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  • November–December 2019
  • Article
  • Organization Science

Pivoting Isn't Enough? Managing Strategic Reorientation in New Ventures

By: Rory McDonald and Cheng Gao
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Abstract

New ventures often experience deviations from their plans that oblige them to reorient in pursuit of better fit between their evolving products and their target customers. Yet research is largely silent on how managers explain such changes and justify their ventures in the wake of fundamental redirections in strategy. Ventures initially attain legitimacy and amass resources on the strength of aims that audiences find compelling; later, those early claims can complicate course corrections. To shed light on how ventures manage strategic reorientations, we conducted an inductive, comparative-case of software-based financial advisors. The ventures pursued parallel reorientations and produced comparable end products, but diverged conspicuously in managing audiences during transitions. Our process model, inspired by these differences, proposes a sequence of stratagems that may enable entrepreneurs to alter strategy while portraying faithfulness to enduring aims. Our theoretical framework posits that for ventures, reorientation without penalty may depend on how they anticipate, justify, and stage changes to various audiences.

Keywords

Strategic Reorientation; Technology Entrepreneurship; Innovation; Product Development Processes; Organizational Adaptation; Qualitative Methods (General); Entrepreneurship; Information Technology; Organizational Change and Adaptation; Strategy; Innovation and Invention; Product Development; Communication Strategy

Citation

McDonald, Rory, and Cheng Gao. "Pivoting Isn't Enough? Managing Strategic Reorientation in New Ventures." Organization Science 30, no. 6 (November–December 2019): 1289–1318.
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About The Author

Rory M. McDonald

Technology and Operations Management
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More from the Authors
  • Disrupting Defense at Anduril Industries By: Rory McDonald, Timothy Buehn, Aditi Ghai and James Heffelfinger
  • Productive Tensions: How Every Leader Can Tackle Innovation's Toughest Trade-Offs By: Chris Bingham and Rory McDonald
  • The Past Is Prologue? Venture-Capital Syndicates' Collaborative Experience and Start-Up Exits By: Dan Wang, Emily Cox Pahnke and Rory McDonald
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