The Paradoxical Foundation of Strategic Management
Contributions to Management Science www.springer.com/series/1505 S. Sulzmaier Consumer-Oriented Business Design 2001. ISBN 978-3-7908-1366-1 C. Zopounidis (Ed.) New Trends in Banking Management 2002. ISBN 978-3-7908-1488-0 U. Dorndorf Project Scheduling with Time Windows 2002. ISBN 978-3-7908-1516-0 B. Rapp/P. Jackson (Eds.) Organisation and Work Beyond 2000 2003. ISBN 978-3-7908-1528-3 M. Grossmann Entrepreneurship in Biotechnology 2003. ISBN 978-3-7908-0033-3 H. M. Arnold Technology Shocks 2003. ISBN 978-3-7908-0051-7 T. Ihde Dynamic Alliance Auctions 2004. ISBN 978-3-7908-0098-2 J. Windsperger/G. Cliquet/ G. Hendrikse/M. Tuunanen (Eds.) Economics and Management of Franchising Networks 2004. ISBN 978-3-7908-0202-3 K. Jennewein Intellectual Property Management 2004. ISBN 978-3-7908-0280-1 M. J. Thannhuber The Intelligent Enterprise 2005. ISBN 978-3-7908-1555-9 C. Clarke Automotive Production Systems and Standardisation 2005. ISBN 978-3-7908-1578-8 M. Lütke Entrup Advanced Planning in Fresh Food Industries 2005. ISBN 978-3-7908-1592-4 U. M. Löwer Interorganisational Standards 2006. ISBN 978-3-7908-1653-2
G. Reepmeyer Risk-sharing in the Pharmaceutical Industry 2006. ISBN 978-3-7908-1667-9 E. Kasper Internal Research & Development Markets 2006. ISBN 978-3-7908-1728-7 L. Coleman Why Managers and Companies Take Risks 2006. ISBN 978-3-7908-1695-2 M. A. Bader Intellectual Property Management in R&D Collaborations 2006. ISBN 978-3-7908-1702-7 David L. Cahill Costumer Loyalty in Third Party Logistics Relationships 2007. ISBN 978-3-7908-1903-8 G. Cliquet/G. Hendrikse/ M. Tuunanen/J. Windsperger (Eds.) Economics and Management of Networks 2007. ISBN 978-3-7908-1757-7 Hartmut Hübner The Communicating Company 2007. ISBN 978-3-7908-1928-1 Jan M. Deepen Logistics Outsourcing Relationships 2007. ISBN 978-3-7908-1916-8 Eike A. Langenberg Guanxi and Business Strategy 2007. ISBN 978-3-7908-1955-7 Oliver Falck Emergence and Survival of New Businesses 2007. ISBN 978-3-7908-1947-2 Christoph Kausch A Risk-Benefit Perspective on Early Customer Integration 2007. ISBN 978-3-7908-1961-8 Fredrik Hacklin Management of Convergence in Innovation 2008. ISBN 978-3-7908-1989-2
Andreas Rasche
The Paradoxical Foundation of Strategic Management
Physica-Verlag A Springer Company
Dr. Andreas Rasche Helmut-Schmidt-University Hamburg University of the Federal Armed Forces Department of Logistics and Organization Holstenhofweg 85 22043 Hamburg Germany
[email protected] http://www.arasche.com
ISBN 978-3-7908-1975-5
e-ISBN 978-3-7908-1976-2
DOI 10.1007/978-3-7908-1976-2 Contributions to Management Science ISSN 1431-1941 Library of Congress Control Number: 2007936684 © 2008 Physica-Verlag Heidelberg This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Physica-Verlag. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Production: LE-TEX Jelonek, Schmidt & Vöckler GbR, Leipzig Cover-design: WMX Design GmbH, Heidelberg Printed on acid-free paper 987654321 springer.com
To My Family
Foreword – Strategic Management in Deconstruction
The concept of ‘corporate strategy’ has changed significantly during the last few decades. Whereas the strategic planning orientation of the 70s and early 80s was still dominated by a belief in feasibility, rationality, and the smooth implementation of prefabricated strategies by top management, strategic management sharpened our understanding of possible pitfalls during planning and put more emphasis on the ‘messy’ realization of strategic plans. Moreover, the unavoidable paradoxes and dilemmas that occur within strategizing are increasingly discussed when writers consider the general importance of the organization together with its external and internal context. Although this trend towards strategic management cannot be neglected, as a quick look into any of the major journals proves, there still is the question of how we can find a theoretical fundament that gives adequate reference to phenomena such as paradox. This is where this book fills a void in the existing academic discourse. Andeas Rasche’s book, a critical, yet constructive, analysis of the theoretical foundation of strategic management and its paradoxical nature enters new territory. In particularly, there are three reasons this is a novel and innovative treatise. First, the discussion of deconstructive thinking with regard to strategic management represents a risky and hence courageous as well as extremely ambitious task. Second, the author manages the difficult task of giving a short but comprehensive introduction to the work of Jacques Derrida. Third, he also surprises the reader with his extraordinary ability to concentrate complex relationships into reduced, though not overly reduced, illustrations. These illustrations allow the reader to gain new insights and sharpen her/his existing knowledge about the theoretical discourse that underlies strategic management. The capability to ‘guide the reader’ through the discussion is evident when looking at Rasche’s matrix (see Figure 1 in chapter one) that is presented in the introductory chapter: based on Pettigrew’s distinction between strategy context, process, and content he provides a structured overview of the strategy field that guides his entire discussion. The resulting clarity of the analysis allows Andreas Rasche to handle a high degree of
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complexity within his discussion. For instance, he criticizes the conventional wisdom of strategy research by identifying three dominant logics – the ‘necessity of adaptation’ (strategy context), the ‘primacy of thinking’ (strategy process), and the ‘fullness of strategic rules and resources’ (strategy content). He uncovers the underlying oppositions that reside within these dominant logics that have until now been obscured. In so doing, the author is able to deconstruct the strategy discourse and thus reveals its paradoxical foundation. The consequences of the deconstructions are clearly discussed: strategy research has to accept its paradoxical foundation and can only do so by challenging its deeply held assumptions, namely the belief in a ‘given’ market (strategy context), the idea of nonparadoxical strategic decisions and the resulting linear nature of strategizing (strategy process), as well as the faith in generalizable solutions to strategic problems (strategy content). Chapters seven and eight present the ‘practical’ implications of the deconstructions and demonstrate that Rasche’s discussion has significant consequences not only for the practice of strategic management in organizations but also for the way strategy is researched and taught within business schools. The integrative framework – strategy-as-practice – introduced to discuss these consequences represents, from my point of view, a consistent and comprehensible conclusion since a practice perspective allows for a discussion of the implications of a Derridian deconstruction of strategic management while, at the same time, still remains attached to the underlying ideas of his philosophical work. The introduction of the concept of ‘communities of strategy formation’ can especially enrich future empirical research on strategic management and thus represents a promising way into the future. All of this results in five major recommendations that the author sets up to extend, modify, rethink, and discuss scholars’ strategic realities. These recommendations he puts forward: (1) move away from the ideology represented by the dominant logics, (2) create future strategic realities under consideration of paradox, (3) acknowledge the fictional ground of strategic management as a means to deparadoxify the identified paradoxes, (4) recognize the supplementary nature of strategy context, process, and content, and (5) start researching strategy as an enacted social practice occurring within the flow of human activity. Andreas Rasche is right: We have to think of strategy as being always already in deconstruction. Günther Ortmann June 2007
Preface – Strategic Management and Paradox
This book is the outcome of a long journey throughout the wilderness of strategic management. It represents a revised version of my PhD thesis that was presented and defended at EUROPEAN BUSINESS SCHOOL, Germany. I would like to briefly address two essential questions within this preface. Why does it make sense to discuss the philosophy of Jacques Derrida with regard to strategic management? I think there are particularly two points that should be considered. First, Derrida’s philosophy can enrich our understanding of the value of and necessity for paradox in strategic management. As mentioned in the foreword by Günther Ortmann, paradox is often mentioned in writings about strategic management, at least in those writings that move beyond a planning orientation, but not sufficiently backed up with theory. I offer one possible way to theorize about paradox in strategic management without immediately concluding the impossibility of strategizing. Rather, I consider paradoxes to operate at the necessary limits of knowledge about strategy management, limits that we should know in order to improve future theorizing. Second, Derrida’s philosophy, a way of thinking that is often called deconstruction, provides a ‘walking stick’ to uncover and address many phenomena that are very important to strategy scholars (e.g., the role of the future and the suspension of meaning). By ‘applying’ Derrida to strategic management – although strictly speaking you cannot apply Derrida from the outside but instead need to recognize that his thinking has always already been part of the practice of strategy – I hope to open up new ways of thinking about strategizing in organizations. Why do we need a variety of new terms to discuss the presented issues? Since this treatise enters new theoretical territory, I had to introduce some terms that the reader might not be familiar with. Although I provide a glossary at the end of the book, let me briefly distinguish three essential terms. First, what I call a ‘strategic reality’ represents my basic unit of analysis. A strategic reality reflects the assumptions somebody attaches to her/his understanding of strategic management. Even though practitioners as well as strategy scholars have strategic realities, I will focus primarily on the
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strategic realities of strategy scholars. Porter, for instance, has a wellknown strategic reality in which he makes certain assumptions (e.g., competitive advantage is determined by the structure of the industry). Second, paradigms in strategy research occurred during the development of the scientific discourse. Whereas in the 60s and 70s the paradigmatic orientation was much influenced by the planning school, the 80s brought about the rise of the market-based paradigm and the 90s the resource-based view. Throughout the book I treat these different schools of thought as paradigms of strategy research. Third, what I call a dominant logic refers to the obscured assumptions that strategy scholars refer to when theorizing about strategic management. The important issue is that dominant logics cut across a variety of paradigms; dominant logics (e.g., that the market dictates strategic conduct) are always part of more than one paradigm, scholars have become so used to them that they are rarely acknowledged or even referred to. Many people have contributed to this study. Particularly, I thank the three supervisors Ulrich Grimm, Hartmut Kreikebaum, and Günther Ortmann. In addition, Dirk Ulrich Gilbert gave me an excellent review of the entire manuscript and added many thoughtful insights. I also thank Henry Mintzberg and Robert Chia for discussing parts of the manuscript with me. Christina Braasch, Hal Salzman, and Michael Darroch provided my appreciated editorial advice. Last but not least, I thank my family as well as my girlfriend, Stephanie Becker, for their support throughout this journey. A.R. July 2007
Contents
Foreword – Strategic Management in Deconstruction ........................VII Preface – Strategic Management and Paradox ...................................... IX 1 Introduction to the Study ........................................................................1 1.1 Underlying Problem and Research Objective................................1 1.2 This Study and the Philosophy of Science...................................16 1.3 Limitations of the Study – Some Words of Caution ...................21 1.4 Structure of Analysis .....................................................................23 2 Strategic Management as a Field of Study .........................................27 2.1 The Concept of Strategy................................................................27 2.1.1 Why Do We Need Strategic Management?.........................27 2.1.2 The Definition of Strategy – Differing Perspectives ..........31 2.2 Paradigm Lost? – The Roots of Strategy Research .....................33 2.2.1 Potential Paradigmatic Classifications................................34 2.2.2 Disciplinary Roots of Paradigms in Strategy Research .....36 2.2.3 Paradigms in Strategy Research – A Historical Sketch .....39 2.2.4 The Desired Paradigmatic Status of Strategy Research ....46 2.3 Strategic Realities – Context, Process, and Content ...................53 2.3.1 Shaping the Contours of the Strategy Field.........................53 2.3.2 Strategy Context – What Shapes Strategies? ......................54 2.3.3 Strategy Process – How Are Strategies Formed? ...............56 2.3.4 Strategy Content – What Are Strategies all About? ...........59 2.4 Strategy Context, Process, and Content – A Résumé .................65 3 The Dominant Logics of Strategy Research .......................................69 3.1 Where to Look for Dominant Logics? .........................................70 3.2 Exploring the Dominant Logics of Strategy Research................74 3.2.1 Strategy Context – The ‘Necessity of Adaptation’ .............74 3.2.2 Strategy Process – The ‘Primacy of Thinking’ ...................81 3.2.3 Strategy Content – The ‘Fullness of Rules/Resources’ ......89 3.2.4 The Dominant Logics of Strategy – An Overview .............96 3.2.5 The Embeddedness of Paradigms in Dominant Logics ......97
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3.3 How Dominant Logics Come into Existence ..............................99 3.3.1 Producing Facts in Strategy Research ...............................100 3.3.2 Sustaining Facts in Strategy Research ...............................104 3.3.3 From Facts to Dominant Logics.........................................111 3.4 Challenges from Outside the Mainstream..................................114 3.4.1 Levels of Critical Strategy Research..................................115 3.4.2 Demanding Reflexivity in Strategy Research ...................116 3.4.3 Critical Reflections on the Dominant Logics ....................118 3.4.4 Paradox and Dominant Logics ...........................................123 3.4.5 Strategy Because of and Despite Paradox .........................125 4 Deconstruction and the ‘(N)either/(N)or’ .........................................127 4.1 The Meaning(lessness) of Postmodernism ................................127 4.1.1 The Philosophical Discourse Around Postmodernism .....127 4.1.2 Postmodernism in Organization Theory ............................135 4.2 Deconstruction in a Nutshell?.....................................................139 4.2.1 The Target – Critique of a Metaphysics of Presence........140 4.2.2 Deconstruction as a Way of Thinking ...............................142 4.2.3 ‘La Différance’ – The Deconstruction of the Sign ...........150 4.2.4 The Deconstruction of the Social – About (Con)Texts ....157 4.2.5 Deconstruction and Paradox...............................................161 4.2.6 Deconstruction – Critical Arguments ................................166 4.2.7 Résumé – Derrida, a Postmodernist? .................................168 4.3 Deconstruction within Organizational Analysis........................170 4.4 Strategic Realities as Text...........................................................175 5 Strategic Realities – The Role of Paradox ........................................179 5.1 Strategizing Because of Paradox ................................................180 5.2 Strategizing Despite Paradox......................................................182 5.3 Strategic Realities Despite and Because of Paradox .................189 6 The Deconstruction of Strategic Realities.........................................193 6.1 Strategy Context – Beyond the Market Given...........................196 6.1.1 Complexity – Beyond the ‘Necessity of Adaptation’.......196 6.1.2 Strategy Context and the Paradox of Adaptation ..............200 6.1.3 The Deparadoxification of Strategy Context.....................205 6.1.4 Implications of the Deconstruction of Strategy Context ..208 6.2 Strategy Process – Beyond the Notion of Feasibility................216 6.2.1 Contingency – Beyond the ‘Primacy of Thinking’...........216 6.2.2 Strategy Process and the Paradox of Undecidability ........220 6.2.3 The Deparadoxification of the Strategy Process...............224 6.2.4 Implications of the Deconstruction of Strategy Process...227
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6.3 Strategy Content – Beyond Simple Generalizations ................ 237 6.3.1 Context – Beyond the ‘Fullness of Rules/Resources’...... 237 6.3.2 Strategy Content and the Paradox of Repetition .............. 240 6.3.3 The Deparadoxification of Strategy Content.................... 246 6.3.4 Implications of the Deconstruction of Strategy Content . 249 6.4 A Résumé – The Neither/Nor of Strategic Realities ................ 265 7 ‘After Derrida’ – Strategy-as-Practice ............................................. 271 7.1 From Deconstruction to Strategy-as-Practice ........................... 272 7.2 ‘Social Practices’ – What’s in a Name? .................................... 274 7.3 Strategy-as-Practice – Towards a Framework .......................... 276 7.4 ‘Communities of Strategy Formation’ ...................................... 282 7.5 Doing Strategy Research ‘After Derrida’ ................................. 286 8 Final Reflections – Retrospect and Prospect ................................... 289 7.1 Retrospect – Rethinking Strategic Realities ............................. 290 7.2 Prospect – Fostering Engaged Scholarship............................... 295 7.3 But, Beyond... – The End and the Beginning ........................... 304 Glossary of Terms ..................................................................................... 307 Bibliography............................................................................................... 311
1 Introduction to the Study
“The lack of critical assessments of strategy research is a conspicuous barrier to more rigorous and useful research.” Paul Shrivastava (1987: 89)
1.1 Underlying Problem and Research Objective Strategy research has been criticized that its contributions are paradigmatically constrained by positivistic assumptions and research traditions largely stemming from economic analysis.1 Not too surprising, such constraints open a considerable gap between the knowledge accumulated by scholars and managers’ ability to use this knowledge (Gopinath and Hoffman 1995). In his review of strategy research Bettis (1991: 315) notes that he is “struck by the sense that most of this research is irrelevant to what is going on in such firms today.” He concludes that the field of strategic management is prematurely stuck in a ‘normal science straightjacket’. Shrivastava’s (1986) early critique of the strategy field gives reference to this theory-practice gap by uncovering the narrow functionalist ideology2 on which strategy research is based. Ideology for him 1
2
See for example the debate in the Strategic Management Journal on the usefulness of applying a constructivist methodology to strategy research (Kwan and Tsang 2001; Mir and Watson 2001, 2000). Another debate in the same journal focuses on the contributions of pragmatist philosophy to a theory of competitive advantage (Durand 2002; Powell 2002). The term ‘ideology’ is used in different ways. Marx (1992), who is often considered the “inevitable point of departure for any contemporary discussion of ideology” (Giddens 1979: 165), used the concept politically to express the interests of dominant classes. Our concept of ideology is similar to the one of Mannheim (1936: 36) who states “that ruling groups can in their thinking become so intensively interest-bound to a situation that they are simply no longer able to see certain facts which would undermine their sense of domination.”
2
Introduction to the Study “refers to those aspects of idea systems that obscure interests served by ideas and facilitate the establishment and maintenance of domination. […] Meaning and legitimation are connected by ideas in such a way as to favor dominant interests.” (Shrivastava 1986: 365, emphasis added)
For Shrivastava these dominant interests are well reflected by scholars’ assumptions of a given ‘natural’ environment and a tendency to provide generalized statements that decontextualize research problems. He accuses researchers of seeking technical efficiency and instrumental rationality as primary goals of analysis. Whilst Shrivastava provides a good starting point to challenge this functionalist ideology, recent critical assessments seem to prove that scholarly activity is as firmly rooted in this ideology as ever (Clegg et al. 2004; Farjoun 2002; Hafsi and Thomas 2004; Levy et al. 2003). To better understand this scientific inertia and to offer alternative ways of reasoning, we need to know more about the process of ideology production that influences the field’s intellectual foundation. Bachelard (1987: 46-50) provides a profound examination of the underlying dynamics of ideology production. Central to his argumentation is the concept of dominant logic, which can be defined as pervasive, yet invisible predispositions with regard to certain scientific problems. Based on the assumption that research fields are often governed by such logics, he claims that once they are established, the appreciation of underlying problems and the willingness to question them vanishes. To be ‘scientific’, researchers need to give reference to the established predispositions that tacitly pervade the community. These predispositions fix central conceptions as well as the used terminology for the respective field of study. Problems are not perceived as problems anymore as the dominant logics dictate what is regarded as scientifically desirable.3 The ability of scholars to critically reflect the underlying assumptions of their discipline is eroded. As discussed 3
These remarks show that the concept of dominant logic comes close to, but is not equal to, what can be labeled ‘normal science’ in a Kuhnean sense (Broich 1994: 1). Kuhn (1996: 24) himself regards normal science as “[...] research [that] is directed to the articulation of those phenomena and theories that the [dominant] paradigm already supplies.” (annotations added) The ideas of dominant logic and normal science share the claim that doubts about favored assumptions and research procedures are suspended (see also the discussion by Willmott 1993: 686). Both concepts are different in that normal science, as we understand the term, “means research firmly based upon one or more past scientific achievements, achievements that some particular scientific community acknowledges for a time as supplying the foundation of its further practice” (Kuhn 1996: 10), while dominant logics are less about the model-role of scientific achievements but look at the assumptions that are attached to these achievements.
Underlying Problem and Research Objective
3
above, strategy research makes no exception in this case. Whipp (1997: 270), for instance, argues that a lack of reflexivity represents a serious problem to strategy scholars. Similarly, Michel and Chen (2004) claim that the field needs to be more self-critical to guarantee relevance, to further intellectual progress, and to help recognize the contribution relative to other areas of research. Considering this, an in-depth discussion of the ideological character of strategy research requires that we examine the process of ideology production by identifying the prevailing dominant logics of the field. The decision which lines of argumentation are labeled ‘dominant’ is contingent (like any decision). This does not mean that we cannot find some classificatory scheme that guides the identification process and thus limits the sphere of possible dominant logics. What is needed is a framework for theory building that captures the widespread activities of strategy scholars and enables us to understand the embeddedness of strategic realities in the context of past and ongoing research. Strategic realities reflect scholars’ constructed nature of the ‘world-of-strategy’; they describe the assumptions researchers attach to their more detailed theories and frameworks of strategic management in terms of central categories like ‘the environment’. For instance, Porter’s (1980) strategic reality includes a variety of assumptions regarding the nature of the environment and the causes of competitive advantage. Since dominant logics need to refer to something, we propose to consider strategic realities as their building blocks. Then, to find a classificatory scheme for dominant logics, we have to articulate those dimensions that scholars use to structure their strategic realities (Freeman and Lorange 1985: 10). To identify these dimensions, we use Pettigrew’s (1988) tripartite framework of strategy context, process, and content as it is (a) widely accepted by scholars working in the strategy field4 and (b) holistic, including a considerable extent of past and ongoing research. Strategy context asks which set of circumstances influence decisions with regard to strategy content and process and thus gives rise to the wherein of strategy research (wherein, in which circumstances, are strategy process and content embedded?). By contrast, content and process assess the purpose of strategic decisions. Do we investigate the decision itself (its content) or how the decision has been made (its process)? Strategy process research covers the way strategies are created, sustained, and changed over time by focusing on the how of decision-making, whereas strategy content addresses the product of 4
See for instance the textbook by de Wit and Meyer (2004) as well as the treatises by Freeman and Lorange (1985), Ketchen et al. (1996), Moore (1995), and Vos (2002).
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Introduction to the Study
the strategy process by asking what constitutes a competitive advantage. Strategy context, process, and content give us an idea about the dimensions that scholars discuss in their strategic realities and thus tell us where we have to look for dominant logics. As a consequence, we now set up the ‘necessity of adaptation’ (strategy context), the ‘primacy of thinking’ (strategy process), and the ‘fullness of strategic rules and resources’ (strategy content) as dominant logics of strategy research and illustrate that their dominance relies on a disregard of their own paradoxical nature. The paradoxes we are interested in are operational in the sense that they are reflected in the praxis of strategizing. For us, paradoxical reasoning is reasoning whereby the enabling and constraining conditions of an operation (e.g., a strategic decision) coincide. Paradox implies that the respective operation is impossible because the condition of the possibility of the operation leads, at the same time, to its impossibility. Regarding strategy context, we can identify a tendency to view organization and environment as two separate entities while thinking about the circumstances that shape strategy. This separation gives rise to a dominant logic that we label the ‘necessity of adaptation’, because it characterizes the fact that scholars analyze the environment as existing on its own and hence in an objective manner. Organizations are left with the task of adapting and fitting to this environment as well as possible. Speaking with Chaffee (1985: 90), adaptation-based strategy research supposes that companies make up their environment in the sense that all social actors are parts of one reality. This reality is relevant to all and provides the point of reference for strategy formulation. The dominance of this thinking becomes most obvious when considering that Ansoff (1987a: 501) sees the core of strategic thinking as “the logic which guides the process by which an organization adapts to its external environment.” This logic has been widely applied by advocates of market and resource-based thinking. Advocates of the market-based view argue that organizations adapt to their environment by following the strategic rules of their industry. Porter (1980) believes that an industry can be perceived as an objective structure that restricts the strategic actions of the corporations located within it. All corporations observe and adapt to this structure while developing their strategy. A similar argumentation is brought forward by the resource-based view. Hamel and Prahalad (1995: 310) argue that a competence is only valuable if customers regard it as leading to a distinct competitive advantage. Customers, like the environment in the market-based view, become ‘objectified’ in the sense that they are thought to determine the value of competences. Similarly, Collis and Montgomery (1998: 31) state that
Underlying Problem and Research Objective
5
“[a] valuable resource must contribute to the fulfillment of a customer’s needs, at a price the customer is willing to pay. At any given time, that price will be determined by customer preferences.” (emphasis in the original, see also Brandenburger and Stuart 1996: 6)
Even the recent view on dynamic capabilities stresses that “in highvelocity markets, effective routines are adaptive to changing circumstances.” (Eisenhardt and Martin 2000: 1117) Resource and market-based reasoning suppose that the environment is objectively given and able to mediate between successful and unsuccessful strategic conduct. This adaptation-based logic obscures a paradox (Vos 2002). For this, we need to recall that the hidden assumption in the paradigm of adaptation is that there is only one environment that exists independent of all organizations. As a consequence, the solution to the problem of adaptation is a rather straightforward one: observe what is going on and adapt to the situation. Considering Ashby’s (1956: 206-207) ‘Law of Requisite Variety’, for a firm to be in control it needs to take as many control measures as there are external variations. In the paradigm of adaptation, firms adhere to this law because they build up requisite variety and establish a point-to-point correspondence to the environment they need to adapt to. However, in a world where the environment is more complex than the organization, it is impossible to establish such a point-to-point correspondence (Luhmann 1994: 46-48). Because of the indispensable complexity-gradient between organization and environment, every observation of the environment is just a construction from the perspective of the organization. This notion implies that every organization possesses its own environment. If the environment is just a construction, what do firms adapt to? It cannot be the (objective) environment because the complexity-gradient restricts full access and thus correspondence to the environment. When considering that the environment is just a construction from the perspective of the organization, there is a paradox that needs to be accepted: adaptation to the environment is only possible as self-adaptation. This situation is paradoxical in the sense that an organization needs to distinguish itself from an environment that is not part of itself, while at the same time it observes that this environment is nothing more than its own production. Organizations cannot observe the environment despite and because of themselves. As long as one obeys to the paradigm of adaptation, one obscures the paradox that organizations can only be adapted to their environment if they are adapted to themselves. This paradox is obscured by the ‘necessity of adaptation’ since the observation of the environment is not problematized and can only be taken into consideration when conceptualizing the organization/environment distinction in a self-referential way.
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Introduction to the Study
Concerning strategy process, scholars tend to follow a notion of feasibility by alleging that thinking (strategy formulation) and action (strategy implementation) are two separable entities (Mintzberg 1994a: 290-294). This results in a dominant logic that we call the ‘primacy of thinking’ because thinking is thought to come before action in a way similar to a cause determining its effect. Implementation is perceived to be a derivation of the fully formulated strategy. Scholars who follow this perspective stress the goal-oriented nature of strategic management and argue that strategies rely on explicit deliberate decisions. Strategizing is thought to be an overly linear process based on rational assumptions. Like an engineer builds a bridge, a manager is thought to be a designer of a grand strategy which first becomes formulated, then implemented, and later evaluated (Leibold et al. 2002: 72; Pettigrew et al. 2002: 12). Instabilities and structural ruptures are assumed to be obstacles to a thriving strategy formation. Unintended successful action patterns are either seen as brilliant improvisations or just pure luck. The implications of this view are far-reaching. For instance, middle and lower management are assigned the role of facilitators that provide relevant information to the executive level where the strategy is developed. In consequence, strategic and operational issues are detached. It is widely recognized that Andrews (1971) and Ansoff (1987b) are advocates of this view on strategy. Whereas it became popular to criticize the linear and formalized character of their work,5 the underlying assumptions are still established in several well-know concepts. Wack (1985: 140), for instance, introduces scenario planning which “[…] structures the future into predetermined and uncertain elements.” Scenarios are thought to provide a range of options about future developments by outlining plausible ways to act. Although scenario analysis does not forecast one best way but rather a set of possibilities, it still relies on the basic premise that thinking precedes action. Similarly, Brandenburger and Nalebuff (1995) assume a predetermined continuity between present and future, although they recognize that there can be multiple futures. Their game-theoretical approach supposes that the future is knowable through “look[ing] forward far into the game and then reason[ing] backward to figure out which of today’s actions will lead you to where you want to end up.” (Brandenburger and Nalebuff 1995: 58, annotation added) Both examples demonstrate that conceiving the ‘primacy of thinking’ as a dead tradition of thought may be a misleading presumption (Mintzberg et al. 2005: 56). 5
As a prominent example one can refer to the ‘Mintzberg-Ansoff-controversy’ held in the Strategic Management Journal between 1990 and 1991 (Ansoff 1991; Mintzberg 1990a; Mintzberg 1991).
Underlying Problem and Research Objective
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In establishing a dichotomy between formulation (thinking) and implementation (action) strategy scholars have overlooked a paradox that inevitably is inherent in any decision. According to non-paradoxical logic, strategic decisions are executed after an appropriate preference order has been established – a preference order that fully justifies the decision (Jutterström 2005). This is a rather idealized version of events because particularly strategic decisions underlie double contingency. Ortmann and Salzman (2002: 208) characterize a double contingent situation as follows: “One firm will make its action dependent upon its competitor’s action, and vice versa, and none of them knows or can have full knowledge about what the other will do – each conditions its actions on the actions and outcome of the other and factors in the environment.”
According to double contingency, the world does not hold still while we are trying to establish a preference order. Strategic interactions among organizations constitute a situation of double contingency, which is recognized as such by both sides: both know that both know that one could also act differently. Then, can we justify a strategic decision ex ante to indicate that goals exist detached from the decision situation? Luhmann (2000: 142) is well aware of the underlying paradox: no decision can ever reach a final justification because it concurrently potentializes other decisions. Any decision (fixation) as opposed to a non-decision (contingency) contains the non-decidable that it cannot analyze away. The paradox points to an interesting insight: a strategic alternative is an alternative because it is potentially possible; however, at the same time the alternative also is no alternative because it cannot be justified. To address this paradox means to recognize that the meaning of decision criteria is constituted in actu, in the course of action so to speak. Preferences, as Luhmann (2000: 134, 222-256) remarks, are fully constituted only after the decision has been made. Not until the decision has finally been executed can one decide whether and how contingency was fixed and what justification was chosen. If we do not want to evade this paradox, we need to break with the either/or-logic to give reference to both, formulation and implementation at once; strategy formation is thinking within (and not prior to) action. According to Hoskisson et al. (1999), strategy content research uncovers the constituting factors of competitive advantage by either deriving certain strategic rules that tell strategists ‘how the markets works’ (e.g., industry analysis) or highlighting the need to develop distinct organizational
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Introduction to the Study
resources (e.g., knowledge).6 Usually, strategic rules and resources are treated as generalizable; strategic rules are thought to be generalizable across organizations while the resource-based view classifies resources as ‘given’ and thus generalizable within organizations. To be generalizable, scholars implicitly assume that strategic rules and resources are able to define their own conditions of application by being ‘full’ of meaning prior to their usage. The resulting dominant logic is called the ‘fullness of strategic rules and resources’ since fullness implies that rules and resource-based theories give recommendations that are thought to be valid regardless of their context of application. To make contextual claims resources and strategic rules need to give reference to the process of their application because a contextual ‘filling’ can be achieved only in actu (Ortmann and Salzman 2002: 208). Theories of competitive advantage are conceptualized as if they were full, whereas in fact they are ‘empty’ waiting to be filled with meaning in the course of application. Emptiness implies that rules and resources expel contextual meaning and are treated as a priori given; corporate diversity is overlaid by generalized (‘empty’) solutions. Wernerfelt (1984: 172), one of the advocates of the resource-based view, argues that “[…] a firm’s resources at a given time could be defined as those (tangible and intangible) assets which are tied semipermanently to the firm.” He defines resources with regard to the corporation but independent of their context of application and thus supposes that resources possess a priori characteristics. Surely, resource-based reasoning emphasizes heterogeneity, which refers to the belief that different organizations have different resources (Rasche and Wolfrum 1994: 503). Yet, heterogeneity does not imply that resources are conceptualized with regard to their application within a firm. Similarly, Porter (1980) defines the skills that are necessary to implement generic strategies. Managers aiming at cost leadership are advised to accomplish: “aggressive construction of efficient-scale facilities, vigorous pursuit of cost reductions from experience, tight cost and overhead control, avoidance of marginal customer accounts, and cost minimization in areas like R&D, service, sales force, advertising […].” (Porter 1980: 35)
Porter’s common characteristics do not acknowledge the dynamic and equivocal nature of implementing a generic strategy. On the one hand, Porter (1996: 62, emphasis in the original) claims that strategy is about “performing different activities from rivals’ or performing similar activities in 6
Strictly speaking, resource-based reasoning also offers strategic rules. Barney (1991), for example, tells us that a resource’s potential depends on its value, rareness, and non-substitutability.
Underlying Problem and Research Objective
9
different ways.” On the other hand, he delivers general recipes for doing so. By neglecting the process of application that produces the specific context in which strategies are put, he believes in the fullness of his rules, but in fact delivers emptiness. This is not to say that strategic rules and resources are superfluous, but that they are potentials that need to be activated in situ. By conceptualizing rules and resources as counterparts to their own application, strategy research has overlooked yet another paradox. If strategic rules and resources were full of meaning, it should be possible to perfectly iterate them across contexts. Yet, every attempt to perfectly iterate a rule or a resource points to a paradox. For this we have to recognize that generalized – ‘full’ – statements suppose that meaning is not context-bound. Meaning, however, is always context-bound and contexts themselves are boundless (Derrida 1999a). Accordingly, rules and resources need to be modified in the course of application because a contextualization becomes necessary. The existence of a rule/resource at the same time implies the impossibility of application without alteration. Perfect iteration is rendered impossible since rules/resources need to, at least partly, destroy their own nature during the process of application. In other words, rules and resources cannot define their own conditions of application. When applying strategic rules and resources, a strategist needs to refer to them and to manage to get along without them at the same time. The either/or-logic that has been established between rules/resources and their application obscures this paradox because it is assumed that rules are one thing and their application another. The paradox can only be uncovered when referring to rules/resources and their application at the same time. Our discussion of the dominant logics of strategy context, process, and content revealed three paradoxes that were disregarded by strategy research up to this point. Put differently, the dominant logics persist as long as scholars obscure their paradoxical foundation. Once we accept paradox and agree to those phenomena that helped us to uncover paradox (e.g., complexity and contingency), the dominant logics’ impossibility is uncovered. By definition, every paradox is about contradictory self-referential reasoning and thus impossibility. In our case, this impossibility refers to an objective description of the environment (strategy context), full justification of strategic decisions prior to implementation (strategy process), and ‘purely’ generalizable strategic rules and resources (strategy content). This raises an important question: What is the point of emphasizing the impossibility (paradoxical foundation) of strategic management? We disagree with scholars who claim that paradox undermines scientific utility and diminishes the ability to guide managerial practice (Porter 1991; Priem and
10
Introduction to the Study
Butler 2001). We propose that paradox in scientific inquiry is intrinsic and indelible (Lado et al. 2006: 116; Poundstone 1988), and increases interest (Davis 1971) and theories’ general potency (DiMaggio 1995). Within this study, we treat paradox as a necessary limit to our knowledge about strategic management, a limit that enhances our understanding of strategic phenomena because its consideration increases our ability to create requisite complexity in strategic realities (Cameron and Quinn 1988). Accordingly, we use paradox as a nucleus for theorizing in strategic management. Since we are attempting to expose the three paradoxes that were briefly outlined above, we need to understand why strategy scholars were able to neglect them. For this we must realize that the identified dominant logics are structured around binary oppositions. The ‘necessity of adaptation’ relies on the opposition environment/organization; the environment demands, the organization reacts accordingly. The ‘primacy of thinking’ is based on the separation formulation/implementation. The ‘fullness of strategic rules and resources‘ is founded on the proposition that rules and resources are detached from their application. This claim refers to the oppositions strategic rules/application and resources/application. All oppositions are hierarchically structured. The environment dictates the organization’s strategy, formulation is thought to precede implementation, and strategic rules/resources are thought to determine their application. If strategy scholars sustain these oppositions by giving primacy to one hierarchical pole, they follow the classic dichotomous approach for coping with paradox (Clegg et al. 2002: 485; Poole and Van de Ven 1989: 566). By regarding self-contradictions as an either/or-choice, research hopes to get rid of or at least evade the ‘dysfunctional’ status of paradox. This mode of thinking is problematic because we cannot analyze paradox away (Luhmann 2000: 131). This would require ‘a safe ground’, ‘a selfdefining’ origin that acts as a ground for strategic reasoning. Yet, to be ‘safe’, every ground needs to be justified. Striving to solve paradox by looking for a fully justified ground, we find ourselves in a situation once characterized by Albert (1985) as the Münchhausen trilemma. According to this trilemma, any attempt to find a final justification that would ‘solve’ paradox results in the choice between an infinite regress, a circulus vitiosus or a dogmatic interruption at an arbitrary point.7 The last alternative of 7
An infinite regress represents the causal or logical relationship of terms in a series that logically has no first or initiating term. A circulus vitiosus characterizes situations in which one trouble leads to another that aggravates the first. The conclusion of one argument is appealed to as one of the truths upon which the argument rests itself. Dogmatic interruptions simply terminate the justification process at an arbitrary point to evade an infinite regress.
Underlying Problem and Research Objective
11
this triple blind-alley sounds familiar since the dominant logics of strategy research terminate the process of justification by privileging one side of an opposition as a metaphysical ground. Accordingly, we cannot prove with a noncontradictory logic that reality is free of paradox. As Luhmann states (1988: 154): “There are paradoxes everywhere, wherever we look for foundations.” To facilitate orientation, the major points of our analysis are summarized in Figure 1.
Fig. 1. The Ideology of Strategy Research
If we cannot analyze paradoxes away, there is need to establish a way of thinking that acknowledges their unavoidable occurrence in order to not regard them as a dysfunctional state. Learning to handle paradoxes implies becoming engaged in their passionate endurance (Derrida 1998b) by actively pursuing implications for further theory development. Recall that the key characteristic of paradox is the simultaneous presence of two mutually exclusive elements. The dominant logics, because of their reliance on hierarchical oppositions, disregard paradox and thus ignore the simultaneous presence of the ‘ends’ of the oppositions. We then need to confess that the ‘ideological core’ of strategy research rests on the existence of oppositions. According to this argumentation, the research problem underlying this study can be formulated as follows:
12
Introduction to the Study The theory of strategic management sustains dominant logics that arise according to the ‘necessity of adaptation’ (strategy context), the ‘primacy of thinking’ (strategy process), and the ‘fullness of strategic rules and resources’ (strategy content). To maintain their dominant character, these logics obscure paradoxes. The paradoxes demonstrate that the arguments that underlie the dominant logics aim at impossibilities (viz. environmental adaptation in strategy context, full justification of strategic decision in strategy process, and generalizable strategic rules and resources in strategy content). As these paradoxes cannot be analyzed away, scholars’ disregard of them, based on the establishment of hierarchical oppositions in the dominant logics, calls for further conceptual research.
To expose paradoxes and consequently dismantle the three dominant logics of strategy research, we highlight the simultaneous existence of both sides of an opposition. By doing so we not only criticize the prevailing dominant logics but offer ways of reasoning that reach beyond ideology. Certainly, this is not to say that the outlined ideology has not been criticized up to this point. By regarding paradoxes not as dysfunctions but statements that meaningfully indicate the margins of knowledge, this study wishes to complement, enrich, and also extend the rich accounts of critical knowledge strategy scholars have developed so far.8 To evocatively explore these margins, an appropriate theory perspective is needed. There are three requirements for a suitable perspective: (a) the theory needs to acknowledge oppositions in some way, (b) the theory has to unravel hierarchical structures to expose their simultaneous occurrence (paradox), and (c) the theory must be applicable to strategic management. A good point of departure for the identification of a suitable approach is provided by Linstead’s (1993: 56) statement: “Where modernism pursues the opposition of terms, actively placing the one over and against the other, postmodernism resists the closure of terms, actively exploring the supplementarity of the one within the other.” (emphasis in the original)
By using the terms modernism and postmodernism, we face a profound problem as both expressions refer to a wide range of theoretical concepts. Modernism and postmodernism cannot be reduced to Linstead’s remarks on oppositional and supplementary logic. Whereas an in-depth discussion of the various meanings of both perspectives is beyond the scope of this in8
Recently published critiques of strategy research as a field of study include: Sarason and Huff (2005), Pozzebon (2004), Clegg et al. (2004), McKiernan and Carter (2004), Knights and Mueller (2004), Levy et al. (2003), Farjoun (2002), Ortmann and Salzman (2002), Sydow and Ortmann (2001), Hoskisson et al. (1999), Franklin (1998b, 1998a), and Calori (1998).
Underlying Problem and Research Objective
13
troduction, we need to clarify which theoretical element of postmodernism addresses the supplementarity mentioned by Linstead. Supplementarity is vital for our analysis, since the limit of every supplementary relation points towards a co-presence of oppositional elements and thus paradox. While sociologists like Luhmann (1994) and Giddens (1984) have endowed us with approaches like ‘the autopoiesis of social systems’ or ‘the duality of structure’ that reflect supplementary relations between categories like agency and structure or organization and environment, we are in search of a more general perspective that captures the diversity of phenomena subsumed under the three dominant logics. An author whose intellectually rich account of work reflects this variety is the French philosopher Jacques Derrida who is often associated with postmodern thinking.9 His work is appealing to our analysis as he focuses on exposing and dismantling hierarchically structured oppositions within ‘texts’. Derrida’s understanding of text may be misleading at this point as one is led to believe that he is exclusively concerned with the written. For Derrida, however, ‘the text’ also relates to the (social) world, or as Cooper (1989: 482) specifies: to the interactional text. This makes texts the building blocks of contexts because contextual features are ‘textualized’ in that they provide the context for ‘the text’ in question. “I believed that this extension and strategic generalization of the text was necessary to give deconstruction its chance. The text is not restricted to the written […] language is a text, the gesture is a text, reality is a text in this new sense.” (Derrida 1987a: 107-108, cited in Ortmann 2003a: 109, translation and emphasis A.R.)
What Derrida labels deconstruction in the quote above represents the major theoretical embodiment of his thinking. Deconstruction acknowledges and overturns the dependence of any text on hierarchically ordered oppositions. Overturning in Derrida’s view does not mean to devote primacy to the so far neglected pole of the opposition. Deconstruction seeks to explore the supplementarity of both poles by thinking the one within the other. The meaning of one pole depends on the supplementary relationship with its other, and this relationship is never fixed but always reconstituted 9
This is not to say that we ignore the work of Luhmann and Giddens form here on but that we discuss their ideas on the background of Derrida’s philosophy. Proceeding in this way is feasible since Giddens (1979: 9-48) extensively refers to Derrida’s work and Luhmann (1995a: 9-35) at least recognizes the importance of his thinking. To neglect ideas like the paradox of decision-making (Luhmann 2000) or the importance of agency in (re)constituting rules and resources (Giddens 1984) for the sake of sticking to one theory only, surely is not an appropriate way for scientific progress.
14
Introduction to the Study
in space and time. Meaning is constantly in a state of flux and can never be fully grasped. Strategic rules, for instance, cannot be applied regardless of context, as this implies that one side of the opposition (‘the strategic rule’) is regarded as being full of meaning, whereas the other side (‘the application’) is deemed to be a simple derivation. Deconstruction argues that both sides cannot do without each other as there is no self-defining cause that is full of meaning to precede and govern the neglected pole of the opposition. Both sides come into existence by giving reference to their (apparent) opposite. In consequence, deconstruction reveals a tension of juxtaposed opposition, a tension that, according to Derrida (1992a), exposes paradox. We argue that deconstruction meets the outlined demands for a theoretical perspective that can guide our analysis: (a) it addresses oppositions in a general sense, (b) it provides a supplementary logic that exposes paradox if the tension of the juxtaposed opposition is considered as a co-presence of its poles, and (c) it can be applied to strategy research since the definition of ‘text’ offers a way to examine the ideas located in scientific discourses and the behavior of strategists (that relates to these ideas) as text production (Kilduff 1993: 14). Deconstruction fits the specific purpose of this treatise and helps to create new ways of thinking by moving beyond the established either/or-ideology of contemporary strategy research. Deconstruction’s potential to challenge existing ideologies is illustrated by Eagleton (1997: 117) who remarks: “Deconstruction has grasped the fact that binary oppositions […] are representative for ideologies. Ideologies like to draw exact lines between the acceptable and the unacceptable, between the self and the non-self, between true and false, sense and nonsense, the central and the marginal, the surface and the depth. Such metaphysical thinking cannot be simply avoided: we cannot propel from this binary thinking into an ultra-metaphysical space. But by means of a specific manner of treating texts […] we can start to unravel these oppositions to show how one term of an antithesis secretly contains its opposite.” (translation A.R.)
Deconstruction enables the conceptual research we like to undertake by providing an apt theory perspective; it thus reflects the possibility of research within this study. Deconstruction provides a supplementary logic to dismantle the hierarchically structured oppositions that occur in the ‘text’ of strategic management. This logic uncovers the paradoxes that have been obscured by the dominant logics of strategy research up to this point.
The need to dismantle the dominant oppositions of strategy research and the realization that deconstruction offers a way to do so justifies the following research objective.
Underlying Problem and Research Objective
15
This study aims at outlining an approach to strategy research that deconstructs the hierarchical oppositions reflected by the ‘necessity of adaptation’ (strategy context), the ‘primacy of thinking’ (strategy process), and the ‘fullness of strategic rules and resources’ (strategy content) to disclose the unavoidable paradoxes that have been neglected so far. As paradoxes only indicate the limits of knowledge we can gain about the nature of things, this study also shows how these paradoxes can be unfolded to think about the possibility of strategic management despite their existence.
Our approach to strategy research intends to challenge taken-for-granted assumptions to offer new ways of thinking about the conventional wisdom of strategic management to complement and extend existing perspectives. Complementing and extending current research does not imply that we deem other positions to be ineffective ways for thinking about strategy; just as we do not claim that research that is in line with the presented dominant logics inevitably follows a ‘modern’ perspective that is now replaced by a more encompassing ‘postmodern’ one. The examined questions may be fundamental, however inevitable to the progress of the field. To facilitate orientation, Figure 2 summarizes our way of argumentation and thus shows the ideas on which the research design is based. We started with the statement that some scholars (e.g., Shrivastava 1987) claim that strategy research possesses an ideology but do not ask why this ideology exists and persists. We then suggested that this ideology is based on three dominant logics that arise according to strategy context, process, and content. These dominant logics are sustained because they neglect their own paradoxical foundation (and thus impossibility). Further sustaining these dominant logics calls for ‘solving’ paradox, which, however, requires an ultimate justification that we do not have according to Albert’s (1985) Münchhausen trilemma. Hence, there is need to uncover and discuss the paradoxes that strategy context, process, and content obscure thus far. To identify a theory perspective that helps us to uncover and discuss paradox, we need to know why the paradoxes are neglected in the first place. The paradoxes are neglected because the dominant logics are based on conceptual oppositions that pretend to provide an origin for strategic reasoning. To dismantle these oppositions and uncover their simultaneous existence (viz. paradox), we use deconstruction. Since every paradox only indicates the limits of knowledge we can have about the nature of strategy, we also show how the impossibility of the dominant logics (viz. their paradoxical nature) can be used positively to inform future strategy research.
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Introduction to the Study
Fig. 2. The Way of Argumentation Underlying this Study
1.2 This Study and the Philosophy of Science In the light of the previous findings, we classify our research in relation to the philosophy of science to better understand the context of the presented arguments and their relation to the work of other scholars (Scherer 1999). The philosophy of science is concerned with an analysis of the methods of scientific practice (How do we conduct our research?), its purpose (To which end do we conduct our research?), its relation to other studies (How can we differentiate our research?), and its addressees (Who do we conduct our research for?). The Methodology Used: We are conducting research about strategy research and thus deal with what Eberhard (1999: 36-46) calls a theoreticalcritical way of reasoning. Schanz (1977: 67) remarks that empirical investigations are only useful if they are based on a solid theoretical foundation and Sutton and Staw (1995) remind us that without conceptual arguments any field ends up in dust-bowl empiricism. Because this study investigates the way scholars theorize within strategic management, our investigation is conceptual and not based on empirical tests of certain phenomena on the
This Study and the Philosophy of Science
17
object level. This does not mean that the presented arguments cannot be empirically tested, but that we need to rely on further research for empirical substantiation.10 Freeman and Lorange (1985: 16) remind us that empirical validity is only one possible criterion for research and that strategic management is especially endangered in traveling the narrow path of empiricism; the creation of future strategic realities must not exclude ‘thought experiments’ that are necessary for conceptual changes. Only by means of these changes can there be further meaningful empirical research. The Purpose of This Study: Reflecting upon the purpose of this study helps us to assess its contributions to the existing body of work. The resulting question is whether we conduct research to establish new ‘truths’ about the way strategy research has to function or how else we wish our arguments to be understood. Since this treatise navigates in the waters of postmodernism, we suppose a postmodern understanding of science that sees scientific practice as being subject to incommensurable metatheoretical assumptions. Following Burrell and Morgan (1979), we identify metatheoretical assumptions with postulates about the nature of science (related to ontological and epistemological issues). Incommensurability describes the impossibility of comparing scientific knowledge that was generated in accordance with different metatheoretical beliefs, as no common standard of rationality exists. Scientific dogmatism becomes out of reach as the validity of statements can only be judged locally (with regard to the assumptions). Incommensurability implies that any treatise needs to submit itself to a competing battle of voices with no voice having a claim to priority over others (Jackson and Carter 1991).11 What are the implications of these remarks for our study? Because of incommensurability this study does not reject the legacy of other perspectives on strategy or suggest that collaboration across different perspectives is impossible. We understand the contributions of this study neither as superior to other perspectives nor as a new ‘truth’ for strategy research but as a novel perspective to see theorizing in strategic manage10
Research methods that are consistent with the assumptions of deconstruction aim at qualitative empirical studies. Exploring organizations via narrative analysis provides a valuable point of departure in this context (Calás and Smircich 1999; Clandinin and Conelly 2000; Czarniawska 1998). 11 Incommensurability does not dissolve scientific legitimization into taste preferences (Jones 2003: 510) as this would lead to the impossibility of serious scientific practice. Scientific argumentation in the light of incommensurability implies a local understanding of rationality – ‘to play by the rules’ favored by a particular community of scholars. Accordingly, Latour (2002) argues that ‘scientific facts’ are not given but constructed by a network of actors (also Astley 1985; Astley 1984; Cannella and Paetzold 1994).
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Introduction to the Study
ment from a different angle. For us, incommensurability implies that the results and claims of this study need to be judged against the background of the assumptions of deconstruction. Hence, science is not a magnificent march towards some higher truth. If there is no final truth to discover, to which end do we conduct our research? How can we evaluate research that denies the existence of final truths? Lyotard (1999: 173-174), for instance, views scientific practice primarily as a way to create new ideas and Weick (1989: 517) claims in a much similar sense that “[…] a good theory is a plausible theory, and a theory is judged to be more plausible and of higher quality if it is interesting rather than obvious, […] a source of unexpected connections, high in narrative rationality, aesthetically pleasing, or correspondent with presumed realities.” (emphasis added)
Interesting theories deny routinely held assumptions; they engage attention and make people sit up and take notice; they create discomfort and produce debate (Davis 1971: 311; McKinley et al. 1999). Kunda (1990) shows that the more a theory challenges taken-for-granted beliefs, the more other scholars see it as interesting and thus care about its arguments and Baldridge et al. (2004: 1066) propose that practitioners often judge interesting theories high in relevance. Thus, creating interest is the purpose of this study.12 The Relation of this Study to other Perspectives: If there is no ultimate, privileged point from where ‘true’ reasoning can unfold, it is essential to differentiate one’s own assumptions to other forms of legitimization within the chosen field of research. Such an overview portrays the ‘scientific landscape’ and provides the scholar with orientation regarding her/his limits of reasoning. Within organization theory and strategic management, a variety of frameworks enable such a differentiation. Most of these reference frames reduce scientific debates to two dimensions to offer a matrix in which researchers are supposed to locate themselves. Burrell and Morgan (1979), for example, distinguish between objective/subjective studies and scholars’ assumptions with regard to the nature of society (order/conflict). Not much different, Astley and Van de Ven (1983) emphasize the deterministic/voluntaristic nature of research as well as the level of organizational analysis (micro/macro). Similar to the modern12
Speaking with Weick (1989: 522-523), we contribute to heterogeneity in ‘thought trials’ within strategic management theory by choosing an uncommon perspective for criticizing existing research. Elsewhere Weick (1987b: 99) states that “[t]heories should be adopted more to maximize what we will see than summarize what we have already seen. Usually, what we have already seen merely confirms what we expect to see. To theorize better, theorists have to expect more in whatever they will observe.”
This Study and the Philosophy of Science
19
ism/postmodernism debate, these frameworks rely on generalizations and are problematic insofar as they tend to dump authors in containers. Yet generalizations offer guidance as they enable a classification of one’s own work in the ever-increasing body of research on organization theory and strategic management. In the following we refer to the framework of Deetz (1996) that represents an extension of Burrell and Morgan’s (1979) work. The framework fits into this study as it addresses postmodern thinking and consequently deconstruction (Figure 3).
Fig. 3. Metatheoretical Assumptions in Organization Theory (adopted from Deetz 1996: 198)
What Deetz (1996: 197) labels the consensus-dissensus dimension refers to the question whether the studied object is regarded to display an unproblematic order (consensus) or whether the existing structures of the object are questioned (dissensus). Consensus based research is a reproductive practice that accepts the status quo of the investigated object, while a dissensus orientation is productive in the sense that it tries to disrupt the status quo by challenging mechanisms of order maintenance. The a prioriemergent dimension concerns the origin of concepts and problem statements within research. Scholars following an a priori orientation argue
20
Introduction to the Study
that their knowledge claims exist independently of their conditions of production; they belief in the production of rational knowledge that is not constrained by the subjectivity of the researcher or the researched. The emergent pole draws attention to scholars who stress the situated nature of research and belief in producing insights rather than truths. As discussed in section 1.1, this study is based on ideas stemming from philosophical postmodernism. Following Deetz’s analytical frame, we are now able to specify the metatheoretical assumptions of postmodern research and in what aspects this style differs from other modes of investigation. For this, we need to discuss the dissensus and emergent character of our research as these are contrasted with postmodernism in Deetz’s framework. The very idea of this study, which is to question the conventional theoretical foundation of strategic management, already points to a dissensus orientation. We view our unit of analysis (strategic management theory) not as unproblematic but refer to three dominant logics which challenge existing belief structures. The discussion of incommensurability already illustrated the emergent character of the proposed research problem. By acknowledging the situated and contextual nature of our claims, we oppose the logic of objectification and unadulterated rationality that is proposed by a priori conceptions of research. Following this line of argumentation, it needs to be recognized that the three dominant logics are not a priori given but inhibit our deconstructionist Weltanschauung. The Addressees of this Study: Creating interest in novel topics by discussing and denying conventional wisdom is a bold venture. Yet, most people will ask: For whom is it done anyway? Is it done for the many strategists who are trying to shape the future of their organizations? Is it done for other scholars to foster reflexivity? This gives rise to the question whether our undertaking represents ‘basic’ or ‘applied’ research. Ulrich (2001b, 2001a) conceptualizes management in general as an applied social science in which ‘practical’ problems are solved. Practical problems in his view are those problems that originate from and refer to practice and are of interest to practitioners, whereas theoretical problems emerge within the process of research. Practical problems are solved for the sake of giving advice to practitioners, while basic problems are merely an intra-scientific matter and solely address other scholars. But is this distinction (i.e. opposition) a useful one? Weiskopf (2003b: 12) remarks that from the viewpoint of deconstruction, there is no reason to distinguish between ‘basic’ and ‘applied’ science since no final legitimization for knowledge, be it practical or basic, exists. If meaning, as Derrida (1976: 425) argues, cannot be objectively determined, there is no way to identify a safe ground (basic knowledge) from
Limitations of the Study – Some Words of Caution
21
which we could derive applied knowledge. To classify scholarly work as basic or applied research obscures that neither ‘applied’ nor ‘basic’ knowledge possess a reference point for justification. There is no fully legitimized basic research from which applied research emerges, like there is no ‘pure’ theoretical knowledge that passively flows into practice to be applied (Nicolai 2004: 954). Such purity would require theories to instruct operations that are by themselves ‘purely’ practical. Deconstruction sees itself as a kind of theoretical practice (Khurana 2002: 251) happening in theory and practice (Derrida 1989a: 85). Science is successful if it fosters dialogue among scholars and practitioners, a dialogue that produces new alternatives for action (Kieser and Nicolai 2005). The question is not whether we conduct basic or applied research, or whether we address practitioners or the scholarly community, but in what way people, be they other scholars or managers, make use of the presented claims to make sense of their problems (Weick 1995: 90). Practitioners may find our arguments helpful in exploring and understanding the messy realities of strategy making. They will, however, not come across a clear set of recommendations of a checklist type that finally tells them ‘how to do strategy’. Researchers may find the presented claims helpful in questioning their own basic belief structures of how to think about strategic management. Since curiosity and an inclination to the unknown are inevitable parts of scientific progress, we hope to contribute to ongoing and stimulate upcoming discussions. If this study creates discomfort about the way a range of scholars still thinks about strategic management, its primary goal has been achieved.
1.3 Limitations of the Study – Some Words of Caution Alvesson and Skoldberg (2000) suggest that research should always be presented in a reflexive style, paying as much attention to process as to product. Calling for more reflexivity in the field of strategic management also means being self-reflexive. As in any other study this treatise is faced with limitations that need to be considered as constraints while making sense of the presented arguments. First, there are limits to the scope of including existing theories and frameworks into the discussion. As the field of strategy relates to a considerable number of journals and books, a complete treatment of the full range of approaches that represent the identified dominant logics is not only impossible but also not desirable. Any attempt to hear and consider all voices would end up in an unfruitful cacophony of opinions. Therefore, the purpose is to isolate key assumptions from exem-
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Introduction to the Study
plary and well-known theoretical offerings in order to use them as a nucleus for argumentation. This means that we deliberately generalize around existing schools of thought (e.g., the market and resource-based school of strategy). The second limitation deals with the way in which existing approaches to strategy are criticized. For this, we need to recognize that the prevailing Zeitgeist influences scholars’ assumptions at the time of theorizing. Wack (1985: 139-140), for instance, notes that in the 60s it was simply considered incompetent or unprofessional to say “Things could go this way – or that.” The disciplinary roots of scholars represent a similar constraint. Students of strategy have borrowed ideas from other fields such as economics, psychology, and sociology (Baum and Hayagreeva 1998). These disciplines pursue their own research traditions and with it certain dominant logics. Economic theory, for instance, does not make ontological or epistemological questions the subject of the discussion. It is no big surprise that strategy scholars working in the realm of economic theory are not overly concerned with questions about the nature of reality or usefulness of causality. When criticizing the works of other scholars, we should keep their disciplinary orientations as well as the prevailing scientific Zeitgeist in mind in order to avoid jumping to conclusions. A final limitation addresses the manner in which a ‘deconstructive study’ – if there is such a thing – needs to be written. Deconstruction means to be critical of any fixed definition of terms and concepts, of any pre-given linear structure of analysis, as well as the authority of the author to have a privileged access to her/his writings. We cannot reject offering at least some ‘prefabricated’ definitions in the course of this study; neither can we do without a linear way of analysis (an unavoidable feature of any book). Yet, we remind the reader that (a) the meaning of terms (e.g., strategy) is not objectively given but constructed by the reader in the particular and unique context of reading, consequently that (b) the author of this text has no privileged relation to it as every reading (by whomever) gives rise to new meaning (Giddens 1987: 206), and that (c) the linear representation of arguments is contingent and simulates a non-existent causal logic. To keep in mind that even though this study may appear to be straightforward, but is in fact struggling with the tensions that any text holds, we ask the reader to remember that any text can be disrupted in its ‘flow’ if we consider that: “W A R N I N G: LINEARITY KILLS”
Structure of Analysis
23
This phrase was introduced by Burrell (1997) who used it in regular intervals throughout his text to underplay the importance of developing an argument in a linear-logical way. The apparent linear nature of the analysis at hand is more a construction than a force. Dealing with these limitations effectively means not abandoning the arguments of this study, but learning to use them with reasonable perspective. Deconstructive logic looks for supplementarity – the one within the other, the destruction for the sake of construction. This destructionconstruction circle provides one option for criticizing theory in strategic management. Options act as constraints and opportunities alike. They are constraints because their availability implies a subsequent decision to either follow deconstructive logic or not. Likewise they are opportunities since they enable the researcher to make this decision in the first place.
1.4 Structure of Analysis Forced by the linear nature of a book, the development of our arguments must proceed in stages. Not all things can be discussed at the same time and usually some terms require the discussion of other terms prior to their introduction. In chapter two we discuss those approaches, classifications, and definitions that have been the ‘bread and butter’ of strategy research ever since its foundations in the 1960s. Mostly, this chapter is supposed to introduce some basic terminology to provide guidance to the reader by bringing in our understanding of what research on strategy context, process, and content is all about. This chapter is necessary because references to the theory developed so far help to set the stage for new conceptual arguments (Sutton and Staw 1995: 372). Any author needs to acknowledge the stream of logic on which s(he) draws and to which s(he) wishes to contribute. Besides this basic introduction to the field of strategy, chapter two also contains a discussion of the paradigmatic status of the field. We deem this discussion to be of special importance, since a treatise that criticizes currently held assumptions inevitably faces the question whether and how different conjectures are related to each other. While chapter two presents a general introduction to the field of strategic management, chapter three argues that within this general field we find three dominant logics that represent the taken-for-granted assumptions of scholars. Chapter two and three differ in that chapter two is about a basic introduction to strategy research whereas chapter three is more argumentative by criticizing the field’s underlying assumptions. Based on the twenty most popular documents of the strategy field, we demonstrate that the
24
Introduction to the Study
dominant logics, which we briefly discussed in section 1.1, are the reference point for theorizing in strategic management. This chapter is necessary to provide a fair treatment of other authors and to give substance to the claim that strategy research is trapped in specific belief structures. Moreover, we discuss how dominant logics come into existence because the mere recognition that there are such logics provides an insufficient picture of the stickiness of scientific knowledge. Last but not least, we assess existing critical perspectives of the dominant logics to show that (a) a small number of scholars have developed a critical tradition in strategic management and (b) that this tradition still leaves a lot of questions unanswered. These remarks provide legitimization for the analysis in the subsequent chapters. Chapter four introduces the philosophy of Jacques Derrida. Starting with some general remarks on the philosophical tradition of postmodernism, which provides a frame of reference for Derrida’s arguments, we explore his style of thinking which is commonly referred to as deconstruction. Since this treatise is not about philosophy but strategic management, we only introduce those parts of Derrida’s work that seem relevant to the overall structure of argumentation. As one would expect, this is not easy, because Derrida has not developed a systematic philosophy. Mostly, we focus on introducing the general reasoning behind deconstruction (because it concerns the oppositions of the dominant logics), his treatment of paradox (because it is the prerequisite for criticizing the dominant logics), and his perspective on the indeterminacy of meaning (because it is necessary to understand how paradox comes about). In addition, we demonstrate how and why Derrida’s philosophical arguments can be applied to social theory since research in strategic management is not genuinely philosophical. While chapter four discusses deconstruction as a way to uncover paradox, chapter five discusses the role of paradox in strategy research. We argue that we have to research strategic management because of and despite paradox. We have to do strategy research because of paradox since paradoxical reasoning reveals the impossibilities that underlie the dominant logics. Yet, we also have to research strategy despite paradox because strategic management is nothing impossible (i.e. paradoxical). Numerous studies (Grant 2003; Regnér 2003) have observed strategic management in praxis. To explain how one can cope with the paradoxical foundation of strategic management, we illustrate how the paradoxes that underlie the three dominant logics can be deparadoxified. Deparadoxification does not imply reintroducing the dominant logics – because to deparadoxify one needs a paradox, a paradox that is obscured by the dominant logics. Deparadoxification paves the way for a different understanding of strategy
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context, process, and content that is outlined in chapter six. The recognition that strategic management needs to be researched because of and despite paradox is a necessary prerequisite for the deconstructions in chapter six. From our perspective, each deconstruction has a double function: it criticizes conventional reasoning (i.e. the dominant logics) by exposing that the paradoxical foundation of strategy context, process, and content cannot be neglected and demonstrates how theorists can creatively use these paradoxes by deparadoxifying them to finally come up with new conceptual frameworks. This double function is reflected by the need to create future strategic realities because of and despite paradox. Chapter six ‘performs’ the deconstructions that are structured with regard to our distinction between strategy context, process, and content. Based on our remarks in chapter five, each deconstruction uncovers a paradox (creating strategic realities because of paradox) and shows how this paradox can incite future research on strategic management (creating strategic realities despite paradox). Accordingly, the three deconstructions follow the same pattern. First, each deconstruction uncovers a paradox that has been neglected by the dominant logics. Thus, every deconstruction shows that the dominant logics aim at impossibilities and that strategy research that criticizes the dominant logics can only happen because of paradox. Second, each deconstruction also shows how the underlying paradox can be deparadoxified and how strategy research is possible despite paradox. Deparadoxification points to the recursive relations that underlie strategy context, process, and content and thus shows new ways of doing strategy research. Chapter seven outlines the implications of the deconstructions. Because the result of each deconstruction is a recursive relation that points to the importance of discussing strategy context, process, and content as consisting of situated activities, we relate our research results to a recently emerging stream of research: Strategy-as-Practice. Based on already existing research on Strategy-as-Practice we outline a research agenda for future investigations in strategic management by concentrating the arguments that have been made up to this point into one underlying framework. In this sense, chapter seven embeds the particular implications that are discussed in chapter six with regard to strategy context, process, and content into one overarching research framework that can inform future investigations. Strategy-as-Practice introduces a common ground that is shared by all three deconstructions and thus enables us to argue in favor of a new perspective on strategic management. The final chapter outlines the contributions of this study. We take a retrospective perspective and summarize the key findings of our discussion.
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Introduction to the Study
These key findings relate to the two major contributions of this treatise: (a) as a critique of currently dominating assumptions in strategy research and (b) as an outline of how to research strategic management in a different way (i.e. a way that considers paradox as a necessary limit to our knowledge about strategy). Finally, we outline how the nature of scholarship needs to change to take the key findings of this study seriously. This discussion is essential to show how the content-related arguments (i.e. how to research strategy context, process, and content differently) can be put into research praxis. We argue that substantial reforms (e.g., with regard to the methodology used and criteria for the evaluation of strategy research) are necessary and timely if the key findings of this study are seriously considered. Figure 4 depicts the structure of analysis and shows the main contribution that each chapter makes against the background of the general research design.
Fig. 4. Structure of Analysis
2 Strategic Management as a Field of Study
While the complexity of strategy as a field of study makes it dangerous to push any particular classification scheme too far, some basic differentiations are useful in establishing starting points for deeper analysis. The objective of this chapter is to make sense of strategy research by shaping the contours of the field. By introducing some basic terminology and revisiting various approaches that have been the ‘bread and butter’ of strategy research for the last 45 years, we hope to give a comprehensive, yet not conclusive, overview. We start by addressing the most fundamental of all questions: What is strategy and why do we need it anyway? Based on the discussion of why there is a need for corporate strategy (section 2.1.1), we discuss different definitions that scholars have attached to this term (section 2.1.2). Over time, some of these definitions became widely accepted and hardened into paradigms that we introduce in section 2.2. These paradigms demonstrate that there are different accepted notions of strategic management. Within these paradigms, strategy scholars have highlighted and discussed distinctive dimensions. To identify and discuss these dimensions, we introduce the tripartite framework of strategy context, process, and content that acts as a frame of reference for the arguments throughout this study (section 2.3).
2.1 The Concept of Strategy 2.1.1 Why Do We Need Strategic Management? Defining the need for a concept like corporate strategy may seem easy at first glance but turns out to be a challenge when considering the large number of varying opinions (Oliver 2001: 7). However, a discussion of this question is inevitable since not everything that goes on in an organization can be labeled strategic; otherwise the notion of strategy would turn out to be meaningless leaving practitioners and academics paralyzed (Bower 1982). To understand why scholars find it worthwhile to apply a
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Strategic Management as a Field of Study
concept that has its roots in conceptualizing war practice, we need to recognize that organizations are complex social systems that possess more alternatives than can be cognitively or practically realized (Luhmann 1995b; Seidl 2003a).13 For action to occur, there needs to be a reduction of complexity by pre-selecting possibilities. Actions activate certain possibilities and leave others aside. The mechanisms that guide this selection process are structures which reduce the amount of ‘approved’ relations within social systems (Luhmann 1994: 384). Structures do not necessarily eliminate possibilities but provide a mechanism to handle them. Strategy is one important means of reducing complexity within organizations. The structures that are constituted by strategic activity, like strategic goals or strategic rules, help managers to sort out possibilities that are not considered to be relevant for the survival of the organization. Complexity, however, is not the only driving force for strategizing since particularly strategic decisions are characterized by uncertainty. Actor A cannot determine its strategic actions until actor B has acted and vice versa. Both actors have a considerable scope for choice. Complexity combined with uncertainty results in ambiguity (Schreyögg and Steinmann 1987: 93). According to Weick (1995: 92), ambiguity is about unclear meaning structures that arise due to a lack of clarity or consistency in reality. Ambiguity covers the fact that there can be multiple even conflicting interpretations for existing data, that goals are unclear and cannot be coded precisely, and that intentions cannot be specified. In other words, ambiguity reflects the lack of clarity with regard to the internal and external environment of organizations. Strategy is not an end in itself but a necessary ‘walking stick’ that helps managers to cope with the ambiguity of their social systems and environments. This walking stick gained popularity after World War II as business moved from a relatively stable environment into a rapidly changing (and thus more ambiguous) environment (Bracker 1980: 219). As organizations slowly moved into the post-industrial era, industries were propelled by technological discontinuities, customers demanding non-standardized products (mass customization), employees changing their work attitudes, 13
The term strategy derives from the ancient Athenian concept of strategos which is compounded of stratos (an encamped army) and agein (to lead). Cummings (1993) notes that the emergence of the term occurred at the same time as military decision-making complexity increased. The first organized writing about military strategy, which is also considered in the realm of strategic management, is Clausewitz’s (1983) book On War. Within Clauswitz’s writings the distinction between strategy and tactics is of great importance. In his view, strategy refers to the deployment of troops, whereas tactics refers to the employment of the latter.
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and deregulated markets (McKiernan 1997: 796). These forces were changing the sources of competitive advantage and the economic structure of industries in an even more unpredictable way. After the fall of the Berlin Wall and the emergence of trading blocks like NAFTA and ASEAN, the speed of internationalization of competition and commodity markets increased rapidly. In a globalized business context with different cultures and corporations that have ever more operations in a changing international environment, ambiguity is gaining ground. At the same time, as Prahalad and Hamel (1994: 7) note, ambiguity becomes a problem because single players do not dominate the decentralized and fragmented structure of numerous industries anymore. Simultaneously, other industries converge into a common whole (e.g., banking and financial services, photo and mobile phone technology). Of course, business strategy cannot foresee all those events. What strategy can do is sustain an organization’s capacity to act in these situations by providing a common frame of reference. Structures, like strategic goals, are the constituting elements of this frame. They reduce ambiguity because they provide direction and cohesion to the enterprise by blinding out some and activating other possibilities. This still leaves the question: Which possibilities are blinded out and which ones are activated by such structures? If we do not know which possibilities are blinded out or highlighted by strategizing activities, we cannot demonstrate why there is a particular need for strategic structures as means to reduce ambiguity. Obviously, non-strategic structures reduce ambiguity as well. What is particularly strategic? Surely, ‘strategic’ has become a buzzword for all disciplines trying to stress the significance of their work (Lyles 1990: 363). The label acts as a powerful rhetorical device (Alvesson and Willmott 1995: 99) often used by managers to make normal circumstances sound unique and important. Partly, this confusion is due to simplifying definitions like the one by Mintzberg et al. (1976: 246) who state that “strategic simply means important, in terms of the actions taken, the resources committed, or the precedents set” or the one by Brews and Hunt (1999: 891) who argue that strategic relates to non-routine problems for which no predetermined solution exists. To gain a more precise understanding of what ‘strategic’ means, we need additional reflections. The most common and widely shared idea about the strategicness of strategy comes from the early days of the field. At that time, strategy was identified with the construction of possibilities for future actions. Chandler (1962: 11), for instance, distinguishes between strategic and tactical decisions. While strategic decisions are needed to secure the long-term health of the enterprise, tactical behavior deals with the
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day-to-day activities that are necessary for efficient and smooth operations. Ansoff (1987b: 24) follows this distinction but specifies that strategies are needed to decide what business the firm is in and what kind of business it seeks to enter. The forward-looking character of these characterizations stresses that strategies are necessary as they provide potentials for the future success of the entire organization. Strategy is about giving direction to organizations (Bower 1982: 630). Chandler and Ansoff’s statements present a first reference point for exploring which possibilities are highlighted by strategic structures – viz. those that offer potentials for future success. Yet, this definition still remains quite vague. Different scholars have provided additional criteria to specify the term ‘strategic’ by suggesting that the future in strategy concerns the non-immediate future and that achievement of future success involves a significant commitment of resources (Schilit 1990: 436). Yet, the problem with understanding strategy solely as preparedness for the future is to neglect the multi-dimensional nature of the concept. Not everything that is preferred as a prospective business idea may be possible to realize or even desirable from the perspective of society. Strategic thinking is also needed to check whether future goals can be achieved at all with the resources at hand and whether these goals are morally upright. Andrews (1971: 24-27) considers these shortcomings and puts the dimensions by which to create potentials for future success in more specific terms.14 He names four aspects that need to be balanced when thinking strategically: what an organization might do, what it can do, what people want it to do, and what it should do from a social point of view. What a company might do refers to the perceived environmental opportunities and threats. By contrast, what a company can do refers to the strengths and weaknesses in its resource base. Apart from what a company might or can do, strategy also needs to consider what organizational members want to do because of their personal values, ideals, and aspirations. The ‘want to do’-dimension accounts for the internal power relations that may offset decisions that are reasonable from the perspective of opportunities and threats as well as strengths and weaknesses. Finally, what a corporation should do refers to the ethical aspect of strategic choice (Behnam 1998).
14
Andrews (1971) is certainly not the only author who discussed the different dimensions of the concept of corporate strategy. Hofer and Schendel (1978: 5), for instance, discuss ‘the allocation of resources’ as an aspect of strategy. We use Andrews’s classification since most other general conceptions of strategy relate to at least one of his dimensions (see also Oliver 2001; Porter 1996; Whittington 2001).
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To conclude, if we consider that organizations need to reduce ambiguity to remain operative (Weick 1979) and believe that strategic management is responsible for sorting out those possibilities that create potentials for future success according to the four dimensions described by Andrews, we can come up with a reasonable way of describing the need for strategy. Strategy is needed because it reduces ambiguity by highlighting those possibilities that tell organizations what they might, can, want to, and should do to create potentials for future success. Structures, like strategic goals, can be described as ‘filters’ organizations apply to sort out possibilities that are not likely to create potentials for future success along these four dimensions. 2.1.2 The Definition of Strategy – Differing Perspectives Our remarks on why a concept like strategy is needed also give us an idea of how scholars define ‘corporate strategy’. Most strategy scholars would probably agree that strategic management aims to create potentials for future success by telling organizations what they might, can, want to, and should do. Although this general definition can act as a useful ‘yardstick’, strategy scholars have developed a variety of strategic realities that characterize ‘corporate strategy’ differently. We do not reproduce the entire list of characterizations but highlight two areas of disagreement that relate to our discussion of dominant logics later on. Most strategy definitions can be distinguished according to (a) whether they see a need for planning and (b) whether they suggest that the environment determines strategic decisions. The need for planning looks at whether scholars assume strategies to be deliberately planned (high need for planning) or in how far they suppose them to emerge in the course of action (low need for planning). Environmental determinism assesses to what extent the environment is seen as a structural constraint (high determinism) or is constituted by the agency of actors (low determinism). Strategy definitions that highlight a high need for planning are (among others) those of Ansoff (1987b: 101), Chandler (1962: 13), and Learned et al. (1969: 15). In an attempt to specify his general remarks on strategy discussed above, Andrews (1971: 25) also expresses confidence in the capacity of managers to plan a strategy by arguing that “[t]he principal subactivities of strategy formulation as a logical activity include identifying opportunities and threats in the company’s environment and attaching some estimate risk to the discernible alternatives. Before a choice can be made, the company’s strengths and weaknesses should be appraised together with the resources at hand and available.”
