sms berlin 2016 cultural perspectives on strategic management

CulturalPerspectivesonStrategicManagement

JoelGehmanandKrsto PandzaSMSBerlin,September18,2016

Goalsforthesession?

1)Sparkconversationsbetweenscholarsattheintersectionofstrategicmanagementandorganizationtheory

2)Identifythepromisingquestionsthatcouldbenefitfromintegratingstrategyandorganizationaltheoryconcepts

3)Discusspossiblechallengesofsuchatheoreticalbricolage

Tohelpthisprocess

Pleasejotdownthoughtsorquestionsforthequestionandanswerperiod

Ourpanelists

Shazhad Ansari, UniversityofCambridgeRodolphe Durand, HECParisCandaceJones,UniversityofEdinburghMichaelLounsbury,UniversityofAlbertaRichardWhittington,UniversityofOxford

Cultural Perspectives on Strategic Management

Shaz Ansari University of Cambridge

SMS 2016 Berlin

Richandgrowingbodyofwork

• Strategyaboutprocess• Strategyaboutpractice• Strategyabouttemporalwork• Strategyaboutleveraginglogicsasresourcesandmanaginginstitutionalcomplexity

• Strategyaboutmanagingstakeholders• Strategyaboutnavigatingparadoxes

Promisingavenues:Fieldsandecosystems

Fields:“thoseorganizationsthat,intheaggregate,constitutearecognizedareaofinstitutionallife:keysuppliers,resourceandproductconsumers,regulatoryagenciesandotherorganizationsthatproducethesimilarservicesorproducts”(DiMaggio&Powell,1983)p.148).

Ecosystems:Dynamicandco-evolvingcommunitiesoforganizations,customers,competitors,suppliers,producers,financiers,tradeassociations,standardbodies,laborunions,governmentalandquasi-governmentalinstitutions,andotherswhocreateandcapturenewvalue(Moore,1996).

Promisingavenues(Framingandinnovation)

• Nonessentialistviewofdisruptiveinnovation;reframinginvolvesachangeinemphasisfromthe“disruptive”aspectoftheinnovationthatupstagesestablishedincumbents,tothebeneficialaspectoftheinnovationthatcanenhancethevaluegeneratedforandbyvariousincumbentswithintheecosystem(Ansari,Garud,Kumaraswamy,2016inSMJ)

Challengesoftheoreticalbricolage

• Specializedreviewersandvocabularies• Discomfortwithterminologyfrom“otherside”orwithwhatisperceivedtobepresenting“oldwineinnewbottles”

• Perceivednoveltyforscholarsinbothcamps• Fusionversusintercalationofconcepts

Ourpanelists


Strategy/O.T.rudy durandHECParis

Strategy :performance;novation

What ifperformanceis nottherightDV?What ifnovationis nottherightIV?

DurandR.,RaoH.,andMonin P.(2007)CodeandConductinFrenchCuisine:ImpactofCode-ChangesonExternalEvaluations, StrategicManagementJournal,28(5):455-472DurandR.andVaara E.(2009)Causation,counterfactuals,andcompetitiveadvantage,StrategicManagementJournal,30:1264-1284PhilippeD.andDurandR.(2011)Thedifferentiatedimpactsofconformingbehaviors onfirmreputation,StrategicManagementJournal,32:969-993DurandR.andVergne JP.(2015)AssetDivestmentasaResponsetoMediaAttacksinStigmatizedIndustries,StrategicManagementJournal,36:1205-1223

Inmyview,everyfirm’schoiceequalsaselection-criterionchoice that increases orrelaxestheselective pressureoncompetitors.Inother words,aSelection Preserving Choicemaintains established rules ofactionandputs pressureoncompetitors toconform tothecurrent modelofcompetition,whereas aSelection Transforming Choice requires thefirm’scompetitors toreact tonewselective rules andcriteria.

