Consolidating company accounting functions
A stability strategy is ideal in stable business environments where an organization can devote its efforts to improving its efficiency while not being threatened with external change.In some cases, organizations are constrained by regulations or the expectations of key stakeholders and hence they have no option except to follow stability strategy.Conservative managers believe product development, market development or new ways of doing business entail great risk and therefore, avoid taking decisions, which can endanger the company.
Niche players also prefer this strategy for the same reasons.
They would prefer to adopt the existing product-market posture and avoid departing from it.
Sometimes, the management is content with the status quo because the company enjoys a distinct competitive advantage and hence does not perceive an immediate threat.
The current level of resource input and managerial effort will not be increased, which means that the functional strategies will continue at previous levels.
This approach suits a firm, which does not have requisite resources to pursue increased growth for a longer period of time.