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The Impact of Strategic Thinking on Human Resources Development Strategy

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 International Journal of Innovation, Creativity and Change. www.ijicc.net
Volume 14, Issue 4, 2020

The Impact of Strategic Thinking on

Human Resources Development
Strategy
Khaled Mohammad Banyhmadana, Imad Al Mualab, Ruba Risheed Al-
Ghalabic, Wedad B. Abu Adid, a,bAmman Arab University, cAl-Balqa’a
Applied University, dUniversity of Jordan, Email: [email protected],
b
[email protected], [email protected], [email protected]

This study aims to identify the impact of strategic thinking on human

resources development at one of the government organisations in
Jordan. The study population consisted of 3,466 employees from
different organisational levels. A total of 300 participants (e.g. from
managers and their assistants to department heads and supervisors)
were randomly selected. Strategic thinking competencies, such as
vision-oriented, and innovative and systemic thinking, affect the
overall human resources development strategy significantly. In
addition, this study recommended managers to focus more on strategic
thinking to enhance their human resource capabilities and concentrate
on developing and empowering human resources.

Keywords: Strategic thinking, Human resource development, Government

organisations, Jordan.

Introduction

Organisations do not live in a vacuum. That is, organisations work in an environment that
shapes their actions and framework (Abdalla, Aziz, & Johari, 2015). Changes, and their pace
are important components of any situation. Also, organisations typically face considerable
changes that lead to different situations, such as opportunities, and threats (Ghafarian &
Kiani, 2010). In the Harvard University Review, Clemons and Santamaria (2002)
characterised the twenty-first century business environment with dramatic transitions,
transient incentives, confusion, and chaos.

In chaotic situations, the laws of play are changing constantly and have no lasting benefit for
the company, except for the continuous adaption to the environment, which means changing
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the behavioural features for a beneficial and productive purpose in different environmental
conditions (Ghafarian & Kiani, 2010). However, a good strategy is the key need of any
company.

Organisations should have a clear view of how they plan to differentiate their products and
offerings from other rivals for various customers. Otherwise, they will be defeated in an
extremely competitive environment. In the past, performance was probable because the
number of competitors and businesses were limited. However, traditional tactics are
dismissed simply and cruelly nowadays. According to organisations, they should find a way
to build and increase incentives instead of reducing or eliminating losses. As mentioned
earlier, successful managers in today’s world refer to those who can understand and take
advantage of the opportunities to respond to environmental changes. The term ‘strategic
thinking’ was firstly proposed at the beginning of the nineteen-nineties because the traditional
methods for strategic preparation failed to predict and create a future for management
literature (Nasi, 1991).

From the point of view of Heracleus (1998), strategic thinking means to develop new and
innovative principles that can rewrite the rules of play, and build a possible view of the future
that is significantly different from that of the present. According to Ghafarin and Kiani
(2010), strategic thinking is often incorporated as insight and understanding that enables a
human being to know which variables are effective and ineffective in achieving success
(Ghafarian & Kiani, 2010). A thinking approach is an essential tool. Thus, nowadays, Chief
Executive Officers should be armed with this instrument. This approach is regarded as a
trump card in the social and economic realms that allow executives to assess the threats,
benefits, and costs related to their actions. Strategic thinking is more concerned with strategy
as an art than with a mechanism, and analytical dimension. It is also recognised as an
effective approach to corporate leadership in today’s evolving, but not forecasting setting.

This strategy can be advantageous for a company (Arayesh, Golmohammadi, Nekooeezadeh

& Mansouri, 2017). In the new era, policy preparation has ended, and its position has been
transferred to strategic thinking. Many positive and beneficial approaches can be applied in
this field. Thinking and proactive preparation should have a function that is similar to play. In
this approach, thought provides a perspective, and strategy preparation is used to clarify and
leverage the possibility (Arayesh et al., 2017). Some scholars described strategic thinking as
‘an intuition and understanding of the present position to take advantage of opportunities’. In
other words, the use of strategic thinking is a way to consider opportunities. Intuition or clear
understanding of the current situation allows managements to understand the realities of the
business and its laws and enables them to develop new and useful approaches. This research
analysed the importance of applying the strategic thinking approach to enable organisation
managers to maximise opportunities and address threats safely. Engaging in deep

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commitment to reach organisational goals increases the need to use strategic thinking, which
will lead organisations to excellence and human resource development.

