Sushil

giftjourn@l
Empirical International Journal of
Study Global Business and Competitiveness
2005, Vol. 1, No. 1, pp 22-32

A Flexible Strategy Framework for Managing Continuity and Change

Sushil
Department of Management Studies
Indian Institute of Technology Delhi
New Delhi, India

Abstract
Continuity and change are the hallmarks of any strategy paradigm, and are traditionally treated in an ‘either–or’
manner. Conventionally, a lot of work has been done on managing continuity and moving ahead with incrementalism.
In the recent years, a lot of change is witnessed in the business environment globally as well as locally. This has led to
a plethora of literature on strategic change and transformation. However, dealing with continuity and change
simultaneously is a subject matter of growing in est, as a large number of leading organizations with strong legacy
are faced with tremendous turbulence. The paper presents a flexible strategy framework to help manage the different
continuity–change combinations. It is presented in the form of Continuity–Change (C-C) matrix to map both the continuity
and change forces in an industry. A broad set of strategies are proposed for various C-C combinations as a guideline
for evolving the strategy in a given context.
Keywords: change forces, continuity forces, continuity-change matrix, globalization, strategy framework

Introduction
But even in a highly turbulent and chaotic business
environment, a discontinuous change may not always be
Continuity and change are hallmarks of strategic thinking
desirable, as it may add to more turbulence and chaos.
all through. Previously, when the environment was stable,
Though it may appear to be paradoxical, the movement has
the strategies were largely evolved around the issue of
taken place to carry both the continuity and change, and
‘continuity’. Some important strategies in this respect are
stability and dynamism simultaneously. Crafting strategy
that of ‘continuity’ and ‘logic incrementalism’ (Quinn, 1978,
involves stitching together a proactive/intended strategy
1980). The organizations used to form strategies so as to
(covering new initiatives plus ongoing strategy) and a
survive and grow by maintaining continuity in their business
reactive/adaptive strategy to accommodate changing
domain. The strategy of
circumstances (Thompson Jr. et
‘incrementalism’ also focuses on
al., 2005). The evidence of a
continuity with an incremental In the last two decades, the globalization process
confluence of continuity and
change to dynamically evolve. made the business environment highly turbulent and
change is brought out in many
Stability used to be considered a the concern of ‘change’ has received immense interest
spheres, such as corporate
key success factor. both by strategic thinkers and practitioners.
governance (Jackson and
Moerke, 2005), role of first line
In the last two decades, the
manager (Colin, 2005), organizational identity (Chreim,
globalization process made the business environment highly
2005), active waiting (Sull, 2005), country models such as
turbulent and the concern of ‘change’ has received immense
German model (Sigurt, 2004) and management of an
interest both by strategic thinkers and practitioners. Many
academic journal (Lorenzen, 2005). Not only the paradox
new theories, such as crafting strategy (Mintzberg, 1994),
of continuity and change, many other tensions and dilemmas
strategic flexibility (Volberda 1998, Sushil 2000), complexity
have created a new strategy revolution (Cannon 1996,
and chaos (Wah 1998, Macintosh and Macklean 1999)
McKenzie 1996).
strategic change and transformation (Kotter 1995, Sadler
1996), have taken the centre stage.
The paper presents a discussion about significant
continuity and change forces which either try to hold back

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 A Flexible Strategy Framework for Managing Continuity and Change

the organization or push it for moving to new frontiers paradox that a starts sliding down due to changed business
respectively. In view of the SAP (Situation-Actor-Process) situation. A practical case of this paradox happening in real
framework (Sushil, 2001), the continuity forces are generally life can be of IBM, which has gone for leading change when
linked with the `actors’ and `processes’, whereas the change business was good (Hemp and Steward, 2004).
forces largely emnate from the chanage `situation’. The
combinations of continuity and change forces are mapped
on a continuity-change (C-C) matrix. Four extreme
Core Competence
combinations of continuity and change forces are highlighted
with possible industry classification. Using these four
continuity-change combinations a flexible strategy Supply Chain
framework is generated, which is discussed for its Technology and Distribution
implications. Network

Continuity Forces

Why an organization should maintain continuity in its

strategy? A set of forces keep pulling it to be clinged to the Infrastructure Culture
current business and also the manner in which it is carried
out. These are the forces of inertia caused by the
organizations themselves. The larger and better performing
the organization is, the larger would be this flywheel of
inertia. In the current business domain, this momentum helps
the organization to steer through the obstacles and grow over Customer
time. For leaders in their own area, it is extremely difficult Performance
Base
to drastically change the course of this continuity flywheel.
It requires tremendous amount of organizational energy and
efforts to change its course of action.

