Strategic Renewal of Organizatio
Organization Science
Vol. 20, No. 2, March–April 2009, pp. 281–293 issn 1047-7039 eissn 1526-5455 09 2002 0281
informs
®
doi 10.1287/orsc.1090.0423 © 2009 INFORMS
Strategic Renewal of Organizations
Rajshree Agarwal
College of Business, University of Illinois, Champaign, Illinois 61822, agarwalr@illinois.edu
Constance E. Helfat
Tuck School of Business, Dartmouth College, Hanover, New Hampshire 03755, constance.helfat@dartmouth.edu
S
trategic renewal, although critical for the sustained success of organizations, has received relatively little attention as distinct from the more general phenomenon of strategic change. Like all strategic issues, strategic renewal presents both opportunities and challenges for organizations. In this article, we first define the term “strategic renewal” and elaborate on important characteristics of this phenomenon. We also bring to bear evidence that suggests that strategic renewal has a critical impact not only on individual firms and industries but also on entire economies. We then provide an in-depth example of a company that has successfully renewed itself more than once, namely, IBM. Finally, we examine several different avenues for strategic renewal, involving both content and process, and identify common themes among them. Key words: strategic renewal; dynamic capability; innovation; cognition; market entry History: Published online in Articles in Advance March 6, 2009.
Introduction
“Strategic renewal” has a nice ring to it. But what does it really mean? Strategic renewal is often discussed but rarely defined. Research that refers to “strategic renewal” frequently uses the term to motivate examples of strategic change more generally, with most examples highlighting the process of change. Although some research has focused squarely on strategic renewal (e.g., Huff et al. 1992, Floyd and Lane 2000), this research also has tended to focus on organizational processes. Like all strategic issues, however,
Vol. 20, No. 2, March–April 2009, pp. 281–293 issn 1047-7039 eissn 1526-5455 09 2002 0281
informs
®
doi 10.1287/orsc.1090.0423 © 2009 INFORMS
Strategic Renewal of Organizations
Rajshree Agarwal
College of Business, University of Illinois, Champaign, Illinois 61822, agarwalr@illinois.edu
Constance E. Helfat
Tuck School of Business, Dartmouth College, Hanover, New Hampshire 03755, constance.helfat@dartmouth.edu
S
trategic renewal, although critical for the sustained success of organizations, has received relatively little attention as distinct from the more general phenomenon of strategic change. Like all strategic issues, strategic renewal presents both opportunities and challenges for organizations. In this article, we first define the term “strategic renewal” and elaborate on important characteristics of this phenomenon. We also bring to bear evidence that suggests that strategic renewal has a critical impact not only on individual firms and industries but also on entire economies. We then provide an in-depth example of a company that has successfully renewed itself more than once, namely, IBM. Finally, we examine several different avenues for strategic renewal, involving both content and process, and identify common themes among them. Key words: strategic renewal; dynamic capability; innovation; cognition; market entry History: Published online in Articles in Advance March 6, 2009.
Introduction
“Strategic renewal” has a nice ring to it. But what does it really mean? Strategic renewal is often discussed but rarely defined. Research that refers to “strategic renewal” frequently uses the term to motivate examples of strategic change more generally, with most examples highlighting the process of change. Although some research has focused squarely on strategic renewal (e.g., Huff et al. 1992, Floyd and Lane 2000), this research also has tended to focus on organizational processes. Like all strategic issues, however,