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Andrews (1971: 20) suggests that strategic decisions crystallize a set of problems an organization can seize upon and solve out of the ‘formless reality’ of a company’s environment. In sharp contrast, authors like Mintzberg (1979), Weick (1987a) or Quinn (1978) are less optimistic about the capacity of managers to plan ahead, because the underlying logic of decisions may only be perceived in an ex post manner making strategies an emergent and retrospective phenomenon. Strategic plans, even vague ones, are excuses to act. Weick (1987a: 229) calls this just-in-time strategy; a perspective that downplays the importance of accurately portrayed episodes where managers meet to make a strategic decision. Just-in-time strategies are an agglomeration of small steps (e.g., the writing of memos) that foreclose alternatives and limit what is possible. The strategy is made without anyone realizing it. Definitions of the concept of corporate strategy can also be distinguished according to their view of the environment. Authors like Porter (1980), Williamson (1991) or Hill and Deeds (1996) argue that organizations are expected to match their environment as well as they possibly can. Strategy is seen as determined by structural constraints (e.g., number and size of firms) that prescribe the profitability of a particular industry; thus the economy somewhat imposes on firms. Accordingly, Hofer and Schendel (1978: 4) argue that “the basic characteristics of the match an organization achieves with its environment is called its strategy” and Williamson (1991: 76, emphasis in the original) stresses that “economizing is more fundamental than strategizing – or, put differently, that economy is the best strategy.” In contrast to this deterministic view, only some scholars do not define strategy as a reaction to environmental circumstances and a means to achieve ‘fitness’ but rather as a way to think about how a firm, despite certain environmental influence, also influences and manipulates its own environment (Bourgeois 1984; Weick 1987a). The discussion illustrates that the only point of agreement in the strategy field may be that there is no single universally accepted definition of strategy. It is a term with multiple meanings, a term whose substance depends on the underlying assumptions of scholars (Franklin 1998b: 446). Our illustration of the two dimensions (i.e. the perceived need for planning and the extent of environmental determinism) that strategy scholars refer to when defining strategy relates to two of our dominant logics. The ‘necessity of adaptation’ is based on the assumption of a high environmental determinism, while the ‘primacy of thinking’ relates to a high need for planning. As the discussion shows, there are perspectives that reach beyond these dominant logics and not all strategy scholars favor environmental determinism and planning-like strategizing. Yet as the discussion in chapter
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three will reveal, (a) the ‘mainstream’ in strategic management theory complies with the dominant logics and (b) that even some of those scholars who take alternative perspectives do not fully disengage from the oppositional-logic that obscures paradox.
2.2 Paradigm Lost? – The Roots of Strategy Research While the preceding section showed that there are different definitions of the term ‘corporate strategy’, some of these perspectives have gained more prominence and consequently hardened into paradigms. For instance, the work of Porter (1980, 1985) has attracted much attention, whereas Weick’s (1987a) strategic reality is not widely accepted. To understand which strategic realities have become established, we need to appreciate the idea of ‘paradigm’. Accordingly, we assume that each paradigm consists of a variety of strategic realities that reflect scholars’ assumptions about strategy. Our discussion of paradigms in strategy research makes two contributions to this study. First, the identification of paradigms enables us to understand how the dominant logics are embedded in research activity. Dominant logics are not paradigms but cut across a variety of paradigms; the dominant assumptions are reproduced within different paradigms (see also section 3.2.5). Second, because the choice of a future direction in strategic management is influenced by its paradigmatic origins and because this study aims to pave the way for an alternative way of thinking, we should have a sound understanding of the terrain to appreciate the accounts of knowledge created by others. To assess the paradigms of strategic management first requires making sense of the term ‘paradigm’ in order to be able to present possibilities for a paradigmatic classification (section 2.2.1). Before we introduce what we label the paradigms of strategy research (section 2.2.3), we discuss the disciplinary roots of strategic management (section 2.2.2) because the disciplinary orientation of scholars influences their paradigmatic perspective. We close by assessing whether strategy research should follow one paradigm (domination), or a bunch of unrelated paradigms (pluralism), and/or should combine paradigms (integration) to cope with research problems (section 2.2.4).
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2.2.1 Potential Paradigmatic Classifications There is often confusion about what counts as a paradigm. Masterman (1970) counts 21 different definitions of the term in Kuhn’s (1996) book The Structure of Scientific Revolutions which we can group into two broad notions. The first notion, which we call ‘the model paradigm sense’, states that paradigms occur with regard to a specific field of research (e.g., strategic management) and need to be understood as “universally recognized scientific achievements that for a time provide model problems and solutions to a community of practitioners.” (Kuhn 1996: xi) This notion stresses the model character of paradigms because they are “[...] accepted examples of actual scientific practice [which] provide models from which spring particular coherent traditions of scientific research.” (Kuhn 1996: 10, annotation added) Paradigms reflect certain standards of scholarliness accepted by a community of researchers but questioned outside this community (Lewis and Kelemen 2002: 251). Paradigms contain assumptions that are often unconsciously held to define the ‘legitimate’ problems and research methods for succeeding in a specific field of inquiry (Mitroff and Mason 1982: 361). Kuhn regards paradigms as governing the progress of what is called ‘normal science’. The latter aims to articulate and apply the accepted paradigm which is not itself questioned. Scientific problems are considered to be an agglomeration of puzzles that can be solved by referring to the assumptions of the paradigm. A normal-scientific puzzle always has a solution that is provided by the paradigm (Kuhn 1996: 36). Normal science needs to be contrasted to ‘revolutionary science’ in which anomalies occur that cannot be solved by the paradigm anymore. As a result, a new paradigm emerges and becomes accepted by the scientific community. Kuhn (1996: 115) argues in this context “[…] the scientist with a new paradigm sees differently from the way he had seen before.” What does he see different? Of course, the field of research s(he) is embedded in. The second broad notion identified by Masterman (1970) regards the metatheoretical character of paradigms. Here, a paradigm is something wider than a model for scientific conduct that supplies ‘tools’ (Kuhn 1996: 37, 76), or model solutions that make problem solving possible. Indeed, the ‘metatheoretical paradigm sense’ argues that paradigms are filters through which individuals make sense of research problems, i.e.: a whole Weltanschauung. Burrell and Morgan (1979) follow this perspective in their trail-blazing book Sociological Paradigms and Organizational Analysis. Although they view paradigms as metatheoretical assumptions with regard to the nature of science (objective/subjective) and the nature of society (regulation/change), they limit their analysis to social theory,
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whereas Kuhn is concerned with the philosophy of science in general. While introducing their paradigm-concept, Burrell and Morgan (1979: 24) argue that “[t]o be located in a particular paradigm is to view the world in a particular way. The four paradigms [developed by them] thus define four views of the social world based upon different meta-theoretical assumptions with regard to the nature of science and society.” (emphasis and annotation added)
Burrell and Morgan’s perspective is shared by Scherer (1999: 5) who identifies paradigms with basic assumptions regarding ontology (the way we think the world is), epistemology (what we think can be known about the world), as well as the methodology used (how we think the unit of analysis can be investigated). Neither ‘the model paradigm sense’ nor ‘the metatheoretical paradigm sense’ can fully account for whatever is researched. It is thus surprising that strategy scholars have relied on an either/or-decision when discussing the paradigmatic status of their field. Some follow ‘the metatheoretical paradigm sense’ by believing that paradigms represent distinct ontological and epistemological assumptions with regard to strategy (Göbel 1997; Mitroff and Mason 1982). Others have followed ‘the model paradigm sense’ by suggesting that paradigms represent universally recognized scientific achievements that provide model problems and solutions regardless of whether these achievements differ substantially in their perceived metatheoretical nature. Foss (1996: 4) and Hoskisson et al. (1999), for instance, argue that the resource and market-based view represent paradigms because they address the same explanandum phenomenon by using different explanatory apparatuses. Surely, both possibilities of classifying paradigms are interrelated. Paradigms understood as model problems and solutions always follow certain metatheoretical assumptions. Conversely, metatheoretical assumptions by themselves make no sense as along as they are not applied to an object of analysis and reflected by model problems and solutions that are accepted. For the remainder of this study, we take an integrative view and characterize paradigms in strategy research as universally recognized scientific achievements that provide model problems and solutions by referring to a certain methodology and metatheoretical assumptions.15 15
This definition is quite comparable with the one given by Kuhn in the postscript to The Structure of Scientific Revolutions (starting with the 1970 edition). In the postscript, he explicitly points out that shared beliefs about certain model problems and personal values (which touch upon metatheoretical issues) are part of a paradigm (Kuhn 1996: 184-185). See also the discussion by Lueken (1992: 118122).
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This definition helps us to differentiate paradigms from strategic realities. A strategic reality is not a paradigm: however, it can be ascribed to one. In this sense, paradigms consist of a variety of strategic realities (i.e. only those strategic realities that are in line with the assumptions favored by the paradigm). Paradigms in strategy research are broadly accepted and provide a point of reference for ‘legitimized’ research during a certain period of time, whereas strategic realities can also reject the assumptions of the dominant paradigm(s). Weick (1987a), for instance, outlines a specific strategic reality, which, though, never gained a paradigmatic status in the strategy field like the planning school did in the 1960s. Because paradigms are heavily influenced by their underlying disciplinary roots, most of all because these roots affect the chosen metatheoretical assumptions, we first discuss the disciplinary basis of paradigms in strategy to then provide a historical sketch of paradigm development in strategic management. 2.2.2 Disciplinary Roots of Paradigms in Strategy Research Because the issues of strategy are multifaceted, the study of strategic management has drawn upon a wide range of disciplines (Baum and Rao 1998; Baum and Dobbin 2000). Pettigrew et al. (2002: 9) even see strategic management as a multidisciplinary melting pot crowded by a variety of dissimilar aspirants. The term discipline follows a rather broad definition in this context. Following, the remarks of Michel and Chen (2004: 5), disciplines do not necessarily refer to well-established sciences like sociology or economics but also include subfields of such sciences (e.g., game theory in economics or organization theory in business administration). Strategy scholars tend to identify their scholarly activity with such disciplines when writing about the ‘economic perspective of strategy’ or the ‘sociological view on strategy’ (Rumelt et al. 1994: 31). A closer look at available theories in strategic management reveals that the field has borrowed extensively from other neighboring disciplines. Theories from various disciplines have expanded and enriched the knowledge base of the field of strategy (Volberda 2004: 35). In a recent survey among 500 members of the Academy of Management’s Business Policy and Strategy Division, Michel and Chen (2004) observed that organization theory, economics, sociology, and psychology are by far the most relied upon disciplines. This survey reveals a diversity of disciplines utilized by strategy scholars. We discuss the contributions of economics and sociol-
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ogy as both disciplines are typically regarded as the most influential (Baum and Rao 1998; Rumelt et al. 1994).16 During the 1980s strategy content scholars increasingly applied economics and developed sophistication in using economic modeling. Rumelt et al. (1991: 9) discuss some reasons for this. First, strategy studies that were conducted in the 1970s were not able to interpret observed performance differentials. For instance, there was need to find out what meaning should be ascribed to performance differences between identified strategic groups (Hatten and Schendel 1977). It was not possible to interpret these results without the rise of industrial organization that provided the notions of market power and barriers to entry. Second, traditional case-based research showed that profits are persistent over time (Learned et al. 1969). There seemed to be an inertia associated with profit differences of firms within the same industry. Again, it was industrial organization economics together with the economics of innovation that provided various explanations for persistently abnormal returns (e.g., mobility barriers or cost of technology transfer). These two points already show that the most significant impact of economics on strategy research has been the explanation of success. Third, it was not until the development of the new institutional economics (Williamson 1975, 1985) that economic thinking moved closer to strategic management. In traditional neoclassical economics, competition eroded extra profits earned by successful firms. This changed as the nature of economic thinking was altered to include concepts like uncertainty, information asymmetry, bounded rationality, opportunism, and asset specificity (Williamson 1975). Of all subfields in the ‘new institutional economics’, the transaction cost approach gained wide popularity in strategic management. The main reason for this dominance is that transaction cost economics provides a common ground where economic thinking, strategic issues, and organization theory meet (Rumelt et al. 1994: 28). Based on this conviction, Williamson (1991: 90) argues that transaction cost economics provides strategy scholars with a core theory to understand the economy as the best strategy. This does not imply that economizing and strategizing are mutually exclusive, but that strategic ploys are pertinent to understand a small number of
16
We do not include organization theory as this field is by itself heavily influenced by economics and organizational sociology. Nelson and Winter’s (1982) book on evolutionary economics, for instance, is often referred to in organization theory. Similarly, many theories of organizations owe a lot to sociological concepts (e.g., new institutionalism, see for example DiMaggio and Powell 1983).
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transactions only, whereas economic transactions are relevant for all (and thus also strategic) transactions.17 Besides transaction cost economics, agency theory gained considerable popularity in strategy research. As agency theory is primarily concerned with the design of incentive agreements and the allocation of decision rights among individuals with conflicting preferences, strategy researchers employed this subfield of the new institutional economics to design incentive schemes so that agents will not distort the capital budgeting process (Milgrom and Roberts 1992; Rumelt et al. 1991; Hoskisson et al. 1999). In the 1980s, evolutionary economics also moved to the forefront of strategic management. Nelson and Winter (1982), for instance, claim that because capabilities are a function of corporate history, it is impossible to just copy best practices from competitors. Accordingly, strategies cannot be simply or even quickly changed but underlie the dynamics of an evolutionary process. In sum, we may state that economics has greatly enriched the study of strategic management by contributing to such persistent paradigms as the market and resource-based view. Nonetheless, it is of categorical importance to recognize that these contributions were possible only after the weakening of the neoclassical orthodoxy. Yet, the rise of the new institutional economics in strategy also accounts for the continuing dominance of quantitative empirical studies. A central focus of empirical research has been to understand the relations associated with the structure-conductperformance framework by means of databases rather than direct engagement with the firm (Bowen and Wiersema 1999; Pettigrew et al. 2002). We conclude that notwithstanding the contributions of economics to strategy, economic thinking has also helped to establish and sustain the ideology this study is concerned with.18 Similar to economic thinking, sociological insights have come from a variety of directions (Pettigrew et al. 2002: 10). Two main concerns distinguish sociology in strategy research from economic reasoning. First, most sociological theories do not study voluntary exchange but start with the 17
Williamson (1991: 76) makes this quite clear: “Strategic ploys are sometimes used to disguise economizing weaknesses. […] More often, strategic ploys can be used to promote economizing outcomes. […] The beguiling language of strategizing – warfare, credible threats, and the like – notwithstanding, students of economic organization are better advised to focus on more mundane issues of an economizing kind.” 18 See also the critical commentaries of Bromiley and Papenhausen (2003), Foss (1996), and Seth and Thomas (1994) regarding the relation between economics and strategy. Rumelt et al. (1994: 25-31) provide a good overview of the taxonomy of economic theories pertinent to strategic management.
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presumption that authority plays a major role in shaping social order. For example, sociological resource dependence theory sees strategic management as a way to protect the organization from those parties that possess critical resources upon which the firm depends (Pfeffer and Salancik 1978). Second, sociology is not much concerned with the instrumental worth of an exchange but studies the exchange itself (Rumelt et al. 1994: 31). This issue has been highlighted by organization ecology approaches, which study a population of firms that are embedded in exchange relationships. Influenced by the work of Hannan and Freeman (1977, 1984), organization ecologists are quite pessimistic about the ability to actively influence strategies. In their view strategies can hardly be influenced in a deliberate way as organizations adopt their environment. Well-managed strategic change becomes the exception rather than the rule because strategies are subject to inertia. The assumption of strategic inertia may be realistic, as Rumelt et al. (1994: 34) argue, if we consider that a whole lot of corporations struggle to ‘manage’ changing environmental conditions. Exchange plays yet another role in sociological strategy research. Whereas economists claim that organizations seek efficiency through exchange, sociological institutionalism argues that firms are part of exchange relationships to act in socially expected ways and thus gain legitimacy. In institutionalism society is seen as the source of strategies which organizations institutionalize (adopt) to gain legitimacy (DiMaggio and Powell 1983). While an economist might argue that a merger is necessary because it provides efficiency, an institutionalist would argue that mergers are conducted because other firms have done so and academics have rationalized them. Understood in this way, institutionalism comes close to social constructivism which describes how ‘taken-for-granted’ institutions come into being (Berger and Luckmann 2000). Institutionalism, organizational ecology, and resource dependence are but a few theoretical lenses that are commonly associated with sociology in strategy research. Recently, European scholars introduced other sociological perspectives by showing the relevance of self-referential systems theory (Knyphausen-Aufseß 1995; Vos 2002) and Giddens’s theory of structuration (Ortmann and Sydow 2001b; Pozzebon 2004). 2.2.3 Paradigms in Strategy Research – A Historical Sketch Recall that we defined a paradigm as consisting of universally recognized scientific achievements that provide model problems and solutions by referring to certain metatheoretical assumptions. Based on these remarks, we now discuss four paradigms (i.e. ‘planning’, ‘forecasting’, ‘market-based’,
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and ‘resource-based’) that occurred during the last 40 years in the strategy field. Although, we introduce the paradigms in a linear fashion, it needs to be noted that the occurrence of one paradigm cannot be identified with the total disappearance of its predecessor. The ascription of a paradigm to a certain decade is rather an idealized version of events. Today, scholarly work often draws on assumptions from different paradigms. Practically, it is hard to differentiate paradigms in a research field because they examine the same object of analysis. To provide a structured yet comprehensive discussion, we employ four criteria that guide the discussion. The criteria are derived from our discussion of the term ‘paradigm’ (section 2.2.1) and the disciplinary roots (section 2.2.2). First, we look at certain model problems and solutions that are offered by the advocates of the paradigm. Second, we assess the underlying methodology that is used by scholars working in the paradigm because the recognition and perceived validity of scientific achievements also depends on the employed methodology. Third, we discuss the underlying disciplinary roots of the paradigm as these influence the metatheoretical assumptions of scholars. Last but not least, we look at these metatheoretical assumptions by referring to the two dimensions discussed in section 2.1.2 (i.e. the ‘need for planning’ that relates to assumptions about rationality and ‘environmental determinism’ that relates to the ontological question whether the environment is given). During 1960s, the first scientific achievements that gained a paradigmatic status in a field known then as business policy can be subsumed under the label ‘planning’. An important year for the establishment of this paradigm was the publication of Chandler’s (1962) seminal work Strategy and Structure that emphasizes the role of internal processes (e.g., decisionmaking) and firm characteristics (e.g., internal structure). Strategy was considered to be about the planning of the basic long-term goals of a corporation to achieve growth. The model problem of the paradigm was to explain how planning practices were supposed to arrange the functions of an organization to achieve long-term goals. Model solutions were primarily developed by focusing on the role of the general manager whose responsibility was the enterprise as a whole (Learned et al. 1969: 3). This active role of management in shaping strategy is also well-reflected in the works of Ansoff (1987b) and Andrews (1971) who suggest that corporate strategy is composed of two practically separated processes: formulation and implementation. The importance of the planning paradigm is highlighted by Rumelt et al. (1994: 18) who argue that “[n]early all of the ideas and issues that concern us today can be found in at least embryonic form in these key writings of the 1960s.”
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In terms of methodology, early strategy scholars were primarily concerned with identifying ‘best practices’ that were useful for managers (Hoskisson et al. 1999: 423). The most appropriate method for achieving this objective was seen to be inductive case-based research as outlined in the book Business Policy: Text and Cases by Learned et al. (1969). Generalizations of what strategy is all about were deemed to be impossible. “It is not possible to make useful generalizations about the nature of these variables or to classify their possible combinations in all situations. Knowledge of what, in general, Policy is and should be is incomplete and inconclusive.” (Learned et al. 1969: 4-5, emphasis in the original)
Because practitioners and other researchers demanded generalizations, strategy scholars relied on comparative case studies to find some general patterns as Chandler did. Because of this perspective, scholars working in the planning paradigm were rather skeptical about the contribution of other disciplines like economics, sociology or psychology. Strategy was seen to be much about intuition. Although it was believed that these disciplines have a lot to do with business in general, there was much disbelief that they can transform intuitive skills into conscious ones (Learned et al. 1969: 6). In terms of the underlying metatheoretical assumptions, scholars believed in a rather high environmental determinism because market opportunities and threats were treated as given (Andrews 1971). To adapt to this environment, managers were advised to follow a rational approach that emphasized a high need for planning (Ansoff 1987b). Where the 1960s gave rise to the basic concepts of strategy, the decade of the 1970s brought these concepts to practice, primarily driven by the continued expansion and further development of strategy consulting. The paradigmatic orientation can be described as ‘forecasting’. Forecast-based planning stood out from long-range planning in that it not only described strategy development in a general sense but also how firms forecast the inputs of management decisions. Forecasting forced managers to define their plans in more competitive terms by gathering information about markets and including customers and competitors in the analysis. The question of how to forecast the performance of a business or set of business units thus acted as the model problem for this paradigm. By focusing on internal and external factors alike, organizations were rearranged in terms of business units to map customers and competitors (Bowman et al. 2002: 35). Model solutions were provided by portfolio management (Hedley 1977; Henderson 1977), which offered a method to evaluate investment opportunities and factors associated with long-term performance, and the PIMS
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database (Schoeffler et al. 1974), which attempted to identify the factors related to long-term performance.19 Besides this focus on performance, the underlying methodology for research changed dramatically. As Rumelt et al. (1991: 8) note, the 1970s witnessed the rise of multivariate statistical methods that were capable of handling large sets of data to test hypotheses in a deductive style of research. Equipped with this methodology, strategy scholars produced an enormous amount of research, the results of which were difficult to interpret because of missing theoretical frameworks and the still unspecified disciplinary roots. Even though econometrics entered the field by providing a framework for conducting research, there was still no common disciplinary ground until industrial organization economics started to search for linkages between research results and theory in the 1980s. Despite the increasing hostility and instability of the environment, largely driven by the oil shock, the metatheoretical assumptions used by scholars remained the same for the most part. Although markets were expected to shift, there was still much hope that one can plan ahead by conducting fine-grained analyses. During the 1980s, because of the abovementioned need for a common theoretical framework, economic thinking moved closer to the center stage of strategy research in terms of theory and method and gave rise to the ‘market-based’ paradigm. The influential work of Porter (1980, 1985) brought industrial economics to the forefront of strategic reasoning. The adoption of the structure-conduct-performance (S-C-P) model shifted the focus of strategic management from the individual firm to the industry or competing groups of firms. Porter (1981) argued that a firm’s performance primarily depends on the industry structure in which it competes. Because structure determines conduct and conduct was basically seen as dependent on the industry structure, performance, which depends on conduct, can be explored by structure. The model problem for this paradigm was to explain competitive advantage by understanding the structure of an industry. The model solution provided by Porter (1980) was the five forces framework that enabled an assessment of industry attractiveness. Industrial organization economics also had a significant influence on the methodology used in strategy research. Porter (1981: 617) outlines this methodological promise as follows: 19
Other tools and concepts that fit in the same category for reasons discussed in section 2.3 are: the experience curve (Henderson 1973), research on strategic groups that explored the linkages between resource choices (interpreted as strategy) and firm performance (Hatten and Schendel 1977), and the formalized strategy formulation process model by Hofer and Schendel (1978).
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“IO [industrial organization] research has developed a strong tradition built around the statistical analysis of populations of firms and industries. Research on strategy is now using such methods to supplement the in-depth case studies that have been the bread and butter of policy research […] Recently a hybrid research design has emerged, using a series of mini-case studies to test richer hypotheses than can be feasibly tested in big samples.” (annotation added)
The use of statistical modeling was now complemented and extended by cases to increase the validity of research results. Yet, the dominance of positive economical research focusing on the precision of the made predictions was still present (Hoskisson et al. 1999: 431). Based on the disciplinary orientation provided by industrial organization economics, the metatheoretical assumptions remained largely the same as in the 1970s, even though the high need for rational planning was more an implicitly held assumption than an explicit concern.20 Because research showed that some firms perform better than others in the same industry and/or strategic group, strategic management refocused on firm level phenomena in the 1990s. Based on Wernerfelt’s (1984) early examination of the relationship between resources and profitability, the field slowly established a ‘resource-based’ paradigm that gained full momentum in the 1990s with the widely recognized contribution of Prahalad and Hamel (1990). Criticizing the work of Porter (1985) for neglecting the impact of firm attributes on the competitive position of corporations, Barney (1991) presented a framework for identifying the characteristics of resources in order to generate sustainable competitive advantage. The underlying model problem for this paradigm can be described as the search for competitive advantage by analyzing a firm’s resource base. In terms of model solutions, scholars identified a variety of resource characteristics (e.g., rareness and non-substitutability) that are supposed to ensure competitiveness and emphasized the role of organizational learning (Teece et al. 1997), knowledge (Kogut and Zander 1992), resource factor relationships (Black and Boal 1994), and organizational culture (Fiol 1991). Because the resource-based view has been mainly concerned with intangible constructs, which are by definition unobservable, researchers have used proxies (e.g., human capital leverage for employee skills) as measures in empirical studies. The methodological focus moved away from largescale data collection to a case study approach that caught the particular circumstances of corporations and provided richer information of a firm’s re20
Porter’s (1981: 616) updated version of the industrial economics framework by Bain (1968) moved beyond simple determinism and also allowed for changes in the industry structure by the conduct of firms. Nevertheless, the underlying ontological tradition in which all firms are part of one reality remained unchanged.
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source base. To increase the reliability of information, scholars combined quantitative financial and qualitative interview-based data in their study of firm resources. This cross-fertilization on the methodological level is well reflected in the disciplinary base of the resource-based paradigm. We agree with Sydow and Ortmann’s (2001: 10-11) claim that the core of resourcebased reasoning rested (and still rests) on economics. However, as Barney (1991: 116) noted “[r]ather than being contradictory, the resource-based model of strategic management suggests that organization theory and organizational behavior may be a rich source of findings and theories concerning rare, non-imitable, and nonsubstitutable resources in firms. Indeed, a resource-based model of sustained competitive advantage anticipates a more intimate integration of the organizational and the economic as a way to study sustained competitive advantage.”
Accordingly, resource-based reasoning also included aspects from sociology and organization theory and thus opened the strategy domain for inputs from non-economical disciplines to understand socially complex competitive resources such as knowledge or culture. Unfortunately, the explicit inclusion of other disciplines did not alter much of the underlying metatheoretical assumptions. Even though scholars highlighted the importance of informal planning processes (Burgelman 1983), the resourcebased perspective did not integrate these insights. This neglect of processrelated issues can be traced to Barney’s (1991: 113) argument that strategic planning itself is unlikely to be a source of sustained competitive advantage. As we enter the 21st century, we need to ask, what is the paradigm that strategy scholars currently refer to? Certainly, the resource-based paradigm is still on the agenda and often perceived to be the dominant frame of reference for research (Hoopes et al. 2003). Because resource-based scholars are increasingly aware of the limitations of theoretical constructs imported from economic theory, they start to cross-fertilize, for instance, by exploring how managerial cognition affects industry structure (Johnson and Hoopes 2003). The continuing dominance of the resource-based paradigm depends on its potential to integrate insights from other disciplines and preceding paradigms (Herrmann 2005; Sydow and Ortmann 2001: 11). First steps in this direction have already been taken. Helfat and Peteraf (2003), for instance, show how to gain a better understanding of dynamic capabilities by integrating insights from evolutionary theory and demonstrate that capabilities follow certain paths over time. We can also speculate that a new paradigmatic orientation might evolve out of a stronger integration of strategy process issues in the resource-based perspective. In his ten-year retrospective on the resource-based view, Barney (2001: 648)
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expresses much hope that theories that assess ‘capability building’ may turn out to be a major issue on the strategy agenda of the future. However, it would be too early and speculative to ascribe these developments a paradigmatic status. We can only argue that there are four paradigms that occurred in the course of the last 40 years (Figure 5). Although these paradigms do not exhaustively cover the entirety of studies in strategic management, they do give a fair overview.
Fig. 5. Paradigms in Strategy Research
Having discussed paradigms in strategy research, we are left with the question whether we should accept and value paradigmatic diversity or seek some sort of integration among paradigms? On the one hand, paradigms provide some order in a time when we face an ever-increasing number of strategic realities. On the other hand, paradigms do not replace one another in a mutually exclusive manner. Our linear treatment of paradigms is a rather idealized version of events that may hold in theory but is less relevant when considering scientific practice. With a co-existence of different voices the legitimized order offered by paradigms turns into a cacophony of opinions. Some scholars stick to resource-based reasoning and look for new ways to conceptualize a firm’s resource base by employing novel methodologies (Hoopes et al. 2003). Others still follow a marketbased perspective but acknowledge the need to reach beyond typical cross-
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sectional economic analysis by also focusing on longitudinal problems (Porter 1991). This co-existence of different paradigms fosters concerns that “our field is rapidly being pulled apart by centrifugal forces.” (Hambrick 2004: 91) In addition, some scholars heavily criticize existing paradigms for being too narrowly focused and plead for a radical shift towards distinct guiding assumptions and the establishment of yet other paradigms (Daft and Buenger 1990). How should we cope with the co-existence of voices? Do we need to integrate different perspectives or maybe look for one overarching paradigm? 2.2.4 The Desired Paradigmatic Status of Strategy Research As discussed in the preceding section, various paradigms have expanded and enriched the knowledge base of the field of strategy. Yet, instead of progress there seems to be disillusionment with the value of the strategy literature (Clegg et al. 2004; Göbel 1997). The desired paradigmatic status of the field remains unclear, resulting in sheer confusion among researchers. Hambrick (2004), for instance, claims that there are too many paradigms with too many assumptions trying to solve too many unrelated research problems. Despite the incredible amount of research undertaken and the rapid development of different paradigms, there is still confusion about which way to go. Should we pursue integration more vigorously in a certain direction or keep expanding our knowledge base? This comes down to the question of whether we need one isolated dominant paradigm, several competing paradigms, or maybe even integration among existing views (Foss 1999: 725; Pettigrew et al. 2002: 9)? How should we think about the desired paradigmatic status of the field? Some scholars favor a clear domination of the field by a single paradigm. Camerer (1985: 1) believes that the deductive use of mathematics and economic concepts with regard to market-based reasoning is the best way to approach corporate strategy. The message such scholars have for the community is that paradigmatic pluralism is dangerous because it ends up in an ‘anything goes’. Scherer (1995: 5) remarks that pluralism is a problem because practitioners, who are the addressees of strategy research, need to make a choice among competing paradigms since their actions require clarity. Podsakoff et al. (2005: 487) even advise us that the existence of a single agreed upon paradigm may be positively related to the influence of journals as editors and reviewers come to rely on universalistic criteria for the evaluation of research. Obviously, the greatest problem of this perspective is the impossibility of justifying the decision why a certain
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paradigm should be used. Nonetheless, once a decision for a paradigm is made, research results can be better evaluated and the field is perceived as ‘mature’. Pfeffer (1993: 618) even argues that a dominant paradigm immunizes a discipline against hostile takeovers from other disciplines (see also Herrmann 2005). Contrary to domination, several researchers argue that strategic management should value paradigmatic pluralism. The belief is that everybody should be heard in the conversation because if this is not the case research will produce a monolithic discipline. Mahoney (1993: 173) remarks that “strategy research should concern itself with continuing the conversation of the field rather than insisting upon a place for universal methodological criteria within that conversation.” Pettigrew et al. (2002: 6) compare such a perspective with a kaleidoscopic view in which new patterns of research are not necessarily any more true or false but are merely there. In a similar way, Rumelt et al. (1994: 1) argue that what will most benefit strategy research is not an overarching paradigm but the articulation of a diversity of orientations. Pluralists are in favor of this position: “Because we find ourselves unable to determine how close our theories are to some absolute truth, we are unable to evaluate paradigms in a way that would enable us to know that any particular one is a priori deserving a dominant position in organizational science. Science is not a magnificent march toward absolute truth, but a social struggle among scholars of the profession to construct truth. […] Because there is no meta-paradigm with which to make the choice between or among paradigms, each scholar must argue from his or her paradigmatic frame.” (Cannella and Paetzold 1994: 332-333)
The benefits of this orientation are obvious. Because there is more than one paradigm and thus also more than one description of the same phenomenon, the complexity and multifaceted nature of strategic issues can be taken into account. The various aspects of one whole (e.g., aspects of strategy) are best grasped under different paradigmatic frameworks (Gioia and Pitre 1990). A single set of assumptions provides only a narrow perspective because many issues will never be debated (Daft and Buenger 1990: 100). In addition, pluralism enhances greater reflexivity because scholars need to reflect on the impact and contribution of their perspective to compare and evaluate research results. These benefits, however, come at a price. Hambrick (2004), for example, argues that too much pluralism erodes the ‘scientific nature’ of the field because no clear standards for the evaluation of research exist anymore. A selection among competing alternative views becomes out of reach (Foss 1996: 7). Does this imply an ‘anything goes’? Based on the remarks of Cannella and Paetzold (1994: 336), we argue that pluralism in
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strategic management does not imply that everything is possible, but that every position deserves to be heard. Positions that do not contribute to the development of the field by solving the problems of practitioners (or at least contribute to this process in some way) will not be heard for a very long time. Accordingly, pluralists cannot be accused of favoring an undirected ‘anything goes’ just because they argue that all positions should be heard. A third alternative is the so-called integration of strategy paradigms. 21 Whereas for radical pluralists incommensurable paradigms simply coexist, integrationists aim to utilize these paradigms to integrate them into a coherent whole. Combe (1999: 341) argues that to reach beyond the narrow and specialized view of one single paradigm, we need to adopt a holistic approach that combines different views. Similarly, Hart (1992) and Cravens et al. (1997) argue that research has been unable to capture the range of themes and dimensions that constitute strategy and therefore would benefit from theoretical integration. As a result, paradigm integration offers holistic frameworks that are supposed to guide future research. The most prominent example of integration comes from Mintzberg (1990b) and Mintzberg et al. (2002) who integrate different paradigms into one holistic and all-encompassing approach that they name the configurational school: “All of the above: That is the message of the configurational school but with a particular angle. […] In other words, the configurational school focuses on typologies and episodes of various kinds – types of organizations, kinds of environments in which they operate, distinct periods in their histories – ideally all integrated into states which are sequenced over time, in life cycles.” (Mintzberg 1990b: 179-180)
Similarly, Hambrick (2004: 93) argues that the ‘big breakthroughs’ in strategy may only arise if multiple paradigms are reconciled or integrated. Integrationists not only join paradigms at a superficial level but also try to combine their underlying metatheoretical assumptions. What are the benefits of integrating different paradigms? Foss (1999: 743-744) argues that an integration of paradigms enhances the understanding of complex phenomena that are hard to grasp through the lens of one single paradigm. Because there are interaction effects between different 21
Integration has its roots in the philosophy of science debates. Lewis and Kelemen (2002: 258) argue that “[m]ultiparadigm inquiry strives to respect opposing approaches and juxtapose the partial understanding they inspire. Paradigm lenses may reveal seemingly disparate, but interdependent facets of complex phenomena.” See also the remarks of Gioia and Pitre (1990) on multiparadigm theory building.
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paradigms, adopting one view only is likely to lead to a biased understanding. Notwithstanding these benefits, the integrational perspective poses the risk for scholars and practitioners that by trying to see everything, they may end up seeing nothing because of the required high level of abstraction that joins radically different perspectives. Therefore, attempts at integration often lead to sophisticated theoretical frameworks that are disconnected from problems in strategic management (Volberda 2004: 35). The three positions (domination, pluralism, and integration) are depicted in Figure 6.
Fig. 6. Views About the Desired Paradigmatic Status of Strategy Research
This brings us to the question, which of the perspectives is adopted within this study? Recall that we, because of our relation to postmodern thinking, favor the incommensurability thesis (section 1.2). An unfounded decision for one particular paradigm (domination) is therefore not feasible. Neither is trying to hear all existing voices (pluralism) nor integrating all views into one overarching whole (integration). Too much pluralism halts the progress of the field by harming communication and evaluation of research, while too little pluralism isolates the field from its empiric reality and fosters scientific rigidity. We need a conception of the paradigmatic status that gives reference to incommensurability but also allows for paradigmatic cross-fertilization. This status would bridge conflicting paradigms while still maintaining their diversity (Weaver and Gioa 1994). In escaping this pluralism-integration dilemma, we suggest the more modest approach of loose coupling (see Figure 6). Based on the work of Weick (1976) and Orton and Weick (1990), originally worked out to study
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the nature of organizations, loose coupling enables us to accept the logic of different paradigms (and thus incommensurability) without losing sight of the whole. To think of loosely coupled paradigms means to accept that the elements of different paradigms are responsive but retain evidence of separateness and identity (Weick 1976: 3). With elements we mean model problems and solutions, methodology, disciplinary roots, and metatheoretical assumptions. These elements are coupled because they can be linked and thus preserve a certain degree of determinacy. Simultaneously, their coupling is loose which means, as Orton and Weick (1990: 203) remark, that the ties between the elements can change suddenly (rather than slowly or not at all) and occur occasionally (rather than constantly).22 According to loose coupling, paradigms retain a sense of incommensurability because there is no neutral language in which the contents of rival theories can be expressed and thus evaluated (Derrida 1981b: 24), but there is also a logically necessary degree of commensurability. This means that although an exchange of ideas between alternative worldviews is never isomorphic, “such communication is not only possible, but is a necessary condition of theory development.” (Willmott 1993: 688, emphasis in the original) The choice we as researchers face should not be to either defend incommensurability or get assimilated by functionalism as Jackson and Carter (1991) claim, but to look for cross-fertilization among competing views for the sake of solving research problems (Galison 1999, 1997). The position of loosely coupled paradigms describes a kind of balanced pluralism that emphasizes that even in the light of incommensurability there can be collaboration. This pluralism is balanced because paradigms are used flexibly, bent to fit the underlying research problem, and complemented by other paradigms. Balanced pluralism does not imply that every paradigm can be usefully applied in every context, nor does it mean that the ties among different perspectives are sluggish. The interaction effects, which are valued by the integration perspective for being stable and coherent, are now conceptualized as unstable and dependent on the context of the research problem. For instance, market and resource-based perspectives show complementarities when applied to a specific problem. 22
A similar position has been suggested by Weaver and Gioia (1994) who argue that a “successful multi-paradigm perspective […] must explain how different theoretical approaches might be related, but must do so (a) while preserving genuine multiplicity (e.g. the relatedness does not involve the reduction of one approach to another) and (b) without uncritically embracing the disunifying ‘paradigms’ paradigm’ (i.e. the increasingly entrenched view of organizational inquiry which – by appealing to the incommensurability thesis – purports unalterably to divide the field into mutually exclusive, contradictory metatheoretical camps).” (Weaver and Gioa 1994: 566, emphasis in the original)
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Whereas Porter (1980: 23-24) points to the importance of considering the dangers of substitute products, he provides little insight into how to analyze competitors for such substitutes.23 Resource-based reasoning can complement Porter’s analysis by providing criteria for assessing the capabilities of competitors (Foss 1996: 19). This interaction effect does not change the nature of both paradigms – they remain separate. To assess where such interaction effects can occur is not an easy task. Scholars need to set premises and test these premises in building and testing their models; they need to build new types of language in a kind of theoretical bricolage (Booth 1998: 15). The pay-offs of loosely coupled paradigms are substantial: one avoids the unrealistic view of a grand theory (integration) and the speechlessness or even paralyses that come along with a bulk of unordered and unconnected perspectives (pluralism). While cross-fertilization can be achieved on a thematic level, the loose coupling of methodological and metatheoretical assumptions is possible as well. Here, the challenge is not only to look for complementarities among existing paradigms, as these show few differences concerning their metatheoretical assumptions anyway (section 2.2.3), but also to include perspectives neglected in the analysis so far. Gioia and Pitre (1990: 591) discuss how such assumptions can be meaningfully combined without ending up in a total integration. They argue that the boundaries between different metatheoretical assumptions can be conceptualized as transition zones. According to the concept of transition zones, these boundaries are permeable to a limited extent. Metatheoretical assumptions can be accommodated and sometimes even linked despite incommensurable paradigmatic bases. Loose coupling is best understood when discussing exemplary transition zones. For instance, within strategic management there is a strong dichotomy between determinism and voluntarism that occurs with regard to a variety of phenomena (e.g., the strategy/structure debate). Does structure follow strategy as Chandler (1962) suggests, or does strategy follow structure as Hall and Saias (1980) claim? Ortmann and Sydow (2001a: 427) show how one can reach beyond a perfunctory compromise between both positions by referring to Giddens’s theory of structuration. Strategic actions bring 23
“Identifying substitute products is a matter of searching for other products that can perform the same function as the product of the industry. Sometimes doing so can be a subtle task, and one which leads the analyst into businesses seemingly far removed from the industry.” (Porter 1980: 23) Jemison (1981: 605) highlights other opportunities for cross-fertilization: (1) the relationship in the evolution of industries and organizations or (2) the influence of interorganizational relationships on strategy-making.
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about changes in organizational structure and this structure influences the way strategies are formed over time. The dichotomy disappears as the duality of structure implies that structures are not determined but (re)created by and through strategic action. Certainly, the application of Giddens’s theory has its limits, as Ortmann and Sydow (2001a: 428) remark themselves; however, it also leaves a great deal of room for coupling seemingly contradictory assumptions for specific problem sets. When considering that the world of strategy (and thus its problems) do not hold still but are constantly changing and that metatheoretical frames can be modified over time, it makes a lot of sense to conceptualize the elements of paradigms as loosely coupled systems. Loose coupling between paradigms does not imply simply looking for ‘a middle way’ or some sort of compromise but giving reasons why and to what extent different perspectives can be linked with one another. As will be shown in chapter six, deconstruction emphasizes loose coupling because (a) it overcomes the conceptual oppositions on which strategy research rests (section 1.1) and (b) it does so without integrating both poles of a dichotomy into an overarching whole. Derrida’s philosophy is a ‘walking stick’ that helps us to make sense of possibilities for crossfertilization and thus supports the development of future paradigms. Of course, deconstruction is not the only possibility for fostering crossfertilization.24 Deconstruction is also not a novel paradigm for strategy research because model problems and solutions are created on the level of the object of analysis. By contrast, metatheoretical assumptions, as provided by deconstruction, may be part of one or even more paradigms on the object level, but are not genuinely concerned with the object of analysis (viz. strategic management).
24
On a metatheoretical level, we have a variety of under or even unexplored possibilities. Giddens’s theory of structuration is just one possibility (Ortmann and Sydow 2001b). Luhmann’s social systems theory provides a frame of reference as well (Knyphausen-Aufseß 1995). Apart from social theories, we may also make use of perspectives that highlight different epistemological and ontological alternatives like constructivism (Mir and Watson 2000). In addition, we should also look within organization theory where metatheoretical frames that favor a weak ontology, such as Weick’s (1979) sensemaking approach, can be found and have already been applied to strategy research (Schneider 1997; Stensaker 2002; Weick 1987a).
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2.3 Strategic Realities – Context, Process, and Content 2.3.1 Shaping the Contours of the Strategy Field While the preceding section outlined four paradigms that illustrate those lines of argumentation that had a significant influence on the field, this section identifies three broad dimensions of thinking about strategic management that are reflected by the different strategic realities within the paradigms. Because strategy scholars have not always dealt with the same set of questions within each paradigm, we need to get to know those dimensions that have informed the creation of distinct strategic realities within these paradigms. For instance, the ‘planning’ and ‘forecasting’ paradigm focus a great deal on the process of strategy creation, while the ‘market-based’ and ‘resource-based’ paradigm are more concerned with the content of strategies. Considering these differences, Pettigrew (1987, 1988) points to a heuristic that yields three fundamental facets: 1) How do we conceptualize the way in which strategies come about (strategy process)? 2) What input needs to be considered by this process to fix the final product (strategy content)? 3) Wherein, in which organizational and environmental circumstances, are the former two dimensions embedded (strategy context)? These three dimensions interact and are only treated separately for analytical purpose.25 Rumelt et al. (1994: 19) note that the distinction between content and process can be traced to the advancement of strategic management as a field of research in the 1970s. The notion of strategy context is not as old as the other two dimensions and was introduced by Pettigrew (1987) as a necessary complement to better understand the development of strategies over time. As context raises the question of wherein process and content are embedded, it is almost self-evident that there can hardly be context research on its own. As MacKay and McKiernan (2004: 69) remark, “the strategy context is very difficult to research in an applied manner.” Strategy context rather provides an important complement to enhance the understanding of process and content. We look at research on context, 25
The separation between the three dimensions is subject of debate. Whereas scholars like de Wit and Meyer (2004: 6), Moore (1995: 22), and Pettigrew (1987: 657) highlight the interrelation of the different facets, Schendel (1992b: 2) is more in favor of a distinction reaching beyond analytical purposes by “contrasting process and content research as opposites, as a dichotomy.” Interestingly, Schendel (1992a: 2) argues some months later in another editorial comment of the Strategic Management Journal that the dichotomy is not real because process needs to be seen as an integral part of content.
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process, and content and introduce basic distinctions that scholars use when they refer to these dimensions. Without doubt, the provided distinctions do not represent an all-encompassing perspective but shape the contours of the strategy field to provide a basis for our further argumentation. Given the enormous volume of relevant research, this review is not meant to be exhaustive. The purpose is to identify lines of inquiry in each dimension that have become widely accepted within the scientific community. 2.3.2 Strategy Context – What Shapes Strategies? As outlined above, strategy context concerns the embeddedness of process and content by looking at the circumstances that influence the strategic decision process as well as the content of the decision itself. According to this view, strategy process and strategy content need to factor in the specific circumstances prevalent in the strategy context. Pettigrew (1987: 657) distinguishes between inner (organizational) and outer (environmental) context. Inner context refers to the capabilities, structure, corporate culture, and political context of a corporation, whereas outer context deals with the social, economic, political, and competitive environment in which a firm operates. Strategy scholars haven taken both perspectives as a starting point for their reasoning. Market-based (outside-in) research focuses on understanding how the external context of a firm, its industry structure, relates to strategic decisions. Of course, the environment is not a homogenous entity but composed of multifaceted combinations of factors such as governmental regulations, common industry practices, product and labor market conditions, and more general megatrends on the societal level like the ‘individualization of preferences’ (Miles and Snow 1978: 18). On the contrary, resource-based (inside-out) research focuses on the internal capabilities an organization possesses and their role in yielding certain strengths and weaknesses that influence strategic decisions. Not all strategy-relevant issues can be divided into the internal and external spheres. Indeed, some influencing factors cut across both dimensions. Accounting for differences between public and private sector organizations, for example, yields variations in the firm’s needed capabilities and its relation to governmental regulations. Outside-in and inside-out thinking correspond to different management styles. Whereas the market-based perspective focuses on effectiveness, the doing of the right things, scholars who take the organization as a reference point are more concerned with efficiency, the doing of things in the right way. The outside-in view tends to favor effectiveness over efficiency by considering Drucker’s (1987) famous claim that it is more important to do
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the right things than to do things right. What sense would it make to serve a market with a product that is not needed? In Chandler’s terminology: the efficiency-oriented organizational structure follows the strategic intent which ensures effectiveness.26 By contrast, the inside-out perspective is concerned with the allocation of resources and the exploitation of capabilities to achieve efficiency. This internal focus is thought to constrain strategy because the structure and processes of an organization influence the scope of the strategic scanning mechanisms available to management. Miles and Snow (1978: 8) put it the following way: “Over time, this limited search activity tends to become routinized in any organization, so that the organization may do some things very well (such as manufacture products efficiently) but lacks capabilities in other areas (such as developing new products).” (emphasis in the original)
According to this point of view, the strategy of tomorrow is thought to follow today’s structure as the latter constrains strategic choice. In this vein, Hall and Saias (1980) argue that structural characteristics, like bureaucracy, affect the organization’s perception of its environment and capabilities. Internal efficiency, represented by the need to have the right structure in place, becomes a precondition for market effectiveness. In other words, the organizational structure has to be modified before strategic planning can be introduced. Hall and Saias (1980) conclude by inverting Chandler’s thesis to assert that ‘strategy follows structure’. In sum, ‘structure follows strategy’ and ‘strategy follows structure’ are two maxims that are inevitably linked to research on strategy context. Strategy context provides challenges to managers and researchers as sensemaking in a complex and fast-changing world not only entails continuous self-reflection but also requires tools that support such reflections in the first place. This increases the awareness of managers of why certain decisions with regard to the organization’s strategy are made. Yet, we
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Chandler (1962: 14) argues in favor of this proposition by stating that “[t]he thesis deduced from these several propositions is then that structure follows strategy and that the most complex type of structure is the result of the concentration of several basic strategies.” Chandler’s maxim is based on an investigation of the disappointing diversification activities of four large American corporations (e.g., General Motors and Sears Roebuck). He concludes that the problem for those early diversifiers was not strategy, but structure. Only when moving from the established centralized structure to a multidivisional one, these corporations were able to fully leverage diversification strategy. In Chandler’s (1962: 314) words, “[u]nless structure follows strategy, inefficiency results. This certainly appears to be the lesson to be learned from the experience of our four companies.”
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should not be too confident in believing that strategy context is something that can be handled by employing the right tools. Lowendahl and Revang (1998, 1996) argue that a simultaneous increase in external (market) and internal (organization) complexity makes it difficult for managers to capture a clear picture of ‘what is really going on at the moment’. The process of complexification is largely driven by the increased importance of different kinds of knowledge and skills among employees as well as the necessary level of sophistication within the respective knowledge area. Likewise, increasingly unstable and dynamic environments that cause a high degree of uncertainty enlarge external complexification. For instance, a rapid diffusion of technology can transform and even integrate entire industries, as a glance at the computer and telecommunication sector proves. Lowendahl and Revang (1998, 1996) conclude that under these conditions strategy context is both fluid and flexible. 2.3.3 Strategy Process – How Are Strategies Formed? Contrary to strategy context, strategy process research has gained significant attention among scholars.27 Recall that the notion of strategy process looks at how strategic decisions are made and put into action and is less concerned with the content of the ‘final product’ that we label strategy. To review the strategy process literature, we rely on an overly linear conception of the strategy process that acts as a ground for our further argumentation. Certainly, there are also non-linear process models that stress the emergent character of strategy making (Eisenhardt and Brown 1998; Stacey 2003) or its political dimension (Knights and Morgan 1991). Yet, since these alternative conceptions are discussed in section 3.4 and this section is solely intended to introduce some basic terminology, we stick to the idealized linear conception. Following the work of Andrews (1971), scholars distinguish between the formulation and implementation phase. Both phases make up the more general process of strategy formation. Formulation typically starts with the agenda building process in which strategic issues gain the attention of management (Dutton and Duncan 1987). To gain the attention of decision makers, a strategic analysis needs to be conducted to reveal the strengths and weaknesses of the organization as well as the opportunities and threats that reside in the environment. The final organizational agenda consists of 27
For different reviews of the large body of strategy process literature see Chakravarthy et al. (2003), Chakravarthy and White (2002), Fredrickson (1983), Huff and Reger (1987), Lechner and Müller-Stewens (1999), and Van de Ven (1992).
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a variety of plausible strategic options that are legitimized throughout the organization. The next activity in the formulation phase, decision-making, concerns the evaluation of these options to finally make a choice. Strategy process research has produced a whole range of theories to cope with the question of how strategic decisions are made. While there is consensus among scholars that decisions and actions represent the core of strategy process thinking, there is major disagreement on how decisions are actually reached. Eisenhardt and Zbaracki (1992) identify four dominant perspectives in the strategic decision-making literature: rationality, bounded rationality, power and politics, as well as the garbage can approach. Especially the bounded rationality and garbage can approach challenge the linear nature of an ideal strategy process. While the rational approach assumes that actors enter decision situations with known objectives that determine the value of possible consequences, bounded rationality considers the cognitive limitations of people by stressing that goals are unclear, shift over time and the analysis of alternatives is limited because decisions tend to follow routinized procedures rather than systematic analysis. The political approach focuses on the process by which conflict among individuals with competing preferences is settled. Strategic choice is ultimately a political process in the sense that powerful persons get what they want and that people engage in tactics and use information to enhance their power. The garbage can model was first articulated by Cohen et al. (1972) and highlights the complexity and ambiguous nature of decisions. By calling attention to the importance of chance and luck, garbage can approaches model decisions as occurring as a result of a random confluence of everchanging problems, choice opportunities, solutions, and people. Decisions are not the result of boundedly rational individuals but emerge in a fuzzy and largely random confluence of events. Strategy implementation is concerned with translating the chosen strategic option into a number of strategic actions. In this sense, the output of the strategy formulation phase provides the input for implementation. Whereas formulation attracted a whole range of conceptual and empirical research, strategy implementation was treated as a minor issue for a long time. Lechner and Müller-Stewens (1999: 12) name two reasons for this. First, since formulation is often equated with decision-making, organizational processes that come after the decision are often neglected or perceived to be the responsibility of other research fields (e.g., organizational behavior). Second, because of the dominance of linear thinking, it is often assumed that once the ‘right’ decisions are made by top management, implementation is not a difficulty anymore and thus rather an issue of opera-
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tive management. This neglect of implementation partly changed with the introduction of the Balanced Scorecard (Kaplan and Norton 1996) that put the translation of theoretical strategy statements onto the agenda of scholars and executives. In his review of empirical and conceptual contributions to strategy implementation research, Noble (1999a, 1999b) identifies a structural perspective and an interpersonal perspective. Whereas the structural standpoint studies the effects of the formal organizational structure on implementation, the interpersonal view looks at how interpersonal processes (e.g., consensus building or leadership style) can help to realize strategy. Considering Chandler’s (1962) argument that organizational structure follows strategic moves, scholars like Drazin and Howard (1984) argue that an alignment of strategy and structure is a precondition for successful implementation. Organizational redesigns become necessary since changing strategies generate administrative problems that cannot be adequately handled by the current structure. To treat organizational redesign as a means for implementation is to assume that an appropriate structure alters organizational routines which lead to the desired behavior (Gupta 1987). Noble’s (1999a, 1999b) second broad perspective of implementation, interpersonal processes, touches upon a variety of aspects. Strategic consensus, for instance, is often considered a vital element of implementation because it provides a collective mindset of the strategic direction and thus enhances commitment. Efficient and effective communication is inevitable in achieving such a shared understanding. Leadership style is another interpersonal aspect and can influence the organizational climate and delegation of authority, both of which have a significant impact on strategy implementation. Besides organizational and interpersonal aspects, implementation researchers also stress the importance of reward systems, changes in resource allocation, and the development of new competences (Aaltonen 2003). To be sure, the list could be continued since tools like the Balanced Scorecard (Kaplan and Norton 1996) give reference to a variety of the listed issues. Last but not least, it is worth noting that strategy evaluation, the monitoring and measuring of strategic activities to take corrective actions if necessary, is often conceptualized as part of implementation (Daft and MacIntosh 1984; Kreikebaum 1997). To conclude, strategy process research, at least within the linear tradition, distinguishes between strategy formulation (i.e. agenda building and decision-making) and strategy implementation (i.e. strategic actions and strategy evaluation).
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2.3.4 Strategy Content – What Are Strategies all About? Strategy content does not refer to the planning of strategies by describing ‘how’ they are formed, but explains the subject matter of strategic decisions by investigating ‘what’ is decided in order to achieve a competitive advantage. For the purpose of this study, strategy content is defined as research that investigates the content of decisions regarding the goals and scope of strategy (Fahey and Christinsen 1986: 168). The major part of content research has sought to identify linkages among environmental conditions, strategic choice, and economic performance (Rumelt et al. 1994: 19-20). Accordingly, content scholars try to understand what drives success in the market and consequently enables organizations to reach a competitive edge. The central research question is usually some variant of the following: What performance results arise from following certain strategies under varying conditions? While economic performance is typically regarded the key measure for success (Rumelt 1982), some scholars have reached beyond a sole focus on financial indicators by including the satisfaction of other stakeholders as a performance measure (Freeman and Gilbert 1988). To think of strategy content solely as the subject matter of strategic decisions leaves little room for differentiation since the bulk of research that can be subsumed under this heading is too immense. Further differentiation is achieved when considering the levels on which strategy content research rests. Levels of Strategy Content Research: Due to the recent increase in cooperative relations among organizations, we refer to network strategy as the highest level of analysis. Moreover, approaches to strategy have attempted to distinguish between issues relating to the scope of the business portfolio (‘domain selection’) and those relating to competing within a specific sector (‘domain navigation’). The former set of decisions refers to a firm’s corporate strategy, whereas the latter set defines its business strategy (Grant 2002: 72). Functional strategy represents the lowest level of analysis and is concerned with improving the performance of a particular function (e.g., marketing) to align its resources so that the goals of a specific business strategy may be achieved. These levels are analytical distinctions that are not always found in practice, often because they are not needed (not every corporation maintains interfirm relations or is in more than one business). In the following, we briefly introduce strategy content research on each level. Given that Sydow and Ortmann (2001: 8) and Prahalad and Hamel (1994: 10) remark that due to the recent increase of interfirm networks it is inappropriate to view corporate strategy as the highest level of aggregation, it is worthwhile to include a network level into the analysis of strategy
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content. As firms increasingly cluster together into groups of more than one organization (Ring and Van de Ven 1992: 483), the modus operandi for remaining competitive increasingly depends on linkages between organizations. The question posed by network level strategy is whether and how the strategy of a multitude of firms can be aligned into a coherent whole. Network level strategy examines the relationships a company wants or needs to have with other market players, most of the time in so-called strategic networks. Striving to understand this relationship, researchers typically appreciate mechanisms like trust and power as they influence the conditions of coordination (Bachmann 2001). By means of these mechanisms, companies in networks align their strategies or develop them in a joint manner to reap the benefits of participation. Corporate level strategy is primarily concerned with assessing what set of businesses an organization should be in (Hofer and Schendel 1978: 27). For this question to make sense, a corporation needs to be in more than one business. Corporate level research supposes that firms possess a business portfolio that needs to be organized in a meaningful way. In today’s business environment, corporate strategy must deal with different operating divisions or even separate legal business units that need to be given some direction. Corporate strategy is even more relevant if we consider that many corporations are increasingly internationalized and need to align their business units with regard to cultural considerations (Barr and Glynn 2004). Consequently, corporate strategy considers the scope and resource deployments as well as the synergetic effects among different business units. Depending on the historical context, strategy scholars have developed different ideas about how to handle a business portfolio. Based on the move of many large corporations from functional to divisional organization in the 1960s, authors like Chandler (1962) emphasized the need for diversification, which resulted in the establishment of conglomerates with a portfolio of relatively unrelated businesses. The fashion changed in the 1970s when the Boston Consulting Group introduced portfolio analysis that offered conglomerates the possibility of managing the scope and relation of their businesses. In the 1980s, based on Peters and Waterman’s (1982/2004) book In Search of Excellence, corporate strategy moved on to call attention to restructuring around core businesses and the disposal of poorly performing divisions. Similarly, Prahalad and Bettis (1986, 1995) recognized that the limit to the diversity of businesses within a firm is dependent on strategic variety, while the latter is determined by the composition of the top management team. During the 1990s the concern to have a clear central business idea continued with the establishment of the core competence debate in which Prahalad and Hamel
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(1990) argued that the alignment of businesses on the corporate level depends on management’s ability to identity, cultivate, and exploit the competences that make growth possible. While the described historical pattern provides a fair sketch of the most important ideas on which corporate strategy rests, it should be clear that the overview is neither exhausting nor fully representative (Grant 2002). Business level strategy investigates how to compete in a specific industry or product/market segment. The overall scope of the corporation becomes less important as business strategy deals with product/market segmentation choices and the stage of product/market evolution instead of the breadth or depth of the business portfolio. As the name indicates, business strategy describes how a particular business intends to succeed in its chosen market segment against available competitors. This raises the question of what we consider to be the scope of a business. Here, it is useful to refer to the widespread notion of ‘strategic business units’. Rappaport (1986: 2) characterizes such units as relating to distinct products or services that serve a well-defined market segment. Strategic business units are product or service oriented and possess an identifiable set of consumers and set of competitors. In practice there is hardly ever a single business strategy for each product offering, if we refer to an ‘offering’ as the unit of customer choice. One reason for this is that business strategies are often defined for entire product lines that include several distinct offerings (Macmillan and Tampoe 2000: 171). A chocolate bar, for instance, can come in a variety of sizes all of which represent different product offerings to the customer. However, not all kinds of bars have their own business strategy. Varying sizes may be represented by different marketing strategies. Business strategies, however, look at how different functional aspects (e.g., marketing, research and development) need to be integrated to deliver a specific product and/or service for a market segment. One of the most well-known research projects in business strategy is the Profit Impact of Market Strategies (PIMS) database that was established based on a study of 57 corporations with 620 diverse businesses. Schoeffler et al. (1974) argue that the basic idea of PIMS is to provide management with information regarding the profit performance of a business under varying competitive conditions. To account for these conditions, the database analyzes the performance effects of 37 factors (among them market share and total marketing expenditures). The findings can be applied to show how profits are expected to vary, if a modification of performance factors changes the strategic position of a business. Besides PIMS, the work of Porter (1980, 1985) had a formative influence on business strategy. His notion of competitive strategy, that is, the search for a favorable
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competitive position in an industry, is tied to an analysis of the determinants of industry attractiveness and an examination of the influencing factors of a relative competitive position within an industry. Industry attractiveness can be explored by considering the elements of industry structure – the five forces – for a specific business, whereas the competitive position is shaped by a company’s ability to follow one out of three generic strategies: product differentiation, cost leadership, and market focus. Porter’s market-driven concept of competitive advantage was complemented by Barney’s (1991) remarks on the importance of resources for sustaining a favorable market position in a certain business. Strategic issues at the functional level refer to specific functional aspects (e.g., marketing strategy, information technology strategy, and human resources strategy). The principal focus is on the maximization of resource productivity through synergies and the development of distinctive competences within the respective function (Hofer and Schendel 1978: 29). Which competences are considered to be important varies by functional area and the stage of product/market evolution. Unlike in business strategy, where synergy was sought between different functions, functional strategy aims to develop synergies within functions, for instance by developing appropriate labor and staffing policies or rescheduling production. Functional strategies describe how the resources of a function can be deployed to realize the objectives of network, corporate, and business level strategies. Since functional strategy is often covered by research of specialized disciplines, like marketing or human resource management, and is less a subject of strategy content scholars, we do not address this type any further. Whilst each level stresses different aspects that we might consider in strategy content decisions, they also work together to form a whole. This opens strategic thinking for cross and even multi-level issues (Dess et al. 1995). Although the question ‘What is the basis of a good strategy?’ may be straightforward, a truly integrated strategy is hard to achieve and even harder to research as a variety of opinions about the nature of strategy content exist. Yet, at a fundamental level, there are two distinct approaches to content that underlie the majority of research on the outlined levels: the market and resource-based perspectives (see Figure 7). While marketbased theories follow an external focus by trying to find certain ‘rules of the market game’ that corporations can rely on, the resource-based view emphasizes the importance of a firm’s competences and capabilities to define the goals and scope of strategic choice. That is why we can presume that strategy content is concerned with the rules of the market and re-
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sources of the corporation that define what strategic decisions are supposed to be taken.28
Fig. 7. A Classification Scheme for Strategy Content Research
To show that research on strategic rules (market-based view) and strategic resources (resource-based view) occurred with regard to network, corporate, and business level research, we briefly discuss the different levels with regard to market and resource-based reasoning. On the network level, Gulati et al. (2000: 205) argue that a consideration of interfirm relationships allows a more refined understanding of industry structure and thus firm performance, whereas scholars like Lorenzoni and Lipparini (1999) and Lavie (2002) stress that the capability of a firm to interact with other companies, which they refer to as a relational resource, accelerates firms’ knowledge access. Within corporate strategy research, proponents of the 28
Hoskisson et al. (1999) claim that over time strategy content research oscillates between the market and resource-based perspective like the swing of a pendulum. While early strategy scholars like Chandler (1962) or Ansoff (1987b) focused on firms’ internal strengths and managerial capabilities, the rise of the industrial organization paradigm in the 1970s and 1980s led the pendulum to swing to the other extreme to come back to its original internal focus with the rediscovery of the resource-based approach by writers like Barney (1991) and Hamel and Prahalad (1990) in the 1990s.
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portfolio perspective, like Hedley (1977), take a market-based view by highlighting the importance of market share and market growth for aligning the loose federation of business units. Prahalad and Hamel (1990) are at odds with such a position as for them a corporation should represent a common resource-base that is applied to various businesses. On the business level, Porter’s (1980, 1985) notion of competitive advantage is fundamentally market driven and looks at the development of resources as a derivative activity. In contrast, Barney (1991) argues that a market-based view has neglected the impact of idiosyncratic resources on a firm’s competitive position. According to this view, business level strategy depends on leveraging a firm’s resource heterogeneity and immobility. To conclude, strategy content research has been concerned with either dismantling the rules of the market or finding the resources that provide a sustainable competitive advantage. This is evidently a simplifying classification, yet one that roughly reflects the field of strategy content. Analyzing Strategy Content – Strategic Rules and Strategic Resources: To conclude our discussion of strategy content, we need to state more precisely how we define strategic rules and resources. This is necessary since the deconstruction of strategy content in chapter six rests on a discussion of the nature of strategic rules and resources. Because we contrast an ‘empty’ understanding of strategic rules and resources from a ‘full’ one later on, we define both categories independent of their use. In their most general sense, we treat strategic rules as expressions of what is supposed to be done. They are codified interpretations of activity that are provided by scholars’ observation of strategy praxis. Strategic rules are regulative; they are typically paraphrased in the form ‘Do X’ or ‘If Y, do X’.29 Treating strategic rules as codified interpretations of strategists’ activity as observed by strategy scholars implies that such rules are not defined as aspects of praxis.30 Strategic rules are thus specific types of formulated rules that are devoid of contextualized meaning. That is why we claimed in section 1.1 that the ‘emptiness’ of strategic rules is not necessarily a bad thing but an inevitable (yet not recognized) feature of scholars’ interpretation of strat29
Porter (1980: 36), for instance, states that cost leadership is a valuable alternative if a firm has a “high relative market share or other advantages, such as favorable access to raw materials.” 30 Giddens (1984: 21) discusses the difference between both forms of rules. “Rules which are ‘stated’, as [regulative] above are interpretations of activity as well as relating to specific sorts of activities: all codified rules take this form, since they give verbal expression to what is supposed to be done. But rules are procedures of action, aspects of praxis.” (annotation added) Wittgenstein’s (1967: 81) argumentation is very similar: “[A]lso obeying a rule is a practice. And to think one is obeying a rule is not to obey a rule.” (emphasis in the original)
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egy praxis. If we agree that those strategic rules that are offered by scholars cannot be aspects of praxis (because they still await their application), it becomes more comprehensible why we define strategic rules as codified interpretations of strategy praxis. A quite similar line of reasoning applies to our definition of strategic resources. Following Penrose (1995: 25), we define resources as transformative capacities that are not yet employed in the routine course of social interaction. Because, for the most part, resources can be defined independently of their use (Penrose 1995), we focus on the manifestations of resources (e.g., as a machine, a patent or a business contract) that still await their application. These manifestations can be classified in tangible (the organizational ‘hardware’) and intangible (the organizational ‘software’) resources (Wernerfelt 1984: 172). Extending Wernerfelt’s work, Barney (2002, 1991) argues that tangible and intangible resources need to be valuable, rare, not imitable, and not substitutable to provide a sustained competitive advantage.31 To conclude, resources are manifestations of transformative capacities and thus reflect a necessary emptiness.
2.4 Strategy Context, Process, and Content – A Résumé The introduced dimensions provide a framework for understanding the rich accounts of research that haven been produced by strategy scholars so far. For the sake of this study, context, process, and content act as key constructs to reflect upon strategizing in organizations. We will come across many of the discussed issues in subsequent chapters. The three outlined facets are not exhausting but highlight distinct aspects of strategic thinking that need to be complemented and extended by other issues. In addition, the linkages among the dimensions are reciprocal and continuous; their separation is therefore of an analytical nature and not a straightjacket for future analyses (Ketchen et al. 1996: 22; Moore 1995). When conceiving the three perspectives in a three-dimensional way (Figure 8), there is need 31
Barney’s (2002, 1991) characteristics represent yet another ‘empty’ strategic rule. Then, one may ask why we not simply analyze the resource-based view as yet another strategic rule. As indicated in section 1.1, the underlying dominant logic (i.e. the ‘fullness of strategic resources’) is not concerned with the fact that resource-based reasoning is itself based on strategic rules that are generalizable across organizations. Fullness, here, refers to the way in which resources are defined within an organization. Because resources are defined as ‘given’ by the dominant logic, they are thought to be full of meaning before any application within the organization.
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to foster diagonal, vertical, and horizontal moves to connect the different boxes. Especially, the dichotomy between strategy process and content calls for integrative research. Recognizing that the way strategies are formed influences the input and outcome of strategic decisions (and thus strategy content) may be a first move in this direction. Such moves can only serve to strengthen the scholarly basis of strategic management (Freeman and Lorange 1985: 32).
Fig. 8. Strategy Context, Process, and Content at a Glance
The consequences of this tripartite framework are depicted in Figure 9. We distinguish between first-order observations (questions in a theory) and second-order observations (questions about a theory). First-order observations aim to identify particular external and internal circumstances that influence strategy context and/or describe existing strategy processes and/or try to define those strategic rules and resources that help organizations to create a competitive strategy content. By contrast, second-order observations question the very nature of strategy context, process, and content by asking how these dimensions need to be conceptualized to come up with reasonable first-order observations. Such investigations aim to find out in which way strategy context, process, and content can be defined. As indicated in chapter one, this treatise exclusively discusses second-order observations by conducting research about strategy research.
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Fig. 9. Strategy Context, Process, and Content and Scholarly Inquiry
Whereas this chapter has provided the reader with some basic terminology and definitions that are relevant for strategy scholars and are needed to achieve mutual understanding, the next chapter takes a more normative stance by discussing the dominant logics of strategy research. When referring to first and second-order observations, we can think of the dominant logics as the ‘conventional’ answers that have been given to second-order questions. To facilitate orientation and show how the different analytical distinctions that were used up to this point interrelate, Figure 10 depicts the connection between strategy paradigms (section 2.2) and strategy context, process, and content (section 2.3) as dimensions of analysis. As discussed in section 2.3, although the ‘planning’ and ‘forecasting’ paradigms were primarily concerned with process research and the ‘market-based’ as well as the ’resource-based’ paradigms were predominantly focused on content, it would be oversimplifying to believe that there was no content research in the 1960s/1970s or process research in the 1980s/1990s. Barney (1991: 113), for instance, explicitly linked formal strategic planning to resource-based reasoning. Likewise, Hofer and Schendel (1978) introduced a variety of strategic rules and thus linked their work to strategy content research. Hence, paradigms only reflect a certain research focus but do not entirely exclude any of the three analytical dimensions (i.e. strategy context, process, and content). This becomes even more obvious if we look at the dominant logics that cut across the various paradigms and thus reproduce certain assumptions with regard to strategy context, process, and content over time. Strategic realities, which are represented by the citation of well-known works in Figure 10, are the ‘building blocks’ of dominant logics.
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Fig. 10. Strategy Paradigms and Strategy Context, Process, and Content
The next chapter takes the reader on a journey through the dominant logics of strategy context, process, and content. We will not simply explain the dominant logics (for this see section 1.1) but try to find prove for our claim that many well-known strategy scholars have given reference to the logics’ central assumptions. In this sense, chapter three attempts to give substance to our assertion that past and present strategy research has given reference to these logics. By doing so, chapter three paves the way for our further argumentation.
3 The Dominant Logics of Strategy Research
“The most difficult thing in science, as in any other field, is to shake off accepted views.” George Sarton (1959: 88, cited in Gioia and Pitre 1990: 584)
Based on our remarks in chapter two, we demonstrate in this chapter how research on strategy context, process, and content is embedded in dominant logics. To reach beyond rhetoric and to avoid oversimplified arguments, we show not only that dominant logics exist in some strategic realities but particularly in those realities that strategy scholars most often refer to. If we believe Prahalad and Hamel (1994: 6) that many assumptions that traditional and recent strategic realities rest on may be incomplete and/or outdated, we need to become familiar with these assumptions before unfolding critical arguments. Discussing these beliefs is inevitable if we are to value the novelty of alternative ways of reasoning later on. As a basis for identifying dominant logics, we first introduce a recent citation index that represents the 20 most widely cited publications in strategy research (section 3.1). We then illustrate that the assumptions and beliefs that are disseminated through these publications are embedded in the dominant logics: the ‘necessity of adaptation’ (section 3.2.1), the ‘primacy of thinking’ (section 3.2.2), and the ‘fullness of strategic rules and resources’ (section 3.2.3). In other words, we show that those publications to which strategy scholars most often refer comply with the dominant logics that underlie our analysis. Since these dominant logics do not appear out of nowhere, we discuss how they gain and sustain their prevailing character (section 3.3). We thereby demonstrate that science in general and strategic management in particular is a ‘political’ and an overly ‘sticky’ business. Because other scholars have also criticized the three dominant logics, we review these critiques and demonstrate that existing critical approaches do not recognize the need to renounce these logics on account of their disregard of their own paradoxical nature (section 3.4). We show that the dominant logics subside once we uncover paradox. This discussion demon-
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strates that there is a need to introduce deconstruction as a ‘method’ for exposing paradoxes and thus acts as a ‘bridge’ to the theoretical introduction of deconstructive thinking in chapter four.
3.1 Where to Look for Dominant Logics? To start with, we should recall that dominant logics refer to the invisible, taken-for-granted assumptions and basic belief structures that scholars refer to when theorizing in strategic management. This invisibility is well described by Kuhn (1996) who, in his opus magnum, The Structure of Scientific Revolutions, characterizes the nature of normal science, which dominant logics are part of, as follows: “No part of the aim of normal science is to call forth new sorts of phenomena; indeed those that will not fit the box are often not seen at all.” (Kuhn 1996: 24) This implies that to see novel phenomena – and thus to foster the development of strategy research – we need to see the ‘box’ first. To paint a fair but coherent picture of this box, we have to identify some solid ground on which strategy research rests. A good point of departure is to look for journals that have had a large impact on the field (Ofori-Dankwa and Julian 2005: 1314). In a recent survey among 500 strategy scholars, Michel and Chen (2004: 6) report that over 47% of the respondents ranked the Strategic Management Journal (SMJ) as the most influential publication.32 Comparing the study of Michel and Chen (2004) to the one by Franke et al. (1990) demonstrates that the
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The two closest ranked journals are the Harvard Business Review with 13% and the Academy of Management Journal with 12%. Further evidence of the dominance of the Strategic Management Journal can be found when referring to Starbuck’s widely cited ranking of social science journals where the Strategic Management Journal ranks 40th (out of 509 journals). For further information see http://pages.stern.nyu.edu/~wstarbuc/cites.htm. Aware of the limitations of previous studies of journal influence (e.g., the focus on a single sub-area of research over a restricted number of years and the inconsistency in using evaluation criteria such as subjective ratings of department chairpersons), Podsakoff et al. (2005) use the ‘objective’ measure of citation frequency to account for the influence of management journals. Out of a sample of 28 journals over a time period of 19 years (1981-1999) the Strategic Management Journal shows an increase in influence (from rank eight during 1981-1984 to rank four during 19951999 in terms of total citation counts in the 28 journals). Based on a survey among tenured professors in strategic management, MacMillan (1989, 1991) and MacMillan and Stern (1987) even rank the SMJ as the most outstanding outlet for research in strategic management.
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SMJ’s lead as the number one journal for strategy research has widened. A good number of surveys rank the SMJ among the five most influential journals in management (Franke et al. 1990; Johnson and Podsakoff 1994). Tahai and Meyer (1999: 279) even conclude their citation analysis with the recognition that the SMJ “has developed as the predominant academic journal influencing the field of management.” Of course, choosing the SMJ as a vantage point comes at the price of neglecting important pieces of work from other journals. It is possible that changes in the intellectual structure of research could occur if articles from a wider range of journals were included. Nevertheless, since we are looking for mainstream strategy research, the SMJ provides a good, if not the most appropriate, object of analysis (Furrer et al. 2002: 20). If we take the SMJ as a point of reference, we need to gain an impression of its underlying intellectual structure. Starting from the hypothesis that the bibliographic references cited in articles are a reliable indication of their influence on scholars’ research, Ramos-Rodríguez and Ruíz-Navarro (2004) identify the most influential publications that were cited in articles published in the SMJ.33 Their bibliometric study from the first days of the journal in 1980 until recently published work in 2000 reveals 50 publications that shaped the intellectual structure of the strategy field enormously. We concentrate on the 20 most cited publications between 1980 and 2000 according to absolute and relative citation frequency as a basis for argumentation (see Figure 11). Against the background of this study, these publications are treated as strategic realities; they reflect scholars’ assumptions regarding the nature of strategic management (see section 1.1).
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There may be a variety of other influences (including colleagues, former professors, life experience) as Tahai and Meyer (1999: 279) note. However, citing an article or book represents a public acknowledgement of an influence, while other factors cannot be measured as easily as citations. In addition, a citation analysis does not reveal whether the cited document is treated positively in the text and whether the document is central or peripheral to the content of the analyzed text.
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Fig. 11. The Most Cited Publications in the Strategic Management Journal (adopted from Ramos-Rodríguez and Ruíz-Navarro 2004: 989).
