induced strategy process

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The induced strategy process carries out the strategic intent of the firm, seeks to reduce variation, produce stability, produce continuity, perpetuate the company's identity, and exploit. The induced strategy process resembles the traditional top-driven view of strategic management, but differs in five important ways as described in its four interrelated variables and its result (Burgelman, 2002) --

  • Concept of corporate strategy -- The concept of strategy -- the official corporate strategy -- is the theory that top management has about the basis for its past and future successes. It provides a shared frame of reference for managers at operational and middle levels in the company, and expresses top management's strategic intent. It reflects organizational learning about the company's distinctive competencies (what it is good at), product-market domain (where it can win), core values (what it stands for), and objectives (what it strives to achieve).
  • Induced strategic action -- Induced strategic action involves initiatives on the part of operational and middle-level managers that fit with the concept of corporate strategy and leverage the organizational learning that it embodies. Induced strategic action is oriented toward gaining and maintaining leadership in the company's core business.
  • Structural context -- As a company grows beyond being a small company, the link between strategic action and the concept of corporate strategy is not as readily maintained. Strategy-making becomes increasingly distributed over differentiated groups and multiple levels of management, all of which take strategic action simultaneously. This provides an important source of internal variation, as individuals who possess data, ideas, motivation, and resources all strive to undertake specialized initiatives. But it also implies that unless a company is able to establish mechanisms to maintain a level of coherence, the corporate strategy will eventually be unrealized. Structural context comprises the administrative and cultural mechanisms that top management can use to maintain the link between strategic action and the existing corporate strategy. Structural context encompasses organizational structure, planning and control systems, resource allocation rules, measurement and reward systems, among other administrative arrangements, as well as cultural aspects such as recruitment and socialization processes and more or less explicit principles of behavior. Structural context is a key part of the internal selection environment that operates on strategic action.
  • Familiar external environment -- The induced-strategy process takes place in the company's familiar external environment (as opposed to the unfamiliar and emerging environments that may impact the company). Ideally, through this process top management can proactively influence the external environment to the company's advantage. More frequently perhaps, that causal arrow goes from the environment to the strategy process, forcing companies to respond to strategic change. Top management's role is to be alert to opportunities and threats that arise from environmental change, and to adjust the induced strategy process accordingly.
  • Creating alignment -- the induced strategy process aims to align strategy and action. Through this process a company's strategic actions are joined over time. Distinct patterns of company level strategy are realized. The organization's character is maintained. The company successfully reproduces itself over time in its familiar environment.

The genetic metaphor for this process is genotype, the genetic makeup of the organization being passed along through the evolution of the organization, in contrast to the autonomous strategy process metaphor of mutation, which changes the genetics of the successive generations of the organization.

Contextual application -- see strategic dynamics for the contextual application of the induced and autonomous strategy process.