the paradoxical foundation of strategic management

The Paradoxical Foundationof Strategic Management

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Andreas Rasche

The ParadoxicalFoundationof StrategicManagement

Physica-VerlagA Springer Company

Dr. Andreas RascheHelmut-Schmidt-University HamburgUniversity of the Federal Armed ForcesDepartment of Logistics and OrganizationHolstenhofweg 8522043 [email protected]://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

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To My Family

Foreword – Strategic Management inDeconstruction

The concept of ‘corporate strategy’ has changed significantly during thelast few decades. Whereas the strategic planning orientation of the 70s andearly 80s was still dominated by a belief in feasibility, rationality, and thesmooth implementation of prefabricated strategies by top management,strategic management sharpened our understanding of possible pitfalls dur-ing planning and put more emphasis on the ‘messy’ realization of strategicplans. Moreover, the unavoidable paradoxes and dilemmas that occurwithin strategizing are increasingly discussed when writers consider thegeneral importance of the organization together with its external and inter-nal context. Although this trend towards strategic management cannot beneglected, as a quick look into any of the major journals proves, there stillis the question of how we can find a theoretical fundament that gives ade-quate reference to phenomena such as paradox. This is where this bookfills a void in the existing academic discourse.

Andeas Rasche’s book, a critical, yet constructive, analysis of the theo-retical foundation of strategic management and its paradoxical nature en-ters new territory. In particularly, there are three reasons this is a novel andinnovative treatise. First, the discussion of deconstructive thinking with re-gard to strategic management represents a risky and hence courageous aswell as extremely ambitious task. Second, the author manages the difficulttask of giving a short but comprehensive introduction to the work ofJacques Derrida. Third, he also surprises the reader with his extraordinaryability to concentrate complex relationships into reduced, though notoverly reduced, illustrations. These illustrations allow the reader to gainnew insights and sharpen her/his existing knowledge about the theoreticaldiscourse that underlies strategic management.

The capability to ‘guide the reader’ through the discussion is evidentwhen looking at Rasche’s matrix (see Figure 1 in chapter one) that is pre-sented in the introductory chapter: based on Pettigrew’s distinction be-tween strategy context, process, and content he provides a structured over-view of the strategy field that guides his entire discussion. The resultingclarity of the analysis allows Andreas Rasche to handle a high degree of

VIII Foreword – Strategic Management in Deconstruction

complexity within his discussion. For instance, he criticizes the conven-tional 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’ (strat-egy content). He uncovers the underlying oppositions that reside withinthese dominant logics that have until now been obscured. In so doing, theauthor is able to deconstruct the strategy discourse and thus reveals itsparadoxical foundation. The consequences of the deconstructions areclearly discussed: strategy research has to accept its paradoxical founda-tion and can only do so by challenging its deeply held assumptions,namely the belief in a ‘given’ market (strategy context), the idea of non-paradoxical strategic decisions and the resulting linear nature of strategiz-ing (strategy process), as well as the faith in generalizable solutions to stra-tegic problems (strategy content).

Chapters seven and eight present the ‘practical’ implications of the de-constructions and demonstrate that Rasche’s discussion has significantconsequences not only for the practice of strategic management in organi-zations but also for the way strategy is researched and taught within busi-ness schools. The integrative framework – strategy-as-practice – intro-duced to discuss these consequences represents, from my point of view, aconsistent and comprehensible conclusion since a practice perspective al-lows for a discussion of the implications of a Derridian deconstruction ofstrategic management while, at the same time, still remains attached to theunderlying ideas of his philosophical work. The introduction of the con-cept of ‘communities of strategy formation’ can especially enrich futureempirical research on strategic management and thus represents a promis-ing way into the future.

All of this results in five major recommendations that the author sets upto extend, modify, rethink, and discuss scholars’ strategic realities. Theserecommendations he puts forward: (1) move away from the ideology rep-resented by the dominant logics, (2) create future strategic realities underconsideration of paradox, (3) acknowledge the fictional ground of strategicmanagement as a means to deparadoxify the identified paradoxes, (4) rec-ognize the supplementary nature of strategy context, process, and content,and (5) start researching strategy as an enacted social practice occurringwithin the flow of human activity.

Andreas Rasche is right: We have to think of strategy as being alwaysalready in deconstruction.

Günther OrtmannJune 2007

Preface – Strategic Management and Paradox

This book is the outcome of a long journey throughout the wilderness ofstrategic management. It represents a revised version of my PhD thesis thatwas presented and defended at EUROPEAN BUSINESS SCHOOL, Ger-many. I would like to briefly address two essential questions within thispreface.

Why does it make sense to discuss the philosophy of Jacques Derridawith regard to strategic management? I think there are particularly twopoints that should be considered. First, Derrida’s philosophy can enrichour understanding of the value of and necessity for paradox in strategicmanagement. As mentioned in the foreword by Günther Ortmann, paradoxis often mentioned in writings about strategic management, at least inthose writings that move beyond a planning orientation, but not suffi-ciently backed up with theory. I offer one possible way to theorize aboutparadox in strategic management without immediately concluding the im-possibility of strategizing. Rather, I consider paradoxes to operate at thenecessary limits of knowledge about strategy management, limits that weshould know in order to improve future theorizing. Second, Derrida’s phi-losophy, a way of thinking that is often called deconstruction, provides a‘walking stick’ to uncover and address many phenomena that are very im-portant to strategy scholars (e.g., the role of the future and the suspensionof meaning). By ‘applying’ Derrida to strategic management – althoughstrictly speaking you cannot apply Derrida from the outside but insteadneed to recognize that his thinking has always already been part of thepractice of strategy – I hope to open up new ways of thinking about strate-gizing 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 someterms that the reader might not be familiar with. Although I provide a glos-sary 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/hisunderstanding of strategic management. Even though practitioners as wellas strategy scholars have strategic realities, I will focus primarily on the

X Preface – Strategic Management and Paradox

strategic realities of strategy scholars. Porter, for instance, has a well-known strategic reality in which he makes certain assumptions (e.g., com-petitive advantage is determined by the structure of the industry). Second,paradigms in strategy research occurred during the development of thescientific discourse. Whereas in the 60s and 70s the paradigmatic orienta-tion was much influenced by the planning school, the 80s brought aboutthe rise of the market-based paradigm and the 90s the resource-based view.Throughout the book I treat these different schools of thought as para-digms of strategy research. Third, what I call a dominant logic refers to theobscured assumptions that strategy scholars refer to when theorizing aboutstrategic management. The important issue is that dominant logics cutacross a variety of paradigms; dominant logics (e.g., that the market dic-tates strategic conduct) are always part of more than one paradigm, schol-ars have become so used to them that they are rarely acknowledged oreven referred to.

Many people have contributed to this study. Particularly, I thank thethree supervisors Ulrich Grimm, Hartmut Kreikebaum, and Günther Ort-mann. In addition, Dirk Ulrich Gilbert gave me an excellent review of theentire manuscript and added many thoughtful insights. I also thank HenryMintzberg and Robert Chia for discussing parts of the manuscript with me.Christina Braasch, Hal Salzman, and Michael Darroch provided my appre-ciated editorial advice. Last but not least, I thank my family as well as mygirlfriend, 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 ........................................................................11.1 Underlying Problem and Research Objective................................11.2 This Study and the Philosophy of Science...................................161.3 Limitations of the Study – Some Words of Caution ...................211.4 Structure of Analysis .....................................................................23

2 Strategic Management as a Field of Study .........................................272.1 The Concept of Strategy................................................................27

2.1.1 Why Do We Need Strategic Management?.........................272.1.2 The Definition of Strategy – Differing Perspectives ..........31

2.2 Paradigm Lost? – The Roots of Strategy Research .....................332.2.1 Potential Paradigmatic Classifications................................342.2.2 Disciplinary Roots of Paradigms in Strategy Research .....362.2.3 Paradigms in Strategy Research – A Historical Sketch.....392.2.4 The Desired Paradigmatic Status of Strategy Research ....46

2.3 Strategic Realities – Context, Process, and Content ...................532.3.1 Shaping the Contours of the Strategy Field.........................532.3.2 Strategy Context – What Shapes Strategies? ......................542.3.3 Strategy Process – How Are Strategies Formed? ...............562.3.4 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 .......................................693.1 Where to Look for Dominant Logics? .........................................703.2 Exploring the Dominant Logics of Strategy Research................74

3.2.1 Strategy Context – The ‘Necessity of Adaptation’ .............743.2.2 Strategy Process – The ‘Primacy of Thinking’ ...................813.2.3 Strategy Content – The ‘Fullness of Rules/Resources’ ......893.2.4 The Dominant Logics of Strategy – An Overview .............963.2.5 The Embeddedness of Paradigms in Dominant Logics ......97

XII Contents

3.3 How Dominant Logics Come into Existence ..............................993.3.1 Producing Facts in Strategy Research ...............................1003.3.2 Sustaining Facts in Strategy Research ...............................1043.3.3 From Facts to Dominant Logics.........................................111

3.4 Challenges from Outside the Mainstream..................................1143.4.1 Levels of Critical Strategy Research..................................1153.4.2 Demanding Reflexivity in Strategy Research ...................1163.4.3 Critical Reflections on the Dominant Logics ....................1183.4.4 Paradox and Dominant Logics ...........................................1233.4.5 Strategy Because of and Despite Paradox .........................125

4 Deconstruction and the ‘(N)either/(N)or’ .........................................1274.1 The Meaning(lessness) of Postmodernism ................................127

4.1.1 The Philosophical Discourse Around Postmodernism .....1274.1.2 Postmodernism in Organization Theory............................135

4.2 Deconstruction in a Nutshell?.....................................................1394.2.1 The Target – Critique of a Metaphysics of Presence........1404.2.2 Deconstruction as a Way of Thinking ...............................1424.2.3 ‘La Différance’ – The Deconstruction of the Sign ...........1504.2.4 The Deconstruction of the Social – About (Con)Texts ....1574.2.5 Deconstruction and Paradox...............................................1614.2.6 Deconstruction – Critical Arguments ................................1664.2.7 Résumé – Derrida, a Postmodernist? .................................168

4.3 Deconstruction within Organizational Analysis........................1704.4 Strategic Realities as Text...........................................................175

5 Strategic Realities – The Role of Paradox ........................................1795.1 Strategizing Because of Paradox ................................................1805.2 Strategizing Despite Paradox......................................................1825.3 Strategic Realities Despite and Because of Paradox .................189

6 The Deconstruction of Strategic Realities.........................................1936.1 Strategy Context – Beyond the Market Given...........................196

6.1.1 Complexity – Beyond the ‘Necessity of Adaptation’.......1966.1.2 Strategy Context and the Paradox of Adaptation..............2006.1.3 The Deparadoxification of Strategy Context.....................2056.1.4 Implications of the Deconstruction of Strategy Context ..208

6.2 Strategy Process – Beyond the Notion of Feasibility................2166.2.1 Contingency – Beyond the ‘Primacy of Thinking’...........2166.2.2 Strategy Process and the Paradox of Undecidability ........2206.2.3 The Deparadoxification of the Strategy Process...............2246.2.4 Implications of the Deconstruction of Strategy Process...227

Contents XIII

6.3 Strategy Content – Beyond Simple Generalizations ................ 2376.3.1 Context – Beyond the ‘Fullness of Rules/Resources’...... 2376.3.2 Strategy Content and the Paradox of Repetition .............. 2406.3.3 The Deparadoxification of Strategy Content.................... 2466.3.4 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 ............................................. 2717.1 From Deconstruction to Strategy-as-Practice ........................... 2727.2 ‘Social Practices’ – What’s in a Name? .................................... 2747.3 Strategy-as-Practice – Towards a Framework .......................... 2767.4 ‘Communities of Strategy Formation’ ...................................... 2827.5 Doing Strategy Research ‘After Derrida’ ................................. 286

8 Final Reflections – Retrospect and Prospect ................................... 2897.1 Retrospect – Rethinking Strategic Realities ............................. 2907.2 Prospect – Fostering Engaged Scholarship............................... 2957.3 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 paradigmati-cally constrained by positivistic assumptions and research traditionslargely stemming from economic analysis.1 Not too surprising, such con-straints open a considerable gap between the knowledge accumulated byscholars and managers’ ability to use this knowledge (Gopinath andHoffman 1995). In his review of strategy research Bettis (1991: 315) notesthat he is “struck by the sense that most of this research is irrelevant towhat is going on in such firms today.” He concludes that the field of stra-tegic management is prematurely stuck in a ‘normal science straight-jacket’.

Shrivastava’s (1986) early critique of the strategy field gives referenceto this theory-practice gap by uncovering the narrow functionalist ideol-ogy2 on which strategy research is based. Ideology for him

1 See for example the debate in the Strategic Management Journal on the useful-ness of applying a constructivist methodology to strategy research (Kwan andTsang 2001; Mir and Watson 2001, 2000). Another debate in the same journalfocuses on the contributions of pragmatist philosophy to a theory of competitiveadvantage (Durand 2002; Powell 2002).

2 The term ‘ideology’ is used in different ways. Marx (1992), who is often con-sidered the “inevitable point of departure for any contemporary discussion ofideology” (Giddens 1979: 165), used the concept politically to express the inter-ests of dominant classes. Our concept of ideology is similar to the one of Mann-heim (1936: 36) who states “that ruling groups can in their thinking become sointensively interest-bound to a situation that they are simply no longer able tosee certain facts which would undermine their sense of domination.”


“refers to those aspects of idea systems that obscure interests served by ideasand facilitate the establishment and maintenance of domination. […] Meaningand legitimation are connected by ideas in such a way as to favor dominant in-terests.” (Shrivastava 1986: 365, emphasis added)

For Shrivastava these dominant interests are well reflected by scholars’ as-sumptions of a given ‘natural’ environment and a tendency to provide gen-eralized statements that decontextualize research problems. He accuses re-searchers of seeking technical efficiency and instrumental rationality asprimary goals of analysis. Whilst Shrivastava provides a good startingpoint to challenge this functionalist ideology, recent critical assessmentsseem to prove that scholarly activity is as firmly rooted in this ideology asever (Clegg et al. 2004; Farjoun 2002; Hafsi and Thomas 2004; Levy et al.2003). To better understand this scientific inertia and to offer alternativeways of reasoning, we need to know more about the process of ideologyproduction that influences the field’s intellectual foundation.

Bachelard (1987: 46-50) provides a profound examination of the under-lying dynamics of ideology production. Central to his argumentation is theconcept of dominant logic, which can be defined as pervasive, yet invisiblepredispositions with regard to certain scientific problems. Based on the as-sumption that research fields are often governed by such logics, he claimsthat once they are established, the appreciation of underlying problems andthe willingness to question them vanishes. To be ‘scientific’, researchersneed to give reference to the established predispositions that tacitly per-vade the community. These predispositions fix central conceptions as wellas the used terminology for the respective field of study. Problems are notperceived as problems anymore as the dominant logics dictate what is re-garded as scientifically desirable.3 The ability of scholars to critically re-flect the underlying assumptions of their discipline is eroded. As discussed

3 These remarks show that the concept of dominant logic comes close to, but isnot equal to, what can be labeled ‘normal science’ in a Kuhnean sense (Broich1994: 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 domi-nant logic and normal science share the claim that doubts about favored assump-tions and research procedures are suspended (see also the discussion byWillmott 1993: 686). Both concepts are different in that normal science, as weunderstand the term, “means research firmly based upon one or more past scien-tific achievements, achievements that some particular scientific community ac-knowledges for a time as supplying the foundation of its further practice” (Kuhn1996: 10), while dominant logics are less about the model-role of scientificachievements but look at the assumptions that are attached to these achieve-ments.

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 seriousproblem to strategy scholars. Similarly, Michel and Chen (2004) claim thatthe field needs to be more self-critical to guarantee relevance, to further in-tellectual progress, and to help recognize the contribution relative to otherareas of research. Considering this, an in-depth discussion of the ideologi-cal character of strategy research requires that we examine the process ofideology production by identifying the prevailing dominant logics of thefield.

The decision which lines of argumentation are labeled ‘dominant’ iscontingent (like any decision). This does not mean that we cannot findsome classificatory scheme that guides the identification process and thuslimits the sphere of possible dominant logics. What is needed is a frame-work for theory building that captures the widespread activities of strategyscholars and enables us to understand the embeddedness of strategic reali-ties in the context of past and ongoing research. Strategic realities reflectscholars’ constructed nature of the ‘world-of-strategy’; they describe theassumptions researchers attach to their more detailed theories and frame-works of strategic management in terms of central categories like ‘the en-vironment’. For instance, Porter’s (1980) strategic reality includes a vari-ety of assumptions regarding the nature of the environment and the causesof competitive advantage. Since dominant logics need to refer to some-thing, we propose to consider strategic realities as their building blocks.Then, to find a classificatory scheme for dominant logics, we have to ar-ticulate those dimensions that scholars use to structure their strategic reali-ties (Freeman and Lorange 1985: 10).

To identify these dimensions, we use Pettigrew’s (1988) tripartiteframework of strategy context, process, and content as it is (a) widely ac-cepted by scholars working in the strategy field4 and (b) holistic, includinga considerable extent of past and ongoing research. Strategy context askswhich set of circumstances influence decisions with regard to strategy con-tent and process and thus gives rise to the wherein of strategy research(wherein, in which circumstances, are strategy process and content embed-ded?). By contrast, content and process assess the purpose of strategic de-cisions. Do we investigate the decision itself (its content) or how the deci-sion has been made (its process)? Strategy process research covers the waystrategies are created, sustained, and changed over time by focusing on thehow 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 trea-tises by Freeman and Lorange (1985), Ketchen et al. (1996), Moore (1995), andVos (2002).


the strategy process by asking what constitutes a competitive advantage.Strategy context, process, and content give us an idea about the dimensionsthat scholars discuss in their strategic realities and thus tell us where wehave 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’ (strat-egy content) as dominant logics of strategy research and illustrate that theirdominance relies on a disregard of their own paradoxical nature. Theparadoxes we are interested in are operational in the sense that they are re-flected in the praxis of strategizing. For us, paradoxical reasoning is rea-soning whereby the enabling and constraining conditions of an operation(e.g., a strategic decision) coincide. Paradox implies that the respective op-eration is impossible because the condition of the possibility of the opera-tion leads, at the same time, to its impossibility.

