With the development of this research it has also been possible to corroborate the empirical validity of an important principle or maxim currently taken for granted in the field of the study of the strategic process of the firm. Namely, that the typology of the strategic processes developed in an organization depends both on its internal characteristics and on the characteristics of the environment in which it is immersed.
In this regard, it has been observed that the companies analyzed in this study have a series of common characteristics (internal and external) that have an important influence on the typology of their strategic processes. These characteristics are cited below, indicating how they influence the morphology of the strategic processes.
1. First of all, it should be taken into account that these are companies that have been recently created (no more than 15 years old), that are small in size (no more than 50 employees), have a low internal complexity (small number of business units, departments,…), and in which the founders still maintain control. All this leads to the existence of a very strong leadership concentrated in the figure of the founders of these companies, which will have a decisive influence on the typology of the strategic processes that are developed in these companies. More specifically:
The typology of the strategic processes developed in these companies will depend significantly on the characteristics of their founders:
– Training and knowledge.
The founders’ level of training and knowledge of business management influences a greater or lesser use of formal processes, systems and tools for the deliberate creation and/or control of strategies.
In the companies analyzed in this empirical research, it has been observed that most of their founders have markedly technical profiles, with no specialized training or knowledge in business management. This fact has influenced the limited use of formal processes, systems and tools for the deliberate creation and/or control of strategies, more typical of ‘technocrats’ in business management.
The opposite would encourage the use of these types of processes, systems and tools.
– Previous professional experience.
The previous professional experience of the founders influences the typology of the strategic processes developed in their companies. In the case studies carried out in this empirical research, the following casuistry has been observed in this regard:
- The fact that one of the founding partners of one of the companies analyzed had previous experience as an entrepreneur (apart from specialized training in business management) has had a decisive influence on the fact that this organization holds a semi-annual executive board meeting, at which the company’s situation is analyzed, important decisions are approved and the business objectives for the next six months are set, and a budget is drawn up. This meeting, in short, constitutes a formal process in which different actions can be carried out for the deliberate creation of strategy (strategic thinking, strategic analysis, strategy formulation, programming and/or control of strategies), making use of various tools for this purpose (minutes of the meeting, where the decisions taken and the objectives set are recorded; budget; etc.).
- The fact of having previous experience in companies in the same sector of activity influences the type of strategic processes that are developed and the level of generation of strategic learning in these processes.
In all three case studies, at least one of the founders had previous experience in a company in the same sector of activity. As a result of the strategic learning experienced during the development of that previous experience, these people had a certain strategic background from the very moment of founding the new company (this being more or less depending on how significant and extensive that experience was) and, therefore, a certain number of intentional strategies, usually in the form of broad action guidelines (strategic visions, general criteria, etc.), which would guide their action in the different areas of the business, which has encouraged a significant number of the strategic processes analyzed to be motivated and/or framed by these action guidelines.
This type of previous experience of the founders also influences the level of generation of strategic learning in the strategic processes developed in their new companies. In the case studies carried out, a lower generation of strategic learning has been observed in those companies whose founders had a greater and more significant previous experience in companies of the same activity sector, which is due to the greater strategic background that these people possessed from the origin of their new companies.
– Management style.
The management style of the founders has an important influence on who are the protagonists of the strategic processes developed.
In this empirical research, it has been observed that open and participative management styles encourage the emergence and development of ‘bottom-up’ emergent strategic actions (in which the protagonists are people located at lower hierarchical levels than the company’s top managers (employees, line managers,…)) and ‘democratic’ type emergent strategic actions (in which the protagonists are the top managers together with people at lower hierarchical levels), as a result of which new ideas or strategic visions are produced, or new strategies, and/or new strategic learning.
On the contrary, an autocratic type of management style will discourage the emergence and development of ‘bottom-up’ and ‘democratic’ type emergent strategic actions, and thus limit the generation of new ideas or strategic visions, new strategies and/or new strategic learning.
In this regard, it should be taken into account that this type of companies (TBFsWAI) are usually characterized by highly qualified human resources that, if given the opportunity, could be an important source of new ideas and strategic initiatives, and therefore of new strategies and strategic learning.
