Context, Concept, Theory, and Analytical Framework

This chapter introduces the scope of the book’s content and is organized into four sections: (a) context, (b) concept, (c) theory, and (d) analytical framework. The first section introduces dynamic market economies as the context that motivates the conceptualization of dynamic strategy. Why do some firms succeed, and others fail, to continuously grow their enterprise value in dynamic competitive environments that characterize such contexts? The second section introduces the concept of dynamic strategy, its underlying logic, and the salient characteristics of its elemental structure. How does the conceptualization of dynamic strategy, which specifies the temporal change in firms’ strategic behavior under uncertainty in dynamic competitive environments, fundamentally differ from other explanations of temporal changes in strategy? The third section introduces the theory of dynamic strategy as motivated to conceptualize the novel construct of dynamic strategy. To explain the elemental actions of dynamic strategy as an outcome of some dynamic processes a theory of dynamic strategy must link the dynamic nature of the firm’s strategic choice processes to the root cause of dynamism of its economic environment. A quasi-Darwinian evolutionary theory of dynamic strategy conceptualizes dynamic strategy as an outcome of evolutionary processes that drive the changes in a firm’s external industrial and internal organizational environment respectively. The final section introduces an alternative analytical framework, Evolutionary Strategy Dynamics (ESD), in response to the compelling need for a single conceptual framework for understanding and analyzing all aspects of strategic firm behavior in dynamic competitive environments.