A unified framework of explanations for strategic persistence in the wake of others’ failures

Abstract

Purpose – Although strategic persistence remains a key issue in change management and strategy literature, the understanding of strategic persistence in the face of other businesses’ failure remains limited. The purpose of this paper is to examine factors that determine strategic persistence in the face of other businesses’ failures. Design/methodology/approach – Through a review and synthesis of the multiple streams of research, the paper provides a number of explanations for strategic persistence. The study complements the analysis with illustrative cases of failed companies. These led to development of an integrated framework of explanations for strategic persistence in the wake of other businesses’ failures. Findings – The analysis led to identification of individual, firm-specific and environmental factors rooted in past events (i.e. past successes, prior commitment and decisions by the top-management team), present circumstances (i.e. nature of the failure) and future outlook (i.e. paradox of success, looming threats and opportunities), which foster strategic persistence. The paper uncovered that persistence may also stem from factors such as “paradox of success” and “too much invested to quit”. Research limitations/implications – The paper suggests that organisations can learn from others’ failures without compromising their values by drawing on the expertise released by failed firms. The study also identified various mechanisms through which organisations can learn from the failure of others and factors that constrain them from doing so. Originality/value – The theorisation and conceptualisation of the literature accommodates the multiple and contrasting perspectives of the subject such as the environmental buffers and paradox of success.