The exploration of Complexity Theories in the fields of economy, business, and strategic management, has resulted in new perspectives and paradigms. These frameworks either build on or expand beyond traditional strategic management theories, such as Resource-Based View (RBV), Porter’s Five Forces, and Dynamic Capabilities (DC).
Complexity-Based Strategic Management
Building on Complexity Theories and Complex Adaptive Systems, this perspective sees companies and markets as complex, adaptive systems that are constantly evolving. The focus is on managing the uncertainty and unpredictability of complex interactions among many agents (e.g., consumers, firms, governments).
Companies adopt strategies that emphasise flexibility, resilience, and adaptive learning rather than traditional control-based models. They must be prepared for nonlinear dynamics, where small changes can have large effects, and where feedback loops and emergent behaviours play a crucial role.
New strategic focus: Resilience, real-time adaptation, decentralisation, and managing uncertainty and complexity.
Ecosystem Strategy and Platform Economy
Instead of focusing on traditional value chains and industries, companies are increasingly seen as part of broader ecosystems where they interact with multiple stakeholders, including competitors, customers, suppliers, and complementors. The rise of platform businesses (e.g., Amazon, Apple, Google) emphasises the importance of creating and maintaining networks and platforms that connect multiple actors in a mutually beneficial way.
This perspective moves away from traditional linear models of strategy toward a more networked and co-evolving approach. Companies must develop strategies that leverage the power of platforms, data, and interdependent relationships within their ecosystem.
New strategic focus: Building platforms, fostering innovation through open ecosystems, and managing multi-sided markets.
Sustainability and Circular Economy Strategies
Sustainability has become central to strategic management as companies are pressured to address environmental and social issues alongside financial performance. Circular economy strategies aim to minimize waste by reusing, recycling, and regenerating products and materials across supply chains, promoting long-term resource efficiency.
This paradigm shifts the strategic focus from short-term profit maximization to long-term value creation, including social and environmental dimensions. Companies are integrating environmental, social, and governance (ESG) criteria into their core strategies.
New strategic focus: Sustainable innovation, resource efficiency, corporate social responsibility, and stakeholder engagement.
Ambidexterity in Organisations
Organizational ambidexterity refers to the ability of companies to simultaneously explore new opportunities (innovation, flexibility, growth) while exploiting existing capabilities (efficiency, productivity). The exploration/exploitation balance is crucial in dynamic industries, especially in tech, where disruptive innovation is common.
This approach highlights the need for firms to build dynamic structures that allow them to shift between exploration (adapting to market changes) and exploitation (optimizing current operations), often requiring dual operating models.
New strategic focus: Balancing innovation and efficiency, managing paradoxes within organizational design, and enabling adaptability without losing operational discipline.
Behavioural Strategy
Drawing from psychology and behavioural economics, behavioural strategy challenges the assumption that companies make decisions based on pure rationality. It recognises that biases, cognitive limitations, and emotions shape decision-making processes at all levels of an organisation.
The focus shifts toward understanding and managing the cognitive biases of leaders and decision-makers, as well as designing processes and structures that mitigate errors in judgment, including overconfidence, groupthink, and risk aversion.
New strategic focus: Understanding psychological biases, developing decision frameworks that account for human behavior, and using behavioral insights to guide strategy.
Digital Transformation and Data-Driven Strategies
The rapid advancement of digital technologies (AI, big data, machine learning, IoT, blockchain) is transforming how companies develop and execute strategies. These technologies enable real-time data analysis, automation, and new forms of value creation.
Companies need to integrate digital capabilities into every aspect of their strategy, shifting from traditional approaches to agile, data-driven decision-making. The use of advanced analytics enables continuous adjustment to changing conditions and customer needs.
New strategic focus: Harnessing AI and big data, developing digital competencies, and creating agile and flexible business models that respond to technological disruptions.
Agile and Lean Strategy
Borrowed from software development, agile and lean methodologies have found their way into strategic management as firms deal with rapid change and uncertainty. These methods emphasize incremental change, continuous feedback, and short planning cycles over long-term, rigid plans.
Firms are adopting agile principles to remain adaptable in turbulent environments. Rather than relying on static, long-term strategies, companies focus on quick iteration, experimentation, and learning to respond to dynamic market shifts.
New strategic focus: Short planning cycles, flexibility, customer-centric innovation, and fostering rapid experimentation.
Purpose-Driven Strategy
The rise of purpose-driven organizations reflects a shift from focusing solely on profits to creating shared value for society. Companies are increasingly aligning their strategies with a broader mission or purpose, which resonates with employees, customers, and stakeholders.
Purpose-driven strategies build brand loyalty and employee engagement, offering long-term benefits in terms of customer trust and reputation. This shift aligns business strategies with ethical, social, and environmental goals, moving beyond profit maximization.
New strategic focus: Aligning business models with a clear purpose, focusing on societal impact, and engaging stakeholders on meaningful issues.
