Global Journal of Flexible Systems Management (June 2015) 16(2):113–114 DOI 10.1007/s40171-015-0095-z
EDITORIAL
Strategic Flexibility: The Evolving Paradigm of Strategic Management Sushil
Received: 2 February 2015 / Accepted: 3 February 2015 Ó Global Institute of Flexible Systems Management 2015
Abstract As the dynamics and turbulence in the environment kept on rising, the traditional strategic management paradigms were not found sufficient to cope with the growing uncertainty. And then the paradigm of ‘strategic flexibility’ came to the forefront of industrial practice, which synthesized the strengths of most of the previous theories of strategic management in a novel way to fill the gaps. It connotes the type of flexibility that caters to both the high variety and high speed. The strategic flexibility can be defined as the proactive as well as reactive strategic moves for change, both internally and externally, by leveraging the vital and desirable aspects of the continuity of the organization in terms of core values, culture, core competence, brand, and its strategic positioning. Strategic flexibility also acts as a predictor of vitality and sustainability of the enterprise. It not only acts as a driver of financial performance, but also contributes to long-term survival (continuity) and growth (change) of any enterprise. Strategic flexibility is placed at a higher level of flexibility maturity, both for the organization and the ecosystem. To sum up, it can be contemplated that the rigid frameworks of strategy formulation (rooted into a generic competitive advantage) are giving place to dynamic and flexible frameworks of strategy formulation and execution. Keywords Flexibility maturity Flowing stream strategy Strategic flexibility Strategic management
Sushil (&) Department of Management Studies, Indian Institute of Technology Delhi, Vishwakarma Bhawan, Shaheed Jeet Singh Marg, New Delhi 110016, India e-mail:
[email protected];
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Strategic management has been emerging through multiple frameworks and theories over the timeline of its evolution. It started taking shape as a process of planning over a comparatively longer time frame. The most famous work, in this regard, is that of Porter’s industrial structure view treating the external environment (in the form of five forces framework) as the driving frame. A counter view emerged, subsequently, to highlight the significance of internal resources of a firm for formulating strategy as resource based view. The points and counterpoints of these external and internal drivers of strategic debate have been going on leading to the emergence of the strategic fit theory, balancing these seemingly opposite frames of reference. In view of the dynamics of environment, new frameworks/ theories started taking shape such as dynamic capability theory, core competence, blue ocean strategy, and many more. But as the dynamics and turbulence in the environment kept on rising, the traditional strategic management paradigms were not found sufficient to cope with the growing uncertainty. And then the paradigm of ‘strategic flexibility’ came to the forefront of industrial practice, which synthesized the strengths of most of the previous theories of strategic management in a novel way to fill the gaps. It kept on evolving and maturing and took a combination of both proactive and reactive strategic approaches to respond to the ever changing market place. It connotes the type of flexibility that caters to both the high variety and high speed. The enterprise is supposed to provide value to the customer and other stakeholders by providing more variety or choice and that too, with high speed and agility. In the context where major competitors have already attained high quality levels to the extent of six-sigma, quality may not necessarily act as a significant competitive advantage. The enterprise can generate competitive advantage by
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Global Journal of Flexible Systems Management (June 2015) 16(2):113–114
continuously providing multiple options and/or offering them with speed to meet the changing customer requirements. It may be observed, that in an hyper-competitive environment, the customers can be strategically attracted by quickly offering innovative models in the market and providing services to respond to the changing customer requirements in an agile manner. This can be noted in the case of telecom handset major players like Apple and Samsung, who have been offering new mobile handset models with innovative features in quick succession. Similarly, in auto industry, the major players like Toyota, GM, Honda, and others have been introducing a variety of models (and their variants) in different segments to beat the competition along with a bouquet of innovative services. The strategic flexibility can be defined as the proactive as well as