How do firms tackle strategic change? A theoretical model of the choice between dynamic capability-based and ad hoc problem-solving approaches

Abstract

Purpose The purpose of this paper is to provide a theoretical account of how firms make choices between dynamic capability-based and ad hoc problem-solving approaches toward strategic change. Design/methodology/approach A model has been developed to answer the questions of how and under what conditions firms develop appropriate approaches to handle strategic change. Findings Drawing upon structural inertia theory (SIT) and the resource-based view (RBV), the model predicts that firms, regardless of their age and size, are more likely to adopt an ad hoc problem-solving approach to handle change in both highly dynamic and low-dynamic environments. However, in moderately dynamic environments, a dynamic capability-based approach may be more appropriate, depending on which theoretical logic (SIT or RBV) the decision is made. Originality/value The paper builds on the useful distinction made by Winter (2003) in terms of the ways to handle organizational change and extends the recent research on temporary vs sustainable competitive advantages to investigate how firms tackle strategic change within the contexts of both environmental dynamism and organizational attributes.