It is a paradox that the forces that contribute to better

performance in the current situation become counter Continuity Forces
productive to lead change. Some of the important continuity
forces are: large customer base, huge infrastructure,
investment in technology, well established culture, core Figure 1: Major Continuity Forces
competence, supply chain and distribution network and
higher level of business performance (Figure 1). Another significant example of changing at the peak of
growth curve can be seen in the cannibalization strategy of
Customer Base Microsoft. It had nearly 80 per cent market share of operating
system market with ‘DOS’, but it followed a strategy to
One of the important change its product to ‘Windows’, a
objectives of any GUI based operating system, and in
organization would be to Some of the important continuity forces are: large due course reached to another higher
increase its market share in customer base, huge infrastructure, investment in peak of the growth curve. If it would
its business domain. The technology, well established culture, core competence, not have cannibalized its own
larger the market share it supply chain and distribution network and higher level product, someone else would have
captures, the larger would of business performance done it and inertia of continuity
be the current customer would have pulled it down with a
base it has to serve. Growth greater speed.
is always one of the major corporate objectives of any
business entity. But higher the organization climbs the growth Infrastructure
curve, higher is the inertia for it to cling with the current
products and services and its delivery mechanisms. The Infrastructure is a major physical flywheel of any business
increasing size of customer base flywheel creates higher enterprise. A sound infrastructure of manufacturing and after
inertia to maintain continuity. Apparently, there may hardly sales service would facilitate an organization for higher
be a valid reason for any organization to move away from business success in terms of profitability and growth. But
such a money spinner. However, if an organization is leading larger the manufacturing and service infrastructure an
the growth curve peak, it is more susceptible to a greater fall organization creates, it demands larger continuity of
and with a higher momentum. As per Handy (1994), it is a operation for higher capacity utilization and amortization of
©2005, Global Institute of
Flexible Systems Management
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 Sushil

fixed costs by achieving economies of scale. On the one hand,competitiveness in the current business with a possibility of
sound infrastructure aids in business performance and makes future extendability. But, in reality, the weight of such unique
it a desirable investment, whereas on the other hand, it actscompetencies may be so heavy and the efforts are so
as a major inertial force for organization to move to anotherconcentrated to develop and defend them, that they might
growth curve even if it may appear to be more lucrative. come in the way of any radical change aspired by the
organizations. It is extremely difficult for any organization
For example, in case of American telecom industry a to go for a major strategic unlearning to turn the tide of the
large infrastructure is created based on GSM technology. It core competencies and thus these core competencies, at
is hampering its change to better technology platforms, such times, may also act as a major continuity force for the leading
as CDMA. Whereas, the late entrants, such as India have organizations.
leapfrogged to better technological infrastructure because
such an inertia was not present in their case. Supply Chain and Distribution Network