Regarding strategy context, we can identify a tendency to view organi-zation and environment as two separate entities while thinking about thecircumstances that shape strategy. This separation gives rise to a dominantlogic that we label the ‘necessity of adaptation’, because it characterizesthe fact that scholars analyze the environment as existing on its own andhence in an objective manner. Organizations are left with the task of adapt-ing and fitting to this environment as well as possible. Speaking with Chaf-fee (1985: 90), adaptation-based strategy research supposes that companiesmake up their environment in the sense that all social actors are parts ofone reality. This reality is relevant to all and provides the point of refer-ence for strategy formulation. The dominance of this thinking becomesmost obvious when considering that Ansoff (1987a: 501) sees the core ofstrategic thinking as “the logic which guides the process by which an or-ganization adapts to its external environment.” This logic has been widelyapplied by advocates of market and resource-based thinking.

Advocates of the market-based view argue that organizations adapt totheir environment by following the strategic rules of their industry. Porter(1980) believes that an industry can be perceived as an objective structurethat restricts the strategic actions of the corporations located within it. Allcorporations observe and adapt to this structure while developing theirstrategy. A similar argumentation is brought forward by the resource-basedview. Hamel and Prahalad (1995: 310) argue that a competence is onlyvaluable if customers regard it as leading to a distinct competitive advan-tage. Customers, like the environment in the market-based view, become‘objectified’ in the sense that they are thought to determine the value ofcompetences. Similarly, Collis and Montgomery (1998: 31) state that


“[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 bedetermined by customer preferences.” (emphasis in the original, see also Bran-denburger and Stuart 1996: 6)

Even the recent view on dynamic capabilities stresses that “in high-velocity markets, effective routines are adaptive to changing circum-stances.” (Eisenhardt and Martin 2000: 1117) Resource and market-basedreasoning suppose that the environment is objectively given and able tomediate between successful and unsuccessful strategic conduct.

This adaptation-based logic obscures a paradox (Vos 2002). For this, weneed to recall that the hidden assumption in the paradigm of adaptation isthat there is only one environment that exists independent of all organiza-tions. As a consequence, the solution to the problem of adaptation is arather straightforward one: observe what is going on and adapt to the situa-tion. Considering Ashby’s (1956: 206-207) ‘Law of Requisite Variety’, fora firm to be in control it needs to take as many control measures as thereare external variations. In the paradigm of adaptation, firms adhere to thislaw because they build up requisite variety and establish a point-to-pointcorrespondence to the environment they need to adapt to. However, in aworld where the environment is more complex than the organization, it isimpossible to establish such a point-to-point correspondence (Luhmann1994: 46-48). Because of the indispensable complexity-gradient betweenorganization and environment, every observation of the environment is justa construction from the perspective of the organization. This notion im-plies that every organization possesses its own environment.

If the environment is just a construction, what do firms adapt to? It can-not be the (objective) environment because the complexity-gradient re-stricts full access and thus correspondence to the environment. When con-sidering that the environment is just a construction from the perspective ofthe organization, there is a paradox that needs to be accepted: adaptation tothe environment is only possible as self-adaptation. This situation is para-doxical in the sense that an organization needs to distinguish itself from anenvironment that is not part of itself, while at the same time it observesthat this environment is nothing more than its own production. Organiza-tions cannot observe the environment despite and because of themselves.As long as one obeys to the paradigm of adaptation, one obscures theparadox that organizations can only be adapted to their environment if theyare adapted to themselves. This paradox is obscured by the ‘necessity ofadaptation’ since the observation of the environment is not problematizedand can only be taken into consideration when conceptualizing the organi-zation/environment distinction in a self-referential way.


Concerning strategy process, scholars tend to follow a notion of feasi-bility by alleging that thinking (strategy formulation) and action (strategyimplementation) are two separable entities (Mintzberg 1994a: 290-294).This results in a dominant logic that we call the ‘primacy of thinking’ be-cause thinking is thought to come before action in a way similar to a causedetermining its effect. Implementation is perceived to be a derivation ofthe fully formulated strategy. Scholars who follow this perspective stressthe goal-oriented nature of strategic management and argue that strategiesrely on explicit deliberate decisions. Strategizing is thought to be an overlylinear process based on rational assumptions. Like an engineer builds abridge, a manager is thought to be a designer of a grand strategy whichfirst becomes formulated, then implemented, and later evaluated (Leiboldet al. 2002: 72; Pettigrew et al. 2002: 12). Instabilities and structural rup-tures are assumed to be obstacles to a thriving strategy formation. Unin-tended successful action patterns are either seen as brilliant improvisationsor just pure luck. The implications of this view are far-reaching. For in-stance, middle and lower management are assigned the role of facilitatorsthat provide relevant information to the executive level where the strategyis developed. In consequence, strategic and operational issues are de-tached.

It is widely recognized that Andrews (1971) and Ansoff (1987b) are ad-vocates of this view on strategy. Whereas it became popular to criticize thelinear and formalized character of their work,5 the underlying assumptionsare still established in several well-know concepts. Wack (1985: 140), forinstance, introduces scenario planning which “[…] structures the futureinto predetermined and uncertain elements.” Scenarios are thought to pro-vide a range of options about future developments by outlining plausibleways to act. Although scenario analysis does not forecast one best way butrather a set of possibilities, it still relies on the basic premise that thinkingprecedes action. Similarly, Brandenburger and Nalebuff (1995) assume apredetermined continuity between present and future, although they recog-nize that there can be multiple futures. Their game-theoretical approachsupposes that the future is knowable through “look[ing] forward far intothe game and then reason[ing] backward to figure out which of today’s ac-tions will lead you to where you want to end up.” (Brandenburger andNalebuff 1995: 58, annotation added) Both examples demonstrate thatconceiving the ‘primacy of thinking’ as a dead tradition of thought may bea 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 (Ansoff1991; Mintzberg 1990a; Mintzberg 1991).


In establishing a dichotomy between formulation (thinking) and imple-mentation (action) strategy scholars have overlooked a paradox that inevi-tably is inherent in any decision. According to non-paradoxical logic, stra-tegic decisions are executed after an appropriate preference order has beenestablished – a preference order that fully justifies the decision(Jutterström 2005). This is a rather idealized version of events becauseparticularly strategic decisions underlie double contingency. Ortmann andSalzman (2002: 208) characterize a double contingent situation as follows:

“One firm will make its action dependent upon its competitor’s action, and viceversa, and none of them knows or can have full knowledge about what the otherwill do – each conditions its actions on the actions and outcome of the otherand factors in the environment.”

According to double contingency, the world does not hold still while weare trying to establish a preference order. Strategic interactions among or-ganizations constitute a situation of double contingency, which is recog-nized as such by both sides: both know that both know that one could alsoact differently. Then, can we justify a strategic decision ex ante to indicatethat goals exist detached from the decision situation?

Luhmann (2000: 142) is well aware of the underlying paradox: no deci-sion can ever reach a final justification because it concurrently potential-izes other decisions. Any decision (fixation) as opposed to a non-decision(contingency) contains the non-decidable that it cannot analyze away. Theparadox points to an interesting insight: a strategic alternative is an alterna-tive because it is potentially possible; however, at the same time the alter-native also is no alternative because it cannot be justified. To address thisparadox means to recognize that the meaning of decision criteria is consti-tuted in actu, in the course of action so to speak. Preferences, as Luhmann(2000: 134, 222-256) remarks, are fully constituted only after the decisionhas been made. Not until the decision has finally been executed can onedecide whether and how contingency was fixed and what justification waschosen. If we do not want to evade this paradox, we need to break with theeither/or-logic to give reference to both, formulation and implementationat once; strategy formation is thinking within (and not prior to) action.

According to Hoskisson et al. (1999), strategy content research uncov-ers the constituting factors of competitive advantage by either deriving cer-tain strategic rules that tell strategists ‘how the markets works’ (e.g., indus-try analysis) or highlighting the need to develop distinct organizational


resources (e.g., knowledge).6 Usually, strategic rules and resources aretreated as generalizable; strategic rules are thought to be generalizableacross 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 de-fine their own conditions of application by being ‘full’ of meaning prior totheir usage. The resulting dominant logic is called the ‘fullness of strategicrules and resources’ since fullness implies that rules and resource-basedtheories give recommendations that are thought to be valid regardless oftheir context of application. To make contextual claims resources and stra-tegic rules need to give reference to the process of their application be-cause a contextual ‘filling’ can be achieved only in actu (Ortmann andSalzman 2002: 208). Theories of competitive advantage are conceptualizedas if they were full, whereas in fact they are ‘empty’ waiting to be filledwith meaning in the course of application. Emptiness implies that rules andresources expel contextual meaning and are treated as a priori given; cor-porate diversity is overlaid by generalized (‘empty’) solutions.

Wernerfelt (1984: 172), one of the advocates of the resource-basedview, argues that “[…] a firm’s resources at a given time could be definedas those (tangible and intangible) assets which are tied semipermanently tothe firm.” He defines resources with regard to the corporation but inde-pendent of their context of application and thus supposes that resourcespossess a priori characteristics. Surely, resource-based reasoning empha-sizes heterogeneity, which refers to the belief that different organizationshave different resources (Rasche and Wolfrum 1994: 503). Yet, heteroge-neity does not imply that resources are conceptualized with regard to theirapplication within a firm. Similarly, Porter (1980) defines the skills that arenecessary to implement generic strategies. Managers aiming at cost leader-ship are advised to accomplish:

“aggressive construction of efficient-scale facilities, vigorous pursuit of costreductions from experience, tight cost and overhead control, avoidance of mar-ginal 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 andequivocal nature of implementing a generic strategy. On the one hand, Por-ter (1996: 62, emphasis in the original) claims that strategy is about “per-forming 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.


different ways.” On the other hand, he delivers general recipes for doingso. By neglecting the process of application that produces the specific con-text in which strategies are put, he believes in the fullness of his rules, butin fact delivers emptiness. This is not to say that strategic rules and re-sources are superfluous, but that they are potentials that need to be acti-vated in situ.

By conceptualizing rules and resources as counterparts to their own ap-plication, strategy research has overlooked yet another paradox. If strategicrules and resources were full of meaning, it should be possible to perfectlyiterate them across contexts. Yet, every attempt to perfectly iterate a ruleor a resource points to a paradox. For this we have to recognize that gener-alized – ‘full’ – statements suppose that meaning is not context-bound.Meaning, however, is always context-bound and contexts themselves areboundless (Derrida 1999a). Accordingly, rules and resources need to bemodified in the course of application because a contextualization becomesnecessary. The existence of a rule/resource at the same time implies theimpossibility of application without alteration. Perfect iteration is renderedimpossible since rules/resources need to, at least partly, destroy their ownnature during the process of application. In other words, rules and re-sources cannot define their own conditions of application. When applyingstrategic rules and resources, a strategist needs to refer to them and tomanage to get along without them at the same time. The either/or-logicthat has been established between rules/resources and their application ob-scures this paradox because it is assumed that rules are one thing and theirapplication another. The paradox can only be uncovered when referring torules/resources and their application at the same time.

Our discussion of the dominant logics of strategy context, process, andcontent revealed three paradoxes that were disregarded by strategy re-search up to this point. Put differently, the dominant logics persist as longas scholars obscure their paradoxical foundation. Once we accept paradoxand agree to those phenomena that helped us to uncover paradox (e.g.,complexity and contingency), the dominant logics’ impossibility is uncov-ered. By definition, every paradox is about contradictory self-referentialreasoning and thus impossibility. In our case, this impossibility refers to anobjective description of the environment (strategy context), full justifica-tion of strategic decisions prior to implementation (strategy process), and‘purely’ generalizable strategic rules and resources (strategy content). Thisraises an important question: What is the point of emphasizing the impossi-bility (paradoxical foundation) of strategic management? We disagreewith scholars who claim that paradox undermines scientific utility and di-minishes the ability to guide managerial practice (Porter 1991; Priem and


Butler 2001). We propose that paradox in scientific inquiry is intrinsic andindelible (Lado et al. 2006: 116; Poundstone 1988), and increases interest(Davis 1971) and theories’ general potency (DiMaggio 1995). Within thisstudy, we treat paradox as a necessary limit to our knowledge about strate-gic management, a limit that enhances our understanding of strategic phe-nomena because its consideration increases our ability to create requisitecomplexity 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 brieflyoutlined above, we need to understand why strategy scholars were able toneglect them. For this we must realize that the identified dominant logicsare structured around binary oppositions. The ‘necessity of adaptation’ re-lies on the opposition environment/organization; the environment de-mands, the organization reacts accordingly. The ‘primacy of thinking’ isbased on the separation formulation/implementation. The ‘fullness of stra-tegic rules and resources‘ is founded on the proposition that rules and re-sources are detached from their application. This claim refers to the oppo-sitions strategic rules/application and resources/application. Alloppositions are hierarchically structured. The environment dictates the or-ganization’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 onehierarchical pole, they follow the classic dichotomous approach for copingwith paradox (Clegg et al. 2002: 485; Poole and Van de Ven 1989: 566).By regarding self-contradictions as an either/or-choice, research hopes toget rid of or at least evade the ‘dysfunctional’ status of paradox. This modeof thinking is problematic because we cannot analyze paradox away(Luhmann 2000: 131). This would require ‘a safe ground’, ‘a self-defining’ origin that acts as a ground for strategic reasoning. Yet, to be‘safe’, every ground needs to be justified. Striving to solve paradox bylooking for a fully justified ground, we find ourselves in a situation oncecharacterized by Albert (1985) as the Münchhausen trilemma. Accordingto this trilemma, any attempt to find a final justification that would ‘solve’paradox results in the choice between an infinite regress, a circulus vitio-sus 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 se-ries that logically has no first or initiating term. A circulus vitiosus characterizessituations in which one trouble leads to another that aggravates the first. Theconclusion of one argument is appealed to as one of the truths upon which theargument rests itself. Dogmatic interruptions simply terminate the justificationprocess at an arbitrary point to evade an infinite regress.


this triple blind-alley sounds familiar since the dominant logics of strategyresearch terminate the process of justification by privileging one side of anopposition as a metaphysical ground. Accordingly, we cannot prove with anoncontradictory logic that reality is free of paradox. As Luhmann states(1988: 154): “There are paradoxes everywhere, wherever we look forfoundations.” To facilitate orientation, the major points of our analysis aresummarized in Figure 1.

Fig. 1. The Ideology of Strategy Research

If we cannot analyze paradoxes away, there is need to establish a way ofthinking that acknowledges their unavoidable occurrence in order to notregard them as a dysfunctional state. Learning to handle paradoxes impliesbecoming engaged in their passionate endurance (Derrida 1998b) by ac-tively pursuing implications for further theory development. Recall that thekey characteristic of paradox is the simultaneous presence of two mutuallyexclusive elements. The dominant logics, because of their reliance on hier-archical oppositions, disregard paradox and thus ignore the simultaneouspresence 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 thisstudy can be formulated as follows:


The theory of strategic management sustains dominant logics that arise accord-ing to the ‘necessity of adaptation’ (strategy context), the ‘primacy of thinking’(strategy process), and the ‘fullness of strategic rules and resources’ (strategycontent). To maintain their dominant character, these logics obscure para-doxes. The paradoxes demonstrate that the arguments that underlie the domi-nant logics aim at impossibilities (viz. environmental adaptation in strategycontext, full justification of strategic decision in strategy process, and gener-alizable strategic rules and resources in strategy content). As these paradoxescannot be analyzed away, scholars’ disregard of them, based on the establish-ment of hierarchical oppositions in the dominant logics, calls for further con-ceptual research.

To expose paradoxes and consequently dismantle the three dominantlogics of strategy research, we highlight the simultaneous existence of bothsides of an opposition. By doing so we not only criticize the prevailingdominant logics but offer ways of reasoning that reach beyond ideology.Certainly, this is not to say that the outlined ideology has not been criti-cized up to this point. By regarding paradoxes not as dysfunctions butstatements that meaningfully indicate the margins of knowledge, this studywishes to complement, enrich, and also extend the rich accounts of criticalknowledge strategy scholars have developed so far.8 To evocatively ex-plore these margins, an appropriate theory perspective is needed.

There are three requirements for a suitable perspective: (a) the theoryneeds to acknowledge oppositions in some way, (b) the theory has to un-ravel 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 isprovided by Linstead’s (1993: 56) statement:

“Where modernism pursues the opposition of terms, actively placing the oneover and against the other, postmodernism resists the closure of terms, activelyexploring the supplementarity of the one within the other.” (emphasis in theoriginal)

By using the terms modernism and postmodernism, we face a profoundproblem as both expressions refer to a wide range of theoretical concepts.Modernism and postmodernism cannot be reduced to Linstead’s remarkson oppositional and supplementary logic. Whereas an in-depth discussionof the various meanings of both perspectives is beyond the scope of this in-

8 Recently published critiques of strategy research as a field of study include:Sarason and Huff (2005), Pozzebon (2004), Clegg et al. (2004), McKiernan andCarter (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).


troduction, we need to clarify which theoretical element of postmodernismaddresses the supplementarity mentioned by Linstead. Supplementarity isvital for our analysis, since the limit of every supplementary relation pointstowards a co-presence of oppositional elements and thus paradox.

While sociologists like Luhmann (1994) and Giddens (1984) have en-dowed us with approaches like ‘the autopoiesis of social systems’ or ‘theduality of structure’ that reflect supplementary relations between catego-ries like agency and structure or organization and environment, we are insearch of a more general perspective that captures the diversity of phe-nomena subsumed under the three dominant logics. An author whose intel-lectually rich account of work reflects this variety is the French philoso-pher Jacques Derrida who is often associated with postmodern thinking.9

His work is appealing to our analysis as he focuses on exposing and dis-mantling hierarchically structured oppositions within ‘texts’. Derrida’s un-derstanding of text may be misleading at this point as one is led to believethat he is exclusively concerned with the written. For Derrida, however,‘the text’ also relates to the (social) world, or as Cooper (1989: 482) speci-fies: to the interactional text. This makes texts the building blocks of con-texts because contextual features are ‘textualized’ in that they provide thecontext for ‘the text’ in question.

