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manipulated by the prescribed rules among interdependent Paper

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manipulated by the prescribed rules among interdependent activities, and is aimed at developing a

In their publication, on the impact of culture, structure and process in the creation of value through incremental innovation Rubin & Abramson (2018) noted that firms were according a lot of attention to disruptive innovation yet incremental innovation was also a strategy for preserving and growing a firm’s practices within a dynamic environment. The authors viewed incremental innovation as the making of improvements or additions to a firm while maintaining the organization’s core product or service model. The article explored cultural, structural, and process enablers for incremental innovation. The authors observed that effective innovation cultures possessed adaptive capacity, which is an ability to capture and exploit external knowledge, encourage creative thinking from all levels of the firm, to see changes that threaten competency, foster a positive attitude towards a firm’s threats and upscale risk tolerance when formulating prototyping new ideas. from the study it emerged that structural elements promoting incremental innovation include dedicating resources for innovation planning, flexible and organic teams, robust central governance models, stable communication systems and organizational rewards that encourage creation of new concepts. More so, they argued that periodic environmental scanning, strategic and scenario planning, objectively testing and filtering new ideas, and empowerment of managers, removal of barriers, and proactive communication about change was fundamental in executing successful transformations.

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Using the relational and behavioral theories, Hess & Hess (2016) conducted a study that explored how elements of stakeholder relationship management facilitates a firm’s ability to pursue activities that support strategic renewal while averting behaviour that supports myopia and strategic inertia. In sum, strategic renewal was viewed as the processes through which a firm attempts to refresh or renew fundamental attributes, capabilities, or resources. The study revolved around employee openness to change, employee alertness and knowledge exchange as factors in strategic renewal. The authors contended that in an ever changing global market firms must adapt and renew themselves and their processes and activities so as to survive. Besides a firm would also have to develop mechanisms to avert inertial forces of existing systems so as to evolve and develop new ones. It was argued that firms also need to be entrepreneurial, which entails development of capacities that create, shape and respond to environmental challenge which is basically strategic renewal in response to inertial forces. According to the researchers, in the past strategic renewal was viewed as a product of many initiatives such as investments in research and development, corporate venturing and acquisitions, changes in staffing and hiring practices, new product development, and reorganizations. However in their research, the authors explored a different dimension of strategic renewal anchored in the principles of stakeholder relationship management. Stakeholder relationship management also referred to as managing for stakeholders was described as a strategic approach to transacting with a firm’s stakeholders such as customers, suppliers, investors, employees, regulators and community leaders so as to understand their concerns, prioritize the development of long-term relationships with stakeholders and seek positive solutions for multiple stakeholders to benefit simultaneously. The researchers proposed that stakeholder-driven strategic renewal is a process of alertness, openness to change, and knowledge exchange that facilitates the core strategic renewal activities of learning, collaborating, and creating opportunities in the organizational environment. They further propose that a more relational perspective on strategic renewal, focusing on stakeholder relationship management gives a more cooperative approach to renewal in lieu of the threat-based logic of other strategic frameworks. The stakeholder-driven approach would also lower costs of transaction, increase efficiencies, reduce risk, and enhance employee participation. The research concluded that stakeholder relationship management encourages exploratory activities necessary for strategic renewal by to exploit past competencies by motivating managers to explore, become open to change and capture new knowledge. Moreso employees tend to prefer exploiting past competencies rather than explore and develop new ones, therefore successful renewal requires a firm to develop processes, people and technologies that support exploration also because in existing literature it is that least developed one (Hess & Hess, 2016; Onobhayedo, 2018). Results from a study by Onobhayedo (2018) on organisational openness revealed that online connectedness between supervisor and subordinate positively impacted the perceived openness of managers. Openness displayed by supervisors online promoted a positive communication climate in a firm because employees’ openness is affected by the level of openness they perceive in their immediate supervisor. This finding suggested that managers should be favourably disposed towards connecting online with their organizational subordinates. In relation to the study managers have a role to champion employee openness to strategic renewal, which according to Onobhayedo’s (2018) study can be achieved online (Onobhayedo, 2018).

