). the significant main effect (ß = . Hypothesis 1 received strong support. 2. Therefore. complexity explained a significant amount of the variance in level of involvement (R2 = .001). LN FTEs was entered first into the regression.com at Jomo Kenyatta University of on February 28. p < . followed by firm size (LN FTEs or units) (Step 2).05. Table 2 presents the results of the moderated regression analyses.36 7.01). In Tests 1 and 3 (see Table 2). and then the interaction term between complexity and firm size (Step 3) (Saks. firm size measures did not provide any significant amount of additional variance (LN FTEs ∆R2 = . we performed a moderated hierarchical regression analysis (Tests 1 and 3) in which complexity was entered first into the regression (Step 1).21** .50. followed by units. Hypothesis 3 received strong support when using the number of employees as a proxy for firm size. At the second level of entry.47** .63 0. To test the extent to which firm size (LN FTEs and units) moderates the relationship between complexity and level of involvement (Hypothesis 3). and the interaction term between complexity and units explained a nonsignificant amount (∆R2 = .
01. illustrating the need for small firms to fully engage organizational mem- Downloaded from jht.05.42 (3.02 . This situation was particularly pronounced for smaller firms in a high-complexity environment.sagepub.001. 317) .Harrington. All betas are standardized.52 . LN FTEs = natural log of full-time equivalent employees.02** 7. **p < .17 .02 . 2b. Test 2 provided no support for Hypotheses 2a.27 .75** (3.003 0.001 0.15** .31 .00 0.63** .50** –.01 . *p < .03 0. 2014 .15** . The regression tests (Test 2 and 3) provided no support for a relationship between the number of units in a firm and level of involvement in strategy implementation.02*** 6. Kendall / STRATEGY IMPLEMENTATION SUCCESS 221 Table 2 Moderated Multiple Regression Analysis: Average Involvement Variable Test 1: H1 & H3 Complexity LN FTEs Complexity × LN FTEs R2 ∆R 2 ∆F F (df) Test 2: H2A.45*** .53** Note: H = Hypothesis. ***p < .21 –. and 2c. a significant interaction between complexity and LN FTEs on level of involvement is depicted in Figure 2.004 . this finding indicates that the relationship between size and average involvement is conditioned by the level of environmental complexity or firm size (Cohen & Cohen.03 . H2B. & H2C LN FTEs Units LN FTEs × Units R2 ∆R 2 ∆F F (df) Test 3: H1 & H3 Complexity Units Complexity × Units R2 ∆R 2 ∆F F (df) Step 1 Step 2 Step 3 .03 .com at Jomo Kenyatta University of on February 28. Plotting the Moderating Effects of Size and External Complexity Based on the moderated regression.06 .03 –.004 . 1983).06 . The variance explained in average involvement by the direct effects of size (LN FTEs and units) and the interaction term were nonsignificant.06 .07 –.15* . As shown in Figure 2. cant interaction term between complexity and LN FTEs.53** 4.02 .95 .02** 7.43** .01 1.03 .001 0. 317) .34* .00 0.04 .15** –. all firms utilized significantly higher average involvement in strategy implementation when the environment was perceived as more complex.
60 7. Therefore.35 7. Level of involvement had a significant positive relationship supporting the hypothesis of a direct relationship between involvement and successful implementation across firms (ß = . Downloaded from jht. There was a significant direct relationship between implementation involvement and level of success in implementing strategy (see Table 3).22 (SD 1.78) when the environment was perceived as high complexity.40 Average Level of Involvement 7.25) when the environment was perceived as low complexity and 7.com at Jomo Kenyatta University of on February 28.sagepub.60 (SD 1.001).30 7.25 (SD 2.20 High Complexity Low Complexity Small Large Firm Size (Number of FTE Employees) Note: Ln FTEs = natural log of full-time equivalent employees.55 7.35. although a significant relationship was present between the perceived level of complexity and firm size. Larger firms’ level of involvement averaged 7.60) for the low-complexity group and 7. the interaction effects were substantially stronger for smaller foodservice firms. 2014 . Smaller firms’ level of involvement averaged 7.45 7.50 7. bers when implementing strategy. p < . Direct Effects of Involvement on Implementation Success Hypothesis 4 received strong support.74) for the high-complexity group.25 7.222 JOURNAL OF HOSPITALITY & TOURISM RESEARCH Figure 2 Interaction Between Firm Size (LN FTEs) and Complexity on the Average Level of Involvement in Strategy Implementation 7.42 (SD 1.
