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Looking out and looking ahead How Norwegian renewable energy companies can thrive going forward despite a predictable past
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This dissertation explores topics on reducing and handling uncertainty in a situation of environmental change, with a particular focus on incumbent companies in the Norwegian renewable energy industry. I aim to investigate how these companies can achieve successful innovation management and strategic renewal during environmental change and in uncertain high-speed environments and to inform both theory and practice. The motivation for this work comes from the observed changes occurring in this traditional industry’s realm and the challenges these changes entail for incumbent companies. After decades with stable market and regulatory conditions, actors in this industry now experience a need for faster renewal, more innovation, and new business development. Established companies run the risk of being outperformed by faster and more flexible actors that take advantage of new technologies and better respond to customer needs. The literature on how incumbent companies and their management should face changes, uncertainty, and the need for innovation is both broad and deep. However, limited research exists on management issues in this particular industry. By focusing on four main theoretical topics, namely, corporate foresight, strategic decision-making, strategic resilience, and ambidexterity, this dissertation aims to address four associated research problems: (1) How can a company access valuable information for future strategies when the business environment is ambiguous and uncertain? (2) On what information sources do managers base their strategic decisions? (3) How can companies ensure continual strategic renewal? (4) Why do efforts to create ambidextrous organizations fail? To examine these questions, this dissertation employs a mix of qualitative research methodologies, from systematic literature review to building a conceptual framework and field research. This dissertation contains two main parts: the general thesis and the appendices including the four scientific papers. The papers are independent but complementary, and together they constitute the scientific base of this dissertation. The first paper is a literature review on corporate foresight, a fairly young research field on companies’ future orientation toward being better informed in high-speed environments. The second paper is an empirical study of CEOs’ rationales for strategically responding to environmental change. The third paper is a conceptual study that analyzes the concept of strategic resilience and suggests a model for how companies can achieve resilience. The fourth paper is an empirical study of failure to achieve ambidexterity and explores how paradoxical tensions can evolve at multiple levels and become detrimental to ambidexterity. Taken together, this dissertation contributes to the literature of innovation management and strategic renewal and provides relevant insights for managers trying to steer their incumbent renewable energy companies through environmental change and uncertain high-speed environments. The key findings of the four studies are that corporate foresight cover a broad research field from vague signal detection to organizational resources. In a situation of high turbulence, complexity and uncertainty, companies tend to invest more than they divest, suggesting a risk-diversifying attitude and attempts to respond to environmental signals. Influence from owners and boards of directors seems directive for strategic decision-making under such circumstances. Despite this eagerness to renew, new investments are surprisingly uniform across the Norwegian renewable energy industry, suggesting only limited external orientation and mimetic isomorphism. Further, the owners and boards of directors are found to have a dominant influence on investment decisions. My coauthors and I suggest that the future orientation of the top management team (TMT) influences the ability to achieve strategic resilience, together with the organizational legacy and problem formulation. At the organizational level, attempts to facilitate renewal through ambidexterity can be set back by paradoxical tensions that, in the end, can evolve into mutually exclusive contradictions that can be detrimental to ambidexterity. In conclusion, turbulence, complexity, and uncertainty challenge established organizations and their managers. Sustained success through volatile times cannot be taken for granted. However, through a forward-looking attitude and deliberate attention to the use of information for strategic decision-making as well as to structural and cultural organizational characteristics, companies in the Norwegian renewable energy industry can better equip themselves for strategic renewal.