ACCA SBL Syllabus C. Strategy - Strategic Drift - Notes ^{2 / 5}

is a departure from the strategic plan over time by a range of small actions moving away from the original desired outcome

Strategic drift particularly affects organisations which have experienced a long period of relative continuity during which strategy has remained relatively unchanged

Here are some ways it can happen:

• The organisation takes planned steps to change ahead of the market and develop a competitive advantage. 

  However, change in the market speeds up, and the firm  is left behind.

• Managers look to expand into new markets, but using the same strategies, if not successful, strategy development loses direction, further damaging performance.

• Eventually transformational change is required if the demise of the organisation is to be avoided. 

  Transformational change tends to occur when performance has fallen off significantly, i.e. in times of crisis.

So, overall it is important to realise why strategic drift occurs.

Managers, faced with the complexities of steering an organisation, tend to look for solutions based on the current ways of doing and seeing things, grounded in the existing organisational culture and this can lead to the wrong decisions being made

The realisation of performance problems is often followed by a period of flux where no clear direction is pursued - this may itself be followed by transformational change, in which there is a (too late) fundamental change in strategic direction

The challenge for managers is to stand apart from their own experience and organisational culture so that they are able to recognise the emerging strategic issues which they face.

New strategies might require actions outside the scope of the existing culture.

Thus people within the organisation are required to substantially change their core assumptions and their ways of doing things.