02* 5. 1986). As shown in Table 1.01 2. the first requirement for mediation was supported (Test 1.e. 1986). implementation success was regressed on both complexity and involvement. As indicated above. All betas are standardized Mediating Effects of Involvement We performed hierarchical multiple regression analyses to test for the mediating effects of level of involvement on the relationship between environmental complexity and implementation success (Hypothesis 5). *p < .Harrington.85*** (2. 1986).13*** Note: H = Hypothesis. the variance explained after complexity has been held constant will be lower than the variance explained by complexity alone (Baron & Kenny. Downloaded from jht. it must be shown that involvement is related to implementation success when implementation success is regressed on both complexity and involvement variables.. it is required to establish and test three relationships (Baron & Kenny.37*** . p < . First.13* .35*** .17*** 24.13*** 47.74* . Table 2).com at Jomo Kenyatta University of on February 28.e.36 24. 2014 .. To test for mediation.14 . independent variable) must be related to implementation success (i.sagepub. To demonstrate mediation. In addition. As indicated in Table 3. ***p < . Kendall / STRATEGY IMPLEMENTATION SUCCESS 223 Table 3 Hierarchical Multiple Regression Analysis: Implementation Success Variable H4 & H5 Tests Complexity Involvement R2 ∆R 2 ∆F F (df) Involvement Complexity R2 ∆R 2 ∆F F (df) Step 1 Step 2 .02.05).001. 1995).14 . complexity explained a significant amount of the variance in level of involvement. 305) . complexity and implementation success were significantly correlated.08 . The regression results in which implementation success was regressed on complexity and involvement are shown in Table 3.35*** . complexity was significantly related to implementation success (R2 = . the correlation between complexity and involvement was significant. the second requirement for mediation was supported. Second. complexity (i.05. we must demonstrate that complexity is related to level of involvement. Finally.12*** 43. Thus. the relationships between complexity and implementation success will disappear when involvement is held constant (Saks. 305) . dependent variable) (Baron & Kenny. If involvement mediates the relationship between complexity and implementation success. thus.08 .85*** (2. To establish a complete mediation relationship.
In addition.sagepub.004 0. the variance in implementation success explained by complexity declined to a nonsignificant level (∆R2 = .com at Jomo Kenyatta University of on February 28. Overall.224 JOURNAL OF HOSPITALITY & TOURISM RESEARCH Table 4 Moderated Multiple Regression Analysis: Implementation Success Variable H6 tests LN FTEs Units LN FTEs × Units R2 ∆R 2 ∆F F (df) Step 1 Step 2 . Environmental complexity was a significant predictor of involvement in the implementation process. foodservice firms that involved more organizational members across the hierarchy achieved greater success in implementing strategy. Involvement explained a significant amount of the variance in implementation success (R2 = .004 .07 –. Our test of Hypothesis 6 received no support. This finding Downloaded from jht. the interaction term of LN FTEs and units was not significant (ß = . these results provide strong support for the mediation hypothesis (Hypothesis 5) with evidence of complete mediation by level of implementation involvement on the relationship between environmental complexity and implementation success.42 (see Table 4). The second test in Table 3 presents the regression results.03 –. There was no significant relationship between implementation success and firm size (LN FTEs ß = .00 0.01). units ß = –.001) above that explained by complexity alone.001).004 . p < . DISCUSSION AND CONCLUSION The findings from this study provided support for many of our hypotheses.13. This indicates that implementation success is neither diminished nor enhanced by firm size alone. The results indicate that involvement explained a significant amount of incremental variance in implementation success (∆R2 = . First. entering involvement before complexity.12. 2014 . Larger firms in more complex environments increased involvement considerably. 317) Note: H = Hypothesis. Table 3 presents the regression results. With involvement held constant. Two sets of regression were performed in which the order of entry for level of involvement and complexity was reversed.03.06 .61 . entering complexity before involvement.06) with an equation F value of . Small firms used a lowinvolvement implementation process in an environment of low complexity but a high-involvement process in an environment of high complexity. p < . One of the most interesting relationships was the interaction between complexity and firm size and its impact on level of involvement. but the main interaction occurred for smaller firms in this study.42 (3.06). LN FTEs = natural log of full-time equivalent employees.03 0.03 .06 . In sum.