– Personality.
The personality of the founders also influences the typology of the strategic processes developed in their companies.
This empirical research has shown that personality types characterized by simplicity and open-mindedness (openness to learning and to new ideas, wherever they come from), entrepreneurial spirit (openness to detecting and taking advantage of new opportunities) and sociability and willingness to interact and collaborate with other agents in the environment, encourage the emergence and development of new streams of strategic actions (usually emergent at the beginning) as a result of which new ideas or strategic visions, or new strategies, and/or new strategic learning are produced.
Finally, it must be taken into account that this strong leadership concentrated in the figure of the founders, together with the existence of a strong organizational culture based on their belief system, assumptions and values, will minimize the appearance and influence of internal power or politics in the strategic processes developed. In fact, this has been observed in the three case studies conducted, in which no hint of internal influence (internal power or politics) has been observed in the strategic processes analyzed.
2. These types of companies also have in common the fact that they base their business on the use of new technologies and technological innovation, and that they are exposed to international markets from the outset. This means that these companies are usually subject to environments with a high degree of turbulence or dynamism, which encourages the appearance of emergent strategic actions, which arise in response to unexpected events in the environment. In this regard, it has been found, for example, that 39% of the strategic processes analyzed in this empirical research are processes that arise emergently and continue to develop deliberately, or processes that contain (among others) sequences of actions that arise emergently and continue to develop deliberately, originating from the occurrence of unexpected events in the environment to which the company founders respond.
3. Finally, it can be seen that the three companies analyzed in this empirical research have the common characteristic, not intentionally sought, of having originated from the entrepreneurial efforts of several people, without the help of the organizations in which they previously worked. This aspect has also influenced the typology of the strategic processes developed in these companies, affecting the little use of formal processes, systems and tools for the deliberate creation of strategy.
On the contrary, if these companies had originated in the University or in other Public R&D Organizations (technology centers, science parks,…), or as corporate spin-offs, their founders, most likely, advised and influenced by these institutions, would have made greater use of formal processes, systems and tools for the deliberate creation of strategy.
Some of the aforementioned characteristics may change over time, which will influence the morphology of the strategic processes developed in these companies. In this regard, the following has been observed in the case studies carried out:
1. In one of the companies analyzed (the oldest company), the complexity of the business has increased significantly over time (increase in the size and internal complexity of the company (increase in the number of business units, departments, functions, sales figures, number of employees, etc.) and increase in the external complexity of the company (increase in the number of markets and customers, competitors, collaborators, etc.), which has led to the following:
– Its top manager tries to establish a series of formal processes, systems and tools for the analysis, formulation, programming, implementation and control of strategies, which help him address the growing complexity. The use of this type of processes, systems and tools entails the development of deliberate strategic actions.
– The vast majority of the ‘bottom-up’ and ‘democratic’ type emergent strategic actions observed in this empirical research have been developed in the strategic processes analyzed in this company, since this growing size and complexity makes it increasingly difficult for top management to address all aspects that influence the business.
Finally, it can be seen that this growing complexity and internal decentralization may encourage the phenomenon of internal power or politics to appear in the future in the strategic processes that are developed in this company.
2. In two of the companies analyzed, the level of dynamism and hostility of the environment has increased over time. This growing dynamism and hostility of the environment encourages the appearance of emergent strategic actions, which arise in response to unexpected events in the environment.
NOTE: A preliminary and reduced version of the results of this empirical research can be found by clicking on the following document (in Spanish language):
Roch, C. J. (2016). El proceso estratégico en empresas de base tecnológica de internacionalización acelerada (The strategic process in technology-based firms with accelerated internationalization). Madri+d Collection. Madri+d foundation for knowledge, Madrid. NEBTS 4, pp. 95-134. Link to access the complete publication through the website of Fundación madri+d: http://www.madrimasd.org/uploads/informacionidi/biblioteca/publicacion/doc/nebts4.pdf.
If you are interested in going deeper into the strategic process, allow me to recommend you: - Book: "The strategic process of the firm: Theory and cases" (Roch, 2024). - Courses and consulting program on the strategic process.