Martin-Rios & Parga-Dans (2016) examined how knowledge-based service oriented firms dealt with persistent economic constraints and the practices they adopted to overcome them. The researchers contended that economic challenges caused firms to mobilise resources towards incremental renewal through service specialisation initiatives because they faced serious threats that affect their survival. Furthermore, the research data pointed to a relationship between the renewal strategy of service specialisation and the development of innovation processes. An analysis of firms that were successful in their renewal showed that innovation facilitated resource allocation and orchestration which led to strategic renewal. Resource orchestration caused firms to undertake adaptive efforts to promote renewal especially when traditional, standard innovative actions were not adequate to assure a firm of its survival, therefore a firm’s ability to adapt to dynamic markets improved when different innovation initiatives were aimed at organizational renewal. Findings of the study suggested that the renewal ability of highly dynamic services depended on the innovation activities that a firm selected and adopted and whether the activities were effectively implemented. The study offered insights into the contribution of organisational innovation and service adaptation towards strategic renewal. in the study corporate innovation was operationalized as adoption of new business practices and activities, new organization of working methods and procedures, new methods of organizing external relations, development of new human capital capabilities, adoption of alternative ways of managing employees and fostering new organizational culture, organizational values, communication plans, employee involvement, and leadership styles. The research also revealed that a service firm may make innovation investments as an operational or routine activity, however such investments may result in unintended strategic renewal. However the researchers argued that a firm’s adaptability to market dynamism would improve when different innovation initiatives were aimed at corporate renewal. For services moving towards decline and attempting renewal, organizational failure was associated with a lack of innovation initiatives. The researchers established that systemic innovations, described as complex, systemic innovations and are new to the industry, assisted service firms in continuously matching their business skills with environment turbulence and the shifting competitive landscape. The study further confirmed that incremental actions alone are insufficient to spur renewal. In contrast, transformative actions drove of strategic renewal especially after an economic slump. Although often deemed as incremental, the researchers observed that innovation in service will at times be discontinuous, especially in unpredictable and continuously changing economic environment. The end product of the research was the formulation of a process theory describing the manner in the strategies through which service firms dealt with persistent economic decline. The renewal ability of a highly dynamic firm hinges on the innovation activities a firm selects and adopt and whether they implement them effectively, highly taking an entrepreneurial dimension (Martin-Rios & Parga-Dans, 2016). A publication by Martens, Matthyssens, & Vandenbempt (2012) corresponded to the findings of the research. The publication reported that volatility in business environments typically forced firms to renew their market strategy. In the article, the authors focussed on a process of renewal that was highly dynamic and incremental. The article reports that incrementalism automatically creeps into market strategy renewal and that difference in managerial rationality at various levels of management, led to remedial, serial and socially fragmented processes in the course of incremental renewal. The authors thus viewed incrementalism in strategy as a natural occurrence that needed to be managed and not so much a deliberate course of action that is skilfully executed (Martens et al., 2012). More so, an article published by Ndofor, Vanevenhoven & Barker (2013) reported that for most of the firms on the decline, the effectiveness of mangers in turning around their decline in business largely depended on the cause of the decline. They further reported that in a large-scale industry the decline of a particular firm would be largely attributed to firm specific poor performance due to a misfit between the firm’s strategy and its environment. In addition, because such a misfit required strategic change for the firm to realign its resources and capabilities with the environment, strategic renewal had a high chance of turning around the firm’s performance. The research also reported that retrenchment focussed on generating efficiency rather than strategic change, it therefore decreased chances of turning around because of its negative side effects on the organization and its employees. The study concluded that new product introductions, strategic alliances, and acquisitions were the visible actions that would allow declining firms in a munificent industry to change their strategic positions (Ndofor et al., 2013). Similarly, a study by McKinley et al., (2014) that investigated organizational decline and innovation revealed that firms that deliberately plan to address effects of economic decline through operational and strategically planned actions successfully and sustainably renewed themselves. The study further revealed that firms undergoing performance decline put great effort in developing valuable and non-imitable strategic actions designed to renew performance and increase the prospects of future market performance (McKinley et al., 2014)

