Purpose The purpose of this paper is to analyze the relationship between organizational performance and the pattern of strategic decisions formalized in the planning of a Brazilian heavy construction company between 2006 and 2014. In this period, the company experienced a recurrent pattern of maintaining strategic decisions, despite the systematic decrease in performance and investments in the formal strategic planning (SP) and monitoring of results. The research focus is on strategic inertia and the influence of social determinants on the relationship between performance and the strategic actions negotiated in formal planning. Design/methodology/approach This is a single-case study. The exploratory-descriptive research comprises data collection on performance and strategic decisions from the period between 2006 and 2014. The analysis was guided through documentary material and data collected from 16 interviews conducted with members of the middle to top management concerning performance, goals, and strategic initiatives. The interviewees’ statements were used to apprehend the interpreted dimension of SP expressed in the meanings attributed to this process. The analysis adopts a sociological base, and strategic inertia is the underlying phenomenon that guides this analysis. Findings The results show the interactive effect caused by political, cognitive, discursive, and ceremonial mechanisms obstruct the company’s strategic decisions. This case study illustrates that the conditions for the phenomenon of path dependence were created, reinforcing the strategic inertia observed in the maintenance of a reproduced pattern of strategic initiatives and goals, even though the performance was recurrently unsatisfactory. In this case, strategic inertia showed a complex relationship between the interpreted performance and strategic actions negotiated in formal planning, conditioned by mechanisms of trajectory reinforcement that interfered with the conditions for strategic change. Research limitations/implications Strategic inertia demonstrates a complex relationship between the interpreted performance and strategic actions negotiated in formal planning, conditioned by mechanisms of trajectory reinforcement that interfere with the conditions for strategic change. Future research on social mechanisms from the perspective of strategy-as-practice could be developed to capture the tacit components, language, power games, and other relevant categories in the social interaction of strategy development at the organizational level. In addition, future research could focus on investigating the extent to which path dependence is contingent, assuming that it is a temporary and, therefore, reversible process. Practical implications This work contributes to the view of SP from the social perspective and shows that the relationship between performance and strategy has biases that can compromise performance. The work highlights implications for maintaining strategic initiative patterns, which shape a path whose function is less associated with its effects on performance and more associated with the commitment to instrumental results, due to the social nature of organizations. Social implications This work deals with social mechanisms that influence strategic decisions. Since organizational performance depends on strategic decisions, the social nature of strategic inertia has causal implications to economic and social impact of organizations. Originality/value This work argues in favor of the influence of self-reinforcing mechanisms of path dependence in the relationship between performance and strategic decisions. The results extended the predominantly structural approach of path dependence by considering interpretive aspects related to the political, discursive, cognitive, and ceremonial dimensions of strategic inertia.
The world is facing a large number of interrelated crises that have seriously increased the level of uncertainty and ambiguity in many areas. In 2018, the UN anticipated that the world was careering toward a global water crisis with a 40% shortfall in freshwater resources by 2030 coupled with a rising population. This nascent crisis represents a “connected challenge” for countries: it contains a multitude of causes and consequences, a multitude of actors and interests for which no “one-size-fits-all” solutions are available. The adequate approach to this type of complex—or “wicked”—problems is not to search for technological solutions only, but to consider new forms of governance that make use of complementary institutional logics. Effective governance depends on the extent of alignment with the complexity and the root causes of the issues. This paper applies wicked problem theory to identify the root institutional and governance causes of uncertainty in a developing country like Brazil, which provides insights to (also) identify approaches that could navigate change in less uncertain and ambiguous directions. We distinguish three types of relevant institutional constraints: logics, complementarities, and voids. Based on semi-structured interviews with representatives from Brazil's water and sanitation sector, we delineate institutional constraints precipitated by the plurality of the governance system. We argue why a tripartite partnership approach—as for instance pioneered by Dutch international water projects in the global South—presents a way out of the wicked water and sanitation problems in Brazil.
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