“I believed that this extension and strategic generalization of the text was nec-essary 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 empha-sis A.R.)

What Derrida labels deconstruction in the quote above represents themajor theoretical embodiment of his thinking. Deconstruction acknowl-edges and overturns the dependence of any text on hierarchically orderedoppositions. Overturning in Derrida’s view does not mean to devote pri-macy to the so far neglected pole of the opposition. Deconstruction seeksto explore the supplementarity of both poles by thinking the one within theother. The meaning of one pole depends on the supplementary relationshipwith 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 hereon 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 refersto Derrida’s work and Luhmann (1995a: 9-35) at least recognizes the impor-tance of his thinking. To neglect ideas like the paradox of decision-making(Luhmann 2000) or the importance of agency in (re)constituting rules and re-sources (Giddens 1984) for the sake of sticking to one theory only, surely is notan appropriate way for scientific progress.


in space and time. Meaning is constantly in a state of flux and can never befully grasped. Strategic rules, for instance, cannot be applied regardless ofcontext, as this implies that one side of the opposition (‘the strategic rule’)is regarded as being full of meaning, whereas the other side (‘the applica-tion’) is deemed to be a simple derivation. Deconstruction argues that bothsides cannot do without each other as there is no self-defining cause that isfull of meaning to precede and govern the neglected pole of the opposition.Both sides come into existence by giving reference to their (apparent) op-posite. In consequence, deconstruction reveals a tension of juxtaposed op-position, a tension that, according to Derrida (1992a), exposes paradox.

We argue that deconstruction meets the outlined demands for a theoreti-cal perspective that can guide our analysis: (a) it addresses oppositions in ageneral sense, (b) it provides a supplementary logic that exposes paradox ifthe tension of the juxtaposed opposition is considered as a co-presence ofits poles, and (c) it can be applied to strategy research since the definitionof ‘text’ offers a way to examine the ideas located in scientific discoursesand the behavior of strategists (that relates to these ideas) as text produc-tion (Kilduff 1993: 14). Deconstruction fits the specific purpose of thistreatise and helps to create new ways of thinking by moving beyond the es-tablished either/or-ideology of contemporary strategy research. Decon-struction’s potential to challenge existing ideologies is illustrated by Eagle-ton (1997: 117) who remarks:

“Deconstruction has grasped the fact that binary oppositions […] are represen-tative for ideologies. Ideologies like to draw exact lines between the acceptableand 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 fromthis binary thinking into an ultra-metaphysical space. But by means of a spe-cific manner of treating texts […] we can start to unravel these oppositions toshow how one term of an antithesis secretly contains its opposite.” (translationA.R.)

Deconstruction enables the conceptual research we like to undertake byproviding an apt theory perspective; it thus reflects the possibility of re-search within this study.

Deconstruction provides a supplementary logic to dismantle the hierarchicallystructured oppositions that occur in the ‘text’ of strategic management. Thislogic uncovers the paradoxes that have been obscured by the dominant logicsof strategy research up to this point.

The need to dismantle the dominant oppositions of strategy research andthe realization that deconstruction offers a way to do so justifies the fol-lowing research objective.


This study aims at outlining an approach to strategy research that deconstructsthe hierarchical oppositions reflected by the ‘necessity of adaptation’ (strategycontext), the ‘primacy of thinking’ (strategy process), and the ‘fullness of stra-tegic rules and resources’ (strategy content) to disclose the unavoidable para-doxes that have been neglected so far. As paradoxes only indicate the limits ofknowledge we can gain about the nature of things, this study also shows howthese paradoxes can be unfolded to think about the possibility of strategic man-agement despite their existence.

Our approach to strategy research intends to challenge taken-for-grantedassumptions to offer new ways of thinking about the conventional wisdomof strategic management to complement and extend existing perspectives.Complementing and extending current research does not imply that wedeem other positions to be ineffective ways for thinking about strategy;just as we do not claim that research that is in line with the presenteddominant logics inevitably follows a ‘modern’ perspective that is now re-placed by a more encompassing ‘postmodern’ one. The examined ques-tions may be fundamental, however inevitable to the progress of the field.

To facilitate orientation, Figure 2 summarizes our way of argumentationand thus shows the ideas on which the research design is based. We startedwith the statement that some scholars (e.g., Shrivastava 1987) claim thatstrategy research possesses an ideology but do not ask why this ideologyexists and persists. We then suggested that this ideology is based on threedominant logics that arise according to strategy context, process, and con-tent. These dominant logics are sustained because they neglect their ownparadoxical foundation (and thus impossibility). Further sustaining thesedominant logics calls for ‘solving’ paradox, which, however, requires anultimate justification that we do not have according to Albert’s (1985)Münchhausen trilemma. Hence, there is need to uncover and discuss theparadoxes that strategy context, process, and content obscure thus far. Toidentify a theory perspective that helps us to uncover and discuss paradox,we need to know why the paradoxes are neglected in the first place. Theparadoxes are neglected because the dominant logics are based on concep-tual 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 indicatesthe limits of knowledge we can have about the nature of strategy, we alsoshow how the impossibility of the dominant logics (viz. their paradoxicalnature) can be used positively to inform future strategy research.


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 tothe philosophy of science to better understand the context of the presentedarguments and their relation to the work of other scholars (Scherer 1999).The philosophy of science is concerned with an analysis of the methods ofscientific practice (How do we conduct our research?), its purpose (Towhich end do we conduct our research?), its relation to other studies (Howcan we differentiate our research?), and its addressees (Who do we con-duct our research for?).

The Methodology Used: We are conducting research about strategy re-search and thus deal with what Eberhard (1999: 36-46) calls a theoretical-critical way of reasoning. Schanz (1977: 67) remarks that empirical inves-tigations are only useful if they are based on a solid theoretical foundationand Sutton and Staw (1995) remind us that without conceptual argumentsany field ends up in dust-bowl empiricism. Because this study investigatesthe way scholars theorize within strategic management, our investigation isconceptual 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 beempirically tested, but that we need to rely on further research for empiri-cal substantiation.10 Freeman and Lorange (1985: 16) remind us that em-pirical validity is only one possible criterion for research and that strategicmanagement is especially endangered in traveling the narrow path of em-piricism; the creation of future strategic realities must not exclude ‘thoughtexperiments’ that are necessary for conceptual changes. Only by means ofthese changes can there be further meaningful empirical research.

The Purpose of This Study: Reflecting upon the purpose of this studyhelps us to assess its contributions to the existing body of work. The result-ing question is whether we conduct research to establish new ‘truths’ aboutthe way strategy research has to function or how else we wish our argu-ments to be understood. Since this treatise navigates in the waters of post-modernism, we suppose a postmodern understanding of science that seesscientific practice as being subject to incommensurable metatheoretical as-sumptions. Following Burrell and Morgan (1979), we identify metatheo-retical assumptions with postulates about the nature of science (related toontological and epistemological issues). Incommensurability describes theimpossibility of comparing scientific knowledge that was generated in ac-cordance with different metatheoretical beliefs, as no common standard ofrationality exists. Scientific dogmatism becomes out of reach as the valid-ity of statements can only be judged locally (with regard to the assump-tions). Incommensurability implies that any treatise needs to submit itselfto a competing battle of voices with no voice having a claim to priorityover others (Jackson and Carter 1991).11 What are the implications of theseremarks for our study?

Because of incommensurability this study does not reject the legacy ofother perspectives on strategy or suggest that collaboration across differentperspectives is impossible. We understand the contributions of this studyneither as superior to other perspectives nor as a new ‘truth’ for strategyresearch but as a novel perspective to see theorizing in strategic manage-

10 Research methods that are consistent with the assumptions of deconstructionaim at qualitative empirical studies. Exploring organizations via narrative analy-sis provides a valuable point of departure in this context (Calás and Smircich1999; Clandinin and Conelly 2000; Czarniawska 1998).

11 Incommensurability does not dissolve scientific legitimization into taste prefer-ences (Jones 2003: 510) as this would lead to the impossibility of serious scien-tific practice. Scientific argumentation in the light of incommensurability im-plies a local understanding of rationality – ‘to play by the rules’ favored by aparticular community of scholars. Accordingly, Latour (2002) argues that ‘sci-entific facts’ are not given but constructed by a network of actors (also Astley1985; Astley 1984; Cannella and Paetzold 1994).


ment from a different angle. For us, incommensurability implies that theresults and claims of this study need to be judged against the backgroundof the assumptions of deconstruction. Hence, science is not a magnificentmarch towards some higher truth. If there is no final truth to discover, towhich end do we conduct our research? How can we evaluate research thatdenies 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 moreplausible and of higher quality if it is interesting rather than obvious, […] asource of unexpected connections, high in narrative rationality, aestheticallypleasing, or correspondent with presumed realities.” (emphasis added)

Interesting theories deny routinely held assumptions; they engage attentionand make people sit up and take notice; they create discomfort and pro-duce debate (Davis 1971: 311; McKinley et al. 1999). Kunda (1990) showsthat the more a theory challenges taken-for-granted beliefs, the more otherscholars see it as interesting and thus care about its arguments and Bald-ridge et al. (2004: 1066) propose that practitioners often judge interestingtheories high in relevance. Thus, creating interest is the purpose of thisstudy.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 todifferentiate one’s own assumptions to other forms of legitimization withinthe chosen field of research. Such an overview portrays the ‘scientificlandscape’ and provides the scholar with orientation regarding her/his lim-its of reasoning. Within organization theory and strategic management, avariety of frameworks enable such a differentiation. Most of these refer-ence frames reduce scientific debates to two dimensions to offer a matrixin which researchers are supposed to locate themselves. Burrell andMorgan (1979), for example, distinguish between objective/subjectivestudies and scholars’ assumptions with regard to the nature of society (or-der/conflict). Not much different, Astley and Van de Ven (1983) empha-size the deterministic/voluntaristic nature of research as well as the level oforganizational analysis (micro/macro). Similar to the modern-

12 Speaking with Weick (1989: 522-523), we contribute to heterogeneity in‘thought trials’ within strategic management theory by choosing an uncommonperspective for criticizing existing research. Elsewhere Weick (1987b: 99) statesthat “[t]heories should be adopted more to maximize what we will see thansummarize what we have already seen. Usually, what we have already seenmerely confirms what we expect to see. To theorize better, theorists have to ex-pect more in whatever they will observe.”

This Study and the Philosophy of Science 19

ism/postmodernism debate, these frameworks rely on generalizations andare problematic insofar as they tend to dump authors in containers. Yetgeneralizations offer guidance as they enable a classification of one’s ownwork in the ever-increasing body of research on organization theory andstrategic 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 andconsequently deconstruction (Figure 3).

Fig. 3. Metatheoretical Assumptions in Organization Theory (adopted from Deetz1996: 198)

What Deetz (1996: 197) labels the consensus-dissensus dimension refersto the question whether the studied object is regarded to display an unprob-lematic order (consensus) or whether the existing structures of the objectare questioned (dissensus). Consensus based research is a reproductivepractice that accepts the status quo of the investigated object, while a dis-sensus orientation is productive in the sense that it tries to disrupt the statusquo by challenging mechanisms of order maintenance. The a priori-emergent dimension concerns the origin of concepts and problem state-ments within research. Scholars following an a priori orientation argue


that their knowledge claims exist independently of their conditions of pro-duction; they belief in the production of rational knowledge that is notconstrained by the subjectivity of the researcher or the researched. Theemergent pole draws attention to scholars who stress the situated nature ofresearch and belief in producing insights rather than truths.

As discussed in section 1.1, this study is based on ideas stemming fromphilosophical postmodernism. Following Deetz’s analytical frame, we arenow able to specify the metatheoretical assumptions of postmodern re-search and in what aspects this style differs from other modes of investiga-tion. For this, we need to discuss the dissensus and emergent character ofour research as these are contrasted with postmodernism in Deetz’sframework. The very idea of this study, which is to question the conven-tional theoretical foundation of strategic management, already points to adissensus orientation. We view our unit of analysis (strategic managementtheory) not as unproblematic but refer to three dominant logics which chal-lenge existing belief structures. The discussion of incommensurability al-ready illustrated the emergent character of the proposed research problem.By acknowledging the situated and contextual nature of our claims, weoppose the logic of objectification and unadulterated rationality that isproposed by a priori conceptions of research. Following this line of argu-mentation, it needs to be recognized that the three dominant logics are nota priori given but inhibit our deconstructionist Weltanschauung.

The Addressees of this Study: Creating interest in novel topics by dis-cussing and denying conventional wisdom is a bold venture. Yet, mostpeople will ask: For whom is it done anyway? Is it done for the manystrategists who are trying to shape the future of their organizations? Is itdone for other scholars to foster reflexivity? This gives rise to the questionwhether our undertaking represents ‘basic’ or ‘applied’ research. Ulrich(2001b, 2001a) conceptualizes management in general as an applied socialscience in which ‘practical’ problems are solved. Practical problems in hisview are those problems that originate from and refer to practice and are ofinterest to practitioners, whereas theoretical problems emerge within theprocess of research. Practical problems are solved for the sake of givingadvice to practitioners, while basic problems are merely an intra-scientificmatter and solely address other scholars. But is this distinction (i.e. opposi-tion) a useful one?

Weiskopf (2003b: 12) remarks that from the viewpoint of deconstruc-tion, there is no reason to distinguish between ‘basic’ and ‘applied’ sciencesince no final legitimization for knowledge, be it practical or basic, exists.If meaning, as Derrida (1976: 425) argues, cannot be objectively deter-mined, 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 asbasic or applied research obscures that neither ‘applied’ nor ‘basic’ knowl-edge possess a reference point for justification. There is no fully legiti-mized basic research from which applied research emerges, like there is no‘pure’ theoretical knowledge that passively flows into practice to be ap-plied (Nicolai 2004: 954). Such purity would require theories to instructoperations that are by themselves ‘purely’ practical. Deconstruction seesitself as a kind of theoretical practice (Khurana 2002: 251) happening intheory and practice (Derrida 1989a: 85). Science is successful if it fostersdialogue among scholars and practitioners, a dialogue that produces newalternatives for action (Kieser and Nicolai 2005).

The question is not whether we conduct basic or applied research, orwhether we address practitioners or the scholarly community, but in whatway people, be they other scholars or managers, make use of the presentedclaims to make sense of their problems (Weick 1995: 90). Practitionersmay find our arguments helpful in exploring and understanding the messyrealities of strategy making. They will, however, not come across a clearset of recommendations of a checklist type that finally tells them ‘how todo strategy’. Researchers may find the presented claims helpful in ques-tioning their own basic belief structures of how to think about strategicmanagement. Since curiosity and an inclination to the unknown are inevi-table parts of scientific progress, we hope to contribute to ongoing andstimulate upcoming discussions. If this study creates discomfort about theway a range of scholars still thinks about strategic management, its pri-mary goal has been achieved.

1.3 Limitations of the Study – Some Words of Caution

Alvesson and Skoldberg (2000) suggest that research should always bepresented in a reflexive style, paying as much attention to process as toproduct. Calling for more reflexivity in the field of strategic managementalso means being self-reflexive. As in any other study this treatise is facedwith limitations that need to be considered as constraints while makingsense of the presented arguments. First, there are limits to the scope of in-cluding existing theories and frameworks into the discussion. As the fieldof strategy relates to a considerable number of journals and books, a com-plete treatment of the full range of approaches that represent the identifieddominant logics is not only impossible but also not desirable. Any attemptto hear and consider all voices would end up in an unfruitful cacophony ofopinions. Therefore, the purpose is to isolate key assumptions from exem-


plary and well-known theoretical offerings in order to use them as a nu-cleus for argumentation. This means that we deliberately generalize aroundexisting schools of thought (e.g., the market and resource-based school ofstrategy).

The second limitation deals with the way in which existing approachesto strategy are criticized. For this, we need to recognize that the prevailingZeitgeist influences scholars’ assumptions at the time of theorizing. Wack(1985: 139-140), for instance, notes that in the 60s it was simply consid-ered incompetent or unprofessional to say “Things could go this way – orthat.” The disciplinary roots of scholars represent a similar constraint. Stu-dents of strategy have borrowed ideas from other fields such as economics,psychology, and sociology (Baum and Hayagreeva 1998). These disci-plines pursue their own research traditions and with it certain dominantlogics. Economic theory, for instance, does not make ontological or epis-temological questions the subject of the discussion. It is no big surprisethat strategy scholars working in the realm of economic theory are notoverly concerned with questions about the nature of reality or usefulness ofcausality. When criticizing the works of other scholars, we should keeptheir disciplinary orientations as well as the prevailing scientific Zeitgeistin mind in order to avoid jumping to conclusions.

A final limitation addresses the manner in which a ‘deconstructivestudy’ – if there is such a thing – needs to be written. Deconstructionmeans to be critical of any fixed definition of terms and concepts, of anypre-given linear structure of analysis, as well as the authority of the authorto have a privileged access to her/his writings. We cannot reject offering atleast some ‘prefabricated’ definitions in the course of this study; neithercan we do without a linear way of analysis (an unavoidable feature of anybook). Yet, we remind the reader that (a) the meaning of terms (e.g., strat-egy) is not objectively given but constructed by the reader in the particularand unique context of reading, consequently that (b) the author of this texthas no privileged relation to it as every reading (by whomever) gives riseto new meaning (Giddens 1987: 206), and that (c) the linear representationof arguments is contingent and simulates a non-existent causal logic. Tokeep in mind that even though this study may appear to be straightfor-ward, but is in fact struggling with the tensions that any text holds, we askthe reader to remember that any text can be disrupted in its ‘flow’ if weconsider 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 inter-vals throughout his text to underplay the importance of developing an ar-gument in a linear-logical way. The apparent linear nature of the analysisat hand is more a construction than a force.