Problem Statement

Governmental organisations are investing great amounts of money and time for the sake of
developing human resources because there is no consistent support that these investments
will yield positive impacts on the overall performance of the governmental organisations
which is provided. Many studies demonstrated the positive impact of strategic thinking in
human resource development activities upon the overall performance of a governmental
organisation (Garavan, Costine & Heraty, 1995; Macky & Boxall, 2007). Furthermore,
several studies did not find a bonding link between the strategic thinking in human resource
strategies, and the overall governmental organisational performance which was observed
(Combs et al., 2006); otherwise, the link is vague (Bartlett, 2001). Each study included the
dissimilarities that constitute on the overall governmental organisation performance, and
strategic thinking human resource development strategies. The main purpose of this study is
to explore whether strategic thinking affects the human resource development strategies in
Jordan.

Literature Review

Although two decades have passed since the introduction of strategic thinking theory in the
strategic field, the literature has mostly been theoretical and empirical, and quantitative
research in this area has been limited. Although the idea of strategic thinking has persisted in
the literature for more than a quarter of a century, it has been incorrectly generalised to other
facets of the creation of organisational action, such as ‘strategy’, ‘strategy management’, and
‘strategy preparation’ (Liedtka, 1998). The issue has two origins. Firstly, the discrepancy
between theoreticians on how to construct organisational approaches. Secondly, the lack of a
clear definition of strategic thinking in an abstract context (Goldman & Casey, 2010). Bonn
(2005) suggested that the current disparity in the interpretation of strategic thinking is the
result of a lack of awareness of this general concept, and a restricted growth of corporate
leaders. Strategic thinking is slower, more complex, and more problem-oriented than
practical activities, and its elements are studied reflectively and not in terms of experience
(Goldman & Casey, 2010). Some theoreticians incorporate individual views and present
strategic thinking as behaviour, such as organised vision, strategy setting, brilliant use of
potential, time-frame thought, hypothesis-based approach, and evaluation (Liedtka, 1998).
Abraham (2005) suggested that strategic thinking was similar to defining viable approaches
or business models that were portrayed to valued customers.

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Strategic thinking is the process of finding new ways to compete and create value for
customers. Therefore, strategic thinking can be characterised as an alternative way or
business model that creates value for consumers (Abraham, 2005). A person who applies
strategic thinking (i.e. implementation of the policy) conducts research to establish the
approach, such as analysis and questioning, issue, conceptualisation, and research (Goldman
& Casey, 2010). After studying literature and history, Goldman and Casey (2010) described
strategic thinking as conceptual, system-oriented, tactical, and opportunity-oriented thinking,
which will result in new and creative organisational strategies.

Strategic Thinking Competencies

The origins of strategic thinking for organisations began in the early twentieth century. The
most basic strategic thinking methods were developed between 1960, and 1990. According to
Allio (2006), when strategic thinking flourished, as indicated by Lin et al. (2016), strategic
planning was first introduced in the nineteen-fifties. Subsequently, it shifted its focus on
strategic management until it reached strategic thinking.

Liedtka (1998) found that the term ‘strategic thinking’ became common in the area of the
strategic approach. The term strategic thinking is used not to focus on a single type of
thinking and features, but to describe a systematic thinking of planning. Strategic thinking is
a way to solve practical challenges that incorporate logical and convergent methods with
creativity, as well as focussed analysis (Bonn, 2005). In other words, Abraham (2005)
described strategic thinking as the process of finding new ways to compete and give
customers interest.

