Home Computer Science Technological Entrepreneurship: Technology-Driven vs Market-Driven Innovation
The Strategy Paradox
Because of the importance given to risk management, exploitation of available information and providing employees with clear guidance on the relationship between their role and overall aims of an organisation, most firms establish a clearly defined, formalised strategy to guide their operations. The purpose of the strategy is to define the benefit which provides the basis for the competitive advantage through which the company seeks to achieve a specified performance. Strategy implementation is achieved through utilisation of appropriate marketing and internal value-added activities (Chaston 2013).
The use of strategy in the real world is evidenced by the fact that in many major consumer goods companies, annual plans are guided by the overall strategy deemed most capable of supporting a positioning that will ensure achievement of forecasted performance (Mahdi et al. 2015). Although there is no reason to doubt the benefits of a strategy, some researchers, especially those examining the behaviour of entrepreneurial organisations, have identified cases in which organisations performing well even though there is no evidence that their activities are being © The Author(s) 2017
I. Chaston, Technological Entrepreneurship,
guided by a clearly defined strategy (Chaston 2009). Furthermore, materials concerning the activities of entrepreneurs such as Larry Page and Sergey Brin during the development of the technology that provided the basis for launching Google, or Chad Hurley, Steve Chen and Jawed Karim while creating the online video streaming proposition YouTube, show that their primary focus was validating the technical feasibility of their ideas, with no attempt to define a marketing strategy to guide their development activities (Chaston 2016).
Mintzberg’s (1990) explanation for the lack of strategy during the development of entrepreneurial propositions was that where marketing strategies exist, they have evolved gradually over time as the individuals involved acquire a deeper understanding of the factors influencing success. Mintzberg’s (1999) typology for this type of strategic behaviour was the ‘Learning School’ approach to organisational management. In his view, the conventional linear sequential planning approach, which he described as the ‘Design School’, involves the specification of a deliberate, detailed strategy which in his opinion no longer remains feasible in to-day’s increasingly uncertain world.
For students, academics and marketers, the apparent contradictions in the literature over the utilisation of a marketing strategy can understandably be quite frustrating in terms of understanding and deciding the degree to which the performance of a product, service or organisation is dependent upon the existence of a well-defined strategy. In reality, the situation is the same as in other areas of academic thought, where evidential variation in the applicability of a specific managerial concept is eventually explained by the application of contingency theory. This involves recognising that a particular managerial approach may be valid in one situation, but may not be acceptable in a different circumstance, and that an alternative solution may be more appropriate.
In commenting upon the relevance of contingency theory in the context of the relationship between the existence of clearly defined strategy and firm performance, Dess et al. (1997) posited that this is dependent upon factors such as a firm’s competitive environment, organisational structure, position of the product on the Product Life Cycle (PLC) curve and the speed or magnitude of technological change. Support for this perspective is provided by Covin et al. (2006) who empirically determined that in a hostile, rapidly changing or heterogeneous market environment, higher financial performance was achieved by firms which had avoided being locked into utilising a clearly articulated strategy to the define nature of the marketing process. Dees et al. noted that the nature of strategy is influenced by whether entrepreneurial activities are driven by a generative mode in which autonomous organisation members are engaged in experimenting and taking risks, sometimes without obtaining prior approval from management, or by a clearly defined directive of future opportunity articulated by senior management.
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