Dealing with these limitations effectively means not abandoning the ar-guments of this study, but learning to use them with reasonable perspec-tive. Deconstructive logic looks for supplementarity – the one within theother, the destruction for the sake of construction. This destruction-construction circle provides one option for criticizing theory in strategicmanagement. Options act as constraints and opportunities alike. They areconstraints because their availability implies a subsequent decision to ei-ther follow deconstructive logic or not. Likewise they are opportunitiessince 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 argumentsmust proceed in stages. Not all things can be discussed at the same timeand usually some terms require the discussion of other terms prior to theirintroduction. In chapter two we discuss those approaches, classifications,and definitions that have been the ‘bread and butter’ of strategy researchever since its foundations in the 1960s. Mostly, this chapter is supposed tointroduce some basic terminology to provide guidance to the reader bybringing in our understanding of what research on strategy context, proc-ess, and content is all about. This chapter is necessary because referencesto the theory developed so far help to set the stage for new conceptual ar-guments (Sutton and Staw 1995: 372). Any author needs to acknowledgethe stream of logic on which s(he) draws and to which s(he) wishes to con-tribute. Besides this basic introduction to the field of strategy, chapter twoalso contains a discussion of the paradigmatic status of the field. We deemthis discussion to be of special importance, since a treatise that criticizescurrently held assumptions inevitably faces the question whether and howdifferent conjectures are related to each other.

While chapter two presents a general introduction to the field of strate-gic management, chapter three argues that within this general field we findthree dominant logics that represent the taken-for-granted assumptions ofscholars. Chapter two and three differ in that chapter two is about a basicintroduction to strategy research whereas chapter three is more argumenta-tive by criticizing the field’s underlying assumptions. Based on the twentymost popular documents of the strategy field, we demonstrate that the


dominant logics, which we briefly discussed in section 1.1, are the refer-ence point for theorizing in strategic management. This chapter is neces-sary to provide a fair treatment of other authors and to give substance tothe claim that strategy research is trapped in specific belief structures.Moreover, we discuss how dominant logics come into existence becausethe mere recognition that there are such logics provides an insufficient pic-ture of the stickiness of scientific knowledge. Last but not least, we assessexisting critical perspectives of the dominant logics to show that (a) asmall number of scholars have developed a critical tradition in strategicmanagement and (b) that this tradition still leaves a lot of questions unan-swered. These remarks provide legitimization for the analysis in the subse-quent chapters.

Chapter four introduces the philosophy of Jacques Derrida. Starting withsome general remarks on the philosophical tradition of postmodernism,which provides a frame of reference for Derrida’s arguments, we explorehis style of thinking which is commonly referred to as deconstruction.Since this treatise is not about philosophy but strategic management, weonly introduce those parts of Derrida’s work that seem relevant to theoverall structure of argumentation. As one would expect, this is not easy,because Derrida has not developed a systematic philosophy. Mostly, wefocus on introducing the general reasoning behind deconstruction (becauseit concerns the oppositions of the dominant logics), his treatment of para-dox (because it is the prerequisite for criticizing the dominant logics), andhis perspective on the indeterminacy of meaning (because it is necessary tounderstand how paradox comes about). In addition, we demonstrate howand why Derrida’s philosophical arguments can be applied to social theorysince research in strategic management is not genuinely philosophical.

While chapter four discusses deconstruction as a way to uncover para-dox, chapter five discusses the role of paradox in strategy research. Weargue that we have to research strategic management because of and de-spite paradox. We have to do strategy research because of paradox sinceparadoxical reasoning reveals the impossibilities that underlie the domi-nant logics. Yet, we also have to research strategy despite paradox becausestrategic management is nothing impossible (i.e. paradoxical). Numerousstudies (Grant 2003; Regnér 2003) have observed strategic management inpraxis. To explain how one can cope with the paradoxical foundation ofstrategic management, we illustrate how the paradoxes that underlie thethree dominant logics can be deparadoxified. Deparadoxification does notimply reintroducing the dominant logics – because to deparadoxify oneneeds a paradox, a paradox that is obscured by the dominant logics. De-paradoxification paves the way for a different understanding of strategy

Structure of Analysis 25

context, process, and content that is outlined in chapter six. The recogni-tion that strategic management needs to be researched because of and de-spite paradox is a necessary prerequisite for the deconstructions in chaptersix. From our perspective, each deconstruction has a double function: itcriticizes conventional reasoning (i.e. the dominant logics) by exposingthat the paradoxical foundation of strategy context, process, and contentcannot be neglected and demonstrates how theorists can creatively usethese paradoxes by deparadoxifying them to finally come up with newconceptual frameworks. This double function is reflected by the need tocreate future strategic realities because of and despite paradox.

Chapter six ‘performs’ the deconstructions that are structured with re-gard to our distinction between strategy context, process, and content.Based on our remarks in chapter five, each deconstruction uncovers aparadox (creating strategic realities because of paradox) and shows howthis paradox can incite future research on strategic management (creatingstrategic realities despite paradox). Accordingly, the three deconstructionsfollow the same pattern. First, each deconstruction uncovers a paradox thathas been neglected by the dominant logics. Thus, every deconstructionshows that the dominant logics aim at impossibilities and that strategy re-search that criticizes the dominant logics can only happen because of para-dox. Second, each deconstruction also shows how the underlying paradoxcan be deparadoxified and how strategy research is possible despite para-dox. Deparadoxification points to the recursive relations that underliestrategy context, process, and content and thus shows new ways of doingstrategy research.

Chapter seven outlines the implications of the deconstructions. Becausethe result of each deconstruction is a recursive relation that points to theimportance of discussing strategy context, process, and content as consist-ing of situated activities, we relate our research results to a recently emerg-ing stream of research: Strategy-as-Practice. Based on already existing re-search on Strategy-as-Practice we outline a research agenda for futureinvestigations in strategic management by concentrating the argumentsthat have been made up to this point into one underlying framework. Inthis sense, chapter seven embeds the particular implications that are dis-cussed in chapter six with regard to strategy context, process, and contentinto one overarching research framework that can inform future investiga-tions. Strategy-as-Practice introduces a common ground that is shared byall three deconstructions and thus enables us to argue in favor of a newperspective on strategic management.

The final chapter outlines the contributions of this study. We take a ret-rospective perspective and summarize the key findings of our discussion.


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 differentway (i.e. a way that considers paradox as a necessary limit to our knowl-edge about strategy). Finally, we outline how the nature of scholarshipneeds to change to take the key findings of this study seriously. This dis-cussion is essential to show how the content-related arguments (i.e. how toresearch strategy context, process, and content differently) can be put intoresearch praxis. We argue that substantial reforms (e.g., with regard to themethodology used and criteria for the evaluation of strategy research) arenecessary and timely if the key findings of this study are seriously consid-ered. Figure 4 depicts the structure of analysis and shows the main contri-bution that each chapter makes against the background of the general re-search 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 topush any particular classification scheme too far, some basic differentia-tions are useful in establishing starting points for deeper analysis. The ob-jective of this chapter is to make sense of strategy research by shaping thecontours of the field. By introducing some basic terminology and revisitingvarious approaches that have been the ‘bread and butter’ of strategy re-search for the last 45 years, we hope to give a comprehensive, yet not con-clusive, overview.

We start by addressing the most fundamental of all questions: What isstrategy and why do we need it anyway? Based on the discussion of whythere is a need for corporate strategy (section 2.1.1), we discuss differentdefinitions that scholars have attached to this term (section 2.1.2). Overtime, some of these definitions became widely accepted and hardened intoparadigms that we introduce in section 2.2. These paradigms demonstratethat there are different accepted notions of strategic management. Withinthese paradigms, strategy scholars have highlighted and discussed distinc-tive dimensions. To identify and discuss these dimensions, we introducethe tripartite framework of strategy context, process, and content that actsas a frame of reference for the arguments throughout this study (section2.3).

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 atfirst glance but turns out to be a challenge when considering the largenumber of varying opinions (Oliver 2001: 7). However, a discussion ofthis question is inevitable since not everything that goes on in an organiza-tion can be labeled strategic; otherwise the notion of strategy would turnout to be meaningless leaving practitioners and academics paralyzed(Bower 1982). To understand why scholars find it worthwhile to apply a


concept that has its roots in conceptualizing war practice, we need to rec-ognize that organizations are complex social systems that possess more al-ternatives than can be cognitively or practically realized (Luhmann 1995b;Seidl 2003a).13 For action to occur, there needs to be a reduction of com-plexity by pre-selecting possibilities. Actions activate certain possibilitiesand leave others aside. The mechanisms that guide this selection processare structures which reduce the amount of ‘approved’ relations within so-cial systems (Luhmann 1994: 384). Structures do not necessarily eliminatepossibilities but provide a mechanism to handle them.

Strategy is one important means of reducing complexity within organi-zations. The structures that are constituted by strategic activity, like strate-gic goals or strategic rules, help managers to sort out possibilities that arenot considered to be relevant for the survival of the organization. Com-plexity, however, is not the only driving force for strategizing since par-ticularly strategic decisions are characterized by uncertainty. Actor A can-not determine its strategic actions until actor B has acted and vice versa.Both actors have a considerable scope for choice. Complexity combinedwith uncertainty results in ambiguity (Schreyögg and Steinmann 1987: 93).According to Weick (1995: 92), ambiguity is about unclear meaning struc-tures that arise due to a lack of clarity or consistency in reality. Ambiguitycovers the fact that there can be multiple even conflicting interpretationsfor existing data, that goals are unclear and cannot be coded precisely, andthat intentions cannot be specified. In other words, ambiguity reflects thelack of clarity with regard to the internal and external environment of or-ganizations.

Strategy is not an end in itself but a necessary ‘walking stick’ that helpsmanagers to cope with the ambiguity of their social systems and environ-ments. This walking stick gained popularity after World War II as businessmoved from a relatively stable environment into a rapidly changing (andthus more ambiguous) environment (Bracker 1980: 219). As organizationsslowly moved into the post-industrial era, industries were propelled bytechnological discontinuities, customers demanding non-standardizedproducts (mass customization), employees changing their work attitudes,

13 The term strategy derives from the ancient Athenian concept of strategos whichis 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 mili-tary decision-making complexity increased. The first organized writing aboutmilitary strategy, which is also considered in the realm of strategic management,is Clausewitz’s (1983) book On War. Within Clauswitz’s writings the distinc-tion between strategy and tactics is of great importance. In his view, strategy re-fers to the deployment of troops, whereas tactics refers to the employment of thelatter.

The Concept of Strategy 29

and deregulated markets (McKiernan 1997: 796). These forces werechanging the sources of competitive advantage and the economic structureof industries in an even more unpredictable way. After the fall of the Ber-lin Wall and the emergence of trading blocks like NAFTA and ASEAN,the speed of internationalization of competition and commodity marketsincreased rapidly. In a globalized business context with different culturesand corporations that have ever more operations in a changing interna-tional environment, ambiguity is gaining ground.

At the same time, as Prahalad and Hamel (1994: 7) note, ambiguity be-comes a problem because single players do not dominate the decentralizedand fragmented structure of numerous industries anymore. Simultaneously,other industries converge into a common whole (e.g., banking and finan-cial services, photo and mobile phone technology). Of course, businessstrategy cannot foresee all those events. What strategy can do is sustain anorganization’s capacity to act in these situations by providing a commonframe of reference. Structures, like strategic goals, are the constitutingelements of this frame. They reduce ambiguity because they provide direc-tion and cohesion to the enterprise by blinding out some and activatingother possibilities.

This still leaves the question: Which possibilities are blinded out andwhich ones are activated by such structures? If we do not know which pos-sibilities are blinded out or highlighted by strategizing activities, we cannotdemonstrate why there is a particular need for strategic structures as meansto reduce ambiguity. Obviously, non-strategic structures reduce ambiguityas well. What is particularly strategic? Surely, ‘strategic’ has become abuzzword for all disciplines trying to stress the significance of their work(Lyles 1990: 363). The label acts as a powerful rhetorical device (Alvessonand Willmott 1995: 99) often used by managers to make normal circum-stances sound unique and important. Partly, this confusion is due to simpli-fying definitions like the one by Mintzberg et al. (1976: 246) who statethat “strategic simply means important, in terms of the actions taken, theresources committed, or the precedents set” or the one by Brews and Hunt(1999: 891) who argue that strategic relates to non-routine problems forwhich no predetermined solution exists.

To gain a more precise understanding of what ‘strategic’ means, weneed additional reflections. The most common and widely shared ideaabout the strategicness of strategy comes from the early days of the field.At that time, strategy was identified with the construction of possibilitiesfor future actions. Chandler (1962: 11), for instance, distinguishes betweenstrategic and tactical decisions. While strategic decisions are needed to se-cure the long-term health of the enterprise, tactical behavior deals with the


day-to-day activities that are necessary for efficient and smooth operations.Ansoff (1987b: 24) follows this distinction but specifies that strategies areneeded to decide what business the firm is in and what kind of business itseeks to enter.

The forward-looking character of these characterizations stresses thatstrategies are necessary as they provide potentials for the future success ofthe entire organization. Strategy is about giving direction to organizations(Bower 1982: 630). Chandler and Ansoff’s statements present a first refer-ence point for exploring which possibilities are highlighted by strategicstructures – viz. those that offer potentials for future success. Yet, thisdefinition still remains quite vague. Different scholars have provided addi-tional criteria to specify the term ‘strategic’ by suggesting that the future instrategy concerns the non-immediate future and that achievement of futuresuccess involves a significant commitment of resources (Schilit 1990:436). Yet, the problem with understanding strategy solely as preparednessfor the future is to neglect the multi-dimensional nature of the concept. Noteverything that is preferred as a prospective business idea may be possibleto realize or even desirable from the perspective of society. Strategic think-ing is also needed to check whether future goals can be achieved at all withthe resources at hand and whether these goals are morally upright.

Andrews (1971: 24-27) considers these shortcomings and puts the di-mensions by which to create potentials for future success in more specificterms.14 He names four aspects that need to be balanced when thinkingstrategically: what an organization might do, what it can do, what peoplewant it to do, and what it should do from a social point of view. What acompany might do refers to the perceived environmental opportunities andthreats. By contrast, what a company can do refers to the strengths andweaknesses in its resource base. Apart from what a company might or cando, strategy also needs to consider what organizational members want todo because of their personal values, ideals, and aspirations. The ‘want todo’-dimension accounts for the internal power relations that may offset de-cisions that are reasonable from the perspective of opportunities andthreats as well as strengths and weaknesses. Finally, what a corporationshould do refers to the ethical aspect of strategic choice (Behnam 1998).

14 Andrews (1971) is certainly not the only author who discussed the different di-mensions of the concept of corporate strategy. Hofer and Schendel (1978: 5), forinstance, discuss ‘the allocation of resources’ as an aspect of strategy. We useAndrews’s classification since most other general conceptions of strategy relateto at least one of his dimensions (see also Oliver 2001; Porter 1996; Whittington2001).

The Concept of Strategy 31

To conclude, if we consider that organizations need to reduce ambiguityto remain operative (Weick 1979) and believe that strategic management isresponsible for sorting out those possibilities that create potentials for fu-ture success according to the four dimensions described by Andrews, wecan come up with a reasonable way of describing the need for strategy.Strategy is needed because it reduces ambiguity by highlighting those pos-sibilities that tell organizations what they might, can, want to, and shoulddo to create potentials for future success. Structures, like strategic goals,can be described as ‘filters’ organizations apply to sort out possibilitiesthat are not likely to create potentials for future success along these fourdimensions.

2.1.2 The Definition of Strategy – Differing Perspectives

Our remarks on why a concept like strategy is needed also give us an ideaof how scholars define ‘corporate strategy’. Most strategy scholars wouldprobably agree that strategic management aims to create potentials for fu-ture success by telling organizations what they might, can, want to, andshould do. Although this general definition can act as a useful ‘yardstick’,strategy scholars have developed a variety of strategic realities that charac-terize ‘corporate strategy’ differently. We do not reproduce the entire listof characterizations but highlight two areas of disagreement that relate toour discussion of dominant logics later on. Most strategy definitions can bedistinguished 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 bedeliberately planned (high need for planning) or in how far they supposethem to emerge in the course of action (low need for planning). Environ-mental determinism assesses to what extent the environment is seen as astructural constraint (high determinism) or is constituted by the agency ofactors (low determinism).

Strategy definitions that highlight a high need for planning are (amongothers) those of Ansoff (1987b: 101), Chandler (1962: 13), and Learned etal. (1969: 15). In an attempt to specify his general remarks on strategy dis-cussed above, Andrews (1971: 25) also expresses confidence in the capac-ity of managers to plan a strategy by arguing that

“[t]he principal subactivities of strategy formulation as a logical activity in-clude identifying opportunities and threats in the company’s environment andattaching some estimate risk to the discernible alternatives. Before a choice canbe made, the company’s strengths and weaknesses should be appraised togetherwith the resources at hand and available.”


Andrews (1971: 20) suggests that strategic decisions crystallize a set ofproblems an organization can seize upon and solve out of the ‘formless re-ality’ of a company’s environment. In sharp contrast, authors like Mintz-berg (1979), Weick (1987a) or Quinn (1978) are less optimistic about thecapacity of managers to plan ahead, because the underlying logic of deci-sions may only be perceived in an ex post manner making strategies anemergent and retrospective phenomenon. Strategic plans, even vague ones,are excuses to act. Weick (1987a: 229) calls this just-in-time strategy; aperspective that downplays the importance of accurately portrayed epi-sodes where managers meet to make a strategic decision. Just-in-timestrategies are an agglomeration of small steps (e.g., the writing of memos)that foreclose alternatives and limit what is possible. The strategy is madewithout anyone realizing it.

Definitions of the concept of corporate strategy can also be distin-guished according to their view of the environment. Authors like Porter(1980), Williamson (1991) or Hill and Deeds (1996) argue that organiza-tions are expected to match their environment as well as they possibly can.Strategy is seen as determined by structural constraints (e.g., number andsize of firms) that prescribe the profitability of a particular industry; thusthe economy somewhat imposes on firms. Accordingly, Hofer andSchendel (1978: 4) argue that “the basic characteristics of the match an or-ganization achieves with its environment is called its strategy” and Wil-liamson (1991: 76, emphasis in the original) stresses that “economizing ismore fundamental than strategizing – or, put differently, that economy isthe best strategy.” In contrast to this deterministic view, only some schol-ars do not define strategy as a reaction to environmental circumstances anda means to achieve ‘fitness’ but rather as a way to think about how a firm,despite certain environmental influence, also influences and manipulatesits own environment (Bourgeois 1984; Weick 1987a).

