Managing identity tensions during strategic change: The role of identity-anchoring narrative

Recent research highlights the intertwined relationship between organizational identity and strategizing. While organizational identity directs how organization members enact or resist new strategy, strategic change also shapes organizational identity. In this study, we explore the interrelations between organizational identity and strategizing by focusing on the identity tensions that emerge in the wake of strategic change. More specifically, we study how identity tensions can be managed in order to create clarity around and acceptance toward new strategic vision, and commitment to realizing the strategy. Studying a construction company that redefined itself as a service company, we elaborate the process through which management in the company constructed a transcending, identity-anchoring narrative that alleviated identity tensions. The identity-anchoring narrative was effective in linking abstract strategy with concrete practice, as well as transcending multiple issue domains and thus reinforcing collective commitment to strategic change.