In addition, Karğin and Aktas (2012) found that strategic thinking capabilities mainly
consisted of three skills: analytical thought, observation, and reframing. In addition, Moon
(2013) described four strategic thinking capabilities: systematic, innovative, vision-oriented,
and market-oriented thinking. In the current study, the researcher adopted a method that was
specified by Moon (2013) to measure the major competencies of strategic thinking by
measuring the first three competencies, for which they are considered the most appropriate
for the current study.

Innovation Thinking Competence

Innovative thinking is a dynamic and purposeful mental operation guided by a strong desire
to seek solutions or to arrive at original products or services, which were not known
previously. Creative thinking is defined by comprehensiveness and difficulty because it
includes cognitive, emotional, and ethical overlapping elements that constitute a specific state
of mind (Jarwan, 1999). It has been described as a mixture of abilities, strategies, and

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personal characteristics that can be elevated to mental processes, if an adequate atmosphere

occurs to achieve original and useful results for the individual’s previous experience, and for
the experience of the organisation (Jarwan, 2002).

Therefore, the opportunity to use innovative thinking represents the creation of many
possibilities and the likelihood of being exposed. clarified this point: ‘Without innovative
thinking, we cannot make full use of the knowledge and experience that is normally available
to us, and thus we are trapped in old structures, outdated habits, traditional ideas, and vague
expectations’.

Vision-oriented Thinking Competence

Al-Naimi (2003) defined vision-oriented thinking competence as an important potential

exploration. The expectations of strategists are embodied in the desired state of the future of
the company (David, 2009). In addition, Al-Naimi described the skill of vision-oriented
thought as a collection of large and comprehensive expectations to characterise the
exploration of the future with the precision of the methods used to achieve desired goals. The
same direction is compatible with the statements of Johnson and Scholes (2008), as the
relation between vision-oriented thought ability, and strategic purpose reflects the strategists’
point of view, which is the ideal circumstance for the future of the business organisation.
Consequently, the vision-oriented thought that pervades the company enhances and improves
engagement instead of embracing and establishing the attitude of the culture that infiltrates
the organisation, as a whole. It also increases the creativity or understanding of individuals
and creates a direction that encourages individuals to participate in such ways. The skill of
vision-oriented thought at the higher level helps give meaning, and provides guidance during
decision-making (Liedtka, 1998)

Systematic Thinking Competence

Strategic thinking is described as a shift away from the view of an enterprise, as a divided
society made up of separate parts that compete for resources to be seen and interacted with,
as a comprehensive system that incorporated each component into a partnership. This
definition requires the ability to get away from the problems of daily work, and notice how
various situations and critical topics are related to one another. For example, a cure that
impacts a particular area has the same effect in other areas (Liedtka, 1998). In any case, this
holistic view of the company needs a comprehensive awareness and control of its internal and
external complexities, particularly the issue of how organisation managements act to change
over time, and the complexities of input that led to such adjustments. These circumstances
include recognising how organisations become part of large and complex structures (Stacey,
2007).

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Organisational Development Strategy

The creation of investment resources allows businesses to create competitive advantage and
wealth. Most businesses struggle to inspire people to seek entrepreneurship opportunities,
thereby reducing the competitive advantage of the company (Day & Wendler, 1998).
Entrepreneurs can leverage opportunities to create a temporary advantage rather than a
permanent one. This situation occurs when businessmen are not effective in handling capital
strategies, thereby posing difficulties in a sustainable and lasting edge (Hitt, Ireland, Camp, &
Sexton, 2001). As a consequence, performing opportunity-related (e.g. entrepreneurship), and
advantage-related (e.g. plan management) activities become necessary to create capital.
However, one opportunity is not adequate (Amit & Zott, 2001).

Hitt et al. (2001), and Ireland et al. (2003) discovered that entrepreneurship policy consists of
competitive entrepreneurship. Enterprises may receive incentives, but they are not in the
position to maximise them. Thus, future capital is not generated, and beneficiaries are not
awarded with their privileges. Consequently, companies that demonstrate competitive
advantage but are unable to identify new prospects pose challenges, such as market changes
that may stop wealth creation or even minimise persistent wealth creation, from the
beneficiaries. Wealth is created when companies mix the productive action of opportunism
(entrepreneurship) with the successful activity of finding advantage (strategic management)
(Ireland et al., 2003).