The discussion illustrates that the only point of agreement in the strategyfield may be that there is no single universally accepted definition of strat-egy. It is a term with multiple meanings, a term whose substance dependson the underlying assumptions of scholars (Franklin 1998b: 446). Our il-lustration of the two dimensions (i.e. the perceived need for planning andthe extent of environmental determinism) that strategy scholars refer towhen defining strategy relates to two of our dominant logics. The ‘neces-sity of adaptation’ is based on the assumption of a high environmental de-terminism, while the ‘primacy of thinking’ relates to a high need for plan-ning. As the discussion shows, there are perspectives that reach beyondthese dominant logics and not all strategy scholars favor environmental de-terminism and planning-like strategizing. Yet as the discussion in chapter

Paradigm Lost? – The Roots of Strategy Research 33

three will reveal, (a) the ‘mainstream’ in strategic management theorycomplies with the dominant logics and (b) that even some of those scholarswho take alternative perspectives do not fully disengage from the opposi-tional-logic that obscures paradox.

2.2 Paradigm Lost? – The Roots of Strategy Research

While the preceding section showed that there are different definitions ofthe term ‘corporate strategy’, some of these perspectives have gained moreprominence and consequently hardened into paradigms. For instance, thework of Porter (1980, 1985) has attracted much attention, whereas Weick’s(1987a) strategic reality is not widely accepted. To understand which stra-tegic realities have become established, we need to appreciate the idea of‘paradigm’. Accordingly, we assume that each paradigm consists of a vari-ety of strategic realities that reflect scholars’ assumptions about strategy.Our discussion of paradigms in strategy research makes two contributionsto this study. First, the identification of paradigms enables us to understandhow the dominant logics are embedded in research activity. Dominantlogics are not paradigms but cut across a variety of paradigms; the domi-nant assumptions are reproduced within different paradigms (see also sec-tion 3.2.5). Second, because the choice of a future direction in strategicmanagement is influenced by its paradigmatic origins and because thisstudy aims to pave the way for an alternative way of thinking, we shouldhave a sound understanding of the terrain to appreciate the accounts ofknowledge created by others.

To assess the paradigms of strategic management first requires makingsense of the term ‘paradigm’ in order to be able to present possibilities fora paradigmatic classification (section 2.2.1). Before we introduce what welabel the paradigms of strategy research (section 2.2.3), we discuss the dis-ciplinary roots of strategic management (section 2.2.2) because the disci-plinary orientation of scholars influences their paradigmatic perspective.We close by assessing whether strategy research should follow one para-digm (domination), or a bunch of unrelated paradigms (pluralism), and/orshould combine paradigms (integration) to cope with research problems(section 2.2.4).


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) bookThe Structure of Scientific Revolutions which we can group into two broadnotions. The first notion, which we call ‘the model paradigm sense’, statesthat paradigms occur with regard to a specific field of research (e.g., stra-tegic management) and need to be understood as “universally recognizedscientific achievements that for a time provide model problems and solu-tions to a community of practitioners.” (Kuhn 1996: xi) This notionstresses the model character of paradigms because they are “[...] acceptedexamples of actual scientific practice [which] provide models from whichspring particular coherent traditions of scientific research.” (Kuhn 1996:10, annotation added) Paradigms reflect certain standards of scholarlinessaccepted by a community of researchers but questioned outside this com-munity (Lewis and Kelemen 2002: 251).

Paradigms contain assumptions that are often unconsciously held to de-fine the ‘legitimate’ problems and research methods for succeeding in aspecific field of inquiry (Mitroff and Mason 1982: 361). Kuhn regardsparadigms as governing the progress of what is called ‘normal science’.The latter aims to articulate and apply the accepted paradigm which is notitself questioned. Scientific problems are considered to be an agglomera-tion of puzzles that can be solved by referring to the assumptions of theparadigm. A normal-scientific puzzle always has a solution that is pro-vided by the paradigm (Kuhn 1996: 36). Normal science needs to be con-trasted to ‘revolutionary science’ in which anomalies occur that cannot besolved by the paradigm anymore. As a result, a new paradigm emerges andbecomes accepted by the scientific community. Kuhn (1996: 115) arguesin this context “[…] the scientist with a new paradigm sees differentlyfrom 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 themetatheoretical character of paradigms. Here, a paradigm is somethingwider 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 filtersthrough which individuals make sense of research problems, i.e.: a wholeWeltanschauung. Burrell and Morgan (1979) follow this perspective intheir trail-blazing book Sociological Paradigms and OrganizationalAnalysis. Although they view paradigms as metatheoretical assumptionswith regard to the nature of science (objective/subjective) and the nature ofsociety (regulation/change), they limit their analysis to social theory,


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 particularway. The four paradigms [developed by them] thus define four views of the so-cial world based upon different meta-theoretical assumptions with regard to thenature of science and society.” (emphasis and annotation added)

Burrell and Morgan’s perspective is shared by Scherer (1999: 5) who iden-tifies paradigms with basic assumptions regarding ontology (the way wethink the world is), epistemology (what we think can be known about theworld), as well as the methodology used (how we think the unit of analysiscan be investigated).

Neither ‘the model paradigm sense’ nor ‘the metatheoretical paradigmsense’ can fully account for whatever is researched. It is thus surprisingthat strategy scholars have relied on an either/or-decision when discussingthe paradigmatic status of their field. Some follow ‘the metatheoreticalparadigm sense’ by believing that paradigms represent distinct ontologicaland epistemological assumptions with regard to strategy (Göbel 1997; Mi-troff and Mason 1982). Others have followed ‘the model paradigm sense’by suggesting that paradigms represent universally recognized scientificachievements that provide model problems and solutions regardless ofwhether these achievements differ substantially in their perceivedmetatheoretical nature. Foss (1996: 4) and Hoskisson et al. (1999), for in-stance, argue that the resource and market-based view represent paradigmsbecause they address the same explanandum phenomenon by using differ-ent explanatory apparatuses. Surely, both possibilities of classifying para-digms are interrelated. Paradigms understood as model problems and solu-tions always follow certain metatheoretical assumptions. Conversely,metatheoretical assumptions by themselves make no sense as along as theyare not applied to an object of analysis and reflected by model problemsand solutions that are accepted. For the remainder of this study, we take anintegrative view and characterize paradigms in strategy research as univer-sally recognized scientific achievements that provide model problems andsolutions by referring to a certain methodology and metatheoreticalassumptions.15

15 This definition is quite comparable with the one given by Kuhn in the postscriptto The Structure of Scientific Revolutions (starting with the 1970 edition). In thepostscript, he explicitly points out that shared beliefs about certain model prob-lems and personal values (which touch upon metatheoretical issues) are part of aparadigm (Kuhn 1996: 184-185). See also the discussion by Lueken (1992: 118-122).


This definition helps us to differentiate paradigms from strategic reali-ties. A strategic reality is not a paradigm: however, it can be ascribed toone. In this sense, paradigms consist of a variety of strategic realities (i.e.only those strategic realities that are in line with the assumptions favoredby the paradigm). Paradigms in strategy research are broadly accepted andprovide a point of reference for ‘legitimized’ research during a certain pe-riod of time, whereas strategic realities can also reject the assumptions ofthe dominant paradigm(s). Weick (1987a), for instance, outlines a specificstrategic reality, which, though, never gained a paradigmatic status in thestrategy field like the planning school did in the 1960s. Because paradigmsare heavily influenced by their underlying disciplinary roots, most of allbecause these roots affect the chosen metatheoretical assumptions, we firstdiscuss the disciplinary basis of paradigms in strategy to then provide ahistorical 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 man-agement has drawn upon a wide range of disciplines (Baum and Rao 1998;

Baum and Dobbin 2000). Pettigrew et al. (2002: 9) even see strategic man-agement as a multidisciplinary melting pot crowded by a variety of dis-similar aspirants. The term discipline follows a rather broad definition inthis context. Following, the remarks of Michel and Chen (2004: 5), disci-plines do not necessarily refer to well-established sciences like sociologyor economics but also include subfields of such sciences (e.g., game theoryin economics or organization theory in business administration). Strategyscholars tend to identify their scholarly activity with such disciplines whenwriting about the ‘economic perspective of strategy’ or the ‘sociologicalview on strategy’ (Rumelt et al. 1994: 31).

A closer look at available theories in strategic management reveals thatthe field has borrowed extensively from other neighboring disciplines.Theories from various disciplines have expanded and enriched the knowl-edge base of the field of strategy (Volberda 2004: 35). In a recent surveyamong 500 members of the Academy of Management’s Business Policyand Strategy Division, Michel and Chen (2004) observed that organizationtheory, economics, sociology, and psychology are by far the most reliedupon disciplines. This survey reveals a diversity of disciplines utilized bystrategy scholars. We discuss the contributions of economics and sociol-


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 econom-ics and developed sophistication in using economic modeling. Rumelt etal. (1991: 9) discuss some reasons for this. First, strategy studies that wereconducted in the 1970s were not able to interpret observed performancedifferentials. For instance, there was need to find out what meaning shouldbe ascribed to performance differences between identified strategic groups(Hatten and Schendel 1977). It was not possible to interpret these resultswithout the rise of industrial organization that provided the notions ofmarket power and barriers to entry. Second, traditional case-based researchshowed that profits are persistent over time (Learned et al. 1969). Thereseemed to be an inertia associated with profit differences of firms withinthe same industry. Again, it was industrial organization economics to-gether with the economics of innovation that provided various explana-tions for persistently abnormal returns (e.g., mobility barriers or cost oftechnology transfer). These two points already show that the most signifi-cant impact of economics on strategy research has been the explanation ofsuccess. Third, it was not until the development of the new institutionaleconomics (Williamson 1975, 1985) that economic thinking moved closerto strategic management. In traditional neoclassical economics, competi-tion eroded extra profits earned by successful firms. This changed as thenature of economic thinking was altered to include concepts like uncer-tainty, information asymmetry, bounded rationality, opportunism, and as-set specificity (Williamson 1975).

Of all subfields in the ‘new institutional economics’, the transaction costapproach gained wide popularity in strategic management. The main rea-son for this dominance is that transaction cost economics provides a com-mon ground where economic thinking, strategic issues, and organizationtheory meet (Rumelt et al. 1994: 28). Based on this conviction, Williamson(1991: 90) argues that transaction cost economics provides strategy schol-ars with a core theory to understand the economy as the best strategy. Thisdoes 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 influ-enced by economics and organizational sociology. Nelson and Winter’s (1982)book on evolutionary economics, for instance, is often referred to in organiza-tion theory. Similarly, many theories of organizations owe a lot to sociologicalconcepts (e.g., new institutionalism, see for example DiMaggio and Powell1983).


transactions only, whereas economic transactions are relevant for all (andthus also strategic) transactions.17

Besides transaction cost economics, agency theory gained considerablepopularity in strategy research. As agency theory is primarily concernedwith the design of incentive agreements and the allocation of decisionrights among individuals with conflicting preferences, strategy researchersemployed this subfield of the new institutional economics to design incen-tive schemes so that agents will not distort the capital budgeting process(Milgrom and Roberts 1992; Rumelt et al. 1991; Hoskisson et al. 1999). Inthe 1980s, evolutionary economics also moved to the forefront of strategicmanagement. Nelson and Winter (1982), for instance, claim that becausecapabilities are a function of corporate history, it is impossible to just copybest practices from competitors. Accordingly, strategies cannot be simplyor even quickly changed but underlie the dynamics of an evolutionaryprocess.

In sum, we may state that economics has greatly enriched the study ofstrategic management by contributing to such persistent paradigms as themarket and resource-based view. Nonetheless, it is of categorical impor-tance to recognize that these contributions were possible only after theweakening of the neoclassical orthodoxy. Yet, the rise of the new institu-tional economics in strategy also accounts for the continuing dominance ofquantitative empirical studies. A central focus of empirical research hasbeen to understand the relations associated with the structure-conduct-performance framework by means of databases rather than direct engage-ment with the firm (Bowen and Wiersema 1999; Pettigrew et al. 2002).We conclude that notwithstanding the contributions of economics to strat-egy, economic thinking has also helped to establish and sustain the ideol-ogy this study is concerned with.18

Similar to economic thinking, sociological insights have come from avariety of directions (Pettigrew et al. 2002: 10). Two main concerns distin-guish sociology in strategy research from economic reasoning. First, mostsociological theories do not study voluntary exchange but start with the

17 Williamson (1991: 76) makes this quite clear: “Strategic ploys are sometimesused to disguise economizing weaknesses. […] More often, strategic ploys canbe used to promote economizing outcomes. […] The beguiling language ofstrategizing – warfare, credible threats, and the like – notwithstanding, studentsof economic organization are better advised to focus on more mundane issues ofan economizing kind.”

18 See also the critical commentaries of Bromiley and Papenhausen (2003), Foss(1996), and Seth and Thomas (1994) regarding the relation between economicsand strategy. Rumelt et al. (1994: 25-31) provide a good overview of the taxo-nomy of economic theories pertinent to strategic management.


presumption that authority plays a major role in shaping social order. Forexample, sociological resource dependence theory sees strategic manage-ment as a way to protect the organization from those parties that possesscritical resources upon which the firm depends (Pfeffer and Salancik1978). Second, sociology is not much concerned with the instrumentalworth 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 relation-ships. Influenced by the work of Hannan and Freeman (1977, 1984), orga-nization ecologists are quite pessimistic about the ability to actively influ-ence strategies. In their view strategies can hardly be influenced in adeliberate way as organizations adopt their environment. Well-managedstrategic change becomes the exception rather than the rule because strate-gies are subject to inertia. The assumption of strategic inertia may be real-istic, as Rumelt et al. (1994: 34) argue, if we consider that a whole lot ofcorporations struggle to ‘manage’ changing environmental conditions.

Exchange plays yet another role in sociological strategy research.Whereas economists claim that organizations seek efficiency through ex-change, sociological institutionalism argues that firms are part of exchangerelationships to act in socially expected ways and thus gain legitimacy. Ininstitutionalism society is seen as the source of strategies which organiza-tions institutionalize (adopt) to gain legitimacy (DiMaggio and Powell1983). While an economist might argue that a merger is necessary becauseit provides efficiency, an institutionalist would argue that mergers are con-ducted because other firms have done so and academics have rationalizedthem. Understood in this way, institutionalism comes close to social con-structivism which describes how ‘taken-for-granted’ institutions come intobeing (Berger and Luckmann 2000). Institutionalism, organizational ecol-ogy, and resource dependence are but a few theoretical lenses that arecommonly associated with sociology in strategy research. Recently, Euro-pean scholars introduced other sociological perspectives by showing therelevance of self-referential systems theory (Knyphausen-Aufseß 1995;Vos 2002) and Giddens’s theory of structuration (Ortmann and Sydow2001b; Pozzebon 2004).

2.2.3 Paradigms in Strategy Research – A Historical Sketch

Recall that we defined a paradigm as consisting of universally recognizedscientific achievements that provide model problems and solutions by re-ferring to certain metatheoretical assumptions. Based on these remarks, wenow discuss four paradigms (i.e. ‘planning’, ‘forecasting’, ‘market-based’,


and ‘resource-based’) that occurred during the last 40 years in the strategyfield. Although, we introduce the paradigms in a linear fashion, it needs tobe noted that the occurrence of one paradigm cannot be identified with thetotal disappearance of its predecessor. The ascription of a paradigm to acertain decade is rather an idealized version of events. Today, scholarlywork often draws on assumptions from different paradigms.

Practically, it is hard to differentiate paradigms in a research field be-cause they examine the same object of analysis. To provide a structuredyet comprehensive discussion, we employ four criteria that guide the dis-cussion. The criteria are derived from our discussion of the term ‘para-digm’ (section 2.2.1) and the disciplinary roots (section 2.2.2). First, welook at certain model problems and solutions that are offered by the advo-cates of the paradigm. Second, we assess the underlying methodology thatis used by scholars working in the paradigm because the recognition andperceived validity of scientific achievements also depends on the em-ployed methodology. Third, we discuss the underlying disciplinary rootsof the paradigm as these influence the metatheoretical assumptions ofscholars. Last but not least, we look at these metatheoretical assumptionsby referring to the two dimensions discussed in section 2.1.2 (i.e. the ‘needfor planning’ that relates to assumptions about rationality and ‘environ-mental determinism’ that relates to the ontological question whether theenvironment is given).

During 1960s, the first scientific achievements that gained a paradig-matic status in a field known then as business policy can be subsumed un-der the label ‘planning’. An important year for the establishment of thisparadigm was the publication of Chandler’s (1962) seminal work Strategyand Structure that emphasizes the role of internal processes (e.g., decision-making) and firm characteristics (e.g., internal structure). Strategy wasconsidered to be about the planning of the basic long-term goals of a cor-poration to achieve growth. The model problem of the paradigm was toexplain how planning practices were supposed to arrange the functions ofan organization to achieve long-term goals. Model solutions were primar-ily developed by focusing on the role of the general manager whose re-sponsibility was the enterprise as a whole (Learned et al. 1969: 3). This ac-tive role of management in shaping strategy is also well-reflected in theworks of Ansoff (1987b) and Andrews (1971) who suggest that corporatestrategy is composed of two practically separated processes: formulationand implementation. The importance of the planning paradigm is high-lighted by Rumelt et al. (1994: 18) who argue that “[n]early all of the ideasand issues that concern us today can be found in at least embryonic form inthese key writings of the 1960s.”


In terms of methodology, early strategy scholars were primarily con-cerned with identifying ‘best practices’ that were useful for managers(Hoskisson et al. 1999: 423). The most appropriate method for achievingthis objective was seen to be inductive case-based research as outlined inthe book Business Policy: Text and Cases by Learned et al. (1969). Gener-alizations of what strategy is all about were deemed to be impossible.

