Strategy Making in a Crisis

Strategy Making in a Crisis

From Analysis to Imagination

Michael Gibbert

Which strategy making approach works best in a crisis? In current literature, the recommendations oscillate between prediction, control, and practice, but this unique book focuses specifically on strategy making in a crisis.

Introduction

Michael Gibbert

Subjects: business and management, organisational behaviour, strategic management

Extract

Strategy-making mirrors the economic environment. When overall economic conditions are favorable, resources are readily available, sales forecasts are met, customers remain loyal, shareholders are calm and strategy making1 is about stating the obvious: a foreseeable future, making decisions about which we know the outcome in advance (e.g. Rumelt, Schendel and Teece, 1991, 1994). However, in a crisis, the business landscape is neither stable nor predictable, resources are scarce rather than abundant, customers disappear, and shareholders revolt, all of which can make prediction and control very difficult (e.g. Gibbert, Hoegl and Valikangas, 2007; Hoegl, Gibbert and Mazursky, 2008; Farjoun, 2008; Moldoveanu, 2009; Gavetti, Levinthal and Rivkin, 2005). What lever to use for strategy making in a crisis? I believe that we can learn some important lessons for coping with the present (and eventual future) crises by taking an in-depth look into how successful strategies have been crafted in past times of crisis. In the early 2000s, I undertook an in-depth field study (Gibbert, Ruigrok and Wicki, 2008; Yin, 1994; Eisenhardt, 1989) inside a major diversified firm in the electronics and electrical engineering industry, here called ElectroCorp. What I found is that the problem, and the solution, is one of imagination. If there is not only one foreseeable future but several (or none), a company without imagination might either not be able to see the light at the end of the tunnel or, worse, mistake it for an oncoming train. What do we know from previous literature? For decades, both scholars and...