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Schematic representation of the evolving contributions of Strategic Planning, Strategic Management, and Open Strategy to strategic openness over time.[1]

Open Strategy is an approach to strategy-making in organizations, distinguished by a higher degree of openness than traditional strategic management, involving greater inclusiveness and/or transparency in the processes and outcomes of strategy formulation and implementation.

The concept of Open Strategy was initially introduced by Henry Chesbrough and Melissa Appleyard in 2007. It was further developed by Richard Whittington, Ludovic Cailluet, and Basak Yakis-Douglas in 2011, who described the phenomenon of engaging a wider range of internal and external stakeholders, such as employees, customers, suppliers, partners, regulators, or the general public, in strategic decision-making.[2][3]

Open Strategy aims to leverage diverse sources of knowledge and ideas, enhance legitimacy and commitment, and foster innovation and learning. The approach, however, presents various challenges and dilemmas, such as managing information overload,  safeguarding intellectual property, balancing conflicting interests, and ensuring strategic coherence. The motivation for as well as the challenges and results of Open Strategy initiatives are influenced by several contextual factors, such as the nature of the industry, the organizational culture, the regulatory environment, and the technological infrastructure.

In general, the Open Strategy phenomenon is evident across different sectors and types of organizations. Examples include private companies like Barclays, Daimler-Benz, and Zurich Insurance Group; public entities such as the City of Vienna and the United States Navy; and community groups and cooperatives, including Wikimedia and Premium-Cola.[4][5]

Driving Forces and Origin

In the field of strategy-making, there has been a notable shift from traditional methods characterized by secrecy and exclusivity to more inclusive and transparent processes. This transition is primarily driven by four key forces: societal, cultural, technological, and organizational.[3]

As general drivers of openness, these forces have fueled the adoption of openness in many different areas of organizational activity.[6] The growing trend of openness in strategizing aligns with a broader societal shift observed over recent decades.[7][8] Initially stemming from the realm of Open Source Software, the ethos of openness, underpinned by transparency and inclusion processes, has expanded across various fields.[9] These include Open Science, Open Innovation, Open Data, Open Government, and more recently, Open Strategy.[10][11][12][13][3]

In the field of business management, a shift toward more openness became primarily evident in 1995. The discourse began with the assertion that strategy is not created only by the people at the top of a company or its planning department.[14] This fundamental idea was further developed a year later, with an emphasis on the democratization of strategy-making.[15] As the new millennium unfolded, several related concepts emerged. In 2003, Henry Chesbrough introduced the paradigm of Open Innovation, followed closely by James Surowiecki's concept of the Wisdom of the Crowd in 2004, and the democratization of innovation by Eric von Hippel in 2005.[11][16][17] After Gary Hamel's emphasis on the democracy of ideas in 2007, Jeff Howe introduced the idea of Crowdsourcing in 2008, further reinforcing this shift.[18][19] In 2011, this evolution resulted in the emergence of more open forms of strategy-making, advocating transparency and inclusion in the strategic management process.[3]

In the evolving landscape of organizational strategy, the Open Strategy phenomenon is significantly influenced by other movements towards more openness, especially Open Innovation. This approach underscores the importance of leveraging both external and internal sources of knowledge and ideas on an operational level.[11] By expanding the principles of Open Innovation to a strategic level, organizations are able to blur the conventional boundaries that traditionally separated strategic planning from other organizational processes. This enables them to adapt to the complex, dynamic, and interconnected business environments of the modern era.[2][3][20][21][1]

Open Strategy also draws inspiration from, and is often interlinked with, other more open practices like crowdsourcing, democratizing innovation, and collective intelligence. For instance, Crowdsourcing, involves issuing challenges to large and diverse groups to generate novel solutions, which aligns with the aim of Open Strategy to engage diverse stakeholder input. In a similar vein, the principle of collective intelligence, which posits that aggregated knowledge from a diverse group fosters better decision-making and innovation, underscores the close relationship with other, more open approaches.

The evolution of openness in strategy-making practices is characterized by three key phases:[1]

  1. Strategic Planning (1960s–early 1970s) marked the beginning of a more structured approach to strategy-making. It initiated a dialogue among managerial elites, setting the foundation for future developments in strategic practices.
  2. Strategic Management (late 1970s onwards) shifted the focus towards strategic management. This phase expanded the dialogue to include middle managers and employees, emphasizing the importance of their roles in effective strategy implementation.
  3. Open Strategy (1990s onwards) further extends inclusivity and transparency in strategy-making processes. It involves a broader range of stakeholders, even during the initial stages of strategy formation, reflecting a movement towards increased openness in organizational practices.