Certainly, no analysis comes without limitations and it is of fundamental importance to recognize these limitations when interpreting research results. Our picture of the 20 most cited documents in strategy research is a rather rough one since we neglect changes in influence over time. The works we refer to represent the 20 most cited works during the entire 21 years covered by the study of Ramos-Rodríguez and Ruíz-Navarro (2004). Of course, there are gains and losses in influence over the length of the study period as Ramos-Rodríguez and Ruíz-Navarro (2004: 990) remark themselves. Yet, even when adopting a dynamic view, 14 out of the 20 documents are still among the top-cited documents when mapping citation frequency only for the 1994-2000 sub-period. A similar picture arises when looking at the 1987-1993 sub-period (17 out of the top 20) and the early days of the journal from 1980 to 1986 (12 out of the top 20). We thoughtfully accept the aggregated picture for the entire period (19802000) as we do not want to have a ‘sub-period snapshot’ of the most influential documents, but a well-balanced longitudinal perspective that accounts for the fact that dominant logics develop over time and do not suddenly ‘fall from the sky’. Indeed, our discussion in section 3.3 will demonstrate that the development of dominant logics is a lengthy process
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depending on a variety of influences (e.g., the reputation of strategy scholars and the unquestioned acceptance of the assumptions that are attached to the dominant logics). Besides variations in taste preferences that might account for gains and losses in influence, there is also a numerical problem. Scholars who publish at an early point in the development of a field have a better chance of being cited. One could resolve this problem by dividing the total number of quotations by the number of years the document has been published. This, however, is a risky approach since the SMJ not only increased the number of issues per year (and thus article output) but also the overall number of citations per article.34 This trend combined with the fact that the SMJ started publication in 1980 and consequently does not adequately represent the debates of the 60s and 70s leads to the conclusion that an adjustment of citation frequency for the years the document has been published underrepresents the early ‘classics’ of the field. Authors like Ansoff (1965/1987b) or Andrews (1971) would suffer from the fact that they were not en vogue at the time (a) the SMJ started publishing, (b) the SMJ increased its output in terms of issues per year, and (c) authors increased the number of citations per article.35 34
The SMJ increased output from 4 issues in 1980 to 12 issues in 2000 and increased the average number of citations from 25,57 in 1980 to 75,27 in 1999 (Phelan et al. 2002: 1163). 35 Take the following example: Barney’s (1991) article has a total citation frequency of 88 and has been published for 10 years (1991 until 2000), which yields 8.8 citations per year for the 10-year period. Andrews’s (1971) book, by contrast, has a total citation frequency of 80 and has been published for 30 years (of which only the 1980 to 2000 period is of relevance to this bibliometric study), which yields 3.81 citations per year for the 21-year period. Barney’s (1991) ‘success’ is mostly due to the fact that his contribution is a trail-blazing one for the resource-based view that gained much popularity during the 90s when there were three times as many issues of the SMJ per year as in the 80s and each article contained three times as many citations as in the 80s. Although, Andrews (1971) had more time to collect citations in the SMJ than Barney (1991), he was not among the advocates of a paradigm during the overall publication period of the SMJ as Barney (1991) was in the 90s. Andrews’s breakthrough came with the planning paradigm of the 60s (see also Learned et al. 1969) and is thus not sufficiently represented by SMJ-citations. It thus needs to be argued that articles that are commonly associated with a paradigm (e.g., Barney 1991 with resource-based thinking) get heavily cited as long as the paradigm is en vogue. In the end, this would lead to an overrepresentation of the authors of the market and resource-based view, as these are the paradigms that fall into the publication period of the SMJ. Without an adjustment, works that are published toward the end of the 1980-2000 period ‘suffer’ from the fact that they had little time to collect citations.
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3.2 Exploring the Dominant Logics of Strategy Research In the following, we consider the identified 20 documents as those strategic realities by means of which we examine whether research in strategic management is based on dominant logics. If SMJ-authors heavily cite these documents and this journal is considered to be the most important outlet for strategy researchers, there is reason to believe that if we show that these documents reflect the basic belief structures of the dominant logics, we can assume that the underlying assumptions really are dominant. It needs to be recognized that the judgment whether a strategic reality submits to a dominant logic depends on our interpretation. Especially when considering that deconstruction argues that texts can have more than one meaning, this is a necessary limitation to our analysis. As we are looking for underlying research assumptions, we face the problem that premises scholars attach to their work are often not directly communicated. Statements like ‘I regard the market to be objectively given’ or ‘I think the strategic concepts introduced in my book are valid independent of their context of application’ rarely exist. Therefore, it is crucial to read between the lines and to refer to examples as well as methodological remarks to come up with a reasonable judgment. 3.2.1 Strategy Context – The Necessity of Adaptation! Recall that the ‘necessity of adaptation’ represents the widely held assumption that the environment exists in an objective manner and that organizations need to adapt to this one environment to achieve appropriate ‘strategic fit’. Companies make up their environment in the sense that all organizations are part of one environment. This environment represents the point of reference for strategy formation. When looking at the identified 20 strategic realities, we stumble over various statements that represent this logic. Williamson (1975: 20) argues that “I assume, for expositional convenience, that ‘in the beginning there were markets’.” For him the market is given in a sense that it provides an origin all actors can refer to. The market is ‘there’ regardless of whether organizations are ‘there’. The implications of this perspective for strategy are far reaching and mostly highlight the need to achieve a match between organization and environment. Hofer and Schendel (1978: 4) argue that “[t]he basic characteristics of the match an organization achieves with its environment is called its strategy” and Ansoff (1987b: 24) regards strategy as being concerned “with establishing an ‘impedance match’ between the firm and its environment.” The
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logic behind these statements is the concept of ‘environmental fit’ that draws a distinction between environment and organization. Lawrence and Lorsch’s (1967) contribution outlines a contingency theory of organizations by investigating what kind of organization it takes to deal with certain environmental circumstances. By following an open systems approach, they argue that “an important function of any system is adaptation to what goes on in the world outside.” (Lawrence and Lorsch 1967: 7) Although, both authors explicitly dismiss an organization theory that is based upon a single best way of organizing in all situations, the contingency approach they outline still assumes that there is a one best way, though one that is bound to the circumstances of a specific environment. The industry forces organizations to adopt a particular strategy and structure; the environment demands and the organization reacts accordingly.36 Nelson and Winter (1982: 14) in their contribution An Evolutionary Theory of Economic Change provide a widely recognized critique of neoclassical economic modeling. In line with evolutionary thinking, they conceptualize the market as a ‘selection environment’ that defines the routines which determine the conduct of organizations. “Given a flow of new innovations, the selection environment thus specified determines the way in which relative use of different technologies changes over time.” (Nelson and Winter 1982: 263)
Determination in their model also runs the other way: firms determine the market to a certain extent. Thus, Nelson and Winter’s (1982: 18) core concern is with “the dynamic process by which firm behavior patterns and market outcomes are jointly determined over time.” This makes their model a kind of co-evolutionary framework. Although, the co-determined nature of the environment reaches beyond much traditional thinking in economics, it is still ‘determination’ that makes the core of their theory. In a world of determination, regardless whether we conceptualize it as a joint or a simple one-way type, there is only one environment that provides the Archimedean point for strategy formation. Firms may have a saying in constituting the environment, yet the industry conditions, that are partly the outcomes of firms’ decisions, are relevant for all market players and consequently determine their conduct.
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Strategy scholars have followed this contingency approach as the following statement indicates: “The field needs to begin to ask and test scientific questions: if a manager finds conditions X, Y, and Z, then he is most likely to be more effective if he follows strategy ‘A’ than ‘B’.” (Fahey and Christinsen 1986: 169) Hofer (1975) even outlines a contingency theory of business strategy.
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The environment/organization distinction becomes most obvious when referring to Andrews’s (1971) well-known SWOT analysis, where strengths and weaknesses refer to the inner dimension and opportunities and threats define the outer dimension. Both dimensions are clearly separated, representing the notion of a boundary surrounding an organization adapting to its environment ‘out there’. In a similar way, Thompson (1967), who follows an open systems approach, views the environment as something organizations need to adapt to in order to achieve fit. He argues that the organization deals with variables of the environment over which it has no formal authority or control. This implies that “[t]he organization must conform to the ‘rules of the game’ or somehow negotiate a revised set of rules.” (Thompson 1967: 148)37 The ‘necessity of adaptation’ is also reflected in Chandler’s (1962) strategic reality since he states that “because all of them [his examined organizations] operated within the same external environment, these chapters in the collective history of the industrial enterprise [...] followed roughly the underlying changes in the over-all American economy.” (Chandler 1962: 385, emphasis and annotation added)
Elsewhere in his book he covers the question why strategies come into being in the first place and argues that new strategic moves are necessary to respond to the opportunities and threats created by the environment (Chandler 1962: 15). It is thus reasonable to assume that Chandler views the environment as something organizations need to adapt to while making sense of their strategy. Based on the work of Chandler, Rumelt (1974) argues that because of certain developments in the environment (e.g., growth of markets and changes in technology) firms face a need to diversify. Diversification is an adaptive response to the needs of the market. The ‘necessity of adaptation’ can also be discussed with regard to the market and resource-based paradigm. Advocates of the resource-based view implicitly refer to the adaptation-based logic by defining the value of resources with regard to a company’s environment:
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Thompson’s (1967) notion of adaptation reaches beyond a simple determinism. He states that “[w]e must emphasize that organizations are not simply determined by their environments. Administration may innovate on any or all of the necessary dimensions, but only to the extent that the innovations are acceptable to those on whom the organization must and can depend.” (Thompson 1967: 148) The environment may be altered, however, only to the extent that the environment accepts these ‘rules of the game’. In other words, Thompson does not reach beyond the assumption that there is only one environment that is relevant for all organizations.
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“Firm attributes may have the other characteristics that could qualify them as sources of competitive advantage (e.g., rareness, inimitability, nonsubstitutability), but these attributes only become resources when they exploit opportunities or neutralize threats in a firm’s environment.” (Barney 1991: 106, emphasis in the original)
According to this logic, resources are only valuable if the environment regards them as such. Although Barney remains remarkably silent on the question which environmental characteristics make a resource valuable, other advocates of the resource-based view define ‘customer value’ as the condition under which resources can be a source of sustained competitive advantage. Stalk et al. (1992: 62) argue that a “capability is strategic only when it begins and ends with the customer.” In this sense, the customer becomes objectified and the organization is once again in search of ‘environmental fit’. Organizations are thought to possess unique bundles of resources which are thought to be determined by the environmental context. A similar way of reasoning applies to the market-based view. Porter (1980, 1985) treats industry structure as an objective entity firms need to adapt to. He explicitly stresses the importance of ‘environmental fit’ which he sees as one important variable in determining the appropriateness of a competitive strategy (Porter 1980: xix). According to Porter, the industry environment determines the competitive rules of the game: “Industry structure has a strong influence in determining the competitive rules of the game as well as the strategies potentially available to the firm. Forces outside the industry are significant primarily in a relative sense; since outside forces usually affect all firms in the industry. […] The intensity of competition in an industry is neither a matter of coincidence nor bad luck. Rather, competition in an industry is rooted in its underlying economic structure and goes well beyond the behavior of current competitors.” (Porter 1980: 3, emphasis added)
In Porter’s strategic reality the industry is perceived as an objective structure that circumscribes the actions of organizations located within it. There is much about the environment but little about the way organizations create this environment. Notwithstanding our discomfort with the underlying assumptions of Porterean industrial organization economics, it needs to be recognized that Porter also modified the traditional assumptions of the Mason-Bain paradigm by allowing conduct (strategy) to influence industry structure. “Traditional IO theory took industry structure as exogenously given, and held that the firm’s strategy and performance were fully determined by this structure. […] Policy practitioners, on the other hand, have long observed that firms can fundamentally change the structure of their industry through their actions. […] However, firms cannot always change industry structure, and thus under-
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The Dominant Logics of Strategy Research standing industry structure in the traditional IO sense is crucial.” (Porter 1981: 613, emphasis in the original)
At first glance, this seems to move Porter beyond the ‘necessity of adaptation’ because organizations are allowed to change the industry structure by means of their actions. Regrettably, Porter does not really take this assumption seriously nor allows it to unfold to its full potential. First, he assumes that there are certain structural parameters (for instance determined by technology) that cannot be altered. Hence, industry evolution can take different paths, however only within the ‘space’ provided by these parameters (Porter 1981: 616). Second, even though he allows for modifications of the industry structure, he still believes that the modified structure is relevant for all market players. The premise of determinism is not abandoned but weakened by allowing organizations to influence the environment. This, however, does not imply that organizations create their environment. A similar way of reasoning applies to Scherer (1980) who is less concerned with strategic management but outlines an economically focused theory of industrial organization. Similar to Porter he assumes that “[c]onduct in turn depends upon the structure of the relevant market.” (Scherer 1980: 4) Even though he acknowledges the feedback effects of firm conduct on market structure, it needs to be doubted that he moves beyond an adaptation-based view. He argues that “[b]y introducing a much richer complement of independent variables, we should be able to predict conduct from structure, and performance from conduct, with greater precision and confidence.” (Scherer 1980: 6)
Scherer does not really challenge the underlying logic of traditional, Mason-Bain-type, industrial organization thinking. Although he uses a more sophisticated analysis and emphasizes firm conduct more than Bain (1968) does, there is no critical discussion of the basic premise that market structure determines firm conduct. In their much-cited contribution A Behavioral Theory of the Firm, Cyert and March (1963: 1) remark that “[i]f the market completely determined the firm’s economic behavior, these internal attributes would be little more than irrelevant artifacts.” At first, this seems to move the authors beyond the ‘necessity of adaptation’ as they assume that firms have some control over the market. While Cyert and March outline a theory of the firm, they do not discuss this issue in any more detail but note that for them the environment consist most of all of other organizations. Then, the question remains if these organizations make up the environment in such a way that all social actors are parts of one reality. From our perspective it needs to be
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doubted that Cyert and March really dismiss this assumption as they outline a variety of models to predict organizational behavior in the environment. In a world of non-environmental determinism there is no room for prediction of organizational moves because organizations make up their own environment and do not belong to some overarching ‘market’ that is controlled by invariant laws. A contribution that deserves special attention is the one by Pfeffer and Salancik (1978). In their book The External Control of Organizations – A Resource Dependence Perspective, they have much to say about the relation between an organization and its environment. Their basic argument can be summarized as follows: “Because organizations import resources from their environments, they depend on their environments. Survival comes when the organization adjusts to, and copes with, its environment, not only when it makes efficient internal adjustments.” (Pfeffer and Salancik 1978: 19)
At first this sounds much like an argument that is based upon adaptation logic. Pfeffer and Salancik (1978), however, are quite aware that many scholars of organization theory tend to view the environment as something given, an assumption they criticize. Accordingly, they suggest that organizations also have an influence on their environment. “Perhaps one of the most important influences on an organization’s response to its environment is the organization itself. Organizational environments are not given realities; they are created through a process of attention and interpretation.” (Pfeffer and Salancik 1978: 13)
Again, we face the question whether the authors really make a case against the notion that there is one reality all organizations share or whether they assume that, even though firms can influence their environment, this environment remains the focal point for all organizations. On the one hand, Pfeffer and Salancik (1978: 72) take much care to point out that “[t]he events of the world around us do not present themselves to us with neat labels and interpretation” but that organizations give meaning to their environment. On the other hand, they follow an open systems approach in line with adaptation-based logic and put much emphasis on the role of constraints. A position that reaches beyond the ‘necessity of adaptation’ does not claim that what happens in an organization “is also a consequence of the environment and the particular contingencies and constraints deriving from that [one] environment.” (Pfeffer and Salancik 1978: 3, annotation added) Throughout their discussion it remains unclear whether the environment really is an organizational construction.
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The work of Miles and Snow (1978) explicitly addresses the problem of adaptation-based logic. They try to reach beyond the rigid view of the organization-environment relationship by arguing that “[o]rganizations act to create their environment: Until recently, much organizational research has been based on the assumption that organizations respond in predictable ways to the conditions which surround them, adjusting their purpose and shape to meet market and other environmental characteristics.” (Miles and Snow 1978: 5, emphasis in the original)
At the same time they also claim that organizations need to adapt to their environment to achieve ‘fit’. “Organizational survival may be said to rest on the quality of the ‘fit’ which management achieves among such major variables as the organization’s product-market domain, its technology for serving that domain, and the organizational structure and processes developed to coordinate and control technology.” (Miles and Snow 1978: 19)
This runs counter to their original premise that organizations create their environment. Throughout their book it remains largely unclear whether they move beyond adaptation-based research or not. What can be said for sure is that they recognized the problem of conceptualizing the environment as a determining force at an early point in time. The contribution of Penrose (1959/1995) discusses the relation between environment and organization in a similar way. Towards the end of her book, Penrose argues that “[t]he environment has been treated not as an objective ‘fact’ but rather as an ‘image’ in the entrepreneurs mind; the justification for this procedure is the assumption that it is not the environment ‘as such’, but rather the environment as the entrepreneur sees it, that is relevant for his actions.” (Penrose 1995: 215)
According to this perspective, there is no need to adapt to an external environment because the organization creates its environment. Unfortunately, Penrose (1995: 217) does not really uncover the circular relationship between environment and organization as she argues that managers need to interpret their environment correctly in order not to fail in their efforts. Then the question remains: Who determines whether the environment has been interpreted in a correct way? Regrettably, Penrose discusses these issues in no more depth. We can thus only assume that even though she recognized the importance of moving beyond the assumption of a given environment, there still is a smack of determinism in her arguments; as she argues herself: “There can be no question that for any particular firm the environment ‘determines’ its opportunities.” (Penrose 1995: 217)
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Last but not least, Quinn’s (1980) contribution needs to be discussed. Although Quinn is not much concerned with the organization/environment-relation, he presents determinants of the strategy process some of which are “dictated by the industry and its environment” (Quinn 1980: 43) and consequently cause similarity within one industry. Quinn assumes that these determinants have a significant influence on the strategy process of an organization. In reverse, this implies that firms need to adapt to these circumstances in order to manage their strategy process in a meaningful way. We can thus argue that Quinn (1980) subordinates to the ‘necessity of adaptation’. To conclude, even though some scholars have challenged the ‘necessity of adaptation’, none of the outlined strategic realities fully reaches beyond the linear logic between environment and organization. Most scholars that challenge the notion of ‘fit’ still present arguments that reveal a conceptualization of the environment that is based on the assumption that all organizations are part of one common reality. Yet, a serious treatment of the circular relation between both spheres would uncover the paradoxical foundation of the environment-organization bond. Henderson and Mitchell (1997: 8) put it in a nutshell by contending that strategy research “has taken primarily an adaptive view of organizational and environmental change, arguing that many firms can adapt their strategies and capabilities as competitive environments change.” 3.2.2 Strategy Process – The Primacy of Thinking! Recall that the ‘primacy of thinking’ argues that strategies are thought to be developed as a grand plan based on forecasts and implemented thereafter. The process can be split up into a number of sub-activities which, if followed in the right manner, lead to the construction of a successful strategy. Thinking is privileged over action because strategies are formulated through a tightly controlled process of human thought. It is believed that strategy is initiated by top management and based on a rational analysis of the environment and the organization. The strategy process is viewed as an intentionally designed meta-plan forecasting the future direction of a company. Put differently, formulation and implementation follow each other in a linear manner like a cause determines its effect. Bromiley and Papenhausen (2003: 415) notice that rational optimization has much in common with strategy. This implies that authors often make the assumption that agents identify certain alternatives, evaluate them to then choose ‘the best’ of all possible alternatives. This procedure assumes that preferences exist in a fully accessible way before decisions are made.
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Central to the distinction between formulation and implementation is the premise that structure follows strategy. According to Chandler (1962: 14), who raised the need for strategic planning by arguing that “structure follows strategy and that the most complex type of structure is the result of the concentration of several basic strategies”, changes in the environment create the need for new strategic moves (formulation) which in turn require an adaptation of the organizational structure (implementation). Only when the strategy is known, management can begin to specify the appropriate structure of an organization. “It seems wise here to emphasize the distinction between formulation of policies and their implementation. The formulation of policies and procedures can be defined as either strategic or tactical. Strategic decisions are concerned with the long-term health of the enterprise. Tactical decisions deal more with the day-to-day activities necessary for efficient and smooth operations. But decisions, either tactical or strategic, require implementation by an allocation or reallocation of resources – funds, equipment, or personnel.” (Chandler 1962: 11, emphasis in the original)
The assumption is that each time a new strategy is formulated, the organizational structure is changed accordingly to fit the novel strategic needs. Rumelt (1974: 149) is in line with these arguments (“The data gave strong support to Chandler’s proposition that ‘structure follows strategy’”) but adds that structure may also affect strategy. This is because certain structural moves, which occurred due to small (not strategically intended) variations in products, might lead to further diversification activities. That strategy follows structure does not imply that the thinking/action opposition is reversed, but that firms are more likely to diversify further than if they had not reorganized. Structural reorganization is a ‘nucleus’ for subsequent strategic moves. Miles and Snow (1978: 7) agree with the early Mintzbergean perspective that strategy is a pattern in a stream of major and minor decisions about an organization’s future domain. Their association with the ‘primacy of thinking’ becomes most obvious if we consider that Miles and Snow (1978) proclaim, with reference to Chandler (1962), that strategy can be inferred from the behavior of an organization. They argue that one can “conceptually associate strategy with intent and structure with action.” (Miles and Snow 1978: 7, emphasis in the original) Decisions that are made at a certain point in time tend to harden to become the relevant aspects of tomorrow’s organizational structure. Another author who is commonly associated with the formulation/implementation opposition is Andrews (1971) and the proponents of the so-called ‘design school’, to use Mintzberg’s (1990a) terminology.
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Like Chandler, Andrews sees corporate strategy as an organization process from which two important aspects can be separated. “The first of these we may call formulation, the second implementation. Deciding what strategy should be may be approached as a rational undertaking. […] The process described thus far assumes that strategists are analytically objective in estimating the relative capacity of their company and the opportunity they see or anticipate in developing markets.” (Andrews 1971: 24-25, last emphasis added)
Andrews advises managers to identify the underlying market opportunities and threats as well as the strengths and weaknesses of a company as objectively as possible. Based on this information, management produces several strategic alternatives of which one is to be selected. Mintzberg (1990a: 175-179) reminds us of the key premises that underlie Andrews’s conception of the strategy process. First, Andrews understands strategy formation as a tightly controlled and conscious process of thought. Strategy is associated with intentionality because action follows once a strategic alternative has been chosen. Second, responsibility for that control must rest with the strategist (usually the chief executive officer).38 Third, strategy formation must be kept simple. This premise directly refers to the second one because if strategy can be controlled by one mind, the resulting process is kept rather uncomplicated. And fourth, strategies should be explicitly articulated throughout the organization because an unstated strategy does not require actions and thus results in ineffectiveness (Andrews 1971: 110). A similar rational approach is suggested by Ansoff (1987b). Unlike Andrews, he highlights the influence of staff planners instead of the manager and provides a more detailed and formalized approach to planning supported by a range of analytical techniques (Mintzberg 1991: 463). Notwithstanding these differences, Ansoff puts much emphasize on the linear nature of the strategy process. This is nowhere more evident than in his action cycle model of strategy development which divides the entire strategy process into a number of small steps. Ansoff (1987b: 178) refers to this method as a ‘cascade’ that starts from a rather broad choice of the firm’s future business areas and progresses to generating specific projects (e.g., newly developed products or service innovations), which are implemented at the end of the process. This formalized approach has also been applied by Hofer and Schendel (1978: 5) who argue that “[i]f strategy is important, its formulation should be managed and not left to chance. In this regard, organizations need formalized, analytical processes for formulating ex38
The limitations of this ‘command and control’ model are discussed by Levy et al. (2003: 98) and Stoney (1998: 4).
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plicit strategies.” Throughout their book they describe a variety of such formalized analytical concepts. Considering their numerous references to the work of Andrews and Ansoff, it is obvious that these concepts are based on a linear notion of causality.39 Moving to the Porterean market-based view, we rarely find explicit statements regarding the nature of the strategy process as Porter is more concerned with strategy content.40 Nevertheless, at the very beginning of his book Competitive Strategy, Porter (1980: xiii) argues that strategy “may have been developed explicitly through a planning process or it may have evolved implicitly through the activities of the various functional departments of the firm.” (emphasis added)
This seems to place him somewhere in the middle of the deliberate/emergent strategy debate as he conceives both forms as an either/ordecision and does not highlight their interrelated nature, as do Mintzberg and Waters (1985: 258). Yet, Porter (1980: xiii) qualifies this statement by arguing that the sum of the different departmental approaches rarely equals ‘the best’ strategy for an organization. Because of this, there are significant benefits to gain from an explicit (and thus planned) approach to strategy. Porter (1980: xiv) sees his strategic reality as a way to predict industry evolution. Prediction means that strategic moves are not left to chance but are deliberately planned. In Porter’s (1996: 77) strategic reality, strategy requires “strong leaders that are willing to make choices.” Such choices 39
The formulation/implementation distinction is most evident in Ansoff’s book Corporate Strategy which is divided into two parts: Strategy Formulation and Strategy Implementation. Ansoff’s (1987b) belief in the rational capacity of human beings to forecast – a view from which he rarely deviates (Ansoff 1991) – becomes obvious when considering the advice he gives for diagnosing environmental turbulence: “The procedure for diagnosing environmental turbulence is to circle the observed values which best describe the condition of each of the eleven attributes [which cause environmental turbulence]. For purposes of capability diagnosis, the circled values should represent the anticipated condition of the environment five to seven years into the future.” (Ansoff 1987b: 207, annotation added) Over the years, Ansoff (1979: 31) also critically reflected upon this mode of thinking but never replaced his basic presupposition of a linear strategy process. 40 The resource-based view remains notably silent on these issues as well. Even though Barney (1991: 113) recognizes that a formal planning system enables a firm to recognize and exploit its resources, he does not provide any precise statements on the nature of the planning process. He only highlights the role of informal strategy-making processes in achieving competitive advantage. Following Barney, such informal processes may be of value because they are rare and less likely to be imitated.
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position the company and have a horizon of a decade or more (Porter 1996: 74). Quinn (1980) provides one of the best-known critical assessments of formal planning by stressing the notion of ‘logical incrementalism’. Formal planning is nothing more than a textbook notion because strategies seem to emerge in quite different ways. In fact, he argues that “the real strategy tends to evolve as internal decisions and external events flow together to create a new, widely shared consensus for action among key members of the top management team.” (Quinn 1980: 15) His empirical study of strategy formation in nine organizations reveals that strategy making takes an incremental form since effective strategies emerge from a series of strategy formulation subsystems. Because the different subsystems cannot be fully coordinated and each subsystem possesses certain cognitive limits, the overall strategy does not evolve in a well-planned way. Quinn’s (1980: 18) point is that “no single formal analytical process could handle all these strategic variables simultaneously on a planned basis.” At first, it seems that Quinn’s notion of logical incrementalism moves us beyond the ‘primacy of thinking’ because it stresses, similar to Mintzberg’s (1979) perspective, the non-causal flow of the elements of the strategy process. A closer look, however, demonstrates that although Quinn (1980) challenges the classical, formalized nature of the strategy process, he does not alter the deeply held assumptions of strategizing as a process based on a distinction between thinking and action. The ‘logical’ component of ‘logical incrementalism’ suggests that skillful managers maneuver the strategy process in a purposeful and effective manner (Quinn 1980: 17). As a result, Quinn (1980: 58) assumes that strategy making is still largely guided by rational behavior. Even though, formulation is a messy process in which different subsystems can hardly be synchronized and Quinn (1980: 145) is well aware that strategy making consists of the incremental interaction of formulation and implementation, his notion of logical incrementalism still assumes that thinking and action can be separated. Incrementalism assumes that goals (ends) and alternatives (means) are coupled through feedback loops (Fredrickson 1983: 568). Yet, this does not imply that thinking (the formulation of goals) intermeshes with action (the implementation of alternatives). The interrelatedness of formulation and implementation (e.g., by means of feedback loops) is different from a gradual production of a strategy within the course of action. This is not to suggest that Quinn’s strategic reality assumes strategy to be based on a clearly identifiable process, but that logical incrementalism cannot entirely reach beyond the well-established thinking/action opposition because thinking and action are still decoupled.
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Out of the 20 documents selected for this discussion of dominant logics, the contributions that stem from organization theory and economics do not directly touch upon the ‘primacy of thinking’ from the viewpoint of strategy, but rather address assumptions with regard to the behavior of men in general and/or its consequences for administrative organization. Since it is reasonable to assume that these general assumptions have inspired the argumentation of strategy scholars, we need to identify the presuppositions these contributions follow. Pfeffer and Salancik (1978) remain notably silent about their assumptions regarding the nature of the decision-making process. Indeed, they conceptualize the environment as a source of uncertainty, constraint, and contingency (Pfeffer and Salancik 1978: 229) and criticize various authors for conceiving organizations as rational instruments for the attainment of goals (Pfeffer and Salancik 1978: 23). They prefer to view organizations as coalitions “altering their purposes and domains to accommodate new interests, sloughing off parts of themselves to avoid some interests; and when necessary, becoming involved in activities far afield from their stated central purposes.” (Pfeffer and Salancik 1978: 24) Nevertheless, their overall model of how environmental effects shape organizations looks considerably like a linear process. First, they claim that there is a causal relationship between environmental factors and the distribution of power and control in organizations; the environment influences the distribution of power and control in organizations and consequently the decisional preferences regarding the choice of executives and their tenure. The selection of administrative staff in turn influences organizational actions (Pfeffer and Salancik 1978: 229). It thus needs to be doubted that the authors move beyond a linear notion of decision-making, although they put much emphasize on uncertainty and contingency. Thompson (1967: 134) takes a mixed approach to model decision processes. He distinguishes between certain and uncertain cause-effect premises and devotes much attention to the constraints of certainty, yet at the same time acknowledges the existence of certainty in particular circumstances. For him organizations are neither rational-machines nor natural systems. Although Thompson challenges the belief in rational organizational processes, he does not dismiss the underlying linear process model. This is because he still believes that principles of administration that are derived from the rational model can be applied “to those portions of organizations which are so protected from exogenous variables that the closed system is practical.” (Thompson 1967: 145) This raises the question: Which are the parts of organizations that are so protected that rationality works and how do we identify them?
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A similar critique applies to the contribution of Cyert and March (1963). Aware of the limitations of full rationality, they claim that planning should be avoided “where plans depend on predictions of uncertain future events [and emphasized] where the plans can be made self-conforming through some control device.” (Cyert and March 1963: 119, annotation added) It remains open how we can meaningfully distinguish between both situations. Cyert and March only advise that in the absence of plans, managers need to solve pressing problems instead of developing sophisticated forecasts. In either case, managers achieve a reasonable decision situation that can be solved and must be ‘managed’ within the scope of the proposed overall organizational decision-making process. This process represents a step-by-step procedure for dealing with decision problems. Even though the authors allow for feedback loops and organizational learning, the linear character of the model cannot be overlooked: first comes the thinking, followed by the action.41 Similar to Cyert and March, those strategic realities that are based on economic analysis stress the bounded rational character of decisionmaking (Nelson and Winter 1982; Scherer 1980; Williamson 1975, 1985). The concept of bounded rationality deserves our attention as it upsets many of the traditional assumptions regarding decision-making. Bounded rationality is a semi-strong form of rationality that, following the work of Simon (1957, 1979), considers the fact that humans face certain cognitive as well as language limits which make it impossible to identify future contingencies in an ex ante manner. According to Simon (1957: 198), bounded rationality reflects that “[t]he capacity of the human mind for formulating and solving complex problems is very small compared with the size of the problems whose solution is required for objectively rational behavior in the real world – or even for a reasonable approximation to such objectivity.”
Bounded rationality considers (a) that complete knowledge of the consequences that follow each choice is impossible to achieve, (b) that since consequences necessarily lie in the future, imagination must supply the lack of judgment; yet imagination is based on values, and values cannot be 41
Ironically, Cyert and March’s decision model, although still based on a thinking/action type of perspective, leaves us with a framework that radically downplays the importance of organizational goals in general. This is why Ortmann (1976: 59) concludes that Cyert and March leave the impression that organizations are goalless and problems are simply solved as they occur. Cyert and March (1963: 119) argue: “We assume that organizations make decisions by solving a series of problems; each problem is solved as it arises; the organization then waits for another problem to appear.”
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anticipated, and (c) that full knowledge of all possible alternatives cannot be achieved (Simon 1971: 81). The pairing of uncertainty with bounded rationality makes it unfeasible for decision-makers to account for all possible consequences – hence: “the future is permitted to unfold” (Williamson 1975: 9). The notion of bounded rationality challenges the very essence of the ‘primacy of thinking’ because bounded rational individuals recognize that they cannot foresee all the things that matter to them. It is thus unlikely that people find the mathematically best solution to their problems. Rather, individuals act intentionally rational; they give the best they can under the limitations they face. The maximizing goal of choice is replaced with the goal of satisficing; a perfect utility-maximizing choice becomes out of reach.42 Simon’s perspective of rationality highlights that the problem of choice is one of describing consequences, evaluating them, and connecting them with behavior. Although he moves from an objective notion of rationality (in which thinking determines action because ‘correct’ behavior maximizes given values in a situation) to subjective rationality (in which maximization is relative to the actual knowledge of the subject), the basic premise of ‘thinking before action’, which is of interest to our analysis, remains unchanged.43 Simon presents a strong argument by considering decision premises to be incomplete and bound to psychological limits, yet his conclusions are not much in favor of a perspective that highlights the gradual production of decision premises in the course of action. For instance, 42
The authors of the economically based strategic realities share this critique. Nelson and Winter (1982) criticize the economic perspective that often conceptualizes economic man as a perfect mathematician; they argue that “[t]his affront to realism is not innocuous. It opens the door to full reliance on the notion of fully preplanned behavior, even in contexts where the level of complexity involved is such as to overwhelm the aggregate capacity of Earth’s computers.” (Nelson and Winter 1982: 66) Similarly, Scherer (1980) argues: “Decision makers cannot know precisely how strong and how elastic demand will be in the next period, let alone ten years hence, or how far labor unions will carry their struggle for higher wages in forthcoming negotiations, or how rival sellers will react to a price increase, or what the prime interest rate will be next June.” (Scherer 1980: 29) In addition, we do not discuss in which way ‘individual’ and ‘organizational’ rationality are linked to each other. Simon (1971: 80, 96-109) puts great emphasis on this topic, yet also remains rather vague in describing their relation. Basically, he assumes that organizations ‘permit’ individuals to approach problems reasonably and even closer to objective rationality (Simon 1971: 80). 43 “In a strict sense, a decision can influence the future [i.e. action] in only two ways: (1) present behavior, determined by this decision, may limit future possibilities, and (2) future decisions may be guided to a greater or lesser extent by the present decision.” (Simon 1971: 97, annotation added)
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Simon’s (1971: 96) model of how individual behavior is integrated into social systems involves three principal steps: (1) the individual makes broad decisions within the limits of the existing organizational policy (substantive planning), (2) the individual establishes more specific mechanisms that cause day-to-day decisions to conform with the substantive plan (procedural planning), and (3) the individual executes the plan within the framework set by the preceding two steps. To conclude, although the notion of bounded rationality has been applied by authors of strategic realities (especially, but not limited to, Nelson and Winter 1982; Scherer 1980; Williamson 1975, 1985) and extended strategy process research, the basic conception of a formulated strategy that is implemented thereafter is not fundamentally altered but only limited in its rational-capacity. Fully reaching beyond the ‘primacy of thinking’ implies considering that thinking and action intermesh. Strategy formulation, then, can no longer be detached from implementation: both processes are deeply intertwined and mutually inform each other. Yet, this perspective requires that we tackle the paradox that every decision faces. 3.2.3 Strategy Content – The Fullness of Rules/Resources! Recall that the ‘fullness of strategic rules and resources’ treats strategic rules and resources as if they were full of meaning and thus a priori given. This leads to a generalization of preferences; either the rules of the market or the resources an organization possesses are thought to be applicable without a deep consideration of the context they occur in. Scholars tend to belief that there is something like a final origin of competitive advantage that needs to be discovered. In other words, rules and resources are conceptualized as if they are full of meaning (i.e. iterable and as a result generalizable across contexts) and thus able to define their own conditions of application. As indicated in section 1.1, strategic rules try to generalize across organizations, while resource-based theories are aware that firms possess heterogeneous resources yet presume that resources within a firm are given regardless of context. To facilitate orientation, we first discuss the ‘fullness of strategic rules’ and then move to the ‘fullness of strategic resources’. The Fullness of Strategic Rules!
It goes without saying that Porter’s (1980, 1985) contributions provide by far the most well known rules of strategy. Among Porter’s (1980: 3) “general analytical techniques” we can find the notion of industry analysis that
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attempts to offer the rules of competition.44 Porter (1985: 7) is convinced that he has listed “all the elements of industry structure that may drive competition in an industry.” The underlying logic is not to apply the rules and thus fill them with meaning, as this would require eventually breaking with their nature or even reinventing them, but to ‘tick boxes’ working through the long list of determinants that supposedly define the rules of the game. It is in this spirit that Harfield (1997: 8-9) reports: “On first reading, my view is that the ‘American East-coast Business Ideals’, as embodied in Competitive Strategy, are not applicable to New Zealand. Competition to gain a dominant market share is about large markets with assumed growth, that is not New Zealand, is it? I assume that the few large public companies might aspire to this model, but New Zealand is made up of small and medium size, often family owned businesses where cooperation is as important as competition. There are factors other than ‘profit above industry average’ as a reason for being in business, aren’t there? The only way to find out is to ask the managers, and listen to their stories.”
Porter does not give reference to the process of applying his rules of competition to a context, a context that might force managers to redefine the rules, to break with them – not for the sake of breaking, but to appreciate their context of application.45 Porter’s second widely shared view is reflected by the rules of achieving competitive advantage by means of positioning. Based on an analysis of industry structure, he argues that there are two types of competitive advantage (lower costs and differentiation) that, combined with the competitive scope (broad or narrow target), yield three generic strategies: cost leadership, differentiation, and focus. To achieve a competitive advantage, organizations cannot be “all things to all people” (Porter 1985: 12), they need to make choices. A firm that does not make such choices or even decides to follow more than one possible strategy becomes ‘stuck in the middle’ – it possesses no competitive advantage. According to Porter (1985: 16), “[t]his strategic position is usually a recipe for below-average perform44
Porter (1985: 4) even speaks about ‘rules’ while arguing that “strategy must grow out of a sophisticated understanding of the rules of competition that determine an industry’s attractiveness.” 45 We should note that Porter (1991) has written an article called Towards a Dynamic View of Strategy in which he separates his own thinking about strategy in a cross-sectional problem (the causes of superior performance) and a longitudinal problem (the dynamic process by which competitive positions are created). However, in discussing the importance of the longitudinal problem, Porter (1991: 109) only pushes back the chain of causality. He writes about the origins of the origins of competitive advantage and acknowledges the importance of the local environment in shaping strategy.
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ance.” Porter (1980: 40-41) provides long lists of skills that are required to implement each of the three generic strategies. Again, we find a logic similar to that of the concept of industry analysis: the rules to achieve competitive advantage are pre-given and managers are advised to make a choice between one of the strategies. Even though Porter (1985: 11) recognizes that specific actions are required to implement each strategy, he still places much emphasis on the general and prefabricated nature of his generic strategies. The ‘tick the boxes’ approach followed by Porter becomes even more obvious if we consider his famous value chain analysis. A value chain displays the total value a firm creates by conducting its value activities. Porter (1985: 39) distinguishes between primary and support activities and argues that the way in which these activities are performed “will determine whether a firm is high or low cost relative to competitors.” He is well aware that firms may possess different value chains because their histories differ, but also claims that “every firm is a collection of activities that are performed to design, produce, market, deliver, and support its products” (Porter 1985: 36) and that “[i]n any firm all the categories of primary activities will be present to some degree and play some role in competitive advantage.” (Porter 1985: 40) Once again, this demonstrates that Porter provides generalized tools that usually leave some possibility of altering the nature of the tool by choosing among a list of predescribed determinants prior to application. The value chain needs to be open for modification to tap its full potential. Here, modification means not adjustment within some predescribed limits but the inevitable enactment within the idiosyncratic context of an organization.46 The toolbox of the strategist is extended when looking at the work of Hofer and Schendel (1978) who provide a variety of ‘analytical concepts’ for strategy formulation. Their analysis in based upon the so-called 46
What, for instance, if we consider the ever increasing role of information technology? Information systems considered by Porter (1985: 43) to be a support activity, often play a major role in firms’ sales activities and their aftersale assistance, and thus eventually qualify as a primary activity in Porter’s terminology. Another example regards ‘inbound logistics’ which, according to Porter (1985: 40), is a primary activity that can be found in every firm (at least to some extent). Inbound logistics is concerned with receiving, storing, and disseminating inputs to the product. But what about corporations that do not need or have inbound logistics, such as a web-designer. There is no material handling, storing, vehicle scheduling or similar operations in such a firm. After all, Porter’s analysis is guided by the notion of an idealized firm which does not always exist, especially if we consider that the nature of firms constantly changes with societal trends (e.g., the use of the internet).
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‘Hofer/Schendel strategy formulation models’ for business and corporate level strategy. These models provide a fine-grained view of how to proceed when formulating strategies on both levels of analysis. In the course of their book, Hofer and Schendel introduce a variety of analytical concepts that can be used by mangers to put their proposed strategy formulation process into practice. On the business level, for instance, they suggest six generic strategies that firms can follow. To select ‘the right’ strategy, firms are advised to consider the stage of evolution of the product/market segment, its current and desired competitive position, as well as its resources. Similar to Porter, the authors argue that any of those six generic strategies are needed to come up with a business strategy. They do not recognize that these suggestions, however important in guiding managers’ efforts in strategy making, need to be applied to a specific context, a context in which it might be necessary to modify a generic strategy to such an extent that there is no reason to assume that anything like a true standardized strategy can exist beforehand. Ansoff (1987b: 111) follows a similar approach as he outlines a portfolio that specifies the combination of available strategic business areas in which a firm wishes to achieve its objectives and subsequently defines four competitive (generic) strategies that firms can use to succeed in each of these areas. Overall, Ansoff’s approach to strategy is similar to the ones described so far: develop criteria that allow us to distinguish between different strategic scenarios in order to offer predefined strategies that can then be implemented. Ansoff even moves one step further by applying the different components of the portfolio to different types of firms. For example, managers that look for a strategy for integrated synergistic firms are given the following advice: “Since its product-market decisions have long lead times, it needs guidance in R&D, and it must be able to anticipate change. Much of its investment is irreversible, since it goes into R&D, which cannot be recovered, and physical assets, which are difficult to sell.” (Ansoff 1987b: 113)
Ansoff believes that there are certain strategic alternatives managers should follow under specific circumstances. Again, we do not doubt that it is useful to provide strategists with some generic options of what a strategy could possibly look like. However, it is dangerous to do so without acknowledging the process of application. Andrews (1971) provides yet another example of what it means to deliver necessary emptiness. His work has popularized the idea of distinguishing between the external situation a firm faces (its opportunities and threats) and its internal characteristics (strengths and weaknesses). Today, we rarely find any textbook on strategy that is not referring to this distinc-
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tion. Over the years, Andrews’s confrontation of external and internal factors became better known as SWOT analysis and was described as a rigorous analytical tool (Weihrich 1982). Needless to say, SWOT analysis overlays corporate diversity with a generic solution. Neither Andrews (1971) nor any of his predecessors, relate the relevance of the SWOT approach to managers’ ability to use and apply this tool to their specific context. All that is offered by Andrews (1971: 71) are long lists of factors that could possibly be considered during an analysis. What are the results of this orientation? Hill and Westbrook (1997) investigate the use of the SWOT concept empirically. Their study of 20 companies that conducted a SWOT analysis reveals that all firms produced long lists of vague terms with the help of consultants. Only in three instances were these lists used for strategy development at all. That is why Hill and Westbrook (1997: 50-51) conclude that: “Our principal conclusion has to be that, from the evidence given above, SWOT as deployed in these companies was ineffective as a means of analysis or as part of a corporate strategy review. […] The relevance and usefulness of any approach is in part related to the ability of those involved. Unless their understanding of how an application should be made, together with the ability to undertake the work in a rigorous and meaningful way, then the outcomes will be less than adequate.”
Their study shows that the success of SWOT depends on the competence of managers to apply, and thus also modify and extend, the original framework. Simply ticking boxes and producing long lists of vague terms does little good. After all, Hill and Westbrooks’ study demonstrates that it is not enough just to call for a consideration of the context of application, but most of all to train those people that are supposed to use strategic concepts. As a result, Andrews’s notion of SWOT analysis neglects the process of filling and thus contributes to the ‘fullness of strategic rules’. Another widely used concept is Miles and Snow’s (1978) adaptive cycle which describes a model of organizational adaptation. Based on Child’s (1972) strategic choice approach, Miles and Snow (1978: 21) argue that adaptation depends on managers’ perception of the environment. They believe that this process can be broken down into three major problems – entrepreneurial, engineering, and administrative – that form a cycle which the organization constantly has to deal with. Based on this cycle, they outline four strategic types of organizations – Defender, Analyzer, Prospector, and Reactor – that represent alternative ways of moving through the cycle. “That is, if management chooses to pursue one of these strategies, and designs the organization accordingly, then the organization may be an effective com-
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The underlying logic is much the same as in the works that have been introduced up to this point: managers are advised only to follow ‘the pure’ strategies proposed by the authors: if not, they are told to end up with efficiency losses. The four archetypes suggested by Miles and Snow (1978: 29) possess certain characteristics. Depending on the nature of the firm a manager works in, s(he) needs to choose the right form to be able to predict behavior (Miles and Snow 1978: 30). The four ‘pure’ types of strategic organizations suggested by the authors do not account for the fact that managers, even if they believe that they fit into one of the categories, need to make sense of the general archetype. The Fullness of Strategic Resources!
Both contributions from the resource-based view that are among our list of strategic realities (viz. Wernerfelt 1984 and Barney 1991) conceptualize resources as a priori given and thus full of meaning prior to application. Barney (1991: 101) distinguishes between physical capital resources, human capital resources, and organizational capital resources and Wernerfelt (1984) claims that only those attributes of these types of resources that enable a firm to implement its strategy are called firm resources. The pioneers of the resource-based view in strategy depict resources as stable building blocks of organizations that can be clearly identified and measured, or, in Wernerfelt’s (1984: 172) words: “anything which could be thought of as a strength or weakness of a given firm.” Resources are ‘real’ and exist regardless of context or the observer. Yet, such a conceptualization does not reflect the messy realities that managers face when applying resources and thus risks lacking meaning for scholars and practitioners alike. Wernerfelt (1995: 172) himself, in a ten-year retrospective view on his own trail-blazing article, argues that “’resources’ remain an amorphous heap to must of us.” There are two other points that support our assertion that resources are conceptualized as given. First, Wernerfelt (1984) argues that resources can be used in several products and suggests creating a resource-product matrix that depicts the importance of a resource in a product. Similarly, Barney (1986) uses the concept of ‘strategic factor markets’ to point out that firms can purchase resources there. Inevitably, these notions imply that resources are easily transferable and for that reason need to be ‘given’ in some way. Second, because most research in the resource-based view is informed by traditional economic analysis, authors like Wernerfelt and
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Barney seem to assume that managers use their resources optimally (Bromiley and Papenhausen 2003). That is, these authors discuss the link between resources and performance in a direct manner, neglecting the managerial choices that are necessary to put resources into action. Again, if people play no or only a minor role, resources are defined without any relation to their application. Even firms with similar tangible resources will have different performance outcomes depending on how management chooses to employ resources. It should not go unnoticed that Nelson and Winter’s (1982) approach to evolutionary economics provides the ground on which much recent resource-based theorizing rests. Their view of the organization as a set of interdependent operational and administrative routines gave rise to the notion of dynamic capabilities (Teece et al. 1997: 516). Although, this conception attaches a ‘dynamic’ label to the discussion, by emphasizing that competences need to change by means of these dynamic capabilities, the basic problem that dynamism and learning cannot be fixed prior to application remains. Pfeffer and Salancik (1978) argue in favor of a resourcedependence approach determining an organization’s action from the ‘outside’. Organizations depend on individual or cooperative actors that control critical resources. In their analysis, the authors focus on the question of how resources can be acquired by an organization to avoid vulnerability and to ensure survival (i.e. a state in which a supply of resources is assured). Whereas this points out that resources are important, their ontological status remains unquestioned. Resources are treated as ‘given’ entities that are either supplied or not supplied by the environment. Penrose (1995) reaches beyond the notion of ‘given resources’ by arguing that it is not the resources per se but the context-bound use of these resources – the services in Penrose’s terminology – that matter. She provides the only contribution within our list of strategic realities that truly reaches beyond a dominant logic, in this case beyond the ‘fullness of strategic resources’.47 According to Penrose (1995: 25), resources consist of a bundle of potential services that need to be activated within application; it is not resources per se that are important but only the services resources render. Her distinction between resources and services reaches beyond the existing dominant logic because she recognizes that resources need to be transformed into services to be of value to organizations. Regrettably, her insights have been neglected by the major contributions of the resourcebased view on strategic management (Kor and Mahoney 2004). 47
This is even more surprising if we consider that the first edition of Penrose’s contribution dates back to 1959, a long time before there was something like a resource-based view on strategy.
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3.2.4 The Dominant Logics of Strategy – An Overview Having discussed the three dominant logics of strategy research and their embeddedness in the 20 most prominent strategic realities, we conclude that mainstream strategy research is dominated by certain logics. Our discussion of the ‘necessity of adaptation’, the ‘primacy of thinking’, and the ‘fullness of strategic rules and resources’ shows that the orthodoxy in strategy research still relates to well-established patterns of thought. Figure 12 summarizes the relation between strategic realities and dominant logics.
Fig. 12. The Embeddedness of Strategic Realities in Dominant Logics
It should not go unnoticed that a number of scholars challenge the dominant logics. However, with the exception of Penrose (1995), they do not entirely reach beyond the established orthodoxy. Whereas these challenges come from inside the mainstream, there are also a variety of challenges that come from outside the mainstream literature (see section 3.4). Most strategic realities that challenge the identified dominant logics, from within or outside the mainstream literature, provide modified perspectives
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on the oppositions (e.g., formulation/implementation); however, they do not confront the deeply held assumptions on which scholarly activity rests. From our perspective, any serious attempt to reach beyond the dominant logics has to consider their inherent paradoxical nature as a point of departure for further reasoning. To demonstrate that the determinism that is inherent in the dominant logics (e.g., an objective environment that determines strategic conduct) is based on impossibility (i.e. paradox), we need to expose paradoxical reasoning and show how such reasoning informs future research. In conclusion, we argue that knowledge in strategy research possesses an ideological function. That is to say, the interests of a dominant part of the research community are represented as the interests of the whole. We characterize this ideology as a functionalistic one that approaches research concerns from a positivistic and deterministic stance (Burrell and Morgan 1979: 26). This reminds us of the philosophical work of Husserl’s (1970) The Crisis of European Sciences and Transcendental Philosophy in which he argues that the rationality of the modern sciences is based upon an idealization of the world that can be called ‘the mathematization of nature’. Such an idealization is a way of looking at the world as if it could be clearly represented and expressed by a researcher (Leiss 1975). The implicit assumption that is attached to such research is that outdated theories are replaced by new ones that are better in terms of accuracy and validity. In their recent study of strategy research Boyd et al. (2005: 852) claim that this model is still considered desirable by many strategy scholars. 3.2.5 The Embeddedness of Paradigms in Dominant Logics When contrasting our argumentation in section 2.2 with the claims presented in this chapter, one may be puzzled by the fact that the pluralism of paradigms in strategy, which presumes a variety of opinions about what strategy is or should be, conflicts with the overarching character of dominant logics. If there is no generally accepted paradigm to pull together the many issues of strategy research, why do dominant logics remain in the field as outlined in the preceding section? Does the notion of dominant logic run counter to our assumption that different paradigms have occurred in strategic management theory thus far? What is the relation between dominant logics and paradigms anyway? We believe that the pluralism among strategy paradigms exists only on a superficial level. Even though resource-based thinking currently dominates the field, no serious researcher would simply forgo definitions of marketbased reasoning. This pluralism is of a superficial nature because every
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paradigm favors almost the same dominant metatheoretical assumptions. These assumptions – largely stemming from the functionalist roots of the field – run throughout the paradigms as dominant logics. In other words, dominant logics do not represent a paradigm, at least if we understand a paradigm as defined in section 2.2.1, but are attached to the paradigms that occurred in the history of strategic management. As a result, strategy research not only relates to certain dominant logics, but these logics are also well represented by the paradigms of the field.48 Our premise is that even though the paradigms of strategy research may differ at first glance, because they focus on such diverse issues as longrange planning of internal functions or the analysis of industry structure, they are stuck in a straightjacket. Even though model problems and model solutions differ among paradigms, the assumptions of strategy scholars have largely converged into a single set of assumptions on a metatheoretical level (Boyd et al. 2005: 853). These assumptions are represented by the dominant logics that we identified in the preceding section; they reflect a fundamental belief about how the world works and help to frame research problems and the chosen methodology. Regardless of whether we agree with Daft and Buenger (1990: 82) that strategy research ‘rushed’ into this convergence at too early a point in time, the devotion to dominant logics inhibits intellectual growth by focusing attention on minor research problems and neglecting ‘the big picture’ within which these problems are located. To illustrate this point, consider the following example. The ‘necessity of adaptation’ cuts across a variety of paradigms in strategy research. The need for environmental fit was recognized by the early advocates of the ‘planning’ paradigm (e.g., Andrews 1971; Ansoff 1987a; Chandler 1962) and sustained by the ‘forecasting’ orientation in the 70s (e.g., Hofer and Schendel 1978). Even the advocates of the ‘market-based’ paradigm (e.g., Porter 1980, 1985) and the ‘resource-based’ paradigm (e.g., Barney 1991) relate, either implicitly or explicitly, to the belief that the environment is in some sense an ‘origin’ for strategic reasoning and that consequently firms have to adapt to whatever is demanded by this ‘origin’. Thus, the ‘neces-
48
This highlights the relation between normal science and dominant logics. Whereas normal science occurs within a paradigm, dominant logics cut across paradigms (see also section 1.1 and the glossary). Kuhn (1970: 245) heavily criticizes researchers for taking too lax an attitude towards normal science: “If [...] some social scientists take from me the view that they can improve the status of their field by first legislating agreement on fundamentals and then turning to puzzle solving, they are badly misconstruing my point.” See also the essays in Lakatos and Musgrave (1970).
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sity of adaptation’ reflects a deeply rooted assumption that has been followed by a variety of strategic realities in different paradigms. To answer the questions posed at the beginning of this section, we note that dominant logics correspond to parts of paradigms, i.e. their metatheoretical assumptions. Thus, the notion of dominant logic neither runs counter nor conflicts with the idea of paradigm. It is our firm belief that unless the dominant logics are challenged, they will continue to govern future paradigms regardless of whether they favor resource, market-based, or any other kind of reasoning. The question strategy scholars face is whether they wish to remain comfortably seated in the fast train that is heading to nowhere as described by Daft and Buenger (1990) or whether they wish to bring this train to a halt, not to reverse its direction, but to take a deep breath and figure out where they wish to go and how they wish to get there in the first place.
3.3 How Dominant Logics Come into Existence Having claimed that strategic management possesses three dominant logics that are well reflected by the metatheoretical assumptions of its underlying paradigms, we now face the question of why the field is able to sustain these logics without getting trapped in a crisis situation that accompanies rare revolutionary upheavals as described by Kuhn (1996). If strategy research manages to ‘blackbox’ many of its presuppositions into dominant logics, we have to discuss the underlying micropolitical dynamics that help to nourish conventional wisdom. In other words, we need to ask why such blackboxing is possible in the first place. By discussing these concerns, we supplement the more content-based arguments of the preceding sections with a discussion about why dominant logics exist anyway and how they are maintained. This discussion is necessary to understand the ‘political’ dimension of scientific practice on which some of our recommendations for future knowledge development in the area of strategic management rest (section 8.1). To show how socio-cultural factors influence the development of belief structures, we discuss concepts stemming from the sociology of scientific knowledge and the sociology of science and apply them to strategic management. While the sociology of science is concerned with science as an institution, the sociology of scientific knowledge addresses the process of intellectual legitimization that we define as “the process by which a theory becomes recognized as a part of a field – as something that cannot be ignored by those who define themselves, and are defined, as legitimate par-
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ticipants in the construction of a cognitive field.” (Lamont 1987: 586). Legitimized theories are often referred to as ‘facts’, that is a piece of knowledge which has been collectively stabilized from the midst of scientific controversies and is strongly confirmed by later scientific contributions (Latour 2002: 42). Overall, there is widespread agreement that knowledge can be shown to be socially constructed within scientific controversies. Starting from this social constructivist perspective, we discuss the production (section 3.3.1) and perpetuation (section 3.3.2) of facts in strategy research to finally illustrate how facts that are sustained for a long period of time are transformed into dominant logics (section 3.3.3). We thus sympathize with the claim that there is no such thing as a natural scientific fact, a fact that is simply ‘there’ by the force of nature, because scientific knowledge in strategic management is the product of a lengthy process of construction. What we show in the following sections is that ‘nature does not force the issue’ (Pinch and Bijker 1984: 420), but that those arguments which are often referred to as facts are socially constructed by a network of diverse actors (e.g., scholars, editors, funding agencies) and do not appear from nowhere. 3.3.1 Producing Facts in Strategy Research To open the black box of science, we need to consider the social mechanisms that curb or foster the incorporation of existing contributions into ongoing discourses. To understand what facts are, we have to understand how they are made and who made them in the first place. We must study science in the making and not ready-made science (Latour 2002). In studying the fabrication of scientific facts in strategic management, we follow researchers at the times and places where they do their work. As for most social scientists, a large part of the job is done behind the desk writing journal articles or books. It is thus reasonable to discuss the role of literature as an essential factor in the production of facts. Our concern is to explore how scholars succeed in producing a document that has the largest possible impact on the scientific community. As Law and Williams (1982: 537) argue, the impact of a paper or book depends on the perceived value that other researchers assign to one’s own work. To be legitimized by others and to gain the status of a fact, a document needs to be reliable and relevant in the eyes of others. It is thus of fundamental importance how scholars present their ‘product’ to achieve maximum recognition. To begin with, we have to recognize that the production of facts is a collective process. The point is that the fate of what a scholar says is in the later users’ hands because the status of a statement depends on later state-
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ments. By itself a statement is neither true nor false, neither a fact nor a fiction, it is made so by others, later on (Latour 2002: 29). It is made more of a certainty, and thus a fact, if others take it up and discuss it favorably. This again means that to produce facts in strategy research – and also in any other scientific field – one needs to gain credibility. Without credibility others will not refer to the research output one offers to the market of knowledge. We then need to ask: What enhances the scientific credibility of an article? What does an author do in order not to be ignored by the scientific community? If an article gets ignored, it cannot be turned into a fact. Even worse, it cannot be rejected; the voice of the scientist remains silent as if the article never existed. Latour (2002), who has been at the forefront of studying the dynamics of science in the making, lists three factors that help to transform arguments into facts. First, there is the argument from authority. To impress a dissenter one needs prestige, most often the prestige of a major journal and/or the excellent reputation of a university or educational fund. Having these allies makes it hard for a dissenter to criticize a piece of literature. If one doubts the claim brought forward by the author, one also questions the honesty, good judgment, and hard work of a large number of wellestablished people (e.g., journal editors, professors that have supported the work of the author). Who wishes to have so many opponents? Concerning strategic management, we can state that an author who publishes in the SMJ definitely experiences positive spillover effects of the excellent reputation of the journal. MacMillan (1989: 391), after having identified the SMJ as the most outstanding forum for publication in strategy research by means of a survey among tenured professors, even claims that “each field of inquiry has a forum in which the work of scholars in that field should be presented, and if a candidate’s work is accepted in that forum, then such work should be deemed scholarly.”
To belong to the ‘club’, scholars need to publish in the forum, which in the case of strategic management is quite a limited one. Even more interesting is a look at the affiliations of the authors of the 20 most cited documents in the SMJ. At the time their work was published, five authors (Porter, Rumelt, Andrews, Lawrence, Lorsch) were associated with Harvard University, while most other authors gained support from other top universities like MIT (Chandler), Yale University (Williamson [1985]), University of Pennsylvania (Williamson [1975]), Stanford University (Hofer), Northwestern University (Scherer), and University of California at Berkeley (Pfeffer). As a minimum, the financial strength and prestige of these institutions supported the success of these authors (e.g., through granting research funds). This argument is consistent with the em-
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pirical findings cited in Park and Gordon (1996: 111) who report that scholars from prestigious universities were among the top contributors for high-rated journals (see also Boyd et al. 2005: 842; Hunt and Blair 1987: 200; Ofori-Dankwa and Julian 2005: 1315). A dissenter wishing to attack a contribution that gained authority from any of the abovementioned sources will face considerable opposition, even at the very beginning of this endeavor. An argument based on authority is what Pinch and Bijker (1984: 425) call rhetorical closure, that is, the introduction of a ‘knockdown’ argument by means of scientific authority to offer ‘definite’ proof of how things are, thereby closing a debate. Following Latour (2002: 33), the second factor that influences the credibility of a scientific contribution is its reference to former well-known texts. The presence and absence of references is often regarded as a direct indicator of the seriousness of a paper. Without any references at all, the paper is ‘naked’; without references to the major debates of a field the paper has few chances of being regarded as a legitimate contribution (Adatto and Cole 1981). The reason for including well-known references is rather simple: to attack a document that is loaded with literature means that the dissenter not only has to weaken the arguments of the author, but also the (legitimized) arguments that the author refers to. Again, we see that a paper that is on its way to becoming a legitimate contribution to a scientific discourse can contribute from positive spillover effects provided by the existing prestige of former articles/books. It is easier to convince people by means of documents that they already know and trust than to persuade them of something very remote or even contrary to their current belief structures. What does that mean for strategy research? Phelan et al. (2002: 1163) report that the number of references per SMJ article has considerably increased over the last two decades (from a mean of 25 per article in 1980 to a mean of 75 per article in 1999). Hence, there is reason to believe that in the strategy community the amount of literature clearly is an indicator of the seriousness of an article. In terms of reference to well-known texts, we can state that existing articles in the SMJ clearly give reference to the ‘big names’ of the field, as demonstrated by the citation index that was introduced in section 3.1. Surprisingly, most of the 20 strategic realities that make up the list of the most cited documents in the SMJ contain neither long lists of references nor much discussion of prestigious former texts (Porter’s Competitive Strategy includes just four pages of bibliography). The latter may be due to the pioneering character that most of the strategic realities had for the (back then) still developing field of strategy. Chandler’s (1962) contribution, for instance, refers often to federal documents
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and statistics. This changes if we look at the few more recent documents that belong to the list of the 20 most popular strategic realities. Barney’s (1991) article, for example, gives reference to a lot of well-known pieces of work like Andrews (1971), Ansoff (1987b), Hofer and Schendel (1978), Nelson and Winter (1982), Penrose (1995), Porter (1980, 1985), Scherer (1980), Wernerfelt (1984). As strategic management reaches maturity, both the number of references and the citation of well-known documents play a vital role in enhancing the credibility of strategic realities. Latour’s (2002) third factor that helps documents on their way to becoming facts is being referred to by later texts. The assertions that are made in the article need the support of later articles to make it more of a fact. In other words: arguments need to be continuously reproduced to become and stay a fact. This is the recursiveness of scientific practice; the probability of being treated favorably by subsequent articles increases if the respective text refers to already well-known pieces of work that in turn enhance their visibility and make it even more impossible to be evaded by future scholars. That is why Zimmerman (1989: 458), while offering advice on how to improve the likelihood of publication in major journals, advises authors to target the largest audience possible as ‘marginal’ opinions are not likely to be referred to by other scholars. Once an author is referred to by later texts, her/his arguments become simplified. A few statements are isolated from the original text to be used over and over again. Repetition not only enhances the visibility of the author but also simplifies the initial argument. For instance, Porter’s (1980) prominent idea of the structural analysis of industries, originally presented on 31 pages with in-depth discussions of the various determinants of the intensity of competition, is usually referred to in the following way: “Porter’s (1980) Five Forces Model, by more clearly specifying the various aspects of an industry structure, provides a useful analytic tool to assess an industry’s attractiveness and facilitates competitor analysis. The ability for a firm to gain competitive advantage […] rests mainly on how well it positions and differentiates itself in an industry. The collective effects of the five forces determine the ability of firms in an industry to make profits.” (Hoskisson et al. 1999: 426) “Porter’s […] five forces model is based on two arguments: (1) industry structure determines the nature of competition in an industry, and (2) the nature of competition is a major determinant of firm profitability.” (Hill and Deeds 1996: 429)
Porter’s argument becomes simplified and is thus easily accessible to a wide range of scholars. The Five Forces Model turns into a fact, something
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that is not questioned anymore and can be turned into a one-line statement (‘Porter has shown that …’). Of course, most journal articles are written under consideration of space constraints that do not allow for an in-depth discussion or even repetition of original contributions. Yet, once an author is being referred to by later texts and her/his arguments become simplified and thus accessible to a wider audience, a new fact is born. From our anatomy of scientific rhetoric, we conclude that there are many supportive mechanisms an author can rely on when trying to gain credibility from the reader. Such mechanisms influence the process through which peers come to define a theory and its producer as important and give rise to what are called facts – knowledge that is little disputed in a discourse field. We have shown how the strategy field has produced facts by making use of these mechanisms. It is important to recognize that there is nothing wrong with facts, as they exist in every (mature) discourse field. For strategy scholars, the Five Forces Model is the Four-P approach to the marketing researcher: collectively stabilized knowledge claims that are confirmed by later scientific contributions.49 3.3.2 Sustaining Facts in Strategy Research The term ‘fact’ already symbolizes stickiness. Nonetheless, one may wonder why we cannot simply break out of this vicious circle? Why not simply write an article that does not cite any facts at all, an article that just contains one’s own thoughts? First, such an article would hardly pass through any double-blind review process in any of the major journals that are considered to be a ‘good outlet for research’. Second, since the allocation of research funds and tenure-policy is mostly tied to scholars’ list of publications, there is strong pressure to publish in high-ranked journals. To become ‘somebody’ in a discourse one needs highly recognized publications. Yet, to publish in a well-established journal one needs to reference the facts of the field. Communication needs to be accessible by others (Luhmann 1994: 198). Breaking out of this circle is possible as the list of critical publications, which can be found in almost every discourse, re49
The creation of facts is also discussed by the literature on management fashions (Abrahamson 1996; Kieser 1996; Miller and Hartwick 2002). Yet, whereas the literature on management fashions deals with publications that are supposed to address practitioners (e.g., ‘Total Quality Management’), Latour’s (2002) remarks focus on the stabilization of facts within the scientific community. Management fashions have a mass appeal even outside the scientific community (Abrahamson 1996), while scientific facts usually are only discussed in the scholarly community.
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veals. But, it takes more than a few articles to challenge existing facts. Then, the question is: How do existing facts withstand the assaults of dissenters? The Perpetuation of Facts and the Matthew Effect
A good way to enter the discussion is to acknowledge Merton’s (1968, 1988) work on the so-called Matthew effect which asserts that science is a ‘sticky business’ because famous people tend to become ever more famous. Greater increments of recognition for scientific contributions are assigned to scientists with considerable repute, whereas scholars who have not made their mark yet are often neglected or rendered less visible. As a consequence the credit for scientific work is often misallocated because if similar research findings are communicated by a well-known researcher and by one who is less widely known, it is the first who usually receives the prime recognition. Merton (1968: 59) concludes from this that scholarly contributions have a greater influence and visibility when a scientist of high rank introduces them. The Matthew effect demonstrates that science is not a private, but a public business and that the prior repute of researchers advances the speed of diffusion of their contributions. As a result, particularistic (judged on the basis of certain personal or social attributes) criteria operate as the basis for judging the dissemination of a scientist’s work (Hunt and Blair 1987: 194). According to the Matthew effect, scientific practice is based on a selfconforming process that curbs the advancement of knowledge in a field of research. Well-known scholars sustain ‘their’ facts because their statements are better recognized by other scholars and become the premise upon which other researchers build their work. Arguments that are introduced by prestigious scholars are more likely to become a fact and keep their status over a longer period of time. That is why the ‘second book’ of an author tends to profit from the success of the first one and, because it often builds on the premises of the first one, sustains already existing facts. If scholar X writes (for various reasons) a very successful book that introduces the knowledge claim Y which becomes a fact, the second book of scholar X, even though different in focus, is often based upon the basic premises that were introduced in the first book. Hence, by writing the second book scholar X not only introduces a new fact, knowledge claim Z, to the field because of her/his prior success, but at the same time enhances the credibility of knowledge claim Y. In strategy research we can examine the Matthew effect when looking at the extended list of the most cited documents displaying the 50 most influential documents (Ramos-Rodriguez and Ruiz-Navarro 2004: 989). For in-
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stance, after the rapid success of Porter’s (1980) trail-blazing book Competitive Strategy, which ranks first in the list, it is not too surprising that the successor Competitive Advantage (Porter 1985) ranks third. Overall, Porter appears four times in the list. Similarly, Rumelt’s (1974) very influential book Strategy, Structure, and Economic Performance, which ranks second in the list, paved the way for the success of his subsequent writings (Rumelt 1982, 1984, 1991) all of which rank among the top 50 documents. Williamson even appears twice in the top 20 documents. The prime recognition of Markets and Hierarchies (Williamson 1975) enhanced Williamson’s visibility and therefore legitimized the success of The Economic Institutions of Capitalism (Williamson 1985). All of this is not to claim that the works of these authors do not deserve to be in the list because the Matthew effect supported their success. We are well aware that Porter’s, Rumelt’s, and Williamson’s contributions to the strategy field represent much needed and innovative discussions that have inspired and enriched the work of other researchers. Nevertheless, the Matthew effect demonstrates that the repeated success of scholarly contributions can be ascribed (at least partly) to her/his eminent status and existing visibility. Bergh et al. (2006: 92) support this claim. In their empirical study of SMJ article impact, they find that when citing a document authors pay most attention to the author and whether s(he) has already published other influential articles and/or books. They also find in their citation analysis that “if a scholar’s initial work has had little impact, then the impact of their later work seems likely to suffer from the same fate.” (Bergh et al. 2006: 92) To conclude, the Matthew effect demonstrates that scientific success is path dependent; the prior repute of scholars helps to sustain already existing facts in strategic management and thus makes a critical assessment of these knowledge claims virtually impossible. The Perpetuation of Facts and the Institutional Environment
The perpetuation of facts can also be discussed from a different, more institutional, angle. For this, we need to assess the nature of scientific discourses. Fuchs and Ward (1994a, 1994b) distinguish between ‘conversational’ and ‘factual’ fields of scientific practice. As opposed to conversational fields, in which scholars observe one another to see the blind spots of argumentation, constantly reread the ‘classics’ everyone refers to, and favor criticism over explanation, factual fields are more closely coupled, have stronger resources, and professional networks to produce ‘objective’ knowledge. In factual fields the theoretical blind spots are protected and rendered more or less invisible because the basic facts the field is built upon are not seen as constructions, but as the way reality is or at
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least as approaching truth. Factual fields rely on strong institutional pressures for conformity and place rather tight restrictions on the amount of tolerated skepticism. Both types of fields produce facts. Yet, while conversational fields constantly challenge the knowledge claims that have become rigid, factual fields sustain these claims and debate their legitimacy only sporadically. As a consequence, factual fields show much homogeneity in their intellectual structure. From our perspective, strategic management possesses the characteristics of a factual field of inquiry. We can observe the homogeneity that characterizes a factual field when looking at the professional network association, the Strategic Management Society (SMS), which is tightly coupled and allows for little heterogeneity in terms of its intellectual strategy. The SMS provides a kind of ‘intellectual umbrella’ for strategy scholars ever since its foundation in 1981. Meyer (1991: 830) even claims that “the Strategic Management Society is our only professional organization whose meetings are regularly attended by academics, consultants, and CEOs.” The SMS is internationalized with members from over 50 countries: however, there are no local or regional sub-groups. As opposed to other fields (e.g., organization theory), there are few other internationally recognized professional associations that address strategic management.50 Because of the missing regional differentiation and the resulting homogeneous character, strategic management possesses no regional research agendas as other disciplines do.51 The missing regional differentiation of the SMS is plastered by the strong representation of articles by North American scholars in the SMJ (the SMS’s official research outlet). When looking at the number of articles by source of authorship, the amount of American-only authored articles increased dramatically between 1980 and 1999. Out of a total of 994 articles for this time period, 724 were solely authored by American scholars (Phelan et al. 2002: 1164). In addition, out of the 125 editors for the journal, 100 hold appointments at North American universities. This raises the question of why the dominance of North American authors has not caused the development of a distinct European professional network with a related research agenda? 50
As possible alternative, internationally recognized networks we may note the Business Policy and Strategy Division of the Academy of Management (http://www.bpsdivision-at-aomconference.org) and the UK-based Strategic Planning Society (http://www.sps.org.uk). 51 See, for instance, Pilkington and Liston-Heyes (1999) who show that production management possesses a European and American research agenda. Their argument is based upon a citation analysis demonstrating that European and American authors in production management cite from different sub-fields in the literature.
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Knyphausen-Aufseß (1995: 263) offers an interesting discussion in this context. He investigates whether there is a difference between North American and European strategy research and concludes that even though European scholars possess a distinct theoretical research tradition at a general level, they still import a great deal of ‘mainstream’ American research. A regionalized European research agenda is, at best, a project for the future. We are thus confronted with a self-energizing logic: Europeans import much of the American research agenda because it is widely accepted and in doing so miss the opportunity to build up their own research tradition in strategic management. The absence of their own research agenda in turn fosters the adoption of the existing American mainstream. Ultimately, this brings up the question of why the American mainstream is legitimized among European scholars who supposedly possess their own theoretical tradition at a general level, as Knyphausen-Aufseß (1995) argues? One plausible answer is that the increasing globalization of science and scholarship, Schott (1993) even speaks about ‘world science’, concurrently fosters its Americanization (see also Kieser 2004). With regard to Australia, Clegg et al. (2000: 109) argue that research there “is merely another field experiment in the global laboratory of universalizing US management theory.” And Hamm (2005: 16-17) remarks that “[i]n Western science, the peak of the pyramid is usually assumed to be science in the US. Western scientists are supposed to follow rather closely what happens in their field in the US, have close connections to their US colleagues and derive many of their hypotheses from the US literature (which would give them at least a tiny little chance to get their own writings published in the US). […] Those who do not follow the US literature closely enough are seen as parochial. […] What is pushed to prominence in US social science is defining the mainstream.”
This is a tough accusation that does not hold for every discourse in the social sciences. Nevertheless, for reasons discussed above there is evidence that strategy research not only has its roots in America but over time has also Americanized scholars from other parts of the world. Strategy research is still marked by its birth in mid-20th century corporate America (Whittington 2004: 63). To further explain the factual nature of the strategy discourse, we also need to take a closer look at the SMJ. To speak only of American mainstream research may be oversimplifying. What do we mean by this when we refer to the SMJ? To gain a better understanding of what is considered scientifically desirable for publication in the SMJ, we should take a look at the journal’s editorial policy. Schendel, who has been the editor-in-chief
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ever since the foundation of the journal in 1980, outlines that policy as follows: “More empirical research is needed in the field. We do not want for theories, but we do want for theories that have been adequately tested against empirical data […] future research should, wherever possible, be normative in character […] future research should be more rigorous.” (Schendel and Hofer 1979: 394)
Not surprisingly this editorial policy has been progressively implemented over the past 25 years leading to an increase in empirical articles by a 7:1 ratio compared to non-empirical work.52 Phelan et al. (2002: 1167) conclude their assessment of the first 20 years of the SMJ with the recognition “that it has become harder to make a competitive contribution with this [conceptual] type of paper.” (annotation added, see also Bergh et al. 2006: 82) While officially introducing the editorial policy of the SMJ, Schendel et al. (1980) argue that a paper acceptable to the journal should contain material that has been tested, or at least is testable, in order to come up with necessary generalizations. Scholars who wish their work to become published in the SMJ need to comply with this type of research in order to get around the editors who have the function of ‘gatekeepers’ (Astley 1985: 508). In consequence, Heugens and Mol (2005: 122) report that existing methodological orthodoxy has a strong bias towards a specialization on quantitative work in US strategy departments and Bergh et al. (2006:
52
Not all empirical work inevitably fosters positivistic assumptions. There is need to distinguish between qualitative and quantitative data analysis. Whereas qualitative work often relies on single case studies that are investigated by means of different methodologies (e.g., ethnomethodology), quantitative work is based on larger sample sizes and mostly quantitative modeling. Using the number of samples as an indicator for quantitative and qualitative work, we can claim that SMJ-content has been largely influenced by quantitative studies of larger sample size. Phelan et al. (2002: 1166) find that SMJ-authors using primary data utilize 175 cases on average while authors who rely on secondary data use an average of 1250 cases per study. These findings are in line with Lampel and Shapira’s (1995) claim that strategic management research is dominated by large database research (for some critical arguments on the use of statistical modeling see the discussion by Mingers 2003). Shook et al. (2003: 1233) report that general linear models remain the most dominant data analytic technique used by SMJauthors. The issue of empirical versus non-empirical research pops up every once in a while in discussions about and in the SMJ. Bartlett and Ghoshal (1991: 7) argue that strategy research tends to have a too narrow perspective dominated by economical methodology. They claim that the field ”has become narrower […] in its search for stronger and more rigorous theory.” In a direct reply, Schendel (1991: 2) criticizes their critique for painting “a narrow and temporarily limited view of the development of the strategy field.”
