Showing papers in "Strategic Organization in 2005"

Strategic organization: a field in search of micro-foundations:

Abstract: Organizations are made up of individuals, and there is no organization without individuals. There is nothing quite as elementary; yet this elementary truth seems to have been lost in the increasing focus on structure, routines, capabilities, culture, institutions and various other collective conceptualizations in much of recent strategic organization research. It is not overstating the matter too much to say that ‘organization’ has generally entered the field of strategy in the form of various aggregate concepts. This editorial essay is born out of a frustration on our part for the present lack of focus on individuals in much of strategic organization and the taken-forgranted status of ‘organization’. Specifically, the underlying argument of this essay is that individuals matter and that micro-foundations are needed for explanation in strategic organization. In fact, to fully explicate organizational anything – whether identity, learning, knowledge or capabilities – one must fundamentally begin with and understand the individuals that compose the whole, specifically their underlying nature, choices, abilities, propensities, heterogeneity, purposes, expectations and motivations. While using the term ‘organizational’ may serve as helpful shorthand for discussion purposes and for reduced-form empirical analysis, truly explaining (beyond correlations) the organization (e.g. existence, decline, capability or performance), or any collective for that matter, requires starting with the individual as the central actor. Our particular focus in this essay is on the organizational capabilities-based literature in strategic management. This focus serves as a specific example of a more general problem of lack of attention to individuals in strategic organization. (Wider implications could be explicated given more space.) As brief support for the fact that our discussion does have wider ramifications, we note that Selznick has also quite poignantly raised the need for micro-foundations on the part of institutional scholars (1996: 274). Whetten (2004) also highlights the fact that scholars are rarely explicit about what they mean by ‘organizational’. STRATEGIC ORGANIZATION Vol 3(4): 441–455 DOI: 10.1177/1476127005055796 Copyright ©2005 Sage Publications (London,Thousand Oaks, CA and New Delhi) http://soq.sagepub.com

Importation as innovation: transposing managerial practices across fields:

Abstract: This article examines transposition as a source of innovation. Transposition is the act of applying a practice from one social context to another.We trace how and why three individuals transposed the American practice of diversity management into Denmark in 2002. The analysis outlines how they came up with the idea to transpose diversity management to Denmark and what motivated them to do so. Based on our analysis, we propose an institutionalist account of innovation in which transposition across fields characterized by different dominant institutional logics plays a prominent role.We identify a number of facilitating conditions for such transposition to occur and we explain how it can subsequently lead to innovation.

Strategic practices as enablers and disablers of championing activity

Abstract: Research into the practice of organizational strategy is centered on the work of individual strategists. Strategic champions, individuals going beyond their operative responsibilities in strategic issues, are key stakeholders in research into strategy-as-practice. In this article, interview accounts of 158 champions from 12 organizations are analyzed for how strate gic practices enable and disable strategic champions in their work. A tension is discovered between recursive practices contributing to ontological security, achieved through pre dictability, and adaptive practices contributing to individual ownership of strategy, achieved through personal interpretation.

Escaping real (non-benign) competency traps: linking the dynamics of organizational structure to the dynamics of search:

Abstract: Focusing on the effect that organizational structure exerts on organizational search, we show under which conditions a change in structure increases performance even in stable environments. We model five different organizational structures (centralized, decentralized, ambidextrous, hybrid and team-based) and study with the help of an agent-based simulation whether transitions among these structures are beneficial. We find that sequences of structures can achieve higher performance than fixed structures. Alternative structures differ in their competency traps or sets of sticking points, that is the sets of points at which a search process in a given structure will terminate. As a result, a shift in structure may dislodge an organization from its current configuration of choices and provoke further search. Changes in organizational structure effectively differentiate between settings in which remaining at a competency trap is in fact a trap and settings in which remaining at a competency trap indicates comp...

