Strategy Making in High-Technology Firms: The Empiricist Mode

Abstract

High-technology firms operate in uncertain and volatile settings in which technologies, competitive boundaries, and market conditions transform continuously. Based on a longitudinal study of high-tech companies in Silicon Valley, the authors propose that these firms adopt an mode of strategy making, thereby fusing together the processes of strategy formation and implementation. This mode involves: experimentation and action to create options and develop new competencies; escalation of viable alternatives with a concerted deplopment of resources; and integration of new initiatives into the strategic context and organizational infrastructure. This article describes selected strategic moves in two medium-sized high-technology firms, proposes a three-stage framework as a basis for explaining their strategy-making process, and discusses the main features of the empiricist mode.