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91) assert that articles with a high level of ‘methodological rigor’ receive more recognition in the strategy discourse. It goes without saying that with such an editorial policy in place there is not much room to challenge deeply held assumptions. Strategy researchers, at least in the SMJ, have not taken much care to reflect on the intrinsic subjectivity of social relations. It seems that Starbuck’s (1982: 8) early appeal to be slow and reluctant in claiming to have approximated true objectivity and clear cause-and-effect relations went unnoticed by the strategy field. In addition, it needs to be noted that SMJ-articles contain an increasing level of intrajournal citation. Phelan et al. (2002: 1163) find that by 1999 the average SMJ-article is citing 10 previous SMJ-articles and that SMJ-articles comprised about 15% of all references in a published article. This makes it even harder to challenge the deadlocked assumptions inherent to so much, mostly quantitative, empirical work. Our discussion demonstrates that strategic management possesses the characteristics of a factual field of inquiry; the tightly organized professional network (SMS) together with its associated journal (SMJ) support the homogenous nature of the field. The SMS and SMJ are dominant (compared to other networks and journals) and dominated (by an empirically-focused research policy). This is not to say that the SMS is a superfluous institution or that the SMJ is a journal not worth reading, but that their tightly controlled character is a factor that should not go unnoticed when asking why the field has been able to sustain its facts for a long time.53 Intellectual homogeneity does not imply that everybody necessarily agrees with the established assumptions or that all scholars share the same opinion about what strategy is or should be, but that strategic management is built upon a set of intellectual presuppositions that are little debated in the community. Singh et al. (2003) even call for more replication of empirical studies to protect against the naïve acceptance of research results. Despite our doubts that a duplication of empirical studies can do any good to improve the reliability of research results – because each study is situated in a specific context that influences its outcomes and a duplication of contexts is basically impossible – it is more dangerous to have an unquestioned answer than an unanswered question. 53
Pettigrew et al. (2002: 6) put it in a nutshell: “Both SMJ and SMS have had their critics and there have been periodic questions about the lack of critical reflection and narrowness of the epistemological, methodological, and theoretical base of writing in the field of strategic management. It is now common to talk of the post-Porter era in strategy, perhaps as we shall see the more general changes in epistemological and theoretical discourse in the social sciences at the beginning of the 21st century […] will collectively push the field of strategy and management in some fruitful new directions?”
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In this section we have argued that the perpetuation of facts in strategy research depends on the factual nature of the field fostered by the institutional settings that define what counts as scientifically desirable and the dynamics of the Matthew effect. As any other discourse, strategic management possesses institutions (professional associations and journals) that legitimize scholarly work and define what counts as important. Yet, as opposed to other discourses, strategic management represents a factual rather than a conversational field.54 This is because the tightly organized nature of its professional network and the narrow editorial policy of its major journal foster a high degree of homogeneity among scholars. In factual fields, the continuous legitimization of facts depends on their ‘quality’ that is judged in accordance with established knowledge claims that are maintained by a tightly coupled network of scholars. All of this points to an irony: existing facts are made stronger through ‘weak’ thinking, that is, the adherence to existing rules while playing the game (Booth 1998: 9). We are not suggesting that path dependency in research is necessarily a bad thing; indeed, all scientific research is in a way path dependent (Kieser and Nicolai 2005) – but that in strategic management research this dependency has created a situation where it is hard to unlock the dominant path to eventually create alternative ones (Garud and Karnoe 2003). 3.3.3 From Facts to Dominant Logics Having discussed the production (section 3.3.1) and perpetuation (section 3.3.2) of facts in strategy research, it is time to ask how facts relate to the notion of dominant logics. We argue that under certain conditions sustained facts can be transformed into dominant logics. For this it is necessary to realize that dominant logics are concerned with the assumptions that are attached to facts. Therefore, we have to distinguish a controversy about facts from one about the assumptions that underlie facts. Facts are 54
Compare for instance the international ‘business ethics’ discourse that has no predominant association, relies on a variety of high-ranked journals (e.g., Business Ethics Quarterly or the Journal of Business Ethics) and is much concerned with discussing and questioning its underlying assumptions (Spence 1998). Hence, business ethics can be described as a conversational field of research. Although there are certain facts (viz. legitimized pieces of knowledge), for instance the idea of stakeholder dialogues, the assumptions that are attached to these facts are heavily debated by the community. Mitchell et al. (1997), for example, suggest that it is not self-evident that managers perceive the attributes that enable a classification of stakeholders in the same way and thus started a debate about epistemological issues in stakeholder theory.
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not dominant logics, but the guiding assumptions of an array of sustained facts can be turned into a dominant logic if the assumptions remain unquestioned. Certainly, this is most likely to happen in a factual field of research where existing institutional pressures prevent reflection. Facts and dominant logics are different conceptions and to question a fact does not always mean to question a dominant logic. For instance, we can criticize the well-established fact that there are five forces that determine competitiveness in an industry. Freeman (1983) suggests that one can easily find more forces (e.g., the power of stakeholders). Yet, to question this fact does not inevitably mean to question the underlying assumptions that ‘shape’ the fact (e.g., that the environment is ‘given’). Without doubt, there are many critical pieces of work that challenge certain facts: however, there is rarely a discussion of their underlying assumptions (i.e. the attached dominant logics). Referring back to our distinction between conversational and factual fields of inquiry, it can be claimed that factual fields sustain existing facts, or at best challenge them sporadically, whereas conversational fields not only question the facts themselves but also their underlying assumptions. As a result, factual discourse fields transform facts into dominant logics by not questioning their underlying assumptions, while conversational fields continuously debate the underlying research logic and thus inhibit the rise of dominant logics (Fuchs and Ward 1994a; Figure 13).
Fig. 13. The Relation Between Discourses, Facts, and Dominant Logics
Only if facts are sustained for quite some time do they provide input for a dominant logic. It takes a lot of time and numerous facts with similar assumptions to create a dominant logic. For instance, even though Ansoff’s (1987b) and Andrews’s (1971) works explicitly rely on a linear notion of
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strategy, the related dominant logic (the ‘primacy of thinking’) did not immediately appear with the publication of their work. It needed other publications that reproduced the fact (Hofer and Schendel 1978; Lorange 1980; Shrivastava and Grant 1985) for the dominant logic to slowly, almost unnoticeably, creep into the discourse. The fact – that a strategy process is linear – was even challenged from various angles. Some claimed that the political dimension is neglected (Pettigrew 1977), while others highlighted the importance of conceptualizing the strategy process in more incremental ways (Quinn 1980). Nevertheless, the dominant logic that thinking comes before action, which is not bound to the strategy process but a very basic assumption about the causality of life, has not been challenged within the mainstream. To conclude, dominant logics emerge from scientific facts that are sustained for a long period of time. Most importantly, in producing dominant logics, facts are not only sustained but their deeply held assumptions are not put into question. This is what Bachelard (1987: 47-50) criticizes when he argues that dominant logics hinder scientific progress because researchers become so used to them that discussing them is too inconvenient or not perceived as useful. In this way, well-established intellectual habits are more and more appreciated not because of their intrinsic value but because of their repeated, unreflective use. As a consequence, assumptions that are attached to dominant logics are treated as if they were clear and straightforward and no alternatives existed, whereas in fact this clarity is a socially constructed misconception. The socially constructed process of knowledge creation and perpetuation is based on a complicated system of actors (e.g., supporters, opponents, editors), institutions (universities, professional networks, and profit as well as non-profit organizations), and rhetorical devices (citation of former texts, authority an article gains from the reputation of a journal). Such a complex interplay of different factors makes it hard to generalize and even harder to apply these issues to a specific scientific discourse like strategy (Lamont 1987: 601). Citations make up an almost endless network of papers and authors that is hard to unravel. Thus, not every established fact nor the success of every much-cited article can be explained by the factors introduced above; they simply provide a rough guide for navigating the ‘jungle of science’. After all, luck may be a factor that is hard to account for.
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3.4 Challenges from Outside the Mainstream “While we are not afraid to challenge the assumptions of others, we should not shrink from challenging our own either.” A Strategy Scholar in an Interview when Comparing the Strategy Field with other Discourses (quoted in Meyer 1991: 830)
Throughout the years there has been no shortage of articles and books that critically examine strategy research. Nevertheless, compared to the overall increase in articles and books on strategic management relatively few scholars have been prepared to challenge the core beliefs and assumptions of the field (Pettigrew et al. 2002: 6). We provide an overview of the critical literature to assess what we already know and what we should know. To be consistent in our argumentation, we only discuss those contributions that critically assess the assumptions of the dominant logics. This makes our review selective since other critical scholars have raised different issues.55 We start by identifying four levels of critical strategy research (section 3.4.1). Next, we review those voices that can be ascribed to the first and second level of critical strategy research (section 3.4.2 and 3.4.3, for the differences between the levels of analysis see section 3.4.1). We argue that although these critiques have provided important insights, they do not fully dismiss the dominant logics. To dismiss the dominant logics one needs to expose their paradoxical nature; only by recognizing their impossibility (i.e. paradoxical foundation) can one justify their infeasibility for coping with strategic problems. Accordingly, the third and fourth level of critical strategy research correspond to a discussion of the paradoxical nature of the dominant logics. The third level (section 3.4.4) argues that critical strategy research has to discuss paradox to show that paradoxical reasoning dismisses the dominant logics. Critical strategy research on the fourth level (section 3.4.5) asks how paradoxes can be used positively to inform future research. In consequence, sections 3.4.4 and 3.4.5 demonstrate why there is a need to introduce deconstruction as a critical strategy to expose 55
For instance, compare works that criticize scholars’ management-centered perspective (Levy et al. 2003: 96), the ill-defined nature of the concept of competitive advantage (Klein 2001), the neglect of emotions in theorizing (Calori 1998: 295), and the disregard of influences from stakeholders (Shrivastava 1986: 368).
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the paradoxes that are attached to strategy context, process, and content and hence pave the way for a discussion of deconstruction in chapter four. 3.4.1 Levels of Critical Strategy Research Although some scholars have challenged the sticky belief structures of strategic management, strategy research has not yet developed a thorough critical tradition (Pettigrew et al. 2002: 11). Critical pieces usually appear quite decoupled from one another and have a hard time gaining momentum. In the end, most critical practice in strategy vegetates on its own. To assess the current status of critical practice, we can refer to different levels of critical strategy research (see Figure 14). These levels represent an ‘escalation of reflexivity’ about the nature of strategic management.
Fig. 14. Levels of Critical Strategy Research
On the first level there are those authors who acknowledge and criticize the narrow ideology on which strategic management rests (see section 3.4.2). Usually, those researchers do not distinguish between context, process, and content issues but argue that there is a lack of progress in research because scholarly activity has been ensnared by the rituals and paraphernalia of ideology (Daft and Buenger 1990: 82). On the second
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level there are those scholars who recognize that context, process, and content research have sustained particular dominant logics (see section 3.4.3).56 Certainly, most critical approaches remain on this level. On the third level, we find those scholars who not only identify a dominant logic but also ask: Why does this dominant logic exist the first place? On this level, critical strategy research recognizes that the dominant logics exist because of their underlying oppositions; these oppositions obscure the paradoxes that inevitably arise once scholars try to justify the existence of the dominant logics. On the fourth level, research appreciates paradox, yet proposes that paradoxes only indicate the limits of knowledge we can have about the nature of strategy and thus unfolds the self-contradicting reasoning in a useful way. These four levels of analysis relate to this study as follows. The first and second level represent existing critical approaches to strategy research and are introduced in the next two sections. Our own critical discussion of strategic management in chapter six rests on the third and fourth level of analysis. Since deconstruction begins with an encounter of the paradoxes that must be overlooked to make dominant logics seem undeconstructible, Derridean thinking primarily addresses the third level of critique. Deconstruction uncovers the paradoxes of strategy research. Yet, deconstruction needs to be supplemented by other theories if one wishes to move to the fourth level of critique to unfold paradox in order to learn how strategic management becomes possible despite its paradoxical character. If we consider that there is no study that discusses all four levels of critical strategy research with regard to strategy content, process, and content, it is not unreasonable to claim that a systematic critique of the field is conspicuously missing from the literature. After all, this study attempts to fill this gap. 3.4.2 Demanding Reflexivity in Strategy Research Critical approaches that address the general monotonous tone in the field and call for more reflexivity often remain unheard. Pettigrew et al. (2002: 14) recognize that only a limited amount of the output of critical strategy 56
Scholars use various disguises for the term dominant logic. Prahalad and Hamel (1994: 6) talk about ‘outdated assumptions’, Bettis (1991) calls it a ‘straightjacket’, and Daft and Buenger (1990: 83) speak about ‘normal science’. The latter notion may be misleading, at least in the context of this study, as normal science, when following Kuhn (1996), occurs with a regard to a paradigm. However, the metatheoretical assumptions that are attached to a paradigm need to be distinguished from a paradigm itself.
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theorists is published in established journals. Many of the writings still circulate as unpublished papers or in edited books. It is thus time to take notice of some of these voices. Already 25 years ago, Evered (1980: 541542) pointed out that he is “left with a real concern that the field may be sliding in the direction of positivism […] Positivism would be even more disastrous for policy/strategy than for other areas of the social sciences […] The ideal research paradigm is presumed already known and important inquiry options are closed out too early.”
In a provocative article, Hirsch et al. (1988: 91) discuss the risk of romance with economic models for strategy research. After assessing the problems with a purely economic view, they conclude that “[i]f and when policy takes such a wholly narrow economic view of organizations, there should be less need for either ‘strategy’ or ‘management’.” Recently, Farjoun (2002: 588) even speaks about the predominance of a mechanistic approach. “Almost from its inception, the strategy field has to a great extent relied on a mechanistic perspective on strategy. This perspective, unified by an epistemologically coherent base, has gradually moved out of alignment with its context.”
In a similar manner, Daft and Buenger (1990: 91) criticize strategy scholars’ loyalty to one dominant set of assumptions which they feel oversimplify the complexity of strategic issues. “We have characterized the social science assumptions driving strategy research as singular and positivist. Our feeling is that most strategists adhere strongly to a belief in systematic, definable strategy procedures and structures that can be described measured, analyzed and compared.”
Bowman (1990: 26) emphasizes the resulting narrow methodological focus. In his view there is no systematic questioning or introspection of the underlying methodological assumptions. “Is the bad money of statistical methodology driving out the good money of strategic substance? I am not saying we shouldn’t do this kind of work; I simply hope that we don’t continue down this road to the point where 90 percent of the empirical work in strategy can be described this way.”
Similarly, Hambrick (1990: 243) argues that there is a clear tendency toward multivariate ‘number crunching’ and Bettis (1991: 316) states that much current research is based on concepts developed decades ago on the basis of analyses of organizations as they and their environments were constituted then. Shrivastava (1987: 88) advises us that missing reflexivity in the scientific discourse of strategy also has consequences for practitioners because “many strategic management practices and norms are
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grounded in past successes, outdated theories or unquestioned ideologies.” This perspective is largely consistent with the one introduced by Whipp (1997: 270) who asserts that it is critical strategy research which offers the most exciting practical insights because it challenges the logic of applied projects. What all these voices tell us is that reflexivity is a precondition for moving beyond any established ideology. Reflexivity is needed because it makes scholars aware of the metatheoretical assumptions that underlie their work; it produces self-awareness and fosters the engagement with as yet marginalized perspectives. Yet, reflexivity takes different forms (Lynch 2000). Reflexivity can mean to be self-critical of one’s own beliefs and assumptions and thus promotes a kind of self-consciousness and selfknowledge. Certainly, self-awareness is desirable but suffers from the fact that one is often ‘trapped’ in the scientific discourse itself. This makes it impossible to uncover many of the blind spots of theorizing. What is needed on all four levels of critical strategy research is a kind of metareflexivity, one that requires a form of ironic detachment, a stepping back from the object of analysis to have the ability to see and critically revalue what others take for granted (Lynch 2000: 30). Meta-reflexivity implies that we constantly need to allow the unseen to disrupt the order, to not become trapped in habit, repetitiveness, or eventually dogmatism (Weick and Westley 2003). We now discuss the second level of critical strategy research (i.e. existing critical reflections on the dominant logics). 3.4.3 Critical Reflections on the Dominant Logics Strategy Context – Strategizing in a Non-Determined World
The ‘necessity of adaptation’ has been criticized under various disguises. First, there are contributions that simply acknowledge the adaptation-based logic that accompanies the organization/environment distinction. Knights and Mueller (2004: 56), for instance, criticize dualisms in strategy and remark that the economics-based strategy literature tends to treat industry structure as objective. Foss (1996: 11) follows a similar line of thought when stating that in strategy research “there is much about the ‘environment’, but little about the ‘company’.” Lowendahl and Revang (1998: 761) argue that the concept of a boundary surrounding an organization as a unit adapting to an environment ‘out there’ becomes close to meaningless when considering the increasing complexity, both within and outside the organization.
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Bourgeois (1984: 586) provides a general critique of determinism in strategic management and argues that when upholding the deterministic perspective, strategizing becomes a reactive waiting game to exploit contingencies as they arise in the environment. Shrivastava (1986: 371) argues against the dominance of fixed structures that organizations simply have to fit into because such a structural view of industries overlooks that actors proactively shape the structure of competition. Smircich and Stubbart (1985) put this argument in more precise terms when arguing in favor of an enactment perspective of markets. In their view, managers should encourage multiple interpretations of the environment and not view them as communication problems. Besides these contributions that only shape awareness for the problem, there are also more substantial discussions of the ‘necessity of adaptation’. Farjoun’s (2002) ‘organic’ perspective on strategy assumes a continuous co-alignment between the firm and its environment. Although, Farjoun (2002: 572) explicitly recognizes the need to influence the environment (e.g., by altering governmental regulations), he still believes that there is one environment that guides and is guided by organizational conduct. Farjoun’s argument remains stuck in the dominant logic as it denies the omnipresent paradox that adaptation to the environment is only possible as selfadaptation. To fully move beyond the ‘necessity of adaptation’, it is not enough to conceptualize the environment as a variable that needs to be managed by firms. To give reference to the paradox, we need a conceptualization of the organization/environment-relation that considers the environment as something constructed by the organization because if the environment is constructed and an organization wishes to adapt to this environment for the sake of strategy formation, it actually needs to adapt to itself. Strategy Process – Corporate Planning as a Ritual Rain Dance
Out of the three dominant logics, the ‘primacy of thinking’ has gained the most attention of critical strategy scholars. We owe much of this attention to the work of Mintzberg (1990a, 1994b) and his colleagues. In his wellknown book The Rise and Fall of Strategic Planning, Mintzberg (1994a) describes three fallacies of planning: predetermination, detachment, and formalization. While discussing the fallacy of detachment of planners from strategy making, he argues that thinking and acting need to be connected. Action and thought must interact if plans are to come alive (Mintzberg 1994a: 291). Plans, in Mintzberg’s view, often paralyze people because they are too precisely formulated and obsolete once actions are finally taken. Although we appreciate such a perspective, Mintzberg does not dis-
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cuss the deeply held ontological assumptions that led to the disconnection of thinking and acting in the first place. The gradual production of decision premises in the course of action remains unexplored (let alone the paradoxical foundation of decision-making itself). His basic point is fair: postponing actions while becoming obsessed with planning is dangerous. Yet, this argumentation does not reach beyond the dominant logic; to get to the core of the dominant logic requires admitting that strategic decisions are paradoxical, yet not fully arbitrary but come into existence under consideration of existing path dependencies. Mintzberg also gained popularity for his definition of strategy as “a pattern in a stream of actions.” (Mintzberg and Waters 1985: 257) Conceiving strategy that way makes it an ex post phenomena, something we can retrospectively appreciate but are unable to control. So, why should we study strategy in that way? According to Mintzberg and Waters (1990: 1-2), actions leave traces that can be easier studied than decisions. “For years, we studied the process of strategy formation based on the definition of (realized) strategy as ‘a pattern in a stream of decisions’. Eventually it occurred to us that we were in fact not studying streams of decisions at all, but of actions, because those are the traces actually left behind in organizations (e.g., stores opened in a supermarket chain, projects started in an architectural firm). Decisions simply proved much more difficult to track down.”
At first glance, this sounds reasonable. On closer examination, though, Mintzberg only reverses the thinking/action-opposition that underlies the ‘primacy of thinking’ in favor of the so far neglected pole. He moves from the thinking/action-opposition, which is favored by classical strategic planning approaches (Andrews 1971), to an action/thinking-opposition. Hence, we face yet another opposition that is matter for deconstruction. This reversal is attempted without considering the deeply held ontological assumptions associated with the priority given to decisions over actions. Chia (1994: 786-789) examines the position of Mintzberg and Waters (1990) and argues that in their perspective action is conceptualized without prior commitment. Action, then, becomes an ill-defined concept because decisions seem to play no role anymore; one simply looks back from the perspective of the identified actions to see whether it is possible to identify some decisions that fit to the actions. This is why Mintzberg and Waters (1990: 5) claim that the commitment that precedes action can be vague and confusing or is even absent at all. After all, Mintzberg and Waters move to the other extreme by privileging action over thinking and consequently have a hard time in devoting attention to the intended part of strategy making (Whittington 2004: 67). The latter may not play the role in strategizing
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that is ascribed to it by classical process thinkers, yet it surely plays some role. A variety of other scholars have criticized the ‘primacy of thinking’.57 The message of these contributions is that one cannot predict the future and that long-term plans are neither necessary nor possible. Ackoff (1981: 359), for instance, concludes: “Most corporate planning is like a ritual rain dance: it has no effect on the weather that follows, but it makes those who engage in it feel that they are in control. Most discussions of the role of models in planning are directed at improving the dancing, not the weather.”
Whereas these statements tell us that perfect planning is illusive, they do not inquire into the consequences of such a perspective. From the perspective of deconstruction, the consequence would be the recognition that strategic decisions face a paradox. Within strategy research, only Clegg et al. (2004: 23) give reference to this paradox. This moves Clegg et al. (2004) beyond the ‘primacy of thinking’. Unfortunately, the authors do not develop this idea to tell us how and why this paradox comes into existence and, at least equally important, how strategists make strategic decisions despite paradox. This, however, is necessary in order not to conclude the impossibility of strategizing. What is needed to advance the discussion is to take the paradox as a point of departure for discussing the rich relationship between thinking and action to finally explore how decisional preferences are constituted in the course of action (Ortmann and Salzman 2002: 215). Having discussed existing critiques of the ‘primacy of thinking’, we conclude that, even though a lot of scholars have emphasized the unpredictable nature of the future and the resulting impossibility of planning, there is virtually no discussion of the paradoxical foundation of strategic decisions and the resulting need to conceive of strategies as something constituted through the interplay of thinking and action. Although recent research has introduced a variety of strategy process models (e.g., evolutionary and political ones, Chakravarthy et al. 2003) and these perspectives add valuable insights to our understanding of strategy making, the paradox on which strategic decisions rest has remained unexplored thus far. Within this study, we show that we need to open strategy making for a consideration of paradox. Yet, we have to do this without concluding the impossibility of strategy formation over time and/or reducing strategizing to mere luck as Markides (1999: 6) does. 57
See, for instance, Calori (1998: 286), Farjoun (2002: 578), Lowendahl and Revang (1998: 762), McKiernan (1997: 795), and Vaara and Kakkuri (1999: 13).
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Strategy Content – The Impossibility of (Meaningful) Generalization
It comes with no big surprise that critical strategy scholars have noted that most strategy content research is overly concerned with finding generalizable results.58 Shrivastava (1986: 369) even argues that there is real pressure to find generalizable results, which has led to an uncritical acceptance of abstracted empiricism. Searching for generality deemphasizes the context in which results occur and in which they are supposed to be meaningfully applied. General findings need to be applied to a context in the sense that they are turned towards the unavoidable restrictions and special circumstances that every context holds. It is this neglect of the process of application that we criticize, not the construction of strategic rules and emphasis on strategic resources. Scholars act as if they were in control of things, as if rules and resources could define their conditions of application, while in fact they deliver emptiness (a necessary and inescapable emptiness). Concerning strategic rules, Ortmann and Salzman (2002: 211) are well aware of the necessity of applying generic strategies to a context. They argue that what is needed is an in-depth examination of the relationship between general strategic rules and their process of application. This argumentation is also true for strategic resources which are usually conceptualized as a priori given, whereas they are only potentials; potentials that need to be filled with context-specific meaning through the process of application (Duschek 2001: 60; Priem and Butler 2001: 33; Steen 2003: 7). The paradox that is attached to strategic rules and resources comes to the fore when considering these contributions, since their general character is always already undermined by the need for local modifications. Yet, there are still questions to debate. First, while these scholars tell us that paradoxes are at the heart of the market and resource-based view, they do not tell us how strategic action is incited by them. Second, because strategists unfold the paradoxes in some way and consequently ‘fill’ the related emptiness of rules and resources with contextualized meaning, research needs to find out how this filling occurs. Our remarks in section 6.3 will consider these issues.
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See Borgeouis (1984: 588), Franklin (1998a: 318), Göbel (1997: 12), Knights (1997: 5-7), Parnell (2002: 2), Seidl (2003a: 6), Shrivastava (1986: 369), Statler and Roos (2002: 10-11), Thomas (1998: 11), and Vaara and Kakkuri-Knuuttila (1999: 5-7).
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3.4.4 Paradox and Dominant Logics Having introduced the first and second level of critical research, we move to the third level of analysis that, together with the fourth level, reflects our contribution to critical strategy research. Regardless of whether we agree with Popper (1970: 53), who argues that science is essentially critical, we need to ask why the dominant logics, that various critical strategy scholars acknowledge (section 3.4.3), should be disclaimed? Addressing this question, some scholars (Gharajedaghi and Ackoff 1984; Lowendahl and Revang 1998; Sarason and Huff 2005) have claimed that the altered societal conditions of our epoch make the three identified logics less appropriate for further research. While we appreciate these perspectives and believe that certain altered societal conditions make the identified dominant logics less appropriate for thinking about strategic management, our answer to the question why the dominant logics should be disclaimed rests on a different line of reasoning. As indicated in section 1.1, we suggest that the dominant logics of strategy research should be rejected because they obscure their own impossibility (i.e. paradoxical foundation). To discuss what critical strategy research at the third level of analysis implies, we outline the relation between dominant logics and paradox in more depth. This will help us to better understand the argumentation in chapter six and to assess the contribution that this study makes to critical strategy research in general. The third level of critical strategy research suggests that dominant logics come into existence because of a neglect of their underlying oppositions (e.g., environment/organization with regard to the ‘necessity of adaptation’ in strategy context). Because these oppositions are neglected, the dominant logics are able to obscure their own paradoxical foundation. How can this be? Recall that a paradox occurs if two mutually exclusive elements occur at the same time. As long as we obey oppositions, the two elements (i.e. the ends of the opposition) are kept apart. To keep the elements of the oppositions apart, research establishes one end of the opposition as an ‘origin’. For instance, within the ‘necessity of adaptation’, the environment is defined as ‘the origin’; the environment is the reason (viz. origin) for organizations’ strategies. The appraisal of an ‘origin’ for strategic reasoning needs to be justified. In fact, one needs to give a reason why the ‘origin’ really is an origin and not based on any other concept to come into being. To put it in the context of our example above: one needs to prove that the environment really is ‘the origin’ for strategic conduct. As will be shown in the following chapter, deconstruction proposes that whenever we try to uphold oppositions, we obscure paradox. In other words, there is no final, self-defining ‘origin’, but what the dominant
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logics establish as an ‘origin’ already depends on its apparent opposite (i.e. the other element in the opposition). We cannot pull both apart. Deconstruction demonstrates that, strictly speaking, both elements of the opposition come into existence at the same time. If this is the case, there is paradox. To put it in a nutshell: once we try to justify the metaphysical ‘truths’ that the dominant logics offer, we expose paradox. If the dominant logics ‘see’ their paradoxical foundation – which they cannot ‘see’ with their current set of beliefs – they recognize that the ‘origins’ they try to establish bring about paradox. In the light of paradox, the dominant status of the dominant logics disappears as the ‘necessity of adaptation’, the ‘primacy of thinking’, and the ‘fullness of strategic rules and resources’ are shown to be impossible and thus lose their ground for argumentation. The dominant logics are dominant only as long as they obscure paradox. Once paradox is accepted, the relentless search for ‘origins’ within strategic reasoning comes to a halt and scholars see the unity of the distinction that underlies the oppositions that make up the dominant logics.59 It is vital to recognize that neither this study nor deconstruction in general criticizes the existence of paradox; paradoxes inevitably occur once we try to justify ‘final truths’ or ‘definite origins’. Paradoxes tell us that to think in categories of ‘truth’ and ‘origins’ is impossible (i.e. paradoxical). We criticize that, because of the fundamental assumptions of the dominant logics, strategy research has not recognized paradoxes as necessary limits to reasoning. Of course, our argumentation is based on one specific perspective (i.e. deconstruction) and cannot claim to be itself generally valid (see section 1.2). After all, this would contradict our own assumptions. Although we have no definite proof that our argumentation is ‘the right’ one, to argue that paradoxes can be neglected and thus assume that there is a possibility of establishing an ‘origin’ for strategic reasoning results in one of the alternatives of Albert’s (1985) Münchhausen trilemma (see section 1.1). If metaphysical solutions are unacceptable, then paradox has to be accepted (Czarniawska 2005: 128; Hofstadter 1987).
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Czarniawska (2005: 130) describes this in a less formalized way: “The image of human beings as rational decision makers controlling the environment requires a linear vision of the world, in which conflict and ambiguity are temporary aberrations to be removed by the next rational action. Much can be said about the practical advantages of such a vision of the world; as usual, however, focusing on certain aspects forces us to gloss over others. In this case, the inherent paradoxicality of human and social life is the victim.”
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3.4.5 Strategy Because of and Despite Paradox On the fourth level of critical strategy research, the paradoxes that are exposed by research on the third level are used as ‘inputs’ for a reconceptualization of certain assumptions in strategic management. As indicated above, every paradox brings about impossibility. To show that this impossibility can be creatively employed by future research and is by no means ‘the end of strategic management’, research on the fourth level demonstrates that every paradox only indicates the limits of knowledge we can gain about the nature of strategic phenomena (e.g., strategic decisions in strategy process research). As will be demonstrated in chapter five, paradoxes can be unfolded through deparadoxification (see section 5.2). Deparadoxified paradoxes are not about reintroducing conceptual oppositions (that result in dominant logics) but means to explore how both ends of an opposition are recursively related and thus supplement each other. Our argumentation in chapter five explains these issues in more detail. To conclude, this study discusses the third and fourth level of critical strategy research and thus adds new insights to already existing critical approaches. To move to the third and fourth level of analysis, we need a theory perspective that guides our discussion. We need a theory perspective that exposes the paradoxical foundation of arguments that are based on apparently non-rejectable truth claims. In the following chapter, we introduce deconstruction as such a perspective. Deconstruction, as will be shown, enables us to discuss the third and fourth level of critical strategy research. It endows us with a set of terms and a logic of thinking that dismantle the dominant logics.
4 Deconstruction and the (N)either/(N)or!
The work of Derrida is often associated with and discussed in the realm of postmodern philosophy. To understand the broader context of Derrida’s philosophical thinking, we need to examine the discourse around postmodern philosophy (section 4.1.1). Since most applications of postmodern philosophy refer to organization theory, yet not to strategic management, we review the existing literature (section 4.1.2), since these writings have an influence on the implications of a deconstructive analysis of strategy research. Based on these remarks we develop an in-depth understanding of Derrida’s notion of deconstruction and its relevance for the social sciences (section 4.2). Because deconstruction has been applied to questions of organization theory, but not strategic management, we look at and classify the existing literature (section 4.3), as these writings have an impact on our own deconstructions in chapter six. Finally, to prepare the ground for an application of Derrida’s thinking to strategy research, we define strategic management as a ‘deconstructible text’ (section 4.4).
4.1 The Meaning(lessness) of Postmodernism 4.1.1 The Philosophical Discourse Around Postmodernism The prefix ‘post’ enriched by the suffix ‘ism’ is an inflationary used label for academic discourses. We do not wish to elaborate on the usefulness of these linguistic endeavors, but focus our analysis on what entered philosophical debates under the umbrella of postmodernism and/or poststructuralism. Although the existence of these ‘post’isms’ in philosophical discourses assumes that we can distinguish both terms, we have to agree with Agger (1991: 111) that a clear distinction is not possible as different authors cut the theoretical pie in any number of ways. To aggravate the situation, philosophers, who are often associated with either one or even both terms – the popular among them being Foucault, Lyotard, Deleuze, and Derrida – did not identify themselves as poststructuralists and/or postmodernists (Münker and Roesler 2000: IX). Therefore, we will not
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elaborate further on the postmodern/poststructural distinction, but focus on the basic tenets of what is ‘commonly’ referred to as postmodern philosophical thinking. Inevitably, this discussion needs to include remarks on modern thinking as only such a distinction can help us to better understand the debate. The fact that the abovementioned authors did not identify themselves with ‘post’isms’ points to an important insight: postmodernism is not a properly formulated theory, and neither are the philosophical approaches of its advocates (Weiskopf 2003b: 11). Philosophical postmodernism is a diverse field of study with no clearly definable methods and models. This does not mean that the label postmodernism is meaningless, as Alvesson (1995) claims.60 Rather, it highlights the necessity of discussing the contours of the field to make sense of proposed arguments and to cope with the theoretical heterogeneity by ‘inventing’ postmodernism within our own writing. At its best, (post)modernism represents a fairly underspecified paradigm within the field of philosophy. Notwithstanding our discomfort with the underspecified nature of the modernism/postmodernism debate, we need to look for ways to differentiate both discourses. Oversimplifying battle cries like “modernism is totalizing and controlling” (Cooper and Burrell 1988: 94) and postmodernism can be associated with the “death of reason” (Power 1990: 110) give no reference to specific arguments and risk ending up as empty clichés. Instead, authors like Koch (2003: 75), Kirsch (1997: 548), and Giddens (1987: 196) propose to approach the discussion on the basis of ‘central issues’ to find some common ground.61 An overarching concept for such issues is provided by what Welsch (1996) calls a radical critique of a unified conception of reason. According to Welsch, postmodern thinking transforms reason from an Enlightenment-based unified conception of rationality as a source of knowledge to a pluralistic one. Whereas modern philosophy assumes that a natural order exists which can be discovered by reason in order to represent and control social conditions, postmodernism destroys this faith in rationality by no longer viewing reason as a distinctive human 60
Alvesson (1995) claims: “The term pomo [postmodernism] has perhaps received too many attributions already able to function as a fertile point of departure or even as a reference in discussions of the various themes currently carried out under the umbrella of pomo.” (Alvesson 1995: 1064, annotation added) “The message in this paper can be summarized under this slogan: The word pomo has no meaning. Use it as seldom as possible!” (Alvesson 1995: 1068) 61 Koch (2003: 66-84) also introduces other criteria to distinguish modern from postmodern philosophy, for instance by giving reference to key authors, philosophical traditions (e.g., phenomenology), and the form of the debate (Is the debate reflected from a modern and/or postmodern angle?).
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faculty anymore. A critique of reason and affirmation of plurality sets the framework for thinking about the contributions of a diverse set of postmodern philosophical concepts, most of them stemming from French contemporary philosophy. Within this framework, we identify four central issues that relate to the works of Lyotard, Foucault, and Derrida and act as the ‘battle field’ of the modernism-postmodernism debate within philosophy: a consideration of the discursive nature of society, the assessment of the relation between knowledge and power, a discussion of the role of the subject, and a debate about epistemological and ontological questions (see Figure 15).62 These central issues are discussed now.
Fig. 15. Central Issues of Postmodern Philosophy
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This classificatory framework is contingent and is based on the authors that are used as a ‘common ground’ to identify the central issues. For instance, we could have also included the debate concerning the possibility of ethics in which Habermas (1996a, 2001), who we refer to as an advocate of ‘reflexive modernism’, tries to establish a moral basis for society at large by seeing the lifeworld as an integrating concept for his basic theoretical categories ‘action’ and ‘discourse’. He assumes that an understanding across different discourses can be reached via communicative rationality. The unity of reason can be identified in the presuppositions faced by actions that are oriented towards reaching understanding about moral conflicts. Lyotard (1988) counters this argument by claiming that any moral position is the product of an ethical discourse which is, however, just one among many possible discursive species. A postmodern conception of ethics faces competing merits of different ethical conceptions that could each be consistent with their own discourse rules, but incompatible with one another.
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The radical critique of reason, which makes totalizing theoretical concepts impossible, is reflected by each of the four issues. However, the most common notion of postmodernism is associated with Lyotard’s (1999) claim regarding the ‘collapse of grand narratives’ that addresses the discursive nature of society.63 The central question for him is how knowledge can be legitimized. In his argumentation he follows a language-games approach in which knowledge is based on a diverse set of discourses. He argues that modern knowledge acquires its legitimacy through reference to grand narratives (e.g., the idea of Enlightenment, Lyotard 1999: 42-43). All discourses, then, need to submit to the legitimization criteria provided by the grand narrative – a universal discourse becomes possible. Postmodern knowledge rejects the legitimacy of these grand narratives and favors an incommensurable coexistence of different discourses.64 No one discourse is privileged because each one possesses its own legitimization criteria for knowledge. A universal legitimization across different discourses is revealed to be impossible. The validity of knowledge becomes localized within each discourse and the plurality and fragmented nature of discourses need to be accepted. Consensus is just a temporal state within a local discourse, but never its goal (Lyotard 1999: 190). Similar to Lyotard, Foucault (1982) argues that truth claims are relative to the discursive framework within which they originate. Discourses follow historicalcontingent rules that exist independent of the conscious speaker. The production of truth is not based on an accurate representation of reality but can only be understood in its historical context. Within his later analysis of discursive practices, Foucault (1980a) discusses the relation between power and knowledge. Whereas modern thinkers supposed that power and knowledge can be treated as separate analytical entities (Weber 1972: 28), Foucault argues that knowledge is integral to the operation of power. He perceives knowledge to be constituted in and through discourses and understands power as a positive social force not residing in commodities but discursive relations among social actors. Power is not bound to individuals or institutions but relational by nature: a power63
The reason for the widespread association of Lyotard with postmodernism is due to the name of his book La Condition postmoderne (The postmodern condition, [Lyotard 1999]) and his attempt to clarify the meaning of the phrase (Lyotard 1997a). He admits that the term, as he used it, was misunderstood by many critics as well as advocates (Lyotard 1997b; Reese-Schäfer 1995: 121-122). 64 Lyotard (1999) distinguishes, for instance, the denotative discourse (in which the true/false distinction is relevant) from the prescriptive discourse (working with the just/unjust distinction). Incommensurability between these discourses is justified by supposing that different discourses have different purposes (e.g., to come up with moral judgments or to persuade other people).
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ful subject is created in the course of exercising power. Foucault (1995) establishes a relation between power and knowledge by considering power to be a creative force that inevitably creates knowledge in actu. For Foucault, power is coupled with the desire to know because power produces knowledge in the sense that it gives rise to discourses that run through society. Conversely, knowledge can be seen as the operation of power because knowledge defines ‘truth’ which provides the basis for social action and intervention – the operation of power. Knowledge, which is perceived as false, does not affect actions and therefore represents no power. For Foucault, knowledge formation and the exercise of power are not neutral as the one always contains the other. Or put differently: knowledge and power do not exist independently.65 Giddens (1987: 204) identifies the discussion of the role of the subject as another important topic within the debate. Modern thinkers like Descartes (1641/1992) presume a unified subject that is fully conscious of itself, perceives the world in an objective way, and has the capability to act rationally. This idea of the subject believes in a static, centered, and incontrol notion of being in which individuals remain self-identical through time and space. Postmodern thinkers de-center the subject to show the ways in which it cannot have full autonomy of cultural or social (or any kind of) discourse. The subject is not something limited and autonomous but a product of history. This is why Giddens (1987: 213) claims that human beings do not make history, but history makes human beings. Contrary to the notion of a subject whose consciousness precedes and governs all social operations, ‘truth’ is not something that can be discovered by a subject as an accurate representation of reality, but that truth is produced within a system of discourses that exist independently of the conscious individual (Foucault 1982). The Cartesian cogito remains ‘empty’ and is filled by the discourses that emerge within history. Foucault therefore stresses that consciousness is not a given but emerges in a diverse set of discourses, and that consciousness is not indivisible but the product of a discontinuous social process. This is why Foucault (1980b: 117) suggests that
65
Foucault (1980a: 51-52) states: “Now I have been trying to make visible the constant articulation I think there is of power on knowledge and of knowledge on power. […] The exercise of power itself creates and causes to emerge new objects of knowledge and accumulates new bodies of information. […] The exercise of power perpetually creates knowledge and, conversely, knowledge constantly induces effects of power. Knowledge and power are integrated with one another, and there is no point in dreaming of a time when knowledge will cease to depend on power.”
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“[o]ne has to dispense with the constituent subject, and to get rid of the subject itself, that’s to say, to arrive at an analysis which can account for the constitution of the subject within a historical framework.”
This does not mean that postmodernists deny the existence of a physical subject. It is only the self-constituting character that is questioned by the notion of de-centering. Giddens (1987: 206) sums up the position of a decentered subject by recognizing that Descartes’s claim ‘I think, therefore I am’ is disqualified in a number of ways. “The ‘I’ is not immediately available to itself, deriving its identity as it does from its involvement in a system of signification. The ‘I’ is not the expression of some core of continuous selfhood that is its basis. The ‘being’ suggested in the ‘I am’ is not given through the capability of the subject to use the concept ‘I’.”
Epistemological and ontological questions, which represent the last central issue, are often regarded as ‘the’ central topic within the modernismpostmodernism debate. To contrast both mentalities, we can refer to modernism as symbolizing epistemological and ontological realism by favoring an ideology of representation in cognitive styles and language-theoretical logic. It was Descartes (1637/1960, 1641/1992) who introduced this style of thinking by tearing the world into the res cogitans (the mental nature) and the res extensa (the corporeal nature). This Cartesian conception sees the subject as sovereign and autonomous able to describe and grasp reality ‘out there’ on the basis of its analytical intellect. Only those things that can clearly be perceived in the corporeal nature are considered to be true. This ultimate rationalistic view can also be applied to language-theoretical arguments, which act as the basis for the postmodern critique. A modern conception of language assumes that a direct linguistic representation of reality is possible because there is a one-to-one correspondence between forms of representation (e.g., words or symbols) and an objective, external world. It is assumed that language fully describes reality since the structure of language directly relates to the meaning of the world. These strong ontological commitments carry with them epistemological consequences because any theory of knowledge needs to entail some theory of the nature of reality. Epistemological modernism, of which positivism is a part, argues for the existence of realist knowledge based on empirical observations. Modern science portrays the world as true and fully observable, making theories attempts to mirror reality (Chia 1996: 47-51). Within this objectivist view of science, progress depends on the cumulative discovery of scientific facts. Postmodern thinkers like Derrida (1999a) criticize these assumptions from a language-theoretical perspective by claiming that language cannot
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represent an objective reality. Words (signs) do not refer to an external referent but only to other – and always different – words. For instance, to know what ‘cost leadership strategy’ means, we need to know what cost leadership is not (i.e. its difference to ‘differentiation strategy’, ‘focus strategy’, etc.), but ‘differentiation strategy’ and ‘focus strategy’ also lack meaning and are only defined with regard to yet other signs. There are only differences and differences of differences and so on. Differences always change; we can never get to the bottom of meaning (see also section 4.2.3). Depending on the context in which a sign is used, there can be an infinite number of meanings. Language does not provide a stable structure on which meaning can rest but defers meaning from one linguistic sign to another. Consequently, there is no essence on which to base the meaning of a certain sign because the latter obtains its meaning only from other – and always different – signs. Meaning in a postmodern sense rests on an infinite play of differences among signs; an objective signification of reality by language becomes impossible.66 This perspective results in what Chia (1995) calls an ontology of ‘becoming’ in which the ephemeral nature of reality is accentuated. This antirepresentationalist view of language rejecting the notion that language can fully describe an objective reality also has epistemological consequences. Postmodern knowledge is conceptualized as contingent in nature and not based upon a universal legitimization. Researchers can no longer claim authority for the meaning and truth of their investigations because research produces nothing more than texts for which there is no solid ground. Accepting this view of knowledge indicates that we cannot think of scientific facts as hard and ‘ready made’ final solutions to our problems. We rather need to agree with Latour (2002) that scientific statements are a product of a power-laden negotiation process among actors (see section 3.3.1). Truth claims are not the result of a logical process, which determines factual relationships through empirical research, but a temporal and social phenomenon. What we call ‘true’ may hold in a specific interpretative com66
This notion of language has consequences for the de-centering of the subject. If consciousness is a result of signification, no subject can derive its identity entirely from itself but only from the system of signification it is involved in. Thus, subjects are not fully self-conscious beings but gain their identity from the differences in language. Derrida (2002: 70) argues in this context “that the subject, and first of all the conscious and speaking subject, depends upon the system of differences […].” Since these differences are in a state of flux, a subject with a stable identity and unified consciousness becomes out of reach. Postmodernism assumes that our world is made up of language and that individuals can only ‘know the world’ through the differences that our language creates (Hassard 1999: 176).
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munity of knowledge producers and consumers, but can just as well be rejected by other communities as non-valid (Gergen 2002: 73-75). A postmodern understanding of knowledge stresses the localized and unstable character of science. To conclude our discussion of postmodern philosophy, Welsch’s (1996) treatment of postmodernism as a radicalized critique of reason is reflected by all of the discussed central issues. Central to our critique of modernism is not only the assertion that reason itself is pluralized, but also that this pluralization is embodied in the concept of difference. We discussed this thinking in differences with regard to four central issues: (1) that discourses gain their identity only in difference to other discourses, (2) that knowledge is constituted by different discourses and relates to power which is relational by itself, (3) that the subject is a product of differences in language, and (4) that the meaning of language cannot be grasped because the latter is made up of a play of differences between signs. If we understand postmodernism in this way, as a style of thinking which is based on difference, we realize the intellectual proximity to other theories, especially Luhmann’s (1994) outline of social systems theory which bases the identity of a social system on the distinction between system and environment. Since this overview must leave the broad philosophical bases from which different authors draw support unexplored, we (a) need to acknowledge that the discussion around postmodern philosophy in general cannot be adequately reproduced here and (b) need to recognize that the discussed authors have contributed to more than one of the identified central issues. These remarks on the modernism-postmodernism debate leave us with the question of how we are supposed to assess the relationship between both discourses. Do postmodern claims dismiss or extend modern ideas? Does modernism maybe even come to its end with no subsequent theoretical offerings at all? Whereas Gmür (1991) finds advocates for all three conceptual relations, we characterize the relation between both styles of thinking from a postmodern perspective by perceiving them as mutual supplements. Lyotard (1997b: 45) has described this supplementary logic as follows: “A work can only be modern if it is first postmodern. Thus understood, postmodernism is not modernism at its end, but in a nascent state, and this state is recurrent.” (translation A.R.)
Modernism is nothing but a consequence of the suppression of the postmodern mentality (et vice versa). That is why postmodernism acts as the very condition for the articulation of modernism (Chia 1995: 580). Notwithstanding this relationship, we have to admit that a certain degree of
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meaninglessness remains attached to both terms. Therefore, the only way to make sense of the discussion is to develop specific versions of both terms without excessively relying on platitudes. We have developed such an understanding for the specific needs of this treatise to appreciate and understand Derrida’s argumentation later on. Before we enter the discussion on deconstruction, we need to look at the treatment of postmodern ideas within organization theory. This will help us to better understand and classify the intellectual context of subsequent arguments with regard to strategy research. 4.1.2 Postmodernism in Organization Theory While section 4.1.1 described postmodern philosophy in general, we now discuss how scholars within the field of organization theory have used these ideas. We focus our analysis on organization theory, since (a) postmodern thoughts have mostly been applied to organization studies but not to strategic management and (b) several of our implications of a deconstructive analysis in chapter six refer to ‘postmodern organization theory’. Postmodernism entered organization studies in the late 80s and early 90s with a series of articles by Cooper (1989), Burrell (1994, 1988), and Cooper and Burrell (1988). Parker (1992) shaped the contours of the debate by treating postmodern ideas in an epochal sense (How do we recognize a postmodern organization?) and an epistemological sense (How can we use postmodern philosophy to see organizations in a different way?). The epochal orientation examines the changing structural characteristics of organizations. Clegg (1990), for instance, argues that postmodern organizations move beyond the bureaucratic, hierarchical, and rationalized form of organizing that Weber (1972) was concerned with. Clegg argues that due to changes on the societal level like globalization and the availability of information technology, organizations move towards a new historical epoch characterized by flexibility, de-differentiated labor, and network-based forms of organizing. Even though these remarks on organizational design are labeled postmodern, they are still based on a realist epistemology because authors such as Clegg (1990) still search for features of the external world that confirm their hypothesis of a new historical epoch of organizations. Because our understanding of postmodernism is based on philosophical questions, we focus on the epistemological discourse. Similar to the debate around postmodern philosophy, the field of epistemological postmodern organization theory is heterogeneous and hard to classify. Several articles and books make postmodern philosophy a subject of organizational analy-
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sis.67 When looking at these books and articles, one can identify three ‘central issues’ that roughly, yet not conclusively, represent the work of scholars: organization as processes of organizing, organizational members as de-centered subjects, and contextual dependency of organizational actions (see Figure 16). These issues do not represent genuine postmodern concerns but are well-established subjects within organizational analysis. Kieser (1998), for instance, while developing a constructivist perspective on organizations, highlights the contextual dependence of interpretations. Similarly, Weick (1979) has shifted our attention from the clear-cut phenomenon ‘organization’ to the many-sided processes of organizing that give rise to the former. Postmodern organizational studies enrich these discussions by interpreting their concerns from a different perspective to shed light on as yet unexplored issues that are of relevance to further theorizing. In the following, we will discuss these three ‘central issues’. Concerning the first central issue (organization as processes of organizing), if meaning is not a steady-state phenomenon because language is ambiguous by nature, there is no reason to assume that organizations consist of a stable set of structures (e.g., rules) that can be adequately described. A structure-determined view is well reflected by the assumption of modern organizational theorists that social entities and their properties can be isolated for the sake of systematic analysis. By contrast, postmodernists understand organizations as an emergent, linguistically constructed phenomenon consisting of an evolving network of actors. There is not the organization, only processes of organizing. Chia (1995: 579) portrays organizing as depending on an ontology of becoming in which “reality is deemed to be continuously in flux and transformation and hence unrepresentable in any static sense.” Postmodern organizational analysis focuses on the underlying (often invisible) processes that apparently stabilize organizations. It was Weick (1979: 3) who first examined such stabilizing processes by defining organizing as “a consensually validated grammar for reducing equivocality by means of sensible interlocked behaviors.” Within his definition Weick draws our attention to equivocality that pervades all organizing and accordingly represents the inevitable status of disorganiza67
See the articles by Alvesson and Deetz (1997), Calás and Smircich (1999), Chia (1995), Gergen and Thatchenkery (1996), Hassard (2002, 1999, 1994), Kilduff and Mehra (1997), Knights (2002), Kreiner (1992), Parker (1992), Weik (1996), Weiss (2000), and Welge and Holtbrügge (1999). There are also several books which discuss postmodern philosophy within organization studies, for instance Chia (1996), Hassard and Parker (1993), Holtbrügge (2001), McKinlay and Starkey (1998), Schreyögg (1999), and Weiskopf (2003a). A summary and critical discussion is given by Koch (2003). Studies with a focus on deconstruction are excluded as these are discussed in section 4.3.
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tion. Disorganization is a status of ‘no meaning’ and ‘no structure’ motivating organizing processes to construct manifestations which we then label organizations.
Fig. 16. Central Issues of Postmodern Organizational Epistemology
The second central issue of postmodern organization theory is the idea of seeing organizational members as de-centered subjects. Whereas modern thinking conceptualizes managers and employees as autonomous, selfevident entities with a secure unitary identity, postmodern studies see subjectivity as a heterogeneous effect of discursive settings. Organizational members become a producer and an effect of a power-laden network of discourses. The focus of analysis shifts to examining the process by which individuals are rendered knowable. Chia (1996: 154) argues that this view moves beyond the egocentric assumption of methodological individualism, whereby some invisible barriers separate subjects from social structures. Such an understanding of subjectivity is opposed to the Weberean model of authority that places power in the hands of autonomous individuals (‘masters’) who gain acceptance through the enforcement of rational rules (Weber 1972: 549). By contrast, a postmodern theory of organizational authority is depersonalized and relational by conceptualizing authority as a
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matter of social interdependence (Clegg 1994). Power is inherent in organizational discourses and structures different forms of knowledge that in turn delimit ‘what can be said’ and ‘what people are’ (Linstead 1993: 63). Knowledge becomes a powerful device because it aids in defining subjects. This Foucauldean view of a production of the subject by correlative elements of power and knowledge has been applied by Townley (1993, 1998) to show the functional orientation of traditional human resource management practices: “The individual is the basic unit of analysis underpinning many HRM practices, that is, an essential human subject whose nature is to be discovered or uncovered, and who is to be motivated through the exercise of correct procedures of recruitment, selection, appraisal, training, development, and compensation.” (Townley 1993: 522) “Rather than thinking in functional terms of [these practices], in this [Foucauldean] perspective an emphasis is placed on how HRM employs disciplinary practices to create knowledge and power. These practices fix individuals in conceptual and geographical space, and they order or articulate the labor process.” (Townley 1993: 541, annotation added)
Obviously, Townley is not concerned with examining the predefined practices of autonomous actors (e.g., HRM managers), but the heterogeneous and power-laden network of social relations that gives rise to the body of knowledge labeled ‘HRM’. This body of knowledge defines individuals and thus makes them analyzable and describable. The last central issue of our conception of postmodern organizational analysis, the contextual dependency of organizational actions, is rooted once again in the critique of the philosophy of presence which we discussed with regard to ontological and epistemological questions in the preceding section. While modern organizational studies treat the presence of objects as unproblematic and believe in the capacity of language to represent them (e.g., contingency theory takes the situational factors as ‘given’), postmodernists highlight their indeterminacy of meaning. The objects of analysis (e.g., resources) gain meaning only with regard to a situation. In other words, there is a contextual dependency of organizational actions. Because the existence of multiple meanings makes generalizations impossible, postmodern organization theory appreciates the contextual, affirms ambiguity, and accepts the paradoxical (Schreyögg and Koch 1999: 18). To conclude, the three ‘central issues’ influence our analysis in chapter six when we inquire into the implications of a deconstructive analysis of strategy research.
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4.2 Deconstruction in a Nutshell? “It is not that bad that we try to encapsulate deconstruction in a nutshell. Let me offer you an anecdote. One day, two years ago, when I was in Cambridge […] a journalist took the microphone and said ‘Well, could you tell me, in a nutshell, what is deconstruction?’ Sometimes, of course, I confess, I’m not able to do that. But sometimes it may be useful to try nutshells.” Jacques Derrida (during a roundtable discussion at Villanova University, see Derrida 1997: 16)
A way of thinking that has become widely recognized in the discourse of postmodern philosophy is Derrida’s notion of deconstruction. We present this approach, or at least what we conceive it to be, as straightforward as the twists and turns of his argumentation permit. Because of these twists and turns, Derrida is often accused of writing in an incomprehensible, impenetrable way that refuses a fixed system of theoretical propositions.68 To respond to these critiques, we need to realize (a) that Derrida’s terminology deliberately changes in almost every text that he writes because deconstruction resists any clear-cut definitions, (b) that it is not Derrida’s intention to come up with a self-contained system of thoughts since this would imply a structure that is conceptualized in terms of a ‘center’ that acts as a fixed point of reference (Derrida 1976: 422-442), and (c) that deconstruction never exists in the singular; there is not the deconstruction as an identifiable method. Deconstruction, like any other term, remains ‘tocome’.69 68
Rorty (1977: 674) writes about Derrida: “Sometimes he talks as if there were some common project (Heaven knows what) on which he and Condillac, Humboldt, Saussure, Chomsky, Austin et al. were engaged, and as he has arguments for the superiority of his own views over theirs. At other times, he seems to disdain internal criticism of his competitors, and simply exhibits the way in which each of them commits the great sin of the Western intellectual tradition […].” In judging Derrida’s style we should remember that demanding conventional academic coherence is against the genuine logic of deconstruction which argues that knowledge is not already clearly structured for us (Cooper, 1989: 481). 69 “Deconstruction in the singular cannot be simply ‘appropriated’ by anyone or anything. Deconstruction are the movements of what I have called ‘exappropriation.’ Anyone who believes they have appropriated something like deconstruction in the singular is a priori mistaken, and something else is going on.” (Derrida 1995a: 141).
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We start our analysis with a discussion of what deconstruction aims to achieve. We demonstrate that deconstruction is concerned with a critique of a metaphysics of presence (section 4.2.1). To show how deconstruction approaches this critique, we illustrate its underlying ‘method’ (section 4.2.2). Because our own deconstructions frequently refer to Derrida’s assertion that there is a constant dissemination of meaning, we discuss his exemplary deconstruction of the sign that discloses the instability of meaning (section 4.2.3). Since an application of deconstruction to strategic management moves us into the territory of the social sciences, we discuss the possibility of applying the overly philosophical ideas of deconstruction in this context (section 4.2.4). Because the goal of this study is to expose paradoxes, we elaborate how deconstructive thinking uncovers paradoxes and how it deals with these logical contradictions (section 4.2.5). We close by revisiting some arguments against deconstruction (section 4.2.6) to finally discuss whether Derrida should be called a postmodern thinker (section 4.2.7). 4.2.1 The Target – Critique of a Metaphysics of Presence It is hard to find a suitable point of departure for analyzing Derrida’s philosophy as he resists any classificatory schemes for his work. Yet there is need to start somewhere. Following Welsch (1996: 247), we view Derrida’s writings primarily as an attempt to criticize the metaphysical embeddedness of Western thinking. This gives rise to the question: What is metaphysical thinking aimed at in the first place? “The main question of metaphysics is, according to Heidegger, that of the origin of entities: why is there something rather than nothing? Faced with this question, Western metaphysics answers with the Leibnizian principle of sufficient reason: every effect has a cause, this arises from another cause, and so on, until one arrives at the first cause, self-sufficient, full and cause of itself […]” (Dupuy and Varela 1992: 1; emphasis added)
Metaphysics is the study of the most fundamental and final concepts and beliefs about the nature of reality – concepts such as being, causation, and time. The metaphysical question aims to discover the ultimate essence of something; this essence is an origin that comes logically first and is independent of what comes after. It is this belief in a last and generally binding origin of things that Derrida’s philosophical approach criticizes. Of course, to speak of ‘things’ and a general critique of metaphysics does not expose any specific arguments. Rather, we need to ask: (1) How does Derrida approach his critique of metaphysics? and (2) What metaphysical phenomena is he criticizing in
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particular? The first question is methodological and asks for the way of thinking that is used by Derrida. We introduce this way of thinking as deconstruction (section 4.2.2). The second question aims to discuss arguments that result from an application of deconstructive logic. Derrida’s major concern is a critique of the metaphysics of presence that represents the desire for immediate access to objective and self-defining meaning. The idea of a metaphysics of presence suggests that everything has to have a determined meaning by privileging that which is and forgetting to pay attention to the conditions of that appearance. Every identity (e.g., of an object or a word) is thought to exude a presence that is always there, a presence that is full of meaning and represents an undeconstructible origin. For Derrida (1977: 12), this metaphysics of presence refers to “[…] the historical determination of the meaning of being in general as presence, with all the subdeterminations which depend on this generic form and which organise within it their system and their historical sequence (presence of the thing to the sight as eidos, presence as substance/essence/existence [ousia], temporal presence as point [stigme] of the now or of the moment [nun], the self-presence of the cogito, consciousness, subjectivity, the co-presence of the other and of the self, intersubjectivity as the intentional phenomenon of the ego, and so forth).” (emphasis and annotations in the original)
Within our own analysis, the identified dominant logics attempt to establish and maintain a metaphysics of presence. The ‘necessity of adaptation’ refers to an objective environment that organizations have to adapt to. The ‘primacy of thinking’ asserts that there is something like a formulated strategy that is self-defining and from which implementation can be derived. Similarly, the ‘fullness of strategic rules and resources’ suggests that because rules and resources are supposed to be generalizable, they are ‘full’ of meaning (and therefore self-defining) and determine their own application. Derrida’s questioning of metaphysics contains a metaphysical character in itself. A critique of metaphysics from an out-of-metaphysical perspective would require terms, theories, and a way of thinking that are freed from all metaphysical thought. Derrida does not claim that he possess a theoretical framework allowing him to simply leave metaphysics behind. In fact, he argues that it is pointless to totally renounce metaphysics, if one wishes to question metaphysics (Derrida 1976: 425). His thinking operates from within metaphysics, at the margins of metaphysics to expose its inherent ambiguity by making explicit its principles (Derrida 2003a 28; Derrida 1986a: 37; Lucy 2004: 77). He does not deny that one can start at an origin, but emphasizes the impossibility to find a final justification for this origin (Derrida 2003a: 281).
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4.2.2 Deconstruction as a Way of Thinking The Text! – It Is Not What You Think
A critique of a metaphysics of presence needs ‘to happen’ somewhere which means that deconstruction needs something to address. For Derrida this something is ‘the text’. If we speak about deconstruction, we speak about deconstructing texts. But what does Derrida mean by ‘the text’? Does deconstruction only target written texts and is thus literary theory rather than an approach applicable to a wider set of questions? In the standard sense one can distinguish between a text (e.g., a book, a newspaper) that is created and real things (referents) in the world (e.g., an animal, a chair). Then, we can say that everything the world holds belongs either to the side of representation (text) or the side of presence (the real world). Derrida’s understanding of text differs from this classical view. For him there are no non-textualized ‘real’ things that exist fully detached outside or beyond ‘the text’: in this sense there can be no outside-text (Derrida 2003a: 274). If there is no outside-text, there can be no representation of reality as representation assumes that there is something prior to textuality (presence): “I wanted to recall that the concept of text I propose is limited neither to the graphic, nor to the book, nor even to discourse, and even less to the semantic, representational, symbolic, ideal, or ideological sphere. What I call a ‘text’ implies all the structures called ‘real’, ‘economic’, ‘historical’, socio-institutional, in short: all possible referents. Another way of recalling once again that ‘there is nothing outside the text’.” (Derrida 1995a: 148)70
For Derrida, the referent is just another text. The claim that there is nothing outside ‘the text’ means that it is impossible to reach a state where a text refers not to another text but to a fixed referent. What texts refer to, what is ‘outside’ them, is nothing but another text. Textuality implies that reference is not to external reality but to other texts, to intertextuality. However, we need to consider 70
In a quite similar sense Derrida argues that “[n]o more than writing or trace, [the text] is not limited to the paper which you can cover with your graphism. It is precisely for strategic reasons [...] that I found it necessary to recast the concept of text by generalizing it almost within any limit that is. That’s why there is nothing ‘beyond the text.’ That’s why South Africa and apartheid are, like you and me, part of this general text. [...] That’s why deconstructive readings and writings are concerned not only with library books, with discourses, with conceptual and semantic contents. They are not simply analyses of discourse. [...] They are also active [...] interventions that transform contexts.“ (Derrida 1986b: 167-168, emphasis in the original, annotation added)
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“[t]hat [there is nothing outside ‘the text’] does not mean that all referents are suspended, denied, or enclosed in a book, as people have claimed, or have been naïve enough to believe and to have accused me of believing. But it does mean that every referent, all reality has the structure of a differential trace, and that one cannot refer to this ‘real’ except in an interpretative experience.” (Derrida 1995a: 148, annotation added)
So, if we speak about deconstructing a text, we do not exclusively refer to written documents but also to categories of politics, ethics, history, and – not to forget – strategic management. Even if we were sitting in a strategy meeting rolling our eyes on the comments of others’ suggestions, we would be using a sign, as our gesture could be treated as text. Text in this new sense may be best understood as the world as such – an interpretative experience. This still leaves the question of what ‘the text’ is made up of; or put differently: How does the world become textualized? Since the linguistic turn in the social sciences and philosophy, advocated by writers like Wittgenstein and Chomsky, we are aware that our world is made up of language and that we can only know the world through language. Or, as Wittgenstein (1959: 149, emphasis in the original) puts it, although in a metaphysical sense: “The limits of my language mean the limits of my world.” Even radical constructivists like Maturana and Bunnell (2001: 37) recognize that the objects our world is made up of are not simply there but created through language. Derrida follows this view by arguing that any text, and with it also categories like truth or meaning, is embedded in the structure of language (Lilla 1999: 192). His own approach to language outlined in Of Grammatology is based upon the notion that from the moment there is meaning there are linguistic signs (Derrida 2003a). We only think in signs. All there is, in fact, are signs. There is no reasoning without recourse to language. Even the nature of cognition would not be what it is without language, since the objects of consciousness and the words that are used to indicate them form an inseparable weave (Bennington and Derrida 1994: 107, for a similar point see also Feyerabend 1988: 159). Everything we can know is text; this text is constructed of words (signs) in relationship. Certainly, one could argue that since Derrida thinks of the world as a text that is shaped by language, he reduces the ‘real mundane objects’ in the world to language. Does Derrida collapse the distinction between words and things by indicating that things are words? Schalkwyk (1997: 388) notes that this is not the case, because Derrida only points to the fact that our grasp of things shares the structure of our grasp of language. Things are not reduced to mere words as critical realists like Fleetwood (2005: 212) have claimed recently: they continue to exist as things, but are textualized. This is not to deny the existence of referents, but to assert that
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referents achieve meaning through language only: things are not ‘things’, but just another text. A ‘real’ cat, for instance, is not in itself ‘outside the text’ as we can attribute values and meanings to it that are open to interpretation. Any reference to the cat would still be another reference. Surely, the cat is also ‘real’ in a sense, but its ‘reality’ is, as Lucy (2004: 144) remarks, “not […] something that could exist outside of claims to know that it exists.” Following this position, it is impossible to find an extra-textual position from where to find meaning. Things are part of ‘the text’ just as language is part of it; but that does not mean that both are the same. Text is an interweaving of the woof of language with what we call ‘the world’ (Schalkwyk 1997: 388). This imbrication of language and the world is the foundation for world-disclosure. After all, Derrida’s understanding of text demands to rethink the effects of reference in general, not to suggest that there is no referent, but that every referent is textual. Deconstructing Texts – The Logic of the Supplement
The remarks up to this point lead to the question: How shall we expose the metaphysical character of texts? Derrida’s answer to this question is reflected by the notion of deconstruction. To understand deconstruction, we first need to realize that we are not facing a coherent theory with a set of principles, but a diverse way of thinking that is hard to grasp. According to Derrida, deconstruction is not an analysis, a method, an act or an operation.71 As to the question of what deconstruction is, Derrida states, "I have no simple and formalizable response to this question. All my essays are attempts to have it out with this formidable question.” (Derrida 1985: 4)72 Deconstruction, as Weiskopf (2003b: 11) remarks with reference to Derrida (2000a), has no specific object: it can only be applied to something. If 71
“Deconstruction is not a method and cannot be transformed into one.” (Derrida 1985: 2) However, “if we were to pretend for a moment that Derrida has a method […] his method would be deconstruction.” (Wood 1980: 506) See also the remarks by Norris (2002: 1) and Derrida (1983: 42) himself. 72 “All sentences of the type ‘deconstruction is X’ or ‘deconstruction is not X’ a priori miss the point, which is to say that they are at least false. As you know one of the principle things at stake in what is called in my texts ‘deconstruction’, is precisely the delimitation of ontology.” (Derrida 1985: 4, emphasis in the original) “[D]econstruction is not a doctrine; it’s not a method, nor is it a set of rules or tools; it cannot be separated from performatives, from signatures, from a given language. So, if you want to ‘do deconstruction’ – ‘you know, the kind of thing Derrida does’ – then you have to perform something new, in your own language, in your own singular situation, with your own signature, to invent the impossible and to break with the application, in the technical, neutral sense of the word.” (Derrida 2000a: 22, 24)
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we can say anything about deconstruction at all, then it is that deconstruction strongly affirms what is to come by helping us understand how meaning, which we tend to view as fixed and self-defining, constantly (re)emerges in new contexts. Many enemies of deconstruction criticize that since there is no formalized definition of what deconstruction is, Derrida offers an obscure concept and eventually is an obscurantist thinker. Derrida’s response to these accusations is simple: “Deconstruction is first and foremost a suspicion directed against just that kind of thinking – ‘what is…?’ ‘what is the essence of…?’ and so on.” (Derrida and Norris 1989: 73). Our idea to explain deconstruction ‘in a nutshell’ points to a contradiction; deconstruction itself is all about cracking nutshells to reveal the ambiguous nature of reality. Taking a rather unconventional approach to ‘define’ deconstruction, we can look it up in a dictionary. The 1989 edition of the Oxford English Dictionary (OED) gives the following definition: “Deconstruction [f. DE+CONSTRUCTION]: (a) the action of undoing the construction of a thing, (b) Philos. and Lit. Theory. A strategy of critical analysis associated with the French Philosopher Jacques Derrida (b.1930), directed towards exposing unquestioned metaphysical assumptions and internal contradictions in philosophical and literary language.” (cited in Royle 2003: 24)
Although this definition is rather short, it stresses at least two important aspects. First, deconstruction is a strategy of critical analysis – although Derrida would refuse to speak of an analysis – that aims to uncover unquestioned assumptions of discourses. ‘Strategy’ is a good term to use here because a strategy is less determined than a method, if we understand strategy as a moderately emergent phenomenon. A thinker who has a method knows how to proceed, while the one who follows a strategy has to make judgments and thus takes more responsibility (Royle 2000: 4). Second, the definition emphasizes the role of internal contradictions. Within this study, these contradictions are considered as paradoxes. As we shall see, paradox is at the heart of deconstruction. Despite these advantages, a drawback of this definition is its focus on philosophy and literary theory. Because of Derrida’s understanding of text, deconstruction is not limited to these discourses but affects all categories that we call ‘real’. Royle (2000: 11) gives a more advanced definition by arguing that deconstruction is “not what you think: the experience of the impossible: what remains to be thought: a logic of destabilization always already on the move in ‘things themselves’: what makes every identity at once itself and different from itself: a logic of spectrallity: a theoretical and practical parasitism or virology: what is
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happening today in what is called society, politics, diplomacy, economics, historical reality, and so on: the opening of the future itself.”
Royle addresses the broad character of deconstruction that is always already at work in ‘things themselves’. This seems to be an important lesson because via deconstruction we do not make up, or invent, or create things in a new way. Deconstruction has always already been there. What remains to be done is to learn to think of things (e.g., strategy) as always being in deconstruction. Like the abovementioned OED definition, Royle places great emphasis on the role of the impossible, the contradictory that deconstruction is concerned with. He also gives reference to the destabilizing effects that come to the fore once we look at a text from a deconstructive perspective. If we wish to get closer to the meaning of this definition, we have to find a way to somehow give a descriptive account of what deconstruction may mean. A good way to do this, without immediately turning deconstruction into a method, is to look for a pattern in Derrida’s own deconstructions. According to Derrida, identifying the central conceptual oppositions of a text exposes its metaphysical character; one pole of the opposition is classically conceived as original, authentic, and superior, while the second is thought of as secondary or even ‘parasitic’. Concepts are textualized in a way that one is always seen as ‘pure’ and full of meaning, whereas the other is just a derivative of the former defined in terms of a lack of presence.73 To understand the necessity for deconstruction therefore means to recognize that “in a classical philosophical opposition we are not dealing with the peaceful coexistence of a vis-à-vis, but rather with a violent hierarchy. One of the two terms governs the other (axiological, logical, etc.) or has the upper hand.” (Derrida 2002: 38-39)
And elsewhere Derrida states “[a]ll metaphysicians from Plato to Rousseau, Descartes to Husserl, have proceeded in this way, conceiving good before evil, the positive before the negative, the pure before the impure, the simple before the complex, the essential before the accidental, the imitated before the imitation etc. And this is not just one metaphysical gesture among others, it is the metaphysical exigency, that which has been the most constant, most profound and most potent.” (Derrida 1995a: 93, emphasis in the original)
73
Prominent examples from Derrida’s own deconstructions include the oppositions signified/signifier (see also section 4.2.3), presence/absence, speech/writing (Derrida 2003a), and to use/to mention (Derrida 1995a). Almost all of Derrida’s texts refer in some way (be it explicit or implicit) to oppositions.
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The desire of the Western culture to view the essence or logos of a concept (e.g., the essence of ‘being’ or ‘truth’) in a way that something else appears as secondary is what Derrida (2003a: 10-12) calls logocentrism. A philosophy favoring logocentric thinking conceives an order of meaning as existing in itself, a metaphysical foundation. Logocentrism represents a metaphysics of presence as what is considered to be secondary is always conceived to be absent, whereas the origin is present in the sense that it is self-defining without reference to the other. The Cartesian cogito, for instance, appeals to presence as the ‘I’ is conceptualized as resisting radical doubt because it is present to itself in the act of thinking (Culler 1982: 94). This is the order traditional reason is built upon, the order of the logos. Consider the following example that is relevant to this study: The ‘necessity of adaptation’ conceives ‘the environment’ as originary and ‘the organization’ (defined as the absence of the environment) as secondary. ‘The environment’ does not only come before ‘the organization’ but is also privileged over it. However, we cannot define ‘the environment’ without any recourse to a notion of ‘the organization’. There is no ‘environment’ on its own just regarding the essence of itself. ‘The environment’, therefore, can never be present to itself in the total absence of ‘the organization’.74 Logocentrism is the primary target of deconstruction as a deconstructive reading identifies the logocentric assumptions of a text by tracking down the binaries and hierarchies it contains. An attack of logocentrism also means that every deconstruction is necessarily a deconstruction of the metaphysics of presence. Thus, deconstruction, which is itself a hybrid term made up of the opposition construction and destruction, is an attempt to dismantle the hierarchical oppositions that govern a text (Derrida 1986a: 87). Dismantling does not mean destroying the oppositions, but showing that by acknowledging their mutual dependence one can create something new. By disclosing the supplementary logic among the concepts, deconstruction demonstrates how a logocentric text always undercuts its own assumptions. Derrida (2003a: 250) argues that the supplement, which is the formerly suppressed concept, is something that gives rise to the concept that is apparently thought of as the ‘origin’ (see Figure 17). The concern is to show how the concept that logocentrism deemed to be a derivation of the ‘origin’ is necessary for the ‘origin’ to mean anything at all. There is no self-defining origin because the formerly excluded concept re-enters 74
In other words, there can be no self-presence because the present’s presence necessarily involves the reference to the non-present (Wheeler 1999: 1006). “It could be shown that all names for reasoning, principle, or center […] have always described an invariant of presence.” (Derrida 1976: 424, translation A.R.)
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and acts as a constituting factor for the former (Girard 1992: 27). Both concepts interpenetrate and inhabit each other. This is where deconstruction starts: in being suspicious about concepts like ‘origin’, ‘final reasons’, and clear ‘cause-and-effect relations’ (Ortmann 2004b: 5). Within this study, we question the self-defining origins that are represented by ‘the environment’ (strategy context), ‘strategy formulation’ (strategy process), and ‘strategic rules and resources’ (strategy content).
