TheInfluenceoftheStrategicPlanningProcessonStrategicChange JaneE.Dutton;RobertB.Duncan StrategicManagementJournal,Vol.8,No.2.(Mar.-Apr.,1987),pp.103-116. StableURL: http://links.jstor/sicisici=0143-2095%28198703%2F04%298%3A2%3C103%3ATIOTSP%3E2.0.CO%3B2-4 StrategicManagementJournaliscurrentlypublishedbyJohnWiley&Sons. YouruseoftheJSTORarchiveindicatesyouracceptanceofJSTOR'sTermsandConditionsofUse,availableat http://www.jstor/about/terms.html.JSTOR'sTermsandConditionsofUseprovides,inpart,thatunlessyouhaveobtained priorpermission,youmaynotdownloadanentireissueofajournalormultiplecopiesofarticles,andyoumayusecontentin theJSTORarchiveonlyforyourpersonal,non-commercialuse. Pleasecontactthepublisherregardinganyfurtheruseofthiswork.Publishercontactinformationmaybeobtainedat http://www.jstor/journals/jwiley.html. EachcopyofanypartofaJSTORtransmissionmustcontainthesamecopyrightnoticethatappearsonthescreenorprinted pageofsuchtransmission. TheJSTORArchiveisatrusteddigitalrepositoryprovidingforlong-termpreservationandaccesstoleadingacademic journalsandscholarlyliteraturefromaroundtheworld.TheArchiveissupportedbylibraries,scholarlysocieties,publishers, andfoundations.ItisaninitiativeofJSTOR,anot-for-profitorganizationwithamissiontohelpthescholarlycommunitytake advantageofadvancesintechnology.FormoreinformationregardingJSTOR,pleasecontactsupport@jstor. http://www.jstor MonJun2517:46:202007 Strategic Marzagement Journal, Vol. 8, 103-1 16 (1987) THE INFLUENCE OF THE STRATEGIC PLANNING PROCESS ON STRATEGIC CHANGE JANE E. DUTTON Graduate School of Business Administration, New York University, New York, New York, U.S.A. ROBERT B. DUNCAN Kellogg Graduate School of Management, Northwestern University, Evanston, Illinois, U.S.A. This paper proposes that organizational decisiorz-rnakers exist in a rnarket for strategic issues where different internal and external trerzds arzd developnzents compete for decision-makers' attention. The paper describes how an organization's strategic planning process affects the set of strategic issues that do captitre decision-makers' attention. It explains how characteristics of the strategic issue array translate into effective and timely initiation and implementation of strategic change. INTRODUCTION Top-level decision-makers operate in a market for strategic issues. Strategic issues are defined as developments, events and trends having the potential to impact an organization's strategy (Ansoff, 1980; Brown, 1981; King, 1982). Stra- tegic issues can represent problems or opportunit- ies to decision-makers. Problem issues, when acted upon, reduce the potential loss to the organization. Thus a competitor may introduce a new technology or product that substantially modifies the availability of substitutes, and poses a potentially significant threat to the viability of a firm's product. In contrast, opportunity issues represent developments or trends, that if acted upon, represent a potential gain for the organiz- ation. The development of a new material or new technology outside of the firm's boundaries, as a strategic issue, might lead to a major competitive advantage for a firm. Both problem and opportunity strategic issues are important because they affect an organization's ability to achieve its goals or objectives (Zentner, 1984). All strategic issues indicate there is some disparity between the 'real' and some 'ideal' state (Keisler and Sproull, 1982). 0143-2095i871020103-14$07 .OO 01987 by John Wiley & Sons, Ltd Strategic issues are difficult to manage because of the subjectivity involved in their detection and diagnosis. They are ambiguous, complex and fluid, making their identification and diagnosis an ongoing, interpretive and politically charged activity (Dutton, Fahey and Narayanan, 1983). There is a market for strategic issues in organizations as issues have value to organiz- ational members. The recognition and legitim- ation of strategic issues and the administrative routines devised to process them (e.g. meetings, minutes, memos, conferences; Huff and Pondy, 1983) provide a channel for promoting interests and conveying concerns that might not otherwise have a legitimate outlet. For example. the adoption of a new technology, considerations of an acquisition candidate, or the firing of a CEO emerge as plausible alternatives only in the context of a particular set of strategic issues. Thus the screening and legitimation of strategic isclues is one important mechanism through which power and influence are exercised (Bachrach and Baratz, 1962; Clegg, 1975). Strategic issues serve as vehicles for translating individuals' concerns into organizational action. By framing an individual's issue as an organiz- ational strategic issue, individuals increase the Receild 12 Novcn7ber 1984 Revised 22 March 1985 104 J. E. Duttorz and R. B. DU~C~M chances that their personal agendas will become operational. For example, a division or sub-unit head who is able to direct top-level management's attention to declining labor quality as a general strategic concern for the firm, gains quicker and more extensive support for divisional attempts to implement new quality control programs. In fact, research suggests that more effective general managers are those who mobilize resources and information to operationalize their agendas (Kotter, 1982). Strategic issues are also points of attentional focus for decision-makers, driving the collection and interpretation of information in predictable ways. For example, a strategic issue surrounding a new competitor's entry into the firm's primary market is very different from an issue concerning impending deregulation. Each issue defines a different subset of information as relevant and important for the organization. For the competitor issue, data on how to raise barriers to entry or the potential for retaliatory action gains value (Porter, 1980). For a deregulation issue, data on the regulatory environment and information on its probable impact are likely to be prized by decision-makers. Strategic issues can thus be seen as having political as well as informational consequences. These consequences can, in turn, be seen to influence strategic decision activity and strategic change in organizations. The purpose of this paper is to establish and describe this relationship in two discrete steps. Step 1 describes the effects the strategic planning process has on the set of strategic issues attended to in an organization. In step 2, characteristics of the strategic issue array are related to the initiation and implementation of strategic change. By outlining these linkages. one begins to see how the strategic issue array acts as a critical vehicle through which strategy formulation influ- ences strategic change. In addition, the proposed relationships generate a set of hypotheses that await future empirical test. THE STRATEGIC ISSUE ARRAY The arguments linking strategic planning and strategic change rest on an understanding of strategic issues and characteristics of an organiz- ation's strategic issue array. As mentioned at the beginning of the paper. strategic issues are internal or external developments, events. and trends viewed by decision-makers as consequen- tial to the organization. These developments, events and trends are not attended to in isolation. Instead, organizational decision-makers' atten- tionrtl resources are distributed across a set of strategic issues (as March