Kathleen M. Eisenhardt, Stanford University
Kathleen M. Eisenhardt, Stanford University
Weaving Strategic Decisions: Strategy Formation under Novelty, Resource Constraint and Complexity (with Timothy Ott)
Weaving Strategic Decisions: Strategy Formation under Novelty, Resource Constraint and Complexity (with Timothy Ott)
Prior research has shown that executives can
benefit by forming strategy both through holistic design and incrementally
learning through action but that the two processes are often at odds with one
another. This study seeks to explore how executives combine holistic and
incremental processes to form strategy in novel, complex, and resource
constrained environments. Through an in-depth, multiple case study of early
stage, two-sided market firms, we develop a theoretical framework to describe
how executives create and maintain strategies for growth. We find that
executives weave strategic decisions together into a system of activities
through two separate but complimentary practices. They use sequential focus to
intensely devote resources to learning in a single decision domain at a time
while using stepping stones in other domains to move incrementally toward
future goals without distracting from their focus. Our results have
implications for research on the microfoundations of strategy and
organizational theory.