Why Gaussian statistics are mostly wrong for strategic organization

Abstract: Consider the coasts of England and Norway. They appear jagged no matter what kind of measure is used: miles, kilometers, meters, centimeters, millimeters. This is called ‘scalability’: no matter what the scale of measurement, the phenomenon appears the same. Scalability results from what Benoit Mandelbrot (1983) called ‘fractal geometry’. A cauliflower is an obvious example. Cut off a branch; cut a smaller branch from the first branch; then an even smaller one; and then even another, etc. Now set them all on a table, in line. Each fractal subcomponent is smaller than the former; each has the same shape and structure. They exhibit a ‘power law effect’ because they shrink by a fixed ratio. Power laws underlie fractal geometry. They are ‘indicative of correlated, cooperative phenomena between groups of interacting agents at the microscopic level’ (Cook et al., 2004). They often take the form of rank/size expressions such as F ~ N-β, where F is frequency, N is rank (the variable) and β, the exponent, is constant. In most exponential equations the exponent is a variable. Power laws call for ‘scale-free theories’ because the same theory applies to each of the different levels, that is, the explanation of the generative process is the same across all levels of analysis. The cauliflower is an obvious example of this as well. STRATEGIC ORGANIZATION Vol 3(2): 219–228 DOI: 10.1177/1476127005052700 Copyright ©2005 Sage Publications (London,Thousand Oaks, CA and New Delhi) http://soq.sagepub.com

A configurational approach to the integration of strategy and organization research

Abstract: Strategic Organization was founded on the belief that strategy and organization research needs to be integrated. We agree that such integration is a worthy objective and are optimistic that it can be achieved. The main reason for our optimism is that the subfield of organization design already resides at the intersection of strategy and organization research, and its framework of theoretical models and application approaches provides a basis for integration. The integration of strategy and organization is needed not only theoretically but practically as well. Empirical research suggests that external factors (e.g. industry conditions) account for roughly 19 percent of a firm’s performance, while developing a sound competitive strategy and organization is responsible for about 32 percent of performance results (McGahan and Porter, 1997, 2003; Reufli and Wiggins, 2003). Clearly, better practice aided by better theory can make a big difference in a firm’s performance, and Strategic Organization should be at the forefront of providing such theory. In addition, we believe that theorists need to be more concerned about practical issues, especially with developing theories that help managers prepare their organizations for the future. For this essay, we define the organization design literature as those works that have been written expressly for designers and practitioners (Galbraith, 1973, 1977, 2000; Nystrom and Starbuck, 1981; Nadler and Tushman, 1997; Goold and Campbell, 2002) as well as the major theoretical frameworks that have been widely used in practice (Drucker, 1946; Weber, 1947; Chandler, 1962; Miles and Snow, 1978; Nohria and Ghoshal, 1997). Based on our assessment of this literature, we think it is unfortunate that the organization design STRATEGIC ORGANIZATION Vol 3(4): 431–439 DOI: 10.1177/1476127005057965 Copyright ©2005 Sage Publications (London,Thousand Oaks, CA and New Delhi) http://soq.sagepub.com

Explaining franchisors’ choices of organization forms within franchise systems

Abstract: When franchisors pursue different priorities, different agency problems become relevant, which drive the franchisors’ choices among various franchising organization forms. We use archival and key informant data from a multi-industry sample of 94 franchisors to examine franchisors’ choices of organization forms based on their goals for growth, uniformity and local responsiveness. Our results indicate that franchisors emphasizing high growth are more likely to use multi-unit rather than single-unit franchising and, within the multi-unit franchising form, they are more likely to use area development franchising than incremental franchising. Franchisors emphasizing uniformity instead of growth are more likely to use area development franchising, but those emphasizing local responsiveness are more likely to use incremental franchising. We discuss the implications of these results for franchising research and practice.

External succession and disruptive change: heirs-apparent, forced turnover and firm performance

Abstract: In general, CEO succession is disruptive to an organization, and external succession is especially disruptive. We analyze the impact on firm performance of disruption caused by external succession. Although traditional analysis of the succession process has emphasized the importance of a smooth transition to minimize disruption, research on external succession has emphasized the benefits of bringing in an outsider to shake things up. We investigate the impact on firm performance of three factors that affect the extent of disruption in external succession: forced turnover, which is generally viewed as highly disruptive; prior appointment of an external successor as an outside heir, in order to reduce disruption; and prior appointment as an outside heir with a public promise of becoming CEO. The results suggest that disruption in the form of forced turnover is associated with higher post-succession firm performance. The appointment of external successors as outside heirs first does not appear to be associat...

