Strategic mapping: relationships that count

The purpose of this paper is to study how the design of a strategy map can be supported by measures expressing the customers’ perceptions about strategic factors and their related determinants. In particular, managers are provided with a fact-based test useful to revise prior knowledge and beliefs.

A case study is used to describe the adoption of the partial least squares path modelling (PLS-PM) approach to structural equation modelling in order to compare competing strategy maps and select the one that best fits customer perceptions. A focus group was organised to design the strategy maps, which were tested through a survey of 600 randomly selected resellers.

The empirical-based validation of a causal map by using PLS-PM may effectively stimulate a revision of managers’ collective perceptions about a phenomenon characterised by implicit knowledge, as in the case of customer needs.

The case-study company operates in a business-to-business environment, and thus only the needs of direct customers have been included in the analysis. Final users’ needs should also be considered, even if different solutions are required for data collection.

The proposed approach provides a set of indicators which allow managers to identify strategic priorities, thus facilitating decision making and strategic planning.

In the strategic management literature, few attempts have been made to operationalise the complex and multidimensional latent constructs of a strategy map combining managers’ implicit knowledge and empirical validation in a “holistic” manner. The adoption of PLS-PM is relatively new in testing the accuracy of causal maps.