An exploration of the strategy formation process in diverse business organisations

Abstract

The business environment is perceived as becoming ever more turbulent. New strategic management theories point to a more organic and emergent strategy formation process, emphasising the paradox of control and questioning management’s role within the strategy domain. This research investigates the theoretical and empirical relationships between strategy formation, management’s role and the business environment within different organisations and at different times. Sixteen cases, representing insights of the strategy formation process in a large high technology company, are presented based on action research conducted over a nineteen month period. A theoretical framework, named the Strategy Formation Matrix, is developed to investigate the relationship between the strategy formation type and the management role. The model is validated and researched theoretically against the strategy literature and empirically in a multiple case study with six diversified companies. The framework is later extended to incorporate the business environment and these relationships are investigated based on a sample of seventeen diversified companies, who represent different industrial sectors and vary in size from small to medium to large. This research has developed new frameworks and models to describe the relationships between the business environment, the strategy formation process, management’s role and the size of organisation. In addition, it adds to existing models and challenges existing theories that link increased turbulence with a more emergent strategy formation process and a static business environment with a more intended strategy formation process.