Fig. 17. Derrida’s Supplementary Logic (adopted and modified from Dupuy and Varela 1992: 3)
For Derrida (2003a: 249-251), the supplement holds two meanings at once. On the one hand, the supplement is a surplus, a complement that enriches the original concept. The supplement supplements a lack (of meaning) of the ‘original’ concept – a lack (i.e. an emptiness) that cannot be avoided. This emptiness is a necessary consequence of the denial of a metaphysical origin that would be self-defining and thus full of meaning. On the other hand, the supplement can also substitute the origin; it can eventually ‘take-the-place-of’ the original and thus make up for something missing. The two characteristics of the supplement are needed for the concepts to interpenetrate and constitute their meaning in a mutually dependent process. Both meanings of the word indicate that the supplement is something exterior that is alien to the apparent origin. It is not known by the plenitude, but nonetheless necessary for its existence. The logic of the supplement entails a disruption of what we think we identify with ‘the origin’ and ‘the derivation’. If a supplement is both a surplus that enriches a plenitude and an extra that makes up for something
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missing, the very nature of a supplement is dangerous. This is why Derrida (2003a: 141) calls the chapter in Of Grammatology that deals with supplementary logic “… This dangerous supplement …”. The supplement is dangerous because it fills a void of meaning of the ‘original’, a filling that implies a constant modification. We can never be done with the ‘effects’ of the supplementary logic because the supplement haunts (Royle 2003: 50). Take the example of strategic rules that we described as ‘empty’. Empty rules represent a void of meaning that is filled in and through application. Application, of course, is the supplement to strategic rules; application fills strategic rules with meaning. Yet, this filling is always ‘dangerous’ in the sense that in the process of application strategic rules are modified; a modification that can be ‘silent’ (and thus not recognized by actors) or more obvious (see also section 6.3). It should be clear from the discussion of the supplementary logic that the deconstruction of a hierarchical opposition is not the same as its simple inversion (Dupuy and Varela 1992: 3). An inversion would create another hierarchy which once again requires overturning. Derrida (1986a: 88) argues that a simple overturning (a replacement) does not move deconstruction beyond its original territory because one remains within the deconstructed system by establishing yet another opposition. It is only the supplementary logic – the thinking of the one within the other – that keeps the deconstructive process in motion and defies its relapse into a static binary structure. Derrida (1986a: 87-89) calls these two movements of deconstruction, the overturning and reversal of the opposition as well as the maintenance of the supplementary relation to displace the former system of thought, a ‘double gesture’. In an oversimplistic way, we can summarize deconstruction as consisting of three phases:75 (1) the identification of a binary opposition that governs a certain text, (2) the overturning of the hierarchical structure residing within the opposition, (3) the maintenance of the supplementary relation among both concepts. Deconstruction is organized around a kind of inventionalism, the inescapable in-coming of the other into the constitution of any concept (Caputo 1997: 42). Formerly oppositional concepts turn out to be mutually dependent and constitute each others meaning in a constantly ongoing supplementary process. That is why deconstruction is all about moving from an either/or-thinking to a neither/nor-type of thinking. 75
Derrida never explicitly mentioned such a scheme. Yet, in the interview ‘Grammatology and Semiology’ he mentions all three phases as being part of deconstructive thinking (Derrida 1986a: 52-82, see also the discussion by Lagemann and Gloy 1998: 55) as well as Culler’s (1982: 154) remarks on schematically summarizing deconstruction.
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To recapitulate our way of argumentation up to this point, we need to consider that far from excluding the world from language or reducing it entirely to language, Derrida advocates an imbrication of language and the world. The resulting weave is what he labels ‘the text’. To deal with the metaphysical embeddedness of this text, Derrida discloses and deconstructs its hierarchically structured binary oppositions. Deconstruction demonstrates that the meaning of each end of the opposition is not selfdefining but depends on its counterpart. The inclusion of meaning into the analysis raises particularly two questions: Why is there no stable meaning within ‘the text’? Why can the origin not just be full of meaning? These questions require discussing how meaning is itself constituted and how language and the world interrelate to make a text meaningful. Derrida’s answer to these questions is that language is itself subject to deconstruction and that because language and ‘the text’ are interwoven this deconstruction has serious consequences for the way we conceptualize the meaning of different ends of an opposition. In what follows, we discuss Derrida’s deconstruction of the linguistic sign to argue against the metaphysical character of language in the epoch of the logos. This exemplary deconstruction offers a new understanding of the constitution of meaning that reaches beyond a metaphysics of presence. 4.2.3 La Différance! – The Deconstruction of the Sign Within the philosophy of language it is commonly accepted to think of language as a system of signs (e.g., words). By deconstructing Saussure’s (1967) view of the sign, Derrida develops an approach to understand in a new way the nature of language and with it the constitution of meaning. The deconstruction of the sign is just one exemplary deconstruction we can refer to. However, because of the interrelated nature of language and the world and the resulting importance of language in the production of text, we need to discuss this particular deconstruction. To understand the deconstruction of the sign, we first introduce some basic linguistic terminology. In a general sense, a sign is comprised of a signifier (the sound image of a word) and a signified (the mental concept that relates to that sound image). Both elements are indispensable to the constitution of a sign as a signifying unit that describes its referent existing in the outside world (see Figure 18). Whereas conventional wisdom emphasizes that each sign represents a referent ‘in the real world’, structuralism, as advocated by Saussure (1967), criticizes this view by arguing that signs have no direct connection to their referent but only unite a signifier and a signified.
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Fig. 18. Basic Linguistic Terminology
According to Saussure, the relationship between signifier and signified is arbitrary, which means that there is no naturally given necessity that the signifier ‘DOG’ automatically refers to a mental concept of a dog (i.e. the signified). The meaning of ‘DOG’ has nothing to do with the characteristics of a dog as such but is only sensible to people because they know that ‘DOG’ is different from other signifiers like ‘CAT’ or ‘COW’. The identity of a sign is constituted negatively through differences to other signs. We have to be careful to interpret Saussure in the right way. Arbitrariness does not mean that the signifier-signified relationship is haphazard. Whenever someone uses the signifier ‘DOG’ it is not just a matter of chance as to what others might interpret it to mean since the meaning of the signified is fixed by historico-institutional agreements. It rather accounts for the fact that there is no a priori reason why ‘DOG’ should signify a four legged barking animal (Lucy 2004: 121).76 What Saussure’s argument comes down to is the idea that the sounds that form words in language have no direct connection to the physical object that they designate. Even though Saussure thinks of the relationship between signifier and signified as arbitrary and thus seems to move beyond 76
It remains largely unclear whether Saussure believed in an arbitrary nature of the signified. This would leave open the possibility of thinking of different kinds of dogs (e.g., a poodle or German shepherd) when hearing the signifier ‘DOG’. Burns (2000: 13), quoting Merquior (1988: 231-232), remarks that it is hard to believe in an arbitrariness of the signified when considering “that Saussure himself in the Course in General Linguistics stresses that the ‘same signified’ exists both for the French ‘boeuf’ and for the German ‘ochs’.”
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the logocentric assumption that signs objectively represent their referents, Derrida (2003a) argues that Saussure still believes in a natural bond between signifier and signified. He bases his argumentation on Saussure’s (1967: 28) claim that spoken language is more intimately related to our thoughts than written words. Following Saussure, speech is more natural than writing and thus enables access to ‘present’ and full meaning. Derrida argues that this assertion runs counter to Saussure’s own fundamental principle of the arbitrariness of the sign. If signs are arbitrary eschewing any objective reference to reality, it cannot be claimed that a certain type of sign (the spoken) could be more natural than another (the written). This is why Derrida (1986a: 54) claims that the concept of the sign remains problematic in Saussure’s analysis (see also Norris 1987: 87-94). By referring to the oppositional nature of the signified/signifier relation, Derrida claims that in Saussure’s scheme the signified is conceptualized as independent of the signifier while the signifier is treated as dependent. The meaning of the signified is self-defining and originary, whereas the meaning of the signifier can only be fixed with reference to the (already existing) signified. According to this logic, the signifier exists only to give access to the signified and thus submits to the concept of meaning that the signified inhabits (Culler 1982: 99). If it is true that no sign can signify on its own because meaning is a product of differences, as Saussure claims, then this conception of the sign as a clearly structured symmetrical unit that gives access to some already existing meaning runs counter to Saussure’s own assumption of arbitrariness. “[In Saussure’s concept of language] the signified can exist for itself […] [A]ctually, the signified has no need for a signifier to come into existence.” (Derrida 2003a: 128, translation A.R.)
The signifier is not assigned any meaning constituting power as it is conceived as empty packing, whereas the signified contains the full meaning of the sign (Welsch 1996: 252). In the Saussurean perspective, the signifier directly yields its corresponding signified like a mirror yields an image (Eagleton 1997: 111). This is why Derrida (2003a: 38) speaks of a transcendental signified. Such a transcendental signified acts as an ‘anchor’ for a text to fix its meaning in an objective and thus determinable sense. According to Burns (2000: 14), the signified in Saussure’s sense exists as a pure concept in a timeless world outside of language before it ‘falls’ into the words of any particular linguistic system. Saussure’s concept of the sign affirms the idea of logocentrism by proposing a self-defining origin for meaning. This is where the metaphysics of presence becomes visible once again. Meaning in the Saussurean sign is present as it comes into be-
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ing as a signifying unit by itself in its own right (Bennington and Derrida 1994: 33). In Derrida’s (2003a: 129, 1986a: 56, 1976: 425) view there is no transcendental signified. The distinction between signifier and signified is not fixed because the signified is nothing more than an effect of an endless chain of signifiers, or put differently: in Derrida’s understanding every sign is a signifier whose signified is another signifier.77 The Saussurean signified/signifier opposition is overturned. “From the moment that one questions the possibility of such a transcendental signified, and that one recognizes that every signified is also in the position of a signifier, the distinction between signified and signifier becomes problematic at its root.” (Derrida 2002: 19, also Derrida 1986a: 56-57)
We can think of the following example to illustrate this point. If we wish to know the meaning (signified) of a word (signifier), we usually use a dictionary to look it up. However, all we find are yet more signifiers whose signifieds we need to look up again ad infinitum. The process is not only infinite but also circular since signifiers transform themselves into signifieds and vice versa. For example, the phrase ‘four-legged barking animal’ operates as the signified of ‘DOG’ but is itself composed of several signifiers with their own signifieds. The signified becomes the result of an endless chain of differences among signifiers. Or, to put it in a deconstructive terminology: the signifier acts as a supplement of the signified. The formerly original term (signified) turns out to be a product of its seemingly opposite (signifier). It is impossible to arrive at a final signified that is not already a signifier in itself (Sarup 1989: 35). Meaning has no final origin as no sign can ever be fully defined by itself. Instead the meaning of a sign is caught up in a play of differential relations with other signs. As soon as there is meaning, there is difference. The differences that create the ‘spacing’ between signifiers are what matters in the context of signification. In Derrida’s view of language, signifiers do not reveal some sort of corresponding objective mental image that supply their meaning, nor do the referents in the external world to which they refer (Giddens 1987: 204). The traditional doctrine of metaphysical realism in which there are clear-cut word-world relationships that provide the notions of truth and reference to the ‘real world’ is consequently overcome.
77
Derrida (2003a: 129) states “The fact that the signifier […] has always been in the position of the signified needs to be reflected by the metaphysics of presence […] as its own death.” (translation A.R.) Derrida does not assert the nonexistence of the signified. Rather, the signified is a product of signifier-effects (see also the discussion by Lucy 2004: 144-145).
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The dictionary example points to an interesting insight. Since meaning is defined differentially, relative to the meaning of other signs, the meaning of a sign is dispersed along the whole chain of signifiers (Derrida 1986a: 67). Meaning is, as Giddens (1979: 30) notes, “created only by the play of difference in the process of signification.“ A sign is constituted by the traces78 of other signs it needed to exclude in order to be itself. The sign, therefore, bears these traces within itself. In contrast to the Saussurean perspective, the signifier-signified relation does not refer to the sign as a signifying unit but to traces and traces of traces. This assertion implies that meaning is never fully present in a sign because it depends on what the sign is not (the traces of the other signs). The meaning of a sign is constituted on the basis of the trace within it.79 This trace ties the sign to the whole chain of non-present signifiers. To assume the presence of a sign would mean to establish an ideal (objective) meaning that antedates the constitution of traces. In this sense a metaphysics of presence would be a presence without difference (Derrida 2001: 29). It is impossible to get to a point where a signifier no longer refers to other signifiers but to an objective meaning. ‘There is nothing outside the text’, means that ‘the text’ is the weaving of differences and traces that constantly (re)emerge in new contexts (Derrida 1986a: 67). Derrida’s rejection of the Saussurean code model indicates that the iteration of a sign cannot be programmed or predicted. Surely, it is possible to iterate a sign as it can be used over and over again. However, it is impossible to use a sign twice in the same context. There is an infinite number of contexts making a repetition of exactly the identical context (in which the sign was used in the first place) unattainable (Bennington and Derrida 1994: 97). Signs constantly contain new meaning when used in a different context. This is because, the repetition of signs in a new context creates new differences that alter and simultaneously defer the presence of their
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The term ‘trace’ may be misleading at this point. Derrida uses this term to avoid speaking of (absent) signifiers which would implicate him in a linguisticism. He perceived his work, however, as not primarily addressing linguistic issues (Bennington and Derrida 1994: 35). 79 Derrida (1981b: 26) points out: “Whether in written or in spoken discourse, no element can function as a sign without relating to another element which is itself not simply present. This linkage means that each ‘element’ [sign] is constituted with reference to the trace of the other elements of the sequence or system it contains. This linkage, this weaving, is the text, which is produced only through the transformation of another text. Nothing, either in the elements or in the system, is anywhere simply present or absent. There are only, everywhere, differences and traces of traces.” (annotation added)
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meaning.80 Derrida (1999a) calls this combination of differing and deferring différance.81 The iteration of a sign is never ‘pure’ but always different and forever new – driven by the creative force of différance (Derrida 1999b: 325). For Derrida, the possibility of repetition requires a mix of sameness and difference. The neologism différance can be thought of as the antagonist of the transcendental signified that paralyzes the deferment of meaning and contributes to the establishment of a metaphysics of presence. The double meaning of the term, uniting the two verbs ‘to differ’ and ‘to defer’, points out that differences among signs are held not only in space but also in time: to differ is at the same time to defer (Derrida 1999a). Concerning the spatial dimension, différance represents the creation of differences (‘to differ’) among signs and thus helps to negatively define the sign’s meaning. As stated above, this meaning is never present but dispersed along the chain of signifiers. Hence, différance also states that the meaning of a sign can never be present, original, or full, but is constantly postponed (‘to defer’). Derrida (1986a: 67-70) sums this up as follows: “This chaining process means that each ‘element’ [sign] is constituted from the trace of other elements it carries in itself. […] Diffèrance is the systematic play of differences, of traces of differences, of the spacing [the spatial dimension] by means of which elements are related to each other. […] The ‘a’ of différance, however, also implies that this spacing is a temporalization, a detour, a deferment, by means of which […] the relation to presence, a present reality of being is always deferred (différes).” (emphasis in the original, annotation added)
Différance shows that signs are not a homogenous unit bridging an origin (referent) and an end (meaning) as Saussure’s semiology implies. The deferring and differing effects of différance move meaning to a future state 80
Now, we can understand why Derrida refuses to clearly define deconstruction. He states “[t]he word ‘deconstruction’, like all other words, acquires its value only from its inscriptions in a chain of possible substitutions [supplements], in what is to blithely called a ‘context’. (Derrida 1985: 4, annotation added). Therefore, “[d]econstruction does not exist somewhere pure, proper, selfidentical, outside of its inscriptions in conflictual and differentiated contexts; it ‘is’ only what it does and what is done with it, there where it takes place.” (Derrida 1995a: 144). Deconstruction is always different from one context to another (Derrida and Norris 1989: 73). 81 In French, the ‘a’ of différance remains silent when pronounced and can only be recognized in the spelling. Différance only exists in writing – an allusion to the speech/writing opposition. The noun ‘différance’ contains the verb ‘différer’ which has a twofold meaning in French: to differ and to defer. Différance is a polysemantic term which emphasizes that one has constructed something that continually breaks up in a chain of different substitutions (Rorty 1977: 677).
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that can never be grasped. Derrida shows that there may be numerous legitimate interpretations of a text because meaning is always ‘in the coming’. Différance acknowledges that the constituting differences of meaning do not appear from nowhere and are not the product of a closed Saussurean linguistic system, but owe their identity to différance. The ongoing movement of différance upsets the idea that there can be something like fixed differences that call the pure meaning of a sign into existence. If we accept that language produces ‘the text’ that we use to make sense of the world, but language as a system of signs does not give rise to some form of objective meaning, we see that différance runs all the way through ideas like truth or presence. Différance comes before being; similarly: a trace comes before the presence of a sign – a trace marks the absence of a presence. The deconstruction of the sign that is discussed within this section follows the general deconstructive pattern as introduced in section 4.2.2. The underlying opposition signified/signifier, stemming from the Saussurean sign model, is criticized by Derrida for privileging the signified as being transcendental. In deconstructing the opposition, Derrida overturns its hierarchical structure by claiming that the signified is the product of differences among an endless chain of signifiers that act as its supplement and thus shows that it is impossible to separate the signified from the signifier. Derrida thus challenges the Saussurean idea of difference, which assumes that for meaning to be created the signs X and Y need to be clearly distinct from each other, and instead argues that such pure difference is not possible because X already contains Y, as it is partly defined by it. It is by means of this supplementary logic that the ambivalence of the meaning of ‘the text’ so fiercely promoted by différance is perpetuated.82 Although the deconstruction of the sign is just one exemplary deconstruction, it alters all other principles of the conceptual structure of metaphysics (Bennington and Derrida 1994: 45). Because of the natural instability of language there is no reason to assume that one can come up with a fixed and transparent meaning of a text; indeed any text remains ‘open’. If ‘the text’ runs through all categories of our life and the meaning that emerges in this text cannot be fixed but is constantly reshaped by dif82
Derrida (1981a) calls this ambivalence of texts dissemination. Every ‘reading’ of a text contains new meanings because every ‘reading’ takes place in a new context (see section 6.3.1). From the moment a text comes into being, dissemination destroys its determined, hegemonic character. Dissemination strongly affirms the anti-unity of meaning. Derrida (1995b: 224) therefore claims: “As for the 'plurality of filiations' and the necessity of a 'more differentiated perception', this will always have been my 'theme' in some way, in particular, as signaled by the name 'dissemination'. If one takes the expression 'plurality of filiations' in its familial literality, then this is virtually the very 'subject' of 'Dissemination’.”
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férance, we need to admit that différance is always and everywhere at work. There is no predefined limit to the applicability of différance. As Caputo (1997: 104) claims: “Derrida also generalizes what was originally a linguistic model in Saussure so that différance is not restricted to language but leaves its ‘mark’ on everything – institutions, sexuality, the worldwide web, the body, whatever you need or want. […] like language all these structures are marked by the play of differences. […] Wherever one is, one is placed within a play of differences, ‘received’ or ‘inscribed’ within différance […].” (emphasis in the original; similarly see also Agger 1994: 503 and Ortmann 2003a: 100)
Because there is différance, there is the impossibility of pure presence in the sense of an absolute meaning. For Derrida this logic takes the form of a law, a law that not only affects writing or speech but also experience in general. This is why he claims: “I shall even extend this law to all ‘experience’ in general if it is conceded that there is no experience consisting of pure presence but only of chains of differential marks.” (Derrida 1995a: 10, emphasis in the original) As will be shown later on, the deconstruction of the sign and its consequence (i.e. différance) has serious implications for our identified oppositions. The meaning of one end of an opposition (e.g., the environment) is not self-defining, objective, and clear, but owes its existence to its supplement (e.g., the organization). Because there is no transcendental signified in general, ‘the text’ of strategic management cannot rely on concepts (e.g., strategy formulation) that are full of meaning. Indeed, these concepts only gain meaning from their supplements (e.g., strategy implementation), and this constant recreation of meaning between the two poles is never fixed and finalized but always subject to différance. Indeed, at the point at which we recognize that the concept of différance is relentlessly at work, all the conceptual oppositions that refer to a metaphysics of presence vanish (Derrida 2002: 26). 4.2.4 The Deconstruction of the Social – About (Con)Texts If we want to apply deconstruction to strategic management, we enter the territory of the social sciences. The notion of différance is, as the quote of Caputo at the end of the preceding section shows, also relevant in the social context. But how are we supposed to think of deconstruction with reference to the continued existence of social order? Obviously, the work of Derrida is not genuinely rooted in social theory, however his way of thinking can be potentially used in this context (Agger 1994: 501-505; Agger 1991: 114; Leledakis 2000: 175; Ortmann 2003a: 88). To make use of de-
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construction in the social sciences requires once more a discussion of Derrida’s understanding of text, this time however in another context. If the world is textualized via language as claimed in section 4.2.2 and the structure of language is not stable by itself as discussed in section 4.2.3, we can argue that other social structures share the same fate. Similar to a written text, the social text is subject to différance. Yet, we can say more about the relation between ‘the text’ and the social world, if we consider that social action always happens in a context. Then, we can specify that “[t]he phrase which for some has become a sort of slogan, in general so badly understood, of deconstruction (‘there is nothing outside the text’ [il n’y a pas de hors-texte]), means nothing else: there is nothing outside context.” (Derrida 1995a: 136, emphasis and annotation in the original)
Derrida (1989b: 873) specifies this by arguing that the statement ‘there is nothing outside context’ means that “there is nothing but context.” Meaning cannot be determined regardless of context; we always find ourselves in a context (Derrida 1979: 81). Contexts and texts comprise the entire ‘real-history-of-the-world’ in which ‘things’ happen and meaning is created (e.g., the political, social, historical, etc.). Does this imply that text and context are simply two sides of the same coin? Not quite, because each text is only part of a context. Every element of a context is in itself a text that needs to be interpreted (Bennington and Derrida 1994: 97). A manager giving a presentation in a strategy meeting creates text (e.g., by his utterances, gestures, appearance in general) that belongs to a specific context (the strategy meeting). Therefore, Derrida’s assertion that there is nothing outside context is based upon the belief that contexts consist of elements of text. Consequently, contexts do not exist as a pre-linguistic given but are themselves textualized. A context represents the textualized set of circumstances that surround situations texts are embedded in. Accordingly, Giddens (1987: 209) claims that meaning is constructed by the intersection of the production of signifiers via différance with the context (e.g., an event) they occur in. The (social) world is embedded in a constant movement of contextualized interpretations of text. The interrelation of texts and contexts implies that one of the definitions of deconstruction would be, as Derrida (1995a: 136) remarks, to consider as far as possible the incessant movement of the recontextualization of texts. To understand Derrida’s idea of context together with his claim that recontextualization is a never-ending process, we need to address a puzzling question: “Are the prerequisites of a context ever absolutely determinable?” (Derrida 1982: 310) If this were the case, we could create the
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same context twice and recontextualization would be perfect iteration. Yet, there is an infinite number of possibilities that can shape contexts. No context permits saturation since ‘the-real-history-of-the-world’ is contingent and ensures the boundless nature of contexts (Bateson 1985: 372-378; Ortmann 2003b: 29). Hence, meaning is not only context-bound because of the ambiguous nature of language, but contexts themselves are boundless and never absolutely determinable (Derrida 2001: 17). Culler (1982: 123) notes that contexts are boundless in two ways. First, there is a structural openness of contexts as any given context is open to further description and thus further specification. This is to say that there is no fundamental limit to what can be included in a given context. No context permits saturation and therefore cannot be described in isolation or be fully portrayed. Second, every attempt to describe a context can be grafted onto this very context, producing a different context that moves beyond the previous description. Each attempt to give a detailed description of the limits of a context therefore displaces those limits (Derrida 2001: 32). Both understandings of the boundless nature of a context highlight its arbitrariness and contingency. This finding gives rise to a question that is important with regard to organizations: If contexts are boundless and their specifications are contingent, how are organizational actors supposed to think of the unlimited nature of contexts? What do they do to specify their contexts? People in organizations specify (mark) contexts through their actions and communications and thus impose meaning on the social world (Bateson 1985: 374). Social action and communication can be equated with organizational (con)text production – or to be more precise: with the specification of context-markings (Ortmann 2003b: 29). In organizations we come across a variety of context specifications: the email that invites us to a meeting (‘No unauthorized entry!’), the clothes we are wearing (‘Today is casual Friday!’) or the gong on the shop floor (‘Lunch break!’). Contexts are not a given natural ground upon which to base interpretation but constructed in a complex network of social relations. Strategies, for instance, represent the attempt to mark future contexts in a meaningful way through social action and communication. This is the crux of the matter: strategic management does not only deal with existing contexts and context-markings but tries to handle the contingency of future contexts. All of this has far-reaching implications for our understanding of society in general and organizations in particular. If contexts are boundless, an application of deconstruction to strategic management focuses on the unpredictable, unforeseeable, new effects that pop up in the reproduction of social life. This points to the impossibility of perfect iterations. Just as the
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meaning of signs is altered in the course of their application in different contexts, the meaning of strategies is not fixed as well. The force of différance does not suddenly come to a halt. Every reproduction means modification. The iterated object might be similar, as Maturana and Bunnell (2001: 37) remark; however, it is never the same since no context can be perfectly reproduced. This implies a renunciation of a metaphysics of presence (this time also with regard to the social). To believe in a ‘present meaning’ would imply that whatever is at stake derives from a ground that guarantees an undeconstructible identity; an identity that is always present, ready to glow in the luminosity of presence regardless of its context of application. The deconstruction of the social emphasizes that there can be nothing pure and full of meaning that can serve as a foundation for an objective worlddisclosure. In an even more generalizing sense, Giddens’s (1984: 16-28) notion of social structure opposes presence. He highlights that structure exists only as memory traces. Social structure is nothing that exists ‘exterior’ to individuals to constrain their actions but is constraining and enabling at the same time. In this new sense, social structure can be described as a ‘virtual order’. “To say that structure is a ‘virtual order’ of transformative relations means that social systems, as reproduced social practices, do not have ‘structures’ but rather exhibit ‘structural properties’ and that structure exists, as time-space presence, only in its instantiations in such practices and as memory traces orienting the conduct of knowledgeable agents.” (Giddens 1984: 17)
Understanding social structures in Giddens’s way shows that the ideas of deconstruction can be utilized in the context of social theory. Applying Derrida’s work to social theory and strategic management in particular thus means considering Giddens’s way of argumentation. Even though structuration theory owes a great deal to the work of Derrida, the adoption of some of the central ideas of deconstruction did not happen without critical reflection by Giddens himself. In section 4.2.6 we revisit some of his central objections to Derrida’s thoughts. Since we have introduced the basic lines of argumentation of deconstruction and demonstrated that it can be applied to strategic management, we are now in the position to ask for the consequences of deconstructive thinking. As indicated in section 1.1, one major consequence that is of relevance within the context of this study is deconstruction’s avowal to paradox. As will be shown next, deconstruction affirms paradox.
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4.2.5 Deconstruction and Paradox We have discussed deconstruction as a way to undermine hierarchically structured oppositions within a social (con)text. A deconstruction elicits concepts that cannot be adopted into such binary structures. Deconstruction turns oppositions into supplementary relations and by doing so exposes paradox, because the supplementary relation can, when attempting to justify one pole of the opposition as a metaphysical ground, be treated as a simultaneous occurrence of both ends of the opposition (Derrida 1998b). This simultaneous occurrence exists only as long as we look for a final origin on which to base one end of the supplementary relation. To illustrate this point, consider the following example. Within scientific inquiry scholars often refer to the problem/solution opposition. First, there is a problem, which is full of meaning and is self-present. Then, there is a solution to the problem. This solution is treated as a derivation from the problem. Hence, scholars privilege the problem and treat the solution as something secondary, something that ‘follows from’. A deconstruction of the opposition shows that the solution, far from being a pure derivation, constitutes the problem. The problem becomes fully defined only through the solution. While looking for a solution, people need to consider the problem (at least to a certain extent) but also define the problem. The deconstruction of the problem/solution opposition shows that both concepts are linked through a supplementary relationship; while looking for a solution, people consider the problem yet also define this problem. If we try to get to the bottom of the problem/solution puzzle (i.e. if we try to justify why we start scientific inquiry with ‘the problem’ or eventually also with ‘the solution’), we end up in a paradox. To search for a solution is paradoxical because the search is concerned with something new, but because of its novelty, we don’t know where to look. If we knew exactly where to look for a solution, we would no longer face a problem. The paradox arises if we allow both ends of the opposition to occur simultaneously. The co-presence of both ends of an opposition appears once we try to justify one pole as a self-defining origin. A problem, for instance, is never fully present in a way that it is able to define itself. To fully define the problem we need the solution, and to find the solution we need the problem; we cannot have both, problem and solution, at the same time. The deconstruction of the problem/solution opposition, like any deconstruction, exposes a logical contradiction – a paradox that Derrida calls aporia. At first, every paradox is paralyzing and inhibits action. Yet, as will be discussed in chapter five, there are ways to deal with paradoxical reasoning. Because of its importance for the arguments of this treatise, we
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first discuss the notion of paradox in general to then turn to Derrida’s treatment of paradox. What Is a Paradox Anyway?
Etymologically, the term paradox derives from the Greek and reflects what is contrary to (para) received opinion of belief (doxa). In its most general sense, paradox means a contradictory assertion. Cameron and Quinn (1988: 2) argue that a paradox “is the simultaneous presence of contradictory, even mutually exclusive elements” that disenable choice between two poles. Within this treatise, we follow a similar definition by Ortmann (2004a: 18) who argues that paradoxical reasoning is reasoning whereby the enabling and constraining conditions of a line of argument coincide. In other words, paradox (aporia) occurs when reason either contradicts itself or experience.83 A paradox that occurs when reason leads to self-contradiction is discussed by Baggini and Fosl (2003: 108). Consider the following statement: ‘This statement is false.’ The paradox comes about if we ask whether this sentence is true or false. If it is true, then it is false. But if it is false, it is true. So the utterance is both true and false at the same time. Epimenides’s liar paradox takes a similar form. If someone asks ‘If I say I am lying, am I telling the truth?’, (s)he utters a falsehood as long as (s)he is lying. This is no problem as long as the statement is not used in a self-referential way. But if someone who just uttered this statement says ‘I am not telling the truth’, (s)he is lying, and actually is telling the truth. Again, the paradox 83
We use the terms paradox and aporia interchangeably. However, it should not go unnoticed that the term aporia is usually used to describe a difficulty, perplexity or a kind of hopelessness that does not necessarily lead to impossibility (i.e. a logical contradiction). Webster’s Third New International Dictionary (1993: 101) refers to an aporia “as a problem or difficulty arising from an awareness of opposing or incompatible views on the same theoretic matter.” By contrast, paradox is about a logical contradiction that arises because the enabling and constraining conditions of a line of argument coincide. Paradox is defined in a narrower sense than aporia. An aporia is about thought-provoking contradictions, while paradox contains two contradictory propositions to which we are led by seemingly sound arguments. We focus our analysis on the formal/logical treatment of paradox and not on informal or rhetorical notions. Informal types of paradox occur for interesting and thought-provoking contradictions of all sorts (Poole and Van de Ven 1989: 563), while rhetorical types of paradox occur if the author concludes something contrary to what has been expected (Lado et al. 2006: 117). For a discussion of the nature of paradoxes see Baggini and Fosl (2003), Clark (2002), and Sainsbury (1988).
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arises because the original statement is both true and false since if it is true it is false and if it is false it is true (Clark 2002: 99). A more mundane form of paradox arises if we consider that reason can also contradict experience. Consider the following example by Zeno of Ela: In a race of Achilles with a tortoise, Achilles gives the tortoise a head start. Although the tortoise is slow, it moves at a constant speed. In the time it takes for Achilles to reach the point of the tortoise, the tortoise will have moved on (call it point A). If Achilles moves to point A, the tortoise has moved on again and is now at point B. It seems like Achilles cannot overtake the tortoise. This is paradoxical, because apparently there seems to be nothing wrong with our reasoning, but from our mundane experience we know that Achilles will overtake the tortoise easily. So we either accept that our reasoning is wrong (although we do not know why) or accept that overtaking is not possible (although we know it is). Every paradox leads to contradiction that cannot be resolved by using standard rules of logic. A paradox is always the unity of a distinction, the simultaneous occurrence of two horns of an opposition at the same time (Luhmann 1995c: 46). In the first example, the distinction true/false appears as a unity leading to indecision. The same holds for the second example in which we think our reasoning is true, but at the same time need to admit that from our experience this cannot be. In this treatise we refer to both forms of paradox, as the paradoxes of strategy research can be described as self-contradicting reasoning and reasoning contradicting experience. For instance, when referring to strategic rules, we cannot say that we follow a rule – if our reasoning defines a rule as something that needs to be iterable – because we have to modify the rule with regard to every replication. Self-contradicting reasoning occurs because rule-following and violation seem to be necessary at the same time. This paradox can also be described as reasoning contradicting experience. We know from Derrida’s reasoning that a perfect replication of a rule in different contexts is impossible. Yet we also know that we follow rules within our everyday life. Again, we face paradoxical indecision: we either claim that Derrida’s reasoning is wrong (even though we can give no reason why) or accept that rule-following is impossible (while from our experience we know it is not). Deconstruction and Paradox – The Unavoidability of Undecidables
For Derrida, paradox refers to the ‘blind spots’ or puzzling moments of metaphysical arguments that cannot be explained by using standard rules of logic. Deconstruction begins with an encounter of these ‘blind-spots’ that must be overlooked to make presence seem undeconstructible (Lucy
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2004: 1-2). According to Derrida (1998b: 23-36), a paradox describes a situation in which we do not know to which side of the opposition to turn. Since paradoxes are inevitable and not reducible, Derrida speaks about their necessary endurance. To experience a paradox means to endure its un-logic with passion, or even more: ‘a passionate suffering’. At least we need to try to experience the impossible (although the impossible itself prevents access [Derrida 1991: 33]) and give justice to its existence: we need to try not to become paralyzed but to get to know the necessary limits of reasoning (Derrida 1992a: 16). Why then does deconstruction not inhibit action; after all, a paradox is about impossibility? The paradoxes that are uncovered by deconstruction are only impossible in a narrow sense. Their impossibility is limited to the establishment of a presence that is self-defining and originary. This is why there can be no metaphysics of presence; any such status results in paradox. After all, this fits our argumentation: the dominant logics of strategy research claim that there is a presence of meaning (e.g., the objective environment or the ‘fully present’ strategic rule), while we contend that this argumentation results in paradoxical indecision that has been overlooked thus far. In consequence, the impossibility that is attached to a paradox occurs only if we try to establish a full and self-defining origin in our thinking (Powell 2006: 59). . Consider the following example to illustrate this point: A strategic rule submits to a metaphysics of presence, if we believe that it can be perfectly iterated. In this way, the meaning of the rule is ‘full’ of meaning, selfpresent, and determines its application. Deconstruction shows that such a conception of strategic rules is impossible (in fact paradoxical) because rules are inevitably modified within their application (see section 6.3.2). Hence, the impossibility of paradox is limited to the self-defining nature of one end of our oppositions, yet this self-defining nature is exactly what the dominant logics propose. It is paradoxical that the environment defines itself and determines organizational strategic conduct, that strategic decisions fully justify themselves and determine strategy implementation, and that strategic rules and resources foresee their conditions of use and determine their application. If we accept impossibility as a limit to our reasoning and explore ways to unfold paradox, we can use paradoxes creatively. For instance, if we say that generic strategic rules necessarily differ from themselves once they are applied (at least in part), we not only circumvent the paradox but also show how strategizing despite paradox becomes possible. Although paradoxes are insoluble, they represent necessary illogicalities. They demonstrate that the ‘truths’ that the dominant logics claim to
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have established are based on self-contradictory reasoning; to merely account for the possible means to perpetuate the belief in foreseeable causalities (Derrida 1998a). Yet, paradox cannot be uncovered by the dominant logics themselves, but only once we allow deconstructive arguments to creep into our analysis. The altered set of metatheoretical assumptions that come along with deconstruction permit us to show to what extent traditional reasoning in strategic management is based on (but at the same time obscures) paradox. These assumptions illustrate that strategies are not a product of a rational calculation that gets by without any human considerations, a machine-like metaphysical scenario in which paradox is simply overlooked. To give rise to its own impossibility, any paradox must invoke that which is outside of the subject’s control (e.g., an ‘open’ context or a contingent future). Derrida has an unusual way of addressing and highlighting paradoxes within his writings. Because deconstructive thinking reveals the impossibility of fixing one side of an opposition as privileged and self-defining, it needs to pay special attention to concepts that favor a both/and-logic to portray moments when meaning cannot be satisfactorily decided. Derrida (1995b: 86) terms these concepts undecidables because it becomes undecidable to which side of the opposition to turn to. Undecidables function from within oppositions and undermine them. They represent the unity of the opposition and cannot be reduced to oppositions, because they disorganize them without providing a solution in the form of a Hegelean Aufhebung (Derrida 1981b: 43). A prominent example for an undecidable is the term différance which means to differ and to defer at the same time. Différance helps us to underscore the paradox that arises according to the deconstruction of the sign. This paradox refers to the presence and absence of the meaning of signs. On the one hand, to say that a sign is, is to say that it differs. On the other hand, to say that a sign differs means that insofar as it differs, it also defers its meaning endlessly. The existence of two contradictory meanings within a single term lies at the heart of undecidables. Undecidables constitute the ambivalent sphere in which opposites are opposed and in which the meaning of one term relates back to the other. The resulting concept of rationality no longer issues from a logos that represents the ‘real’ essence or truth of things, it yields no better theory of truth, but is “an intellectual predisposition specifically attuned to the aporias which arise in attempts to legitimize truth claims.” (Chia 1996: 19)
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4.2.6 Deconstruction – Critical Arguments Deconstruction is often equated with destruction and annihilation rather than the dismantling of deeply entrenched, metaphysical structures of thought. It is not uncommon to portray Derrida as an anarchist, nihilist, and relativist destroying our beliefs in values, institutions, and even truth itself (Caputo 1997: 36). Any serious discussion of Derrida’s ideas requires hearing the arguments of these critics. When looking at contemporary philosophical and sociological discussions, one can identify at least three objections that are worth mentioning: (1) deconstruction is subject to a performative contradiction, (2) deconstruction favors a relativism of meaning in the sense of an ‘anything goes’, and (3) deconstruction promotes a retreat into ‘the text’ and neglects referents in the ‘real’ world. The first objection, the existence of a performative contradiction, is raised by Habermas (1990: 185) who argues that Derrida’s own tools of thought (constituted by the language he uses) are themselves imbued with a metaphysics of presence. Language, which is the only available medium to uncover the insufficiency of logocentric thinking, already possesses logocentric characteristics. In line with this argumentation, Steiner (1990: 173) argues that because deconstruction does not hold a meta-language that can divorce itself from différance, Derrida’s propositions with regard to the nature of language cancel each other out. One cannot think about the constitution of meaning through language in a ‘safe’ manner, if there is no meta-language that acts as a point of reference. Derrida claims that meaning can never be fully grasped yet writes and speaks to be understood – at least in some way (Lilla 1996: 401). Derrida is aware of the fact that he does not possess a non-metaphysical language that would allow him to simply step out of conventional thinking. He recognizes that “it is pointless to renounce the concepts of metaphysics if one wishes to refute metaphysics itself.” (Derrida 1976: 426, emphasis in the original, translation A.R.) Thus, he knows very well that he cannot do without metaphysical concepts like reason and truth. Yet, he puts these concepts in a new context to transform and reinterpret them (Forget 1991: 52). These contexts not only give rise to another way of understanding metaphysical concepts but also rest on a different (deconstructive) logic of sensemaking. The dream of an all-encompassing context devouring all truth claims is not a Derridean dream, although it is perceived by Habermas as such (Forget 1991: 56). The second objection, deconstruction subverts truth by affirming an ‘anything goes’, is again raised by Habermas (1990: 198) who claims that Derrida’s work implies that “any interpretation is inevitably a false interpretation, and any understanding a misunderstanding.” For Habermas
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(1990: 197) this is further evidence for the “relativism of meaning that Derrida is after.” If language really is structured by différance, there can be no solid foundation, no fixed point of reference, no authority or certainty, either ontological or interpretive. Everything can be put in question, that is, viewed as arbitrary, with the result that assumptions of coherence of a text become radically shaken. The notion of truth becomes out of reach, making a consensus among people impossible. Other scholars have gratefully taken up Habermas’s claims. Steiner (1990: 175) asks why authors should go through the trouble of writing and readers through the trouble of reading if understanding cannot be reached. Similarly, Lilla (1999: 188) argues that deconstruction stands for a neutralization of all assessment criteria (e.g., in science) to leave judgments to the random mood of people. Does deconstruction mean that you never have to say you are sorry because truth and validity claims are discounted? Derrida (1995a: 137) has explicitly denied being a relativist. He does not question the concept of truth as such, but rather a singular, all encompassing, and final truth. Texts, therefore, do not have no meaning, but too many meanings to fix them in a comprehensive way. This is because ‘truths’ can only appear in language and relative to a context of interpretation. In addition, language, context, and interpretation hold certain characteristics that prohibit the achievement of one truth: language does not purely represent the referent as the ‘thing in itself’, contexts for interpretation are boundless and infinitely extendable, and interpretations always refer to preceding interpretations that faced the same set of circumstances. All of this is not to deny the existence of the world of objects and events, but rather to hold the referents at bay and look at how language shapes their meaning in ever new contexts. Hence, no interpretation can claim to have captured the truth but only a truth in context. “This way of thinking context does not, as such, amount to a relativism, with everything that is sometimes associated with it (skepticism, empiricism, even nihilism).” (Derrida 1995a: 137)
If deconstruction seeks not to destroy meaning and truth but exposes their production as context dependent, we need to ask whether consensus and understanding can be achieved in such a state of affairs. Derrida (1995a: 145) knows very well that stabilizations within language, in the sense of a consensus to achieve understanding, are not impossible per se but relative, even if they sometimes occur to be immutable. This relativity is a temporal and contextual stabilization of a predominant interpretation of a text. Yet, the relativity of this stability is, as Ortmann (2003a: 80) remarks, by no means relativism. Deconstruction does not subvert truth, nor does it claim that ‘anything goes’. Instead, it points to the destabilizing ef-
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fects that necessarily occur if one wishes to put an absolute truth into words. The last objection is that deconstruction promotes a ‘retreat into the text’. Giddens (1987: 199, 208, 210 and 1979: 36) argues that Derrida views language in isolation from the social environments of its use. Overwhelmed by the significance of language, deconstruction neglects the parts of the world that remain silent to make them part of an all-encompassing understanding of text. In Giddens’s view deconstruction fails to relate ‘the text’ to an ‘exterior’ world in which social action takes place. Is deconstruction imprisoned in ‘the text’? We can surely not deny that Derrida reconceptualizes ‘the text’ in a broad sense. If we recall that speech, action, gestures, and even cognition produce text, it seems like the ‘real’ world is sucked up by ‘the text’. Notwithstanding this definition of text, this does not entail that ‘the text’ neglects the ‘real’ world, since ‘the text’ only suggests that all reality contains the structure of a differential trace and the only way to experience reality is by interpreting these traces (Derrida 1995a: 148). We cannot say that deconstruction neglects the real world but textualizes it. Textualization means world-disclosure – a disclosure that is based upon ‘texted’ contexts. Giddens is right by claiming that Derrida has failed to explicitly link the notions of text production and social action, but is too enthusiastic in believing that language and text production are “[dragged] away from whatever connections of reference it might have with the object world.” (Giddens 1987: 204) The German poet Stefan George (1868-1933) has brightly formulated Giddens’s acquisition in the last two lines of his wellknown poem The Word: “So, I renounced and sadly see: Where words break off no things may be.” Again, Derrida does not suppose that language has the power to create or wipe out objects, but that différance generates the slippery meaning we ascribe to these objects. Of course, as Giddens remarks, these differing and deferring effects of language do not occur in some detached universe but in social practices that are embedded in contexts. Derrida makes a first step in this direction by explicitly paying attention to the notion of ‘context’, which is nothing but a product of (socialized) text production. To expect from Derrida an extension of his understanding of text to questions of social theory would disregard his primary field of study: philosophy. 4.2.7 Résumé – Derrida, a Postmodernist? Derrida (1999c: 263) has never sought or welcomed the label ‘postmodernism’, like any label whatsoever. For him, the word ‘post’ implies that
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something is finished, that we can get rid of whatever was before the ‘post’ (Derrida and Norris 1989: 72). Yet, as discussed throughout this section, deconstruction strongly rejects any definite closure of meaning. Nevertheless, when referring to the framework of postmodern philosophy (section 4.1.1), we can identify parallels between deconstruction and philosophical postmodernism. The belief in the absence of a final origin (e.g., for truth) points to Derrida’s concept of reason. If there is no metaphysical ground, we cannot only read Derrida as someone who is opposed to a unified conception of reason but who pluralizes and marginalizes the latter (Welsch 1996: 245). Deconstruction contributes to the ‘radicalized critique of a unified conception of reason’ that we identified as a framework for postmodern philosophy. Within this framework, Derrida contributes to three of the four ‘central issues’: regarding epistemological and ontological questions he contributes to a denial of a linguistic representation of reality, regarding the role of the subject he contributes to the de-centering of the subject, and regarding the discursive nature of society he contributes to the idea that there must be differences between discourses. The denial of a linguistic representation of reality is well reflected in Derrida’s work. He claims that the signified cannot exist as independent of the signifier to represent reality in a one-to-one manner. The signified is just an effect of the differences among signifiers. Meaning is not forever fixed in a signified but the result of the play of differences in the process of signification. Meaning constituting differences exist only in the constant process of deference; meaning is subject to a permanent loss of presence. Objectivity is lost, both on the level of the sign – through the rejection of a transcendental signified – and on the level of the referent – through the renunciation of an objective world that can be captured by signifieds (Derrida 1986a: 68-71; Giddens 1979: 30-31). Derrida also moves beyond the Cartesian conception of a unitary subject. Within deconstruction the subject is de-centered because it is itself a product, but not a master, of différance (Derrida 1986a: 70; Derrida 1982: 11). The subject has no authority for meaning and truth anymore. Derrida demystifies the fully conscious subject by claiming that no identity can ever be identical to itself, but is constituted in and through the differences of language. The ‘I’, as Giddens (1987: 206) remarks, cannot be conceptualized as being directly available to itself, but derives its identity from the system of signification it is involved in. The human self becomes a signifying subject only by entering into a system of differences to speak about signs that need to be interpreted. The subject is not a pre-existing and fully defined entity that comes to interact with other such entities; rather it is constituted in the process of signification (Leledakis 2000: 187). Subjects
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are not the master of the significatory process but its product, because they are enabled to speak through the system of differences that constitute language. A self-conscious subject could be ascribed to a metaphysics of presence, as its identity would be self-defining and thus independent of the play of differences. The third central issue, the rejection of the idea that there can be grand narratives that justify knowledge, is also represented in Derrida’s philosophy. Deconstruction’s disavowal of a metaphysics of presence emphasizes that differences are constitutive not only for signification, but for existence in general (Giddens 1987: 202). Derrida rejects any kind of totalities to point to their relational and non-universal nature. According to the notion of différance, meaning is never present, an objective truth not available, and knowledge not justifiable regardless of context. The validity of knowledge is localized depending on the context of its occurrence. From this point of view, a universal legitimization across fragmented contextualized discourses turns out to be impossible. To conclude, Derrida’s contribution to the three central issues enables us to locate him in the discourse of postmodern philosophy. This is not to say that his work is postmodern per se as many ad hoc classifications, which identify postmodernism with plurality in general, assume. To which extent we can label Derrida’s position ‘postmodern’ depends upon the (contingent) criteria we use to make sense of postmodern philosophy. After all, we have provided just one possible way to approach this question.
4.3 Deconstruction within Organizational Analysis Although deconstruction has not been extensively applied within the broader field of business administration so far, scholars of the field of organization theory have adopted some of its central ideas. In the following, we look at and classify the existing literature, as these writings have an impact on our own deconstructions in chapter six. Because scholars of organization theory are predominantly used to thinking in binary oppositions, it is difficult for them to understand that deconstruction turns against oppositions (Knights 1997; Ortmann 2003a: 134-137). Oppositions like structure/agency, individual/organization or micro/macro-level underlie various organization theories and are only slowly dismantled (e.g., via an application of structuration theory, Giddens 1984). Organizational analysis when viewed as a deconstructive practice rejects conceptual oppositions and criticizes the existence of pure origins (for an example see Chia 1994, 1996 and Ortmann 2003a, 2003b). This kind of thinking is reflected by the
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applications of deconstruction in organization studies that are classified in Figure 19. The depicted framework distinguishes three different foci of application that can be attributed to those authors who have used deconstruction in organizational analysis.
Fig. 19. Deconstruction in Organizational Analysis
First, deconstruction can be applied as an analytical tool for a ‘literary analysis’ of written texts within organization theory. The aim is a deconstruction of oppositions within a particular publication to show that the neglected term actually is constitutive of the privileged one. Second, it is possible to aspire to a deconstruction of dominant logics that occur within ‘the text’, which in this context is better understood as academic discourse, of organization theory. Thus, the meaning and assumptions that the academic discourse has attached to certain concepts (e.g., organizational order, decisions) are criticized. By deconstructing these oppositions (e.g., order/disorder), researchers reveal the paradoxes that occur when one starts to base these oppositions on a metaphysics of presence. Third, it is possible to apply deconstruction as an epistemological and ontological frame of reference. Scholars following this approach try to establish a ‘deconstructive perspective’ for conducting organizational analysis, but do not base their arguments on particular oppositions. Certainly, the three forms of application are not clearly separable; they overlap, often within the same piece of work. Regarding the first focus of application (i.e. deconstruction of oppositions within a particular publication), Kilduff (1993) applies deconstruc-
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tion in his fine-grained reading of March and Simon’s (1958/1993) book Organizations. He ‘opens’ this particular text for the reader to see the pattern of conflicting relationships. By referring to the opposition nonmachine/machine model of the employee, Kilduff (1993: 17) shows that the non-machine model is privileged for being able to capture what March and Simon label bounded rationality. Yet the deconstructive reading of the text demonstrates that March and Simon simultaneously denounce and glorify the machine model as they still understand the human mind as a computer that can be programmed to perform tasks. Deconstruction traces the self-contradiction that resides in March and Simon’s text. That is why Kilduff (1993: 21) states that March and Simon “both accuse their predecessors of treating the employee as a machine and fill the absence they claim to have found in the literature with an updated machine model.”
In Kilduff’s view the assumption that human behavior can be programmed reappraises the machine metaphor that March and Simon wanted to abandon in the first place. The formerly rejected concept, the machine model of the employee, is thus not abandoned by the book Organizations, but only reappraised. If the new model of the employee is as mechanical as the old one, March and Simon’s original opposition cannot be perpetuated anymore. Even though Kilduff reveals the paradox in March and Simon’s text, he does not discuss how the seemingly secondary term, the machine model, constitutes the favored non-machine model. Simply showing that there is no such thing as a non-machine model of the employee in March and Simon’s book does not exhaust the full potential of deconstruction. The conceptual integration and separation of both terms through a supplementary relationship would have been a necessary next step. The second focus of application (i.e. a deconstruction of dominant logics) is reflected by Cooper’s (1986) discussion of the opposition organization/disorganization with regard to the academic discourse of organization theory in general. Starting with the assertion that many scholars who deal with organizations tend to follow a dominant logic by treating them as ordered systems, Cooper (1986: 305) suggests that the work of organizations is focused upon “transforming an intrinsically ambiguous condition into one that is ordered so that organization, as a process, is constantly bound up with the contrary state of disorganization.” Refusing the traditional view that organizations appear to be an already formed order, Cooper introduces a non-static boundary concept that actively differentiates between system and environment, a kind of différance so to speak. Accordingly, order is a nascent state in the process of organizing (Kornberger 2003). If organization is the appropriation of order out of disorder,
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there needs to be a state of the world that makes this active differentiating possible and necessary, a state of disorder that pervades all social organizations. Cooper (1986: 316) calls this state the ‘zero degree of organization’ and conceives it as “a theoretical condition of no meaning, no form, of absolute disorder which one might call the primary source of form or organization, if the concept of ‘primary’ and ‘source’ did not call to mind the sense of an absolute origin which was itself organized.” (Cooper 1986: 321)
This zero degree of organization represents a surplus – what Derrida calls a supplement – that is necessary for order to exist. Disorder and chaos do not destabilize organizations but enable them to be formed in the first place. It is this paradox, the simultaneous existence of order and disorder, which emerges from Cooper’s deconstruction. Disorganization is a necessary state for organizations to occur in the first place; disorganization is a supplement without which it is not possible to speak or even write about something like ‘organizational order’ in the first place. Similar to Cooper, Ortmann (2003a: 151-162), while deconstructing the opposition social role/application, also refers to the discourse of organization theory and not to a particular publication. According to the accepted dominant logic, roles reflect generalized behavioral expectations that are a priori given and thus assigned a presence of meaning that privileges them over their own application. This, however, cannot be true as an iteration of any role underlies the force of différance that ensures its constant and inevitable modification. Every application of an organizational role implies, strictly speaking, its (necessary) violation – not in the sense of noncompliance but as a new enforcement of the role. The underlying paradox is obvious: role takers have to follow and destroy their role at the same time; they have to (re)invent the role in every situation. Roles are constantly supplemented by their own application, an application that was originally thought of as a derivation. Cooper’s (1986) and Ortmann’s (2003a) deconstructions of dominant logics reveal paradoxes. Indeed, the discussion of the paradoxes that deconstruction uncovers is most obvious within the second focus of application (yet not entirely limited to it).84
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Ortmann and Cooper are not on their own in the sphere of deconstructing ‘the text’ of organization theory. Chia (1994) offers a deconstruction of conventional assumptions in decision-making. To avoid a replication of arguments, we do not discuss this particular deconstruction any further (see the comprehensive discussion in section 6.2.2). See also Ortmann’s (2003b) remarks on the deconstruction of rules (also section 6.3.2) and Cooper’s (1989) deconstruction of the formalist and expertise model in the study of bureaucracy.
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Referring to the third focus of application (i.e. deconstruction as an epistemological and ontological frame of reference), Chia (1996) uses deconstruction as a strategy to obtain a different understanding of the assumptions underpinning organizational thinking in general. While conceptualizing organizational analysis as a ‘deconstructive practice’, he distinguishes between upstream and downstream thinking. Downstream thinking is identified with privileging the epistemological position of representationalism, the belief that organizational thinking can accurately describe and represent reality ‘as it is’. Organizations are taken to be discrete and identifiable objects existing ‘out there’ that readily lend themselves to analysis (Chia 1996: 4). This mode leads away from process-oriented theories of how ‘truth’ in and about organizations is produced. To overcome these problems, Chia proposes an upstream mode of organizational analysis which highlights the contextuality of actions and views organizations not as things but as an emergent process. This process is based upon the premise that linguistic constructs (like organizations) cannot be objectively described because reality is not static and representable (Chia 1996: 172). Chia refers to deconstruction as a way to show that meaning structures in organizations are never fixed, and hence representational, but subject to différance and thus unstable. This has far-reaching consequences regarding our treatment of organizations. “What deconstruction offers, therefore, is an alternative way of understanding organizational analysis as a form of deconstructive practice intended to resist the seductions of using readily available concepts and categories that provide the intellectual bases for traditional knowledge formation.” (Chia 1996: 192)
Chia suggests that organizations are not the supposedly ‘pure’ phenomena we are searching after, but that the very possibility of representing something like ‘the organization’ (e.g., by a researcher) already needs to be seen as problematic (see also Moriceau 2005). All three foci of application reveal important insights into the study of organizations by questioning taken-for-granted assumptions. As will be shown throughout the chapters to come, deconstruction can also be applied to strategic management. Our treatment of deconstruction in strategic management corresponds to the second focus of application; we deconstruct dominant logics that occur within ‘the text’, which in this context is better understood as the academic discourse, of strategic management. For us, this academic discourse (i.e. ‘the text’) is represented by strategic realities (see section 1.1) that reflect scholars’ assumptions regarding the nature of strategy. These clarifications sharpen our understanding of the relation between dominant logics and strategic realities: dominant logics are patterns of invisible assumptions that occur in the academic discourse (i.e.
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‘text’) of strategic management while strategic realities make these assumptions more visible. In this sense, strategic realities stand for ‘the text’ that we address within this study. Because this assertion is central to relating our argumentation to Derrida’s work, we discuss it in more depth in the following section.
4.4 Strategic Realities as Text What do we deconstruct within this study? As noted above, we treat strategic management as a text that is created and sustained within a scholarly community. Ideology, to come back to the starting point of our analysis, inscribes itself in signifying practices – the discourse of strategy – and is inscribed in ‘the text’ scholars generate and refer to (Belsey 1980: 42). In this sense, strategy research corresponds to a field of meaning that opens itself up for deconstruction. This field of meaning ‘hosts’ three dominant logics that we discussed in section 3.2. These dominant logics are made up of a variety of theories and frameworks that reflect certain assumptions about strategy and are thus part of scholars’ strategic realities. For instance, Porter’s (1985) famous notion of competitive advantage or Hofer and Schendel’s (1978) perspective on strategy formulation represent specific strategic realities that are supposed to aid practitioners. Strategic realities describe ‘the text’ that is produced by scholars to make sense of the problems of strategic management. Deconstruction aims at the meaning that is assigned to such central conceptions as ‘strategic environment’, ‘strategic rules’ or ‘strategic resources’ within these strategic realities. By conceiving strategic management as a text, we refer to the constitutive orders of knowledge and power that identify strategy research as a science. This knowledge does not exist by itself: it refers to, but does not represent, the ‘real’ world of strategizing within organizations. How can this be? From our discussion of Derrida’s understanding of text, we know that the distinction between signs and referents in the outside world cannot be made anymore because there is nothing beyond the system of differences that constitutes meaning. Strategic management efforts in organizations are, like the written texts on strategy, constituted by a system of differences and hence subject to the force of différance. Strategic management theory is text in the same way that a ‘real’ organization – with its strategic resources, strategic rules – is text. As Derrida (1986b: 168) explains: “That is why deconstructive readings and writings are concerned not only with library books, with discourses, with conceptual and semantic contents. They are
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not simply analyses of discourses […] They are also effective or active (as one says) interventions, in particular political and institutional interventions that transform contexts without limiting themselves to theoretical or constative utterances even though they must also produce such utterances.”
Deconstruction is not simply a matter of discourse, of displacing the semantic content of the discourse; it goes through social structures and institutions (Derrida and Norris 1989: 71-72). When deconstructing a strategic reality, we do not solely deconstruct some idealized conception existing in the scientific discourse, but at the same time ‘the text’ that is actively produced in organizations while strategic realities are experienced. For instance, Hamel and Prahalad’s (1998) notion of core competences is a well-established strategic reality within ‘the text’ of strategy research. In experiencing and referring to this reality, strategists produce text, which makes up the social context of application and is open to interpretation. This is to say that the theoretical conception of a core competence is as much subject to différance as its application and experience in the ‘real’ world. The deconstruction of strategic realities, then, focuses attention on an ideology that extends from the discourse of strategy research to the world of work. Strategic realities entail strategy as a research discipline in academia and the practice of strategizing in organizations. In summary, referring to Derrida’s disseminated idea of text, strategic management can be regarded as a text on two, interrelated levels. First, the discursive settings and constitutive orders of knowledge that arise from the research of scholars in their attempts to develop strategic realities are textual. And second, the experience of these strategic realities in a social field of practice is textual as well. We cannot limit our deconstructive reading of strategic management to any of these plateaus, as this would imply that we treat ‘the text’ as a clear-cut object (which it is not). As Derrida (1981a: 328) puts it: “There is nothing before the text; there is no pretext that is not already a text.” The scientific discourse that holds the ‘idea’ of strategic management is not an entirely different and clearly separable domain from the ‘real’ world of strategizing. This is why we described deconstruction as a theoretical practice (section 1.2), a practice that does not come to a halt at the ends of a scientific discourse but reaches from the world of academia to the one of strategists in ‘real’ organizations. Within the realm of this text of strategic management, deconstruction begins with an encounter of the unavoidable paradoxes that have been overlooked by the dominant logics. Deconstruction equips us with a set of metatheoretical assumptions that uncover paradox. As will be shown in chapter six, whenever we use deconstructive logic to reflect on the desire of the dominant logics to establish a metaphysics of presence (e.g., an ob-
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jective environment or fully rational decisions), we can demonstrate that there is a paradox that has been neglected up to this point. In this sense, the dominant logics deny their own impossibility. After all, deconstruction shows us that a metaphysics of presence (that the dominant logics try to establish) is impossible (i.e. paradoxical). We do not criticize the existence of paradoxical reasoning within strategic management but its obscuration by traditional research. From a deconstructive perspective, paradox cannot be avoided when we start looking for a final origin of our reasoning. Once we learn to appreciate paradox as a necessary limit to reasoning in strategic management research, we (a) realize that the dominant logics aim at impossibilities and consequently (b) have to demonstrate that paradoxes can be unfolded and that strategizing becomes possible despite its paradoxical core. While chapter six exposes the paradoxes that have been obscured by the dominant logics and thus demonstrates that their reasoning results in impossibilities, we also need to show what strategists and theorists can learn from this impossibility and how they can strategize despite paradox. Thus, the next chapter illustrates what paradoxical reasoning means for strategic management and how deparadoxification is possible.
5 Strategic Realities – The Role of Paradox
“One of the reasons why I find the current literature on management so repulsive is that for the most part it eschews paradox.” Ian I. Mitroff (1995: 750)
To deconstruct means to uncover the paradoxes that reside in those strategic realities that comply with the dominant logics. Whereas chapter three outlined the need to expose paradox and thus to dismantle the dominant logics and chapter four introduced the possibility of doing so by discussing deconstruction, this chapter asks for the consequences of paradox with regard to the creation of future strategic realities. It is necessary to discuss the consequences of paradox before we present the deconstructions in chapter six, since we have not yet clarified (a) the value of paradox and (b) possibilities of dealing with paradoxical indecision. The value of paradox is discussed in section 5.1. We analyze the importance and usefulness of paradoxical reasoning for creating future strategic realities. We demonstrate that paradoxical reasoning is not only necessary to dismantle the identified dominant logics but provides other advantages as well. This enables us to understand why scholars can profit from a consideration of paradox. If scholars can profit from paradox, we need to ask how they can embed paradox into their strategic realities (section 5.2)? To embed paradox, though, is not easy because we identified a paradox as something impossible. Consequently, we have to ask: Is strategic management impossible and how should we embed something that is impossible into future strategic realities? This question exposes an essential tension: Although we give good reasons for the existence of paradoxes (impossibility), we can observe the practice of strategy within organizations (possibility). Strategic decisions are made and strategic rules are applied. So, where is the paradox? Either our reasoning is wrong (although we provide good explanations for our arguments) and there are no paradoxes, or strategists somehow manage to cope with paradoxical indecision. From our perspective, the second issue is the case: paradoxes are omnipresent, but strategists constantly deparadoxify and thus preserve their capacity to act. To outline
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the implications of a deconstructive analysis later on, we discuss how deparadoxification happens. The final remarks in section 5.3 combine our discussion of the value of paradox (section 5.1) and the necessity to deparadoxify (section 5.2) by outlining how the creation of future strategic realities is possible because of and despite paradox and thus paves the way for our analysis in chapter six.
5.1 Strategizing Because of Paradox Paradoxes have a poor reputation, both within science in general and especially in strategic management (Ortmann 2004a). Our discussion of the dominant logics revealed that strategy scholars eschew paradox because they are in search of elegant and precise strategic realities: the environment determines strategic conduct, strategy implementation follows formulation, and rules and resources are generalizable. All of this calls for unambiguousness and not logical contradiction. Whenever paradox is invoked in writings on strategic management, it is treated as an anomalous, irregular phenomenon that should be avoided at any expense (Bowman 1980). Why should scholars not neglect paradox when building strategic realities? Why should they, even contrary to conventional wisdom, take paradox as a meaningful point of departure for their reasoning? Our most essential answer to these questions has already been discussed (section 3.4.4) but is worth repeating to facilitate orientation: we cannot neglect paradox because we miss the metaphysical ground upon which to base ‘final origins’ (Derrida 1992a). Any disrespect of paradoxical reasoning calls for a metaphysical ground from which justifications spread out. Whenever we try to ‘prove’ that the strategic environment is objective or that strategic rules are perfectly generalizable (which would displace paradox), we need some sort of justification; in fact we need a final justification (an Archimedean point). Albert (1985: 13) argues that such a final ground cannot be found because one would end up with the uncomfortable choice between an infinite regress, a logical circle, or a dogmatic interruption of the justification process at an arbitrary point. To avoid the first two alternatives while justifying their choice of one side of an opposition, scholars often interrupt the process of justification. This, as Albert (1985: 14) remarks, comes at the price of establishing a dogma. Inconsistencies are at the heart of argumentations that are based on ‘final origins’ and ‘definite truths’ and there is no reason why we should ignore this (Poole and Van de Ven 1989: 562). Whereas this line of reasoning tells us that the
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dominant logics cannot be sustained because of their inevitable impossibility, there are still other rationales for valuing paradox. First, the neglect of paradox is purchased at the price of remoteness. Non-paradoxical theories might look elegant and precise, whereas in fact they obscure a great deal of the complexity we face (Czarniawska 2005). To analyze the complexity and equivocality of social life, we have to embed paradox into our theories of strategic management. In a world where managers cannot rely on ready-made solutions paradox is valuable because contradiction is the home of creativity (Fiol 1995: 71). Whenever people feel puzzled, for instance because they suddenly realize that the strategic concept they apply is in need of modification and consequently tells them less about the nature of competitive advantage than they expected, they have to be creative to work out solutions. Creativity is of importance to strategy as strategizing is often considered to be largely about originality and craft (Mintzberg 2005: 93). Second, paradox enhances the way strategy scholars build their strategic realities. Because a great deal of strategy research is about ‘puzzle solving’ and the perpetuation of facts, scholars try to perfect parts of their strategic realities (e.g., a certain theory) by testing them against the ‘hard’ reality. Poole and Van de Ven (1989: 563) argue that this leads to a state where the theorizing process dominates researchers’ thinking. Scholars are focused on ironing out problems, testing them adequately, revising them, and defending them against criticism. Consequently, they end up in a state of ‘trained incapacity’ to appreciate aspects not mentioned in her/his strategic reality because all that is looked out for is consistency with less and less correspondence to the multifaceted reality of strategizing itself. The recognition of paradox can guide us out of the box of consistent theorizing to learn to appreciate tensions that guide, stimulate, and advance more encompassing strategic realities (Lewis and Kelemen 2002). Paradox forces people to ‘think twice’ about that which is taken-for-granted (Lado et al. 2006: 118). Third, paradox considers a phenomenon that is of importance to strategy scholars: equivocality. Often, the recognition that something is paradoxical is based on the insight that there is equivocality. Lado et al. (2006: 117) even argue that in most cases the recognition of equivocality is a precondition for paradox and that paradox also contributes to equivocality. According to Weick (1995: 27), equivocality refers to the problem that there are too many meanings resulting in confusion. This, of course, is perfectly in line with deconstruction. The discussion in section 4.2.3 showed that meaning is always in a state of flux and can never be finally determined. To demonstrate how paradox and equivocality are interrelated consider the
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following example: In section 4.2.5 we introduced a paradox that occurs according to the relation between a problem and its solution. If we assume that the world is non-equivocal, the paradox disappears. Then, we could ‘fix’ the meaning of the problem and its solution; the problem would determine its solution. When acknowledging that strategic management is all about reducing equivocality and ambiguity to give an organization direction for the future (section 2.1), it becomes clear that strategy scholars should not neglect paradoxical reasoning because it is at the heart of the phenomena they are interested in. These three issues show that a consideration of paradox is needed to accept the complexity strategists have to deal with. Strategic management loses an important resource for developing future strategic realities if we obscure paradox and act as if the dominant logics were undeconstructible. Any disregard of the limits that are indicated by paradoxes is purchased at the price of remoteness from the reality practitioners and scholars jointly face. This is why Mitroff (1995: 749, emphasis in the original) argues that “the management of paradox is one of the most crucial of all human activities, and as such, necessitates radically different notions of management.” Yet, if we wish to ‘manage’ paradox, we face a considerable tension: On the one hand, the impossibility that a paradox establishes is inevitable and cannot be analyzed away. On the other hand, we know that strategic management is possible (e.g., strategic decisions are made). This raises the question of how strategic management becomes possible despite paradox? What do strategists do to cope with paradoxical indecision?
5.2 Strategizing Despite Paradox “What am I to do, what shall I do […], now proceed? By aporia pure and simple?” Samuel Beckett, The Unnamable
Paradoxes are irritating; they destroy our conventional order of reason and actors usually find themselves paralyzed resulting in an inability to act. The consequential prescription is clear: eliminate paradox wherever possible, for if you do not do so you are either mad or an artist (Czarniawska 2005: 129). The urge to ‘solve’ paradox stems from the insight that paradox violates logic: two opposing statements within the same line of argumentation are not logical. But, what can we do in the light of paradox? In line with a considerable body of literature (Luhmann 1988; Ortmann
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2004a; Poole and Van de Ven 1989), we suggest that actors can strategize despite paradox. In everyday life paradoxes usually pass by unobserved (Luhmann 1988: 154). A quick look at any organization proves this point: strategic decisions are made, strategic rules applied, and strategic resources utilized. This does not imply that deconstruction is a waste of time, but that deconstruction uncovers the limits of knowledge we can possibly gain about the nature of strategizing. If we consider these limits as a regulative idea, we can unfold (deparadoxify) paradox. In this way, paradox even incites action because strategists start thinking about how to cope with a puzzling situation. Practitioners, while working on strategic problems, can proactively consider paradoxes and thus alter the way they deal with strategy context, process, and content (see chapter six). Yet, before we outline how strategizing despite paradox becomes possible with regard to strategy context, process, and content, we need to understand ways of deparadoxification (Akerstrom Andersen 2001). From our perspective, deparadoxification needs to be considered within future strategic realities that scholars create to ‘guide’ those strategic realities that practitioners generate in their attempts to handle strategic problems. Deparadoxification is not about avoiding paradox but interrupting selfcontradictory reasoning to circumvent the purity of paradox and to suggest meaningful ways ahead. Deparadoxification implies offering ways to unfold paradox so that the self-contradictory moments of reasoning do not appear visibly as paradox (Luhmann 1990a: 137). Because deconstruction exposes paradox (see section 4.2.5) yet does not explicitly show how to deal with paradoxical reasoning (Derrida 1992a, 1998b), our remarks on deparadoxification are not based on deconstructive reasoning. Like a paradox that guides us to the limits of knowledge, Derrida operated at the margins of philosophy and other discourses. As Teubner (2001: 32) reminds us, Derrida does not shy away from the precipice of paradox; he deliberately enters the dark worlds of paradoxical reasoning with passion to postpone the question of possibility to an indeterminate future. When looking at the literature on deparadoxification (Akerstrom Andersen 2001; Czarniawska 2005; Luhmann 2000; Ortmann 2004a; Vos 2002) one can identify particularly two ways to deparadoxify: temporalization and bootstrapping.85 85
Ortmann (2004a) identifies a variety of other ways to deal with paradoxical reasoning (e.g., spatialization of paradox). To deparadoxify via spatialization means that the two conflicting ends of the opposition are not decoupled over time but in space. In this way, the simultaneous presence of the mutually excluding ends of the opposition is dispersed. For instance, one group of strategists deals with strategy formulation and another with implementation.
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The Temporalization of Paradox – The Role of Fictions
Temporalization reflects a detachment of the conflicting ends of an opposition in time. Thus, the conflict is postponed into the future. To prevent paralyzation, people act with a sense of naivety to reflect upon their actions later (Vos 2002: 30). For instance, the justification of a decision is paradoxical because one cannot know ‘the good reasons for the decision’ until action (which is actually supposed to be guided by the decision) has been carried out. What do strategists do in the absence of good reasons? Usually, they work with assumptions, scenarios or visions. Statements like: ‘Let us assume for a moment that there is a need for this product’ temporalizes paradox; the paradox does not suddenly fade away but is provisionally deferred. At first glance, this approach sounds simple: ‘Just do it!’; Spencer Brown (1979: 3) would have said “Draw a distinction!”. On closer examination, this naivety turns out to be what Ortmann (2004c) calls the establishment of an As If, a necessary fiction. Fictions, here, are not essentially about a deliberate inconsistency of talk, decision, and action – something that Brunsson (1989) calls organizational hypocrisy – but reflect inevitable and often unrecognized anticipations that practitioners make to perpetuate their capacity to act. If we cannot come up with a final justification for a decision prior to action, we often act as if we had good reasons on which we can rely. As Ifs obscure the naivety that guides our operations, if we try to get around paradox. Yet the naivety that is attached to an As If could be interpreted as decisionism, which is the perspective that justifications can never be completed but instead need to be interrupted by decisions that are themselves not justifiable and thus arbitrary. Is the establishment of an As If arbitrary? Ortmann (2004c: 207-210) offers a good reason why As Ifs are not decisionistic. If fictions regulate our social life, they need to be accepted and have to demonstrate their viability within social praxis (see also Watzlawick 2002: 14-15). The belief that is part of the anticipation may be contingent but is not arbitrary. Luhmann (1988: 154) stresses this point as well by arguing that deparadoxification depends on conditions of social acceptability that change with the transformation of a social system and society at large. Strategists experience this test for social acceptance every day when the workforce, unions or analysts reject their strategic fictions or when the As If, that is supposed to guide the application of a strategic rule (‘Let us assume that cost leadership works for us’), turns out to be in need of modification. As Ifs are necessary to preserve the capacity to act despite paradox, but the meaning of a strategy remains a matter of retrospective fulfillment. Fictions do not ‘solve’ paradox; they render it invisible and help us to temporarily ignore the paradoxical foundation of an operation.
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Bootstrapping and Paradox – When Fictions Are Fulfilled
Another possibility for dealing with paradox rests on self-referential reasoning itself. While paradoxical reasoning is about contradicting selfreference, there is also the possibility of displacing paradox in the sense that self-referential reasoning is not contradictory anymore. The concept of ‘bootstrapping’ claims that social actors often create the foundation of their own operations (Barnes 1983). Certainly, this is a self-referential operation, though one that is non-contradictory. Bootstrapping stands for operations that create the foundations that make these operations possible in the first place (Kauffman 1998: 423; Ortmann 2004a: 25). Similar to a self-fulfilling prophecy, bootstrapping links the ends of an opposition in recursive loops. For instance, a strategist describes her/his environment as hostile and thus makes this environment hostile. To start these recursive loops, the paradox needs to be displaced again. Most of the time this happens via temporalization. For example, ‘We define our strategy as an innovation-minded one’ reflects a fiction. Bootstrapping emphasizes that this fiction is likely to be fulfilled and then acts as the ground for the next round of strategizing. The major difference between bootstrapping and temporalization is that bootstrapping explicitly highlights noncontradictory self-reference and thus could be described as a special case of temporalization (i.e. a fulfilled fiction). To better understand the bootstrapped nature of social life, we need to reflect on an exemplary bootstrapped operation. For this we have to consider the performative part of our language.86 Barnes (1983: 526), following the speech act theorists Austin (1980) and Searle (1983), directs our attention to the bootstrapped character of performative speech acts. According to Austin (1980: 5), performative speech acts “do not ‘describe’ or ‘report’ or constate anything at all, are not ‘true or false’; and the uttering of the sentence is, or is part of, the doing of an action.” (emphasis added)
To use a performative speech act means to perform an action that carves out reality (e.g., nominating, firing or adjourning). Performatives do something to a state of the world rather than describing it; they form reality. To pronounce an entity an X makes this entity an X. This is self-referential and thus a bootstrapped operation. By performing speech acts, we make our reality into a reality we then refer to. In other words, speech acts create what they refer to. An X is whatever the individual calls an X. The boot86
Performatives are just one possible type of bootstrapping. Hofstadter (1987: 315), Kauffman (1998: 422-423), and Ortmann (2004c: 56-61) give yet other examples (e.g., bootstrapping in evolutionary biology or in computing).
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strapped character of performative speech acts has consequences for our analysis. If we consider the world-disclosing role of language (i.e. speech acts) as described in section 4.2.3, it is not improper to think of strategic rules, resources, decisions, and descriptions as coming in part into existence by means of performative speech acts. Strategic management constantly relates to performatives – managers announce a merger or formulate a strategy. Consider the following example: Similar to strategic decisions, strategic rules face the paradox that they are supposed to guide application whereas their meaning can only be fixed within application. Hence, there is no self-defining origin that allows us to think of the rule as being selfpresent and the cause of itself. If there is no self-defining origin from which a rule can emerge, but we know that rules exist, we have to discuss how they come into being. One possibility of thinking of the constitution of strategic rules is to describe their application as a bootstrapped operation that is based on performatives. Then, strategic rules, which are actually supposed to guide strategic action and thus ‘strategy talk’, become established through performative speech acts (‘strategy talk’) and the related implied actions. Although the underlying paradox tells us that there is no final origin from which a self-defining rule can appear, we can describe the constitution of strategic rules as a bootstrapped operation based on performative speech acts (see Figure 20). The paradox (‘for a rule to mean anything there needs to be application, yet for application to come about there needs to be a rule’) is turned into a bootstrapped operation as long as we identify the constitution of strategic rules with performative speech acts (‘strategic rules are established through speech acts that are actually supposed to be guided by these rules’). Thus, to analyze what strategists say can add more to our understanding of strategy than analyzing chunks of performance-related data (Hardy et al. 2000). The performative character of strategic management has been widely neglected so far. Strategists often do things to the world: The market potential that is announced by the CEO is made the point of reference for strategy formation (strategy context). Synergy effects are taken as reasons for a merger and are thus treated as the justification for a strategic decision (strategy process). Porter’s five forces framework is classified to be the strategic rule relevant to the corporation (strategy content). On closer examination, we see that the performative effects of speech acts are much like a fiction (Ortmann 2004c: 50). We act as if the reasons at hand are relevant, and this makes them reasons. We act as if Porter’s framework can help us with the content of our strategy, and this makes Porter’s frame the input for strategy content. The strategy turns out to be whatever strategists
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identify to be their strategy. This is far from being arbitrary. As stated above, As Ifs need to prove themselves in social praxis.
