بازآفرینی استراتژیک سازمان strategic renewal of organizations

Strategic 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, strategic renewal has important content aspects as well. The need to incorporate both content and process aspects of strategic renewal, along with a lack of clarity regarding the term itself, suggests that we first need a working definition of strategic renewal. Then, we need to better understand what strategic renewal consists of and how firms cope with the challenges and opportunities that strategic renewal presents. In what follows, we first define what we mean by 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. Then we provide an example of a company that has successfully renewed itself more than once, namely, IBM, and show how IBM’s experience can help us to understand strategic renewal more generally. Finally, we examine several different avenues for strategic renewal, exemplified by the articles in this special issue, and identify common themes among them. Defining Strategic Renewal To define the term “strategic renewal,” we first define what we mean by “strategic” and then define “renewal.” There are numerous definitions of “strategy,” along with numerous conceptions of what it means to be “strategic,” and we do not propose to arbitrate among them here. Instead, for purposes of our analysis, we define “strategic” as “that which relates to the long-term prospects of the company and has a critical influence on its success or failure.”۱ In this definition, something is strategic if it relates to a firm’s future prospects in a substantial way. Some factors that are critical to a company’s long-term prospects may be relatively unimportant to its current well-being, and vice versa. In addition, because a firm and its managers cannot predict with certainty what factors will turn out to be critical for success in the future, factors that have the potential to affect an organization’s long-term prospects in a substantial way also are strategic. There is a long laundry list of factors that fall into the category of potentially critical to an organization’s future. As examples, Rumelt et al. (1994) mention goals, products and services, policies that determine how a firm competes in product markets with regard to rivals, scope and diversity of businesses, organization structure, administrative systems, and policies that define and coordinate work. Recent scholarship suggests that to this list we must add critical resources (tangible and intangible assets), capabilities, routines and other processes, and people (individuals and teams) that affect an organization’s ability to succeed in the future. Winter (2007) observes that “issues relating to the development and decay of [resources and] capabilities are quintessentially strategic because they define the menu of future choice” (p. 27). Using reputation for trustworthiness as an example, Winter (2007) notes that 281 Agarwal and Helfat: Strategic Renewal of Organizations 282 Organization Science 20(2), pp. 281–۲۹۳, © ۲۰۰۹ INFORMS a good reputation is a critical determinant of a firm’s relationships with stakeholders such as suppliers and customers, which in turn affect future opportunities. Like many strategic assets, reputation takes time and effort to build (Dierickkx and Cool 1991, Agarwal et al. 2009), and cannot be immediately duplicated by rivals. Thus, differences in reputation lead to differences in the opportunities available to firms. In addition, given that reputation is often product-specific or market-specific, even good reputations may have built-in constraints regarding the range of choices that they afford for the future. The example of firm reputation applies to many resources and capabilities in that they provide opportunities for the future but also contain constraints (Helfat 2002). Poor-quality resources limit future opportunities due to their low quality; high-quality resources afford greater opportunity but still may be limited in the potential scope of their future application. Hence, strategic opportunities for the future depend in important ways on the current state of the organization (Winter 1987, Nelson 1991). In addition to defining the word “strategic,” we must also define our use of the word “renewal.” Most dictionaries define the verb “renew” as “to make like new” (e.g., Merriam-Webster Online Dictionary 2008). Synonyms include “to refresh” by restoring strength or animation or “to replace” that which is damaged, decayed, old, or worn out (Merriam-Webster Online Dictionary 2008, Webster’s Seven New Collegiate Dictionary 1972, Webster’s New World Dictionary 1962). Dictionaries also make clear that the verb “renew” is distinct from the verb “change.” In its broadest definition, the verb “change” means “to make or become different” (Merriam-Webster Dictionary 2008). Change can include refreshment or replacement, but need not. For example, change might refer to extensions, additions, or deletions without any associated renewal. Thus, renewal is one type of change. Exactly what constitutes “refreshment” or “replacement” for a business organization requires further explanation. To begin, the relevant aspects subject to refreshment or replacement are the strategic attributes of organizations mentioned earlier, such as goals, products and services, resources and capabilities, and the like. The perhaps more difficult question has to do with what it means to refresh or replace such attributes. Here there are several points worth making. First, refreshment or replacement does not necessarily imply restoration of an attribute to its original state. For example, an organization can substitute one type of attribute for a qualitatively different type of attribute. Second, refreshment or replacement can be partial or full. Firms may retain a portion of an attribute in its current state if it continues to serve a useful purpose. Third, refreshment or replacement may extend beyond the original attribute in either size or scope of application. Fourth, firms can undertake strategic refreshment through reconfiguration of current attributes, with or without additions or deletions. Fifth, firms may undertake strategic renewal to refresh or replace current organizational attributes that serve a useful function in the present, but may not do so in the future. Finally, strategic renewal often connotes momentum. The verb “regrow,” meaning “to continue growth after interruption or injury” (Merriam-Webster Dictionary 2008), is particularly germane here. Although regrowth need not be part of renewal, refreshment or replacement may be the first step that provides a basis for future growth. Strategic renewal further encompasses process, content, and outcomes. Merriam-Webster Dictionary (2008) defines the noun “renewal” to include “the act or process of renewing,” “the quality or state of being renewed” (content), and “something renewed” (outcome). The last definition of “something renewed” raises the concern that we must use the word renewal with care, to avoid a performance tautology. The fact that a strategic attribute has been renewed tells us only that it was refreshed or replaced, and that the outcome presumably has a minimal level of functionality. Without further investigation, we cannot tell how well the attribute performs its designated task (its “technical fitness,” in the terminology of Helfat et al. (2007)). Moreover, the fact that renewal has occurred tells us nothing about its contribution to profitability. Ascertaining how well strategic renewal enables a firm to make a living, or what Helfat et al. (2007) term “evolutionary fitness,” requires additional information. The foregoing discussion suggests that strategic renewal has several important characteristics. First, strategic renewal relates to that which has the potential to substantially affect the long-term prospects of a company. Second, strategic renewal encompasses the process, content, and outcome of renewal. Third, strategic renewal involves the refreshment or replacement of attributes of an organization. Fourth, such refreshment or replacement aims to provide a foundation for future growth or development. Based on these characteristics, we define strategic renewal as follows: Strategic renewal includes the process, content, and outcome of refreshment or replacement of attributes of an organization that have the potential to substantially affect its long-term prospects. This definition is intentionally broad. Key aspects of this definition relate to refreshment and replacement, rather than to all types of change, and to the longterm prospects of an organization—without specifying the exact nature of the content, process, or outcome of renewal. The types of organizational attributes and strategic issues that are relevant will depend on the situation. There are many different possible approaches to and avenues for strategic renewal, and our definition allows for this variety. In addition, attempts at strategic renewal Agarwal and Helfat: Strategic Renewal of Organizations Organization Science 20(2), pp. 281–۲۹۳, © ۲۰۰۹ INFORMS 283 may vary in the degree of success, and our definition does not presuppose a particular outcome. Finally, although strategic renewal encompasses content, process, and outcomes, we would not expect an individual research study to necessarily cover all three of these aspects. Having thus defined and elaborated on the concept of strategic renewal at a fairly abstract level, we next examine more concretely why firms may undertake strategic renewal. These reasons vary in important ways that may affect the extent of the changes that firms may put in place, as next explained.