Strategic Thinking Elements

Takor indicated that strategic thinking consists of characteristics, such as being active, risk-
taking, central control, and power communications (Robinson, 2012). The other aspects of
strategic thinking, which include systemic perspective, time-based analysis, intentionality,
and optimism, have been discussed by Liedtka (1998). If employees can think creatively, and
the organisation has facilitated a high-quality designed system, then these aspects allow the
organisation towards change, and will have a positive impact on its performance (Liedtka,
1998).

Abraham stated that the powerful reasons for enhancing strategic thinking include creativity,
finding new possibilities, futurism, teamwork, and being distinctive (Abraham, 2005). Bonn
considered three characteristics that are important for strategic thinking, namely, awareness
of the internal and external environment, such as complexity, and networks; innovation; and
vision. Liedtka (1998) added several other elements to Bonn’s characteristics, including the
maximisation of the available resources through possible opportunities, thinking based on
time, and the ability to be speculated.

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Strategic Human Resource Development

Strategic human resource development is a different conceptualisation of human resource

development (Sambrook, 2000; Garavan & Carbery, 2012). In terms of general system
theory, strategic human resource development is a component within the organisation
structure. In addition, human resource development is the function of the strategic human
resource development subsystem. Also, the main distinction between human resource
development, and strategic human resource development is their scope. Human resource
development incorporates all activities related to learning (Garavan, Costine & Heraty, 1995;
Lammintakanen, Kivinen & Kinnunen, 2008; Sambrook, 2004).

Human resource development explores learning at all stages within the company, whereas
human resource development examines practices at the strategic level. The functional
framework involves operational goals and strategies for enhancing corporate efficiency
(Blazey, 2013; Wognum & Lam, 2000). The distinction lies in the emphasis of human
resource development on the structure level process selection, execution, and evaluation at
the organisational framework level of the enterprise.

In human resource development, shifting the demographics of the population was a

precipitating factor in altering the conceptualisation of human resource development
operations within the company. At present, we are on the cutting edge of a new world system
after suffering from the COVID-19 pandemic, and because of the changes in the world
economic system a few decades ago.

Even with the increased need for and legitimacy of human resource development activities,
many organisations began to reduce the amount of available human resource development to
their employees. The increasing global economic competition, and decreased productivity in
relation to international competitors has resulted in closer scrutiny of expenditures and
reduced the number of training opportunities in many organisations (Oakes, 2014).

Early strategic human resource models illustrate how human resource development activities
could improve organisational performance (Garavan, 1991; Torracco & Swanson, 1995). The
models incorporated the word ‘strategic’ to make an explicit distinction between earlier
human resource development models (Garavan 1991; Fredericks & Stewart 1996; Harrison,
1997; Lee, 1997; Sambrook, 2000). This distinction was predicated by the need to illustrate a
more business-focussed approach for carrying out human resource development activities;
one that emphasised ROI, and the impact human resource development activities could have
on organisational goals. Additionally, the emphasis on strategy illustrated how human
resource development could be impactful beyond simply training employees. Rather than
using strategic human resource development, complete systems of human resource

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development activities throughout the organisation could be aligned with strategic goals to
affect the performance of the employees and organisations in the present, and future.
According to the previous analysis of a literature review, this study proposed the following
research models (Figure 1) followed with the research hypotheses.

Figure 1. Study Model Independent Variables’ Dependent Variable

H01: strategic thinking has a significant impact on human resources development strategy at
the level of (α≤ 0.05).
H01a: systematic thinking has a significant impact on human resources development strategy
at the level of (α≤ 0.05).
H01b: innovative thinking has a significant impact on human resources development strategy
at the level of (α≤ 0.05).
H01c: vision-oriented has a significant impact on human resources development strategy at
the level of (α≤ 0.05).