Building theory from practice

Abstract: The relationship between management research and practice is expanding in response to growing demand for research that is relevant to business and society, contributing in active and visible ways to the generation of wealth and competitiveness. Expectations of relevance come from many different sectors: universities, students, politicians, business leaders and funding agencies, to name a few. These trends signal a shift away from the prominence of science in social science, to a stronger emphasis on the social significance of social science to society. As management researchers, this appeal for social relevance poses challenges for the way we construct our theories and how we conceive their implications. In this essay we suggest one way to strengthen the relevance of management research. It entails shifting from a logic of building management practice from theory to one of building management theory from practice. Some management researchers are already hard at work redefining the social role of management theory. They converge on a definition of our role as providing practical relevance through theory for those who lead and work in organizations (Argyris, 2003; Tushman, 2003; Hoffman, 2004). In striving not just to balance rigor and relevance, but to maximize their benefits simultaneously, these researchers urge us to move once again into the domain of practical action, Lewin’s action research having provided the first such model (Lewin, 1946). Unfortunately, as Argyris (2003) and Hoffman (2004) point out, existing institutional systems and professional expectations often generate more restrictions than incentives to create such relevant or actionable knowledge. Our proposal for enhancing the relevance of management research suggests a different path: turning the relationship between research and practice upside down. Instead of defining ourselves as researchers who translate our theoretically derived knowledge into practical solutions (e.g. consulting tools, new management practices), we advocate seeing ourselves as tapping into practical knowledge in order to produce better theories. Drawing on Schutz’s (1980/1967) idea of the levels of knowledge, we take as our point of departure the first-order theorizing of practitioners. We use corporate branding as an example of a first-order construct from practice that contributes relevance to second-order constructs in STRATEGIC ORGANIZATION Vol 3(3): 337–348 DOI: 10.1177/1476127005055795 Copyright ©2005 Sage Publications (London,Thousand Oaks, CA and New Delhi) http://soq.sagepub.com

Identity and collaborative strategy in the Canadian HIV/AIDS treatment domain

Abstract: We explore the links between identity and strategy making by drawing upon a case study of a collaborative strategy implemented by community organizations and pharmaceutical companies involved in Canadian HIV/AIDS treatment. In implementing collaborative strategy, our analysis shows that champions engage in identity work that simultaneously involves: identification with their respective constituencies and, specifically, with categories associated with high legitimacy; counter-identification from their respective constituencies by constructing themselves as different from its core members; and dis-identification away from their constituency towards their collaborative partners. We also examine the interactions between champions and other actors involved in the strategic change process to show the limits and tensions involved in such identity work. We conclude with a discussion of the implications for research and practice.

Knowledge creation and the location of university research scientists’ interpersonal exchange relations: within and beyond the university

Abstract: Our study examines how the location (geographic and organizational distance) of the direct interpersonal exchange relationships a university researcher establishes and main tains affects his or her knowledge creation. In order to create new knowledge, researchers seek to combine and exchange information and know-how with others and must often go outside the boundaries of their universities to obtain the needed resources. We explore the impact of working with others, both within and outside the organization, on new knowledge creation. We argue for a curvilinear effect between distance and knowledge creation, in that spatially close and distant exchange partner locations will have a greater effect on knowledge creation than intermediate distances. Hypotheses, tested on a large sample of university biomedical research scientists, are largely supported.

Should you bank on your network? Relational and positional embeddedness in the making of financial capital

Abstract: This study explores the mechanisms through which relational embeddedness affects the performance of banks in syndication networks formed in the Canadian investment banking industry I argue that banks have a choice between building embedded network ties that are overlaid with social context and arm’s-length ties that facilitate individual competition Contrary to the arguments advanced in previous studies, I propose that maintaining a mix of arm’s-length and embedded relationships represents a disadvantageous network strategy Such strategy not only simultaneously exposes investment banks to competition from their peers, relying primarily upon embedded or arm’s-length ties, but also sends confusing signals about banks’ networking behavior I also propose that the link between relational embeddedness and performance is moderated by banks’ positional embeddedness, reflected in their status, and find that banks of higher status extract greater benefits from maintaining embedded ties, as compared with banks o

