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The balance of management attention to strategic
and operating issues is ultimately determined by the firm’s
external environment.
If the market size is growing, technology is
stable and customer demands and preferences change slowly, a
firm can remain successful by focusing its attention on the
operating activities, and letting its products, markets and
competitive strategies evolve slowly and incrementally.
In such environments a majority of firms
typically focus their attention on the operating
issues. Strategic issues seldom get much management attention.
The strategic evolution of the firm is from the bottom up,
initiated and implemented through cooperation among the
departments.
Only a small minority of firms in growing and
stable environments is strategically aggressive. These are the
firms led by restless and ambitious entrepreneurs who are bent
on expanding the firm beyond the limits made possible by its
markets.
However, if environment turns turbulent, and / or
market demands approach saturation, firms no longer have the
option of a dominant concern with operations. Continued
success, and even survival, is possible only if management gives
a high priority to the firm’s strategic activity.
Sooner or later, a majority of firms in the
industry have to become vigorous strategic actors. The
alternative is to go bankrupt. |
