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Performance implications of strategic changes: An integrative framework

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  • Pangarkar, Nitin

Abstract

Companies often initiate strategic changes to adapt to an evolving environment and/or to improve their competitiveness and performance. In this article, I examine why some strategic changes are fruitful for the companies that initiate them whereas others are not. I propose a framework for understanding the fruitfulness of strategic changes based on their expected impact on competitiveness and likely stakeholder commitment to the changes. I propose that strategic changes are likely to be most fruitful when their potential to enhance competitiveness is high and the stakeholder commitment is likely to be high. At the other end of the spectrum, companies should avoid implementing strategic changes that have low potential to enhance competitiveness and where the stakeholder commitment is low. Being poor strategic choices, these changes may not enhance competitiveness or performance, but, in fact, detract from them. I provide case-based evidence for the framework drawing on strategic changes implemented by Starbucks, McDonald's, and Tupperware and also identify conditions, specifically relating to the decision-making process and corporate governance, under which detrimental strategic changes may be implemented. I also offer a set of recommendations to companies to help them avoid making poor strategic choices.

Suggested Citation

  • Pangarkar, Nitin, 2015. "Performance implications of strategic changes: An integrative framework," Business Horizons, Elsevier, vol. 58(3), pages 295-304.
    • Handle: RePEc:eee:bushor:v:58:y:2015:i:3:p:295-304
    DOI: 10.1016/j.bushor.2015.01.003
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    References listed on IDEAS

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    1. Dennis A. Gioia & Kumar Chittipeddi, 1991. "Sensemaking and sensegiving in strategic change initiation," Strategic Management Journal, Wiley Blackwell, vol. 12(6), pages 433-448, September.
    2. Edward J. Zajac & Matthew S. Kraatz & Rudi K. F. Bresser, 2000. "Modeling the dynamics of strategic fit: a normative approach to strategic change," Strategic Management Journal, Wiley Blackwell, vol. 21(4), pages 429-453, April.
    3. Vincent L. Barker Iii & Irene M. Duhaime, 1997. "Strategic Change In The Turnaround Process: Theory And Empirical Evidence," Strategic Management Journal, Wiley Blackwell, vol. 18(1), pages 13-38, January.
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    Cited by:

    1. Schonberger, Richard J., 2019. "The disintegration of lean manufacturing and lean management," Business Horizons, Elsevier, vol. 62(3), pages 359-371.

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