To avoid surprises, acknowledge the dark side: illustrations from securities analysts

Abstract: In the field of strategic organization, we presume the strategies and organization behavior we chronicle and praise are all above board and free from the likelihood of criminal prosecution. While generally the case technically, this assumption is also aided and abetted by the little known or examined fact that many of the large American corporations included in our studies have been officially accused of violating the law. Criminal prosecution is avoided by the ritual of the consent order signed by the accused party, in which the company neither confirms nor denies committing the alleged offense(s), but promises not to do it again. A reported influence on the decision to bring a criminal indictment against Arthur Andersen for its role in the Enron debacle was its history of already having signed consent orders to cease and desist from the very actions that helped contribute to Enron’s collapse. Studies of the firms signing these orders, and the wide set of behaviors they promise to not engage in (again), would provide a fascinating look at some unofficial strategies of American business, its folkways and a potential early warning about which firms are more likely to face subsequent criminal prosecution. In the post-Enron administration of New York state’s attorney-general, Eliot Spitzer, the more serious criminal indictment has come to supplant the comparatively benign consent order. Spitzer’s recent investigations have brought to light some glaring examples of ethical and legal wrongdoings across the fields of accounting, consulting, insurance, securities analysis and investment banking. Consistent with folk wisdom and what may not have surprised legal scholars (who regularly ‘imagine what could go wrong and don’t be surprised if it does’), it is jarring that academic experts and scholars on these industries had to learn from newspaper accounts that: Wall Street did not protect investors; public accountants did not report earnings accurately; consultants did not give STRATEGIC ORGANIZATION Vol 3(2): 229–238 DOI: 10.1177/1476127005052881 Copyright ©2005 Sage Publications (London,Thousand Oaks, CA and New Delhi) http://soq.sagepub.com

So you call that research? Mending methodological biases in strategy and organization departments of top business schools

Abstract: We believe that all strategy and organization (SO) scholars should be able to decide for themselves whether to specialize in certain parts of the knowledge cycle or adopt a broader, multi-method view on the scientific process. In a situation of ―methodological pluralism‖, individuals might choose to contribute to the construction of new administrative theories by means of qualitative works like case studies, ethnographies, biographies, or grounded theory studies (e.g., see Denzin and Lincoln, 2000). Others could then specialize in testing these theories by means of experiments, surveys, or longitudinal econometric studies (e.g., see Lewis-Beck, 1987-2004). Again others could combine both approaches in Herculean attempts to conduct high-impact, integrative research with the potential to change the way we understand the field as a whole.

Influences of relative rewards of top managers on firm performance

Abstract: In this work the impacts of top managers’ relative rewards on firm performance are examined. What is suggested and empirically found is that greater disparities in interrank values of salary streams may lower the performance of more focused firms (such as single-product firms or related diversifiers). It is also suggested and found that higher gaps in interrank values of salary streams may boost the performance of less focused firms (unrelated diversifiers). In contrast, it is proposed and found that expanded differentials in interrank values of stock options may improve performance, regardless of the strategic profile of the enterprise. Moreover, it is contended and found that intrarank disparities in salary streams or options may adversely influence the performance of the more focused as well as the less focused firms.

Communication clarity in strategic management data sources

Abstract: Researchers often use organizational documents as source material without considering that measurements of organizational attributes might vary according to the document type used. We examine the communication clarity, described by sensitivity and specificity, of three document types used to score organizational strategy variables. We hypothesize that each type will have greater sensitivity or greater specificity, depending upon document objectives and rhetorical devices. Using a partial least squares analysis method, all except one hypothesis were supported: communication clarity does vary by document type. Shortcomings of each document type are discussed and possible ways for strategy researchers to overcome those shortcomings are suggested.

The managerial revolution revisited: the moderating impact of top managers’ social class position:

Abstract: This article draws on early sociological critiques of the managerialist thesis to develop a new conceptualization of corporate ownership and control which is used here to inform an analysis of the ...