Strategic renewal and the interaction of cumulative stress and inertia

Strategic renewal is accomplished in large and small ways. This paper proposes a four phase characterization of how organizations move between state sustaining renewal and the more radical reconceptualizations that significantly alter organization activity. The argument juxtaposes inertia (or commitment to current strategy) and stress, the dissatisfactions that signal the need for renewal. To explore the details of this interaction, and its implications for the evolution of strategy over time, a formal model is developed. Quite plausible organization paths of renewal are simulated via the model which help illustrate our main theoretic arguments.