An exemplar of open strategy: decision-making within multi-sector collaborations

Abstract

Purpose– Collaborations and partnerships that span economic sectors heighten the complexity of decision-making processes and introduce challenges for structuring collective action. As hybrid organizations designed for cooperation, multi-sector partnerships involving firms from the private, public, and nonprofit industries are more likely to utilize a platform of open strategy than their single-sector counterparts. Through studying the decision-making process of multi-sector partnerships, the purpose of this paper is to suggest that the formative extra-organizational boundary conditions of these partnerships create fertile ground for a platform of open strategy.Design/methodology/approach– This manuscript presents a thorough analysis of the literature regarding multi-sector partnerships and the construct of open strategy to consider the importance of goal interdependence and strategic openness in the strategic decision-making process. The combination of these research streams results in a theoretical model of open strategy to be validated in the multi-sector partnership context.Findings– Partnerships that span multiple market sectors (multi-sector partnerships (MSPs)) are often founded on cooperation as opposed to competition and this fundamental distinction impacts organizational strategy and, more specifically, the manner in which strategic decisions are made. As proposed, the open strategy process model outlined in this work relies on goal interdependence, stakeholder legitimacy, participatory decision making, transparency, and inclusiveness as core components.Research limitations/implications– Future research that considers the implications of open strategy on performance and other organizational outcomes in the MSP context is warranted. Similarly, future research could ascertain the effects of open strategy on individual-level outcomes such as job satisfaction, organizational commitment, turnover, and related constructs. Additionally, later scholarship in the context of MSPs could serve to illuminate the possible effects of strategic openness on the social structures of partner organizations as well as highlight possible unintended consequences of its implementation.Practical implications– In practical terms, this research provides direction for managers of MSPs, particularly during the formative phases of collaboration. Establishing a clear recognition of interdependence toward partnership goals is demonstrated to be a valuable first step for establishing the preconditions for a platform of strategic openness. Subsequently, implementing techniques and disciplines to enhance the inclusiveness and transparency of information, to foster participation in decision making, and to recognize all stakeholders with a claim on outcomes during the strategic decision-making process combine to achieve the outcomes demonstrated by early adopters of open strategy.Social implications– This research has the potential to further the understanding of several questions arising from collaboration scholarship such as: what are the strategies and capabilities required to succeed in managing organizational forms that fuse and cross well-established public and private sector boundaries? How can public and private actors mutually learn and develop such capabilities? The authors hope that by putting forth this new model of open strategy in multi-sector social partnerships, the authors can stimulate both practice and empirical study to separate the general principles from the contingencies. The weighty social issues of the day can benefit from these efforts.Originality/value– This work links, both theoretically and conceptually, heretofore disparate streams of literature to outline a process by which strategic decisions are made in multi-sector collaborations. Traditional notions of competitive strategy have been demonstrated to be inadequate to guide theory and practice regarding the decision-making process within multi-sector collaborations. This work attempts to resolve that deficiency by considering goal interdependence and various dimensions of strategic openness (inclusiveness, transparency, stakeholder legitimacy, and participatory decision making) as aspects of cooperative strategy. The resulting model contributes to the instrumental view of stakeholder theory, the conceptual richness of the open strategy construct, and suggests a normative governance platform for multi-sector partnerships.