Each phase represents a significant shift towards increased openness in strategy-making, evolving from a closed dialogue among top management to a more inclusive and transparent process involving a wider array of stakeholders.[1]

Dimensions and Dynamics

Open Strategy is conceptualized “as a dynamic bundle of practices promoting greater strategic transparency and/or inclusion among internal and external actors. The balance and extent of openness adapt to evolving contingencies from within and outside organizational boundaries.”[22] Open Strategy can consequently be understood along two key dimensions: inclusion and/or transparency, both addressing internal and external stakeholders, expanding beyond the confines of managerial elites.[22][20][3]

The concept of “inclusion” within Open Strategy encompasses engaging a variety of actors in the strategic discourse, thereby enriching the strategy-making process. This aspect aims to diversify the range of voices and perspectives in strategy development and implementation. It emphasizes both external and internal consultation in order to exchange “information, views and proposals intended to shape the continued evolution of an organization’s strategy”.[23] This shift marks a departure from traditional strategy paradigms, which were exclusively the domain of top management, breaking down the monolithic structure of conventional strategy-making. Inclusion manifests in several sub-dimensions:the variety and diversity of participating constituencies, the degree and form of involvement (including decision-making), and the openness and transparency of participation procedures. [20]

Dynamics of Open Strategy

  1. Transition from Closed to Open Strategy: A traditionally closed strategic management process can evolve in its openness by either enhancing its inclusiveness, its transparency, or both, transitioning towards a fully open strategy.
  2. Enhancement of Partially Open Processes: Processes that are already partially inclusive or transparent can further augment their openness, culminating in a fully open strategy.
  3. Contraction of Partly Open Strategies: Conversely, a partly open strategy process can retract, becoming more closed by either diminishing its inclusiveness or its transparency.
  4. Reduction in Fully Open Strategies: A fully open strategy process might also reduce its degree of openness, partly or completely reducing its inclusiveness or transparency.

Dynamics Leading to Increased Openness

In the context of Open Strategy, a variety of dynamics are driving organizations towards an increased state of openness, characterized by practices of transparency and inclusiveness. Some organizations opt for greater transparency in strategic decisions without necessarily expanding the stakeholder group involved in decision-making. Conversely, organizations such as Siemens have actively sought to involve their employees in strategy formation, encouraging them to contribute ideas and suggestions.[27] In certain instances, organizations are increasing both transparency and inclusion, gaining additional insights while also sharing more strategic information broadly. However, it is important to recognize that an increase in one dimension (transparency or inclusion) does not necessitate a corresponding increase in the other.[3]

Dynamics leading to reduced openness

Despite the noticeable trend towards increased openness, there are also dynamics that can lead organizations to lessen their level of openness.[24] Some organizations, faced with challenges associated with increased openness, may revert to more traditional, closed strategic methods. For instance, start-ups that initially adopted a more inclusive approach might find it more efficient to revert to a primary focus on transparency over time.[28] The decision and degree of openness are influenced by a myriad of internal and external factors, including the competitive landscape, organizational structures, and the skills of the individuals involved. As organizations navigate the intricacies of an open strategy, they must remain agile, constantly re-evaluating and recalibrating their approach in response to changing circumstances.[29]

Practices

Drawing from the Strategy as Practice (SAP) tradition, which emphasizes the activities and interactions in strategic management, Open Strategy extends this focus into a more inclusive and transparent realm.[30]  Depending on the degree of inclusion and transparency, Open Strategy can manifest in various forms and practices. These include online platforms, crowdsourcing, wikis, blogs, social media, town hall meetings, workshops, surveys, or open contests.[22]These practices can be applicable across different stages of the strategic management process, encompassing analysis, idea generation, formulation, implementation, evaluation, and refinement.