In order to add value on the entire value chain and pass it on

to the customer, a huge supply chain and distribution network
Technology is usually created for the existing products. For the inbound
logistics, a military of first tier, second tier and third tier
Technology is a major strategic driver for leveraging the suppliers is raised and for the outbound logistics a huge
success of any enterprise. It requires technological excellence network of distributors, wholesalers and retailers is
to achieve the performance objectives of cost, quality and established by leading organizations. In case of direct
choice. The technological capabilities can be either marketing, like Dell, an entirely different kind of distribution
developed in-house, by creating a big R&D base, or can be set up is created. Such a cumbersome network, both on
outsourced by acquiring well tested technology from other inbound and outbound logistics, would propel organizations
organizations. In either case, it is a big investment and is to continue in the ongoing areas.
associated with a major risk. The manpower capabilities to
handle particular type of technologies and associated An efficient supply chain is helpful in minimizing cost,
technical capabilities provide an organization cutting edge just-in-time deliveries and so on in the current framework.
and competitive advantage. For example, Intel has The contractual arrangements across the network would bind
unmatching capabilities on chip technologies. At the same it to perform the current services excellently and hold from
time, these technological capabilities pull the organization any major departure or experimentation. Huge investment
to move largely around them and aspire for higher in information technology across the whole network though
developments in the similar areas. makes it function smoothly, it becomes a major stabilizing
force as well. In consumer durables industry, such a network
A large number of examples can be cited, to see the is very vast and is a major fixed cost to be amortized by
leading organizations becoming prisoners of their own economies of scale and scope. Thus, it can be seen that global
technological excellence forces. For example, Intel in chip organizations in consumer durables industries, such as
technologies, Microsoft in operating system technology, Toyota, Honda, GM, Ford, Electrolux and Whirlpool have
Xerox in photocopying technology, Ford and GM in car been operating with a lot of continuity in their offerings.
making technologies and so on. It took a lot of efforts for
IBM to come out of Mainframe technology syndrome. Apple Culture
could not yet effectively pull out of its Macintosh technology
prison. Culture of any organization is a major unifying force to
maintain continuity. Quite a few radical change initiatives
Core Competence could not succeed as the culture of the organization did not
match with the radically changed processes/systems. Cultural
One of the widely proclaimed strategic concepts is that of change in any organization is a cumbersome and slow
core competence. Though the concept, as proposed by Hamel process. Good work culture is always considered to be a
and Prahlad (1994), is in the context of competing for the major contributor to organizational performance, but it also
future, it may also act as a big continuity flywheel. The acts as a stabilizing force inhibiting major change efforts
leading organizations concentrate their efforts to create a and usually creates a resistance to change.
bundle of skills and technologies that are competitively
unique and provide a distinct value to the customer. For It is advocated that it is not wise to focus directly on
example, in the case of Sony it is ‘miniturization’, for Honda culture for a cultural change, rather it would be effective to
it is ‘engines and power trains’, for Motorola it is ‘wireless focus on the components shaping it, such as changing people,
communication’, and so on. Since these core competencies incentives, controls and organizational structure (Hrebiniak,
are unique, the organizations try to defend them and make 2005). He gives examples of Sears and Wal-Mart to illustrate
them harder to imitate. In the process, organizations gain how structural change can affect behavior and culture. The

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 A Flexible Strategy Framework for Managing Continuity and Change

change force emanating from competition desired Sun
Microsystems to follow a low-cost strategy in contrast to its
strategy of differentiation, which conflicted with its business
model and company culture and forced it to maintain
continuity in strategy.
effective management of change as if ‘change’ is inevitable.
Hammer and Champy (1993), in the context of reengineering,
have talked of 3Cs of change, that is, customers, competition
and change. The guiding line for most of change theorists
has been “change is the only constant”.

The cultural force of The forces of change might result

continuity is, at times, so high Some of the significant change forces that are into either a gradual or continuous
that even in cases of major discussed here include globalization, new change, like Total Quality
change efforts by way of opportunities, changing competition, changing Management (Juran, 1995), or a
mergers and acquisitions customer needs, new technology, e-business models, radical change like Business
(M&A), it tries to convert the Mergers and legislation Acquisition (M&A), and Process Reengineering (Hammer
culture of the acquired changes in government policy and legislation and Champy 1993, Crego Jr. and
company to match with the Schiffrin 1995) or strategic or
parent company. This becomes a major issue of concern in organizational transformation (Peters 1994, Edosomwan
managing post M&A integration. 1996). In the process, the concern for ‘continuity’ is left far
behind.
Performance
Some of the significant change forces that are discussed
Every organization aims to enhance its business performance here include globalization, new opportunities, changing
in terms of profitability, growth, customer satisfaction and competition, changing customer needs, new technology, e-
other business objectives. Higher performance in current business models, Mergers and Acquisition (M&A), and
business is always welcome and appreciated. But, at the same changes in government policy and legislation (Figure 2).
time, higher business performance may be sticky and may
force the organization to adhere to the current high
performing framework. This does not create any Change Forces
dissatisfaction with current state, which is a prerequisite of
change, as was evident from the cases of GM and IBM, who Government
had been too confident of their success and almost reached Globalization Policy and
to the brink of extinction. Why should we go for a change if Legislation
we are at our best, may be a normal attitude of any
organization. But the latest thinking is dealing change while
we are at our best (Hempard and Steward, 2004). This may
be desirable as the best possible performance may be an
indication of approaching the maturity in the current Mergers and
New
framework. Thus, for still higher performance, a new growth Acquisitions
Opportunities
curve is to be searched. This kind of approach is fairly well
known in the context of technology management, where it is
proposed to couple a number of S-curves for continuous
growth in technological performance (Khalil, 2000).
Competition e-Business
Change Forces

