Performance implications of strategic changes: An integrative framework

Nitin Pangarkar

Business Horizons, 2015, vol. 58, issue 3, 295-304

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.

Keywords: Strategic changes; Performance implications; Stakeholder commitment; Tupperware; Starbucks; McDonald's (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:bushor:v:58:y:2015:i:3:p:295-304

DOI: 10.1016/j.bushor.2015.01.003

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