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CA Intermediate · Financial Management and Strategic Management · Introduction to Strategic Management

Arvind Auto Components follows a five-year plan. Midway, a sudden government policy shift on EV incentives makes a part of the plan unworkable, and the top management quickly modifies its approach to supply EV parts instead. The original plan was deliberate; the changed response is described as an emergent strategy. Which statement about this is correct?

An emergent strategy arises in response to unforeseen developments, such as a sudden policy shift, and may differ from what was originally intended. It is not fully planned in advance, so the idea that it is pre-planned or merely an operational plan is incorrect.

  1. AAn emergent strategy is one that is fully planned in advance and unchanged during execution
  2. BAn emergent strategy arises in response to unforeseen developments and may differ from the intended strategyCorrect
  3. CAn emergent strategy exists only in firms that have no strategic intent
  4. DAn emergent strategy is the same as a functional-level operational plan

Explanation

Strategies are not always fully planned. Realised strategy is a mix of intended strategy that is carried out and emergent strategy that develops in response to unforeseen events. Emergent strategy is not fully planned in advance, and it is not tied to the absence of intent or to functional plans.

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