The Evolution of Strategic Simplicity: Exploring Two Models of Organizational Adaption

Some companies compete in a comprehensive and multifaceted way, paying close attention to costs, quality, marketing, expansion, and innovation. Others embrace much simpler competitive strategies and concentrate on just one or two of these elements. This paper examines the causes and consequences of such strategic simplicity in two very different environments: the stable furniture industry and the more turbulent software industry. It was found that a “passive” model of organizational adaptation applied in the former industry: firms simplified their strategic repertoires unless managers felt their firms were threatened or unless the firms had built in slack resources. Thus, simplicity was inversely related to managerial discomfort and administrative slack, and positively associated with financial liquidity. By contrast, an “opportunistic” model of adaptation seemed to characterize the behavior of companies in the more turbulent computer software industry. In this setting, firms tended to expand their repertoires of competitive strategies whenever “outsiders” with new ideas were added to the top management group. In both industries, simplicity was found to increase subsequent return on assets.

[1]  H. J. Blommestein,et al.  Responding to Crises. , 1997 .

[2]  Danny Miller,et al.  The simplicity of competitive repertoires : An empirical analysis , 1996 .

[3]  J. Dutton,et al.  Advances in strategic management , 1994 .

[4]  R. M. Hall,et al.  A framework linking intangible resources and capabilities to sustainable competitive advantage , 1993 .

[5]  S. Mezias,et al.  The three faces of corporate renewal: institution, revolution, and evolution , 1993 .

[6]  David J. Miller,et al.  The Architecture of Simplicity , 1993 .

[7]  Frances J. Milliken,et al.  The role of managerial learning and interpretation in strategic persistence and reorientation: An empirical exploration , 1992 .

[8]  David Rogers.  The Future of American Banking , 1992 .

[9]  Kim B. Clark,et al.  Product Development and Competitiveness , 1992 .

[10]  Theresa K. Lant,et al.  Aspiration Level Adaptation: An Empirical Exploration , 1992 .

[11]  Michael Niblock,et al.  Managing on the edge , 1992 .

[12]  S. Mezias,et al.  An Organizational Learning Model of Convergence and Reorientation , 1992 .

[13]  D. Hambrick,et al.  The seasons of a CEO's tenure. , 1991, Academy of management review. Academy of Management.

[14]  F. Damanpour.  Organizational Innovation: A Meta-Analysis Of Effects Of Determinants and Moderators , 1991 .

[15]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[16]  David J. Miller,et al.  Stale in the Saddle: CEO Tenure and the Match Between Organization and Environment , 1991 .

[17]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[18]  C. Prahalad,et al.  The Core Competence of the Corporation , 1990 .

[19]  Warren Boeker,et al.  Strategic Change: The Effects Of Founding And History , 1989 .

[20]  Glenn R. Carroll,et al.  Ecological models of organizations , 1988 .

[21]  M. Tushman,et al.  Readings in the Management of Innovation , 1988 .

[22]  Frances J. Milliken,et al.  Challenger: Fine-Tuning the Odds Until Something Breaks , 1988 .

[23]  Donald C. Hambrick,et al.  Large Corporate Failures as Downward Spirals , 1988 .

[24]  Warren Boeker,et al.  Organizational Origins: Entrepreneurial and Environmental Imprinting of the Time of Founding , 1988 .

[25]  Donald C. Hambrick,et al.  The Top Management Team: Key to Strategic Success , 1987 .

[26]  J. Ford,et al.  Organizational Adaptation to Performance Downturns: An Interpretation-Based Perspective , 1987 .

[27]  T. Roehl,et al.  Mobilizing invisible assets , 1987 .

[28]  Donald C. Hambrick,et al.  Managerial Discretion: A Bridge Between Polar Views of Organizations , 1987 .

[29]  Jitendra V. Singh.  Performance, Slack, and Risk Taking in Organizational Decision Making , 1986 .

[30]  A. V. D. Ven,et al.  Central problems in the management of innovation , 1986 .

[31]  J. Pennings.  Organizational strategy and change , 1985 .

[32]  Daniel A. Levinthal,et al.  Learning from Experience in Organizations , 1985 .

[33]  M. Tushman,et al.  Organizational Evolution: A Metamorphosis Model of Convergence and Reorientation , 1985 .

[34]  R. J. House,et al.  Organizations: A Quantum View , 1984 .

[35]  P. Nystrom,et al.  To Avoid Organizational Crises, Unlearn , 1984 .

[36]  Barry M. Staw,et al.  The Justification of Organizational Performance. , 1983 .

[37]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .

[38]  R. Osborn,et al.  Handbook of Organizational Design. Vol. 1: Adapting Organizations to Their Environments. , 1982 .

[39]  M. K. D. Vries,et al.  Top Executive Locus of Control and Its Relationship to Strategy-Making, Structure, and Environment , 1982 .

[40]  R. Katz.  The Effects of Group Longevity on Project Communication and Performance. , 1982 .

[41]  P. H. Friesen,et al.  Innovation in Conservative and Entrepreneurial Firms: Two Models of Strategic Momentum , 1982 .

[42]  Gavin J. Wright.  An evolutionary theory of economic change , 1982 .

[43]  I. Janis.  Groupthink: Psychological Studies of Policy Decisions and Fiascoes , 1982 .

[44]  Daniel A. Levinthal,et al.  A model of adaptive organizational search , 1981 .

[45]  Barry M. Staw,et al.  Threat-rigidity effects in organizational behavior: A multilevel analysis. , 1981 .

[46]  L. Bourgeois.  On the Measurement of Organizational Slack , 1981 .

[47]  B. Hedberg.  How Organizations Learn and Unlearn , 1981 .

[48]  Danny Miller,et al.  Momentum and Revolution in Organizational Adaptation , 1980 .

[49]  J. March.  Footnotes To Organizational Change , 1980 .

[50]  Lawrence R. Jauch,et al.  Short term financial success in large business organizations: The environment‐strategy connection , 1980 .

[51]  L. J. Bourgeois,et al.  Strategy and Environment: A Conceptual Integration , 1980 .

[52]  J. Pfeffer,et al.  The External Control of Organizations. , 1978 .

[53]  R E Miles,et al.  Organizational strategy, structure, and process. , 1978, Academy of management review. Academy of Management.

[54]  Robert J. Litschert,et al.  A Conceptual Model of Strategy Formation , 1978 .

[55]  James G. March,et al.  The Structure of Chaos: Organized Anarchy as a Response to Ambiguity@@@Ambiguity and Choice in Organizations. , 1977 .

[56]  P. Khandwalla.  The design of organizations , 1977 .

[57]  Henry L. Tosi,et al.  On the Measurement of the Environment: An Assessment of the Lawrence and Lorsch Environmental Uncertainty Subscale , 1973 .

[58]  Jay R. Galbraith.  Designing Complex Organizations , 1973 .

[59]  J. Child.  Organizational Structure, Environment and Performance: The Role of Strategic Choice , 1972 .

[60]  M. Aiken,et al.  The Organic Organization and Innovation , 1971 .

[61]  K. Weick.  The social psychology of organizing , 1969 .

[62]  James D. Thompson.  Organizations in Action , 1967 .

[63]  J. March,et al.  Handbook of organizations , 1966 .

[64]  O. Williamson.  The economics of discretionary behavior : managerial objectives in a theory of the firm , 1965 .

[65]  M. Shubik,et al.  A Behavioral Theory of the Firm. , 1964 .

[66]  Tom R. Burns,et al.  The Management of Innovation. , 1963 .

[67]  W. Ashby,et al.  An introduction to cybernetics. , 1956 .