“It is not possible to make useful generalizations about the nature of these vari-ables or to classify their possible combinations in all situations. Knowledge ofwhat, 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 generalpatterns as Chandler did. Because of this perspective, scholars working inthe planning paradigm were rather skeptical about the contribution of otherdisciplines like economics, sociology or psychology. Strategy was seen tobe much about intuition. Although it was believed that these disciplineshave a lot to do with business in general, there was much disbelief thatthey can transform intuitive skills into conscious ones (Learned et al. 1969:6). In terms of the underlying metatheoretical assumptions, scholars be-lieved in a rather high environmental determinism because market oppor-tunities and threats were treated as given (Andrews 1971). To adapt to thisenvironment, managers were advised to follow a rational approach thatemphasized a high need for planning (Ansoff 1987b).

Where the 1960s gave rise to the basic concepts of strategy, the decadeof the 1970s brought these concepts to practice, primarily driven by thecontinued expansion and further development of strategy consulting. Theparadigmatic orientation can be described as ‘forecasting’. Forecast-basedplanning stood out from long-range planning in that it not only describedstrategy development in a general sense but also how firms forecast the in-puts of management decisions. Forecasting forced managers to define theirplans in more competitive terms by gathering information about marketsand including customers and competitors in the analysis. The question ofhow to forecast the performance of a business or set of business units thusacted as the model problem for this paradigm. By focusing on internal andexternal factors alike, organizations were rearranged in terms of businessunits to map customers and competitors (Bowman et al. 2002: 35). Modelsolutions were provided by portfolio management (Hedley 1977;Henderson 1977), which offered a method to evaluate investment opportu-nities and factors associated with long-term performance, and the PIMS


database (Schoeffler et al. 1974), which attempted to identify the factorsrelated to long-term performance.19

Besides this focus on performance, the underlying methodology for re-search changed dramatically. As Rumelt et al. (1991: 8) note, the 1970switnessed the rise of multivariate statistical methods that were capable ofhandling large sets of data to test hypotheses in a deductive style of re-search. Equipped with this methodology, strategy scholars produced anenormous amount of research, the results of which were difficult to inter-pret because of missing theoretical frameworks and the still unspecifieddisciplinary roots. Even though econometrics entered the field by provid-ing a framework for conducting research, there was still no common disci-plinary ground until industrial organization economics started to search forlinkages between research results and theory in the 1980s. Despite the in-creasing hostility and instability of the environment, largely driven by theoil shock, the metatheoretical assumptions used by scholars remained thesame for the most part. Although markets were expected to shift, there wasstill much hope that one can plan ahead by conducting fine-grained analy-ses.

During the 1980s, because of the abovementioned need for a commontheoretical framework, economic thinking moved closer to the center stageof 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. Theadoption of the structure-conduct-performance (S-C-P) model shifted thefocus of strategic management from the individual firm to the industry orcompeting groups of firms. Porter (1981) argued that a firm’s performanceprimarily depends on the industry structure in which it competes. Becausestructure determines conduct and conduct was basically seen as dependenton the industry structure, performance, which depends on conduct, can beexplored by structure. The model problem for this paradigm was to explaincompetitive advantage by understanding the structure of an industry. Themodel solution provided by Porter (1980) was the five forces frameworkthat enabled an assessment of industry attractiveness.

Industrial organization economics also had a significant influence on themethodology used in strategy research. Porter (1981: 617) outlines thismethodological promise as follows:

19 Other tools and concepts that fit in the same category for reasons discussed insection 2.3 are: the experience curve (Henderson 1973), research on strategicgroups that explored the linkages between resource choices (interpreted as strat-egy) and firm performance (Hatten and Schendel 1977), and the formalizedstrategy formulation process model by Hofer and Schendel (1978).


“IO [industrial organization] research has developed a strong tradition builtaround the statistical analysis of populations of firms and industries. Researchon strategy is now using such methods to supplement the in-depth case studiesthat have been the bread and butter of policy research […] Recently a hybridresearch design has emerged, using a series of mini-case studies to test richerhypotheses than can be feasibly tested in big samples.” (annotation added)

The use of statistical modeling was now complemented and extended bycases to increase the validity of research results. Yet, the dominance ofpositive economical research focusing on the precision of the made predic-tions was still present (Hoskisson et al. 1999: 431). Based on the discipli-nary orientation provided by industrial organization economics, themetatheoretical assumptions remained largely the same as in the 1970s,even though the high need for rational planning was more an implicitlyheld assumption than an explicit concern.20

Because research showed that some firms perform better than others inthe same industry and/or strategic group, strategic management refocusedon firm level phenomena in the 1990s. Based on Wernerfelt’s (1984) earlyexamination of the relationship between resources and profitability, thefield slowly established a ‘resource-based’ paradigm that gained full mo-mentum in the 1990s with the widely recognized contribution of Prahaladand Hamel (1990). Criticizing the work of Porter (1985) for neglecting theimpact of firm attributes on the competitive position of corporations,Barney (1991) presented a framework for identifying the characteristics ofresources in order to generate sustainable competitive advantage. The un-derlying model problem for this paradigm can be described as the searchfor competitive advantage by analyzing a firm’s resource base. In terms ofmodel solutions, scholars identified a variety of resource characteristics(e.g., rareness and non-substitutability) that are supposed to ensure com-petitiveness and emphasized the role of organizational learning (Teece etal. 1997), knowledge (Kogut and Zander 1992), resource factor relation-ships (Black and Boal 1994), and organizational culture (Fiol 1991).

Because the resource-based view has been mainly concerned with in-tangible constructs, which are by definition unobservable, researchers haveused proxies (e.g., human capital leverage for employee skills) as measuresin empirical studies. The methodological focus moved away from large-scale data collection to a case study approach that caught the particular cir-cumstances of corporations and provided richer information of a firm’s re-

20 Porter’s (1981: 616) updated version of the industrial economics framework byBain (1968) moved beyond simple determinism and also allowed for changes inthe industry structure by the conduct of firms. Nevertheless, the underlying on-tological tradition in which all firms are part of one reality remained unchanged.


source base. To increase the reliability of information, scholars combinedquantitative financial and qualitative interview-based data in their study offirm resources. This cross-fertilization on the methodological level is wellreflected in the disciplinary base of the resource-based paradigm. We agreewith Sydow and Ortmann’s (2001: 10-11) claim that the core of resource-based reasoning rested (and still rests) on economics. However, as Barney(1991: 116) noted

“[r]ather than being contradictory, the resource-based model of strategic man-agement suggests that organization theory and organizational behavior may bea rich source of findings and theories concerning rare, non-imitable, and non-substitutable resources in firms. Indeed, a resource-based model of sustainedcompetitive advantage anticipates a more intimate integration of the organiza-tional and the economic as a way to study sustained competitive advantage.”

Accordingly, resource-based reasoning also included aspects from sociol-ogy and organization theory and thus opened the strategy domain for in-puts from non-economical disciplines to understand socially complexcompetitive resources such as knowledge or culture. Unfortunately, theexplicit inclusion of other disciplines did not alter much of the underlyingmetatheoretical assumptions. Even though scholars highlighted the impor-tance of informal planning processes (Burgelman 1983), the resource-based perspective did not integrate these insights. This neglect of process-related issues can be traced to Barney’s (1991: 113) argument that strategicplanning itself is unlikely to be a source of sustained competitive advan-tage.

As we enter the 21st century, we need to ask, what is the paradigm thatstrategy scholars currently refer to? Certainly, the resource-based paradigmis still on the agenda and often perceived to be the dominant frame of ref-erence for research (Hoopes et al. 2003). Because resource-based scholarsare increasingly aware of the limitations of theoretical constructs importedfrom economic theory, they start to cross-fertilize, for instance, by explor-ing how managerial cognition affects industry structure (Johnson andHoopes 2003). The continuing dominance of the resource-based paradigmdepends on its potential to integrate insights from other disciplines andpreceding 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 dynamiccapabilities by integrating insights from evolutionary theory and demon-strate that capabilities follow certain paths over time. We can also specu-late that a new paradigmatic orientation might evolve out of a stronger in-tegration of strategy process issues in the resource-based perspective. Inhis ten-year retrospective on the resource-based view, Barney (2001: 648)


expresses much hope that theories that assess ‘capability building’ mayturn 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 para-digmatic status. We can only argue that there are four paradigms that oc-curred in the course of the last 40 years (Figure 5). Although these para-digms do not exhaustively cover the entirety of studies in strategicmanagement, they do give a fair overview.

Fig. 5. Paradigms in Strategy Research

Having discussed paradigms in strategy research, we are left with thequestion whether we should accept and value paradigmatic diversity orseek some sort of integration among paradigms? On the one hand, para-digms provide some order in a time when we face an ever-increasing num-ber of strategic realities. On the other hand, paradigms do not replace oneanother in a mutually exclusive manner. Our linear treatment of paradigmsis a rather idealized version of events that may hold in theory but is lessrelevant when considering scientific practice. With a co-existence of dif-ferent voices the legitimized order offered by paradigms turns into a ca-cophony of opinions. Some scholars stick to resource-based reasoning andlook for new ways to conceptualize a firm’s resource base by employingnovel methodologies (Hoopes et al. 2003). Others still follow a market-based perspective but acknowledge the need to reach beyond typical cross-


sectional economic analysis by also focusing on longitudinal problems(Porter 1991).

This co-existence of different paradigms fosters concerns that “our fieldis rapidly being pulled apart by centrifugal forces.” (Hambrick 2004: 91)In addition, some scholars heavily criticize existing paradigms for beingtoo narrowly focused and plead for a radical shift towards distinct guidingassumptions and the establishment of yet other paradigms (Daft and Buen-ger 1990). How should we cope with the co-existence of voices? Do weneed to integrate different perspectives or maybe look for one overarchingparadigm?

2.2.4 The Desired Paradigmatic Status of Strategy Research

As discussed in the preceding section, various paradigms have expandedand enriched the knowledge base of the field of strategy. Yet, instead ofprogress there seems to be disillusionment with the value of the strategyliterature (Clegg et al. 2004; Göbel 1997). The desired paradigmatic statusof the field remains unclear, resulting in sheer confusion among research-ers. Hambrick (2004), for instance, claims that there are too many para-digms with too many assumptions trying to solve too many unrelated re-search problems. Despite the incredible amount of research undertaken andthe rapid development of different paradigms, there is still confusion aboutwhich way to go. Should we pursue integration more vigorously in a cer-tain direction or keep expanding our knowledge base? This comes down tothe question of whether we need one isolated dominant paradigm, severalcompeting paradigms, or maybe even integration among existing views(Foss 1999: 725; Pettigrew et al. 2002: 9)? How should we think about thedesired paradigmatic status of the field?

Some scholars favor a clear domination of the field by a single para-digm. Camerer (1985: 1) believes that the deductive use of mathematicsand economic concepts with regard to market-based reasoning is the bestway to approach corporate strategy. The message such scholars have forthe community is that paradigmatic pluralism is dangerous because it endsup in an ‘anything goes’. Scherer (1995: 5) remarks that pluralism is aproblem because practitioners, who are the addressees of strategy research,need to make a choice among competing paradigms since their actions re-quire clarity. Podsakoff et al. (2005: 487) even advise us that the existenceof a single agreed upon paradigm may be positively related to the influ-ence of journals as editors and reviewers come to rely on universalistic cri-teria for the evaluation of research. Obviously, the greatest problem of thisperspective is the impossibility of justifying the decision why a certain


paradigm should be used. Nonetheless, once a decision for a paradigm ismade, research results can be better evaluated and the field is perceived as‘mature’. Pfeffer (1993: 618) even argues that a dominant paradigm im-munizes a discipline against hostile takeovers from other disciplines (seealso Herrmann 2005).

Contrary to domination, several researchers argue that strategic man-agement should value paradigmatic pluralism. The belief is that everybodyshould be heard in the conversation because if this is not the case researchwill produce a monolithic discipline. Mahoney (1993: 173) remarks that“strategy research should concern itself with continuing the conversationof the field rather than insisting upon a place for universal methodologicalcriteria within that conversation.” Pettigrew et al. (2002: 6) compare such aperspective with a kaleidoscopic view in which new patterns of researchare not necessarily any more true or false but are merely there. In a similarway, Rumelt et al. (1994: 1) argue that what will most benefit strategy re-search is not an overarching paradigm but the articulation of a diversity oforientations. Pluralists are in favor of this position:

“Because we find ourselves unable to determine how close our theories are tosome absolute truth, we are unable to evaluate paradigms in a way that wouldenable us to know that any particular one is a priori deserving a dominant posi-tion in organizational science. Science is not a magnificent march toward abso-lute truth, but a social struggle among scholars of the profession to constructtruth. […] Because there is no meta-paradigm with which to make the choicebetween or among paradigms, each scholar must argue from his or her para-digmatic frame.” (Cannella and Paetzold 1994: 332-333)

The benefits of this orientation are obvious. Because there is more thanone paradigm and thus also more than one description of the same phe-nomenon, the complexity and multifaceted nature of strategic issues can betaken into account. The various aspects of one whole (e.g., aspects of strat-egy) are best grasped under different paradigmatic frameworks (Gioia andPitre 1990). A single set of assumptions provides only a narrow perspec-tive because many issues will never be debated (Daft and Buenger 1990:100). In addition, pluralism enhances greater reflexivity because scholarsneed to reflect on the impact and contribution of their perspective to com-pare and evaluate research results.

These benefits, however, come at a price. Hambrick (2004), for exam-ple, argues that too much pluralism erodes the ‘scientific nature’ of thefield because no clear standards for the evaluation of research exist any-more. A selection among competing alternative views becomes out ofreach (Foss 1996: 7). Does this imply an ‘anything goes’? Based on theremarks of Cannella and Paetzold (1994: 336), we argue that pluralism in


strategic management does not imply that everything is possible, but thatevery position deserves to be heard. Positions that do not contribute to thedevelopment of the field by solving the problems of practitioners (or atleast contribute to this process in some way) will not be heard for a verylong time. Accordingly, pluralists cannot be accused of favoring an undi-rected ‘anything goes’ just because they argue that all positions should beheard.

A third alternative is the so-called integration of strategy paradigms.21

Whereas for radical pluralists incommensurable paradigms simply co-exist, integrationists aim to utilize these paradigms to integrate them into acoherent whole. Combe (1999: 341) argues that to reach beyond the nar-row and specialized view of one single paradigm, we need to adopt a holis-tic approach that combines different views. Similarly, Hart (1992) andCravens et al. (1997) argue that research has been unable to capture therange of themes and dimensions that constitute strategy and thereforewould benefit from theoretical integration. As a result, paradigm integra-tion 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 intoone holistic and all-encompassing approach that they name the configura-tional school:

“All of the above: That is the message of the configurational school but with aparticular angle. […] In other words, the configurational school focuses on ty-pologies and episodes of various kinds – types of organizations, kinds of envi-ronments in which they operate, distinct periods in their histories – ideally allintegrated into states which are sequenced over time, in life cycles.” (Mintzberg1990b: 179-180)

Similarly, Hambrick (2004: 93) argues that the ‘big breakthroughs’ instrategy may only arise if multiple paradigms are reconciled or integrated.Integrationists not only join paradigms at a superficial level but also try tocombine their underlying metatheoretical assumptions.

What are the benefits of integrating different paradigms? Foss (1999:743-744) argues that an integration of paradigms enhances the understand-ing of complex phenomena that are hard to grasp through the lens of onesingle paradigm. Because there are interaction effects between different

21 Integration has its roots in the philosophy of science debates. Lewis and Kele-men (2002: 258) argue that “[m]ultiparadigm inquiry strives to respect opposingapproaches and juxtapose the partial understanding they inspire. Paradigmlenses may reveal seemingly disparate, but interdependent facets of complexphenomena.” See also the remarks of Gioia and Pitre (1990) on multiparadigmtheory building.


paradigms, adopting one view only is likely to lead to a biased understand-ing. Notwithstanding these benefits, the integrational perspective poses therisk for scholars and practitioners that by trying to see everything, theymay end up seeing nothing because of the required high level of abstrac-tion that joins radically different perspectives. Therefore, attempts at inte-gration often lead to sophisticated theoretical frameworks that are discon-nected from problems in strategic management (Volberda 2004: 35). Thethree positions (domination, pluralism, and integration) are depicted inFigure 6.

Fig. 6. Views About the Desired Paradigmatic Status of Strategy Research

This brings us to the question, which of the perspectives is adoptedwithin this study? Recall that we, because of our relation to postmodernthinking, favor the incommensurability thesis (section 1.2). An unfoundeddecision for one particular paradigm (domination) is therefore not feasible.Neither is trying to hear all existing voices (pluralism) nor integrating allviews into one overarching whole (integration). Too much pluralism haltsthe progress of the field by harming communication and evaluation of re-search, while too little pluralism isolates the field from its empiric realityand fosters scientific rigidity. We need a conception of the paradigmaticstatus that gives reference to incommensurability but also allows for para-digmatic cross-fertilization. This status would bridge conflicting para-digms while still maintaining their diversity (Weaver and Gioa 1994).

In escaping this pluralism-integration dilemma, we suggest the moremodest approach of loose coupling (see Figure 6). Based on the work ofWeick (1976) and Orton and Weick (1990), originally worked out to study


the nature of organizations, loose coupling enables us to accept the logic ofdifferent paradigms (and thus incommensurability) without losing sight ofthe whole. To think of loosely coupled paradigms means to accept that theelements of different paradigms are responsive but retain evidence of sepa-rateness and identity (Weick 1976: 3). With elements we mean modelproblems and solutions, methodology, disciplinary roots, and metatheo-retical assumptions. These elements are coupled because they can belinked and thus preserve a certain degree of determinacy. Simultaneously,their coupling is loose which means, as Orton and Weick (1990: 203) re-mark, that the ties between the elements can change suddenly (rather thanslowly or not at all) and occur occasionally (rather than constantly).22 Ac-cording to loose coupling, paradigms retain a sense of incommensurabilitybecause there is no neutral language in which the contents of rival theoriescan be expressed and thus evaluated (Derrida 1981b: 24), but there is alsoa logically necessary degree of commensurability. This means that al-though an exchange of ideas between alternative worldviews is never iso-morphic, “such communication is not only possible, but is a necessarycondition of theory development.” (Willmott 1993: 688, emphasis in theoriginal) The choice we as researchers face should not be to either defendincommensurability or get assimilated by functionalism as Jackson andCarter (1991) claim, but to look for cross-fertilization among competingviews for the sake of solving research problems (Galison 1999, 1997).