Mostmarkets aremediated (e.g.cultural,experience,hedonistic,financial products)andribbed/filled with norms andcategories

DurandR.(2012)Advancingstrategyandorganizationresearchinconcert:Towardsanintegratedmodel? StrategicOrganization,10(3):297-303.Vaara,E.,&Durand,R.(2012).Howtoconnectstrategyresearchwithbroaderissuesthatmatter?. StrategicOrganization, 10(3),248-254

My recent research investigates thenormativeandcognitivepillars ofstrategic choices

OTinto Strategy

• What doperformanceanditsmeasuresmeanreally?Howdofirmsstrategicallycreatemarketsandinstitutionalizemetricstomeasure theirperformance?Logics:Thornton,Jones,Lounsbury,Greenwood,Ansari….Materiality:Mckenzie,Millo,….Categories:Bowers,Chae,Pontikes,Porac,Smith…

• Whyandhowdofirmspositionthemselvesandparticipateininstitutionalprocesses,andhowdotheirchoicesinfluencetheconditionsfortheircompetitiveness?Movements:King,Soule,McAdam,McDonnel,…Institutionalization:Ansari,Hiatt,Patterson,Sine,…

Strategy into OT

• Why,howandwhendoinstitutionalandstrategyfactorsdriveanorganizationinselectingtheuseofitsresources?Andwhataretheconsequencesoftheseoutcomesforthoseinstitutionalordersandlogicsthatprevailwithinthefieldorindustry?

• Systematicinclusionofbotheconomicandinstitutionaldeterminantsoforganizationalconformity/deviance,andoftheirconsequences.

ExamplesDurandR.andJourdanJ.(2012)JulesorJim:Alternativeconformitytominoritylogics,AcademyofManagementJournal,55(6):1295-1315

DurandR.,Szostak B.,JourdanJ.andPH.Thornton.(2013)Institutionallogicsasstrategicresources,E.Boxenbaum andM.Lounsbury (eds),InstitutionalLogicsinAction,PartA,ResearchintheSociologyofOrganizations,Volume39A,165–201

Durand,R.andP-AKremp (2016)Classicaldeviation:OrganizationalandIndividualStatusasAntecedentsofConformity,AcademyofManagementJournal,59:65-89

Paolella,L.andDurandR.(2016)CategorySpanning,Evaluation,andPerformance:RevisedTheoryandTestontheCorporateLawMarket,AcademyofManagementJournal,59:330-351

Ourpanelists


OTandStrategy• OT’sfocusoncultural,historicaldynamicsandmaterial

practicesofindustriesandentrepreneurialstrategiesilluminatessubstitutioneffectsandwhencomplementarityversuscompetitivenessareenacted

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ENR ArchRec Apparent consumption (Metric Tons)

EngineersImitate&Substitute;ArchitectsReinvent&ExtendIngall’s Bldg 1903

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1, rue Danton, Paris. 1892. Hennebique.

UnityTemple,1909

duRancyPerret,1922

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Ourpanelists


Cultural Perspectives on Strategic Management:Bridging Strategy and Organization Theory

Michael LounsburySMS 2016, Berlin

Theoretical Prelude:Institutional Theory a la 1980s

v Culture foregrounded in Institutional theory which asserted that firms aim to be similar to peers to gain legitimacy and avoid penalties associated with deviance (DiMaggio & Powell, 1983)

v Isomorphism (corecive, normative, regulative) became the master theoretical frame for the study of diffusion through the 80s and 90s (Strang & Soule, 1998)

v Many Critiques:

v Depicted later adopters as passive and “a-rational”

v Culture is everywhere, but unitary and dominating

v By opposing rationalistic accounts, it maintained a false distinction between institutional (culture) and technical forces

v Neglects Practice Variation and messiness of practice and action

Optimal Distinctivenessv The proliferation of isomorphism theory gave rise to a core paradox at

the interface of strategy & organization theory: how do firms strategically manage competing pressures to be both “like” and “different from” organizational peers (Durand and Calori, 2006).

v In contrast to isomorphism theory, strategy emphasizes firm difference by establishing valuable, rare and inimitable resources to gain competitive advantage (Barney, 1991)

v Building on Brewer’s (1991) ideas about how individuals forge unique identities amidst strong normative pressures to conform, scholars have argued that firms need to engage in strategies that achieve optimal distinctiveness—the extent to which audiences perceive this tension to be appropriately reconciled. In turn, audience perceptions are theorized to affect performance outcomes (e.g., Deephouse, 1999; Lounsbury & Glynn, 2001—a core idea in the Cultural Entrepreneurship approach).