Though The ‘actors’ and ‘processes’ linked with the

enterprise create forces to maintain continuity, the
continuously changing business situation, in particular due
to globalization, generates forces that direct the organizations Customer New
to strive for change. The situational change forces could be Needs Technology
both external and internal. The external change forces may
emanate from changes on political, economic, social and/or Figure 2: Major Change Forces
technological fronts, whereas the internal change forces may
be because of poor performance (low profitability, loss of Globalization
market share), change in top management, and so on.
In the last two decades, the process of globalization has
In the last two decades, a plethora of literature is created pervaded almost all the spheres and not remained isolated in
around the issues linked with ‘change’ and ‘transformation’. case of few corporations only. Despite cultural, legal and
The mantra of organizational success is proclaimed to be commercial factors that support localization, the
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Flexible Systems Management
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 Sushil

globalization forces are becoming stronger day by day due from global competitors. This has been experienced by the
to liberalization of trade and investments, multilateral Indian industry in the post liberalization era. For example,
agreements such as World Trade Organization (WTO), prior to liberalization ‘Maruti’ was almost a monopoly in
increased economies of scale, homogenization of customer Indian automobile industry in new technology cars, which is
needs, reduced cost of coordination due to subjected to tremendous competition by major competitors,
telecommunication and IT developments, and so on (Gupta such as Hyundai, Toyota, Ford and so on resulting into a
and Westney 2003, Lasserre 2003). The process of continuous loss in its market share. This has prompted
globalization creates global competition and pushes domestic ‘Maruti’ to adopt ‘lean manufacturing’ on the one hand and
companies to move out of the shell. This has been discussed to integrate multiple services on the other.
in case of Japanese competition entering America by Hamel
and Prahlad (1985). Almost the similar situation is created The competition is not only coming from global
for Indian organizations that are now facing global competitors, but also from the unknown quarters in the
competition after intense liberalization in 1991. transformed industrial landscape. This may be due top
substitute products/services, or vertical integration by
Thus, even though the organizations, might be leading existing players. The steel industry has lost a lot of share to
in the domestic market, such as ‘Maruti’ and ‘Tata Motors’ substitutes, such as aluminium and plastics. The vertical
in automobile industry, the globalization forces are integration has led to changed force of competition in oil
demanding a major strategic and organizational change from industry. ‘Reliance’, by way of forward integration, entered
such well established organizations. As a consequence, in the distribution of oil and became a major competitor to
organizations in recent past, moved from domestic strategy ‘Indian Oil’. Diversification also created new competitive
to multi-domestic strategy, global strategy or transnational equations. Reliance emerged as a major competitor to
strategy. The presence of world-class global or transnational established players in telecom industry from no where.
corporations, such as GE, GM, Ford, Electrolux, Toyota,
Honda and Philips, its witnessed in almost all major In addition to the new competitors, the basis of
industries. Thus, globalization can be seen as a major change competition is also shifting in various industries. Rather than
driver that is influencing all other change forces, either only cost, other performance areas, such as quality, choice
directly or indirectly. and speed are also emerging important competitive
advantages. This would require the organizations to
New Opportunities completely transform their competitive strategies.

New opportunities are emerging on the scene and are getting
multiplied due to globalization and liberalization of business.
The liberalization of tariff and non-tariff barriers and
multilateral treaties are throwing a range of opportunities
for the business enterprises. However, it requires to make
major changes in the strategies, structure and systems to
encash these opportunities. The organizations subject to low
continuity forces may quickly jump and strategically
transform to align with the new ways of doing business.
However, the organizations being pulled by their massive
continuity forces need to develop more innovative strategies
to take immediate benefit of these new opportunities.
The organizations in emerging industries, such as ITES,
BPO, and in service based industries such as financial
services appear to be more dynamic to quickly adapt to these
new opportunities. Whereas, product based organizations,
such as automobiles, home appliances, electronics and so
on need to overcome the inertia of their continuity flywheel
in a major way.
Competition
It is not only the opportunities that act as a major change
driver, the changing face of competition may also drive the
organizations to change. In the wake of globalization, the
competition to domestic companies suddenly starts coming
Customer Needs
Another major change force constitutes of customers
themselves. The customers are becoming more aware, quality
conscious and demanding. In a competitive environment,
‘customer orientation’ is becoming the mantra of success.
The needs and tastes of customers are changing which are
fuelled by the range of competitive choices available in the
market place. These are also governed by new product
features and options available with technological innovation
in the industry. For example, in case of mobile phone hand
sets, new product models are launched everyday with
attractive features. The mobile phones have changed from
simply a telecom equipment to Internet connectivity, colour
option, camera, MMS and so on.
In the Indian automobile market, the customer needs
have moved from economy to comfort and style. This has
prompted to an economy car manufacture like ‘Maruti’ to
go for brand extension so as to include ‘style’ by launching
its new model ‘SWIFT’.
Today, customers want more value for money and are
not merely looking the price tog. They are expecting total
customized solutions to their requirements rather than a
merely a product, and are also willing to pay for it. Thus, the
customer driven organizations are under great pressure to