Overall. Earlier researchers have purported the use of high involvement for a variety of reasons: utilizing knowledge specificity across the organization. higher average involvement across firms in the foodservice industry resulted in a greater likelihood of successful implementation of strategies. whether a new restaurant concept.Harrington. Managers that appear to be champions of strategic action plans throughout implementation seem to create an environment more conducive to ultimate implementation success (Nutt. small firms may need greater involvement to increase understanding of what is going on and make use of information from those closest to the action. increasing the likelihood of properly allocating resources. provides a higher level of service. But in an environment of high complexity. But given a highly complex environment. 1989). Kendall / STRATEGY IMPLEMENTATION SUCCESS 225 supports Harrington’s (2005) contention that the degree of external complexity is a primary driver of higher manager or organizational member involvement during strategy implementation. increasing the adaptability or innovativeness of the firm. Large foodservice firms in this study were multiunit firms in the QSR. This type of establishment operates in an (internal) environment that is less routine. smoothing the process across a variety of stakeholders with potentially divergent vested interests. and midscale dining segments. In a low uncertainty environment. and to speed the process due to time constraints. or Downloaded from jht. 2014 . menu item. higher involvement acts as a catalyst for successful implementation allowing smaller competitors to react to environmental change and to speed the implementation of these actions. Curiously. Strategic planning and environmental scanning resources can be more centralized in this type of organization. Product testing. casual. we can speculate that smaller firms should have a lower tendency for having knowledge specificity dispersed across a complex organization and have managers that are more likely to have greater position power to minimize the ability of organizational stakeholders to slow or impede the implementation process. Although the specific reason of higher involvement was not an explicit issue in this study. fine-dining restaurants. higher involvement tactics during strategy implementation allow these smaller foodservice firms to utilize all of their human capital to react to environmental change and ensure a greater likelihood of success when implementing strategy. This type of firm operates with greater standardization and more centralized planning of strategy and tactics. 1995). managers or owners in this type of establishment have position power and due to lower internal complexity can use low-involvement tactics with more success. This contention is supported by earlier research on the nimble and adaptive characteristics of successful small airlines compared to larger competitors (Chen & Hambrick.sagepub. Furthermore. the findings in this study (the interaction of size and complexity with involvement) indicate that small foodservice firms follow a contingency approach and only create a process of higher involvement in an environment of high complexity. One reason for this situation is that many of the firms in the small-size category were single-unit. and where strategy is developed and implemented in realtime at the unit level.com at Jomo Kenyatta University of on February 28. This study found no relationship between firm size and implementation success.
