Policy Games for Strategic Management

In the life of each organization, situations arise that are completely new to the history of the organization. These situations are complex, surprising, urgent, inspiring, threatening and sometimes enduring. Leadership is forced to bring the organization into uncharted territory. Facing these situations, and often after a period of muddling through in a business-as-usual way, leadership has to recognize that a breakthrough response will only emerge from a previously unexplored (and, for this organization, a revolutionary) strategy process. Think about the bewilderment in a high-tech company when an emerging technology from a competitor threatens the whole existence of their organization.

The California energy crisis in 2002 is another example: by initially oversimplifying the problem and failing to identify and evaluate major alternatives, the state found itself in a crisis of its own making. If there had been proper communication about this complex system among all interested parties (e.g. suppliers, regulatory agencies, distributors, and consumers), it is unlikely that the decisions made would have proven so unsatisfactory. Yet another instance is the dilemma faced by a nationalized railway or postal service – is deregulation an opportunity or a threat? Should they lobby against adoption of a new deregulation law, or pursue it as a great opportunity?

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