White water, still water : strategy making processes for navigating a changing domain

Abstract

This study began with the idea that managers make business-level strategic decisions both by adapting to circumstances and by exercising analytical choice processes. Industry competitive conditions were proposed to affect the interplay of the two elements of strategy making over time. Five broad research questions guided this project: (1) How do organizations blend analysis and adaptation in strategic decision making when industry competitive conditions are mild? ; (2) Does this blend change in a patterned way when industry competition intensifies? ; (3) What do these patterns look like? ; (4) What firm characteristics are associated with the patterns?; and (5) Why do these patterns emerge? A model suggesting possible answers to these questions was proposed, and field research to substantiate the model and investigate a set of research propositions generated by the model was conducted in eight firms in eight different industries. An embedded multiple case design was used to trace at least two strategic decisions in each firm. Extensive interviews with every top management executive, along with available internal documents and public records were used to construct decision time lines. Data was collected and analyzed about each strategy making team and their interactions, as was information about current and past industry conditions facing each firm. Findings indicated that analytic and adaptive approaches to strategy making were combined in all sample firms, and that in most cases, the blend of these approaches changed in a patterned way as competitive conditions intensified. Each proposed strategy making pattern could be identified in the sample, and only one firm could not be confidently assigned to one of the proposed patterns. Indicators of these patterns included team communication density and communication openness, team coalition formation habits, perceptions of the success of past strategies, the presence of approach champions on the team, firm market strength, the trigger of industry competition and the historic pattern of industry competition. A final dynamic model was offered to suggest how the relationship between changes in industry competitive conditions and changes in strategy making approaches was mediated by the firm's external orientation and its ability to exert control over its competitive system.