2003.. the position power of the person or group providing the directives.g. This relationship was implicit in the strategy-making process framework by Harrington (2005) and was supported by the results of this study. & Tse. can be pretested at designated locations. All of these differences may explain the variation in levels of involvement in a high-complexity environment by small and large foodservice firms. The interaction of complexity and foodservice firm size on involvement in implementation appears to be a significant predictor of implementation success. West. Schmelzer and Olsen (1994) indicated that the number of employees and number of units in a restaurant firm increased perceived environmental uncertainty. even large multiunit firms are composed of geographically dispersed units with ownership structures that create dispersed knowledge and conflicting vested interests. Overall. 2014 .226 JOURNAL OF HOSPITALITY & TOURISM RESEARCH marketing campaign. the time constraints associated with the strategy. most of the relationships proposed by Harrington (2005) and tested in this study were supported. in circumstances where managers hold sufficient position power and frontline members do not have sub- Downloaded from jht. Using a contingency perspective and secondary measures of environmental complexity. and the need to increase acceptance of strategies by franchisees or other stakeholders. Therefore. This mediating impact of involvement level between complexity level and implementation success supports the notion of “fit” tested by Harrington (2004). This lack of support illustrates a possible relationship of internal complexity (firm size) being related to the complexity of the external environment by the leaders in the foodservice industry. This finding does not preclude the need for greater involvement based on the nature of the strategic decision that is made. and the mediating effects of level of involvement between complexity and success all received support in this study. Harrington’s (2004) study found a similar relationship between complexity. Olsen. This idea was partially supported by the significant correlation between the number of employees and perceived complexity (see Table 1) but not supported by the idea that these two measures of size interact to create higher internal complexity. and firm success. For example. This finding indicates the need to co-align internal processes with organizational structure and the external environment to achieve greater success (e. all of these issues create a need for higher involvement tactics during strategy implementation by large firms. involvement in the generic strategic process.sagepub. This situation is particularly true of firms operating in more complex environments. Okumus. Direct effects of firm size (number of employees or units) and interacting effects between the number of employees and units on level of involvement were not supported. but this need is tempered by many of the centralization issues described above.com at Jomo Kenyatta University of on February 28. the moderating effects of complexity and firm size on the individualistic-collective nature of the strategic process. The direct effects of external complexity. thus reducing risk and uncertainty in strategy implementation. Still. Our findings supported the hypothesis that involvement level mediates the relationship between external complexity and implementation success. the direct effects of involvement on implementation success. 1998).
responses to this study may represent the most recent tactics but this does not rule out the use of multiple tactics that may depend on the timing or nature of the strategic action plan. although research provides some support for the use of entirely self-reported measures. & Kenny.. as theorized by earlier researchers in the implementation literature (Okumus. Baron. 2014 . First. In this case. P. In addition. The study findings also support the contention by Edgar and Nisbet (1996) based on chaos theory. R. J. strategic. & Huonker.. (1986). D. Specifically. Study Limitations This study has several limitations. Improvements in measurement are likely utilizing measures of communication networks or profiles of depth and breadth of involvement by organizational members during the strategic process. managers may successfully utilize low-involvement tactics regardless of firm size.. Furthermore. due to high uncertainty in the general environment. REFERENCES Ashmos. or have other unique “bundling” type business models that may not be clearly represented in this study. McDaniel. What a mess! Participation as a simple managerial rule to “complexify” organizations. 189-206. Jr. D. A. Journal of Personality and Social Psychology. Journal of Management Studies. this approach is an increase in involvement by managers and others in the implementation of strategy.Harrington. The sample in this study was derived from a specific region within the United States. D. firm structure. M. R. successful implementation is derived through an interaction of the external context. the measure of implementation success used in this study has a risk of monomethod bias. W. 1173-1182.. Downloaded from jht. 51(6).sagepub. More clarity in the operationalization of the involvement construct should also be accomplished. and organizational processes. foodservice firms should not try and predict the future but instead should adjust the managerial approach to ensure a firm capability to quickly adapt to environmental change. have significant holdings as basically a real estate business. Additional measures of performance such as growth in sales per unit or customer satisfaction surveys should be included to increase the validity of these findings. and statistical considerations. Duchon. Further research is needed using a larger.. (2002). A key contribution of this study is the finding that the depth of involvement throughout the hierarchy in the implementation process matters. many firms may be involved in several restaurant industry segments. 2003). And. more diverse sample or using a longitudinal approach to ensure that these results can clearly be generalized to the global foodservice industry or other types of service firms. respondents to this study were asked to choose the implementation tactic that was used during the most recent strategic process in their organization. which limits the generalizability of these findings.com at Jomo Kenyatta University of on February 28. Thus. The moderator-mediator variable distinction in social psychological research: Conceptual. 39(2). Kendall / STRATEGY IMPLEMENTATION SUCCESS 227 stantial vested interests in strategic outcomes. R.
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