Authentic leadership and strategy implementation: the mediating effect of participative decision-making as a strategic practice

Abstract

Strategy implementation is one of the major unresolved and persistent challenges in strategy management. Research on how to effectively implement strategy is lacking creating a gap in practice and theory. Strategy implementation is a highly behavioural and socially interactive process. Leadership approaches and practices that prioritise interpersonal factors are thus imperative in enhancing strategy implementation. To this extent, the study investigated the influence of authentic leadership on strategy implementation and the mediating effect of participative decision-making. Grounded in strategy-as-practice theory, the research positions participative decision-making as a strategic practice enacted by authentic leaders to enhance strategy implementation. A cross-sectional, quantitative research design was followed. Data was collected from private sector organisations in South Africa using an online survey. The study had 1291 usable responses. Structural Equation Modelling (SEM), particularly PLS-SEM, was employed to test the hypothesised relationships and understand the mediation effects. The study revealed that authentic leadership behaviours positively influence strategy implementation both directly and indirectly through participative decision-making, thus confirming partial mediation. Participative decision-making emerges as a key strategic practice that strongly predicts strategy implementation and acts as a mechanism for authentic leaders to enhance strategy implementation. Practically, the research underscores the need for organisations to cultivate authentic leadership behaviours and integrate participative decision-making practices in organisational frameworks and processes to encourage genuine employee involvement in decisions. Organisations should therefore not solely rely on their formal process, structures and systems to implement strategy. This study advances strategy-as-practice theory by highlighting the importance of authentic leadership behaviours in directly and indirectly affecting strategy implementation, and participative decision-making as a key strategic practice to enhance the implementation of strategy.