Choice interactions and business strategy
Article Type: Abstracts From: Strategic Direction, Volume 25, Issue 9
Ghemawat P., Levinthal D. Management Science (USA), September 2008, Vol. 54 No. 9, Start page: 1638, No. of pages: 14
Purpose – Explores the structure of choice settings, policy choices and business strategy. Design/methodology/approach – Examines the nature of interdependencies among strategy choices, and links the conceptual framework of activity systems to a more general matrix structure that allows for directional interdependencies. Focuses on two sorts of structures of interactions among choices: one which examines the effect of heterogeneity among choices with respect to the hierarchy of interactions; and one which examines the heterogeneity among choices with respect to the centrality of interactions. Explores the emergence of strategic positions from two perspectives: whether high-order or strategic guidance along a few dimensions, followed by tactical adjustment and alignment of the remaining dimensions through local search can be expected to lead to high levels of performance; and the residual costs of different types of initial; mis-specified choices, following local search and tactical adjustment aimed at mitigating mistakes from prior competitive settings. Considers three modes of interaction: influence, dependency and autonomy. Findings – Maintains that it is useful to distinguish the degree to which choices are autonomous, influential or dependent. Argues that when choices are independent, strategic decision making must take more factors into account; whereas if the impact of a strategic choice is independent of other choices, the strategic planning process can be greatly simplified. Research limitations/implications – Has no stated implications for future research. Originality/value – Contributes to the business strategy literature,addressing the extent to which policy choices may be more or less strategic, and the feasibility of offsetting past strategic mistakes through tactical adjustments. Article type: Research paper ISSN: 0025-1909 Reference: 38AH473
Keywords: Business policy, Corporate strategy, Strategic choices