Fig. 20. Contradictory and Non-Contradictory Strategic Reasoning
Bootstrapping is operational self-reference, but of a type of selfreference that is not contradictory. Performative speech acts, which reflect bootstrapped operations, temporalize complexity and thus ‘transform’ paradox into a recursive step-by-step (Ortmann 2004a: 26). According to Hofstadter (1987: 137), recursive relations are not paradoxical because they consider time to a greater extent. A recursive definition is not solely defined by itself but through a ‘simpler’ version of itself. Giddens (1984) gives a good example: the duality of structure, which conceptualizes structure as the medium and outcome of the conduct it recursively organizes, refers to structure in a dynamic way. The structural properties of social systems are not caught up in paradox, because a ‘simpler’ version of structure is the foundation for a ‘more advanced’ account over time. To conclude our argumentation on temporalization and bootstrapping, recall that paradoxes paralyze and thus inhibit action; suddenly there seems to be no ground on which people could base their actions. This ground is missing because the paradox demands that actors consider two contradicting issues at the same time. Temporalization and bootstrapping show that people can create a ground on which further actions are based. Although this ground is not a final origin, it is a ground that preserves peoples’ capacity to act. Temporalization bases this ground on a fiction, whereas bootstrapping emphasizes that this ground is often self-created. Of course, every fiction is a self-creation, yet not every fiction is fulfilled in praxis. To announce a strategy creates a ground from which further actions can unfold, yet this does not necessarily imply that this announcement
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constitutes the strategy. If fictions are accepted by other actors and at least partly fulfilled, we look at a bootstrapped operation (i.e. we announce or proclaim a strategy and thus make our announcement a strategy). To grasp the role of deparadoxification within a study that addresses deconstruction, we need to discuss the relation between deparadoxification and Derrida’s supplementary logic. Deparadoxification and Derrida s Logic of Supplementarity
What first looks like an insoluble paradox turns out to be gradually formed in and by recursive loops. This recursiveness can also be described by referring to Derrida’s (2003a) logic of supplementarity. Yet, as described in section 4.2.2, for Derrida the logic of supplementarity describes a situation that points towards paradox. It is the encounter with the impossible (with the paradoxical) that the supplementary logic primarily aims at (Derrida 1998b: 16), although the logic itself can be also be used to describe recursive relations (Dupuy and Varela 1992; Girard 1992; Ortmann 2003a). Derridean supplementarity turns into a paradox if we analyze both ends of the underlying opposition to occur at the same time. We thus have to respect that deconstruction is primarily about exposing paradox and the undecidable moments of argumentation, yet can also be employed to unravel the inherent recursiveness between the poles of an opposition (see Figure 21). To uncover this recursiveness, we need to enrich the supplementary logic with analytical tools that help us understand how recursiveness emerges out of paradox. Temporalization and bootstrapping represent tools that allow us to show how a paradoxical relation is turned into a recursive one (see chapter six).
Fig. 21. Two Disguises of the Logic of Supplementarity
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As depicted in Figure 21, every paradox is a problem of time, if we conceive of time in its most radical way (Luhmann 2000: 132). Deparadoxification techniques do not deny paradox “but displace it temporarily and thus relieve it of its paralyzing power.” (Teubner 2001: 32) They demonstrate that we oscillate between the poles of an opposition, which are paradoxical only as long as we look for the unity of the distinction (Weizsäcker 1976). Oscillation, the constant movement between both ends of an opposition, defers impossibility and affirms what is ‘to come’ (Luhmann 1995c: 51).
5.3 Strategic Realities Despite and Because of Paradox Consider that we have argued that strategy research cannot neglect paradox and should value it for a variety of reasons (section 5.1) but also that paradoxes only indicate the limits of knowledge we can possess about strategic management and that there is need to deparadoxify (section 5.2). This demonstrates that we have to incorporate both paradox and deparadoxification into our strategic realities; we need to build strategic realities because of and despite paradox. We have to construct strategic realities because of paradox since deconstructive logic suggests that paradoxes unavoidably occur once we look for final origins (e.g., an objective environment). To remind ourselves that these origins are impossible and to not get trapped in the outlined dominant logics (section 3.2), we need to include paradox. Likewise, we need to construct strategic realities despite paradox, as we cannot conclude the impossibility of strategic management if various authors have empirically observed practitioners’ work on strategic problems (Chelsey and Wenger 1999; Liedtka and Rosenblum 1996). To conclude that strategic management is impossible neglects that firms engage in this social practice. What we label ‘The Deconstruction of Strategic Realities’ in chapter six shows that strategic realities exist because of and despite paradox (Figure 22). On the one hand, our deconstructions of the strategic realities within the dominant logics have to uncover the paradoxes that strategy research has overlooked thus far. This, of course, is the classical task of any deconstruction. On the other hand, our deconstructions also aim at deparadoxfications that transform paradox into non-contradictory recursive relations. Although Derrida himself always tried to push his own analyses in the direction of paradox to show that a self-defining origin that acts as a final metaphysical cause is impossible to reach, we believe in accordance with a variety of scholars (Dupuy and Varela 1992; Girard 1992; Ortmann 2003a)
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that deconstruction can also help us to develop new conceptions that ‘bridge’ the underlying oppositions to show their recursive connection. As noted at the end of section 5.2, to employ Derrida’s deconstructive logic in the context of deparadoxification is by no means ‘against his theory’.87 Yet, to employ deconstruction in this sense implies to enrich (not replace) Derrida’s arguments with (a) the deparadoxification techniques that were outlined in the preceding section and (b) selected insights from other theories (e.g., Giddens’s [1984] theory of structuration and Luhmann’s [1995b] social systems theory).
Fig. 22. Theorizing in Strategy Research Despite and Because of Paradox
Our task in chapter six is not to stress hopelessness but to meaningfully connect organization and environment (strategy context), strategy formulation and implementation (strategy process), as well as strategic rules/resources and their application (strategy content). Connecting oppositions in a both/and-way does not mean integrating them into a coherent whole in order to ‘solve’ paradox. Scholars who look for synthesis disservice theory and practice by obscuring the anxiety that arises from the copresence of oppositions (Clegg et al. 2002: 488). Our analysis points towards the challenge of creating strategic realities despite and because of paradox. We agree with Poole and Van de Ven (1989: 575) who argue that “in pursuit of an elusive consistency, researchers may create self-encapsulating theories which may freeze thinking. There is great potential to enliven current 87
Derrida (1992a: 16) knows very well that “it is impossible to have a full experience of aporia, that is, of something that does not allow passage” and also stresses that “the aporia can never simply be endured as such.” (Derrida 1993: 78)
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theory and to develop new insights if theorists search for and work with inconsistencies, contradictions, and tensions in their theories, and in the relationship between them.”
To work with contradictions and inconsistencies is not an easy task because to ‘push’ paradoxical reasoning to its limits brings about impossibility. The following chapter has to address this tension between ‘the impossibility of paradox’ and ‘the empirical reality of strategy making’. In line with Clegg et al. (2002: 486), we believe that any treatment of paradox needs to positively regard the co-presence of opposites but also explore the recursive relationship between both poles without immediately assuming a dead end. This, then, is the primary task of ‘The Deconstruction of Strategic Realities’.
6 The Deconstruction of Strategic Realities
“Every act of creation is first of all an act of destruction.” Pablo Picasso
To facilitate orientation, recall our main way of argumentation up to this point. Chapter three argued that strategy scholars are skilled in creating oppositions that govern the field in an almost unnoticed way and thus led to the establishment of dominant logics. Oppositions exist because many widely used strategic realities look for ‘origins’ (e.g., a formulated strategy in strategy process research). Yet ‘origins’ cannot be fully justified; any attempt to rationalize the purity of an ‘origin’ results in paradox. Hence, oppositions prevent the discussion of paradoxes that are unavoidably present and in consequence lead to dominant logics. Based on these insights, chapter four introduced deconstruction as a kind of metascience that challenges and surpasses the metaphysics of logocentric systems, i.e. strategic realities that in our case form ‘the text’ to be deconstructed. This text imposes an order on reality by which a subtle repression is exercised. By dismantling strategy’s logocentric oppositions, deconstruction uncovers the paradoxes that occur once a metaphysics of presence is left behind. Chapter five argued that to merely uncover paradoxes is not enough; any exposure of the impossibility that paradox brings about needs to be supplemented by remarks on deparadoxification. Paradoxes only represent necessary limits to our knowledge about strategic management, but we should not conclude the impossibility of strategic management. We concluded that this chapter’s subject (i.e. ‘The Deconstruction of Strategic Realities’) must show that strategic realities are created because of and despite paradox. To consider paradox means to link both ends of an opposition together, yet without concluding contradictory self-reference (Poole and Van de Ven 1989: 567). Our premise that ‘The Deconstruction of Strategic Realities’ has to consider paradox and deparadoxification is reflected by the method of argumentation that guides the analysis throughout chapter six. Figure 23 depicts this method of argumentation and illustrates that the deconstruction
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of strategic realities with regard to strategy context, process, and content consists of four parts. In the first part of each deconstruction (sections 6.1.1, 6.2.1, and 6.3.1) we begin with a discussion of ‘blind spots’. As noticed in section 1.1, the dominant logics cannot see that they cannot see the paradoxes because of their underlying metatheoretical assumptions. We expose these blind spots and introduce different assumptions from the perspective of deconstruction. In fact, we revisit concepts like complexity (strategy context), double contingency (strategy process), as well as the insaturable nature of contexts (strategy content).
Fig. 23. Outline of the Deconstruction of Strategic Realities
In the second part of each deconstruction (sections 6.1.2, 6.2.2, and 6.3.2) we apply the metatheoretical assumptions that were discussed in the first part to deconstruct the identified dominant logics. Each deconstruction exposes a paradox, something that is impossible. The discussed paradoxes demonstrate that the dominant logics of strategy context, process, and content aim at impossibilities and therefore cannot be sustained any longer. The third part of each deconstruction (sections 6.1.3, 6.2.3, 6.3.3) applies the deparadoxification techniques that were identified in chapter five and demonstrates how we can theorize in strategic management despite the paradoxes that we identified.
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The fourth part of each deconstruction (sections 6.1.4, 6.2.4, and 6.3.4) outlines implications of a deparadoxified understanding of strategy context, process, and content. To discuss the implications of each deconstruction, we introduce undecidable terms (i.e. ‘framing’ for strategy context, ‘improvisation’ for strategy process, and ‘iterability’ for strategy content, see Figure 23). These undecidable terms not only constantly remind us of the paradoxical nature of strategy context, process, and content but also illustrate that paradoxes can be unfolded over time. We first discuss these terms from a ‘theoretical’ perspective to show what scholars can learn from deconstruction and then outline ‘practical’ implications that demonstrate what practitioners can take away from our discussion. Although both implications are based on Derrida’s way of thinking, we complement his remarks with selected ideas from other theories (e.g., Weick’s [1995] sensemaking approach or Schütz’s [1967] conception of the social world). This approach is feasible, since Derrida never applied his thoughts to organizations in general or strategic management in particular. When looking at the complete structure of analysis that underlies ‘The Deconstruction of Strategic Realities’, we see that it reflects the need to build theories in strategic management because of and despite paradox (see section 5.3). The discussion of the blind spots and the resulting paradoxes represent the first two parts of each deconstruction; both parts discuss the existence of strategic realities because of paradox (see the first grey box in Figure 23). Whereas the first two parts show that strategic realities relate to and exist because of paradox, the last two parts of each deconstruction show that paradoxes are conceptual limits to our knowledge about strategy and that we can build strategic realities despite paradox (see the second grey box in Figure 23).
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6.1 Strategy Context – Beyond the Market Given “Those who talk about the environment determining the organizational structure introduce some rather severe simplifying assumptions that we are eager to erase (and replace with other severe simplifying assumptions).” Karl E. Weick (1979: 135)
6.1.1 Complexity – Beyond the Necessity of Adaptation! In section 3.2.1 we argued that the ‘necessity of adaptation’ resides in the belief that firms are part of an all-encompassing environment. The environment is seen as an ultimate point of reference to which firms have to adapt to while formulating their strategies. In the following, we discuss more closely why such a conception of the organization/environment relation obscures paradox. To unfold our reasoning, we must assume for a moment that the paradigm of adaptation was right: organizations adapt to an objective environment that displays the ultimate form of complexity.88 If the ‘necessity of adaptation’ were right, the environment would represent a definitive point of reference that tells organizations how to identify themselves and their strategies. Accordingly, the identity of an organization (and thus the identity of an organization’s strategy) is a matter of pure adaptation to the environment. The environment yields an identity for an organization’s strategy that is not a product of the organization but of the environment. This identity is ‘pure’; it is self-defining and origin of itself; it needs nothing else to come into existence. That is why Derrida (1992d: 9-10) argues that such an identity, if it were to exist at all, were identical to itself. Pondering about the possibility of such a ‘pure’ identity, an identity that simply is the product of some higher authority (i.e. the environment), Der88
Because deconstruction argues for the irreducibility of meaning, Derrida (1995a: 118-119) has explicitly linked the problem of meaning and context to the fact that ‘the text’ represents the complexity of the world (see also Cilliers 2005: 259). Knowledge about referents always remains provisional. Luhmann (1995b: 24) gives a more formal definition of complexity: “A definition of complexity follows from this: we will call an interconnected collection of elements ‘complex’ when, because of immanent constraints in the elements’ connective capacity, it is no longer possible at any moment to connect every element to every other element.”
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rida (1998c, 1992d) suggests that whatever entity is to gain an identity (e.g., the ‘I’ or the organization) is already caught up in the movement of supplementarity. Identity is not a static concept, not something that imposes itself on us from the ‘outside’. Identity is a constant reinvention. For Derrida, the enormous complexity that resides in ‘the text’ prohibits the creation of any fixed or given identities; to fix an organization’s identity would be similar to claiming that meaning could be conclusively determined. The identity of an organization (and its strategy) is a product of the ‘play of differences’; these differences are not stable but change constantly. Every difference is also a deference of a self-present identity into the future; every identity is subject to différance. Because of the complexity that structures ‘the text’, there can be no predetermined meaning. Indeed, the meaning of an organization’s identity is always moving, it is never fully ‘there’. Derrida (1992d: 9) argues in this context that no identity can ever be identical to itself. ‘Self-difference’, which is just another way to express différance, structures every identity. Derrida (1998c: 28) argues that “an identity is never given, received, or attained; only the interminable and indefinitely phantasmatic process of identification endures.” Identity is identification – a never-ending process that is well described by Alice in Wonderland who states that “at least I know who I was when I got up this morning, but I think I must have changed several times since then.” (Carroll 1994: 43-44, emphasis in the original) To move Derrida’s rather abstract argument closer to our concerns, we have to ask how identification occurs. If we trust Derrida (1992d) that constantly changing differences constitute identity, identification results from the continuous processing of selections to reduce complexity. Organizations have to reduce complexity to perpetuate their capacity to act. If they fail to make selections and thus do not reduce complexity, there is no possibility of fostering the process of identification anymore (because in the absence of differences any distinction between environment and organization disappears). As discussed in section 2.1, organizations cannot practically realize all alternatives that are ‘offered’ by the environment.89 Strategy is all about the reduction of complexity by selecting alternatives. The 89
Strictly speaking, the alternatives that identify an organization do not rest in the environment. If they were to rest in the environment, the latter would be a kind of pool of all possible alternatives. Yet the environment only comes into being when alternatives are activated (when differences are made) by the organization. With regard to Derrida (2002), alternatives reside in the general text, a text that in Luhmann’s (1995b) conception of social systems is called ‘Welt’ (see also Luhmann’s [1995a] own remarks on Derrida’s conception of text).
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differences that are drawn in the process of identification bring the categories ‘the environment’ and ‘the organization’ into existence. In fact, the environment is what the organization is not. If complexity reduction is at the heart of strategic management, we cannot neglect that organizations make selections (Seidl 2003b, 2000). If organizations propel identification by creating differences, they lack what Ashby (1956) calls requisite variety. Following Ashby’s Law of Requisite Variety, we have to take as many control variables as there are external variations. “This is the law of Requisite Variety. To put it picturesquely: […] only variety can destroy variety.” (Ashby 1956: 207, emphasis in the original)
According to this law, an organization has to establish a point-to-point correspondence to the environment to remain in control. Yet because the process of identification relies on differences that reduce complexity, organizations lack this requisite variety that would allow them to react to every state of the environment. If an organization were to succeed in establishing such a point-to-point correspondence, the organization/environment distinction would be cancelled out; there would be no difference between environment and organization anymore, as both possess the same level of complexity. In Derrida’s terminology: both categories would no longer be textualized. Organizations can never capture the entire environmental complexity, because every attempt to come into existence requires a distinction that sorts something out. If distinctions act like a kind of filter, the environment turns out to be a construction from the side of the organization. In consequence, we need to give up the assumption that organizations adapt to an environment that exists independently of them, because there is nothing an organization can adapt to but its self-construction of the environment. This makes the ‘necessity of adaptation’ an improper point of departure for theorizing, as a constructed environment cannot be objectively given to act as a point of reference for adaptation (every adaptation to a constructed environment already is self-adaptation). The ‘necessity of adaptation’ neglects that every organization misses the requisite variety that is required to refer to an environment that exactly suits the organization. Only with a point-to-point correspondence in place would perfect adaptation be theoretically possible. Because of the missing requisite variety organizations possess no formal criterion to check whether they have adapted yet. The organization’s inferiority in terms of complexity is due to the necessary but limited number of selections it needs to make in the process of identification.
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We will briefly summarize our argumentation by highlighting the two major points of our discussion. First, an organization’s identity, which influences the development of its strategy, is never simply given (for identity always already is identification). Second, this process of identification can be described as an active operation (i.e. the establishment of differences by the organization). These differences bring ‘the environment’ and ‘the organization’ into existence. Indeed, the environment turns out to be what the organization is not. The differences that organizations draw reduce complexity because every difference acts like a kind of filter. In consequence, the organization constructs its own environment. Yet a constructed environment provides no point of reference for adaptation because it no longer exists independent of the organization. Consequently, neither the environment nor the organization represent the ‘essence’ of strategizing, an absolute point of reference for the strategy context that ‘is itself’ by virtue of its being. In conclusion, the problem of complexity reduction is at the heart of our thinking about strategy context. The creation of an organization, and especially strategizing within an organization, is just an answer to the problem of complexity. Thinking of the strategy context in terms of adaptation, means neglecting that organizations do not derive their identity from the ‘essence’ of the environment but are caught up in a process of identification that is based on the creation of differences that reduce complexity. Strategic approaches that find their conceptual foundation in adaptationbased logic (e.g., Porter’s objective rules of an industry sector) seem to neglect this argument. This blind spot of adaptation-based strategy context research enables scholars to suppress a paradox. In the following section, we show how the arguments that were presented in this section enable us ‘to see’ the paradox that inevitably occurs once we try to justify the metaphysics of presence that belongs to the claim of an objective strategy context.
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6.1.2 Strategy Context and the Paradox of Adaptation “In the beginning there were markets.” Oliver E. Williamson (1975: 20)
“And in the beginning, there is the and.” Jacques Derrida (2000c: 282 emphasis in the original)
In the preceding section we discussed ‘complexity’ as the blind spot of the ‘necessity of adaptation’. Based on these remarks, we now demonstrate that adaptation-based logic, while trying to ‘prove’ that that the environment acts as a kind of origin for strategic reasoning, obscures a paradox. Adaptation-based strategy research can be criticized for the denial of a paradox that arises once we consider the lack of requisite variety that any organization necessarily faces. In other words, if the ‘necessity of adaptation’ tries to show that the environment is a kind of origin for strategic reasoning, it obscures the fact that organizations lack requisite variety and consequently make selections, reduce complexity, and thus construct their own environment. This lack of variety gives rise to a paradox that will be explained in this section. Because Derrida never explicitly focused or discussed categories like ‘the environment’ or ‘the organization’, we need look for a discussion of similar categories within his writings. From our perspective, Derrida’s (1987b, 1981a) understanding of the relation between inside and outside can help us to discuss the underlying paradox. This inside/outside-debate fits our remarks on strategy context, because we usually think that the environment is something outside whereas the organization is something inside. Derrida (1987b: 45) contends that the common distinction between inside and outside is an essential metaphysical thought that is especially revealed in the study of art.90
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The discussion of the inside/outside opposition runs through many of Derrida’s discussions. In Dissemination he writes about hymen, the virginal membrane, that stands between the inside and outside. Hymen, similar to the frame, “is an operation that both sows confusion between opposites and stands between the opposites at once.” (Derrida 1981a: 212, emphasis in the original) Hymen is an undecidable term that represents fusion but by the same token also upholds the difference between inside and outside.
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“This permanent requirement – to distinguish between the internal proper sense and the circumstance of the object being talked about – organizes all philosophical discourses on art, the meaning of art and meaning as such, from Plato to Hegel, Husserl and Heidegger. This requirement presupposes a discourse on the limit between the inside and outside of the art object, here a discourse on the frame.” (Derrida 1987b: 45, emphasis in the original)
The frame distinguishes between inside and outside but is not ‘given’ in a way for us to simply accept the difference. Rather, the frame occupies a sort of ‘non-space’ between inside and outside and thrives on its simultaneous presence and absence. The frame is not naturally imposed but constructed through differences that are never complete but perpetuated by différance. Such as there is no pre-defined limit to ‘the text’, there can be no natural boundary around what we believe to be inside. Of course, the performance of a frame seems rather unproblematic in a painting, where the frame seems more ‘given’ but is always recreated by the observer. In other aesthetic objects (e.g., sculptures) or in terms of social relations (e.g., environment and organization) frames are not so easily identified. Based on this understanding of the inside/outside-relation, Derrida (1987b: 37) discusses Kant’s distinction between the ergon (which is the pure internal work) and the parergon (which is what is outside the work).91 He argues that the apparent pureness of the ergon depends on the supplementarity of the parergon. To be recognized as a work, the ergon needs to be set off against a background. This distinction is by no means naturally given but an active operation of framing. Derrida calls this active framing work parergonality and thus supports his argument that the ergon needs to be understood as an effect of the parergon. To understand the relation between inside and outside as parergonal (framing) means to give reference to its undecidable nature in which neither inside nor outside are simply ‘present’. The inside supplements and thus constitutes the outside. There can be no outside or inside just on their own as this would imply a metaphysics of presence; the outside is in the inside, whereas the inside also is in the outside.92
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The outside, here, is not merely understood as the wall on which the work hangs but the general text in which the art object is created or constituted (Derrida 1987b: 61-62). 92 One may argue here that parergonality is restricted to the discourse about art in general. Derrida (1987b: 61), however, makes quite clear that the frame is “at the invisible limit to (between) the interiority of meaning (put under shelter by the whole hermeneuticist, semioticist, phenomenologicalist, and formalist tradition) and (to) all the empiricisms of the extrinsic which, incapable of either seeing or reading, miss the question completely.”
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If we apply this kind of thinking to the relation between environment and organization, we can argue that the environment exists only because of the organization, while at the same time the organization cannot exist without its environment. The apparent purity of the environment is constantly supplemented by the organization that actively frames its own environment. The supplement is added to compensate for a lack in what is thought to be complete; the organization always adds a new dimension to the environment (Cooper 1986: 315). That is why the conception of the environment cannot be fixed or grounded in a notion of presence. There can be no strategy context that is simply derived from an objective and self-present environment, but only a strategy context that is based on the relation between organization and environment. Applying Derrida’s thinking to strategic management demonstrates that the strategy context is something that is ungrounded (viz. has no origin from where to start reasoning). These arguments enable us to demonstrate that adaptation-based logic is based on a paradox. If it is true that the environment consists only because of the organization (i.e. it is a construction of the organization), every adaptation to the environment is only possible as self-adaptation. This leads into a vicious circle: the organization can only be adapted to the environment if the environment is adapted to the organization. The implications of this finding lead to paradox: you cannot distance yourself from the environment for the sake of strategy formulation and at the same time produce this very environment. While looking for strategic fit, organizations need to describe the environment that exists regardless of them (as otherwise they could not establish distance), whereas in fact the environment exists only because of the organizations. The strategic environment cannot exist at the same time because of and despite an organization. You cannot adapt to something (and take it as a reference point despite yourself) that at the same time exists only because of your own existence (see Figure 24).
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Fig. 24. The Paradox of Adaptation and the Strategy Context
Certainly, one could claim that even though the environment is an organizational construction there is at least something one can adapt to (i.e. the construction of the environment by the organization). At least, an organization could observe its own construction of the environment and then adapt to this construction, could it not? Of course it could; but it cannot do so in an objective way; the organization cannot fully observe its own existence. This argument can be explained as follows: To observe the construction of the environment means to observe the organization that constructs the environment (because the construction does not simply exist on its own). Yet if an organization really wants to achieve a perfect fit it needs to attain full knowledge of its constructed environment, which requires that the organization needs to observe itself in a perfect way. This, however, is not possible. Every self-observation of an organization contains a blind spot because during a self-observation an organization cannot observe that it is observing itself. In other words, self-observation is paradoxical because the organization/environment distinction, that the organization inevitably needs to make to reduce complexity, cannot be used to observe what is observed by this distinction. The same distinction cannot be used twice to observe something different. In consequence, each attempt to describe the environment (which is a construction from the side of the organization) by means of self-observation remains at least incomplete and contains a blind spot. Hence, organizations cannot ‘check’ whether they have adapted because the necessary self-observation is paradoxical. Contact with ‘my’
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environment is only possible through self-contact, which requires a selfobservation that has a blind spot.93 These remarks suggest that the impossibility of the paradox that we uncovered is limited to a description of an objective environment. Because every organization describes itself when it describes its environment, but a perfect self-observation is impossible due to the blind spot that inevitably occurs, we must conclude that organizations cannot identify an objective, fully present point of reference that they could use for adaptation. In other words, organizations cannot describe their environment despite their existence, because it is the organization that is ‘in the way’. This limitedness of the paradox is in line with Derrida’s (1992a) reasoning because he suggests that the impossibility of a paradox is limited to the establishment of a metaphysics of presence that is self-defining and based on an ‘origin’. Yet to suggest that an objective description of the environment is impossible does not mean that there can be no strategic descriptions at all. Certainly, there are strategic descriptions of categories like opportunities and threats as well as strengths and weaknesses. But the consequence of the paradox is that we cannot assume any kind of causal relation between environment and organization. “[S]ince elements and structures, situatedness and semantics are performances of the system, too much ‘of its own’ enters into the ‘adaptation’ for one to infer an increased compatibility of system and environment as a result. Paradoxically, precisely its own part in the process of structural adaptation may prevent a system from successfully stabilizing itself within its environment in the long run.” (Luhmann 1995b: 351)
The environment does not act as a self-defining cause for the structural existence of an organization but is a necessary construction from the side of 93
“Observing one’s identity leads to paradox because you have to observe yourself as something else based on the same distinction that made it possible to identify yourself.” (Vos 2002: 218) This paradox occurs because an observer cannot observe the spot behind the foundational distinction of a system by means of the same distinction. This is why every observation has a blind spot, because during an observation the distinction that enables the observation cannot be observed. Identity when observed by the organization itself is paradoxical: the organization only is itself because it uses the distinction of being itself and not being itself in order to distinguish itself. This paradox is a timeless identity, because observations of identity are paradoxical when they are extracted from time. One way to deparadoxify this situation is by means of ‘simply’ starting to operate (e.g., through an As If) to postpone the question about the unity of the distinction. Of course, one could argue that a second-order observer can uncover this blind spot. This, however, does not solve the problem since the second-order observer would face her/his own blind spot.
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the organization. This does not imply that the environment does not influence the organization; it only means that the environment does not determine it. It is not being suggested that organizations do not face an environment, but that this environment constitutes no metaphysical ground which strategic reasoning can use as a source for adaptation. We can conclude that Derrida’s (2003a) deconstructive logic helped us to expose a paradox with regard to strategy context research. Organizations that strive for adaptation face paradoxical indecision: to adapt to something they need to describe an environment that exists regardless of them, while at the same time this environment only exists because of them. Of course, organizations can observe part of their own environmental construction, yet they cannot fully observe this construction: this is because observing the environment implies observing oneself, which is not fully possible due to the blind spots involved. This paradox demonstrates that the adaptation-based logic of the ‘necessity of adaptation’ aims at an impossibility (i.e. a paradox). The ‘necessity of adaptation’ obscures the paradox because the observation of the environment and the processing of complexity are not regarded as problematic. From this perspective, the dominant logic cannot be sustained any longer, because the ‘core’ of the logic (i.e. the belief in adaptation and strategic fit) aims at a metaphysics of presence that remains impossible. As indicated in chapter five, the exposure of a paradox needs to be supplemented by a positive use of paradoxical reasoning for the sake of creating other strategic realities. The paradoxical foundation of the organization/environment relation implies that we have to think of the circumstances that shape strategy in a different way. In the following sections, we explore this way of thinking by showing (a) how the relation between ‘the environment’ and ‘the organization’ is deparadoxified by strategic actors and (b) that we can gain important insights from a deparadoxified understanding of strategy context. 6.1.3 The Deparadoxification of Strategy Context To outline any implications at all, we have to explore how the strategy context becomes possible despite the paradoxical nature of adaptation. From a theoretical perspective, strategizing is paralyzed by paradoxical indecision: organizations cannot refer to their environment for the sake of strategy formulation despite themselves when they are constructing this environment at the same time. Yet from a practical perspective, organizations seem not too paralyzed. They somehow manage to identify their strategy context, although, strictly speaking, they cannot because of the
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underlying paradox. Even though the paradox is only a theoretical limit to our knowledge and organizations do not usually demand an objective description of their strategy context, the question remains how strategists deal with an environment to which they need to refer themselves and from which they need to achieve distance, all while looking for a point of reference for the strategy context. If adaptation cannot be achieved, on which foundation do organizational members base their strategy context? How do they identity the strategy context when they have no perfect environment to which they can adapt? To become operational, organizations deparadoxify this situation by making use of time. As indicated in chapter five, the temporalization of paradox is one possible approach for dealing with contradictory selfreference. This is not to say that temporalization is the only way to deparadoxify, but it is a widely used one with regard to questions of strategy context (Vos 2002). Because the paradox of adaptation tells us that strategists cannot get to the bottom of their strategy context (i.e. they cannot find a ‘perfect’ point of reference), they can at least act as if such a reference point existed (e.g., ‘Let us act as if our strategic environment is highly competitive.’). Although it is impossible (i.e. paradoxical) to find a fully determinable point of reference for adaptation, the As If temporalizes the underlying paradox and thus preserves managers’ capacity to act.94 Faced with the indecision of the paradox – the need to achieve distance from something that is created by oneself – managers can identify their strategy context by acting as if there were a strategic environment (whereas in fact they are looking at their own construction of this environment). The ground that is provided by the As If is by no means a metaphysical one; there is no perfect justification for the As If, no higher-ranking authority that imposes exactly this assumption. As Vos (2002) suggests, the differences that the As If is based on underlie a sense of naivety. Naivety does not imply arbitrariness. In particular, there are two reasons for this. First, every As If needs to be accepted by other actors (within the organization and in the market). In other words, strategists are not able to identify every environment they want to identify. The fiction needs to be communicated and objectified within social praxis to be of relevance for future sensemaking processes (Berger and Luckmann 2000; Ortmann 2004c: 124). Second, the contingency of the As If is path-dependent, meaning that its establishment does not happen in an unconditioned way. In94
Indeed, the temporalization happens because organizations first look at their environment because of them (i.e. their construction) and then treat this construction as if it existed despite them. In this sense, the paradox does not disappear but remains invisible and is deferred into the future.
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deed, former notions of the strategic environment have an impact upon those that follow; in this sense As Ifs are recursively related. Of course, at a certain point in time (usually in the very early stages of the development of a firm or after a crisis) every description of the environment is open to revision (Arthur 1994; Sydow et al. 2005). Yet after a while, already established environmental constructions restrain future choices. Identified ‘strengths’ remain ‘strengths’ and ‘opportunities’ keep on being ‘opportunities’. Certainly, few practitioners would admit that their strategy context is based on fictions, fictions that are the product of organizational members and not ‘demanded’ by the environment. To legitimize certain strategic moves by claiming that ‘the environment demanded us to do this’ usually finds easier acceptance ‘within’ the organization and ‘the market’. The As If that acts as a nucleus for the identification of the strategy context usually remains unnoticed from the perspective of the strategist. Yet, from the perspective of an observer, we need to admit that the absence of an objective environment permits the establishment of a reference point that takes the place of the As If. To conclude, the paradox of adaptation clarifies that there is no reference point within the strategy context that firms can use for adaptation. Deparadoxification helps us to understand what strategists do in the absence of such a reference point and how they create a non-metaphysical ground on which the strategy context rests. Inevitably, the resulting strategy context is ‘imperfect’; there is no ‘origin’ on which to base strategy. No organization can perfectly observe its environment because of and despite itself to then find a point of reference for adaptation; the paradoxical nature of adaptation prevents access. To speak with Luhmann (1995b: 208), the deparadoxified strategy context represents “the world after the fall from grace.” In the following section, we illustrate the ‘theoretical’ and ‘practical’ implications of this discussion. These implications need to show that, based on the As If, strategists link environment and organization in recursive loops. As indicated above, an As If reflects a starting point for identifying the strategy context (e.g., ‘If we act as if we face a highly competitive environment, our major strength is our short product-to-market time.’). The question then is how such recursive loops between environment and organization appear and what we can learn from them.
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6.1.4 Implications of the Deconstruction of Strategy Context Framing – The Enactment of Strategy Context “Your inside is out / And your outside is in” John Lennon/Paul McCartney (“Everybody’s Got Something to Hide Except Me and My Monkey”)
We start by outlining ‘theoretical’ implications that mostly address the scholarly community. The basic question we need to ask is: What happens with the As If ? If the fiction provides a ground from which further sensemaking processes can unfold, we need to know more about the process of identification that underlies managers’ understanding of the strategy context. To discuss this issue, we should (re)consider the following aspects: The As If is based on differences that are drawn by practitioners within organizations. Because of these differences, managers regard certain aspects of the unordered general text (Derrida 2003a) as relevant; they kind of sort information out which then makes up their construction of the environment. This construction, though, is what they subsequently experience as a constraint (i.e. ‘the environment’). In other words, the environment is a self-created constraint from the side of the organization (see also parts in section 6.1.1). What is important for us is that the argumentation that was just described is well reflected by a single concept: enactment. The theoretical notion of enactment refers to the ideas of Weick (1979: 130) and “captures the more active role that we presume organizational members play in creating their environments which then impose on them.” Enactment reaches beyond the idea of pure notional constructions; it is activity to enforce a state of the world.95 Enactment does something to the world. Although certain environmental aspects sometimes seem imposed by the environment – 95
Weick (1979: 164) argues: “The concept of an enacted environment is not synonymous with the concept of a perceived environment, even though citations of the concept would suggest that it is. If a perceived environment were the essence of enactment then the phenomenon would have been called enthinkment, not enactment. We have purposely labeled the organizational equivalent of variation enactment to emphasize that managers construct, rearrange, single out, and demolish many ‘objective’ features of their surroundings.” (emphasis in the original) Daft and Weick (1984: 288) even speak of a new type of organization: “These organizations construct their own environments. They gather information by trying new behaviors and seeing what happens. They experiment, test, and stimulate, and they ignore precedent rules, and traditional expectations.”
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for instance when considering formal and informal regulations – it is the organization that directs its attention toward them. By engaging in activity, organizations isolate and combine these regulations and thus regard them as relevant (or not relevant) to their environment. According to Weick (1979: 154): “Once something has been isolated, then that is the environment momentarily for the organization and that environment has been put into place by the very actions of the employees themselves.” (emphasis in the original)
An As If reflects an attempt to enact a strategic environment. Strategists start drawing lines between events and objects in the ‘real’ world so that the strategy context appears meaningful. The enacted strategy context is what they then experience as a constraint. Organizations, as Weick (1979: v) argues, draw the lines that they themselves stumble over. Enactment teaches us that the strategy context is not ‘given’ but ‘becomes’. This process of becoming is one of ongoing differentiation to appropriate order out of disorder; environment and organization arise as categories because they result from an active operation (Cooper 1986). Similarly, Cunliffe (2001: 352) argues that managers ‘author’ the shape of their environment and by doing so create a sense of their own identity. Hence, enactment influences the organization (i.e. its identity) and the environment (i.e. its enacted landscape).96 Based on the notion of enactment, how should strategy scholars think about the relation between organization and environment? Because the organization is as much inside the environment as the environment is inside the organization (Cooper 1986: 303), we propose to conceptualize the organization/environment relation as supplementary sensu Derrida. To grasp the supplementary nature of the organization/environment opposition, we suggest portraying the relation between both spheres by means of framing. Framing is itself an undecidable term, because the frame is at the limit separating inside from outside (or outside from inside). The frame remains undecidable, caught between organization and environment, inside and outside (Derrida 1987b: 61). A frame neither belongs to the organization nor to the environment. Framing draws our attention to the interrelatedness of both spheres: the organization creates its environment while at the same time this environment constrains its future 96
Organizations cannot enact any reality that they choose. People experience limits to what they enact, just as they experience limits to what counts as an As If (Smircich and Stubbart 1985: 732). First, because prior enactments act as constraints and people cannot simply forget about what they used to believe. Second, enactment is a collective process and whatever is enacted needs to be socially accepted. Individuals can introduce their enactments to other people, but whether and how they are accepted remains an empirical question.
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actions and thus identity. There is no environment or organization as such, but whenever an environment is framed the organization is framed as well et vice versa. That is why the frame has no place of its own, belonging either to the environment or the organization. Only framing effects occur (Derrida 1987b). As Ifs generate such framing effects. On the one hand, an As If frames the environment of an organization (because of fictions, people regard certain aspects of an apparently unordered state of the world as important). On the other hand, As Ifs also give the organization identity and thus constrain future sensemaking processes (because they serve as plausible guides for subsequent actions and interpretations [Weick 1979: 229]). The resulting supplementary relation is depicted in Figure 25. This treatment of Derrida’s supplementarity reflects our belief that this logic can also be interpreted in a non-paradoxical sense (see section 5.2). According to Derrida (2003a), the supplement constantly ‘adds something’ to the original and eventually also ‘takes-the-place-of’ the original. As indicated by Weick’s (1979) remarks on enactment, the organization constantly carves out new dimensions of the environment; the organization frequently adds something to the void that the environment leaves. Both, the organization and environment are unstable and underlie the force of différance. Most of the time, of course, the enactment just adds-on: it highlights new facets of the environment. Rarely, does the organization carve out a completely new, enacted landscape and consequently ‘takes-the-place-of’ the environment.
Fig. 25. The Framing of Strategy Context
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Whereas the idea to treat the organization/environment-relation in a recursive way (i.e. in our case as ‘framing’) has also been acknowledged by scholars in the field of organization theory (Kieser 1998; Ortmann 1995: 107; Weick 1979, 1995), the strategic management community remained notably silent and at best discussed the implications of this finding in an implicit way (Harris and Ruefli 2000).97 In a sense, this is unfortunate because there are a variety of more precise ‘theoretical’ implications that the notion of a framed strategy context brings about. We would like to highlight particularly the consequences for the strategy/structure debate, since we identified this discussion as belonging to strategy context research (see section 2.3.2). The basic question is whether ‘structure follows strategy’ (Chandler 1962) or ‘strategy follows structure’ (Hall and Saias 1980; Rumelt 1974). In this debate, structure is equated with internal efficiency, whereas strategy represents external effectiveness. Chandler’s dictum means nothing more than that the environment specifies the strategy and the organization has to adapt accordingly by adjusting its structure. From the perspective of a framed strategy context, the assumption that internal structure follows external strategic intent overlooks that, at the same time, internal structure also enacts the external strategy. Strategy-making is constrained by the
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Although Smircich and Stubbart (1985) opened a debate about the general nature of the environment in strategic management, their plea for a consideration of enactment remained largely unheard. Henderson and Mitchell (1997: 6) put in a nutshell: “[R]esearchers interested in characterizing the environment have typically been content with very simple models of the firm while researchers interested in the internal dynamics of firms have usually been content with very simple models of the environment.” Most scholars rely on models where the direction of causality is unidirectional. Ingram and Baum (1997) suggest that firms learn from their own operating experience in the market and thus shape their internal capabilities accordingly. Firms learn from their own or others’ experience in the market. Arguing the other way around, Tripsas (1997) shows how existing competences shape responses to technological change. Her work points towards the relationship between organizational competences and environmental conditions, yet it remains unidirectional in its argumentation because the influenced environmental conditions impose on the organization like constraints. Peteraf and Shanley (1997) and Ocasio (1997) discuss the interactions of competition (environment) and managerial work (organization). In fact, Peteraf and Shanley (1997) argue that the formation of strategic groups results from managerial cognition rather than ‘real’ differences in a firm’s characteristics. These groups are perceived as constraints to further strategizing. Ocasio (1997) shows that firm behavior is the result of how firms channel and distribute attention of their decision-makers. Firms enact their environment, which then imposes on themselves (see also Grimm 1996).
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way organizational members make sense of their environment. Structure not only follows but also enables strategy.98 Today’s structure, by limiting the enactment of the environment, influences tomorrow’s strategy in the same way that today’s strategy, by constraining the internal way of operation and demanding new administrative behavior, limits tomorrows structure. Structure affects the scanning mechanisms of organizations that drive the enactment of the environment. For this reason, management’s strategic choices not only shape the organization’s structure, but structure also influences what is regarded as (un)important and thus the strategic direction of a corporation (Miles and Snow 1978: 7-8). Once again, organizations define the lines that they stumble over. In a Derridean sense, structure supplements and thus adds a new dimension to strategy which can, but does not have to, lead to a new strategic orientation. Structure supplements strategy, because when enacting the environment people constantly recreate their reality. Enactment adds a new dimension to strategy, since enactment as argued above, has a great deal to do with creating novel meaningful relations between events and objects. Especially in times of crisis or obvious ecological change (Weick 1979: 130), new meaning structures are more quickly incorporated into existing strategic orientations. Although, Miles and Snow (1978) discussed the interrelated nature of strategy and structure quite early, deconstruction enables us to see that we face an opposition that is based on a supplementary relation. In this way, one central task for strategic managers becomes the encouragement of new strategic directions (e.g., by fostering multiple interpretations or creating test markets) to fully leverage the creative force of the supplement. To conclude, the strategy/structure-debate is not irrelevant but based on inaccurate questions. Strategy scholars, by trying to identify an Archimedean point, attempt to find reasons why strategy or structure are supposed to be at ‘the beginning’ of a chain of causation. From the perspective of deconstruction, strategy and structure are supplementary and mutually inform each other (Ortmann 2003a: 134, for a similar point see also Gaitanides 1985).
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Fredrickson (1986: 281), for example, suggests that strategic decisions are affected by the centralization of an organization’s structure because of the cognitive limits of the central decision maker. In a similar way, Burgelman (1983: 64) argues that “[b]ecause of the effects of structural context on the generation and shaping of strategic projects, it is also possible to posit that strategy follows structure.”
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Managing for a Framed Strategy Context
Having outlined more ‘theoretical’ implications of our discussion of strategy context by emphasizing the need for framing, we now discuss what strategists can take away from the notion of framing. Indeed, we ask how practitioners can manage for framing. In the following, we particularly discuss three aspects (i.e. a reinterpretation of the SWOT framework, the value of counter-assumptions, and the need to look at regulation in a recursive way) as these issues are frequently considered to address managerial concerns with regard to strategy context research (Beardsley et al. 2005; Hill and Westbrook 1997). First, framing implies rethinking classic tools like SWOT. In fact, environmental analysis is managerial analysis et vice versa. The recursive relation between organization and environment prohibits a strict distinction between both spheres without acknowledging the influence of ‘the other’ that Derrida (2003a) places so much emphasis on. For instance, getting to know opportunities and threats from outside inevitably means getting to know oneself, since the self rather than ‘the environment’ enacts these categories. Many strategic managers tend to look at and blame ‘the environment’ when looking for explanations of their situations, whereas they should look at themselves and their actions and interactions that bring about reality. As Weick (1979: 152) argues: “If people want to change their environment, they need to change themselves and their actions – not someone else. Repeated failure of organizations to solve their problems are partially explained by their failures to understand their own prominence in their environments. Problems that never get solved, never get solved because managers keep tinkering with everything but what they do.” (emphasis in the original)
When looking at the other side of the SWOT framework, one can argue that if organizations want to change their strengths and weaknesses, they need to change their enacted environments. This is because mental schemes that enact an environment shape and are shaped by the identity of an organization and affect the perceived strengths and weaknesses. To alter one’s environment can result in different strengths and weaknesses. Beer companies, for instance, believed for a long time that diet beers could not be sold (because of the missing ‘taste’). Only an ‘unwisely’ acting corporation tested the assumption and introduced diet beer. By doing so, the firm not only created one of the most significant product innovations in the beer industry and changed the competitive environment but also revised its own strengths and weaknesses. Second, if the strategy context is a product of framing effects, managers should be less concerned about what is typically regarded right and wrong
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within an industry. Rather, they should test their own assumptions periodically by acting as if counter-assumptions are viable (Smircich and Stubbart 1985: 732). Experimenting and testing are undervalued activities in strategic management, since frameworks like Porter’s industry analysis or portfolio analyses often act like straightjackets and do not allow for the creative destruction of currently held assumptions. Enacting an environment requires forgetting; or, in more mundane words: learning requires unlearning. Framing strategy context implies as much the creation of organization and environment as their destruction. Third, based on our conviction that the strategy context is framed, we can also show the implications for the nature of regulation in strategic management. When writing about regulation, strategy scholars usually assume that there are laws or other regulatory frameworks that constrain the way business is done (Beardsley et al. 2005). To a certain extent this is true; firms need to comply with regulatory schemes that impose upon them. This, however, is only half of the story, because the environment, characterized here by existing regulations, is enacted by organizations. Enactment implies that managers make something out of the regulations that surround them. In fact, managers attend to some regulations, ignore others, and try to arrange them in a way that makes them appear more orderly. Many firms even ‘manage’ regulatory risk to create potential opportunities for themselves. Why does the notion of framing lead us to the claim that regulative frameworks are influenced by organizations? For this, reconsider that we discussed framing as a more general concept to express the supplementary relation between organization and environment. This supplementary relation is based on our conviction that organizations enact their environment. Enactment means to establish something into the world. As Ortmann (2004c: 203, emphasis in the original, translation A.R.) claims: “Enactment is the performative enforcement of something that ‘counts as’, that thereby comes into effect.” Enactment means to create something, to carve out reality, not solely as a pure notional construct, but through activity, an activity that has consequences. Such consequences can be ‘used’ to the advantage of firms. Following Weick (1995: 162), enactment can result in the active ‘manipulation’ of the environment; it enforces a state of the world and brings reality into being. The environment does not impose limitations on organizations, but organizations impose these limitations on themselves. “Limitations are deceptive conclusions but, unfortunately, people don’t realize this. What they don’t realize is that limitations are based on presumptions rather than action. Knowledge of limitations is not based on tests of skills but rather
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on an avoidance of testing. On the basis of avoided tests, people conclude that constraints exist in the environment and that limits exist in their repertoire of responses.” (Weick 1979: 149, emphasis in the original)
When applying this line of thinking to the common understanding of regulation, we have to admit that it is not only regulation that regulates, but that the regulated sphere (viz. the firm) has a certain influence on regulation. Following Ortmann and Zimmer (2001), we call this exertion of influence on regulation recursive regulation. By influencing regulating instances on the national and supranational level, organizations create the foundation on which they base their subsequent actions. Recursive regulation is a bootstrapped operation; it influences institutions that organize political, economic, and social interactions. When discussing recursive regulation, we mean the intended modification of supraorganizational, formal institutions like laws or property rights (Ortmann and Zimmer 2001: 310-311). Deliberately influencing formal institutions entails shaping a regulatory framework, which organizations then experience as constraints to their behavior. Weick (1995: 165) gives an example by referring to the daylight savings time coalition: “This coalition, consisting of people representing convenience stores, fast food chains, greenhouses, and makers of sporting goods, lobbied to the U.S. Congress to move the start of daylight savings time from last Sunday in April to the first. This effort, which was successful, created extra hours of evening daylight, which in turn led more women to visit convenience stores and restaurants on their way home because they felt safer, led gardeners to think of spring earlier and to purchase more plants quickly, and led people playing sports to begin their season earlier.”
This coalition found that regulation not only runs from the regulating instances to firms, but also the other way around. In the spirit of the Derridean supplement, recursive regulation adds a new dimension to existing regulations, which, in an extreme case, can also mean to replace them entirely. In a pragmatic sense, recursive regulation requires that managers more explicitly reflect on practices like lobbying and the overlap of posts between business and government. These phenomena are usually considered to be sleazy and ethically questionable. Thus, recursive regulation asks managers to include ethical reflection in their thinking about strategy formation (Crane and Matten 2004: 399; Hosmer 1994; Meznar et al. 1990). In summary, our discussion of recursive regulation shows that a deconstruction of strategy context is not a mere theoretical endeavor but is already rooted in everyday strategic practice.
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6.2 Strategy Process – Beyond the Notion of Feasibility “Cause and effect, means and ends, seed and fruit cannot be served; for the effect already blooms in the cause, the end preexists in the means, the fruit in the seed.” Ralph Waldo Emerson (Essays and English Traits)
6.2.1 Contingency – Beyond the Primacy of Thinking! In section 3.2.2 we argued that the ‘primacy of thinking’ reflects the belief of a variety of strategy scholars that thinking (strategy formulation) comes before action (strategy implementation). Although most scholars do not overly believe that the strategy process is purely linear, but rather highlight its political and incremental character (Chakravarthy et al. 2003), there remains the deeply held assumption that thinking comes before action. To discuss the dysfunctional nature of the ‘primacy of thinking’ and to demonstrate that this dominant logic obscures a paradox, we first need to expose the blind spot that underlies the detachment of thinking and action from the perspective of deconstruction. Of course, if the ‘primacy of thinking’ asserts that the future is to a certain degree determinable, any notion that disregards this dominant logic must be based on the conviction that the future is to a large extent indeterminable. We can only plan in the light of what we already know. But what do we know about the future? Derrida (1995b: 386) claims that the future is something monstrous, something that we neither can nor should predict. “[T]he future is necessarily monstrous: the figure of the future, that is, that which can only be surprisingly, that for which we are not prepared, you see, is heralded by species of monsters. A future that would not be monstrous would not be a future; it would already be a predictable, calculable, and programmable tomorrow. All experience open to the future is prepared or prepares itself to welcome the monstrous arrivant, to welcome it, that is, to accord hospitality to that which is absolutely foreign or strange, but also, one must add, to try to domesticate it, that is, to make it part of the household and have it assume the habits, to make us assume new habits.” (Derrida 1995b: 386-387, emphasis in the original)
What does Derrida mean by the phrase ‘monstrous arrivant’? Royle (2003: 111) argues that, like the word ‘arrive’, ‘arrivant’ has to do with what comes to the shore. A monstrous arrivant comes to a threshold, a border –
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one that points towards the future – to surprise us. That is why, we, and especially we as strategists, need to welcome this monstrous arrivant, since no strategic decision would be possible without the singularity that is attached to this arrivant. For Derrida (1992b: 200), deconstruction is about “the opening of the future itself” because, as remarked in chapter four, a deconstructive thinking necessarily destabilizes any context. In fact, this destabilization is a necessary condition for the dangerous monstrosity of the future. As Derrida (1977: 5, emphasis in the original) claims: “The future can only be anticipated in the form of an absolute danger. It is that which breaks absolutely with constituted normality and can only be proclaimed, presented, as a sort of monstrosity.” In a certain sense, this is also true for strategy. If the future were not a dangerous one, there would be no need to become involved in something like strategic management. Indeed, if we were able to calculate the future, regardless by which analytical tool, there would be no need for strategic management anymore. This is not to suggest that foresight is completely impossible, but that foresight is not a linear calculation. Strategic management has tried to tame these monsters without recognizing that a future that is forced into the straightjacket of a plan is not a future anymore. In the absence of uncertainty, strategists only face a computational exercise. This, however, runs counter to the very idea of strategizing which is to prepare for the unknown (Ortmann and Sydow 2001a: 435). Brews and Hunt (1999: 891) even argue that it is the very nature of strategizing to be concerned with non-routine problems that cannot be solved in a predetermined manner. If the future is conceived to be calculable, there is no need for planning (and strategists) anymore. We could leave the task of strategic management to computers that enforce programmable decisions. This results in yet another contradiction: if we think of the future as something ‘manageable’, there is no future anymore. This is why Derrida (1989a: 80) argues that “[m]onsters cannot be announced. One cannot say: ‘here are your monsters’, without immediately turning the monsters into pets.” When considering our remarks in chapter four, we can understand why Derrida thinks in such a way. Here, we have to recall the deconstruction of the sign and think about its implications. To announce a monster would fix the meaning of the future; to say ‘the future is about…’. However, as we know, meaning is always in a state of flux because it is subject to différance. There is no such thing as a self-present meaning of the future that could operate outside of the play of differences. Because there is no outside-text, where referents just ‘are’, but only textualized (i.e. interpretative) experiences of the world in which all reality already has the structure of a
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differential trace, the future as it is needs to remain unknown. Meaning, regardless of whether we look at the meaning of the now or the meaning of the future, is always in the coming. To look at the future in a determinable way is like assuming that there is some ‘present’ meaning, something that stops différance from occurring. Although Derrida’s (1977, 1992b) emphasis on the indeterminable nature of the future provides the basis for our critique of the ‘primacy of thinking’, we can sharpen our understanding of how ‘monstrosity’ relates to strategic management by discussing the notion of ‘contingency’. In its most general sense, contingency refers to the fact that something might or might not occur. Kant (1787/1995: 124) even equates contingency with coincidence and emphasizes that there is no God-given necessity that things happen. If we put this in more concrete terms and agree with Luhmann (1994: 47) that contingency describes that things can also be otherwise possible, that there is no predetermined way of history but always the possibility of alternatives, we need to concur that defining something as contingent means that everything is neither necessary nor impossible (Luhmann 1992: 96). “Contingency means that being depends on selection which, in turn, implies the possibility of not being and the being of other possibilities. A fact is contingent when seen as selection from other possibilities which remain in some sense possibilities despite a selection.” (Luhmann 1976: 509, quoted in Vanderstraeten 2002: 84)
Contingency does not imply arbitrariness (Ortmann 1995: 23), because arbitrariness means that everything is possible, while contingency states that things could have also happened in another way. This ‘being otherwise possible’ does not mean otherwise in an arbitrary way, but otherwise in a more or less restricted ‘space of possibilities’. Every new step appears to be otherwise possible, but only against the background of what has already been determined in the course of social life. Contingency implies forced freedom; we cannot foresee the future because there is no way to predetermine one’s own actions.99 Contingency is a helpful concept since it allows us to explicitly consider that strategic decisions need to factor into the behavior of other market 99
While this study is concerned with the intersection of contingency and the future, contingency also relates to the past, because humans have infinite ways of recalling (i.e. narrating, memorizing) the past (Gumbrecht 2001: 53). Contingency also interferes with the present in the sense that our descriptions and actions could always be otherwise possible, an argument that, as far as descriptions are concerned, gained much popularity under the label ‘constructivism’ (see Czarniawska 2000; Erdmann 1999; Hejl and Stahl 2000).
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players. Strategies are never built in a vacuum but are all about the actions of other organizations. This brings us right to the concept of double contingency that considers that the actions of organizations are mutually dependent and that no firm can have full knowledge of what the other might do (Morgenstern 1935: 344). Since strategic management particularly needs to get by without a safe ground, because it is all about paving ways into an uncertain future (section 2.1), double contingency should be at the heart of our thinking about strategy formation. Luhmann (1995b: 123) reminds us that double contingency cannot be neutralized or even eliminated; social interaction needs to be conceived as the confrontation of at least two autonomous actors (ego and alter). Double contingency is not a consequence of the mutual dependence of social actors, as Parsons (1951) assumes, but of the confrontation of at least two autonomous social actors that have the capacity to make their own selections with regard to one another. This is because contingency means that facts are selected from a range of possibilities, whereas the non-selected possibilities still remain (in some sense) possible despite their nonselection. In the case of double contingency, alter’s contingent behavior depends on ego’s while at the same time ego’s contingent behavior depends on alter’s. This is the basic condition of possibility for social action as such (Vanderstraeten 2002: 81). Because of this immanent circularity of the conditions of double contingency, social actions are made indeterminable. The implications of the acknowledgement of double contingency are far-reaching. In terms of strategic management, social action in the situation of double contingency is always indeterminable and cannot be made otherwise by means of sophisticated strategic analyses. Even though we never face a situation of ‘pure’ double contingency (Vanderstraeten 2002: 84), because we always act against the background of what has already happened, the basic problem that is attached to double contingency remains: no organization can have full knowledge about its own conduct and the strategic actions of other actors. After all, isn’t this what strategy is all about: the creative use of ploys to gain some advantage over others (Mintzberg et al. 2005: 26)? To conclude, Derrida’s discussion of the monstrous nature of the future and our extension of his remarks with regard to the notion of (double) contingency demonstrate that we cannot replace real actors by variables and real time by the order of these variables (Abbott 1991: 230). Each reduction of uncertainty is a constructed reduction and this is also true for analytical tools such as scenario planning or game theoretical concepts that recently have gained much popularity in strategic management
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(Brandenburger and Nalebuff 1995; Lindgren and Bandhold 2003). Contingency disenables the metaphysical ground on which rationalized strategic decisions seemingly rest. In the following section, we show how a consideration of contingency helps us to uncover a paradox that arises once we attempt to establish a metaphysics of presence with regard to the relation between decision and action. Our remarks thus give reference to the call for conceptual research by Langley et al. (1995: 265) who argue that “the relationship between decision and action can be far more tenuous than almost all of the literature of organization theory suggests.” 6.2.2 Strategy Process and the Paradox of Undecidability “The only decision possible is the impossible decision.” Jacques Derrida (1995b: 147)
Recall that deconstruction starts with an encounter of the metaphysics of presence that underlies our thinking. While looking at the classic thinking/action opposition, it is obvious that ‘thinking’ is defined in a selfsufficient way. This logocentrism classifies thinking (strategy formulation) as being full of meaning and action (strategy implementation) as its necessary consequence. Thus, strategic decisions have ontological priority over action. How does deconstruction approach the hierarchical structure that resides in the thinking/action opposition? Derrida (1995b: 147, 1992a: 24) starts by acknowledging the monstrous, double-contingent nature that underlies the future. He asserts that to make choice real, one needs to accept that the future cannot be certain, because if the future were certain, there would be no choice anymore. If strategic choice only is real in the light of uncertainty, why then is ‘real’ choice paradoxical? To answer this question, we have to get back to the supplementary logic that is at the heart of any deconstruction. If thinking is not full of meaning, it is constantly supplemented by action. Action ‘adds’ a new dimension to the ‘original’ (i.e. thinking) – a surplus that can turn out to be dangerous because it modifies the decision premises that justified the decision ‘in the beginning’ (Derrida 2003a: 249-251). Decision premises are not entirely the outcome of thinking but are completely constituted in the course of action. Not until the decision has finally been executed can one decide whether and how contingency has been fixed and what justification was chosen. Action constantly supplements, in fact ‘gives-new-meaning-to’, thinking in a way that makes it impossible to fully justify a decision a pri-
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ori. The justification one chooses prior to action cannot ‘stand in’, at least not in a pure sense, for the decision one is about to make.100 These insights lead to a paradox: a decision can only be justified with regard to action, but action needs a decision to come about. Decisions are impossible in the sense that the preferences, which give the good reasons why the decision is carried out, are fully constituted in actu only (see Figure 26). Because the meaning of a decision is constituted in the course of action, we need to make decisions if, and only if, they are impossible to justify. The condition of the possibility of a decision, that is its justification, implies at the same time its impossibility since there is no full justification until the decision has finally been executed. No decision can reach a final definition (i.e. justification) since it potentializes other decisions. In the words of Derrida (1995b: 147-148): “These are the only decisions possible: impossible ones. […] It is when it is not possible to know what must be done, when knowledge is not and cannot be determining that a decision is possible as such. Otherwise the decision is an application: one knows what has to be done, it’s clear, there is no more decision possible; what one has here is an effect, an application, a programming.” (emphasis in the original)
The very nature of decisions excludes any form of constraint that would enable us to make calculable decisions. Because of paradox, strategic decisions deserve their name only if they contain the ‘ghost of the undecidable’ (Derrida 1992a: 24-25). Every (strategic) decision remains caught in a ghost that represents the undecidability of an open future. “The undecidable is not merely the oscillation or the tension between two decisions; it is the experience of that which, though heterogeneous, foreign to the order of the calculable and the rule, is still obliged – it is obligation that we must speak – to give itself up to the impossible decision, while taking account of law and rules. A decision that didn’t go through the ordeal of the undecidable would not be a free decision […] That is why the ordeal of the undecidable that I just said must be gone through by any decision worthy of the name is never past or passed, it is not a surmounted or sublated (aufgehoben)
100
Culler (1982: 86) refers to Nietzsche to show that our traditional view on causality may be misleading. Nietzsche argues that the concept of causal structure is not something given but the product of a reversal (chronologische Umdrehung). For instance, if we feel pain, we start looking for a cause, maybe a pin, and start reversing the perceptual order ‘pain … pin’ into ‘pin … pain’. In a quite similar sense, Chia (1994: 788) discusses the concept of causality and talks about the ‘actionality of decision’ and the ‘decisionality of action’. The action already is in the decision and the decision is in the action.
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moment in the decision. The undecidable remains caught, lodged, at least as a ghost – but an essential ghost – in every decision, in every event of decision.” (Derrida 1992a: 24-25, emphasis and German annotation in the original)
The force of différance, which defers the meaning of a decision and thus makes it impossible to arrive at fully justified decision premises that determine action, makes us recognize the ghost that is inherent to every event of decision. For Derrida (1995a: 116), undecidability implies that no completeness of a decision is possible. Every decision is structured by this experience of the undecidable, the limits of decidability, to finally become a decision. The point here is not whether decisions exist or not, but to question a telos that is present to and identical with itself. Whenever we decide upon in principle undecidable questions, we become metaphysicians (Foerster 1992: 13).
Fig. 26. The Paradox of Undecidability and the Strategy Process
Undecidability is at the heart of Derrida’s thinking about decisions. It is from the moment we surrender to the undecidable nature of decisions that the very question of how decisions come into being can be posed (Derrida 1995b: 147).101 Apparently, there is no moment in which a decision can be 101
The undecidable nature of decisions has been discussed by a variety of authors. Foerster (1992: 14, emphasis in the original) states that “[o]nly those questions, that are in principle undecidable, we can decide.” In a similar way, Luhmann (2000: 131-132) devotes much attention to undecidability, because the undecidable nature of decisions acts as the presupposition of the possibility of every decision as such.
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called present. That is why Luhmann (1995c: 51) argues that “the future never becomes present; it never begins but always moves away when we seem to approach it.” If contingency were fixed, the future would be present, but since it can only be fixed in retrospection, the decision is never ‘there’. Either a decision has not been made yet and is still in the process of fabrication or it has been made and is therefore ‘gone’. That is why, according to Derrida (1989a: 79), monstrosity can only be recognized after a decision, when it has become the norm. However, once it has become the norm, it is no longer monstrous. The very idea of a justifiable decision is infinite – it is irreducible to itself and owes its existence to ‘the other’ (action); the other, that constantly supplements, possesses a singularity that is forever new and different. Because différance is all about a deferral of meaning that makes ‘presence’ impossible, a monster never presents itself but always remains ‘to come’. According to Derrida (2000b: 534), “[d]ifférance is a thought which wishes to yield to the imminence of what is coming or about to come.” At first, this sounds devastating for anyone who tries to think about strategic management. Yet, on closer examination, the monstrosity of the future turns out to be the very condition of strategizing as such. As Mintzberg (1994a: 276) asks: “How can we know that a strength is a strength without acting in a specific situation to find out?” People often wonder why decisions are impossible if they make decisions every day. Strategists in particular are perceived as strong leaders who make the hard choices in business (Porter 1996: 77). Like any paradox that deconstruction exposes, the impossibility of decisions is limited to the establishment of a metaphysics of presence; in this case presence refers to decisions that are self-defining to then determine action. Accordingly, decisions are not impossible per se, but their reasonable justification becomes out of reach. The contradiction that underlies the undecidability of decisions arises from the desire to fully justify a decision prior to action. On closer examination the paradox of decision-making turns out to be a paradox of justification in decision-making (Ortmann 2003a: 145-147). However, particularly strategic decisions call for justification because they include considerable resource commitments and are irreversible (Mintzberg et al. 1976: 246; Schilit 1990: 436).102 Because of time and re102
By contrast, on the routine level, decisions are usually less reflected upon and reached relatively quickly (Selten 1990: 652). The impossibility that the paradox brings about is thus most visible when there are non-routine (strategic) decisions that need to be safeguarded against antithetic perspectives (e.g., from critical stakeholders). A strategist, who can give no reasonable justification why a strategic move is necessary, be it in front of the supervisory board or at the shareholders meeting, not only risks her/his job but also lacks institutional support.
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source constraints, strategists are usually comfortable with adequate reasons for these decisions. This, of course, defies the underlying paradox. If strategists do not find these reasons, which act as bridges over the cleft of contingency, they mandate external consultants or apply analytical techniques (e.g., scenario planning) to at least keep up the appearance of a ‘rational’ decision. To conclude, the paradox that underlies strategic decisions demonstrates that the dominant logic (i.e. the ‘primacy of thinking’) aims at a metaphysics of presence that remains impossible. Of course, as already recognized, the paradox remains a theoretical limit with regard to our reasoning about strategy formation. Not even the classical linear strategy process models (Andrews 1971; Hofer and Schendel 1978; Lorange 1980) demand a full justification of strategic decision prior to action. Nevertheless, they are based on the premise that action follows thinking, a premise that is upset by the paradox. Thus, it is not important for strategy process research whether this paradox exactly represents those strategic realities that comply with the dominant logic, but what we can learn from the necessary limits of knowledge about strategy formation that the paradox uncovers. To demonstrate what we can learn from the paradox, we need to move to a discussion of deparadoxification to then outline detailed implications of our deconstruction. 6.2.3 The Deparadoxification of the Strategy Process Taking up Pettigrew’s (1992a: 10) call for more explicit thinking about the assumptions that underpin strategy process research, we believe that theorizing has to start with a consideration of paradoxical reasoning to then show how strategies unfold despite paradoxical indecision. To show how strategizing becomes possible despite the paradox of undecidability, we need to discuss the deparadoxification of the strategy process. To grasp how the strategy process becomes deparadoxified, we should first of all recognize that a variety of authors have studied how managers make strategic decisions (Mintzberg 1976; Schilit 1990). Regardless of the ongoing debate whether strategic decisions can be identified at all (Langley et al. 1995; Mintzberg and Waters 1990), we have to admit that strategists somehow manage to get around the paradox. To put it metaphorically, strategists manage to build bridges over the ‘abyss of contingency’. Our discussion of deparadoxification needs to identify these ‘bridges’. Of course, the easiest way to circumvent the paradox right from the beginning is to not desire fully justified strategic decisions. Aware of their bounded rationality and influenced by time and resource constraints man-
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agers usually look for satisfying justifications (Simon 1971). In this case, the paradox seems less ‘visible’ because people act as if ‘whateverreasons-they-have’ will do. The extent to which strategists realize that there is such a thing as a paradox – or, from their perspective a decision that is ‘tough to make’ – depends on the importance of the decision. In cases where a significant strategic investment is needed or a considerable number of resources are applied, there is a necessity to find not only some sort of justification but also the justification. To not lose their capacity to act, managers temporalize the paradox by acting as if their justifications were somehow ‘real’ and adequate, as if they had something they can rely on (Ortmann 2004c: 208). To temporalize the paradox means to first create a ground for action by proceeding as if the ‘good reasons’ for the decision were known to then unfold strategic deeds (Gumbrecht 2001: 55). Although most As Ifs are not realized as ‘fictions’ but treated as ‘truths’, for reasons of legitimacy and institutional support, strategy researchers can observe them. Strategic plans, for instance, represent an As If. Yet, and this is a vital difference, when a researcher looks at a plan from the perspective of an As If, s(he) reconceptualizes the role of the plan from a different angle. A strategy scholar who observes a plan as an As If treats it as an ‘excuse to act’. Plans, from our perspective, are a pretext for action, they help strategists to negotiate a part of their reality that then comes back and imposes on the organization. Ironically, we have to agree with the ‘primacy of thinking’: yes, plans are important, but not for the reasons that most strategy researchers think. Weick (1979: 11), in the tradition of Cohen and March (1974), has described this very well: “[P]lans become excuses for interaction in the sense that they induce conversations among diverse populations about projects that may have been low-priority items. The interaction may yield immediate positive results, but such outcomes are usually incidental. Much of the power of planning is explained by the people that it puts into contact and the information that these people exchange about current circumstances. When people meet to plan for contingencies five years away, contingencies that seldom materialize, they may modify one another’s ideas about what would be done today. But that is about all that can be accomplished.” (emphasis in the original)
Deparadoxification emphasizes that plans should not be studied as plans, but (a) as excuses to act, (b) as symbols and advertisements that give signals to observers (e.g., analysts) and show the organization at its best, and (c) as games to test the commitment of people to programs they advocate (Cohen and March 1974: 115; Weick 1979: 10). As Ifs are not solely reflected by plans. ‘Visions’, although not as precise as plans, are also much about fictions. Especially in small entrepre-
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neurial firms, the individual vision of a leader often replaces formalized plans (Mintzberg and Waters 1985: 260). Likewise, ‘scenarios’ provide a selection of multiple grounds that organizations can base their actions on (Wack 1985). In addition, on the more personal level, individuals often make assumptions about ‘what-the-corporate-strategy-means-to-them’ and thus base their actions on As Ifs. These kinds of fictions, of course, are likely to modify/extend/corrupt existing plans. ‘Visions’, ‘scenarios’, and individual assumptions should be valued for the same reason as plans: mostly they are excuses to act and thus necessary to foster strategic sensemaking. As Ifs provide a ground from which strategizing unfolds and defers paradoxical indecision into the future. Understanding this ground as fictional implies not understanding strategy formation merely as an analytic task, but to refocus analyses on the role of confidence in the fiction. Strong beliefs can bring events into existence. This makes strategic management more of a motivational problem than an attempt in forecasting (Weick 1987a: 225). To understand the strategy process as resting on As Ifs also emphasizes another issue that is widely neglected by scholars who treat plans as unproblematic: the matter of path dependency. Schreyögg et al. (2003: 267) suggest that it is a common assumption in strategy process research that plans are developed with regard to the belief that strategists can ‘start anew’ every time a planning process starts. This, however, is not the case. Although As Ifs are in principle contingent, they are influenced by previous assumptions that hardened into a certain ‘path’. Hence, an As If is always influenced by former decisions and occurs in the more or less restricted space of already existing strategic paths. In short, history matters! Porac et al. (1995), for instance, illustrate how organizations in the Scottish knitwear industry were limited in their ability to establish new strategic orientations due to already existing mental schemes. In a similar sense, Ortmann et al. (1990) find that existing strategic assumptions reflect a certain ‘stickiness’ because their reorientation would imply a reallocation of power within the organization, which, of course, is not favored by those who already possess power. Path dependency demonstrates that As Ifs, although contingent, do not emerge from ‘nothing’; their formulation is restricted by existing cognitive patterns and and/or power relations (see also Prahalad and Bettis 1995, 1986). Our discussion up to this point has already demonstrated (a) that As Ifs deparadoxify the strategy process, (b) that As Ifs can be interpreted as plans but lead to different solutions about the value of planning, and (c) that As Ifs are path dependent. Although As Ifs are different from plans, they share one aspect with them: As Ifs are seldom fully realized in praxis,
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otherwise we would look at self-fulfilling prophecies. Like a decision cannot determine action, a fiction can only inform (but not determine) future strategizing. Fictions are constantly modified in the course of strategizing (Mintzberg 1994). Some modifications pass by unobserved or are skillfully hidden; others are more obvious and turn out as a ‘change in plans’. As Ifs are subject to an everlasting process of ‘becoming’ that is based on collective actions in social praxis; they are of relevance only if social actors collectively embed their effects into their daily activities. Such collective acceptance does not occur suddenly but is shaped by the process of social reality construction. According to Berger and Luckmann (2000: 58), collectively accepted reality constructions gain the status of objectified institutions once the actions of agents are reciprocally typified. To become socially relevant, fictions need to be objectified; they need to be accepted by the members of an organization. In the following section, we illustrate the ‘theoretical’ and ‘practical’ implications of our discussion of the paradox of undecidability and the related deparadoxified understanding of strategy formation. The underlying question of this discussion is: What do strategists ‘do’ with the As If that helps them to circumvent paradox? Any As If is only a stimulation for further strategic sensemaking and is reworked/modified/supplemented within the course of strategizing. Our ‘theoretical’ implications will show how scholars can conceptualize a strategy process that constantly reworks As Ifs and thus deeply links formulation and implementation, whereas our ‘practical’ implications illustrate what managers can do to ‘manage’, or at least guide, such a process. 6.2.4 Implications of the Deconstruction of Strategy Process Improvisation – About Real-Time Strategy
As already indicated in the preceding section, As Ifs do not determine action. If we consider Derrida’s (2003a) remarks on supplementarity, we can give a reason for the non-determinable nature of an As If. Because strategic actions always add a new dimension to the fiction, we never face a ‘pure’ and self-defining As If. The necessary fictions are constantly modified in a sense that thinking and action intermesh; thinking (i.e. the As If) in a sense informs action, but action also modifies (and thus constitutes) thinking. Such an understanding implies a non-paradoxical understanding of Derrida’s supplementarity relation; a perspective that takes the As If as a stimulus and then outlines the gradual production of the strategy over time. To conceptualize such a process, we refer to Derrida’s (2000a) interest in
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improvisation.103 The term improvisation fits our analysis since it is undecidable and highlights the rich interplay between formulation (thinking) and implementation (action). Although Derrida (2000) emphasized the need for improvisation, he never formally developed a definition. Since improvisation has not been applied substantially to strategic management but only with regard to organization theory, we supplement Derrida’s remarks with comments by authors who discuss improvisation within organization theory.104 Much of the literature on organizational improvisation is based on the jazz metaphor (Kamoche et al. 2003; Weick 1998; Zack 2000). Like in jazz, where musicians create music real-time while continually adjusting to the changing interpretations of other group members, organizational improvisation is about producing something (e.g., a strategy) on the spur of the moment. Weick (1998: 544) refers to Berliner’s (1994: 241) definition of improvisation as “reworking precomposed material and designs in relation to unanticipated ideas conceived, shaped, and transformed under the special conditions of performance, thereby adding unique features to every creation.”
According to Weick (1993b: 348), organizational improvisation is about continuously reconstructing processes and designs; the creation of something while it is being performed. Improvisation accounts for the fact that the acts of composing and performing are inseparable and that order in organizations is constantly changing, as members have to react in a spontaneous way. Irby (1992: 630) puts it in a nutshell by arguing that improvisation is “thinking in the midst of action”. If we apply these insights to strategic management, we need to recognize that decisions and actions not only interrelate in the sense that one informs the other, but both spheres are 103
Pondering about the possibility of improvisation, Derrida (2000a: 10) remarks with a sense of irony in an interview: “The question was: ‘What is improvisation? Is an improvisation possible?’ I had to improvise of course, and I said ‘No, an improvisation is absolutely impossible’, and went on speaking for half an hour, I think. And today, I remembered this when you asked me to say something and I agreed on the condition that it would be totally improvised; that was the contract.” (emphasis added) 104 There has been almost no discussion of strategy as improvisation up to this point. Exceptions are the articles by Crossan et al. (1996) and Perry (1991) that, however, treat improvisation in a rather unconventional way without paying much attention to the convergence of thinking and action. Weick (1987a) also outlines improvisation as a ‘substitute for corporate strategy’, yet overemphasizes the role of action. Improvisation does not mean to focus solely on action, as the emergent strategy perspective does, but to conceive planning (thinking) as an activity while action unfolds.