The position of loosely coupled paradigms describes a kind of balancedpluralism that emphasizes that even in the light of incommensurabilitythere can be collaboration. This pluralism is balanced because paradigmsare used flexibly, bent to fit the underlying research problem, and com-plemented by other paradigms. Balanced pluralism does not imply thatevery paradigm can be usefully applied in every context, nor does it meanthat the ties among different perspectives are sluggish. The interaction ef-fects, which are valued by the integration perspective for being stable andcoherent, are now conceptualized as unstable and dependent on the contextof the research problem. For instance, market and resource-based perspec-tives show complementarities when applied to a specific problem.

22 A similar position has been suggested by Weaver and Gioia (1994) who arguethat a “successful multi-paradigm perspective […] must explain how differenttheoretical approaches might be related, but must do so (a) while preservinggenuine multiplicity (e.g. the relatedness does not involve the reduction of oneapproach to another) and (b) without uncritically embracing the disunifying‘paradigms’ paradigm’ (i.e. the increasingly entrenched view of organizationalinquiry which – by appealing to the incommensurability thesis – purports unal-terably to divide the field into mutually exclusive, contradictory metatheoreticalcamps).” (Weaver and Gioa 1994: 566, emphasis in the original)


Whereas Porter (1980: 23-24) points to the importance of considering thedangers of substitute products, he provides little insight into how to ana-lyze competitors for such substitutes.23 Resource-based reasoning cancomplement Porter’s analysis by providing criteria for assessing the capa-bilities of competitors (Foss 1996: 19). This interaction effect does notchange the nature of both paradigms – they remain separate. To assesswhere such interaction effects can occur is not an easy task. Scholars needto 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 substan-tial: one avoids the unrealistic view of a grand theory (integration) and thespeechlessness or even paralyses that come along with a bulk of unorderedand unconnected perspectives (pluralism).

While cross-fertilization can be achieved on a thematic level, the loosecoupling of methodological and metatheoretical assumptions is possible aswell. Here, the challenge is not only to look for complementarities amongexisting paradigms, as these show few differences concerning theirmetatheoretical assumptions anyway (section 2.2.3), but also to includeperspectives neglected in the analysis so far. Gioia and Pitre (1990: 591)discuss how such assumptions can be meaningfully combined without end-ing up in a total integration. They argue that the boundaries between dif-ferent metatheoretical assumptions can be conceptualized as transitionzones. According to the concept of transition zones, these boundaries arepermeable to a limited extent. Metatheoretical assumptions can be accom-modated and sometimes even linked despite incommensurable paradig-matic bases. Loose coupling is best understood when discussing exemplarytransition zones.

For instance, within strategic management there is a strong dichotomybetween determinism and voluntarism that occurs with regard to a varietyof phenomena (e.g., the strategy/structure debate). Does structure followstrategy as Chandler (1962) suggests, or does strategy follow structure asHall and Saias (1980) claim? Ortmann and Sydow (2001a: 427) show howone can reach beyond a perfunctory compromise between both positionsby referring to Giddens’s theory of structuration. Strategic actions bring

23 “Identifying substitute products is a matter of searching for other products thatcan perform the same function as the product of the industry. Sometimes doingso can be a subtle task, and one which leads the analyst into businesses seem-ingly far removed from the industry.” (Porter 1980: 23) Jemison (1981: 605)highlights other opportunities for cross-fertilization: (1) the relationship in theevolution of industries and organizations or (2) the influence of interorganiza-tional relationships on strategy-making.


about changes in organizational structure and this structure influences theway strategies are formed over time. The dichotomy disappears as the du-ality of structure implies that structures are not determined but (re)createdby and through strategic action. Certainly, the application of Giddens’stheory has its limits, as Ortmann and Sydow (2001a: 428) remark them-selves; however, it also leaves a great deal of room for coupling seeminglycontradictory assumptions for specific problem sets. When consideringthat the world of strategy (and thus its problems) do not hold still but areconstantly changing and that metatheoretical frames can be modified overtime, it makes a lot of sense to conceptualize the elements of paradigms asloosely coupled systems.

Loose coupling between paradigms does not imply simply looking for ‘amiddle way’ or some sort of compromise but giving reasons why and towhat extent different perspectives can be linked with one another. As willbe shown in chapter six, deconstruction emphasizes loose coupling be-cause (a) it overcomes the conceptual oppositions on which strategy re-search rests (section 1.1) and (b) it does so without integrating both polesof a dichotomy into an overarching whole. Derrida’s philosophy is a‘walking stick’ that helps us to make sense of possibilities for cross-fertilization and thus supports the development of future paradigms. Ofcourse, deconstruction is not the only possibility for fostering cross-fertilization.24 Deconstruction is also not a novel paradigm for strategy re-search because model problems and solutions are created on the level ofthe object of analysis. By contrast, metatheoretical assumptions, as pro-vided by deconstruction, may be part of one or even more paradigms onthe object level, but are not genuinely concerned with the object of analy-sis (viz. strategic management).

24 On a metatheoretical level, we have a variety of under or even unexplored pos-sibilities. Giddens’s theory of structuration is just one possibility (Ortmann andSydow 2001b). Luhmann’s social systems theory provides a frame of referenceas well (Knyphausen-Aufseß 1995). Apart from social theories, we may alsomake use of perspectives that highlight different epistemological and ontologi-cal alternatives like constructivism (Mir and Watson 2000). In addition, weshould also look within organization theory where metatheoretical frames thatfavor a weak ontology, such as Weick’s (1979) sensemaking approach, can befound and have already been applied to strategy research (Schneider 1997;Stensaker 2002; Weick 1987a).

Strategic Realities – Context, Process, and Content 53

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 thoselines of argumentation that had a significant influence on the field, thissection identifies three broad dimensions of thinking about strategic man-agement that are reflected by the different strategic realities within theparadigms. Because strategy scholars have not always dealt with the sameset of questions within each paradigm, we need to get to know those di-mensions that have informed the creation of distinct strategic realitieswithin 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 withthe content of strategies. Considering these differences, Pettigrew (1987,1988) points to a heuristic that yields three fundamental facets: 1) How dowe conceptualize the way in which strategies come about (strategy proc-ess)? 2) What input needs to be considered by this process to fix the finalproduct (strategy content)? 3) Wherein, in which organizational and envi-ronmental circumstances, are the former two dimensions embedded (strat-egy context)?

These three dimensions interact and are only treated separately for ana-lytical purpose.25 Rumelt et al. (1994: 19) note that the distinction betweencontent and process can be traced to the advancement of strategic man-agement as a field of research in the 1970s. The notion of strategy contextis not as old as the other two dimensions and was introduced by Pettigrew(1987) as a necessary complement to better understand the development ofstrategies over time. As context raises the question of wherein process andcontent are embedded, it is almost self-evident that there can hardly becontext research on its own. As MacKay and McKiernan (2004: 69) re-mark, “the strategy context is very difficult to research in an applied man-ner.” Strategy context rather provides an important complement to enhancethe understanding of process and content. We look at research on context,

25 The separation between the three dimensions is subject of debate. Whereasscholars 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 “con-trasting process and content research as opposites, as a dichotomy.” Interest-ingly, Schendel (1992a: 2) argues some months later in another editorial com-ment of the Strategic Management Journal that the dichotomy is not realbecause process needs to be seen as an integral part of content.


process, and content and introduce basic distinctions that scholars usewhen they refer to these dimensions. Without doubt, the provided distinc-tions do not represent an all-encompassing perspective but shape the con-tours of the strategy field to provide a basis for our further argumentation.Given the enormous volume of relevant research, this review is not meantto be exhaustive. The purpose is to identify lines of inquiry in each dimen-sion 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 processand content by looking at the circumstances that influence the strategic de-cision process as well as the content of the decision itself. According tothis view, strategy process and strategy content need to factor in the spe-cific 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 thesocial, economic, political, and competitive environment in which a firmoperates. Strategy scholars haven taken both perspectives as a startingpoint for their reasoning. Market-based (outside-in) research focuses onunderstanding how the external context of a firm, its industry structure, re-lates to strategic decisions. Of course, the environment is not a homoge-nous entity but composed of multifaceted combinations of factors such asgovernmental regulations, common industry practices, product and labormarket conditions, and more general megatrends on the societal level likethe ‘individualization of preferences’ (Miles and Snow 1978: 18). On thecontrary, resource-based (inside-out) research focuses on the internal ca-pabilities an organization possesses and their role in yielding certainstrengths and weaknesses that influence strategic decisions. Not all strat-egy-relevant issues can be divided into the internal and external spheres.Indeed, some influencing factors cut across both dimensions. Accountingfor differences between public and private sector organizations, for exam-ple, yields variations in the firm’s needed capabilities and its relation togovernmental regulations.

Outside-in and inside-out thinking correspond to different managementstyles. Whereas the market-based perspective focuses on effectiveness, thedoing of the right things, scholars who take the organization as a referencepoint are more concerned with efficiency, the doing of things in the rightway. The outside-in view tends to favor effectiveness over efficiency byconsidering Drucker’s (1987) famous claim that it is more important to do


the right things than to do things right. What sense would it make to servea market with a product that is not needed? In Chandler’s terminology: theefficiency-oriented organizational structure follows the strategic intentwhich ensures effectiveness.26 By contrast, the inside-out perspective isconcerned with the allocation of resources and the exploitation of capabili-ties to achieve efficiency. This internal focus is thought to constrain strat-egy because the structure and processes of an organization influence thescope 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 orga-nization, so that the organization may do some things very well (such as manu-facture products efficiently) but lacks capabilities in other areas (such as devel-oping new products).” (emphasis in the original)

According to this point of view, the strategy of tomorrow is thought to fol-low today’s structure as the latter constrains strategic choice. In this vein,Hall and Saias (1980) argue that structural characteristics, like bureauc-racy, affect the organization’s perception of its environment and capabili-ties. Internal efficiency, represented by the need to have the right structurein place, becomes a precondition for market effectiveness. In other words,the organizational structure has to be modified before strategic planningcan be introduced. Hall and Saias (1980) conclude by inverting Chandler’sthesis to assert that ‘strategy follows structure’. In sum, ‘structure followsstrategy’ and ‘strategy follows structure’ are two maxims that are inevita-bly linked to research on strategy context.

Strategy context provides challenges to managers and researchers assensemaking in a complex and fast-changing world not only entails con-tinuous self-reflection but also requires tools that support such reflectionsin the first place. This increases the awareness of managers of why certaindecisions with regard to the organization’s strategy are made. Yet, we

26 Chandler (1962: 14) argues in favor of this proposition by stating that “[t]he the-sis deduced from these several propositions is then that structure follows strat-egy and that the most complex type of structure is the result of the concentrationof several basic strategies.” Chandler’s maxim is based on an investigation ofthe disappointing diversification activities of four large American corporations(e.g., General Motors and Sears Roebuck). He concludes that the problem forthose early diversifiers was not strategy, but structure. Only when moving fromthe established centralized structure to a multidivisional one, these corporationswere able to fully leverage diversification strategy. In Chandler’s (1962: 314)words, “[u]nless structure follows strategy, inefficiency results. This certainlyappears to be the lesson to be learned from the experience of our four compa-nies.”


should not be too confident in believing that strategy context is somethingthat can be handled by employing the right tools. Lowendahl and Revang(1998, 1996) argue that a simultaneous increase in external (market) andinternal (organization) complexity makes it difficult for managers to cap-ture a clear picture of ‘what is really going on at the moment’. The processof complexification is largely driven by the increased importance of differ-ent kinds of knowledge and skills among employees as well as the neces-sary level of sophistication within the respective knowledge area. Like-wise, increasingly unstable and dynamic environments that cause a highdegree of uncertainty enlarge external complexification. For instance, arapid diffusion of technology can transform and even integrate entire in-dustries, as a glance at the computer and telecommunication sector proves.Lowendahl and Revang (1998, 1996) conclude that under these conditionsstrategy context is both fluid and flexible.

2.3.3 Strategy Process – How Are Strategies Formed?

Contrary to strategy context, strategy process research has gained signifi-cant attention among scholars.27 Recall that the notion of strategy processlooks at how strategic decisions are made and put into action and is lessconcerned with the content of the ‘final product’ that we label strategy. Toreview the strategy process literature, we rely on an overly linear concep-tion of the strategy process that acts as a ground for our further argumenta-tion. Certainly, there are also non-linear process models that stress theemergent character of strategy making (Eisenhardt and Brown 1998; Sta-cey 2003) or its political dimension (Knights and Morgan 1991). Yet, sincethese alternative conceptions are discussed in section 3.4 and this section issolely intended to introduce some basic terminology, we stick to the ideal-ized linear conception.

Following the work of Andrews (1971), scholars distinguish betweenthe formulation and implementation phase. Both phases make up the moregeneral process of strategy formation. Formulation typically starts with theagenda building process in which strategic issues gain the attention ofmanagement (Dutton and Duncan 1987). To gain the attention of decisionmakers, a strategic analysis needs to be conducted to reveal the strengthsand weaknesses of the organization as well as the opportunities and threatsthat reside in the environment. The final organizational agenda consists of

27 For different reviews of the large body of strategy process literature see Chak-ravarthy et al. (2003), Chakravarthy and White (2002), Fredrickson (1983), Huffand Reger (1987), Lechner and Müller-Stewens (1999), and Van de Ven (1992).


a variety of plausible strategic options that are legitimized throughout theorganization. The next activity in the formulation phase, decision-making,concerns the evaluation of these options to finally make a choice. Strategyprocess research has produced a whole range of theories to cope with thequestion of how strategic decisions are made. While there is consensusamong scholars that decisions and actions represent the core of strategyprocess thinking, there is major disagreement on how decisions are actu-ally reached.

Eisenhardt and Zbaracki (1992) identify four dominant perspectives inthe strategic decision-making literature: rationality, bounded rationality,power and politics, as well as the garbage can approach. Especially thebounded rationality and garbage can approach challenge the linear natureof an ideal strategy process. While the rational approach assumes that ac-tors enter decision situations with known objectives that determine thevalue of possible consequences, bounded rationality considers the cogni-tive limitations of people by stressing that goals are unclear, shift over timeand the analysis of alternatives is limited because decisions tend to followroutinized procedures rather than systematic analysis. The political ap-proach focuses on the process by which conflict among individuals withcompeting preferences is settled. Strategic choice is ultimately a politicalprocess in the sense that powerful persons get what they want and thatpeople engage in tactics and use information to enhance their power. Thegarbage can model was first articulated by Cohen et al. (1972) and high-lights the complexity and ambiguous nature of decisions. By calling atten-tion to the importance of chance and luck, garbage can approaches modeldecisions as occurring as a result of a random confluence of everchangingproblems, choice opportunities, solutions, and people. Decisions are notthe result of boundedly rational individuals but emerge in a fuzzy andlargely random confluence of events.

Strategy implementation is concerned with translating the chosen strate-gic option into a number of strategic actions. In this sense, the output ofthe strategy formulation phase provides the input for implementation.Whereas formulation attracted a whole range of conceptual and empiricalresearch, strategy implementation was treated as a minor issue for a longtime. Lechner and Müller-Stewens (1999: 12) name two reasons for this.First, since formulation is often equated with decision-making, organiza-tional processes that come after the decision are often neglected or per-ceived to be the responsibility of other research fields (e.g., organizationalbehavior). Second, because of the dominance of linear thinking, it is oftenassumed that once the ‘right’ decisions are made by top management, im-plementation is not a difficulty anymore and thus rather an issue of opera-


tive management. This neglect of implementation partly changed with theintroduction of the Balanced Scorecard (Kaplan and Norton 1996) that putthe translation of theoretical strategy statements onto the agenda of schol-ars and executives.

In his review of empirical and conceptual contributions to strategy im-plementation research, Noble (1999a, 1999b) identifies a structural per-spective and an interpersonal perspective. Whereas the structural stand-point studies the effects of the formal organizational structure onimplementation, the interpersonal view looks at how interpersonal proc-esses (e.g., consensus building or leadership style) can help to realize strat-egy. Considering Chandler’s (1962) argument that organizational structurefollows strategic moves, scholars like Drazin and Howard (1984) arguethat an alignment of strategy and structure is a precondition for successfulimplementation. Organizational redesigns become necessary since chang-ing strategies generate administrative problems that cannot be adequatelyhandled by the current structure. To treat organizational redesign as ameans for implementation is to assume that an appropriate structure altersorganizational routines which lead to the desired behavior (Gupta 1987).

Noble’s (1999a, 1999b) second broad perspective of implementation, in-terpersonal processes, touches upon a variety of aspects. Strategic consen-sus, for instance, is often considered a vital element of implementation be-cause it provides a collective mindset of the strategic direction and thusenhances commitment. Efficient and effective communication is inevitablein achieving such a shared understanding. Leadership style is another in-terpersonal aspect and can influence the organizational climate and delega-tion of authority, both of which have a significant impact on strategy im-plementation. 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 theBalanced Scorecard (Kaplan and Norton 1996) give reference to a varietyof the listed issues. Last but not least, it is worth noting that strategyevaluation, the monitoring and measuring of strategic activities to take cor-rective actions if necessary, is often conceptualized as part of implementa-tion (Daft and MacIntosh 1984; Kreikebaum 1997).

To conclude, strategy process research, at least within the linear tradi-tion, distinguishes between strategy formulation (i.e. agenda building anddecision-making) and strategy implementation (i.e. strategic actions andstrategy evaluation).


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 deci-sions by investigating ‘what’ is decided in order to achieve a competitiveadvantage. For the purpose of this study, strategy content is defined as re-search that investigates the content of decisions regarding the goals andscope of strategy (Fahey and Christinsen 1986: 168). The major part ofcontent research has sought to identify linkages among environmentalconditions, strategic choice, and economic performance (Rumelt et al.1994: 19-20). Accordingly, content scholars try to understand what drivessuccess in the market and consequently enables organizations to reach acompetitive edge. The central research question is usually some variant ofthe following: What performance results arise from following certainstrategies under varying conditions? While economic performance is typi-cally regarded the key measure for success (Rumelt 1982), some scholarshave reached beyond a sole focus on financial indicators by including thesatisfaction of other stakeholders as a performance measure (Freeman andGilbert 1988). To think of strategy content solely as the subject matter ofstrategic decisions leaves little room for differentiation since the bulk ofresearch that can be subsumed under this heading is too immense. Furtherdifferentiation is achieved when considering the levels on which strategycontent research rests.

