A Comparative Analysis of Open and Closed Strategy-Making: A Simulation Study

Open Strategy is a novel strategy-making approach that considers the inclusion of stakeholders as one of its main principles. While it has the potential to enhance the strategy-making process, there also is a lack of studies examining its long-term effectiveness. To address this gap, we conduct a simulation study to explore the impact of stakeholders’ participation in the idea-generation phase on the performance of strategies, considering the complexity of the strategic task, the number of participants, and their objectives’ alignment with the organization’s objectives. We find that Open Strategy initially outperforms closed strategy-making, but not in the long-term, particularly if the objectives of the participants differ from those of the organization. Additionally, Open Strategy leads to better performance when more participants are involved, and complexity is lower. Our study challenges the prevailing views about Open Strategy as a superior approach to the strategy-making process.