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 A Flexible Strategy Framework for Managing Continuity and Change

renew and upgrade their offerings and value addition as networks. They are creating big e-market place, such as
compared to the competitors. Covisint and Car point.

New Technology Almost every organization, small or big, product or

service and old or new is driven by the wind of this new
Not only the market-pull is a change force, technology-push paradigm called e-business. What should be the level of e-
is another greater force in the era of globalization. The business transformation, that is, information, automation of
globalization brings out new technology in the market place processes, transaction and integration, would depend upon
which forces existing organizations to upgrade their the e-business maturity of the enterprise (Sawhney and Zubin,
technology portfolio. In case of home appliances industry, 2001).
with the entry of global majors like Electrolux, Whirlpool,
LG and Haier, the local players are either vanished (for Mergers and Acquisitions
example, Voltas, Kelvinator of India) or had to acquire new
technology (for example, Godrej and Videocon). As the markets are maturing, the industries are getting
Globalization is a major contributor to transfer of technology consolidated and mergers and acquisitions (M&A) are
along with Foreign Direct Investment (FDI). The becoming a major drive. M&As are taking place due to a
technological scenario in major sectors in Indian industry variety of reasons, such as efficiency, diversification market
has drastically changed in post liberalization phase, which power, control and others. Some of the global majors, such
has both facilitated and forced technology influx in the Indian as Daimler Chrysler and Asea Brown Boveri are a result of
industry. large M&A activity. Some organizations have grown globally
With the change in competitors’ technology, the via this route, such as ‘Electrolux’. The M&A revolution is
organizations are driven to enhance their technology acting as a big change force for the organizations for either
acquisition and developmental efforts. How far the to go for acquisition or get acquired. The ‘Tata Tetley’ merger
organization can go with the existing technology and when is a unique example of Indian tea industry getting globalized
the upgradation is to be done, is the key question of in an inorganic manner.
continuity-change balance before a large number of
organizations. The organizations in services sector, dealing The M&A activity, on the one hand, changes the nature
with soft technology (such as IT), can opt for a quicker of competition in the market and creates cross-cultural
change as compared to the organizations dependent upon integration pressures within the organizations, on the other.
hard core product and process technologies.
Government Policy and Legislation
e-Business
Government policies and legislation act as macro change
Developments on the front of information technology (IT) drivers. Government fiscal policies, by way to setting levers
have led to the emergence a new business paradigm, that is, of taxes and duties, promote or restrict certain products and
e-business. The e-business model has shown tremendous sectors, encourage foreign trade, facilitate technology flow,
advantages in terms of speed, accuracy, lower transaction and so on. The working of industry is greatly influenced by
cost, larger customer reach, any time-any where business, change in governmental policies which may be either
and so on. A prominent example of this is the Dell’s direct favourable or adverse to it in the current business framework
marketing model which has offered it tremendous flexibility and thus force the organizations to change their strategies.
and cost advantage and pushing it up in the competitive
ladder. The adoption of e-business model has severely The imposed strategies may also be resulted as a
strained the traditional ‘brick and mortar’ model of doing consequence of some legislative measures. In case of
business which is less responsive and more costly. automobile industry in India, the Supreme Court imposed
the implementation of EURO norms for pollution control.
Various e-business models, such as business-to-business This has acted as a major change driver for many auto
(B2B), business-to-customer (B2C) and business-to- companies to go for change in technology. Similarly, the
government (B2G) have been tried out and the outcome is refrigeration and air conditioning industry is globally affected
mixed. On some fronts, big success has been achieved, by the international requirement of UN environmental body
whereas there are still grey areas, such as security, privacy to phase out CFC as a refrigerant in view of Ozone layer
and so on, that need to be further explored. This has led to depletion. This acted as a major driver for developing non
the emergence of ‘click and brick’ model, a combination of CFC refrigeration technology.
e-business and traditional business models. This approach
is widely adopted and many organizations have Continuity-Change Matrix
complemented their traditional business by e-business route.
For example, DaimlerChrysler (DC) and Ford, the two auto Strategies for confluence of continuity and change could be
majors, have used e-business widely to service their global generated by understanding the balance of continuity and
©2005, Global Institute of
Flexible Systems Management
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 Sushil

