Strategic development processes during economic and financial crisis

Abstract

PurposeThis paper aims to explore the strategy development process followed by firms during the current economic and financial crisis through the relationship between changes in performance measures and strategic success factors.Design/methodology/approachA survey to executives of global firms asking the importance of widely accepted performance indicators and strategic success factors has been performed obtaining 53 usable surveys. Test has been performed to identify respondent bias. Empirical results from the survey are presented and t‐tests have been performed to validate the statistical significance of the change in importance of performance indicators and strategic success factors.FindingsThe findings suggest that firms followed a reactive strategic development process since they adjusted their strategic direction to the short‐term problems in their performance affected by the economic crisis. While firms may focus their attention to similar set of performance measures during the crisis, their strategic behavior to face the crisis differs.Research limitations/implicationsWhile the sample is small (53 respondents), the authors believe that the quality of the respondents, senior managers and directors with responsibility for strategic development processes, compensates for the small number of responses.Practical implicationsRehearsing strategies can be a powerful tool to avoid reactive strategic behavior either anticipating environmental constraints through scenario planning or testing the robustness of strategic initiatives using diverse tools like strategic modeling.Originality/valueThe paper offers an empirical validation of strategic development processes under uncertainty considering the linkage between changes in organizational performance, performance indicators and strategic success factors.