Portfolios of Strategic Initiatives: A Complexity Perspective
Type
working paper
Date Issued
2013
Author(s)
Abstract
This study examines the impact of portfolios of strategic initiatives on performance in large, multibusiness firms. Conceptualizing multibusiness firms as complex systems, we draw on complexity theory to argue that portfolios of strategic initiatives have an effect that exceeds the cumulative effects of single initiatives. We suggest that managers can address three types of complexity that have differing performance effects by employing the design principles of goal variety, modularization, and formalization. With the help of a unique, longitudinal data set in the European financial-services industry, we find evidence of the hypothesized portfo-lio effect. Our results suggest that goal variety and formalization are positively related to per-formance, which partially supports our theory. In addition, we find that modularity has a cur-vilinear effect.
Language
English
Keywords
Strategic initiative
portfolio
strategic renewal
complexity theory
HSG Classification
contribution to scientific community
HSG Profile Area
SoM - Responsible Corporate Competitiveness (RoCC)
Refereed
No
Publisher
University of St. Gallen and University of Zurich
Subject(s)
Division(s)
Eprints ID
225029