reactive strategic moves for change, both internally and externally, by leveraging the vital and desirable aspects of the continuity of the organization in terms of core values, culture, core competence, brand, and its strategic positioning (Sushil 2014a). This is the fountainhead of flowing stream strategy, which dynamically balances the continuity and change forces through the strategic channels of divert, shift, partition, and integrate (Sushil 2007, 2012a, 2013). Some lead examples of strategies in practice (under these channels) are: cannibalization by Microsoft; brand extension by Maruti; go green by Walmart; and offering solutions by IBM; among others. The strategic flexibility also imbibes stakeholder theory (not adequately dealt with in past frameworks) and caters to the strategic factors of enterprise, customer and all other stakeholders such as employees, shareholders, partners, society, and so on. Strategic flexibility also acts as a predictor of vitality and sustainability of the enterprise (Sushil 2010, 2011). It helps in synergizing the economic, environmental and social perspectives with the engagement of all the stakeholders. It not only acts as a driver of financial performance, but also contributes to long-term survival (continuity) and growth (change) of any enterprise. Only those firms are able to survive the onslaught of high environmental uncertainty, in terms of economic upheavals, technological obsolescence, and unknown quarters of competition/substitution in a global business world, that are strategically flexible. The firms with strategic flexibility are able to adjust their learning and innovation processes and can quickly adapt to the changing environment, which also gives them longevity. Some notable examples of long lasting corporations are Stora (a major paper, pulp and chemical manufacturer from Sweden), Sumitomo Group, and Royal Dutch/Shell, among others. At the same time, it also fuels their innovation and entrepreneurship processes to adopt a sustainable growth path by hedging a variety of risks.
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Strategic flexibility is placed at a higher level of flexibility maturity, both for the organization and the ecosystem (Sushil 2012b, 2014b). The operational flexibilities in various processes form the lower levels of maturity that provide a base for any enterprise to practice strategic flexibility, as it would require various processes and actors to be remoulded or reconfigured as per the strategic change initiatives. For example, Dell strategically captured a large market share by offering customized personal computers through e-business route, which is supported by organizational flexibility, logistics flexibility, and manufacturing flexibility. It is worth noting that the strategic flexibility in case of Google not only enabled it to enter into an entirely new market space of search engines, but also paved the way to constantly diversify into related as well as unrelated areas through technological and organizational flexibilities (Sushil 2015). To sum up, it can be contemplated that the rigid frameworks of strategy formulation (rooted into a generic competitive advantage) are giving place to dynamic and flexible frameworks of strategy formulation and execution that can take the today’s enterprise to a new level of thinking and action. The overall landscape is changing fast and almost in an unpredictable manner, in which only strategically flexible enterprises can hope to steer and achieve their goals in an inclusive and engaging manner. It would be interesting to observe the developments on this front, to contemplate the new paradigms of strategic flexibility that are likely to evolve in times to come.
References Sushil (2007). Principles of flowing stream strategy. Global Journal of Flexible Systems Management, 8(3), 3–4. Sushil (2010). Star model of sustainable enterprise. Global Journal of Flexible Systems Management, 11(4), 3. Sushil (2011). Flexibility vitality and sustainability. Global Journal of Flexible Systems Management, 12(1&2), 3. Sushil (2012a). Making flowing stream strategy work. Global Journal of Flexible Systems Management, 13(1), 25–40. Sushil (2012b). Flexibility maturity model: Possibilities and directions. Global Journal of Flexible Systems Management, 13(2), 75–76. Sushil (2013). Flowing stream strategy: Leveraging strategic change with continuity. New Delhi: Springer. Sushil (2014a). Managing continuity and change for strategic performance. Global Journal of Flexible Systems Management, 14(4), 275–276. Sushil (2014b). The concept of a flexible enterprise. In Sushil & E. A. Stohr (Eds.), The Flexible Enterprise (pp. 3–26)., Flexible Systems Management New Delhi: Springer. Sushil (2015). Diverse shades of flexibility and agility in business. In Sushil & G. Chroust (Eds.), Systemic flexibility and business agility. Flexible Systems Management New Delhi: Springer.
