Filters in the Strategy Formulation Process

The importance of knowledge management to business increases and there are few signs that the pace would slow down. This is due to the fact that more and more of the added value companies create is built on the tacit and explicit knowledge that individuals possess and create. The purpose of a company is, by its existence, to produce more value than individual actors operating alone. One of the characterizing features of the new economy as a system is the fast feed back loops that create an emergent order for the economy (Brown and Eisenhardt 1998). The literature suggests that flexibility, the capability to adjust fast, is the best means to compete in this context. The key to adjustment is the organization’s strategic flexibility (Sanchez 2002). The key competence of an organization is its capability to capture the external information and then to build up proactive strategies or innovations for the changing environment.