The Role of the Social Context for Strategy-Making

In recent years, a new form of strategy-making has evolved within firms, which focuses on the continuous development of strategic initiatives. Nevertheless, our understanding of the professional management of strategic initiatives remains limited. Why do some initiatives fail to materialize? What role does organizational context, and more specifically its social aspect, play in this process?

Karolin Marx analyzes the impact of the social context, represented by the embeddedness of the initiative teams in the intrafirm network, on the performance of strategic initiatives by studying a sample of 54 corporate strategic initiatives. The results support the significance of the social context for strategy-making. However, it is shown that social relationships are not only positive, but can also impede the successful development of strategic initiatives. Furthermore, it is underscored that exploratory initiatives prosper in a different social setting than their exploitive counterparts. Therefore management should create a balanced environment in which both types of initiatives can develop and survive.