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deeply intertwined. As Orlikowski (1996: 63) remarks, improvisation considers strategy not as a drama staged by deliberate directors with predefined scripts. Rather, improvisational strategy slowly unfolds as people do what they are supposed to do (their job) and also do what they are often prohibited to do (the informal gossip about ‘how-things-work-out-aroundhere’). To further discuss strategy as improvisation, we follow Cunha’s et al. (1999: 302) definition of improvisation in general and define strategic improvisation as the conception of strategic action as it unfolds that is enforced by organizational members and draws upon existing As Ifs. To provide an ordered discussion of strategic improvisation, we explain the various elements of this definition. Strategic Improvisation Draws on As Ifs: Every improvisation needs to start with something to improvise around. If there is no material that strategists can use for improvisation, there is no possibility of improvising. The necessity to draw on existing materials addresses the common misunderstanding that improvisation is anarchic and thus of no value to strategy scholars. Weick (1987a: 229) argues that improvisation contains some order, which, however, is underspecified. Like in jazz or in improvisational theater, improvisation does not occur from nowhere but needs something to improvise around. Jazz consists of variations of a theme, improvisational theater starts with a situation, and strategy starts with an As If. Improvisation means to make something out of these fictions as action unfolds in a spontaneous but historically contextualized way. If we understand strategizing to be about working out responses in real-time (Crossan and Sorrenti 1997: 156), there is less possibility of deploying sophisticated analytical tools or analyzing large chunks of data; one has to tackle the issues at hand with whatever is currently available. Strategic Improvisation Reflects a Conception of Strategic Action as it Unfolds: This part of the definition highlights that the preferences on which strategic decisions rest do not exist prior to implementation but are constructed in the course of action. If preferences are fully constituted in actu, there is no need to assume that strategy formulation determines implementation (Moore 1995: 23). In fact, implementation constantly supplements the As If (see Figure 27). Decision premises and thus the meaning of strategy are gradually produced over time. Strategic improvisation suggests that strategy making is thinking within (and not prior to) action. This is not to claim that strategic decisions do not exist anymore, but that the meaning of these decisions can only be fixed in a retrospective manner. In analogy to Weick’s (1979: 133) organization formula, we might ask: How should we know what our strategy is before we see what we strategize? Or, in a more general sense: How can we know what we are supposed to want
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before we see what we are doing? (Ortmann 1997: 54) Strategic improvisation is planning as action unfolds, the quick and unpredictable oscillation between thinking and action that occurs when initial strategic fictions are constantly redefined, modified, supplemented or even replaced (Mintzberg 1994).105
Fig. 27. Strategy Formation as a Recursive Improvisational Process
Strategy as improvisation teaches us that strategies come into being as action slowly unfolds. Strategizing, then, is not a matter of pure thinking, but each strategy is fully constituted in the course of action. This, of course, highlights the role of the Derridean supplement, which in this case is action. The supplement constantly haunts the ‘origin’; there is no time where strategic actions do not occur. The world does not suddenly come to a halt once managers start to plan (Huff and Huff 2000). Customers are served, products are produced, and the world changes. Considering that 105
Ortmann and Salzman (2002: 221) agree with this conception and argue that “[t]he process of implementing and executing strategies, far from being less important and a mere derivation from the strategy is, instead, actually part of the process of constructing the strategy.” In a similar manner, Weick (1987a: 230, emphasis in the original) states that “[t]he thread that runs through this chapter is that execution is analysis and implementation is formulation.” Ortmann (1997: 46), while discussing the famous text of Heinrich von Kleist The Gradual Production of Thoughts in Talking, even generalizes this argument. Thinking and action are always connected in a recursive manner, and not only in strategy. This insight is also discussed in the context of knowledge. Tsoukas (2000), for example, encourages scholars to think of ‘knowledge as action’.
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‘official planning programs’ are supposed to last between six to twelve months (Chesley and Wenger 1999), there is no reason to believe that actions do not occur during this time. Action cannot be postponed because meaning cannot be postponed. So why do we still like to think of plans? Mostly, because well-designed plans make actions seem to be sensible; then the acts appear to be under the control of the plan (Weick 1979: 103) and strategists can legitimize their strategic moves more easily. This is not to say that there are no plans, but that plans cannot fix meaning and that whatever a plan actually means can only be fixed retrospectively because reflection cannot but refer to the past. While the supplement constantly ‘haunts’ the origin, it modifies and substitutes. What is planned is always already in need of modification – a modification that reinscribes thinking into the strategy process. This makes strategy implementation not a mere derivation of formulation (see similar Eisenhardt and Brown 1998; Ortmann and Salzman 2002). On the contrary, implementation is part of strategy formulation. In the midst of action, people ponder about strategic issues; they discuss, dismiss, defend, attack, and modify what they think is a plan. Modifications, here, are not to be confused with ex post strategic controlling where plans are adjusted. Rather, modifications happen constantly and are unavoidable, because the deferring and differing force of différance makes it impossible to think of strategy in a stable way (Derrida’s 1999a). In the words of Weick (1987a: 229): the strategy process becomes a just-in-time exercise in which formulation and implementation are recursively connected and the strategy content is quickly adjusted in the midst of strategy making. Formulated strategies are not ‘pure’ – in Derrida’s words: self-present – but come into existence by giving reference to their counterpart, not necessarily in a visible way but at least as a trace (Derrida 1977: 61). Does this imply that there is no such thing as deliberate strategy formation anymore? To conceptualize the strategy process solely as a just-intime endeavor does not reflect the empirical reality in a variety of organizations. Of course, there are cases in which strategy formulation and implementation seem to be related in a linear manner, although much of this classification is a retrospective appraisal. While the exact form of the strategy process remains an empirical question depending on a variety of factors (e.g., company size or leadership style) and we certainly have to admit that there is a continuum of possibilities as outlined by Mintzberg and Waters (1985), this does not make improvisation a useless conception. The degree of improvisation in a strategic planning process depends on the force of the supplement. The supplement, as discussed in chapter four, means to add on (a slight modification) but also to-take-the-place-of (a
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substitution). Strategies can be slightly modified in the course of implementation. In this case it seems as if the linear perspective holds (although, strictly speaking, it does not). If, however, a strategy is substituted, the supplement replaces the ‘original’ As If. Strategic Improvisation is Enforced by Organizational Members: Improvisation can be a collective or individual undertaking. Obviously, strategic improvisations can start on the individual level, for instance, if a strategist recognizes the need to promptly adjust resource allocations according to new market conditions. Yet, since strategy is a phenomenon that concerns the entire organization (see section 2.1), improvisations need to manifest themselves in the shared social practices of organizational members. An improvisation that is only relevant to a small group of people, but ignored by the rest of the organization, will not make its way on the strategic agenda. To gain strategic momentum, improvisations need to be acknowledged by others and thus ‘move’ in some way through the organization. For instance, a brilliant idea for a new product or service can be born during a coffee break conversation, which, however, is of no strategic value until the improvisation gains some momentum within the organization. To understand how improvisations are embedded in social practices, it is worthwhile to disassemble the process of organizing. Weick (1979: 89) argues that this process consists of interlocked behaviors between two or more people. The development of a collective structure through interlocked behavior among individuals occurs through so-called mutual equivalence structures that rely on consummatory acts (concluding actions) and instrumental acts (initial activities that allow the consummatory acts to occur). “A mutual equivalence structure comes into existence when my ability to perform my consummatory act depends on someone else performing an instrumental act. Furthermore, my performance of my instrumental act has the function of eliciting the other’s instrumental act. If this pattern holds, and if I keep repeating my instrumental act, then the two of us have organized our strivings into a mutual equivalence structure.” (Weick 1979: 98)
Organizations are full of mutual equivalence structures as nobody operates in a vacuum. The actions of people depend on one another and this mutual dependence interlocks their behavior in a way for collective structures to occur. If people depend on one another to do their job, they need to communicate which in turn allows them to move improvisations through the organization (e.g., through stories). Because of interlocked behaviors, improvisations also gain momentum through ‘snowballing’. The snowball effect occurs, when some people show commitment to an improvisation,
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which then leads to escalation (Staw and Ross 1978). A does it because B has already done it and C only waits for A to do it. What is important is that improvisations need to be socially accepted to make it onto the strategic agenda. Having discussed the three parts of our definition of strategic improvisation, we can conclude that improvisation within strategy assumes that strategists act their way into understanding. Does this imply that the strategy process is completely disorganized or even chaotic as Eisenhardt and Brown (1998) propose? As already mentioned, the degree of perceived order depends on the force of the supplement (to add/to substitute) and remains an empirical question. Even within a strongly improvised strategy process there is some degree of order, an order that is underspecified and often not immediately visible to agents. The literature on organizational improvisation calls this kind of order ‘minimal structures’ (Kamoche and Cunha 2001; Pinnington et al. 2003). Such structures provide a minimum framework of commonality that people use as a rough guideline for orientation while being in midst of the turbulence of improvisation. In the following, we explain the relation of minimal structures and strategizing in more depth. Following the work of Langley et al. (1995: 270), we characterize such minimal structures in strategizing as issue streams. Issue streams reflect the everyday practice of strategizing, because strategy meetings are usually organized around issues rather than decisions. In strategy, well-known issues can be, for example, a merger, an initial public offering or a diversification into a new market segment. These issues persist in some form for a considerable time and do not suddenly disappear if a strategy meeting is finished. Issues flow through the organization and often intersect with other issues (see Figure 28). Strategizing is about improvisation around these issue streams. Figure 28 depicts three issue streams (A, B, C). In line with Pettigrew (1992a), we propose that each issue stream consists of a variety of ‘events’. Events can be formally scheduled (e.g., a strategy meeting or a workshop) but also arise informally (e.g., a lunch break conversation). Conceptualizing the strategy process as an improvisational practice around issue streams yields a variety of advantages. First, issue streams can ‘absorb’ the often unplanned and thus emergent character of strategic events. A lunch break conversation may retrospectively turn out to be about an ongoing issue stream. Likewise, an officially scheduled meeting on issue A may turn out to be about no strategic issue at all. Second, issue streams allow us to acknowledge that there is not the one strategy in an organization but instead a variety of, often parallel, issue streams. Third, issue
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streams also reflect our conviction that strategic events are not arranged in a linear manner but ‘simply happen’ in a rather disorganized style that we retrospectively make sense of. Last but not least, issue streams can be understood as being enabled by fictions. This allows us to link our remarks on the As If with regard to strategy process research with the conception of strategic improvisation.
Fig. 28. Strategic Improvisation Around Issue Streams
Figure 28 depicts three ways of issue interconnectedness: sequential, lateral, and precursive. Although no comprehensive theory of issue interconnectedness currently exists (Langley et al. 1995: 270), we wish to examine these three linkages briefly. Sequential linkages should not be confused with reintroducing linear planning through the backdoor. Rather, a sequential linkage simply suggests that there are strategic events that cover the same issue at different points in time. Lateral linkages, in which an event that appears under issue A effects issue B, couple events that affect each other across different issue streams. Laterally connected events are likely to share common resources (e.g., management time). Resources used with regard to one issue stream almost inevitably affect the resources available in other issue streams. Precursive linkages also consider crossissue connectedness but cut across different times. An event that occurred under one issue can affect subsequent events on other issues within the same organization. For instance, one event may evoke novel problems that turn out to be relevant for future events in other issues streams.
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To understand strategizing as improvisation around issue streams can meaningfully inform future process research, since it recognizes the minimal structures that link strategic events (and thus provides order) and, because of its underspecified nature, allows for improvisations to occur (and thus reflects the recursively organized nature of formulation and implementation). Improvisation around issue streams takes into account that in everyday organizational life people tend to think in categories of issues rather than decisions. Issues reflect the minimal and often incomplete structures that organizational members use as a rough guideline for their actions. To conclude, strategic improvisation fits the demands of today’s competitive environment in which the general environmental predictability is down to a minimum and markets often call for immediate response (Kim and Mauborgne 2005). Failing to respond in the moment is likely to result in lost opportunities (Crossan and Sorrenti 1997: 156). Our conceptualization of strategy as improvisation shares some aspects with already wellknown perspectives on the strategy process (e.g., the mix of deliberate and emergent elements [Mintzberg and Waters 1985] or the connection of formulation and implementation [Chakravarthy et al. 2003]). Yet, strategy as improvisation also underscores so far unacknowledged or at least widely neglected issues (e.g., the role of the supplement in adding and eventually replacing strategies, the focus on issue streams in providing minimal structures or the discussion of As Ifs as the necessary material for strategic improvisation). We encourage other scholars and practitioners to imagine the strategy process as a recursively related loop between formulation and implementation (Broich 1994; Langley et al. 1995: 270). Strategy as improvisation allows us to embed the practice of strategizing into the everyday activities of organizations. Finding out what a strategy is all about is not a purely cognitive act but most of all an empirical question to be settled in the context of action. This moves strategy formation beyond any metaphysics of presence: the strategy is not, the strategy becomes. Such a picture of the strategy process may look delusive to many scholars, as it reduces the notion of feasibility. Yet strategy as improvisation considers the messy realities that organizations have to cope with. Managing for Strategic Improvisation
What does improvisation mean for practitioners? We believe that improvisation cannot be prescribed and that managers cannot suddenly turn their organizations into improvisational ones. Nevertheless, the literature on organizational improvisation (Cunha et al. 1999; Weick 1998; Zack 2000)
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suggests some general conditions that are likely to positively influence improvisation in organizations. First, improvisation implies that there should be less investment in front-end loading (Weick 1987a: 229). From an improvisational perspective it makes no sense to try to anticipate everything in advance, since people start to alter these analytical frameworks as soon as there is need. If there is a convergence between conception and execution (Moorman and Miner 1998), strategizing relies more on general knowledge, a large and diverse repertoire of skills, trust in institutions, the ability to do a quick study, confidence in strategic fictions, and last but not least the candidness to accept alterations. Second, improvisation asks practitioners to consider every employee as a strategist. Whereas formal planning overemphasizes the role of specialists and top management (Levy et al. 2003), strategic improvisation considers the fact that strategy is often made without anyone realizing it. Crossan et al. (1996: 23) tell the story of Honda’s entry into the US motorcycle market. Honda used bigger motorcycles to make its way into the market but underestimated the more demanding driving conditions that caused unexpected engine failures curtailing sales of the big bikes. Yet Honda had also brought smaller motorcycles to the US, which were solely used for employee transport. A Honda employee riding her/his smaller motorcycle encountered a customer in a parking lot. The customer wondered about the smaller motorcycle, expressed interest and thus caused the successful introduction of smaller motorcycles into the market enabling Honda to establish a 63% market share in the American motorcycle market in just four years. This parking lot conversation illustrates improvisation because it (a) was unplanned, (b) caused immediate reaction, (c) was not driven by an executive but a ‘normal’ employee, and (d) blurs the distinction between formulation and implementation. Third, improvisation does not imply that traditional tools are no longer of value and should be discarded. Many tools permit temporary orientation in a game that is constantly changing its parameters. Improvisation does not mean conducting no strategic analysis anymore or leaving everything to chance, but understanding the value of tools from a different perspective and acknowledging that tools are not enough (Mintzberg 1994; Quinn 1980). Danger arises when executives use planning tools in too rigid a way, when they draw a too definite a line between formulation and implementation and thus act as if there is no need for improvisation, as if everything is under control. In a world where the future is monstrous in a Derridean sense, survival depends on improvised solutions that are often restricted by inflexible strategic plans. Conventional planning tools should
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be understood as frameworks that help to formulate convincing As Ifs that the organization uses for improvisation. In summary, the distinction between pure planning and purely emergent strategies is misleading, because the distinction between formulation and implementation is undecidable (Brews and Hunt 1999). By taking the impossibility of strategy formation as a conceptual limit for theorizing, we demonstrated how improvisation shapes firms’ strategies despite their paradoxical foundation. Transforming the underlying paradox into a recursive relationship between thinking and action allows for a certain degree of intention (viz. strategic fictions) but at the same time considers the gradually constructed nature of strategic preferences by means of improvisation. The justification of strategy remains a retrospective undertaking and our reflections on future ways of action always refer to what anyone will have performed (future perfect tense).
6.3 Strategy Content – Beyond Simple Generalizations 6.3.1
Context – Beyond the ‘Fullness of Rules/Resources’
The dominant logic that arises within strategy content research (i.e. the ‘fullness of strategic rules and resources’) proposes that strategy scholars conceptualize strategic rules and resources as if they were full of meaning, and thus generalizable, whereas in fact they are empty, waiting to be contextualized in the process of application. As indicated in section 3.2.3, strategic rules are thought to be generalizable across a variety of organizations, while strategic resources are usually treated as generalizable within a firm. Camillus (2003: 97), for instance, argues that “normative guidelines that possess wide if not universal relevance are obviously invaluable to designers of planning processes and systems.” Taking a more critical attitude Grandy and Mills (2004: 1162) state that “[t]he assumption and acceptance that these typologies ‘fit’ all organizations in all industries is remarkable.”106 The orthodoxy seems to be to rely on principles that praise ana106
A similar point is raised by Numagami (1998: 4) who argues that “[l]awlike regularities in social phenomena are not regularities ‘out there’, but are created and recreated by human conduct, consciously or unconsciously.” Miller and Hartwick (2002: 26) even argue that generalizability is a characteristic of all management fads and suggest that “[f]ads claim universal relevance, proposing practices that adherents say will apply to almost any industry, organization, or culture – from General Motors to government bureaucracies to mom-and-pop groceries. But few management approaches are universally applicable, and attempts to implement a mismatch approach can do more harm than good.”
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lytical detachment and methodological elegance over insight and prudence, which are necessary to meaningfully apply, and at the same time adjust, prescriptions (Hayes and Abernathy 1980: 70). Inevitably, this raises the question why oversimplifying generalizations with regard to strategy content are neither desirable nor possible. For any principle, be it a strategic rule or a strategic resource, to be generally applicable, one would need not only to anticipate its context of application completely but also to regulate this very context (see section 4.2.4). One would need to be able to foresee and manage the context of application of a strategic rule/resource so that generalizations become attainable. A truly generalizable strategic rule would need to include all contextual features (e.g., with regard to the country or industry in which the firm operates). Likewise, a resource that is thought to be valid regardless of the context of application within an organization has to disregard contextual features (e.g., the characteristics of the people who apply the resource or their understanding of how to handle it). Can we ‘manage’ those contexts? According to Derrida, contexts always remain open and thus non-saturable. In fact, deconstruction implies paying the sharpest attention possible to context, acknowledging its limitless nature, and giving reference to the never-ending movement of recontextualization (Derrida 1995a: 136). What are the reasons for the non-saturable nature of contexts? Every context is not simply given, in the sense of some harder reality that imposes on people, but produced, in fact enacted, through actions and interpretive strategies. People, while making sense of their world, fix what belongs to a context and by doing so draw distinctions, which cannot be justified in advance. Contexts are not a simple natural ground on which managers can base their strategic activity but emerge because of their actions and related interpretations. Accordingly, contexts always remain open to further descriptions, as there is no pre-described limit of what might be included.107 Distinctions can always be drawn differently. For in107
Franck (1992: 636) describes this problem by referring to the problem of the frame-axiom. For instance, “if I paint my house red in situation S1, then the color of the house in situation S2 should be red. The activity, rearranging the furniture, that I conduct in situation S2, results in situation S3. Which color does the house have in S3? Of course red, since rearranging the furniture does not alter the color of the house. Though, logically this possibility remains. That is why I would need a frame-axiom stating that rearranging the furniture leaves the color of the house unaltered. However, where are the limits of this frame axiom? From a formal-logical perspective, rearranging furniture could change everything I know about the world. Hence, if I want to describe this situation, I would need a limitless number of frame-axioms.” (Franck 1992: 636-637, translation A.R.).
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stance, when talking about suppliers, do we include sub-suppliers or maybe even sub-sub-suppliers as well? Which competitors do we regard as important? Who is a competitor for my product or service anyway? These questions need to remain open and can only be fixed with regard to the specific situation at hand. The context of application of a strategic rule and resource is open in yet another way. Any effort to describe/codify a context (e.g., ‘the project’ or ‘the industry’) already yields another context that escapes the previous formulation (Culler 1982: 124). In other words, any attempt to describe the limits of a context make possible the displacement of those limits. Contexts always draw upon previous contexts, which are themselves embedded in still other contexts (Dixon and Jones 2005: 243). This intercontextual character entails that there is no stability that allows us to completely iterate a context without modification. While discussing the quote ‘I have forgotten my umbrella’ that appears in Nietzsche’s unpublished writings, Derrida (1995a: 63) argues that “[a] thousand possibilities will always remain open even if one understands something in this phrase that makes sense (as a citation? the beginning of a novel? a proverb? someone else’s secretarial archives? an exercise in learning language? the narrative of a dream? an alibi? a cryptic code – conscious or not? the example of a linguist or of a speech act theoretician letting his imagination wander for short distances, etc.?).”
The meaning of this short phrase remains open not only because there is dissemination of meaning per se, but also because every reading places this text into a new context and thus allows other contextual specifications to occur. Of course, some contextual factors are less relevant than others and we possess schemes that guide our enactment of contexts (Weick 1979: 133-136), but Derrida makes the point that any specification of context remains contingent. In Derrida’s (1979: 81) view, the ‘totality’ of context is unmasterable, both in principle and in practice. The limitless nature of the context of application is the condition of strategizing as such. Without the ceaseless destabilization of any context – the possibility of the unanticipatable – there is no need for something like strategic management. In consequence, the condition on which most strategic rules and conceptions about resources rest becomes self-defeating. If these principles could really be applied to each company in every situation, we would end up in a situation where only violating these principles enables firms to distinguish themselves from their competitors to create competitive advantage. Take the example of Porter (1980), who advises managers to choose between cost leadership, differentiation, or a focus strategy. If these rules apply to everyone in the industry, strategizing no
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longer implies doing things differently, which following Porter (1996) is the essence of strategy, but doing the same things as your competitors. Hence, the only way to become different is to disobey these rules, which means to end up in a ‘stuck-in-the-middle’ situation that, according to Porter, should be avoided. In the end, the blind spot of the ‘fullness of strategic rules and resources’ is to neglect the dissemination of meaning. Because contexts are open, they never determine the meaning of a strategic rule or resource. Indeed, if meaning is related to context, there can be no ‘proper’ context that provides proof for a final meaning. We cannot generalize around strategic rules and resources, at least not without recognizing that whatever is at stake needs to be put into a context and consequently needs to be transformed with regard to the specific circumstances at hand; that is to say not without the recognition that “dissemination affirms the always already divided generation of meaning.” (Derrida 1981a: 268) Dissemination discloses the contingency of meaning, not to question every strategic principle, but to insist that whatever we call strategic cannot exist as a universal truth. That is why deconstruction is a strategy without finality (Derrida 1982: 7), a strategy that intervenes into whatever happens and thus transforms anything at stake (e.g., a strategic rule) – a transformation that brings about paradox. 6.3.2 Strategy Content and the Paradox of Repetition “So, at the same time, you have to follow the rule and to invent a new rule, a new norm, a new criterion, a new law.” Jacques Derrida (1997: 6)
In the preceding section we discussed the unbound nature of contexts as the blind spot of the ‘fullness of strategic rules and resources’. Based on these remarks, we now demonstrate that the argumentation of the ‘fullness of strategic rules and resources’ obscures a paradox that makes the dominant logic a less proper point of departure for theorizing. Indeed, the fundamental oppositions that strategy content research faces (i.e. rule/application and resource/application) cannot be sustained once we consider the unsaturable nature of contexts. To unfold our argumentation, we need to discuss the repeatability of strategic rules and resources, because in order to generalize rules and resources need to be perfectly re-
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peatable. A strategic rule is only generalized if the advice that is offered by the rule can be applied (and thus repeated) in a variety of contexts across organizations. Likewise, a strategic resource can only be treated as generalized if it is applied exactly in the same way in a variety of contexts within an organization. Put differently, for application of rules/resources to come about there needs to be repetition. Of course, repetition is possible in some way. In section 2.3.4 we classified strategic rules as codified interpretations of generalizable (i.e. repeatable) procedures of action and strategic resources as manifestations of tangible or intangible transformative capacities. Codified interpretations of strategic rules reflect regularities of the type ‘If X, do Y’ that are supposed to be followed by a variety of organizations. Certainly, different managers in different organizations can repeat (i.e. apply) the codified statement of a strategic rule that is provided by some strategy scholar. Likewise, manifestations of resources (e.g., a machine or a patent) can be applied and thus repeated in a variety of contexts within one firm. Yet, for generalizations to be valid, strategic rules and resources need to be not only repeated in some way, but in a perfect way. Every deviation destroys generalizability. We then have to ask: Is a perfect and unaltered repetition of the intended meaning of a strategic rule possible? Can we apply a generic strategy twice in the same way? And with regard to resources, is a perfect repetition of the use of a manifestation of a resource possible? Can we apply machines/patents/business contracts etc. twice in the same way? Derrida (1995a: 117) discusses the question of repetition (iteration) in some depth. According to his argumentation, the perfect repetition that is needed to make generalizations valid is impossible. This, however, does not mean that Derrida totally questions and abandons generalizations; the relation between singularity and generalizability is quite special in Derrida’s thinking. Deconstruction does not neglect the general but tells us that “[t]he singular is in fact always bound up with the general.” (Royle 2003: 120) Each time a manager applies Porter’s generic strategies, s(he) creates something singular, unique, unlike everything else that has existed so far, but at the same time also refers to the general, the same that crosses all attempts to strategize by means of Porterean logic. Every application of a generic strategy is a strategy in itself and an example of generic strategies in general. Every repetition produces a difference that alters and defers the meaning of strategy content. Différance is at the heart of repeatability and ensures that the meaning of rules and resources is never fully present. This interplay of sameness and difference conditions singularity and reminds us that repetition is never pure but always leads to alterations. As Lucy (2004: 59) argues, “[t]o repeat something is to alter it, to make a dif-
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ference.” The alteration of the meaning of a rule or resource is already represented within these concepts, constantly contaminating their purity (presence). If strategy content were present, it would be a presence without difference, which is impossible (Bennington 1989: 84). This repetition-asdifference enables and limits strategic rules and resources to make us aware that nothing can exist only for itself in a state of self-presence. What permits pureness to occur is ‘this dangerous supplement’ (Derrida 2003a) which constantly adds a new dimension of meaning to the ‘origin’. In our case, the supplement is application – the action that is required for strategic rules and resources to mean anything at all. We cannot refrain from applying strategic rules and resources, as this would make them unessential. Yet application means modification and thus partly destroys rules and resources. The impossibility of perfect repetition points towards paradox. We cannot replicate strategic rules and resources in their purest sense, which is to say without modification. The condition of their possibility (which is their iteration), already modifies, alters, perverts, sometimes even replaces them.108 Strategic rules and resources do not apply themselves; people apply them within a specific context, a context that cannot be perfectly regulated a priori but remains open and thus calls for adjustment. Strategists need to regulate and get by without regulation. To follow a strategic rule and to apply to a strategic resource in a pure way, preserving their ‘original’, intended meaning, is impossible. As Derrida (1992a: 23) argues with regard to just decisions: “[F]or a decision to be just and responsible, it must, in its proper moment if there is one, be both regulated and without regulation: it must conserve the law and also destroy it or suspend it enough to have to reinvent it in each case, re108
Ortmann (2003a: 207) remarks that the discussion of rules and resources actually contains a double-paradox. They not only provide generalized principles for specific contexts but at the same time are also thought to be generalizable within the scope of a corporation (i.e. applicable to all occurring contexts), although not beyond the corporation (as this would cause an imitation of the competitive advantage). Thus, strategic rules and resources offer uniqueness as a general concept. In the words of Ortmann and Salzman (2002: 224): “the ‘search for strategy’ as an ideal, general way to uniqueness is a paradoxical undertaking, hopeless insofar as it is aimed at generalizable singularity.” Ironically, we face a situation in which most strategic rules and resource-concepts promote uniqueness (viz. ‘make your corporation special’) but offer general prescriptions (viz. ‘that is how everybody needs to do it’). For instance, generic strategies are supposed to be valid ‘inside’ all organizations, but are supposed to also provide a distinct and unique competitive advantage ‘outside’ the firm (see also Vos 2005: 367).
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justify it, at least reinvent it in the reaffirmation and the new and free confirmation of its principle. Each case is other, each decision is different and requires an absolutely unique interpretation, which no existing, coded rule can or ought to guarantee absolutely. […] It follows from this paradox that there is never a moment that we can say in the present that a decision is just […].” (first emphasis added)
The supplement ‘forces’ the meaning of strategic rules and resources to be contextualized, to be valid for a single case only. But contexts, as indicated in the preceding section, are open and unsaturable and cannot be regulated in advance, at least not in a perfect way. This is the ground from which our reasoning regarding strategy content needs to unfold: strategizing is about applying strategic rules and resources (Ortmann and Sydow 2001a: 438), an application which cannot purely reproduce because it always already calls for modification. Strategic rules and resources cannot account for their own interpretation by agents in situ; they cannot regulate their own conditions of application. In other words, we cannot understand strategic rules and resources as a generalized way for becoming idiosyncratic (Figure 29). To think of perfectly repeatable strategic rules/resources means to establish a metaphysics of presence (i.e. an ‘origin’ that is self-defining and does not need any application to create meaning).109
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Giddens sets up this paradox as well by arguing that “no course of action can be said to be guided by a rule because every course of action can be made to accord with that rule. However, if that is the case, it is also true that every course of action can be made to conflict with it.” (Giddens 1984: 21) Yet he also resolves this indecision by suggesting that this paradox holds only as long as we think about codified interpretations of rules. If rules are procedures of action, aspects as praxis, one looks at their constant enactment and reproduction in social practices (that includes modification and manages to get by without perfect replications). Wittgenstein (1967: 81) remarks in a very similar sense: “This was our paradox: no course of action could be determined by a rule, because every course of action can be made out to accord with the rule. The answer was: if everything can be made out to accord with the rule, then it can also be made out to conflict with it.” Barnes (1995: 202) remarks, “nothing of the rule itself fixes its application in a given case, […] there is no ‘fact of the matter’ concerning the proper application of a rule, […] what a rule is actually taken to imply is a matter to be decided, when it is decided, by contingent social processes.” (as quoted in Tsoukas 2000: 109, emphasis added)
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Fig. 29. The Paradox of Strategic Rules and Resources
Based on this paradox, Ortmann (2003b: 33) draws our attention to the unavoidable necessity of rule modification. He claims that rules are inevitably modified, and for resources things are not much different (Ortmann 2003a: 185-209). Because strategic rules and resources need to be applied, they cannot avoid the dangerous supplement that modifies their meaning. Strategists thus need to know that to break with a rule or to alter the meaning of a resource is not necessarily a bad thing, but often indispensable to address the context they face. When talking about deviations from strategic rules and resources, we do not focus on deliberate violations (for instance, when a strategic rule like cost leadership is given a twist to legitimize child labor), but on modifications that happen in the spirit of the context at hand. Certainly, it is not always easy to distinguish between both forms of modification. Yet it shows the need to study how managers adjust strategic rules and resources (McKiernan 1997: 794). While this line of argumentation seems comprehensible for strategic rules, it is less clear for resources. Modification with regard to resources does not imply altering their manifestations (e.g., as a machine) but the meaning people attach to them. The meaning, though, is of special importance. With the recent debates on the knowledge-based view of the firm (Grant 1996; Kogut and Zander 1992), the meaning of resources seems to move to the heart of resource-based thinking. Of course, a machine can be used more than one time, but the meaning that is attached to this machine and the way it is used is in a constant state of flux. Whether, how, and in which way a machine is applied is, of course, a question of context. In other words, what is at stake is the meaning that is attached to tangible and intangible resources and not their mere physical qualities (e.g., as machines, patents or IT systems). Hence, it is paradoxical to replicate the unaltered meaning of a strategic resource, since the supplement (application) brings about new facets of meaning, but at the same time acts as the condition of the possibility for resources.
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The paradox that strategic rules and resources are unable to define their own conditions of application has been widely neglected by empirical strategy content research thus far. Nevertheless, some scholars have acknowledged the consequence of the paradox (i.e. generalizable statements about ‘what constitutes a good strategy’ are impossible). Pfeffer (1994: 34) shows that one cannot simply adhere to Porter’s five forces framework to make out competitive advantage because competitiveness is a dynamic concept that changes over time. He argues that when identifying the five top performing US firms for the 1972 to 1992 period, which according to Porter should be in industries where patent protection of product or service technology could be achieved, one ends up with a list of organizations that operate in industries characterized by massive competition, horrendous losses, widespread bankruptcy, and almost no barrier to entry. The point is not to believe that Porter offers a false analytical tool, but that the general nature of his framework does not offer a reasonable explanation of competitive advantage in every industry. The corporations Pfeffer identifies did not get their competitive edge from any of the five Porterean forces but from the way they managed their workforce, a factor that may be included in strategic analysis by supplementing existing frameworks sensu Derrida.110 To conclude, the ‘fullness of strategic rules and resources’ aims at impossibility. It assumes that strategic rules and resource are generalizable and thus can be repeated (i.e. applied) without modification. Yet application is not a secondary operation that can simply be deduced; application acts as a supplement that may be restricted (but not determined) by existing meaning structures but leads to a modification that not necessarily runs counter to the ‘original’ but puts it into context and thus preserves peoples’ 110
With regard to organizational rules in general, the study by Orr (1996) reveals the impossibility of conceiving rules as determining their own application. In his ethnographic observation of field service personnel repairing office machines, he points out that such work is resistant to rationalization, because the necessary expertise cannot be easily codified in rules. While observing the work of service personnel, he realizes that the documentation, which is supposed to help the technicians, “is composed of representations, which inherently afford multiple interpretations and uses, and instructions, which require interpretations by their users in the context of their application. As Suchman writes, following Garfinkel, ‘Indexicality of instructions means that an instruction’s significance with respect to action does not inhere in the instruction, but must be found by the instruction follower with reference to the situation of its use (Suchman 1987: 61). […] There is also a certain amount of resentment of the diagnostic procedures; as one technician told me, technicians like to think they have more on the ball than just following directions.” (Orr 1996: 110)
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capacity to strategize. Like signs, which are unstable and only gain meaning in and through social praxis (Derrida 2002), to know a universal rule or to apply a resource by itself in no way guarantees that its generality is enabled in the context of application. The supplement always undermines what we think is generally valid. Like a parasite, the social practices of people constantly recontextualize and revise strategic rules and resources. That is why Derrida (1995b: 234) remarks “deconstruction is always a discourse about the parasite.” 6.3.3 The Deparadoxification of Strategy Content As indicated in the preceding section, the uncontaminated iteration of strategic rules and resources is impossible. Yet we all know that strategists somehow deal with this paradox. Deephouse (1999), Lozeau et al. (2002), and Zbaracki (1998), for instance, investigate how strategic rules become applied. Likewise a variety of authors have empirically observed that managers refer to resources (Henderson and Cockburn 1994; Lorenzoni and Lipparini 1999). So, where is the paradox? To discuss this question, we need to recall that the paradox that we identified with regard to strategy content research states that a perfect repetition of the meaning of strategic rules and resources is impossible. In practice, though, strategists usually neither demand nor desire a pure iteration of strategic rules and resources; they are aware that strategic rules formulated by strategy scholars need to be adjusted to fit their context. They also accept that the meaning of those resources that are vital for their company change over time. In other words, practitioners simply modify the meaning of the rule or resource without caring much about their uncontaminated iteration. Yet, to conclude from this that the paradox is not of relevance is misleading. Although strategists do not demand a perfect iteration of strategic rules and resources, they still want to apply not just any rule/resource but the intended rule/resource. That is to say, that there are limits to modifications. To obey Porter’s (1980) generic strategies means to give reference to his work, to apply those characteristics that he identified as being relevant within any of the generic strategies. There are limits to deviations and whatever is thought to be general needs to stay at least recognizable under its proper name (Derrida 1995a: 9). ‘Cost leadership’ cannot mean just anything, but needs to give some reference to the intended meaning that Porter (1980) had in mind. This is even more important, if we consider that the contextual interpretation of a strategic rule or resource needs to be socially accepted. For example, others need to recognize the proposed cost cutting measures as being part of a ‘cost leadership’ strategy. In a time
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where strategic management also has a signaling function to other stakeholders (e.g., stockholders, institutional investors or NGOs), significant modifications of strategic rules and resources need to be justified with regard to their intended meaning. This then makes the paradox more visible and strategists eventually look into the ‘eyes of the impossibility’ that paradoxical indecision brings about.111 This brings us to the question of deparadoxification. How do strategists circumvent the paradox of iteration? To escape paralyzing indecision, strategists temporalize paradox; they act as if their interpretation of the strategic rule or resource is relevant, whereas they know – or at least should know – that this interpretation cannot represent an uncontaminated iteration. This As If obscures paradox and demonstrates that formulated (written or oral) strategic rules and statements about how resources are understood have the character of a fiction. Faced with the paradox, strategists act as if their interpretation is valid; they act as if the meaning that they ascribe to labels like ‘variety-based positioning’ (Porter 1996: 66) or ‘competence-based leadership’ (Hamel and Prahalad 1998: 189) corresponds with the intended meaning. This, then, establishes a ground from which further strategic action can unfold. Any formulation, of course, is guided by a sense of naivety. Those in charge cannot know in which way and to what extent the meaning of their formulation becomes modified in praxi. To treat strategic rules and resource as if they were meaningful preserves strategists’ capacity to act despite the underlying paradox.112
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To speak about the ‘proper name’ of a strategic rule or resource is interesting. The word ‘proper’ comes from the Latin proprius and has the meaning of ‘one’s own’. To refer to a strategic rule’s or resource’s proper name thus means to acknowledge its ‘own character’ (that which identifies it). Yet, as Derrida (1977: 111) remarks, the identification of propriety requires the existence of signifying elements that are shared with others (and are thus improper). One can only identify propriety by giving reference to its impropriety (that which makes the proper identifiable for everybody). 112 If we consider that those formulations that deparadoxify strategy content are based on performative speech acts, we can emphasize the bootstrapped character of formulated strategic rules and statements about resources. Recall that a bootstrapped operation creates its own grounds; performative speech acts bring into existence what they refer to. Of course, strategic formulations become established through performative speech acts. Managers announce a ‘cost leadership’ strategy and thus make the strategy a low-cost one or define ‘knowledge’ as a key resource and thus make knowledge a key resource. These performative formulations, that are actually supposed to guide strategic actions, come into existence because of the ‘actionality’ of performative speech acts (see section 5.2).
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To facilitate orientation and pave the way for the discussion of implications, we will briefly show how strategic rules and resources relate to the fictions that deparadoxify strategy content. Concerning strategic rules, we propose that in an initial sense they can be understood as strategy scholars’ codified interpretations of strategic activity. Then, a manager who refers to these codified statements and interprets them establishes a fiction and consequently acts as if her/his interpretation corresponds with the ‘initial’ meaning of the rule. This fiction temporalizes the paradox. Of course, the fiction still represents a certain emptiness. Strategists do not know whether, how, and in which way the fiction is socially accepted and embedded in the strategizing routines of their organization. Similarly, strategic resources represent manifestations of transformative capacities. These manifestations (e.g., a license or a machine) can be used more than once; yet the meaning that is attached to these manifestations changes with every application (e.g., a license can be used to produce slightly different goods at different locations with different people who have different knowledge about how the license is supposed to be applied). Accordingly, the meaning that is attached to manifestations of resources cannot be perfectly iterated; this is paradoxical. To deparadoxify this situation, those who apply a resource can act as if their interpretation of the resource is valid and somehow corresponds to its proper nature. Certainly, the underlying As If is a fiction that is ‘filled with meaning’ in and through the conduct of organizational members. The As Ifs that are needed to deparadoxify strategic rules and resources help us to understand how managers deal in practice with the impossibility of generalizing strategic rules across a variety of organizations and strategic resources within a particular firm. The As Ifs temporalize the paradox; they defer it into an indeterminate future. Of course, we should suspect that practitioners are seldom aware of the As If that underlies their thinking about strategy content. Yet, even though practitioners usually do not demand perfect iterations, their application of a formulated strategic rule or manifestation of a resource is based on a fiction. Fictions are inevitable since managers cannot know whether and in what way the strategic rule they regard as important or the resource they have identified as a strength is applied (and thus modified) over time. In the following, we take the existence of the As Ifs as our starting point for discussing ‘theoretical’ and ‘practical’ implications of the paradox of repetition. Inevitably, the discussion of implications needs to demonstrate how the As Ifs that deparadoxify strategic rules and resources are further ‘filled’ with meaning. As indicated above, an As If is a fiction that needs to be realized in praxis.
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Iterability – The Emptiness and Fullness of Strategy Content
Recall that the paradox that, strictly speaking, makes generalizations with regard to strategic rules and resources impossible is based upon Derrida’s (1991: 83-84) claim that every repetition also brings about alteration. Replication is the possibility of singularity; this is paradoxical (and thus impossible) only if we look at an uncontaminated iteration. Derrida (1995a) discusses this interconnectedness of repetition and alteration with regard to the term: iterability. Iterability, as Derrida (1995a: 7) suggests, comes from the Latin iter (‘again’) and the Sanskrit itara (‘other’) and is the logic that ties repetition to alteration. Iterability asks us to think replication and modification together to consider that reproduction already is the possibility of singularity. Whatever is at stake remains identifiable within and among organizations, but only in, through, and in view of its alteration (Derrida 1995a: 53). The structure of iteration implies both identity and difference. Conceiving strategic rules and resources as being reproduced by iterability entails accepting that they are repeatable in some sense, while at the same time they are modified because of their repetition. Iterability implies that organizations do not completely neglect the sameness that makes strategic rules/resources in some way repeatable. In fact, according to iterability, organizations base their strategies on an indispensable emptiness, which is necessary for repetition, and a gradual filling of this emptiness to take specific circumstances into account (Ortmann and Salzman 2002: 212). They consider general (empty) strategic prescriptions and modify (fill) these prescriptions over time. Emptiness, then, represents the repeatability of rules and resources in principle, while fullness characterizes ‘the other’ that each context brings about and without which no rule or resource gains meaning in praxis. Emptiness implies that strategic rules and resources can be repeated and act as a ground for strategizing, whereas fullness points out that this repetition fills rules and resources with contextualized meaning and modifies them to account for the specific circumstances at hand. The question is: How are strategic rules and resources filled with meaning? To theoretically conceptualize the process of filling, we need to demonstrate how ‘empty’ strategic rules and resources are ‘filled’ in the course of application. Of course, the underlying relation is supplementary in a Derridean sense: ‘empty’ rules and resources are ‘filled’ (and thus modified and eventually replaced) until the next round of strategizing where the initial filling needs to be reworked according to novel contextual circumstances. In the following, we describe this supplementary relation and its
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implication in more depth. To organize this rather long discussion, we have structured our argumentation into five parts (see Figure 30).
Fig. 30. Outline of the Discussion of Emptiness and Fullness
Strategic Concepts-in-Use and Competences To discuss the supplementary relation between ‘empty’ strategic rules/resources and their gradual filling within the course of application, we need to be able to contrast emptiness from fullness. So far, our definition of strategic rules (as codified interpretations of scholars’ observation of strategic activity and resources as manifestations of transformative capacities) cannot conceptually grasp ‘fullness’. This is because these definitions of rules and resources only refer to their necessary emptiness. In fact, codified interpretations of rules and manifestations of resources disregard their process of application. To contrast emptiness from fullness, we need a conception of strategic rules and resources that gives reference to their application. Our existing definitions need to be supplemented by an understanding that grasps the fact that strategic rules and resources become aspects of praxis. Figure 31 contrasts the different definitions.
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With regard to the market-based view, we contrast ‘empty’ strategic rules from ‘full’ strategic concepts-in-use. Following Giddens’s (1984: 21) understanding of rules in general, we define strategic concepts-in-use as procedures of action that are applied in the enactment of social practices. Formulated strategic rules are thus only special types of strategic conceptsin-use (viz. their codified interpretations). The notion of strategic conceptsin-use reflects our belief that every strategic rule, once applied by managers, becomes an aspect of praxis. That is to say, codified interpretations of strategic rules can only be filled with reference to the conduct of people. A strategic rule gains meaning when people start to apply it in the course of social action.
Fig. 31. Emptiness, Fullness, and Objects of Analysis
With regard to the resource-based view, we contrast ‘empty’ resources from ‘full’ strategic competences. We define strategic competences as the deployment of resources over time (Freiling 2004: 31; Ortmann 2005a: 34; Penrose 1995: 25). The competences that are yielded by resources only come into existence in the process of application. Freiling (2004: 31) makes this quite clear: “The firm itself has to be in a position to make use of these resources in a goaland market-oriented way. This is only possible in case of available actionrelated competences. They unfold the potential of resources […].”
Of course, the idea of competences is by no means a novel one. For instance, Prahalad and Hamel (1990: 82) identify competences as the collective learning in the organization. One may wonder, then, why we still criticize resource-based reasoning for its neglect of the process of employing
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resources, if strategic competences already highlight the employment of resources. When taking a closer look at the competence-based literature (Freiling 2004; Prahalad and Hamel 1990; Stalk et al. 1992: 62; Tallman 2003), it becomes obvious that, despite the emphasis on the deployment of resources, competences are still seen as generalizable. Prahalad and Hamel (1990: 83), for instance, argue that competences have to be transferable and Freiling (2004: 31) argues that competences are repeatable. Yet, if competences can be transferred and are repeatable, they cannot represent idiosyncratic circumstances (Ortmann 2005a: 34). Competences, as deployed resources, cannot be a priori ‘given’. Emptiness and Fullness and the Lifeworld of Organizations Having introduced the notions of strategic concepts-in-use and competences, we can now discuss how we understand emptiness and fullness in general. Faced with the emptiness of general strategic rules and resources – or a deparadoxifying As If about them – strategists have to ‘fill’ this necessary emptiness with meaning. The process of filling gives reference to the in principle repeatable strategic rules and existing resources and considers the context that calls for modification. Fullness is about a contextualized understanding of whatever is thought to be generalizable; it brings about strategic concepts-in-use and competences. Any fullness, though, has to be emptied to factor in inevitable recontextualizations. Emptying implies discarding and unlearning strategic concepts and competences that are currently in use; it is about the necessary forgetting of whatever is contextualized. Emptying a strategic concept-in-use or competence implies reconsidering its underlying generalizability. Far from being a mere theoretical construct, this ‘looking back’ at strategic rules and resources happens in ‘strategy reviews’ when strategists reflect on their understanding of currently deployed strategic concepts and the significance of strategic competences (see Figure 32).
Fig. 32. The Emptiness and Fullness of Strategy Content
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Emptiness and fullness allow us to explore in more depth the relation between strategic rules and concepts-in-use as well as resources and competences. But with regard to what conditions does fullness occur? When adopted by an organization, strategists embed rules and resources into their organization-specific lifeworld (Lebenswelt) and by doing so carve out the meaning of strategic concepts-in-use and competences. We use the term lifeworld with reference to Schütz (1962: 231-233) and its later adoption by Berger and Luckmann (2000: 17). Although Schütz’s remarks primarily concern society at large, we interpret his idea of the lifeworld with regard to organizations. According to Schütz, the lifeworld is the paramount reality within which the self suspends all modes of disbelief. The lifeworld is what we take for granted as everyday reality. People in organizations use this lifeworld as a ‘home base’ for their orientation. The lifeworld acts as an archetype for our experience of reality (Schütz 1962: 233): to a large extent it reflects the regularities that people procure. The organizational lifeworld is also reflected by a certain cognitive style and specific ways of using language. All organizations have their specific way of ‘talking’ (Czarniawska-Joerges and Joerges 1988) and a certain common-sense mode that all people share. This common-sense mode identifies an organization and influences the way people interact. Fullness is always a fullness that can only be achieved with regard to the lifeworld of an organization. Once embedded in and applied to the lifeworld of an organization, strategic rules and resources gain meaning. What does it mean to possess a ‘given’ bundle of resources like knowledge and certain high-tech machines? For Sony it implies becoming good at ‘miniaturization’, for 3M having a competence with ‘sticky tape’, and for IBM becoming good at ‘integrated data service’. What does it mean to choose cost leadership or differentiation as relevant strategic rules? Cost leadership at Tesco is different from cost leadership at Ryanair. Strategists have to modify, corrupt, and even replace the empty codified interpretations with contextualized meaning in praxis. Of course, ‘fullness’ with regard to the lifeworld can never imply selfpresence in a Derridean sense. We cannot stop différance from occurring, to suddenly face a fixed center from which our reasoning unfolds. There cannot be full meaning, only meaning in the moment. The moment, however, is never fully present (Derrida 2003a). Fullness is by itself in a constant state of flux. Consequently, considering strategic concepts-in-use and competences as stable within the lifeworld of an organization bears the risk of reintroducing these categories as general means for specification, while specification can neither be determined nor foreseen by some metacompetence or meta-rule. While this is true from a theoretical lens, we
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should not forget that much strategizing is based on routines that possess a relatively stable character (Zollo and Winter 2002) or whose exact modification is not all that relevant within the course of strategizing. All of this leaves the question of how emptiness is filled unaddressed. We now examine the process of filling through which rules/resources are transformed into aspects of praxis. Phenomenological Remarks on the Process of Filling To understand how ‘empty’ strategic rules and resources are given meaning, we have to consider that the organizational lifeworld holds a variety of interpretative schemes by which people understand their context and make sense of their world (Schütz 1962: 233). Mundane examples of such schemes are symbolic orders, value systems, and stories that actors share to coordinate and assign meaning to their actions (Gilbert 2003: 131). Empty strategic rules and resources refer to contextualized interactions whereby meaning gets mediated by communication and under consideration of the interpretative schemes that actors possess. We propose, following Duschek (2001), to understand the application of interpretative schemes by referring to Schütz’s (1967) phenomenological conception of the social world. According to Schütz, our reflective grasp on the social world is based on perceived types with which we are familiar. To come to terms with the world we experience and to make sense of it, we classify the specific characteristics of a context we face, referring it back to typical characteristics that are familiar to us. As Schütz (1967: 83) explains, “the lived experience that is to be classified, refers […] back to the schemes on hand, and fixes its specific essence.” These schemes are interpretative schemes within which actors have organized the experiences of their past. According to Schütz (1967: 84), interpretative schemes are “the completed meaning-configurations that are present at hand each time in the form of ‘what one knows’ or ‘what one already knew’. They consist of material that has already been organized under categories.”
Interpretative schemes are anchored in the specific lifeworld of an organization. Schütz (1967: 81) makes quite clear that interpretative schemes result partly from our own past experience and partly from what others have taught us. This means that schemes are tied to the unique experience of an organization and are bound to its specific circumstances. Every particular experience of a general strategic rule or resource, then, is referred to a general type that is part of an interpretative scheme rooted in the lifeworld. Schütz uses the term type to emphasize that interpretative schemes consist of a variety of types that allow people to experience the unique in terms of broader, well-known categories. Typification, which is the proc-
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ess of ascribing a general type to a particular experience, applies to all kind of objects and human beings. Organizational members classify whatever they experience in the ‘here-and-now’ as specific and context-bound in a well-known scheme (type) and thereby make these experiences in some way knowable to them. Typification is used because in everyday organizational life the particular characteristics of a context, which make this context totally unique and not repeatable, are not always all that relevant (Duschek 2001: 75). This makes typification the abstract act by which the specificity of a situation is detached from the particularities of its context and reduced to its ‘typical’ (viz. for the organizational lifeworld knowable) characteristics. We thus experience the singularity of the situation through a typified interpretative scheme.113 By typifying, one is attuned to the continuities of experience and tends to disdain special instances and unique detail. This leads to what Schütz calls idealizations, which spread through our experience of the organizational lifeworld. Referring to Husserl, Schütz (1964: 285) argues that “[h]e [Husserl] calls them the idealization of an ‘and so forth and so on’ (und so weiter) and – its subjective correlate – the idealization of ‘I-can-do-it-again’ (ich kann immer wieder).“ (German annotations and emphasis in the original)
Schütz assumes the adequacy of idealizations until counter-evidence occurs. Interpretative schemes provide a roughly coherent complex of meaning by which organizations interpret present experiences, make them understandable, and to a certain extent decontextualize them to plan their courses of action. We are now in a position to describe the process of filling more precisely. Usually, the emptiness of a strategic rule or resource is introduced by specific ‘labels’. When applying a strategic rule, strategists have to figure out what ‘Cash Cow’, ‘Total Quality’ or ‘transaction costs’ mean this time. Similarly, when applying a resource, people need to figure out what their ‘core competence’, ‘market knowledge’ or the ‘availability of top experts’ mean in the specific situation that they face. These labels occur with regard to the specific lifeworld of an organization. To make sense of them, 113
Schütz (1964: 285) gives the following example: “Strictly speaking, each experience is unique, and even the same experience that recurs is not the same, because it recurs. It is a recurrent sameness, and as such it is experienced in a different context and with different adumbrations. If I recognize this particular cherry tree in my garden as the same tree I saw yesterday, although in another light and with another shade of color, this is possible merely because I know the typical way in which this unique object appears in its surroundings. And the type ‘this particular cherry tree’ refers to the pre-experienced types ‘cherry tree in general’, ‘trees’, ‘plants’, ‘objects of the outer world’.” (emphasis added)
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there are long discussions about what it means to have a core competence or what precisely a Cash Cow represents for the organization in its current context. Within these discussions, labels are decontextualized, because people refer ‘this-particular-notion-of-core-competence’, which exists in the ‘here-and-now’ of the lifeworld with its unique meaning, to preexperienced types like ‘competences in general’, ‘competition’, and ‘resources’. In his empirical observation of how organizations adopt TQM, Zbaracki (1998: 605), for instance, notes that “[i]ndividuals who encounter TQM must integrate their understanding of the technical dimensions of TQM with the everyday realities they encounter in ongoing organizational processes.” (emphasis added)
By embedding strategic rules and resources in their lifeworld, organizations overcome the compatibility gap (Lozeau et al. 2002) between general assumptions and the idiosyncratic context at hand. People include the typified meaning-configurations of concepts-in-use and competences into their ‘stock of knowledge at hand’. By applying typified schemes, people construct concepts-in-use and competences without giving reference to each and every particular characteristic of the individuality of their lifeworld. The resulting understandings of concepts and competences are thus conveyed into the lifeworld and carry with them the presumption (idealization) of their applicability until counter-evidence occurs. The singular grasp of a strategic rule or resource is transformed into an anonymity that is valid in the organization only (Schütz 1964: 40). The resulting ‘full’ notions of concepts-in-use and competences act as idealizations that are applied routinely in the spirit of Schütz’s ‘I-can-do-it-again’ without recognizing every detail that a context holds. Understanding the application of strategic rules and resources based on interpretative schemes moves us beyond the dichotomy of ‘entirely empty strategy content regardless of context’ and ‘entirely filled strategy content with regard to a unique context’. That is why Schütz (1964: 42) calls them ‘mediating typifications’. In fact, rules and resources are filled with regard to the organizational lifeworld, but not with regard to every unique context that pops up in the course of strategizing. Whenever strategy content is filled it conserves a sense of generalizability, as for organizations it is impractical to regard the precise circumstances appearing in time-space. Yet, at the same time, strategy content is also turned towards the exclusivity of an organization. This is why the inclusion of Schützean ideas reflect Derrida’s (1991) iterability – the ‘strange’ recurring character of rules and resources and their modification. Of course, Derrida would question the existence of idealizations throughout time and space, as every iteration brings
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about a slight (often unnoticed) modification. Schütz’s ideas, however, help us understand that even though these slight modifications exist, people often disregard every precise detail that the particularities of organizational life bring about; people work, chat, discuss, argue, and follow their routines (Segal-Horn 2004: 141). To conclude, the phenomenological interpretation of the process of filling demonstrates more precisely how managers cope with the inevitable emptiness of strategic rules and resources. Schütz’s ideas supplement Derrida’s remarks on iterability and make the idea of iteration-as-modification (i.e. iterability) more applicable to the problems of strategic management. However, our discussion leaves one question unanswered: If concepts-inuse and competences can gain relatively stable meaning (because they are idealized), how do these idealizations change over time? Existing concepts-in-use and competences need to change as organizations face novel situations that make existing interpretations inappropriate. Indeed, whatever is filled also needs to be forgotten (‘emptied’) to create room for interpretations that fit progressing contexts. That is why the next section discusses the dynamic interplay between fullness and emptiness. Emptying and Filling as Situated Learning Any concept-in-use or strategic competence has to change over time. Existing contextualizations are likely to result in incompetence (Argyris 1986); after a while they are applied to avoid surprise, embarrassment or threat eventually resulting in organizational inertia. Inertia reflects an organization’s inability to apply distinctive interpretative schemes to update their strategy content regarding new situations. To change concepts-in-use and competences is tough, as the ‘taken-for-granted’ (idealized) character of our everyday knowledge has to be altered (Nonaka and Takeuchi 1995: 45-46). To reconfigure meaning that has been attached to competences and concepts-in-use requires learning, if we interpret learning as the development of new contextualizations in the lifeworld. Yet, for learning to come about there also needs to be unlearning – a process through which people discard outdated strategic concepts-in-use and competences (Hedberg 1981: 18). Unlearning is indispensable to embed novel experiences in different cognitive patterns. To empty a concept-in-use or competence can be interpreted as unlearning; it implies discarding existing contextualizations of strategy content to clear space for prospective fillings. According to this perspective, emptying (unlearning) paves the way for new fillings (learning) to emerge. We thus agree with Prahalad and Bettis (1995: 10) who argue that “strategic learning and unlearning […] are inextricably intertwined.” (see also Nystrom and Starbuck 1984: 58) This reflects the supplementary rela-
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tion between emptiness and fullness. To fill ‘empty’ strategic rules and resources there needs to be learning (i.e. the development of new idealizations). Because the supplement always adds new meaning (Derrida 2003a), strategic rules and resources are inevitably altered in the process of filling. Unlearning, then, implies discrediting existing concepts-in-use and competences to allow for a new round of filling. Although learning and unlearning enable us to conceptually grasp the dynamic interplay between emptiness and fullness, there is one important question that remains unanswered: How do people know when and whether their current concepts-in-use and competences are outdated? How do they know when to (un)learn? Weick and Coutou (2003) and Langer and Moldoveanu (2000) address this question and argue that in order to alter existing interpretations people need to draw novel distinctions that make them aware of their context; they need to be in a state of alertness and lively awareness regarding events occurring around them (Albert 1990: 154). To recognize the need for unlearning means to be opposed to the non-reflected application of existing modes of behavior. In other words, people have to identify the singularity of a new situation and experience this singularity (‘What is new about the recent project/product/initiative?’). With regard to our phenomenological discussion of emptiness and fullness, to (un)learn means to critically reflect idealized typifications of strategic competences and concepts-in-use regarding their appropriateness (Daft and Weick 1984; Weick et al. 1999). This insight seems simple but has important consequences. If (un)learning is bound to a context and means giving the sharpest attention possible to contextual features, one cannot generalize with regard to the interplay of emptiness and fullness (Easterby-Smith et al. 2000; Messner et al. 2005: 6). Put differently, no generalizable meta-learning competence can ensure that outdated interpretations of strategic rules and resources are disregarded. This competence, like any competence, is at best a potential that has to be activated with regard to a context. In consequence, the interplay between learning and unlearning, and thus also between emptiness and fullness, is situated. The situated nature of learning has been promoted by a variety of scholars (Brown and Duguid 1991; Brown and Duguid 2001). While discussing the nature of learning, Tyre and Hippel (1997: 72), for instance, remark that situated learning “reveals that intelligent actors incorporate codified, abstract theory into local, informal routines, freely adapting it as they work on actual problems in their particular social and physical circumstances.”
Situated learning gives the sharpest attention possible to the social, cultural, and physical context that affects how and what organizations learn.
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To understand the dynamics of emptiness and fullness as a process of situated learning stresses that a change of the idealized ‘stock knowledge at hand’ is by itself a process that is bound to context and not generalizable. Forgetting existing contextualized notions of strategy content is as much context-bound as adding new idealizations by reinterpreting strategic prescriptions according to novel circumstances. This, of course, is a plea to treat any kind of meta-learning-competence with great care. Such competences suffer from the same problem as the apparent ‘fullness of strategic rules and resources’: they are thought to be generalizable, yet can only provide potentials that have to be activated with regard to a specific situation. Without recognition of this insight, research is likely to engage in a relentless search for meta- and meta-metacompetences that relegate the search for competitiveness to the fringe of an infinite regress. (Un)Learning understood as the dynamic interplay between emptying and filling can be achieved only in situ.114 114
This insight is interesting with regard to the recent development of a dynamic capability view. According to dynamic capabilities, it is not a competence per se that renders competitive advantage but the way it is actualized with regard to changing market conditions and organizational circumstances. Teece et al. (1997: 516, emphasis added) define such capabilities as “the firm’s ability to integrate, build and reconfigure internal and external competences to address rapidly changing environments.” Thus, dynamic capabilities represent firms’ ability to empty competences and to refill the latter according to varying contexts. For instance, while product-related knowledge can be classified as a competence, an organization that possesses dynamic capabilities develops routines to reconfigure this knowledge as markets emerge, collide, split, evolve, and die (Eisenhardt and Martin 2000: 1107). That is why Zollo and Winter (2002: 340) identify dynamic capabilities with the organizational manifestation of learning; they constitute an organization’s systematic method for modifying its underlying competences. Notwithstanding these conceptual advantages, there are also critical aspects that become evident from the perspective of a deconstructed resource/application opposition. First, whereas Teece et al. (1997) tell us what dynamic capabilities are, they tell us nothing about how firms reconfigure their competences. Second, it remains unclear how firms develop dynamic capabilities (Helfat and Peteraf 2003: 997; Moran and Ghoshal 1999: 409). Eisenhardt and Martin (2000: 1107) still conceptualize such capabilities as ‘given’ and argue that one can identify them quite easily. In fact, they argue that “dynamic capabilities can be duplicated across firms” so that a ‘best practice’ exists which all firms can use as a benchmark. If dynamic capabilities are generalizable across firms, they exist in an a priori manner, but not with regard to the specific lifeworld of an organization. The development of competences is as much based on situated learning as the development of the development of competences. If learning is situational, the learning of learning cannot be generalizable.
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Implications of the Discussion of Emptiness and Fullness The outlined supplementary relation between emptiness and fullness as well as our phenomenological interpretation demonstrate that strategy scholars can learn a lot more from deconstruction than the exposure of paradox. To summarize what other scholars can take away from our discussion, we integrate our key points into a short conclusion. The conclusion consists of two parts: (1) remarks on the resource-based view and (2) remarks on the market-based view. Remarks on the Resource-based View: Current theorizing lacks an elaborated understanding of the relation between resources and competences. To discuss this relation, strategy scholars should consider the work of Penrose to a greater extent. According to Penrose (1959/1995), firms do not create value because they possess resources but only due to their effective and efficient use. “Strictly speaking it is never resources themselves that are the ‘inputs’ in the production process, but only the services that the resources can render. The services yielded by resources are a function of the way in which they are used – exactly the same resource when used for different purposes or in different ways and in combination with different types or amounts of other resources provides a different service or set of services. The important distinction between resources and services is not their relative durability; rather it lies in the fact that resources consist of a bundle of potential services and can, for the most part, be defined independently of their use, while services cannot be so defined, the very word ‘service’ implying a function, an activity.” (Penrose 1995: 25)
Competences portray such services, because they reflect an organization’s ability to organize, reflect, co-ordinate, and govern tangible and intangible resources in time-space. This makes competences unique combinations of ‘lifeless’ resources. However, the simple ability to make productive services (i.e. competences) available from resources is not enough. To stay competitive, firms strive for the ability to constantly reconfigure competences. As Penrose (1995: 137) explains: “Even when a firm enters a new field armed with a revolutionary innovation and is able to ward off competition with patent protection or other restrictive devices, it must expect that in time it will be overtaken if it fails to continue to develop its advantage.”
Penrose asks us to think of the services yielded by resources not as something that happens once, but to recognize that constant renewal of these services is part of the competitive process. To conclude, a stronger consideration of the work of Penrose (1995) should make strategy scholars aware that (a) resources are potentials and consequently that (b) the process of re-
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source application and modification should be of greater interest to strategic management than it has been so far. It seems only of secondary importance whether scholars identify ‘quality’, ‘financial strength’ or ‘good relations to the government’ as key resources. Theorizing has to focus on how people generate and reconfigure competences out of these resources. Remarks on the Market-based View: A similar line of reasoning applies to strategic rules that represent the market-based perspective in our treatment of strategy content. Strategy scholars need to realize that managers tend to overestimate the value of strategic rules. As Starbuck and Nystrom (1984: 59) explain, “[m]anagers often get in trouble by trying to follow prescriptions that have been formulated by someone else in a different situation.” Consequently, the work of strategy scholars should not be limited to defining strategic rules, but investigating what people make of these rules, how they make sense of and customize them to fit the idiosyncrasies of their context. Certainly, scholars’ advice to managers should not be that it is unimportant which strategic rule to choose, but that this decision is (a) contingent and (b) only an initiator for strategic sensemaking. From our perspective, these issues deserve more attention in the current scientific debate (for exceptions see Lozeau et al. 2002 and Rigby 2003). Our discussion also shows that the emptiness of strategic rules and resources is not a shortcoming of current theorizing, but a precondition to make them fit into the idiosyncrasies of organizations. From our perspective too few strategy scholars acknowledge the emptiness of strategic rules. Nicolai (2004: 954) argues that the neglect of this insight leads to the impression that knowledge about strategy passively flows from the domain of research to the one of practice. Organizations can adopt the labels of strategic rules (e.g., ‘differentiator’), but their strategic concepts-in-use necessarily differ. This insight has two implications for researchers. First, scholars who research the ‘successful’ application of strategic rules often focus on labels (see for example Marcus et al. 1995) and thus gain the impression that general strategic rules are applied effectively. Second, those who research how consultants introduce general strategic rules can contribute by acknowledging that if organizations possess their own lifeworld, ‘empty’ strategic rules (like the ones introduced by consultants) can at best cause perturbations that lead to organization-specific reactions (see also Seidl 2006). Our comments on the resource-based and market-based perspective are not supposed to imply that strategic rules and resources are unimportant. Consider the example of chess. As a beginner chess player, one finds a variety of books that offer very precise rules, explaining how chess is supposed to be played and even how experienced players can improve their
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performance. Yet the question of how, where, and in which way these rules shall be applied need to remain unanswered and depend on how one makes sense of them. This makes these rules neither unimportant nor obsolete. Managing for the Iterability of Strategy Content
The preceding section discussed the emptiness and fullness of strategic rules and resources as a consequence of their iterability. We argued that if strategic rules and resources really are modified every time they are applied (i.e. repeated), we have to understand the supplementary relation between ‘empty’ strategic rules/resources and their application as a constant movement between emptiness and fullness. Now we must inquire into the ‘practical’ consequences of this discussion. What can organizational members do in their efforts to strategize to consider the more theoretical ideas that were presented throughout our discussion of emptiness and fullness? Of course, there is no checklist-type catalog of recommendations. Nevertheless, there are some issues that can help practitioners not to disregard the issues that have been discussed. To organize the discussion, we distinguish between two sets of ‘practical’ advice. First, we recommend that strategists gain a different understanding of strategy content in general. Second, we advise managers to develop a different understanding of people within developing strategy content. Of course, both sets of advice interrelate and are distinguished for analytical purposes only. A Different Understanding of Strategy Content in General We encourage managers to view their strategy content as being shaped by quasi-experimentation. ‘Quasi’ because we cannot randomly choose strategic rules and resources to define strategy content, strategic rules and resources have substance and to believe that ‘anything will do’ may turn out to be a costly and delusive endeavor. ‘Experimentation’ because we cannot foresee what rules and resources may mean in the lifeworld of an organization. Benders and Bijsterveld (2000: 61) conclude from their empirical observation of the adoption of lean management that the action undertaken in the name of the concept became completely decoupled from the concept’s original intent and were experiments on their own. Likewise, in his empirical study of firms’ adoption of TQM, Zbaracki (1998: 620) argues that many of the TQM efforts looked like experiments. Experiments are usually conducted when facing uncertainty to find out whether something will fulfill the desired purpose. Managers who understand the development of strategy content as quasi-experimentation take uncertainty and the unsaturable nature of contexts serious. They are prepared to corrupt strategic rules
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and resources and see the process of filling as experimentation. These managers neither offer nor accept ‘strategic truths’. One possibility to put strategy as quasi-experimentation into practice is to emphasize the role of stories within strategizing.115 Story-based knowledge integrates the general and the particular and thus allows strategists to experiment.116 Organizational knowledge is often reflected by stories that highlight the discursive and contextualized nature of strategy (Barry and Elmes 1997: 430; Boje 1991a; Weick 1995: 127). Stories provide managers and workers with clues about how to encounter new situations and trigger novel actions that lead to competent modifications of existing concepts-in-use and competences. Allowing stories to unfold helps people to understand the particularities of their lifeworld, since stories reflect “the complex social web within which work takes place and the relationship of the narratives, narrator, and audiences to the specific events of practice.” (Brown and Duguid 1991: 44) Stories are storehouses of past problems as well as diagnoses and thus media by which interpretative schemes are shared (Brown 1997: 349). Listening and making sense of stories go hand in hand with storytelling. Strategists who are able to formulate strategies as convincing stories integrate general knowledge of strategic rules/resources with the idiosyncrasies of a particular context. In this case, stories not only foster but also reflect prudence. Strategizing is about narration, yet narration can also be a strategy. Conceiving strategy as made up of stories that ‘flow’ through the organization allows managers to extend the clarity they may have achieved in one area (e.g., market definition) to adjacent areas that are less orderly. This seems to be of special importance since strategic concepts-in-use and competences affect different parts of the organization. Consequently, their filling occurs alongside a variety of, often unconnected, issues (e.g., R&D and distribution). Based on this, Weick (1995: 128) argues that stories provide cues (viz. indicators) that act as a pretext for updating existing inter115
Other possibilities that put a more practical twist on strategy as quasiexperimentation are: to foster the development of communities of practice (Wenger et al. 2002), to make managers aware of the need to disregard existing defense routines (Stacey 2003: 113), and/or to teach managers that arguing and debating are not an obstacle to the development of strategy content (Weick 1995: 185). 116 The literature on stories and storytelling in organizations is diverse and cuts across a variety of sub-fields (e.g., HRM – see for example Denning 2001; consulting – see Boje 1991b; and change management – see Czarniawska-Joerges and Joerges 1988). It is thus surprising that stories have not made their way into the strategy discourse yet (for laudable exceptions see Barry and Elmes 1997 and Hardy et al. 2000).
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pretative schemes. Communicating strategy by stories and understanding strategizing itself as influenced by stories is more practical than one might think. Usually, people find it easy to relate to stories. Individual life consists of a variety of characters, plots, and scripts, all of which can be found in stories (Fleming 2001: 35). Strategists are not primarily analyzers and decision-makers, but they listen to and present stories that help people make sense of the stream of unexpected events. A Different Understanding of People While Developing Strategies Whereas our remarks on strategy as quasi-experimentation called for a different understanding of the development of strategy content in general, there are also implications that address the role of people more directly. Our remarks on emptiness and fullness reveal the need to highlight the process of application of strategic rules and resources. Nevertheless, this cannot be just any application, but must be a competent application; the interpretation of the strategic rule and resource needs to suit the organizational context. Of course, managerial competency cannot be acquired like some asset. This is not a weakness of our argumentation. On the contrary, it puts the filling of strategic rules and resources where it belongs – in praxis.117 We cannot say all too much about peoples’ competency in praxis, as most of this remains a matter of contextualized, single casebased empirical research (Orr 1996). However, ‘not too much’ does not mean ‘nothing’. One possible way to understand practitioners’ competency in applying strategic rules and resources is to emphasize a ‘competency of forgetting’. As indicated in the preceding section, filling always implies emptying because contexts are not stable (Derrida 2002). Strategic concepts-in-use and competences need to be reworked quite frequently. To rework strategy 117
Speaking with Aristotle (1962), we can be even more precise: the filling of strategic rules and resources is not only a matter of praxis but peoples’ practical wisdom (phronésis) within this praxis. Practical wisdom is about knowing what is good for humans in general and competently applying this knowledge to particular circumstances (Oliver et al. 2005; Tsoukas and Cummings 1997: 665). In terms of strategy, phronésis implies that it is not enough to know about strategic rules and resources, but to have the ability to put them into practice in concrete situations. Phronetic strategizing highlights case-based knowledge and practical rationality, leading to a concern with fine-grained contextual factors that occur in situ (Wilson and Jarzabkowski 2004: 16). We find a similar treatment of practical wisdom in Kant’s Critique of Judgment, where Kant refers to the power of judgment (Urteilskraft) as “not merely the capacity to subsume the particular among the general (whose idea is given), but also in reverse, to find for the particular the belonging generality.” (Kant 1996: 22, translation A.R.)
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content, people need to learn to forget and discredit what they believe. Discrediting emphasizes the need to purposely turn one’s back on what has worked so far. Weick (1993a, 1996b), for instance, argues that firefighters are most likely to get killed in their 10th year on the job, when they think they have seen everything. At that time, they are less open to new information that would allow them to update their interpretative schemes. Typically, discrediting means a refusal to accept a given stock of knowledge as true. Weick (1979: 221, emphasis in the original) even urges managers “to treat memory as a pest!” To discredit concepts-in-use and competences is a vital competence, because already existing interpretations of strategy content tend to be very sticky and are usually reinforced by path-dependent processes (Zbaracki 1998). To practically rethink the role of people requires stating more precisely what practitioners should discredit. We suggest that managers have to discredit their idealized understanding of existing concepts-in-use and competences. To make this understanding somewhat visible, we can turn to the idea of ‘strategy maps’ (Kaplan and Norton 2004; Wright 2001). According to Kaplan and Norton (2004: 45), a strategy map is a visual representation of strategists’ mental pictures of strategy content. Strategy maps explore the manifold relationships that interconnect a company’s objectives. Needless to say, there is not the appropriate strategy map. Indeed, strategy maps are all about filling an empty idea (viz. mapping) with contextualized content. When referring to strategy maps, our focus is not so much on visualizing strategy for the sake of it, but to highlight that the very activity of mapping enables people to see new conclusions and thus helps them discredit what they believe to know. Discrediting makes the point that anything that is done to a strategy map can also be undone to change it. By discrediting strategy maps we do not mean that people have to refuse a strategy map altogether. Rather, people need to question the accuracy and reliability of their understanding of concepts-in-use and competences. After all, doubt means tolerance for novel perspectives raised by outsiders.
6.4 A Résumé – The Neither/Nor of Strategic Realities What can be concluded from the deconstruction of strategic realities with regard to strategy context, process, and content? Each of the three deconstructions shows that (a) many authors have neglected a paradox so far, a paradox that shows that the identified dominant logics (i.e. the ‘necessity of adaptation’ with regard to strategy context, the ‘primacy of thinking’ with regard to strategy process, and the ‘fullness of strategic rules and re-
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sources’ with regard to strategy content) are aimed at an impossibility; and that (b) based upon this impossibility, we can reconceptualize research with regard to strategy context, process, and content in a way that considers paradox as a limit to our reasoning yet does not conclude impossibility, but rather demonstrates supplementarity. In this sense, each deconstruction has ‘destroyed’ something (i.e. a dominant logic) and created something new (i.e. a supplementary relation). That is why the term ‘deconstruction’ is itself made up of the words destruction and construction. Figure 33 outlines this relationship between destruction (i.e. creating strategic realities because of paradox) and construction (i.e. creating strategic realities despite paradox) with regard to our own structure of analysis.
