Analysis of Strategic Persistence or Reorientation
One of the problems managers face today is the challenge of making their company productive, profitable, and achieving long-term organizational goals. This requires the ability of the manager to maximize on their proficiency in current business practices, while maintaining a level of flexibility as it applies to changing the strategic direction of the organization. Strategic reorientation is defined as "a change in business strategy coupled with change in other key organizational dimensions" (Batra, Lant, Millike, 1992).
Strategic reorientation is required for an organization to change the direction of the company or to maximize the success of the organization. The decision to institute reorientation is determined by past performance of the company, managerial interpretations of experiences, and characteristics of top management. There are often structural, political, and psychological pressures to continue with past strategies. These factors influence the likelihood of strategic reorientation taking place. Also, organizational literature suggests that actions are historically linked to the process of trial-and-error learning. Positive outcomes are repeated, and negative outcomes are not. When organizations experience successful performance they will maintain status quo, even if change or reorientation would create a more successful company. When unsuccessful performance occurs, organizations tend to undergo a new learning process that leads to reorientation. Managers act on their interpretations of experience, and those interpretations are usually influenced by pressures towards persistence of past strategies. The importance of knowing when to institute strategic reorientation can save a company from financial disaster and prevent an industry leader from allowing others to take over their given market.
The significance of this problem is supported...