The engagement of employees in the strategy process and firm performance: the role of strategic goals and environment

Despite the call to engage employees in strategy making processes, empirical evidence that ties this engagement to financial performance has not been forthcoming. This study fills this gap by investigating whether involving employees in the strategy making process leads to a higher achievement of strategic goals and subsequently increased financial performance. Our findings suggest that the link between strategy making processes and financial performance may be underestimated unless strategic goals are included as a mediator. We also find environmental dynamism moderates the relationships we investigate. Under conditions of low dynamism, there is a stronger relationship between the engagement of employees and strategic goals related to innovation than under conditions of high dynamism. Conversely, strategic goals related to quality have a stronger relationship with engagement of employees under conditions of high dynamism when compared to conditions of low dynamism. [PUBLICATION ABSTRACT]