Inclusion Practices in Open Strategy

Transparency Practices in Open Strategy

Opportunities and Challenges

The following overview provides a summary of the most relevant opportunities and challenges associated with increased inclusion and transparency, reflecting on the motivations that drive organizations towards Open Strategy and the potential hurdles encountered in this endeavor.[20]

Opportunities of Open Strategy

Inclusion
Transparency

Dilemmas of Open Strategy

The dilemmas of Open Strategy introduced by Hautz et al. in 2017 describe the challenges faced by organizations when adopting a more inclusive and transparent approach to their strategic planning.[22] Central to these dilemmas is the trade-off between the benefits of wider stakeholder engagement and the operational, informational, and relational challenges that come with it:

Additional Challenges of Openness

Inclusion
Transparency

Perspectives

The exploration of Open Strategy has been enriched through various theoretical lenses, each highlighting distinctive facets of this domain. David Seidl and colleagues have broadly categorized the theoretical perspectives on Open Strategy into six distinct groups:[20]

  1. Practice Theories: These theories suggest that Open Strategy is an eclectic bundle of practices aimed at fostering transparency and inclusivity in strategic deliberations. Prominent theories within this domain, such as Giddens’s structuration theory and Schatzki’s theory of practice bundles, provide avenues for exploring the diverse practices of Open Strategy and their implications.
  2. Communication-based Approaches: This perspective emphasizes the pivotal role of discourse in facilitating broader participation in strategy formulation and implementation. Theories like discourse theory and dialogue theory have been utilized to explore how different forms of communication can either enable or hinder wider engagement in strategic processes.
  3. Sensemaking Theories: These theories underscore the importance of cultivating shared understandings among diverse stakeholders, particularly when dealing with complex strategic issues. Key theories like Karl Weick’s sensemaking approach and the theory of negotiated order offer insights into how Open Strategy can enhance collective sensemaking.
  4. Stakeholder-related Approaches: This view considers Open Strategy as a novel platform for engaging a variety of stakeholders. Through theories like stakeholder theory and collaborative decision-making, researchers examine how Open Strategy fosters joint decision-making and stakeholder engagement.
  5. Institutional Approaches: These approaches link Open Strategy to wider societal expectations and institutionalized norms, aligning it with other openness phenomena like Open Government and Open Science. Theories like World Society Theory and the sociology of professions are some of the institutional theories that provide a framework for analyzing the societal drivers and the institutional work necessary for the enactment of Open Strategy.
  6. Information/Knowledge-based Approaches: These approaches treat Open Strategy as a mechanism for facilitating the exchange of knowledge and information among organizational members. Theories like the knowledge-based theory of the firm and network theory elucidate the epistemic and design dimensions of Open Strategy, highlighting how different arrangements influence the flow of strategy-relevant information.

Most Relevant Literature (in chronological order)

  1. Chesbrough, H., & Appleyard, M. M. (2007). Open Innovation and strategy. California Management Review, 50(1), 57–76. https://doi.org/10.2307/41166416
  2. Whittington, R., Cailluet, L., & Yakis-Douglas, B. (2011). Opening strategy: evolution of a precarious profession. British Journal of Management, 22(3), 531-544. https://doi.org/10.1111/j.1467-8551.2011.00762.x
  3. Full special issue edited by Whittington, R., Hautz, J., & Seidl, D. (2017). Open Strategy: Transparency and Inclusion in Strategy Processes. Long Range Planning, 50(3), 297-426. https://doi.org/10.1016/j.lrp.2016.12.001
  4. Seidl, D., von Krogh, G., & Whittington, R. (2019). Cambridge Handbook of Open Strategy. Cambridge University Press. https://doi.org/10.1017/9781108347921
  5. Whittington, R. (2019). Opening Strategy - Professional Strategists and Practice Change, 1960 to Today. Oxford University Press. https://doi.org/10.1093/oso/9780198738893.001.0001
  6. Stadler, C., Hautz, J., Matzler, K., & Friedrich von den Eichen, S. M. (2021). Open strategy: Mastering Disruption from Outside the C-Suite. MIT Press. https://doi.org/10.7551/mitpress/13719.001.0001
  7. Full special issue edited by Dobusch, L., von Krogh, G., Splitter, V., Walgenbach, P., & Whittington, R. (2022). Open Organizing in an Open Society? Conditions, Consequences and Contradictions of Openness as an Organizing Principle. Organization Studies, 44(1), 1-169.
  8. Pittz, T. G., & Adler, T. R. (2023). Open strategy as a catalyst for innovation: Evidence from cross-sector social partnerships. Journal of Business Research, 160, 113696.

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