What is it about?
New technologies require organisations to develop new capabilities and competencies if they are to use them strategically. These capabilities may be developed in-house or acquired externally. A resource-based view suggests a rational stepwise model of how organisations acquire new resources (the build/buy decision) when taking a new strategic direction. Although emergent strategy is addressed to some extent (Wernerfelt, 1984), the dominant view of strategy formulation in RBV approaches is a rational, stepwise progression through a series of capability and competency acquisitions and deployments. However, this paper identifies two models for utilising new technologies, one confirming the rational stepwise model of strategic planning, and one that is emergent. These outcomes permit the development of a richer resource-based view of strategy to include emergent strategy, and suggest a diverse range of strategic options for organisations exploiting new technologies.
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Why is it important?
There is an assumption that all organizations have strategies (Buckland, 2009), and that strategy is developed in response to managerial perceptions of the need to change (Ambrosini et al., 2009). However, this strategic process is not consistent with an emergent, bottom-up view of strategy (Buckland, 2009; Easterby-Smith et al., 2009). The aim of this research, therefore, is to provide a basis for understanding how a model of emergent strategies might be incorporated in the resource-based view (RBV). Two ideal models of strategy development are identified in this research: one is rational stepwise; the other is emergent, ex-post, relying on experimentation, where strategy is used to legitimize what has already been accomplished. The findings permit the development of a richer RBV of strategy to include emergent strategy.
Perspectives
The research finds that there are two ideal models of strategy development: one rational stepwise, the other emergent, relying on experimentation as the main driver for exploitation of new technologies; ex ante and ex post are extremes of a continuum and therefore ideal types. Different capabilities are deployed at different times, confirming the view of dynamic capabilities. Capabilities for either model may be acquired internally or externally, but with ex-post emergent strategy, core capabilities are acquired internally through experimentation, and strategy is used as a legitimizing process to confer organizational acknowledgment of what has already been accomplished. The determination of experimentation as the principal means of implementing emergent technology-based organizational change supports the situated change perspective (Orlikowski, 1996). It is in the day-to-day activities of practitioners that opportunistic change emerges from experimentation. This research places that view of change in the resource-based view of the firm. This research also suggests that firms might deliberately take an ambidextrous approach and seek a balance of planning and emergence in their strategy process (Raisch et al., 2009).
Dr Julian M Sims
Birkbeck University of London
Read the Original
This page is a summary of: A Resource-Based View of the Build/Buy Decision: Emergent and Rational Stepwise Models of Strategic Planning, Strategic Change, January 2016, Wiley,
DOI: 10.1002/jsc.2044.
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