Methods

To explore the impact of strategic thinking on human resource development strategy, this
study adopted a quantitative technique in collecting and analysing data using the SPSS. The
data were collected from managers in all levels at one of the government organisations in
Jordan. The study population consisted of 3,466 employees from all different organisational
levels. It was selected as a random sample of 300 managers and their assistants, and
department heads and supervisors. The majority of respondents were male (65 per cent, n =
195), and most of them hold a bachelor degree (72 per cent, n = 216), while the remainder
held a masters degree and Ph.D. Regarding the position, the majority of the study sample
were supervisors and section heads (66 per cent, n = 198), followed by managers (23 per
cent, n = 69), and a minority were deputy and assistant managers (11 per cent, n = 33). The
internal consistency test (Cronbach alpha) was used to measure the consistency of the study
measurement, and to obtain an alpha value (Alpha ≥ 0.60), which is generally acceptable to
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human sciences (Sekaran & Bougie, 2010). After the test, all the values obtained from the
study variables were greater than the minimum acceptable value.

Results

To test the hypothesis of the study, a multiple regression analysis was used to investigate the
impact of the dimensions of the strategic thinking (systemic, innovative, and vision-oriented
thinking) among the managers in developing human resource strategies. The Table 1 shows
the statistical analysis results. The results showed that strategic thinking (e.g. systemic,
innovative, and vision-oriented thinking) has a statistically significant impact on human
resources development strategy.

Table 1: Results of multiple regression analysis

Independent Variables β T Sig.
Systematic Thinking 0.237 2.200 0.030
Innovative Thinking 0.208 2.137 0.035
Vision-Oriented Thinking 0.306 3.017 0.003
R= 0.625, R =0.390, F=20.283.
2

DV: Human Resources Development Strategy

As shown in Table 1, the correlation coefficient R (0.625) was at (α ≤ 0.05). The coefficient
of determination R2 was 0.390, indicating that the changes in human resources development
strategy was a result of the changes in strategic thinking (e.g. systemic, innovative, and
vision-oriented thinking).

The values of the degree of impact of the beta for systemic, innovative, and vision-oriented
thinking competence are (β = 0.237), (β = 0.208), and (β = 0.306), respectively. This result
suggests that a one-degree increment in systemic, innovative, and vision-oriented thinking
increases human resources development strategy by 23.7 per cent, 20.8 per cent, and 30.6 per
cent, respectively. The significance of this effect confirms the calculated F value, which has
reached 20.283 at a significant level of (α≤ 0.05). All study hypotheses are accepted on the
basis of these findings.

Discussion and Conclusions

The studied organisation uses strategic thinking to develop their human resources strategy.
The findings of this study show that vision-oriented thinking was the most significant
variable, followed by systematic thinking, and finally, innovating thinking. These findings
are expected based on the nature of the study sample, firstly because the participants are
working at a semi-military organisation. Thus, they have a strong bureaucracy, and a
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systematic job design. The finding of this study has highlighted the importance of each
dimension of strategic thinking in developing corporate and business strategies, specifically
those for human resources.

This study concludes that the development of human resource strategies depends on strategic
thinking. That is, through vision-oriented, systematic, and innovate thinking. Therefore,
Jordan’s government organisations should encourage their managers, in all levels, to be more
vision-oriented when they are involved in formulating strategies. Also, managers should be
aware of the impact of different work elements on one another, and within a whole system,
which may help Jordan’s government organisations in fostering the development of
strategies, and human resources specifically. In addition, Jordan’s government organisations
should create an environment that encourages innovative thinking among employees to
motivate them to share knowledge, experience, skills, and their ideas regarding the
development of human resources, and other kinds of strategies. The study recommends
decision makers in Jordan’s governmental, and private organisations to pay more attention in
all the dimensions of strategic thinking (e.g. systemic, innovative, and vision-oriented
thinking), and rely on them when they intend to formulate a new strategy. In addition, this
study recommends managers to focus on strategic thinking to enhance the capabilities of their
human resources, and focus on empowering the development strategies implemented by the
human resource department.

Moreover, future research should consider more variables, such as employee engagement,
organisational citizenship behaviour, commitment, and other organisational and socio-
psychological factors that may affect the development of human resource strategies.

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