change forces. The continuity and change forces, as discussed zone, for example, Petro-chemicals, steel and fertilizer
in the previous sections, would be different for different industry, as shown in Figure 4.
industries and business organizations. In order to map the
position of an industry or enterprise with respect to these b. Low Continuity Force and Low Change Force:
forces a Continuity-Change (C-C) matrix is developed, as The industries/organizations in this category have low
shown in Figure 3. This matrix has continuity forces (due to bindings on either side and can be treated as ‘Quick
‘actors’ and ‘processes’) on the x-axis and change forces Encashers’ typified as ‘Mushroom’. These organizations can
(caused by the ‘situation’) on the y-axis. The level of either quickly encash the opportunities and can shift to new ones
of these forces could be ‘Low’ or ‘High’. These forces could due to low continuity forces. Industries requiring low
be assessed independently for each category, such as infrastructure and networking, such as coaching and Small
customer base, infrastructure, technology and so on and Scale or Tiny Industries may fall under this category.
agregated as ‘continuity forces’. Similarly, the ‘change forces’
can be assessed for globalization, new opportunities, change c. Low Continuity Force and High Change Force:
in customer needs and so on, as These are ‘Change Masters’
given in the previous section, As per the proposed C-C matrix, there can be four typified as ‘Wind’, as these
and an aggregate score can be possible combinations of the continuity and change industries/ organizations have
obtained. forces, which are metaphonically named according to low pull due to existing
the characteristics of that category framework and need to be
As per the proposed C-C changed radically due to new
matrix, there can be four possible combinations of the opportunities or innovative technological change. These
continuity and change forces, which are metaphonically organizations are under continuous pressure of transforming
named according to the characteristics of that category. These themselves, e.g. Business Process Outsourcing (BPO) and
combinations are: IT Enabled Services (ITES).

d. High Continuity Force and High Change Force:

The industries/organization under this category have huge
global infrastructure, significant investment in technology,
large customer base and complex supply chain and
distribution networks. At the same time, they are under server
Change Masters Synthesizers
High pressure due to globalization, intense competition, changing
(Wind) (Flowing Stream) customer requirements, M&A and many other change forces,
for example, Telecom, Electronics and Automobile industries.
Change Forces

These industries/organizations need to deal with a

c d
confluence of continuity and change and are the
b a ‘Synthesizers’ metaphorically called as ‘Flowing Stream’.
The concern of simultaneous continuity and change is
maximum under this category.
Low Quick Encashers Stabilizers
(Mushroom) (Tree) Telecom
BPO Electronics
ITES Automobile
High
c d
Low High
Change Forces

Continuity Forces b a

Coaching Petrochemicals
Figure 3: Continuity-Change (C-C) Matrix Small Scale & Tiny Steel
Industries Fertilizers
a. High Continuity Force and Low Change Force: Low
These industries/organizations in this category are called as
‘stabilizers’ and typified as ‘Tree’, as these are usually more Low High
stable like a tree and slowly evolve over time maintaining Continuity Forces
continuity in their strategy. Traditional industries with big
infrastructural base and slow technological change lie in this
Figure 4: Mapping of Select Industries on
Continuity-Change Matrix
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 A Flexible Strategy Framework for Managing Continuity and Change

The C-C matrix provides a flexible strategic framework

to evolve various strategy options depending upon the Strategic Renewal and Strategic Flexibility for
mapping of continuity and change forces. Flexible strategies Transformation Integrating Opposites
for different continuity change combinations are discussed High
in the next section.
c d

