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As information technologies evolve quickly, the convergence between the technology platform of the firm and changes in business ecosystems raises the need for continuous renewal. This study explores how technology-based corporations’ drives renewal with new business areas, coping with organizational tensions invited by rapid change. Prominent theories assume that renewal-associated tension obstructs the renewal process and should consequently be eliminated. This assumption, however, is problematic since tension is also a source of firm growth, and eliminating it reduces strategic renewal to a zero-sum game. Therefore, a theory of strategic renewal needs to stress the properties of tensions and how these can drive growth. The dissertation approaches the problem of theory development, asking how the renewal process is sustained in technology-based corporations exposed to rapidly changing environments.

Using the extended case method, the study addresses prominent theorizing about dynamic capabilities and examines new business development in three firms, ABB, Ericsson, and Saab, considering how they sustained the renewal process in the face of technological change, crises, and other tension-laden events in the first decade of the 21^st century. The empirical study reveals how properties of tension constitute an inherent, socially constructed force that becomes a latent impetus underlying the renewal process. This feature can be termed paradoxical tension because its social dimensions appear irrational and absurd when juxtaposed to technological change and growth creation in the firm. Because paradoxical tension may develop as imperceptibly latent it challenges those who manage renewal across changeable environment. However, too frequent reorganizations of the division of units between existing and new businesses can be devastating for innovation and growth throughout the renewal process.

In sum, a theory is developed that explains how actors in evolutionary systems of dynamic capabilities handle various types of paradoxical tension that ensures a firms prosperity and continuous renewal. This theory improves our knowledge of whether the firm possesses adequate entrepreneurial management capacity to generate new business areas that continuously renew the firm. Paradoxical tension is a reality that affects firm growth, and strategy theorists as well as executives need to address this problem of learning.

Harnessing paradoxes is at the heart of achieving strategic renewal of the modern corporation. While recent research has theorized either paradoxical properties of processes or reconfiguration of capabilities in firm organization, much less is known about their interdependent relationship. This paper aims to explain this relationship. Based on a longitudinal design with three major cor-porations and a dataset of 10 068 documents including 45 interviews, the study unveils how tech-nological and enteprenurial elements mutually forms a paradoxical tension. This tension is crucial for firms to understand when altering reconfiguration of capabilities because not harnessing the paradox will impede the ability to maneuver strategic renewal.

This paper extends our understanding about strategic renewal by bringing in the concept of value constellation. This concept denotes an organization’s particular set-up of actors that aligned to a certain role performs social transactions to extract value from existing business and emerging business. The concept requires attention because the value constellation has long-term effects on competitiveness, which in turn is the key issue about strategic renewal. We develop a novel scenario model that explains how the strategic renewal attribute of value constellation plays in practice and out in the field. The main contribution is a more social and less aggregated perspective of renewal than earlier research has offered us. In addition, by using the concept of value constellation we show how both radical and incremental renewal can co-exist and how internal and external processes are both significant in the renewal initiative. Our argument is derived from prior publications of empirical studies by other scholars, and moreover supplemented by empirical examples from Ericsson and Saab based on in-depth case study data from an on-going research project.

This paper explores the co-existence of both radical and incremental renewal–referred to as the strategic renewal overlap– and the practice behind it. The paper does so by examining the global corporation Ericsson that renewed into multimedia business and the defense corporation SAAB that renewed into training systems and services. The empirical data consist of in-depth interviews, internal documents, and press articles and annual reports, which are analyzed using extended case method. The findings provide deep insights into what it is that managers actually do when they engage in strategic renewal overlap. Altogether the paper shows that the strategic renewal overlap is of central concern because if we understand more of its nature then we can also understand some of the reasons behind the success and failure of technological change.