In the past, strategy researchers have not focused on turbulent environments. Most of the extant frameworks in strategic management implicitly assume a benign environment that is simple and not very dynamic. Yet, recent advances in technology, coupled with a global political climate that is favorable to free markets, have made parts of many industries such as financial services, health care, and transportation more turbulent. In industries related to information and communication (what I call “Infocom”) traditional industry boundaries have disappeared. For firms competing in these industries, the organizational set, or the number of competitive forces that a firm faces, has expanded, and technological innovations have accelerated the rate of change. Coping with the resulting turbulence calls for a new approach to competitive strategy.
In their seminal paper on the causal texture of organizational environments, Emery and Trist classified a firm’s environment in terms of its complexity and dynamic.1 The larger the firm’s organizational set, the greater the complexity that it faces.2 Complexity is a measure of the number of competitive configurations that a firm must ideally consider in shaping its own strategy.
The dynamic of the environment, i.e., the rate at which these configurations change over time, is the other key determinant of turbulence. When a business environment is highly complex and changing rapidly, the resulting turbulence in a firm’s... To read the complete article, login or sign-up using the form below.
Become a premium subscriber today to read this and all MIT Sloan Managmeent Review articles.
Buy this article. Purchase one or more copies of this article in PDF form.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Upgrade your existing subscription to premium
Sign in if you are a premium subscriber.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