Change Forces
Flexible Strategies for Continuity-Change Combinations
b a
Flexible strategies for different continuity-change
combinations are proposed, as given in Figure 5. The Freewheeling and Incrementalism and
selection of strategy would depend upon the balance of Experimentation Evolution
continuity and change forces acting on an organization. There
Low
are four extreme categories of strategies that are proposed
according to the combinations given in C-C matrix. The
organizations lying at the interface of Low or High continuity/
change forces may explore to evolve hybrid strategies. The Low High
four major strategies as per the ‘Flexible Strategy Matrix’
(Figure 5) are discussed along with suitable real life Continuity Forces
examples.
Figure 5: Flexible Strategy Matrix
a. Incrementalism and Evolution
b. Freewheeling and Experimentation
For organizations that are ‘stabilizers’, operating under ‘high’
continuity forces and ‘low’ change forces, the major strategic The strategy of ‘Freewheeling and Experimentation’ can be
path could be of ‘Incrementalism and Evolution’ or adopted by organizations that are not under major pressure
continuous and gradual change. This can be metaphorically of either continuity or change forces. This can be
typified as ‘Tree Strategy’, as this resembles the metaphorically stated as ‘Mushrooming Strategy’, which is
characteristics of a tree that gradually evolves from a seed characterized by quickly encashing the opportunity and
to a fully grown tree and gets renewed everyday. Though the moving fast to other lucrative opportunities, if they come in
change takes place in such an organization, it is very slow the way. As these organizations do not have a major continuity
and the strategy is predominantly guided by the forces of pull, may be because of low customer base, limited
continuity. An organization following this strategy would infrastructure and low investment in technology, they can
nurture continuity and grow in the existing areas in a step- easily opt for freewheeling to any new areas and experiment
by-step manner by enlarging infrastructure, improving to encash even small opportunities.
technology, strengthening core competence and culture,
streamlining and expanding supply chain and distribution One major example of this type of strategy could be
network and ultimately enriching the customer base and seen in computer education and coaching industry. When
improving business performance. there was an IT wave in 90s and there were huge requirements
of professionals with JAVA and multimedia technologies,
For example, in steel industry, ‘SAIL (Steel Authority small computer coaching institutes got mushroomed all
of India Limited)’ has followed this strategy of around. In the event of IT slowdown, a large number of them
incrementalism and evolution by way of modernization and got vanished and again with the growing opportunities in
quality improvement. It has instituted suggestion schemes ITES/BPO industry coaching institutes of different kinds
and quality circles. It obtained ISO 9000 certification and have now flourished. The strategy adopted by larger players
used customer satisfaction as a means to attain market like NIIT and APTECH were different as they moved for
leadership. strategic renewal and transformation and moved to enlarge
the offering to include software solutions in addition to
In petrochemicals industry, ‘Reliance’ has grown steadily learning solutions.
by way of vertical integration. It has gone for backward
integration upto exploration and forward integration to many Small ‘Me Too’ kind of players with limited investment
petrochemical products such as polymers, and marketing and are not in a position to sustain even low change forces and
distribution. Based on the project management learning in prefer to packup and move to greener pastures in search of
this area, it then moved to other diversified projects. new opportunities.