Basu & Wadhwa (2013) examined the relationship between a firm’s venturing activities and its undertaking of strategic renewal. According to the researchers the conditions that drive firms to undertake strategic renewal adaptation and innovation towards survival and industry changes in response to technological trajectories, competitive scenarios, and regulatory regimes. The research categorised a firm’s entrepreneurial initiatives as either venturing or renewal. Renewal entailed fundamental changes to existing ways in which a firm competes, such as its business models, strategies, and structures. It was observed that results of a firm’s renewal initiatives include reconfiguration of its existing businesses, as well as a shift from existing and familiar core businesses into newer and more unfamiliar ones. The research implied that activities such as research and development, external sourcing, and product innovations are undertaken to achieve renewal. Discontinuous strategic renewal entailed shifts from existing core businesses into newer and more unfamiliar businesses. Such renewal involves more exploration than exploitation and a significant level of uncertainty. Exploration is described as the development of new and unfamiliar competences, while exploitation is conceptualized as the realization of returns from existing and familiar competences. Firms with strong internal capabilities may effectively employ external venturing to augment these capabilities instead of building capabilities in newer business domains, to enhance their absorptive capacity for recognizing the potential of external knowledge and assimilating it effectively. The findings of the study illustrated that, different external venturing approaches, such as corporate venture capital investment, alliances, and acquisitions ((?irjevskis, 2019; Hess & Hess, 2016; Chesbrough & Bogers 2014; Hung & Chou 2013; Ndofor et al., 2013) differ in their influence on strategic renewal. The findings further suggested that of all the external venturing modes, acquisitions are more likely to lead to discontinuous renewal than alliances and corporate venture activity. This result complements the existing literature (Hess & Hess, 2016) on external venturing by pointing out that firms in dynamic industries are constantly exposed to dramatic and continuous changes in their environment, which places significant pressures on them to adapt constantly rather than to change dramatically (Basu & Wadhwa, 2013) (Basu & Wadhwa, 2013). Similarly, an article published by Colabi & Khajeheian (2018) explored the delineating process, content, and outcome of strategic renewal and its potential to affect the long-term prospects of organizations. The investigation was carried out in a corporate entrepreneurship context so as to draw distinct features therein. The results of the study suggested that from an entrepreneurial perspective, strategic renewal is the process of reconsidering a firm’s capabilities in balancing the exploration and exploitation of opportunities. According to the study entrepreneurial strategic renewal strategies include product regeneration, organization revitalization, marketing mix reformulation and business model renovation strategies which are interactive and interdependent in nature. The study suggested that strategic renewal is a firm’s response to intra-organizational inappropriateness, extra-organizational challenges, and to the economical, governmental, cultural, societal, regional, geographical, market and industrial conditions (Colabi & Khajeheian, 2018).

Mwangi and Murigu (2015) undertook a study to establish the factors that affect profitability of general insurance companies in Kenya. The study theorised that retention ratio, liquidity, underwriting risk, age, leverage, equity capital, management competence index, size and ownership structure of general insurance firms influenced performance which was measured by profitability and return on assets. The study found no relationship between performance and retention ratio, liquidity, underwriting risk and age. The study further established that older insurance firms were more experienced, had reaped the benefits of organizational learning hence they were not prone to challenges on renewing themselves. The study suggested that general insurers in Kenya should increase leverage, equity capital and quality of staff to enhance their performance. The researchers argued that addition of capital influx would enable the firm to expand and open new branches which signified growth and enabled the firm to exploit economies of scale. Opening up new branches would possibly open new avenues for renewal as new markets came with new demands. The researchers further recommended that future research needs to be carried out similar to this by including both general insurers and life insurers. Then, an analysis should be carried out jointly and separately for the two classes of insurers (Mwangi & Murigu, 2015). This study was conducted by including all classes of insurance firms in composite, general and life insurance.

Begonia & Periz (2014) investigated the relationship between knowledge creation and strategic renewal to the extent to which structural changes affect the creation of new knowledge within firms. The study established that structural design variables – liaison position, networked design, innovation teams and work teams affect the creation of new knowledge in firms. For the study the enablers – intention, autonomy, fluctuation and creative chaos, redundancy, variety, and trust and commitment, taken from Nonaka’s framework, were used as intermediate variables. The researchers concluded that the relationship between structural variables and enablers, and the relationship between enablers and knowledge creation is highly relevant for knowledge creation in firms. Further to the research showed that knowledge creation has the potential to catalyse innovation, hence initiate change within the firm.

An investigation on centripetal and centrifugal forces driving strategic renewal was a case study conducted by Maijanen & Jantunen (2014) that focussed on the relationship between an organisation’s internal renewal and its dynamics in relation to strategic renewal. In this study, strategic renewal was described as a phenomenon encompassing both cognition and capabilities, while cognition and capabilities were viewed as the manner in which organizations think and act respectively as they

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This paper is written by Sebastian He is a student at the University of Pennsylvania, Philadelphia, PA; his major is Business. All the content of this paper is his perspective on manipulated by the prescribed rules among interdependent and should be used only as a possible source of ideas.

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