Fig. 33. The Deconstruction of Strategic Realities
As depicted in Figure 33, we started each deconstructin with a discussion of a blind spot. Indeed, we suggested that the exposure of these blind spots is a precondition for discussing the paradoxes. Because of these blind spots, the dominant logics could not see that they could not see paradox. With regard to strategy context, we demonstrated that, since strategizing means complexity reduction (see also section 2.1), organizations only face a construction of the environment (because they sort alternatives out). Yet, if this is true, organizations have no reference point for adaptation anymore. With regard to strategy process, we illustrated that strategizing means to prepare a firm for the unknown. However, because of the contin-
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gency of social life, we can never entirely grasp the future. If the future remains necessarily uncertain, we cannot fully justify the premises of strategic decisions prior to implementation. With regard to strategy content, we argued that strategic management is supposed to make firms different form their competitors. However, firms can only make themselves different if they consider the idiosyncrasies of their context – a context that is always unbound. Because contexts are unbound, generalizations are less likely to be possible. Overall, we discussed the concepts of ‘complexity’ (strategy context), ‘contingency’ (strategy process), and ‘the unboundedness of contexts’ (strategy content) from Derrida’s perspective. As a next step, we used the insights from the discussion of the blind spots to expose paradoxes. Each paradox demonstrates that the metaphysics of presence that the dominant logics try to establish is impossible to achieve; there is no origin from which our reasoning can safely unfold. Concerning strategy context, we argued that companies cannot regard the environment as existing despite them but need to do so for adaptation to occur. This, of course, is a consequence of the recognition of complexity; without the insight that strategic management reduces complexity, we cannot accept that organizations just face a construction of their environment. Concerning strategy process, our discussion of contingency revealed that, strictly speaking, strategy formulation cannot precede implementation because the meaning of the underlying decision premises is fixed in the course of action. In consequence, strategic decisions are necessary, if they are impossible to (fully) justify. For implementation to come about there needs to be strategy formulation. Yet the meaning of a formulated strategy does not exist without implementation. Concerning strategy content, our discussion of the unlimited nature of contexts showed that generalizations with regard to strategic rules and resources are impossible. In fact, to generalize means to be able to perfectly repeat a rule or resource. But because contexts are not determinable, such perfect iterations are unachievable. Indeed, every repetition of a strategic rule or resource brings about a modification. After we discussed the paradoxes, we demonstrated that the impossibility that each paradox brings about does not imply ‘the end of strategic management’. On the contrary, we argued that the impossibility occurs as impossibility only if we try to get to the bottom of existence by demanding an objective strategic environment (strategy context), a final justification of a strategic decision (strategy process), or a pure iteration of strategic rules and resources (strategy content). Based on this insight and the remarks in chapter five, we demonstrated how scholars and practitioners can deparadoxify the apparently impossible situation. In fact, we made use of
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one particular way of deparadoxification: the temporalization of paradox via fictions. Scholars and practitioners get around paradox (most often in an unnoticed way) by acting as if their constructed environment provides a point of reference (strategy context), as if their justification of the strategic decision is fully valid and thus able to inform strategy implementation (strategy process), and as if their interpretations of strategic rules and resources somehow correspond to their generality (strategy content). These As Ifs endow strategy scholars, but most of all practitioners, with a nonmetaphysical ground from which further theorizing can unfold. This ground is non-metaphysical because it rests upon rather ‘naïve’ assumptions, but no final truths. Based on these deparadoxifications, we outlined detailed implications for ‘theory’ and ‘practice’. We argued that Derrida’s (2003a) supplementary logic cannot only be used to discuss paradox, but also to show the recursive linkage between the poles of the underlying oppositions (i.e. environment/organization with regard to strategy context, formulation/implementation with regard to strategy process, and strategic rules and resources/application with regard to strategy content). Starting from the belief that each supplementary relationship becomes in principle possible because of the As If that displaces the paradox, we illustrated how strategy context, process, and content can be reconceptualized as resting on supplementary relationships. To describe these relationships, we offered undecidable terms (i.e. ‘framing’ for strategy context, ‘improvisation’ for strategy process, and ‘iterability’ for strategy content). Regarding strategy context, framing shows that the environment depends as much on the organization as the organization depends on the environment. Concerning strategy process, improvisation works against the Cartesian split between mind and matter. Not only are strategy formulation and implementation deeply intertwined, they also exist in a mutually supportive way. With regard to strategy content, iterability points out that strategic rules and resources are in some way repeatable, however when repeated also change and distort their meaning. Iterability moves strategy content beyond a Newtonian fixation obsessed with causal logic and general laws to argue that it is more important what people do with given strategic rules and resources – how they make use of their potential – than which rule or resource is considered to be of importance. These undecidables move theorizing from an either/or to a neither/normentality revealing the unity of the differences those prominent oppositions consist of. Strategic realities, both in ‘theory’ and in ‘practice’, constantly face this undecidable nature. Undecidables disrupt the oppositional logic, which is fundamental to hierarchical structures; they skim across
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both sides of an opposition but do not appropriately correspond with either; they exceed the clearly defined boundaries of the oppositions and challenge the very tenets of metaphysical thinking. While for Derrida undecidable terms remain unresolved concepts that illustrate the contradictions inherent to any kind of determinism, we have shown that there is a way to acknowledge these contradictions, not to finally resolve them, but to use them as a limit for strategic reasoning in order to consider strategizing as a relentless oscillation between the poles of oppositions. As academics, we should have the sovereignty to draw our distinctions in favor of undecidables, because “[w]ords of this type situate perhaps better than others the places where discourses can no longer dominate, judge, decide: between the positive and the negative, the good and the bad, the true and the false.” (Derrida 1995b: 86, emphasis added)
7
After Derrida! – Strategy-as-Practice
Having discussed the deconstruction of strategic realities with regard to strategy context, process, and content and outlined detailed implications of our analysis, we now show how our remarks can be connected with the most recent research in the field of strategic management. This is important because scholarly work in general, and a critical study in particular, needs to be accessible to other researchers; others have to be given the opportunity to relate similar pieces of work to the key conclusions of a treatise. Because the three deconstructions underscore the significance of situated managerial activity, we relate the implications of our study to the recent discussions of a practice perspective on strategy (Jarzabkowski 2005; Johnson et al. 2003; Whittington 2002a, 2002b). Of course, the deconstructions in chapter six already point to the importance of practice. Yet what is different – and this is where chapter six and seven vary – is a systematic discussion of strategy practice by embedding our remarks in an existing research framework. We start by demonstrating how the deconstruction of strategic realities leads to practice-based strategy research (section 7.1). Because scholars in the social sciences have discussed the term ‘social practice’ with regard to a variety of notions, we offer a definition that can inform strategy research (section 7.2). Based on our discussion of the term ‘social practice’ and in consideration of existing conceptual work regarding Strategy-as-Practice, we outline a research framework that contains a taxonomy of terms scholars can use to study strategy from a practice perspective (section 7.3). We move on with an exemplary application of this framework and demonstrate how it helps us to understand one particular phenomenon (i.e. communities of strategy formation), which is of relevance to Strategy-as-Practice (section 7.4). Finally, we give a short conclusion of what it means to do strategy research ‘After Derrida’ (section 7.5).
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7.1 From Deconstruction to Strategy-as-Practice When looking at the deconstruction of strategy context, process, and content, there is one common issue running through all discussions: the importance of the situated activity of people (see Figure 34). In the following, we distinguish mere human activity (praxis) from social practices. Practices are routinized patterns of activity while praxis represents the whole of human action (Jarzabkowski 2005: 8). In consequence, the practices that organizational members perform are embedded in praxis (see also sections 7.2 and 7.3). In which sense do strategy context, process, and content refer to social practices that are embedded in in praxis? The deconstruction of the ‘necessity of adaptation’ (strategy context) makes obvious that, far from being determined by the environment, strategists actively influence and shape what they subsequently perceive as their relevant environment. Strategy context is influenced by what people do; enacting strategy context is not something passive but an activity. What we label ‘environment’ and ‘organization’ are constructed in the social practices that people perform. Regarding strategy process, the deconstruction of the ‘primacy of thinking’ points to the importance of conceiving strategy formation as a stream of improvisations within issue streams. Improvisation shifts the focus from understanding the strategy process as a macrolevel phenomenon, assembled by formulation and implementation, to a micro-perspective highlighting the importance of the everyday doings of people. To conceptualize strategy as improvisation implies that strategy formation does not merely happen at the desk of the CEO, but is a constant process of reworking strategic fictions within the social practices that people perform. Again, the focus is not on conceptualizing some abstract process model that is remote from managerial activity, but to explore the detailed and situated activities that reflect what actually gets done in the everyday work of strategists. The deconstruction of ‘the fullness of strategic rules and resources’ (strategy content) demonstrates that strategic rules and resources gain meaning (i.e. are ‘filled’) in the process of application. Focusing on application implies centering attention on the daily activities through which people make their strategy content meaningful. To make strategy content meaningful is not a passive operation, but only happens in and through activity (i.e. the strategy practices in praxis). Strategists act, and in doing so create the material that they use for sensemaking; it needs the situated actions of people to create meaning, not merely a process of thinking. Once again, the center of attention is on the contextualized doings of people that bring about strategic concepts-in-use and competences.
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Fig. 34. From Deconstruction to Strategy-as-Practice
If we look for a common ground regarding the deconstruction of strategy context, process, and content, we can suggest that they highlight the need to study strategy as an activity, something that people do in the social practices they perform. This insight is in line with the findings of strategy scholars who have recently called for the development of a ‘practice perspective on strategy’ (Jarzabkowski 2005; Johnson et al. 2003; Whittington 2002a, 2002b). Consequently, we suggest treating the deconstruction of strategic realities as one possible theoretical approach to give emphasis to the need for a practice perspective on strategy.118 Deconstruction uncovers the need to study strategy practices in praxis in order to explore the detailed processes of organizational life that relate to strategic outcomes (Johnson et al. 2003: 3). To take the implications of a deconstructive analysis seriously, scholars have to ask what situated practices people perform when they strategize, where they do this, when they do this, which organizational members are involved, and, most important, how such practices are performed. Answering these questions implies shifting focus from a perspective concerned with the problem ‘Why do we do strategy?’, which resulted in a plethora of models about competitive advantage, to address the question ‘What do we do when we strategize?’.119 118
Other possibilities to underscore the need for a practice perspective on strategy are discussed by Whittington (2002b), who refers to Giddens’s (1984) structuration theory, and Jarzabkowski (2004), who refers to de Certeau’s (1988) theory of everyday life. 119 Understanding strategy as consisting of practices occurring in praxis does not imply merely focusing on strategy process issues, as the word practice might indicate. Traditional process research focuses on the organization as a whole and is less concerned with related managerial activity (Whittington 1996: 732).
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What are the contributions of a practice perspective on strategy? First, a focus on strategy practices allows us to study strategy in its micropolitical and historical context to pay attention to existing power relations and the identities of the actors involved (Knights and Morgan 1991). Second, Strategy-as-Practice allows us to refocus research from cross-sectional macro-analyses, in which firms are treated as black boxes, to concentrate on the ‘real work’ of people. In pursuit of their aims, strategists engage in a variety of practices that are worth studying. Third, and from the perspective of this study probably the most important contribution, to research Strategy-as-Practice disregards the opposition between strategy process and content. As indicated in chapter two, strategy context is usually not seen in opposition to process and content, since process and content cannot be meaningfully investigated without any reference to context (et vice versa). Nevertheless, strategy process and content research are often conceptualized as an opposition (Ketchen et al. 1996; Moore 1995). From the perspective of Strategy-as-Practice, both the formation of strategy (process focus) and the outcome of strategizing (content focus) occur in and refer to practices. Certainly, scholars can focus their investigation of strategy practices on either content or process issues. Nevertheless, whenever one is studying the improvisations that happen within the strategy process, one is also studying the enactment of strategy content. To conclude, deconstruction is one perspective which shows that the question ‘What constitutes a winning strategy?’ is not answerable in principle, but only with regard to the situated practices of people. We cannot eliminate the difficulties of defining competitiveness by gathering more cross-sectional data about entire companies, but need to start studying what strategists do, how they do it, and in what situations they do it. Like in medicine, where no practitioner or researcher can make meaningful statements without some knowledge of anatomy, strategic management should take its anatomy more seriously. Yet, to explore the anatomy of strategy, we first need to know what represents a social practice in general to then discuss strategy practices in particular.
7.2
Social Practices! – What!s in a Name?
As indicated in the previous section, social practices occur in praxis. Whereas the notion of praxis is fairly easy to understand, since it merely incorporates the flow of human activity, the concept of practices within this praxis deserves some explanation (Jarzabkowski 2005: 8). If social practices are important to strategic management, we need to know what a
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practice is. Rouse (2001: 190) observes that this question arises with some force because of the diversity of issues included under the term. Although Derrida’s work, when applied to strategic management, points to the importance of a practice perspective, he never explicitly discussed the concept of ‘practice’. That is why we have to turn to authors who have defined the term ‘practice’. We find such authors in a stream of research that is often classified as ‘practice theories’ (exemplary see Barnes 2001; de Certeau 1988; Giddens 1979, 1984; Latour 2005; Schatzki 2001, for an overview see Reckwitz 2002). Based on these authors, we describe an idealized conception of practices. To organize the discussion, we discuss two aspects of practices that are relevant to our discussion of strategy practices later on: (1) their regularized yet situated character and (2) their socially recognized nature. First, regarding their regularized and situated character, Giddens (1976: 75) characterizes practices as “regularized types of acts.” Practices are regularized types of behavior – repeated (routinized) patterns of activity. For instance, practices are regularized ways of consuming, learning, working, or strategizing. Whereas regularized means repeated and repetition always refers to a certain sense of generalizability, our discussion in section 6.3.3 showed that repeatability implies modification over time. Practices are shared patterns of behavior that are repeated over time and occur as situated activities that are bound to the idiosyncrasies of a situation (Giddens 1979: 54). Second, concerning the socially recognized nature of practices, Barnes (2001) argues that practices are socially recognizable forms of activity. This is not to say that a single person cannot carry out a practice, but that even individually performed practices connect the person with the underlying macrosocial structure (Giddens 1979: 56). The socially recognized nature of practices is inseparable from the question of whether practices represent shared phenomena. Take the following examples: a strategist who regularly prepares a PowerPoint presentation for the monthly strategy review is conducting a practice; a team of managers meeting every Friday afternoon in the cafeteria to discuss and reflect on what has happened in the previous week also follows a practice. Is the first practice, which is carried out solo, no practice at all? Barnes (2001: 21-26) discusses this question and suggests that, while it is true that some practices are carried out in isolation, all practices have a shared character. This is because in order to prepare the presentation, the strategist needs to have learned what goes into the presentation, s(he) needs to be sensitive to what other practitioners are doing, and s(he) must continuously interact with fellow participants to
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factor in the changing nature of the practice itself. As Barnes (2001: 26) explains: “It is only through the interaction of a membership characterized by mutual intelligibility and mutual susceptibility that something identifiable as a shared practice can be sustained.”
The only difference between these two exemplary practices is that in the second example the interactions for the maintenance of the practice are more concentrated and immediately apparent, while in the first example interactions are more spread out.120 Based on these two characteristics, we define a practice as a socially recognized, repetitive but situated pattern of activity in which bodies are moved, objects are handled, subjects are treated, things are described, and the world is understood (see also Reckwitz 2002: 250). Practices are sets of regularized but situated bodily performances that are intertwined with ways of understanding the world. Consider the practice of playing soccer, which requires body movements (e.g., running and kicking) as well as certain interpretations (e.g., of the rules of the game). The definition also points to the importance of things (objects) that are used when carrying out a practice. Conducting a practice often implies handling objects in a specific way (e.g., a ball in soccer). The proposed definition of a practice is useful in that it allows us to discuss more precisely how strategy context, process, and content ‘happen’ in practices (see section 7.3). It also emphasizes more clearly that there is a difference between ‘practices’ (i.e. shared routines of behavior) and ‘praxis’ (i.e. the, often uncoordinated, flow of activity, Whittington 2006: 619).
7.3 Strategy-as-Practice – Towards a Framework We have shown that deconstruction calls for a systematic discussion and consideration of peoples’ practices that carve out strategy context, process, and content (section 7.1). We have also looked at selected insights from the practice-based literature to find a definition for the term ‘practice’ (sec120
The social character of practices is also emphasized by Schatzki (2001: 3) who argues that practices can be types of discursive activity. Language, then, characterizes social practices, because what is done is inseparable from what is said. In a late Wittgensteinian sense, Giddens (1979: 4) claims that “[l]anguage is intrinsically involved with that which has to be done: the constitution of language as ‘meaningful’ is inseparable from the constitution of forms of social life as continuing practices.” (emphasis in the original) See also the discussion by Reckwitz (2002: 254-255) and Yanow and Tsoukas (2005: 5).
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tion 7.2). In this section, we draw upon this definition to outline a conceptual framework that will allow us to study strategic management as a phenomenon that is based on practices in praxis (Jarzabkowski 2003; Johnson et al. 2003; Pye 2005; Whittington 2002a, 2004). To research strategy as a social practice, we need a taxonomy of terms and concepts that enable us to better understand what a strategy practice is and how it relates to the work of strategists. In the following, we introduce a classification scheme to guide research that takes the idea of Strategy-as-Practice seriously. By doing so, we aim primarily to advance future theorizing ‘After Derrida’ in the field of strategic management. To do so, we must ask: How can we research strategy as a practice? A good point of departure for discussing this question is Whittington’s (2002b) distinction between strategy praxis, practices, and practitioners. Strategy praxis is what is actually done, i.e. the work of strategizing in organizations. The praxis of strategists consists of formal and informal strategic activity that is reflected for instance by strategy meetings, top management away-days, strategy reviews or lunch break conversations. Unlike social practices, which pertain to a pattern in a stream of activity, strategy praxis describes the whole of human action with regard to strategy. Of course, as Jarzabkowski et al. (2006: 6) remark, the notion of strategy praxis alone is too sweeping and ambiguous to come up with meaningful research results. One needs to identify further analytical points to concretize what happens within strategy praxis. The concept of strategy practices is useful in substantiating the rather broad nature of strategy praxis. Strategy practices are the ‘done thing’, in the sense of repeated patterns of activity with regard to a specific aspect or issue of strategy. In other words, within their strategy praxis, practitioners draw upon strategy practices to construct what is then perceived as a firm’s strategy. Strategy practices can be derived from the larger social fields in which an organization is embedded (e.g., consultants promote ‘empty’ strategic concepts or there are certain industry-specific practices such as routines of environmental scanning, Porac et al. 1995). Yet strategy practices can also be developed by an organization without any formal reference to institutions ‘outside’ the firm. Jarzabkowski (2003) suggests that strategy practices are habitual operating procedures. In her empirical study of three UK universities, she identifies three exemplary practices: direction setting, resource allocation, as well as monitoring and control. Even though other firms may have similar practices in place, the organizations that Jarzabkowski (2003) studied did not derive these practices from ‘out-
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side’ but developed them out of the ongoing flow of strategy praxis.121 Strategy-as-Practice research is not focused on these practices per se but investigates how organizations put them into use. The issue is not whether a firm has a strategy practice, but what it does to make this practice ‘alive’. Jarzabkowski (2005: 10), for example, quotes the strategy director of a telecommunications company who discusses the use of the Value Chain Analysis (i.e. a strategy practice that this company adopted): “It’s linear and really what we are dealing with isn’t like that. It’s more of […] a square or something, many more connections to take account of and not linear like that. But value chain’s handy. People recognize that. You know, you put up the five or six boxes in an arrow and it makes sense. It’s a communication thing.”
This quote indicates that the use of the practice is at least as vital as the practice itself. Strategy practices are enacted over time; they are altered according to the uses to which they are put and thus not only transform themselves but also the wider field of strategy praxis (de Certeau 1988; Jarzabkowski et al. 2006). Strategy practitioners are the doers of strategy, the strategists. Formally, the top management team and its advisors reflect this set of practitioners. Managers participate in a diverse set of activities – some of which have the character of practices and some of which refer to strategy. Usually, much strategizing is about interaction and collaboration since knowledge of strategy is too multifaceted for an individual to cover. While the work of senior executives is quite well understood (Hambrick 1989; Pettigrew 1992b), the work of strategy consultants and informal participants (e.g., middle management or in-house strategy staff) has received little attention. 121
Whittington (2002b: 3-4) argues regarding strategy practices that “[a]t the enterprise level, these might be the routines and formulae of the formal strategy process, laid down in corporate cultures; at the wider societal level, these strategy practices might be the working through of accepted analytical tools, or even due notions of appropriate strategy-making behavior, as promulgated by legislation, business schools, consultancies or model firms such as General Electric.” To not confuse praxis with practice, we should be aware that aspects of strategy praxis could become practices. For instance, an informal lunch break meeting about a particular domain of interest that becomes institutionalized can become a valuable strategic practice. Strategy praxis represents the whole of human action regarding strategy in and between organizations, whereas strategic practices are routinized patterns of activity within this praxis. As strategists follow these practices, they reproduce and modify their existing stock of practices on which they draw in their next round of strategizing praxis (Whittington 2002b, see also Whittington 2006: 620).
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Strategic management would benefit from a much broader definition of the term ‘practitioner’. From our perspective, practitioners are those people who make strategy in their activities, often, but not exclusively, by drawing on strategy practices. Figure 35 relates strategy praxis, practices, and practitioners and depicts a conceptual framework to study Strategy-asPractice.
Fig. 35. A Conceptual Framework for Analyzing Strategy-as-Practice (adopted and modified from Jarzabkowski et al. 2006: 8)
As illustrated in Figure 35, what we label Strategy-as-Practice occurs at the nexus between strategy praxis, practices, and practitioners. It is unfeasible to fully isolate any of the three elements in order to study them ‘just on their own’, however, because empirical research needs to be focused it is likely to relate to a combination of the elements instead of addressing them altogether (indicated by the categories A, B, and C in Figure 35). Based on this framework, we now discuss possible routes of research that are likely to occur with regard to Strategy-as-Practice and also highlight how existing strategy research already informs this emerging agenda. Strategy Practitioners and Strategy Practices (A): Research in this direction foregrounds the practitioners and the practices that s(he) uses in the doing of strategy. Studies that reach in this direction ask, for example: What kinds of practitioners are influential in transferring and applying strategy practices? Samra-Fredricks (2003: 149) examines how one practi-
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tioner succeeds in convincing his colleagues of a new strategic direction by referring to the rhetoric of portfolio analysis (i.e. transforming operations from a ‘cash cow’ back into a ‘star’). This study shows that language is an undervalued resource when it comes to understanding how people use strategy practices. The link between strategy practices and practitioners not only highlights the need to research how actors make use of strategy practices in general but also how practitioners shape these practices through who they are and what resources they draw upon. Who a person is and how this person identifies her/himself is innately linked to how that person acts and makes use of strategy practices. After all, the relation between strategy practitioners and strategy practices can also be investigated in the reverse direction: the use of strategy practices also influences the personal identity of practitioners since certain aspects of a practice (e.g., ‘downsizing’ when following a divestment strategy) can influence how a person thinks of her/himself. Strategy Practices and Strategy Praxis (B): Investigations that examine how strategy practices and praxis influence each other can follow two lines of reasoning. First, it is possible to research how standard practices (e.g., predefined planning procedures) impact the strategy praxis within organizations (Regnér 2003; Whittington 2006). In his empirical study of eight oil companies, Grant (2003: 507) finds that the highly formalized planning practices that were used in the 1970s and 1980s are increasingly replaced by more informal discussions. While there are still planning systems (i.e. strategy practices), the impact of these systems on everyday strategy praxis has changed considerably Second, it is possible to investigate how strategy practices emerge from the undifferentiated strategy praxis in organizations. Jarzabkowski and Wilson (2002), for instance, empirically show that strategy practices often emerge from situated strategy praxis. Their longitudinal perspective of strategizing within a university demonstrates how strategy praxis was strongly grounded in embedded strategy practices (e.g., direction-setting routines) which had case-specific meanings. These practices became accepted as the known ways of doing strategy and acting strategically within the context of the university. As Whittington (1996: 732) remarks, “knowing the ‘done thing’ [i.e. the practices] locally is essential to be able to get things done.” (annotation added) Strategy Praxis and Practitioners (C): The relation between strategy praxis and practitioners’ activity within this praxis is best described by referring to Weick’s (1979, 1995) sensemaking approach. The question is how practitioners make sense of their daily strategy praxis and in what way this is consequential for the firm. Not surprising, most studies that focus on the interplay of strategy praxis and practitioners’ role within this
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praxis refer to sensemaking theory. Rouleau (2005), for instance, describes how middle managers produce mental models out of their daily strategy praxis and how this process is anchored in their existing knowledge about strategy praxis. Rouleau’s (2005) study demonstrates how practitioners assign meaning to the undifferentiated stream of experience that their strategy praxis is about. For example, the study illustrates how middle managers make sense of the firm’s new strategic orientation in daily informal conversations and more formal strategy meetings. In a quite similar way, Balogun and Johnson (2005, 2004) study how middle managers make sense of a top-down strategy initiative. Their findings exemplify that practitioners’ everyday experiences (i.e. their strategy praxis) and the gossip, stories, jokes, and conversations they share with their peers about these experiences modify the intended top-down initiative and lead to unintended outcomes. To conclude, the discussion of the framework shows that selected pieces of existing empirical strategy research contribute to our understanding of Strategy-as-Practice. Even though the clarity that is achieved by the different areas (A, B, and C) is of a more analytical nature and does not enable us to ‘pack’ research into ready-made boxes, the framework fosters orientation and shows which questions can be discussed by future research. Discussing these questions means taking the consequences of deconstruction seriously. Practice-based strategy research considers deconstruction in that it proposes that strategizing is neither ‘abstract’ nor remote from what people are doing, but rather that strategy happens in what people do. Strategy context, process, and content are shaped through the interplay of strategy praxis, practices, and practitioners. Regarding strategy context, the framing of organization and environment often happens in well-established strategy practices (e.g., framing effects occur while resources are allocated and budgets are discussed). Concerning strategy process, the numerous formal and informal strategic meetings/workshops/conversations that make up improvisational strategy represent strategy praxis and can eventually become institutionalized strategy practices (e.g. a routinized lunch break conversation can turn out to be a practice). Regarding strategy content, many ‘empty’ strategic rules represent strategy practices that are adopted and modified by practitioners (Whittington 2002b). In a similar way, competences are usually conceptualized as routinized behavior occurring in praxis (Teece et al. 1997: 516). Considering the limited amount of research, the Strategy-as-Practice field has to be opened up to new conceptual thoughts within the outlined research fields (A, B, and C) as well as empirical testing of these ideas. To outline one possible particular and exemplary conceptual idea, we discuss
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the notion of ‘communities of strategy formation’ in the next section.122 Research on such communities can be located in section A of Figure 35 since it primarily links strategy practices with the work of practitioners. Communities of strategy formation allow us to study more precisely how strategy practices are shared and reflected upon. The idea of communities of strategy formation is based upon the widespread literature on communities of practice (Brown and Duguid 1991; Lave and Wenger 1991; Wenger 2004) that represent ‘loci’ where practices are shared, elaborated, advanced, and eventually modified.
7.4
Communities of Strategy Formation!
If we look at the interplay between strategy practices and practitioners, there is need to explore how practitioners share and develop strategy practices. This is especially important from the perspective of deconstruction, since the remarks on strategy context, process, and content revealed that strategic activity in praxis (and its performance in particular practices) is constantly reworked. The question is: Where are strategy practices reworked? To rework a practice there needs to be reflection and an exchange of experiences. But where does this exchange occur? So far, Strategy-asPractice scholars have paid little attention to this research question. The following remarks attempt to fill this research gap by outlining the conceptual idea of ‘communities of strategy formation’. The focus on strategy practices and practitioners (section A in Figure 35) does not imply that research on communities of strategy formation has nothing to say about strategy praxis, but that the focus of inquiry is on the (re)construction and sharing of practices by practitioners. Our idea of communities of strategy formation rests upon the more general thought that ‘communities of practice’ represent informal, contextualized loci where practices are shared and reflected upon. The term ‘community of practice’ implies “participation in an activity system about which participants share understandings concerning what they are doing [i.e. which practices they follow] and what that means in their lives and for their communities.” (Lave and Wenger 1991: 98, annotation added) Communities of practice are the social fabric of knowledge (Wenger 2004: 1). Here, we focus on knowledge about strategy. Communities are groups of 122
Other areas that have not yet gained sufficient attention in the Strategy-asPractice research community are: (1) the way practitioners are prepared for strategy praxis (relating to section C in Figure 35) and (2) the way existing strategy practices are abandoned (relating to section B in Figure 35).
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people who share a passion for a bundle of practices and who interact regularly to learn how to do them better; they refer to informal social structures whose members are bound to what they do together “from engaging in lunchtime discussions to solving difficult problems.” (Peltonen and Lämsä 2004: 253) The informal character underscores the self-organized nature of communities of practice. Although communities can be ‘cultivated’ (Wenger et al. 2002) and supported in their work, their informal character makes us think of a world that is messy and constantly evolving. Communities of practice are composed of people who interact on a regular basis around a common set of issues, interests, or needs that are reflected by their work practices. To relate the basic idea of communities of practice to strategic management and to show what communities of strategy formation are about, we discuss communities of strategy formation as relating to three core elements of the Strategy-as-Practice agenda: a strategy praxis with regard to which a community of practitioners shares strategy practices. The praxis creates a common ground and identity for a community. When discussing communities of practice with regard to strategy, this praxis is, of course, strategic activity. In strategy, and in most other generic fields (e.g., innovation management), the praxis is likely to be clustered. Accordingly, there is not ‘the’ community that is concerned with strategy practices, but a variety of communities addressing different practices. The praxis guides the questions practitioners ask while being in the community. Within the community of practice literature, practices denote a set of regularized and socially defined ways of doing things (Wenger et al. 2002: 38, also section 7.2). Practices that are shared by members of a community refer to patterns of behavior necessary for doing strategy (e.g., with regard to a strategic concept) reflected by the stories, cases, and documents that practitioners possess. The last structural element, the community of practitioners, reflects the need for members to interact regularly on issues important to their praxis. A community, as Wenger et al. (2002: 34) remark, is not just a website or a database. It is a group of people who interact, learn, build relationships, and develop their knowledge about the domain in general and the practice in particular. Interaction does not necessarily mean face-to-face conversations, although according to Wenger et al. (2002: 34) direct conversations are necessary to sustain the community over time, but can also be based on teleconferences or regular document sharing. Members of the community do not necessarily need to be formal strategists but often represent line functions. In strategy, this approach can be very useful since strategic management is usually considered to be detached from the actual work of
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people. A community, then, can bring together formal strategists’ knowledge and ‘common’ managers’ experience of a strategy practice. Our description of communities of strategy formation shows that such communities represent loci where strategists reflect, advance, and learn about their practices. Whereas the practice itself is usually performed in the everyday strategy praxis, a community enables practitioners to share experiences and extend their ideas about this practice. Take the example of the Balanced Scorecard, which represents a standardized strategy practice used by many organizations. While most practitioners, who are either directly or indirectly concerned with the practice ‘Balanced Scorecard’, undertake the implementation of the concept within their department, a community is the place where these people share experiences, learn from each other, eventually modify the practice, fill it with new meaning, and begin to abandon outdated interpretations. Communities ‘host’ mostly informal discussions about practices: they give practices shape and continually serve to recreate knowledge associated with practices.123 As indicated at the beginning of this section, the idea of communities of strategy formation fits particularly well with the implications of a deconstructive analysis. Regarding strategy context, communities reflect practitioners’ enactment of the environment. Because communities emphasize interaction, interpretation, and the ongoing processes of sensemaking and storytelling of those who participate in the work-in-progress, they help 123
If communities are mostly informal, there is the question of whether and how management can do anything about their existence. Aware of the limitations ‘to manage’ a community of practice, Wenger et al. (2002: 49) suggest ‘cultivating’ communities instead. Cultivating means designing for aliveness, not by dictating formalized structures, but by bringing out the community’s own internal direction and character. Cultivating a community implies guiding this institution to realize itself to become ‘alive’. As Wenger et al. (2002: 53) state, “’[a]live’ communities reflect on and redesign elements of themselves throughout their existence.” To design for aliveness, managers can ensure that the community has sufficient resources (e.g., time and technological infrastructure) and they can stimulate discussions within the community by bringing in information from outside the community. Instead of forcing participation, cultivating a community means providing opportunities for interaction and participation to keep the peripheral members connected. Communities of strategy formation, like any other community of practice, are living things that cannot be deliberately designed in a formalized way without risking their existence. For an indepth discussion see Wenger et al. (2002: 49-64) as well as Wenger (2004). The discussion about how to cultivate communities of practice, which are selforganized systems, could also benefit from perspectives that consider autopoietic systems thinking and its implications for management practice (for an overview see Bakken and Hernes 2003).
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strategists to enact their environment. As Brown and Duguid (1991: 52) explain, communities are “continually developing new interpretative schemes of the world because they have a practical rather than formal connection to the world.” These interpretations are constructed through circulating stories that shape the meaning of an organization’s environment. A competitor or regulation may be seen from a different angle when experiences are shared, stories told, and interpretative schemes updated. Concerning strategy process, communities retain knowledge in living ways and understand learning as a task of improvising around practices in praxis (Peltonen and Lämsä 2004: 255). In communities, learning about strategy practices is about improvisation. There is no predescribed way according to which communities have to function: strategists interact and thus act their way into understanding. Hence, we can think of the gathering of communities of strategy formation as parts of the wider strategy formation process.
Fig. 36. Communities of Strategy Formation and Deconstructive Analysis
With reference to strategy content, we suggest that a large degree of the filling of empty strategic concepts and the development of competences happens in these communities. A community concerned with the Balanced Scorecard or Lean Management informally shares knowledge about these practices and thus fills them with situation-specific knowledge. Likewise, competences can be developed and advanced within such communities (Ortmann 2005b). Communities of strategy formation support the filling of concepts and enable strategists to reflect on the development of competences because they promote situated learning (Brown and Duguid 1991: 47). Learning in communities is situational in the sense that practitioners learn with regard to local conditions and in informal ways (e.g., by sharing
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stories). The central issue in situational learning is not that somebody learns about a practice but within the practice that a community shares. Figure 36 depicts the contribution that communities of strategy formation make to a deconstructed world of strategy research. To conclude, communities of strategy formation occur where practitioners feel the need and have the passion to share and reflect upon strategy practices. The observations of Wenger et al. (2002), Orr (1996), and Tyre and Hippel (1997) show that communities are not just a ‘theoretical’ phenomenon but can be empirically investigated in a meaningful way. With regard to Strategy-as-Practice, the studies of Nocker (2005), who researched the collective strategizing by a project community, Jarzabkowski and Wilson’s (2002: 357) empirical observation of a community in the context of a university, and Hendry’s (2000) empirically grounded conceptualization of strategic decisions as discourse within a community of practitioners, provide evidence that communities of strategy formation exist. Although these pieces of work can be interpreted as resting on the idea of communities of strategy formation, they are not based on a conceptual frame. The outlined conceptual idea of communities of strategy formation can thus inform future empirical investigations by providing a more explicit link between the literature on communities of practice and Strategyas-Practice.
7.5 Doing Strategy Research After Derrida! Against the background of this study, Strategy-as-Practice is yet another strategic reality. To view strategy as consisting of practices in praxis reflects specific assumptions regarding the nature of strategy. In fact, this strategic reality conceptualizes strategy “as socially accomplished activity, constructed through the actions, interactions and negotiations of multiple actors and the situated practices that they draw upon.” (Jarzabkowski et al. 2006: 4) To conceive Strategy-as-Practice gives reference to the role of deconstruction. Like deconstruction, which is never passive but always about an active intervention into existing structures (Derrida 1995b), strategy is about activity; it is an active involvement in the flow of organizational activity to prepare a firm for the unknown. Doing strategy research ‘After Derrida’ assumes that strategy is not something organizations possess, like a property out of nowhere, but something people in these organizations do. To conduct strategy research without any reference to practices in praxis is like trying to develop managerial recommendations without an understanding of the underlying processes and activities. For strategy
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scholars this implies placing greater emphasis on the “unheroic work of ordinary practitioners.” (Whittington 1996: 734) To study strategy as a situated activity helps us to gain a deeper level of explanation of strategic issues. For instance, to study the daily activities of practitioners who are officially or unofficially in charge of strategy can help us to better understand how unintended outcomes (Mintzberg 1994a) come about or how actors become trapped in micro-political battles (Pettigrew 1977). We do not claim that all of this is entirely original. Mintzberg (1973), for example, already investigated what managers do (e.g., telephone calls and meetings) and how these activities contribute to specific outcomes. Yet, while mainstream strategy research has moved away from such interest in the doings of people, Strategy-as-Practice attempts to bring it back to centre stage (Chia 2004: 29). To achieve this ‘practice turn’ in strategic management, more conceptual and empirical research on the detailed micro activities that make up strategizing needs to be conducted. The outlined conceptual framework (section 7.3) can guide future research in different yet connected directions. Of course, there is need for balance: not all strategizing refers to institutionalized strategy practices but is often represented by rather uncoordinated activities that ‘simply happen’ in strategy praxis. With regard to future investigations, the challenge will be not only to theoretically conceptualize practice-based phenomena (e.g., ‘communities of strategy formation’) but also to start examining them empirically. This, of course, poses a methodological challenge that the Strategy-as-Practice community needs to accept.124 Empirical strategy research in an ‘AfterDerridean’ context implies actually looking at how people do strategy and thus immersing oneself in the messy and fluid realities of strategizing. This is not an easy task. But, who said that strategy research is easy?
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In terms of methodology, ethnomethodological ideas (Berard 2005; Garfinkel 1984; Garfinkel and Sachs 1990; Maynard and Wilson 1980) seem one possible alternative for conducting empirical research with regard to the Strategy-asPractice research agenda. For ethnomethodologists, social structure is not visible by virtue of its links with physical structure but becomes observable as a manner of speaking. Macrostructure is a practical achievement of people whose sayings and doings make relevant collective categories (e.g., strategy practices, Coulter 2001: 34). Not much different, microanalysis looks at how actors enact these categories by becoming engaged in conversations. In consequence, ethnomethodology blurs the distinction between the macro and micro; in both cases research refers to what people say. For the Strategy-as-Practice agenda this implies taking the study of single speech acts (Schegloff 1987) and episodes of strategic talk (Hendry and Seidl 2003) more seriously.
8 Final Reflections – Retrospect and Prospect
“The superfluous metaphysical ballast which burdens the brains of our science, […] which checks scientific progress by distorting and hiding the multitude of real problems, may then be thrown overboard.” Gunnar Myrdal (1965: xiii)
This treatise has come a long way. Although one searches for something novel in any treatise, it is impossible to state where and how to search until one finally hits on something that appears meaningful. If the outcome were predetermined, one would not need to search in the first place. The sense a book makes can only be fixed and discussed in a retrospective manner. Within this study we have come across a variety of issues, which we will now reconceptualize in order to display their contributions. Even though chapter six and seven discussed detailed implications of our deconstructive reading of strategic management, there is still the need to condense the core messages of this study. Section 8.1 takes a retrospective perspective and presents the central findings of our discussion, whereas section 8.2 is prospective in that it outlines what kind of scholarship can support the central findings. In this sense, section 8.2 tells us what scholars can do to take the core findings (section 8.1) of this study seriously. As noted in chapter two, we do not believe that it is worthwhile to create disintegrated paradigmatic islands within strategy research; nor are we suggesting that deconstruction provides ‘the’ one best way for conducting scholarly work. Deconstruction, as used in this study, is about enriching and supplementing existing strategic realities and eventually creating new ones. In this sense, deconstruction is about gestures. A gesture is an expressive act of courtesy and respect to others; it is “a notable or expressive action: as (a) something said or done by way of formality or courtesy (b) something said or done to bring about a desired end.” (Webster’s Third New International Dictionary 1993: 952-953) Sections 8.1 and 8.2 offer a variety of ‘gestures’: (a) as acts of friendship to extend, modify, rethink, and discuss strategic realities and (b) as requests to bring about a different way of strategy research, not necessarily to replace it but to enhance and
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deepen it. In the following section, the key findings of this study are expressed in the form of five ‘gestures’. In section 8.2, we offer five more ‘gestures’ that discuss the implications of the key findings of this treatise for the nature of scholarship.
7.1 Retrospect – Rethinking Strategic Realities Gesture One: “Strategic Realities – From Dominant Logics to Strategy-asPractice”: The ‘common thread’ that runs through this study is the notion of strategic realities. Strategic realities reflect the constructed world of strategic management, both in theory and practice. This study has been mostly concerned with scholars’ strategic realities and their underlying assumptions. We demonstrated that a great deal of current theorizing in strategy research rests on strategic realities that favor a dominant set of assumptions (i.e. dominant logics). These dominant logics reinforce themselves because authors (often implicitly) adopted them. For instance, Porter’s (1980, 1985) well-known strategic reality had a significant effect on Ghemawat’s (1986) strategic reality which promoted ‘sustainable advantage’. To identify scholarly work within strategic management as strategic realities instead of ‘theories’ or ‘frameworks’ has the advantage that the term ‘strategic reality’ stresses the constructed nature of strategy research. In this sense, nature does not force scholars to look at strategic management in a specific way; they make assumptions and thus ‘construct’ their world of strategy (Pinch and Bijker 1984: 420). Scholars’ strategic realities do not represent a ‘natural necessity’. We argued that the dominant logics that underlie most strategic realities are dominant because they neglect their own paradoxical nature. Those strategic realities that reflect the dominant logics try to establish a metaphysics of presence; they are in search of a final origin from which their reasoning can spread out. By applying Derrida’s deconstructive logic, we demonstrated that the search for this origin results in paradoxical indecision. Accordingly, the dominant logics aim at impossibilities and therefore have to be dispensed with (at least from the perspective of deconstruction). Our discussion of the paradoxes that arise with regard to the ‘necessity of adaptation’ (strategy context), the ‘primacy of thinking’ (strategy process), and the ‘fullness of strategic rules and resources’ (strategy content) enabled us to outline a different perspective on strategy context, process, and content (see chapter six). This perspective can be described as our strategic reality, which is not necessarily superior to, but is at least different from ‘traditional’ strategy research. To show that our ideas do not stand on
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their own, we connected our research results to a recently emerging strategic reality: Strategy-as-Practice. In summary, the ‘journey’ of this study can be traced with reference to the concept of strategic realities. One key finding of this treatise is that to capture the multiple faces of strategic management one needs to allow for the emergence of different strategic realities. From our perspective, this presupposes the discussion of paradox. The next ‘gesture’ will substantiate this claim. Gesture Two: “Creating Strategic Realities Because of and Despite Paradox”: Another key finding of this study is the need to build strategic realities because of and despite paradox. If we want to have a broader picture of strategizing in organizations by allowing different strategic realities to emerge (see ‘gesture’ one), we need to consider paradox within the course of the creation of strategic realities. Scholars have to build theories because of paradox since strategic management is dominated by an ideology, a prevailing cluster of assumptions (Starbuck 1982: 3). To build different strategic realities that widen our understanding of strategic management, we need to reach beyond this ideology. The identified paradoxes imply that the dominant logics, which make up the ideology (see section 1.1), aim at impossibilities and are thus not a valuable point of departure for strategy research. At first this seems to narrow down the scope of possible strategic realities and thus our understanding of ‘strategic management’. Yet, we should not forget that these paradoxes are bound to our deconstructive understanding of the world. As indicated in section 1.2, deconstruction is just one possible perspective to look at strategy research. To prevent any kind of ideology, we need multiple explanations and collaboration across different sets of assumptions (section 2.2). From our perspective, theorists should consider paradox to learn how to reach beyond the current ideology that is governing our field and thus achieve a more balanced perspective of strategic management (Lado et al. 2006). Whereas theorizing because of paradox enables us to ‘see’ the limitations of the field’s underlying ideology, it would be false to classify strategic management as impossible (i.e. paradoxical). Strategy is one of the most intensive and expensive activities that organizations are involved in (Whittington 2001). It absorbs a full cast of players and thus cannot be classified as impossible. In consequence, theorists not only have to build strategic realities because of but also despite paradox. Strategic realities that acknowledge paradox (i.e. the impossibility of ‘origins’) thus have to deparadoxify themselves. To deparadoxify helps theorists to shake off deterministic views in order to account for the messy realities strategists face in their everyday activities. As demonstrated throughout the discussion in chapter six, what first seems impossible (i.e. paradoxical) turns out to be
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gradually produced by operations that are connected through supplementary loops. Strategy scholars can respect supplementarity by considering the importance of the ‘And’. The ‘And’ connects – for instance, organization and environment – not in a linear but in a mutually enhancing manner. As Derrida (2000c: 285) explains: “Wondering what the ‘and’ is, what and […] means and does not mean, does and does not do, that is perhaps, before any enumeration of all possible titles of the type ‘deconstruction and …’, the most constant task of any deconstruction.” (emphasis in the original)
The ‘And’ uncovers and affirms the neither/nor of strategic realities, the constant need to consider undecidables as the medium by which scholars are reminded that this thing that they call ‘strategy’ is always associated, completed, supplemented, and accompanied by ‘the other’ (that which we used to ignore – e.g., ‘application’ or ‘implementation’). In summary, in line with other scholars (Huff 2001; Ortmann 1995; Ortmann and Sydow 2001a; Vos 2002) we call on strategy researchers to place greater emphasis on the role of recursive relations. Gesture Three: “As If – The Fictional Character of Strategic Management”: Another key finding of this study is the importance of fictions, which we labeled ‘As Ifs’ throughout our discussion. With reference to ‘gesture’ two, we can say that As Ifs deparadoxify strategy context, process, and content (see chapter five and six). As Ifs temporalize paradoxes and thus preserve peoples’ capacity to act, to a certain extent in ‘theory’ but most of all in ‘practice’. Temporalization means to move the impossibility of the paradox into an indeterminate future where it is less troublesome. Although temporalization is just one possible way to deparadoxify, we highlighted its importance with regard to the paradoxes of strategy context, process, and content. Unfortunately, few conceptual or empirical studies in strategy research have discussed the role of fictions so far (for a laudable exception see Ortmann 2004c). In consequence, this study shows that we need more research regarding those fictions that deparadoxify strategic management. When researching fictions in strategic management we need to be careful what we are talking about. The fictions that deparadoxify strategy context, process, and content are usually necessary anticipations of the future; they are not so much about a more or less deliberate ‘hypocrisy’, the inconsistency between talk, decision, and action (Brunsson 1989). The As Ifs that we are concerned with are often not realized as such, actors do not recognize these fictions as fictions and/or take them for granted (Ortmann 2004c: 30). Although strategists themselves might not be aware of fictions, strategy scholars, who are observers of strategy praxis, can identify them
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and thus start to understand the role of anticipations in temporalizing paradoxes. To do this kind of research, we need a more worked out conceptual framework for studying fictions in strategic management. Such a framework would represent a highly valuable strategic reality that can be based on existing work regarding fictions in organization theory and other disciplines (for an overview see Ortmann 2004c). Gesture Four: “The Supplementarity of Strategy Context, Process, and Content”: Every As If directed us to a different understanding of strategy context, process, and content. Once the underlying paradoxes are deparadoxified, we were able to see that deconstruction does not merely promote impossibility but supplementarity (i.e. recursiveness). Every paradox merely indicates the limits of knowledge we can gain about strategic management, whereas supplementarity – the constant interplay between the ‘origin’ and that what used to be marginalized – emphasizes that strategy context, process, and content are in a constant state of flux. To conceptualize this relentless movement between the ends of the underlying oppositions (e.g., environment/organization or formulation/implementation), we developed and described undecidable terms (i.e. ‘framing’ for strategy context, ‘improvisation’ for strategy process, and ‘iterability’ for strategy content). In this sense, another key finding of this study is that strategy context, process, and content are based on a both/and-logic. This logic reflects the fact that the meaning that is produced at the nexus between both poles of the underlying oppositions can never be satisfactorily decided. Concerning strategy context, framing describes the active operation of drawing distinctions that carve out organization and environment. Whenever strategists frame their environment by appropriating order out of disorder (e.g., by regarding a certain group of people as relevant customers) they also frame their own identity. The frame operates at the margin between organization and environment; the organization enacts its environment and thus shapes its own identity (Weick 1979, 1995). ‘The’ environment does not exist as a category just for itself, a category that could possibly act as an ‘origin’ for adaptation. Regarding strategy process, strategic improvisation describes planning as action unfolds, the modification or eventual replacement of strategic fictions within the course of strategizing. Strategic improvisation highlights that the strategy process is most of all about situated activity. Strategy formulation is as much about activity as strategy implementation is; actions cannot be postponed. Accordingly, there is a supplementary relation between formulation and implementation in the sense that the supplement (i.e. action/implementation) constantly modifies and constitutes whatever was formulated. Plans are excuses for action; they make actions appear to be under control (Mintzberg 1994a;
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Ortmann and Salzman 2002; Weick 1979). Concerning strategy content, iterability explains the interconnectedness of repetition and alteration with regard to strategic rules and resources. Based on iterability, we described the interplay between ‘empty’ strategic rules/resources and their application as a process of filling. Of course, this filling gives reference to the supplementary relationship between ‘empty’ strategic rules/resources and their application. The supplement (i.e. action/application) always modifies the necessary emptiness that is attached to strategic rules and resources. In consequence, strategic rules and resources cannot be generalizable or even a priori given; they gain meaning in and through action. This shifts the research focus from the traditional concern with the ‘drivers’ of competitive advantage to an investigation of strategists’ activities that revive abstract categories like ‘cost leadership’ or ‘distinctive capabilities’. To conclude, one key finding of this study is that supplementarity is at the heart of research on strategy context, process, and content. Gesture Five: “Researching Strategy as a Practice in Praxis”: The supplementary relations that strategy context, process, and content are based on emphasize the importance of activity (see also section 7.1). We discussed this insight in chapter seven where we connected our findings to a stream of research that emerged recently: Strategy-as-Practice (Johnson et al. 2003; Jarzabkowski 2005; Whittington 2002b). Accordingly, our research provides a theoretical foundation for this young field of inquiry. We outlined and discussed a research framework – composed of strategy praxis, practices, and practitioners – that can guide future research on Strategy-as-Practice. Thus, another finding of this study is that strategy research that takes the insights of the deconstruction of strategy context, process, and content seriously has to focus on the detailed and situated activities of practitioners that do strategy. Doing, here, is not raised to a level of abstract categorization as traditional strategy process research does (Chakravarthy and White 2002; Pettigrew 1977) but refers to the practical performance of strategy in the actions and interactions of people. In this sense, organizations do not have a strategy; they do strategy. Most importantly in the context of this study, Strategy-as-Practice blurs the distinction between strategy context, process, and content. The three dimensions can be conceptualized as relating to strategy practices in praxis. For instance, many of the ‘empty’ strategic concepts that are available from management gurus or consultancies represent strategy practices (i.e. they refer to patterns of activity that need to be enacted). While filling these practices, practitioners have to improvise to make the practices sensible in the local context of their organization (Whittington 2006). This improvisation, of course, represents parts of the wider strategy process and
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also contributes to the framing of strategy context since the discussions that are needed for the enactment of the practice shape the perception of the environment and identity of a firm. In summary, this study showed that deconstruction leads us to and supports the idea of Strategy-as-Practice. Doing strategy research ‘After Derrida’ means opening the black box of ‘the firm’ to relocate strategic management where it belongs and emerged from: praxis.
7.2 Prospect – Fostering Engaged Scholarship In the light of the findings of this study, we have to ask: What can we do to consider practically the presented key findings within our research? To outline a different way of strategy research is one thing, to actively consider it in research praxis another. The question is: What kind of scholarship do we need in order to produce knowledge about strategic management that takes into account the key findings of this study? As indicated in chapter seven, we believe that strategy research ‘After Derrida’ has to investigate strategic management as a situated activity in organizations. To research this activity it is not enough to simply do ‘desk’ or ‘database’ research; there needs to be more collaboration between theorists and practitioners (Johnson et al. 2003; Mintzberg 2005). So far, much knowledge about strategy is either produced in a detached way from practice and/or practice is exclusively seen as a place where data is gathered. To overcome this theory/practice dichotomy, Van de Ven (2006: 4) has called on researchers to foster ‘engaged scholarship’ which he defines “as a collaborative form of inquiry that leverages the different perspectives and competencies of key stakeholders (researchers, users, sponsors, and practitioners) in producing knowledge about a complex problem or phenomenon. Engaged scholarship draws upon knowledge of practice, values, and policy as well as scientific knowledge in various disciplines to develop models that can be brought to bear on specific problems in the world.”
Engaged scholarship promotes a different understanding of the value of science itself. Most strategy scholars still think that science is like a ‘march towards some truth’ that can be discovered by developing precise hypotheses that are validated through rigorous research. Engaged scholarship views strategic management as a ‘phronetic science’ (Oliver et al. 2005). Unlike orthodox science, where the researcher and the researched are distanced and the focus is largely on generating testable hypotheses and propositional theory, phronetic science is about generating practical knowledge by being concerned with and getting involved in conduct, conduct
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that can only be observed with regard to particular circumstances (Calori 2002: 878). This, of course, demands that we become involved in strategy praxis and consider reflective practitioners as co-authors of theories. Phronetic science is not about generating ‘the truth’ about some kind of phenomena but about gathering contextualized knowledge. The following five ‘gestures’ outline how we think engaged scholarship can be undertaken. They specify Van de Ven’s (2006) more general idea with regard to different areas that affect the nature of scholarship (e.g., methodological focus of research). Surely, these ‘gestures’ do not offer a comprehensive discussion of the nature of scholarship as one could include other topics as well (e.g., the way doctoral programs are designed). Yet, the five issues that we chose to discuss relate particularly well to strategic management and were thus selected as a nucleus to foster future debates. Rethinking scholarship is crucial to produce conceptually and empirically the kind of knowledge about strategy that this study has only started to create. Gesture One: “Does Anybody Listen? – Relating Theory and Practice”: According to Van de Ven (2006), engaged scholarship is about relating theory and practice. If strategy research ‘After Derrida’ draws upon knowledge of practices and emphasizes the activities that people perform while doing strategy, we have to better integrate practitioners’ concerns and experiences with scholars’ knowledge claims (Herrmann 2005: 123). Because strategic management is situated and about enacted practices, those people who are at the frontline should have more influence on the way we theorize. At first, this seems almost self-evident. Yet, especially in strategic management, the theory-practice link is quite fragile; there is dissatisfaction on both sides. A variety of strategy scholars express concerns that most of the research is irrelevant to what is going on in firms (Bettis 1991; Tranfield and Starkey 1998). Regardless of what is stated in editorial policies, most scholars write more or less for each other. In consequence, practitioners question the usefulness of research and think of scholars as being in an ‘ivory tower’ (West 1990). Practitioners often feel that research is not designed to understand the problems they face. Although this issue is severe, it has received little attention in the academic discourse. Of course, the entire issue of research’s ‘practical relevance’ is beyond the scope of this study. Nevertheless, we would like to offer two exemplary points that are worth considering when trying narrowing the gap between academia and practice. First, strategy scholars need to dispense with the belief that academic knowledge flows in an unhindered way into practice. There needs to be a debate about the applicability of knowledge. Without this debate, the pressure to produce relevant research results in
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practical irrelevance, because the concept of application itself remains unquestioned (Nicolai 2004: 971; Starkey and Madan 2001: 4). Second, we need to change the way we conduct strategy research. This can be done by co-producing knowledge with practitioners. There are virtually no articles that are written jointly with practitioners in the leading journals of the field (for an exception see Hurst 1986). As Calori (2002: 880) notes: “Some practitioners, who take time to reflect on their personal experience, may produce enactive research in which a quasi-perfect unity of time-space and action-reflection is achieved (even when part of that reflection is retrospective). Think of Henri Fayol and Chester Barnard.” (emphasis in the original)
A ‘thick’ description by practitioners, that is, a detailed portrayal of their everyday doings and interactions (Geertz 1973), can help us value how they identify with their practices and whether their perspectives fit with our strategic realities. If the question of what strategy is about cannot be answered in principle, but only with regard to situated practices, we need greater collaboration with those who do the work of strategy. Producing such ‘thick’ descriptions requires rethinking the methodologies used. Gesture Two: “The Altered Role of Methodological Rigor”: Engaged scholarship is about pluralistic methodology. If strategic management is a complex and multifaceted phenomenon, like our remarks throughout this study indicate, we need to explore these different facets. For this, we need a more balanced methodological focus where the insufficiency of invariant laws in strategy research is acknowledged (Numagami 1998) and the value of case-specific, qualitative studies is enhanced. As discussed in chapter three, the strategy field has a strong focus on quantitative data analytic techniques (Bergh et al. 2006: 93). Phelan et al. (2002: 1165) identify a clear trend toward greater quantitative empirical content in the Strategic Management Journal, while conceptual papers and single case studies seem to fall of the agenda. Shook et al. (2003: 1233) even find that, contrary to some predictions, the use of general linear model techniques (such as regression) has increased over time. Similarly, Bowen and Wiersema (1999) argue that the current methodological focus has resulted in an obsession with cross-sectional methods that embody the implicit assumption that model parameters are stable across firms and over time.125 125
Especially when considering the recent rise of the RBV, where only those firms with unique competences are assumed to have a competitive advantage, largesample and cross-sectional techniques are unlikely to be able to disentangle the variety of effects associated with competences. Another problem is the question of unobservables. The resource-based tradition has introduced concepts like dynamic capabilities or organizational competences. These phenomena cannot be studied through sending out questionnaires (Godfrey and Hill 1995).
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As shown in chapter six and seven, problems and concepts in strategic management have clear firm and time-specific components; there are no truly general solutions to strategic problems. This is not to suggest that we abandon all large-scale quantitative empirical research, but that we (a) reflect on the results such research offers more critically, (b) recognize that it is not enough to conduct research on organization but also in organizations, and hence (c) complement quantitative results with in-depth, longitudinal, single case-based investigations that take into account the context in which a firm operates (Duncan 1979: 424). If solutions really are local and context-specific, researchers have to get out to see what is happening (Lowendahl and Revang 1998: 765) and co-produce knowledge with practitioners in the field. To value the context specificity of strategic management in organizations, single case-based qualitative research needs to find its way back on the agenda. While strategy research in the 1960s was greatly concerned with discussing single case studies, the strategy field should renew this focus to make use of improved data gathering and data analytical techniques. More recently, ethnographic and fieldwork methods have proven to be promising alternatives for producing ‘thick’ descriptions that are often based on informal stories and organizational ‘gossip’ (Rouse and Daellenbach 1999: 490).126 These methods provide a different perspective because they (a) make the researcher an active participant in organizational life and (b) do not aim to discover what really happens but investigate the way people momentarily construct strategy in the context of their organizations (Cunliffe 2001: 355). A renewed focus on qualitative work may have yet another advantage. Quantitative mathematical models are often inaccessible to practitioners, whereas qualitative studies enable scholars to talk to managers in words that are meaningful to them (Välikangas 2003). To talk to managers in meaningful ways, we as scholars should learn to drop some of our heavy methodological tools (Weick 2001, 1996a). Gesture Three: “That’s Plausible! – How to Evaluate Strategy Research?”: Because engaged scholarship is about valuing context specific, qualitative, case-based research, we have to ask how such research can be evaluated. Evaluation of ‘thick’ descriptions of strategy praxis is tough because results hardly relate to the traditional criterion for testing theories: validation. According to validation, hypotheses are created and tested to be either confirmed or suspended. But is validation a useful criterion anyway? 126
Ethnographic methods range from semistructured and unstructured interviews over unobtrusive ‘shadowing’ techniques to participant observations (see Bernard 1994). This puts narrative studies (Czarniawska 1998, 1997) and conversation analysis (Schegloff 1987) on the agenda.
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Weick (1999) suggests that validation is an insufficient criterion for evaluating research, since it (a) distances the hypotheses from its generation, (b) displaces the role of the theorist since the ‘environment’ seems to decide whether the theory is true or not, and (c) eventually leads to trivial theories because the process of theory construction is hemmed in by strictures that neglect the usefulness of theories altogether.127 Weick (1999: 516) suggests concentrating instead on the process of theorizing rather than evaluating the theory itself. Instead of validating ‘true’ theories, strategy research needs to suggest novel relationships and connections that had previously not been suspected. This brings the theorist back into the picture because the theorist, not the environment, now controls the survival of conjectures. Weick argues that the selection criterion used by theorists to retain conjectures should be ‘plausibility’. Scholars need to ask whether conjectures are plausible. When theorizing is driven by concerns for plausibility rather than concerns for validity, conjectures that are generated in the process of theorizing need to be judged with regard to different criteria (in fact, criteria that operationalize ‘plausibility’). What are examples of such criteria? First, conjectures need to stimulate interest by challenging existing beliefs (Davis 1971; Shrivastava 1987: 79). Conjectures that completely disconfirm or affirm current beliefs and assumptions are unlikely to create interest. Interest is a selection criterion during the process of theory construction, because disconfirmed beliefs are opportunities to learn something new or to discover something unexpected (Weick 1999: 525). Second, conjectures can also be selected according to aesthetic criteria. Elegancy, which is a criterion enjoyed by mathematicians, can engender feelings of beauty that allow conjectures to be retained. Overall, Weick suggests that theory is not testable against some ‘hard’ reality, which would tell us whether our hypotheses are true or not. The complexity of the social world makes theory construction in the social sciences a difficult task. When evaluating strategy research, we should be aware that theory construction is more about imagination than ‘proving’ validity. To build better theories, theorists have to think more creatively and recognize that their own thinking depends on pictures, metaphors, and mental maps of the object of study (i.e. strategy). 127
Weick (1999: 519) argues: “Most existing descriptions of the theorizing process assume that validation is the ultimate test of a theory and that theorizing itself is more credible the more closely it stimulates external validation at every step. Thus, a dual concern with accurate representation and close correspondence between concepts and operations is evident virtually from the start in any theorizing activity. These concerns can be counterproductive to theory generation.”
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This altered picture of evaluating strategy research has important consequences for the editorial policy of the major (and minor) journals of the field. Almost certainly, pressures will continue to mount for ‘quick and dirty’, ‘close-to-the-market’ output (Gopinath and Hoffman 1995: 577; Willmott 1993: 706). Calori (2002: 881) notes that suspicion towards a different epistemological stance reduces the chance of entry in (North American) ‘A’ journals and academic careers become more uncertain. Journals that are identified as ‘top’ publications usually have scholars on their editorial boards who require the work to be published to meet the highest standards of ‘scientific rigor’ (Podsakoff et al. 2005: 486). Rigor, here, refers to established theoretical perspectives, orthodox research methods, and the need to show that hypotheses were validated or not. Yet, what counts as rigorous research is not God-given but a product of lengthy processes of ‘fact’ production (section 3.3) and the training of researchers.128 If scientific rigor is a socially constructed phenomenon, scholars can actively influence this process. Editors need to encourage authors to follow ‘non-traditional’ perspectives, both in terms of methodology and the delivered content. A promising way to achieve a different editorial policy is to open editorial boards of North American journals for authors from other parts of the world where ‘scientific rigor’ is defined in other ways. Clegg and Ross-Smith (2003) argue that the dominance of North American journals, together with the capacity of their editors to shape what gets published, is overwhelming. In addition, Baruch (2001) notes that non-North American scholarship is significantly underrepresented in these journals. The major journals of the field need to open their agendas (a) for critical conceptual strategy research that builds on hitherto underrepresented metatheoretical perspectives and (b) for empirical studies that seriously consider non-traditional methods and give us deep insights into single cases of strategy making to – in a Derridean sense – supplement and extend existing research.
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In their recommendations regarding doctoral education in strategic management, Summer et al. (1990: 368) give the following advice: “Both ‘Philosophy of Science’ and ‘Quantitative Analysis’ are crucial to understanding and evaluating research in Business Policy and Strategy, so those areas deserve immediate attention. A ‘Design and Methods’ course should typically follow the above two, and many students will require additional work in econometrics or other quantitative fields.” In consequence, students of strategy are trained very early in their careers about what it means to conduct ‘rigorous’ research. We do not suggest that no quantitative training has to be offered, but rather that a balanced education between quantitative and qualitative methods has to be achieved.
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Gesture Four: “Teaching Strategic Management – ‘Are You Telling the Truth?’”: Engaged scholarship does not only imply doing research that is engaged with regard to practice but also equipping those who will be practitioners one day with knowledge that is practically relevant. Accordingly, engaged scholarship also means rethinking the orthodoxy in teaching. Once we submit to the grand narratives of modernism (e.g., ‘truth’ and ‘enlightenment’) that have been so well described by Lyotard (1999), we define the purpose of teaching as telling students about ‘the truth’. The pedagogical assumption is that we can distinguish between what is true and what is false to let students know about the object of knowledge as it is. Derrida’s radical rejection of a final truth (différance) has far-reaching implications for the way we teach (about strategy). First, we need to reflect on what we teach to students. The strategic tools that we provide presume that students have almost perfect information about what is going on in their ‘environment’ and ‘organization’. This leads to the illusion of ‘being in control’ of things. If there is no truth and thus no perfect information (e.g., about the industry one operates in), we need to tell students that it is not the tools themselves that will help them with strategizing but the way they make sense of, enact, extend, and meaningfully modify these tools. Students need to be aware that homogenized tools are only frames of reference but do not embrace any universalistic strategic philosophies. Second, to be able to apply strategic tools meaningfully, students need to possess more than just well developed analytical capabilities. This implies rethinking whom we teach strategy to and thus the traditional selection criteria for entrance to business schools. Indeed, as Mintzberg (2005) argues, the well-known and widely applied GMAT scores offer an insufficient picture of students. “GMAT stands for Graduate Management Admission Test, and it assess one’s ability to give fast answers to little numerical and verbal problems. […] Since how well you do depends on how well everyone else does, you had better prepare by buying a special book or taking a special course, because that is what everyone else is doing. […] So instead of practicing management, the would-be manager practices tests. Good managers are certainly intelligent, and the GMAT certainly measures intelligence, at least formalized intelligence. […] So the GMAT constitutes a useful but insufficient screening device, more useful, in fact, to identify successful students than managers. The latter have to exhibit all kinds of other characteristics that are not measured by such scores – indeed, many that are not adequately measured by any scores.” (Mintzberg 2005: 15, emphasis in the original)
Strategic management, as shown throughout this study, is about ‘art’, ‘intuition’, ‘telling stories’, ‘creating plausible fictions’, and most of all ‘on-
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the-job experience’. Mintzberg (2005: 243) suggests that rethinking MBA application procedures implies (a) that true management education should be a privilege earned by leadership performance in practice and (b) that organizations themselves should suggest candidates and support them. Certainly, managers need some kind of undergraduate education that provides a basic stock of knowledge (e.g., regarding typical line function tasks). The question, however, is whether management, and strategic management in particular, should be taught at the undergraduate level at all? Mid-career managers are better equipped to understand strategic problems and the limitations/opportunities of tools and theories that they get to know in the classroom. Third, there is need to reconsider how we teach strategy. If there is no ‘truth’ that can be taught and students are not chosen based on their GMAT score but because of their performance in practice, it makes no sense to teach strategy in a lecture-type manner. Experienced managers have stories to share and often first-hand knowledge about concepts. Instead of leveraging this knowledge, many strategy courses still rely on cases because case teaching has been found more effective than lecture teaching with regard to attaining cognitive skills and motivational aims in the classroom (Böcker 1987; Summer et al. 1990). The case-method, though, has serious drawbacks. Usually, cases are used to bring students closer to the ‘real world of management’. Yet, the real world, as Mintzberg (2005: 43) remarks, is not ‘out there’ to be plucked from some tree of practice. The case method reduces strategizing to decision-making and analysis by training students to analyze large chunks of given data. Once again, students believe to be in control. But strategic managers do more than decision-making; they create events, experience, test, bargain, argue, and negotiate. We are not suggesting that cases no longer be used. Compared to traditional lecture-type teaching, cases involve students and expose them to the complexities of strategic realities in organizations. Yet, under the premise that strategy is taught to experienced managers, one can do better than discussing cases. Mintzberg (2005: 246-266) suggests that the classroom should leverage managers’ experience. By experience he means natural experience that has been lived in everyday life on and off the job, while created experience (e.g., through role plays) can at best be supplementary, but not central, to the education process. Teaching strategic management needs to be about experienced reflection, where managers bring their knowledge to the classroom and faculty introduces concepts and theories. Reflection takes place where both spheres meet: experience about strategy considered in the light of conceptual ideas.
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Gesture Five: “Engaged Scholarship? – Engaged Practice!”: Engaged scholarship rests on a stronger collaboration between theorists and practitioners. Although collaboration can be fruitful, because the accepted definition of the scope of a research field can be changed (Franklin 1998a: 326-328), it is hard to achieve in practice. Whereas the previous three ‘gestures’ demonstrated what scholars could do to close the gap between strategic management and strategy praxis (e.g., with regard to the methodology used, the evaluation of research, and/or the way strategy is taught), this ‘gesture’ is about practitioners’ role in engaged scholarship. Most important, engaged scholarship needs reflexive practitioners who treat universal prescriptions of the kind ‘How to really achieve a competitive advantage’ with great care and a critical attitude. Like in medicine, where there is no universal drug against all diseases, the deconstruction of strategy content has shown that there is no general solution that applies to all kind of strategic problems in every company. As Mintzberg (2005: 250251) explains, theories should be used “not because they are true but because they are useful – under particular circumstances. […] Situations vary enormously. What we should be doing in our management classrooms, therefore, is drawing out the implicit theories that managers have in their mind […] and offering alternate theories, competing explanations of the same phenomena, so that managers can interpret their experience from different perspectives.” (emphasis in the original)
Strategists who are sensitive to engaged scholarship (a) do not follow the latest management fad that promises to be valid for each and every company,129 (b) do not perceive themselves as rational agents (Hurst 1986: 26), and (c) recognize that the people who apply strategic concepts are more important than the concepts themselves. These kinds of practitioners foster engaged scholarship because their reflexive awareness of the strategy praxis they operate in fosters the co-production of knowledge about strategic management with scholars. Reflexive practitioners are stimulated by strategy scholars to build their own strategic realities (and do not passively consume ‘empty’ prescriptions made by other scholars and/or strategists in a different context).
129
The very latest management fad – Blue-Ocean-Strategy – is about creating new business segments by deliberately neglecting the frontiers of the more traditional business (Kim and Mauborgne 2004). Faced with the question which corporations can especially profit from Blue-Ocean-Strategy thinking, W. Chan Kim, one of the promoting professors of this concept, replies: “The approach can be implemented by all corporations – regardless of the industry they are in.” (Kim and Mauborgne 2005: 52, translation A.R.)
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7.3 But, Beyond... – The End and the Beginning “Doubt is not a pleasant state, but certainty is a ridiculous one.” Voltaire
The results of this study should be evaluated in the context of its limitations (section 1.3) as well as its underlying intent. Our intent was to provoke additional thought, research attention, and concern for the ideas presented. As indicated throughout this text, we do not wish simply to replace some apparently ‘old-fashioned’ logic by some ‘new’ one. Reflexivity – one, maybe the, major topic of this treatise – is not a means to produce privileged knowledge (Lynch 2000). Reflexivity is the recognition that an unquestioned answer can be more dangerous than an unanswered question; it is about uncovering tensions between different positions. The common thread running through this study – ‘Strategic Realities’ – exemplarily reflects a tension between that which is ‘strategic’ (as a concern for the future which always remains to be thought) and that which is ‘real’ (as a concern for the very moment, that which is real, but never ‘here’ as an event that we can adequately grasp, [Derrida 2003b]). Discussing and writing about scholars and practitioners’ strategic realities implies questioning any metaphysics of presence that classifies strategic management as something that is simply ‘there’; any strategic reality – be it the one of scholars who think about strategic management or the one of practitioners who practice strategic management – is always already exposed to différance, deferring any definite meaning into an indeterminate future. In consequence, neither scholars nor practitioners can simply do deconstruction.130 Deconstruction is always already at work in works (Derrida 1986c: 123) and each deconstruction speaks with a single voice (Derrida and Norris 1989: 75). We have to think of strategy as being always already in deconstruction: this is what this study has done. Of course, strategic management can be influenced by writings (e.g., Derrida’s writings). Yet, this does not ipso facto make it ‘deconstructive’. The deconstruction of 130
Even Deconstruction has become a management fad. Promoted by the Boston Consulting Group, the Deconstruction of value chains is about the dissolution of traditional boundaries of industries, companies, and businesses. When gas stations become supermarkets, Deconstruction is at work (Khurana 2002: 251). Accordingly, there is need to differentiate deconstruction from Deconstruction, although, in a deconstructive world, there is no clear-cut distinction between both notions, as d/Deconstruction is always itself reiterated and thus subject to deconstruction.
But, Beyond... – The End and the Beginning
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strategic realities is not something brought in from the outside, although it might sometimes appear as if this were the case. Deconstruction already is at work in the ‘inside’ like a parasite that strongly affirms what is to come. A ‘deconstructionist strategic management’, but there is no such thing, could not be the result of a successful application of Derrida’s theory. Deconstruction in strategy has always already begun (Derrida 1987b: 19). This treatise has emphasized many research opportunities for future scholarly work, both with regard to strategic management itself (see especially chapter seven) but also concerning research about strategy research. Whereas there is an ever-increasing body of empirical work regarding strategy context, process, and content, too few studies actually question the way such research is undertaken. Future studies that discuss the way we theorize about strategic management can, for instance, deconstruct other prominent oppositions (e.g., top manager/employee or resource/marketbased view, Ortmann 2003a: 134), investigate the way we produce dominant logics more closely, or discuss the underlying methodologies and possible alternatives in a much more comprehensive way. After all, if we really want to establish a different kind of strategy research, the concept of ‘engaged scholarship’ deserves more discussion. Without modification of the institutions that shape the strategy discourse (e.g., journals’ editorial policies and strategy departments’ tenure procedure) real change with regard to the content of the discourse is unlikely to occur (Knights and Morgan 1991). So, how to end this book? Certainly, every deconstruction can be deconstructed! Writing is never neutral but always requires interpretation. Neither authors nor readers have privileged access to the meaning of texts. In this sense, a book is always beyond our control. It carries a burden of meaning that constantly escapes, slips away, and breaks out. We then have to ask: Can there be an end to a book? Derrida (1977: 18) refers to the idea of the book as a “natural totality” that is alien to the différance of meaning it carries. Isn’t the end of a book its beginning and its beginning the end? We are never done with a book, like we are never done with deconstruction. This, therefore, cannot have been a book. […]
Glossary of Terms
Aporia
Aporia comes from the Greek meaning ‘the impassable’. According to Derrida, the aporetic is a recurring structure (e.g., in decisions and rules) to which philosophy should aspire. Similar to paradox, whatever is aporetic does not permit ‘immediate access’.
Conversational Field
Discourse fields in which scholars closely observe one another to see existing blind spots of argumentation. Such fields favor criticism over explanation and challenge existing facts.
Deconstruction
Not a method! A strategy of critical analysis aiming at unraveling the selfcontradictions inherent in ‘texts’. Deconstruction shows the supplementary relation between two poles of an opposition. In its starkest sense, deconstruction affirms paradox. Hence, deconstruction is about experiencing the impossible—that what makes every identity at once itself and different from itself.
Différance
Signs never have a fixed meaning. The iteration of a sign creates new differences and by doing so simultaneously defers the presence of meaning. Because of its double meaning (to differ/to defer), différance implies that there can be no present (objective) meaning. Like ‘the text’, différance is not limited to the written; it leaves its mark on everything.
308
Glossary of Terms
Dominant Logic
Dominant logics refer to the invisible assumptions and basic belief structures scholars refer to when theorizing in a field of inquiry. In an unnoticed way, they predispose scholars toward a specific set of problems and thus accrue inertia. Unlike normal science, dominant logics cut across paradigms.
Fact
A legitimized piece of knowledge that has been collectively stabilized from the midst of scientific controversies and is strongly confirmed by later scientific contributions.
Factual Field
A closely coupled scientific discourse with strong professional networks which protect its blind spots. Facts are not seen as constructions but as the way reality is. Such fields rely on strong institutional pressures and place tight restrictions on the amount of tolerated skepticism.
Framing
An active operation of differentiation that creates the enacted environment and at the same time gives an organization identity. The frame is between organization and environment and is thus an undecidable term. Since the frame has no place of its own, there are only framing effects.
Improvisation
The conception of action as it unfolds, drawing upon existing material and enforced by organizational members. Strategy as improvisation gives primacy neither to formulation nor to implementation but describes strategizing as thinking in action. In consequence, improvisation is another undecidable term.
Iterability
The logic that ties repetition and modification. Because of iterability, there is no pure replication of strategic rules and resources. Any replication always already means modification. The structure of itera-
Glossary of Terms
309
tion implies identity and difference at the same time. Normal Science
Normal science refers to the routine work of scientists experimenting within a paradigm, slowly accumulating detail in accordance with established broad theory. Within normal science, scientists do not challenge or attempt to test the underlying assumptions of the paradigm and thus adhere to and sustain dominant logics.
Logocentrism
The desire of the Western culture to view the essence (logos) of a concept (e.g. ‘truth’) in a way that something else appears as secondary.
Paradox
The simultaneous presence of contradictory elements. Paradoxical reasoning is reasoning whereby the constraining and enabling conditions of a line of argument coincide. Paradox shows us the limits of reasoning, if we try to get to the bottom of things. Although paradox implies impossibility, there are ways of deparadoxification.
Strategy Practice
Strategy practices are repeated (routinized) patterns of strategic activity. Strategy practices are the ‘done thing’; for instance, the application of a strategic concept or resource allocation routines.
Strategy Praxis
Strategy praxis represents what actually gets done (i.e. the work of strategists in organizations). Strategy praxis consists of many informal and formal events. Repeated patterns of behavior within strategy praxis can become strategy practices (e.g., strategy workshops).
Strategic Reality
The constructed ‘world-of-strategy’ in theory and practice. Strategic realities reflect the assumptions of scholars and prac-
310
Glossary of Terms
titioners regarding the nature of strategy and usually include a variety of theories and frameworks. Porter, Mintzberg, and Hamel/Prahalad have their own strategic realities, while Jack Welch and any other strategist also construct their own ‘worldof-strategy’. Strategic realities reflect the belief that ‘strategy’ does not fall from the sky, but is a product of contingent decisions regarding a specific set of assumptions. Supplement
The parasite, ‘the other’ that constantly adds itself to the ‘void’ that the original leaves. The supplement constitutes the origin and shows that there can be no selfpresent beginning. The term ‘supplement’ is itself undecidable and means to add on and to replace/substitute.
Paradigm
Universally accepted scientific achievements that for a period of time provide model solutions and model problems to a community of scholars. Paradigms also include certain metatheoretical assumptions and thus represent a Weltanschauung.
‘The Text’
Not a book! ‘The text’ includes all possible referents in the world. Referents are textualized through language in context. Hence, everything we can know is text, that is constructed through signs in relationship. We may suggest that ‘the text’ is the imbrication of language and the world; an interweaving of the woof of language with what we call ‘the world’.
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