Evaluating Strategy Formation: A Multi-Case Study
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School of Science |
Master's thesis
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Date
2012
Department
Major/Subject
Yritysstrategia ja kansainvälinen liiketoiminta
Mcode
TU-91
Degree programme
Language
en
Pages
179 + [16]
Series
Abstract
In complex, dynamic and unpredictable conditions companies are forced to adapt to change. Effective and responsive strategy formulation is crucial to a company's success. Existing literature on strategy formulation is mainly limited to evaluating reactively the strategy outcome over time whereas practitioners need proactive confidence on their current decisions. The right form of the process can support both the quality of the decisions and their implementation. This thesis investigates the drivers of successful strategy formation with the following research questions:. 1. What are the drivers of successful strategy formation according to literature?. 2. What antecedents and process characteristics drive strategy formation in the case companies?. 3. What are the theoretical and managerial implications of the study?. The literature review of the study builds a framework for analyzing a company's strategy formation antecedents (incl. organizational, environmental and strategic context), formulation process characteristics (incl. strategist, issue and actions), and formulation process outcomes (incl. strategic thinking, strategic planning, embedding). In addition, the study identifies dominant lenses of strategy formation process research that are used for reflecting on the case companies. Three archetypes of strategy formation were recognized in the set of case companies studied. The Portfolio firm, belonging to a private equity investor's portfolio, is top-management driven, owner-controlled, and relying on external support in its strategy formulation. The Process industry firm operates in capital intensive industry where capital budgeting and long range planning is essential in strategy formulation. The Cooperative firm, on the other hand, differs in terms of its distributed power, resources and ownership that call for involvement in strategy making. In addition, the study shows that the reign of formal strategic planning in firms is still continuing but should be challenged with insight from e.g. strategy-as-practice view. Furthermore, the study suggests that contextual factors should define the mode of facilitation and the equilibrium of top-down command and bottom-up involvement in strategy formulation.Description
Supervisor
Keil, ThomasThesis advisor
Ere, TomiPajunen, Jaakko
Keywords
strategy formulation, strategian muodostaminen, strategy formation, strategian muodostuminen, strategy process, strategiaprosessi