Corporate strategy, organizational politics,and firm performance

Abstract

A well known fact is that one cannot divorce politics from life. This then means that most life activities have elements of politics in them. So our lives in the firms we work in whether public, private, large or small have political connotations in them. The workplace has been termed as a market place where the parties involved strive to get what is best for them at times engaging in political activities and conflicts (Aryee et al., 2004). Given this scenario it is essential that we not only learn how to cope up with the existing politics in the organizations we work in but strive to understand it more. The nature of organizational politics will vary from firm to firm depending on the influences of the firm's associates among other things (Moussetis et al., 1999).

The subject of organizational politics can rightfully be said to have been a 'taboo topic' for quite a long time not just in strategic management but management as a whole (Fischer, 2007; Lewis, 2002). Fischer (2007) says, 'Everybody knows about organizational politics but most have been loath to talk about it' . Detailed research work in this area can be traced to the early 1980s (Aronow, 2004). Organizational politics is very much intertwined with the field of corporate governance that is more precisely corporate control (Pettigrew et al., 1999). Pettigrew et al. (1999) argues that as a matter of fact organizational politics needs to be viewed as a part of corporate governance and a very vital one for that matter. Corporate governance commenced gaining publicity in the 1990s. The issue of why firm owners or shareholders employ professionals to manage their firms commonly referred to as the agency theory is a central one on corporate governance (Pettigrew et al., 1999; McDonald et al., 2008).

This paper explores the effect of organizational politics on the firm's corporate strategy and the firm performance. Though, over the years organizational politics has been viewed somehow in the negative manner (Aronow, 2004) we strive to bring out some of the positive aspects of organizational politics. We believe that bringing out these positive aspects to the forefront and practicing them will inevitably improve the firm's value creation and or maintenance which in tum will lead to the improvement of the firm's performance. We further believe that the net effect of this will be to increase the number of value creating firms. There is no doubt in anyone's mind, particularly African that value creating firms will contribute tremendously towards the development of 'mother Africa' and her inhabitants.