Strategic renewal and the interaction of cumulative stress and inertia

TLDR

Strategic renewal occurs in both incremental and radical ways, driven by the tension between inertia and stress that signals the need for change. The study aims to characterize the four phases of organizational renewal and to model how inertia and stress interact to shape strategic evolution. A formal model is constructed to capture the interaction between inertia and stress across the four renewal phases. Simulations of the model generate plausible renewal trajectories that support the theoretical claims about inertia‑stress dynamics.

Abstract

Strategic renewal is accomplished in large and small ways. This paper proposes a four phase characterization of how organizations move between state sustaining renewal and the more radical reconceptualizations that significantly alter organization activity. The argument juxtaposes inertia (or commitment to current strategy) and stress, the dissatisfactions that signal the need for renewal. To explore the details of this interaction, and its implications for the evolution of strategy over time, a formal model is developed. Quite plausible organization paths of renewal are simulated via the model which help illustrate our main theoretic arguments.