The threat of failure, the perils of success and CEO character: Sources of strategic persistence

Abstract

The survival and continuing prosperity of an organization depends on its ability to remain flexible and responsive to changes in its own performance levels as well as in its environment. However, some organizations persist instead in pursuing strategies that may no longer be appropriate and that can at times turn out to be disastrous. There are two related streams of explanations for this phenomenon: those that see inappropriate strategic persistence as a possible response to potential failure (escalating commitment to a chosen course of action) and those that see it as a possible outcome of success (the perils of success or excellence). Based on findings from a case study, this article argues that the strategist's character-based personal issues can also contribute to strategic persistence.