Managing Strategy and Flexibility : A trade-off for Swedish Companies

Abstract: Firms are reliant on a suitable fit between the firm and their business environment. Simultaneously environments globally become increasingly unpredictable, jeopardizing firms’ ability to develop and implement strategic directions to achieve a suitable fit. To tackle this challenge theorists call for increased flexibility in strategic processes by increasing strategic flexibility. However, the two concepts of strategy and flexibility work as opposing forces of change and stability. This study aims to explore the complex interplay between the two detached concepts in two large Swedish companies Saab and Ericsson. This paper embraces a qualitative method with semi-structured interviews combining deductive and inductive approaches to analyze the interplay between strategy and flexibility. Earlier theorists within strategic flexibility academia primarily focused on providing a resolution of definitional differences; therefore this study provides a new theoretical framework, comprised of a strategy as a plan approach combined with acknowledging strategic decisions in various intra-firm levels. Findings from this study indicate that firms should constantly consider four different trade-offs: decentralized versus centralized control, valuing short-term versus valuing long-term strategies, relying on individual experience versus planning to manage changes and product- versus market-driven strategies to achieve a beneficial interplay between strategy and flexibility.