Study of strategic persistence

Abstract

Firms that survive through various environmental fluctuations do so by ensuring long term survival through short term profitability They overcome environmental fluctuations by building second order competencies during long periods of stability These competencies help the firm tide over the shorter periods of change In order to understand how firms survive it is helpful to study how they develop and assimilate these competencies To do so we focus on the periods of stability during which these competencies are developed Extant literature does not provide much clarity on the periods of stability as it does on the periods of change Within this literature studies which research the processes which occur during the periods of stability are even fewer Such studies require a shift away from a general linear model into a more complex investigation into the natural histories of firms To understand the organisational processes and their interaction with the environment we view firms as complex adaptive systems Complex systems turn environmental inputs and turn them into outputs through an interaction of organisational components fortified through an interconnecting web of feedback loops The actors in the system are perceptive to changes in the environment and undergo adaptations to stay synchronized with the environment Firms that maintain this equilibrium for extended periods can reap higher performance rewards During periods of stability firms commit resources to change inputs to outputs They use resource commitment as a way of deciding the long term strategic direction of the firm The firm creates routines organisational structures power structures control systems etc to increase efficiencies and improve performance In ambiguous environments firms attempt to reduce uncertainty through a search for information The firm adapts through an alternation of small and large changes leading to a punctuated equilibrium model of organisational evolution newline newline