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 Sushil

c. Strategic Renewal and Transformation continuity at the same time. This strategy frontier needs to
The ‘Change Masters’, that are subject to ‘low’ continuity be explored further for a right balance and synthesis of
forces and ‘high’ change forces, are driven by the strong opposing forces acting on well established organizations,
wind and may follow a strategy of ‘Strategic Renewal and so as to divert their inertia on new frontiers without losing
Transformation’. This strategy may be typified as ‘Wind the benefits of continuity.
Strategy’ as the predominant driver as well as outcome of
the strategy is ‘change’. These organizations have low This would require to explore a range of strategy options
continuity pull due to less elaborate infrastructure, faster in view of the various types of continuity and change forces.
technological obsolescence (such as Information For example, to take advantage of existing huge customer
Technology), and flexible and flatter distribution network base for change the strategic option could be of
(particularly in case of services). Thus, the strategy would ‘cannibalization’. The inertia of vast infrastructure can be
be to follow the wind of change and adopt a path of a dealt with by way of ‘outsourcing’. The widening of scope
combination of strategic renewal and radical transformation. to ‘offer solutions’ in place of individual product and services
can aid in tapping new opportunities and change in customer
For example, ICICI financial services have fast speed requirements by utilizing the strengths of existing products
as the aim, and to achieve this as the structure is managed and services. The force of new opportunities can also be
through empowered teams, which leaves very little for top beneficially channelized by ‘extending the application of core
management role in day-to-day functions of the bank. The competence’. Some lead examples of a few of these strategic
central authority is also diffused with discretionary powers options are discussed below.
to the product teams as well as the front online sales teams.
Thus, to be first in the market, ICICI depends on its ability to The strategic option of ‘cannibalization’ is effectively
foresee the future and park funds and resources in the new used by ‘Microsoft’ and ‘Intel’ to offer upgraded products
direction. At the same time, the entrepreneurial approach with new technology using the existing large customer base
and experimentation, which as the experimentation ground.
is constantly on at ICICI, The organizations that are under high continuity forces
gives the bank the as well as high change forces are ‘Synthesizers’ and The strategic option of
competitive success are supposed to exhibit strategic flexibility to integrate ‘outsourcing’ is used by quite a few,
through intermittent the opposing forces acting simultaneously but one unique example is of ‘Bharti
phases of radical and Televenture’ which has dared to
incremental changes. even outsource the core activity of
management of large telecom network to IBM and hardware
The BPO (Business Process Outsourcing) industry is to Nokia and keeping largely the marketing and branding
growing fast and is able to adapt to new change pressures functions with it. This has provided the organization with
due to lack of legacy. It quickly transformed from merely a benefits of strategic flexibility to experiment new schemes
‘call centre’ approach to up in the value chain and is able to coupled with savings in cost.
stabilize any new process by using six-sigma methodology
d. Strategic Flexibility for Integrating Opposites The widening of scope by ‘offering solutions’ is utilized
The fourth category of organizations that are under high effectively by ‘IBM’ and ‘Maruti’ in different ways. IBM has
continuity forces as well as high change forces are used the route of M&A to move from a computer company
‘Synthesizers’ and are supposed to exhibit strategic flexibility to a computing solutions company. It has sold its PC division
to integrate the opposing forces acting simultaneously. in Asia and acquired part of Price Waterhouse Coopers to
These are the leading offer consulting services for
organizations that usually have offering comprehensive
big customer base, huge Many more strategic options for integrating continuity solutions. On the other hand,
infrastructure, a lot of investment and change forces to create a win-win strategy need ‘Maruti Udyog Limited’, a
in technology, unique core to be explored to enrich the flexible framework of leading automobile company in
competencies, complex supply ‘Flowing Stream Strategy’ India, has integrated a large
chain and distribution network, number of services, such as
well established culture and leader in performance. The financing, insurance, after sales services, reverse logistics
leaders in their own area are also subject to high change and so on by way of strategic alliances to add value under a
forces owing to globalization, stiff competition, changing highly competitive situation with reducing margins.
customer requirements, advances in technology and so on.
The strategy proposed for this category is most challenging Many more strategic options for integrating continuity
and comprise of ‘Strategic Flexibility for Integrating and change forces to create a win-win strategy need to be
Opposites’ and can be metaphorically started as ‘Flowing explored to enrich the flexible framework of ‘Flowing Stream
Stream Strategy’. A flowing stream is continuously changing Strategy’.
its course, and at times radically, while maintaining its

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 A Flexible Strategy Framework for Managing Continuity and Change

Conclusion Handy C. (1994) The Age of Paradox, Harvard Business

School Press, Boston.
The set of strategies discussed in the previous sections
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continuity and change is reflected in all the strategies IBM, Harvard Business Review, December, 61-70.
discussed in the previous sections, the confluence of
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fourth strategy, that is, to be developed to evolve a ‘Tree Strategy’ into a Execution and Change, Wharton
‘Strategic Flexibility for ‘Flowing Stream Strategy’ School Publishing, Pearson
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Reflecting Applicability in Real Life

1. Assess the continuity and change forces for your organization and map it on the Continuity-Change Matrix proposed
in this paper.

2. Basd on the mapping of your organization develop a suitable strategy balancing the continuity and change forces.

Sushil is Professor of Strategic, Flexible Systems and Technology Management at the

Department of Management Studies, Indian Institute of Technology Delhi. He is having
ten books to his credit in the areas of Flexibility, Systems Thinking, and Technology
Management. He has over 200 publications in various journals and conferences. He is
Editor-in-chief of Global Journal of Flexible Systems Management ( giftjourn@l).

He has acted as consultant to both governmental and private industrial

organizations, a few representative ones are LG Electronics, Rockwell International,
Tata Consultancy Services, Tata Infotech Ltd., CMC Ltd., James Martin & Co., Gas
Authority of India Ltd. and Sona Koyo Steering Systems. He is Founder President of
the Global Institute of Flexible Systems Management (www.giftsociety.org).

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