Institutional Theory & Optimal Distinctiveness Research in SMJ, 1980-2015

Optimal Distinctivenessv Research has highlighted how OD affects

v financial performance (Deephouse, 1999) v resource acquisition (Lounsbury and Glynn, 2001)v corporate governance (Zajac and Westphal, 1994)v firm and stakeholder attention (Ocasio, 1997)v reputation (Basdeo et al., 2006)

v The majority of OD publications in SMJ have been grounded in Deephouse’s (1999) idea of strategic balance, focusing on stable, institutionalized contexts and single OD points:

v operationalized as an intermediate level of strategic deviation; he measured it as the degree of deviance from a mean industry attribute position (asset strategy of banks). He found a significant, curvilinear relationship between the mean deviation of commercial banks and their financial performance in the Twin Cities area.

Optimal Distinctivenessv Opportunity for a renewed approach to OD & engagement between

Strategy & OT (Zhao, Fisher, Lounsbury & Miller, forthcoming SMJ).

v In contrast to isomorphism, new developments such as the Institutional Logics Perspective (Thornton et, al., 2012) & the Cultural Entrepreneurship literature (Lounsbury & Glynn, 2001; Garud, Gehman & Giuliani, 2014; Pandza & Thorpe, 2009 have focused more explicitly on agency, heterogeneity, and dynamic social processes

v Builds on the “toolkit” conceptualization of culture (Swidler, 1986) and engages practice approaches (e.g., Lounsbury & Crumley, 2007; Smets, Greenwood & Lounsbury, 2015; Seidl & Whittington, 2014; Whittington, 2006)

v Although some markets may exhibit relatively static, single OD points, such cases may be rare, and many markets may bear multiple OD points because of multipoint competition (Fuentelsaz and Gómez, 2006), multiple strategic groups (Peteraf and Shanley, 1997), multiple logics etc.

v A renewed approach to OD, and the OT/Strategy interface should focus on temporality (Gray, Purdy & Ansari, 2015 AMR), multiple audiences, and the active co-construction of varied OD points

Implications for Category Researchv Category research is one of the highest growth areas at the

interface of OT & Strategy, but most research has focused on the categorical imperative (isomorphism) and its scope conditions

v We need more attention to OD & the social processes of categorization (see forthcoming RSO volume by Durand, Granqvist &Tyllström—From Categories to Categorization: Studies in Sociology, Organizations and Strategy at the Crossroads

v How (and how much) can actors deviate from norms?

v How and under what conditions is deviance rewarded?

v How much variability in a category is acceptable?

v How does intra-category variability lead to category change or new category creation?

Logics, Categories & Optimal Distinctiveness

v Variability inside categories may be importantly shaped by logics connected to diverse actors and/or audiences

v For example, Jones, Maoret, Massa & Svejenova (2012) showed how the logics of commerce, state, religion and family, associated with the clientele (audiences) of architects consequently shaped the formation of the “modern architecture” category

v Plural logics & category expansion resulted in multiple conflicting exemplars within the category (e.g., minimalist functional vs. eclectic/organic)

v A renewed OT/strategy research agenda might examine how these kinds of socio-cultural processes affect the construction and dynamics of different optimal distinctiveness points in a category

Ourpanelists


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JeanLaveandEtienneWenger

WandaOrlikowski

DaveKnightsandGlennMorgan GoogleScholarcitationsto“StrategyasPractice”p.a.

StrategyasPractice:Originsin(thefringesof?)OrganizationTheory

‘Strategyassomethingpeopledo,withstuff,in

society’

Or

Strategizingactivityasexpressionofinstitutionalizedpractices

PlanningProcesses&

Performance

ProcessesofStrategicChange

OrganizationandStrategyasProcess

Practices&

Institutions

ProcessesofPracticeChange

PracticesasWorkand

Entrepreneurship

e.g.Ansoff(1990)

e.g.Petttigrew(1985)

e.g.Langley&Tsoukas(2010)

e.g.Fligstein(1985)

e.g.Fligstein(1993)

Processualists Institutionalists

OntologicalConvergenceonActivity

e.g.Fligstein(2001)

sms berlin 2016 cultural perspectives on strategic management

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