Question

In 1976 a research study by Hedberg, Nystrom & Starbuck showed that there is a "...tendency for successful firms to stagnate over time...".

Explain (1) how this can happen, and (2) what steps can be taken to prevent this from happening.

In 1976 a research study by Hedberg, Nystrom & Starbuck showed that there is a "...tendency for successful firms to stagnate over time...".

1) Explain how this can happen

2) what steps can be taken to prevent this from happening.

Answer 1

1.

The successful could stagnate over a period of time, due to excessive reliance upon the once successful strategy and fear from making changes. When a firm relies on an approach that was successful and does not innovate, then firm can not remain successful for a longer period of time and stagnancy comes due to lack of change, no innovation and lack of urgency among the employees. It makes them focus upon what they did in the past and never focus upon capitalizing on new opportunities. It brings stagnation to the company.

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2.

It could be prevented using different steps. The first step should be the focus upon continuous improvement that may be small at a time, but it will make significant impact and organization will move from strengths to strengths. The second step should be to develop a culture of innovation and creativity and employees should be encouraged to come up with new ideas. It will make organization to come up with new innovations and make the employees to be of competitive advantage. It will prevent stagnancy. The third step is the implementation of emergent change and organizational restructuring. It will make organization to keep evolving with changing time. It will also prevent stagnation.