Overcoming strategic persistence: Effects of mental simulation on reorientation after change

Rapidly changing environments place a premium on the ability to adapt and adjust. However, a large body of theory and research shows that managers are prone to strategic persistence, the tendency to stick with suboptimal courses of action, even when the need for change is clear. While this tendency is well documented, surprisingly few studies have focused on the micro-level means of overcoming persistence. To fill this gap, this article reports an experimental examination of the role of mentally simulating alternative futures in alleviating the effects of persistence by stimulating strategic reorientation – shifts in patterns of strategic decision behavior. Using a complex business simulation, we demonstrate that undertaking multiple scenario analysis prior to radical change in the organizational task environment leads to increased strategic reorientation following the change. The findings suggest that compared to other forms of intervention, the self-generation of alternative scenarios, a technique associated with high levels of mental simulation, appears particularly adept at facilitating strategic reorientation. We discuss the implications for current theories of the antecedents of strategic persistence and strategic reorientation.