Environmental sensing, strategic-orientation evolution, and founding imprint: Rethinking strategic fit in dynamic capabilities research

We contribute to the dynamic capabilities perspective by proposing a conceptual model that explains how strategic orientation and environmental sensing co-evolve in a recursive process of establishing and reestablishing strategic fit. Organizations engage in environmental sensing to identify sources of environmental change and, if required to respond, make decisions that align with their strategic orientation. We introduce the concept of strategic-orientation adjustment, linked to the receding and resurfacing of an organization’s founding imprint, to explain how organizations respond to environmental pressures and adapt their strategic orientation. Our model offers novel insight into the dynamics underpinning the interplay between environmental sensing and the evolution of strategic orientation. Building on the literatures on organizational history and the microfoundations of dynamic capabilities, our article offers an alternative perspective to the configurational view of dynamic capabilities, strategic orientation, and strategic fit. We illustrate our theory using the cases of pioneering electric guitar-making companies Gibson and Fender.