Levels of Strategy Content Research: Due to the recent increase in co-operative relations among organizations, we refer to network strategy asthe highest level of analysis. Moreover, approaches to strategy have at-tempted to distinguish between issues relating to the scope of the businessportfolio (‘domain selection’) and those relating to competing within aspecific sector (‘domain navigation’). The former set of decisions refers toa firm’s corporate strategy, whereas the latter set defines its businessstrategy (Grant 2002: 72). Functional strategy represents the lowest levelof analysis and is concerned with improving the performance of a particu-lar function (e.g., marketing) to align its resources so that the goals of aspecific business strategy may be achieved. These levels are analytical dis-tinctions that are not always found in practice, often because they are notneeded (not every corporation maintains interfirm relations or is in morethan one business). In the following, we briefly introduce strategy contentresearch 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 isinappropriate to view corporate strategy as the highest level of aggrega-tion, it is worthwhile to include a network level into the analysis of strategy


content. As firms increasingly cluster together into groups of more thanone organization (Ring and Van de Ven 1992: 483), the modus operandifor remaining competitive increasingly depends on linkages between orga-nizations. The question posed by network level strategy is whether andhow the strategy of a multitude of firms can be aligned into a coherentwhole. Network level strategy examines the relationships a company wantsor needs to have with other market players, most of the time in so-calledstrategic networks. Striving to understand this relationship, researcherstypically appreciate mechanisms like trust and power as they influence theconditions of coordination (Bachmann 2001). By means of these mecha-nisms, companies in networks align their strategies or develop them in ajoint manner to reap the benefits of participation.

Corporate level strategy is primarily concerned with assessing what setof 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 onebusiness. Corporate level research supposes that firms possess a businessportfolio that needs to be organized in a meaningful way. In today’s busi-ness environment, corporate strategy must deal with different operating di-visions or even separate legal business units that need to be given some di-rection. Corporate strategy is even more relevant if we consider that manycorporations are increasingly internationalized and need to align theirbusiness units with regard to cultural considerations (Barr and Glynn2004). Consequently, corporate strategy considers the scope and resourcedeployments as well as the synergetic effects among different businessunits. Depending on the historical context, strategy scholars have devel-oped different ideas about how to handle a business portfolio. Based on themove of many large corporations from functional to divisional organiza-tion in the 1960s, authors like Chandler (1962) emphasized the need fordiversification, which resulted in the establishment of conglomerates witha portfolio of relatively unrelated businesses.

The fashion changed in the 1970s when the Boston Consulting Groupintroduced portfolio analysis that offered conglomerates the possibility ofmanaging the scope and relation of their businesses. In the 1980s, based onPeters and Waterman’s (1982/2004) book In Search of Excellence, corpo-rate strategy moved on to call attention to restructuring around core busi-nesses and the disposal of poorly performing divisions. Similarly, Prahaladand Bettis (1986, 1995) recognized that the limit to the diversity of busi-nesses within a firm is dependent on strategic variety, while the latter isdetermined by the composition of the top management team. During the1990s the concern to have a clear central business idea continued with theestablishment of the core competence debate in which Prahalad and Hamel


(1990) argued that the alignment of businesses on the corporate level de-pends on management’s ability to identity, cultivate, and exploit the com-petences that make growth possible. While the described historical patternprovides a fair sketch of the most important ideas on which corporatestrategy rests, it should be clear that the overview is neither exhausting norfully representative (Grant 2002).

Business level strategy investigates how to compete in a specific indus-try or product/market segment. The overall scope of the corporation be-comes less important as business strategy deals with product/market seg-mentation choices and the stage of product/market evolution instead of thebreadth or depth of the business portfolio. As the name indicates, businessstrategy describes how a particular business intends to succeed in its cho-sen market segment against available competitors. This raises the questionof what we consider to be the scope of a business. Here, it is useful to referto the widespread notion of ‘strategic business units’. Rappaport (1986: 2)characterizes such units as relating to distinct products or services thatserve a well-defined market segment. Strategic business units are productor service oriented and possess an identifiable set of consumers and set ofcompetitors. In practice there is hardly ever a single business strategy foreach product offering, if we refer to an ‘offering’ as the unit of customerchoice. One reason for this is that business strategies are often defined forentire product lines that include several distinct offerings (Macmillan andTampoe 2000: 171). A chocolate bar, for instance, can come in a variety ofsizes all of which represent different product offerings to the customer.However, not all kinds of bars have their own business strategy. Varyingsizes may be represented by different marketing strategies. Businessstrategies, however, look at how different functional aspects (e.g., market-ing, research and development) need to be integrated to deliver a specificproduct and/or service for a market segment.

One of the most well-known research projects in business strategy is theProfit Impact of Market Strategies (PIMS) database that was establishedbased on a study of 57 corporations with 620 diverse businesses. Schoef-fler et al. (1974) argue that the basic idea of PIMS is to provide manage-ment with information regarding the profit performance of a business un-der varying competitive conditions. To account for these conditions, thedatabase analyzes the performance effects of 37 factors (among them mar-ket share and total marketing expenditures). The findings can be applied toshow how profits are expected to vary, if a modification of performancefactors changes the strategic position of a business. Besides PIMS, thework of Porter (1980, 1985) had a formative influence on business strat-egy. His notion of competitive strategy, that is, the search for a favorable


competitive position in an industry, is tied to an analysis of the determi-nants of industry attractiveness and an examination of the influencing fac-tors of a relative competitive position within an industry. Industry attrac-tiveness can be explored by considering the elements of industry structure– the five forces – for a specific business, whereas the competitive positionis shaped by a company’s ability to follow one out of three generic strate-gies: product differentiation, cost leadership, and market focus. Porter’smarket-driven concept of competitive advantage was complemented byBarney’s (1991) remarks on the importance of resources for sustaining afavorable 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 re-sources strategy). The principal focus is on the maximization of resourceproductivity through synergies and the development of distinctive compe-tences within the respective function (Hofer and Schendel 1978: 29).Which competences are considered to be important varies by functionalarea and the stage of product/market evolution. Unlike in business strat-egy, where synergy was sought between different functions, functionalstrategy aims to develop synergies within functions, for instance by devel-oping appropriate labor and staffing policies or rescheduling production.Functional strategies describe how the resources of a function can be de-ployed to realize the objectives of network, corporate, and business levelstrategies. Since functional strategy is often covered by research of special-ized disciplines, like marketing or human resource management, and isless a subject of strategy content scholars, we do not address this type anyfurther.

Whilst each level stresses different aspects that we might consider instrategy content decisions, they also work together to form a whole. Thisopens strategic thinking for cross and even multi-level issues (Dess et al.1995). Although the question ‘What is the basis of a good strategy?’ maybe straightforward, a truly integrated strategy is hard to achieve and evenharder to research as a variety of opinions about the nature of strategy con-tent exist. Yet, at a fundamental level, there are two distinct approaches tocontent that underlie the majority of research on the outlined levels: themarket and resource-based perspectives (see Figure 7). While market-based theories follow an external focus by trying to find certain ‘rules ofthe market game’ that corporations can rely on, the resource-based viewemphasizes the importance of a firm’s competences and capabilities to de-fine the goals and scope of strategic choice. That is why we can presumethat strategy content is concerned with the rules of the market and re-


sources of the corporation that define what strategic decisions are sup-posed to be taken.28

Fig. 7. A Classification Scheme for Strategy Content Research

To show that research on strategic rules (market-based view) and strate-gic resources (resource-based view) occurred with regard to network, cor-porate, and business level research, we briefly discuss the different levelswith regard to market and resource-based reasoning. On the network level,Gulati et al. (2000: 205) argue that a consideration of interfirm relation-ships allows a more refined understanding of industry structure and thusfirm performance, whereas scholars like Lorenzoni and Lipparini (1999)and Lavie (2002) stress that the capability of a firm to interact with othercompanies, 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 oscillatesbetween the market and resource-based perspective like the swing of a pendu-lum. While early strategy scholars like Chandler (1962) or Ansoff (1987b) fo-cused on firms’ internal strengths and managerial capabilities, the rise of the in-dustrial organization paradigm in the 1970s and 1980s led the pendulum toswing to the other extreme to come back to its original internal focus with therediscovery of the resource-based approach by writers like Barney (1991) andHamel and Prahalad (1990) in the 1990s.


portfolio perspective, like Hedley (1977), take a market-based view byhighlighting the importance of market share and market growth for align-ing the loose federation of business units. Prahalad and Hamel (1990) areat odds with such a position as for them a corporation should represent acommon resource-base that is applied to various businesses. On the busi-ness level, Porter’s (1980, 1985) notion of competitive advantage is fun-damentally market driven and looks at the development of resources as aderivative activity. In contrast, Barney (1991) argues that a market-basedview has neglected the impact of idiosyncratic resources on a firm’s com-petitive position. According to this view, business level strategy dependson leveraging a firm’s resource heterogeneity and immobility. To con-clude, strategy content research has been concerned with either disman-tling the rules of the market or finding the resources that provide a sustain-able 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 pre-cisely how we define strategic rules and resources. This is necessary sincethe deconstruction of strategy content in chapter six rests on a discussionof the nature of strategic rules and resources. Because we contrast an‘empty’ understanding of strategic rules and resources from a ‘full’ onelater on, we define both categories independent of their use. In their mostgeneral sense, we treat strategic rules as expressions of what is supposed tobe done. They are codified interpretations of activity that are provided byscholars’ observation of strategy praxis. Strategic rules are regulative; theyare typically paraphrased in the form ‘Do X’ or ‘If Y, do X’.29 Treatingstrategic rules as codified interpretations of strategists’ activity as observedby strategy scholars implies that such rules are not defined as aspects ofpraxis.30 Strategic rules are thus specific types of formulated rules that aredevoid of contextualized meaning. That is why we claimed in section 1.1that the ‘emptiness’ of strategic rules is not necessarily a bad thing but aninevitable (yet not recognized) feature of scholars’ interpretation of strat-

29 Porter (1980: 36), for instance, states that cost leadership is a valuable alterna-tive if a firm has a “high relative market share or other advantages, such as fa-vorable access to raw materials.”

30 Giddens (1984: 21) discusses the difference between both forms of rules. “Ruleswhich are ‘stated’, as [regulative] above are interpretations of activity as well asrelating to specific sorts of activities: all codified rules take this form, since theygive verbal expression to what is supposed to be done. But rules are proceduresof action, aspects of praxis.” (annotation added) Wittgenstein’s (1967: 81) ar-gumentation is very similar: “[A]lso obeying a rule is a practice. And to thinkone is obeying a rule is not to obey a rule.” (emphasis in the original)

Strategy Context, Process, and Content – A Résumé 65

egy praxis. If we agree that those strategic rules that are offered by schol-ars cannot be aspects of praxis (because they still await their application),it becomes more comprehensible why we define strategic rules as codifiedinterpretations of strategy praxis.

A quite similar line of reasoning applies to our definition of strategic re-sources. Following Penrose (1995: 25), we define resources as transforma-tive capacities that are not yet employed in the routine course of social in-teraction. Because, for the most part, resources can be definedindependently of their use (Penrose 1995), we focus on the manifestationsof resources (e.g., as a machine, a patent or a business contract) that stillawait their application. These manifestations can be classified in tangible(the organizational ‘hardware’) and intangible (the organizational ‘soft-ware’) resources (Wernerfelt 1984: 172). Extending Wernerfelt’s work,Barney (2002, 1991) argues that tangible and intangible resources need tobe valuable, rare, not imitable, and not substitutable to provide a sustainedcompetitive advantage.31 To conclude, resources are manifestations oftransformative 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 richaccounts of research that haven been produced by strategy scholars so far.For the sake of this study, context, process, and content act as key con-structs to reflect upon strategizing in organizations. We will come acrossmany of the discussed issues in subsequent chapters. The three outlinedfacets are not exhausting but highlight distinct aspects of strategic thinkingthat need to be complemented and extended by other issues. In addition,the linkages among the dimensions are reciprocal and continuous; theirseparation is therefore of an analytical nature and not a straightjacket forfuture analyses (Ketchen et al. 1996: 22; Moore 1995). When conceivingthe three perspectives in a three-dimensional way (Figure 8), there is need

31 Barney’s (2002, 1991) characteristics represent yet another ‘empty’ strategicrule. Then, one may ask why we not simply analyze the resource-based view asyet another strategic rule. As indicated in section 1.1, the underlying dominantlogic (i.e. the ‘fullness of strategic resources’) is not concerned with the fact thatresource-based reasoning is itself based on strategic rules that are generalizableacross organizations. Fullness, here, refers to the way in which resources aredefined within an organization. Because resources are defined as ‘given’ by thedominant logic, they are thought to be full of meaning before any applicationwithin the organization.


to foster diagonal, vertical, and horizontal moves to connect the differentboxes. Especially, the dichotomy between strategy process and contentcalls for integrative research. Recognizing that the way strategies areformed influences the input and outcome of strategic decisions (and thusstrategy content) may be a first move in this direction. Such moves canonly 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) andsecond-order observations (questions about a theory). First-order observa-tions aim to identify particular external and internal circumstances that in-fluence strategy context and/or describe existing strategy processes and/ortry to define those strategic rules and resources that help organizations tocreate a competitive strategy content. By contrast, second-order observa-tions question the very nature of strategy context, process, and content byasking how these dimensions need to be conceptualized to come up withreasonable first-order observations. Such investigations aim to find out inwhich way strategy context, process, and content can be defined. As indi-cated in chapter one, this treatise exclusively discusses second-order ob-servations by conducting research about strategy research.

Strategy Context, Process, and Content – A Résumé 67

Fig. 9. Strategy Context, Process, and Content and Scholarly Inquiry

Whereas this chapter has provided the reader with some basic terminol-ogy and definitions that are relevant for strategy scholars and are needed toachieve mutual understanding, the next chapter takes a more normativestance by discussing the dominant logics of strategy research. When refer-ring to first and second-order observations, we can think of the dominantlogics as the ‘conventional’ answers that have been given to second-orderquestions. To facilitate orientation and show how the different analyticaldistinctions that were used up to this point interrelate, Figure 10 depicts theconnection 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 ‘mar-ket-based’ as well as the ’resource-based’ paradigms were predominantlyfocused on content, it would be oversimplifying to believe that there wasno content research in the 1960s/1970s or process research in the1980s/1990s. Barney (1991: 113), for instance, explicitly linked formalstrategic planning to resource-based reasoning. Likewise, Hofer andSchendel (1978) introduced a variety of strategic rules and thus linkedtheir work to strategy content research. Hence, paradigms only reflect acertain research focus but do not entirely exclude any of the three analyti-cal dimensions (i.e. strategy context, process, and content). This becomeseven more obvious if we look at the dominant logics that cut across thevarious paradigms and thus reproduce certain assumptions with regard tostrategy context, process, and content over time. Strategic realities, whichare represented by the citation of well-known works in Figure 10, are the‘building blocks’ of dominant logics.


Fig. 10. Strategy Paradigms and Strategy Context, Process, and Content

The next chapter takes the reader on a journey through the dominantlogics of strategy context, process, and content. We will not simply explainthe dominant logics (for this see section 1.1) but try to find prove for ourclaim that many well-known strategy scholars have given reference to thelogics’ central assumptions. In this sense, chapter three attempts to givesubstance to our assertion that past and present strategy research has givenreference to these logics. By doing so, chapter three paves the way for ourfurther 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 howresearch on strategy context, process, and content is embedded in domi-nant logics. To reach beyond rhetoric and to avoid oversimplified argu-ments, we show not only that dominant logics exist in some strategic reali-ties but particularly in those realities that strategy scholars most often referto. If we believe Prahalad and Hamel (1994: 6) that many assumptions thattraditional and recent strategic realities rest on may be incomplete and/oroutdated, we need to become familiar with these assumptions before un-folding critical arguments. Discussing these beliefs is inevitable if we areto value the novelty of alternative ways of reasoning later on.

As a basis for identifying dominant logics, we first introduce a recent ci-tation index that represents the 20 most widely cited publications in strat-egy research (section 3.1). We then illustrate that the assumptions and be-liefs that are disseminated through these publications are embedded in thedominant logics: the ‘necessity of adaptation’ (section 3.2.1), the ‘primacyof thinking’ (section 3.2.2), and the ‘fullness of strategic rules and re-sources’ (section 3.2.3). In other words, we show that those publications towhich strategy scholars most often refer comply with the dominant logicsthat underlie our analysis. Since these dominant logics do not appear out ofnowhere, we discuss how they gain and sustain their prevailing character(section 3.3). We thereby demonstrate that science in general and strategicmanagement in particular is a ‘political’ and an overly ‘sticky’ business.Because other scholars have also criticized the three dominant logics, wereview these critiques and demonstrate that existing critical approaches donot recognize the need to renounce these logics on account of their disre-gard of their own paradoxical nature (section 3.4). We show that the domi-nant logics subside once we uncover paradox. This discussion demon-


strates that there is a need to introduce deconstruction as a ‘method’ forexposing paradoxes and thus acts as a ‘bridge’ to the theoretical introduc-tion 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 re-fer to when theorizing in strategic management. This invisibility is welldescribed by Kuhn (1996) who, in his opus magnum, The Structure of Sci-entific Revolutions, characterizes the nature of normal science, whichdominant logics are part of, as follows: “No part of the aim of normal sci-ence is to call forth new sorts of phenomena; indeed those that will not fitthe box are often not seen at all.” (Kuhn 1996: 24) This implies that to seenovel 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 thisbox, we have to identify some solid ground on which strategy researchrests.

A good point of departure is to look for journals that have had a largeimpact on the field (Ofori-Dankwa and Julian 2005: 1314). In a recent sur-vey among 500 strategy scholars, Michel and Chen (2004: 6) report thatover 47% of the respondents ranked the Strategic Management Journal(SMJ) as the most influential publication.32 Comparing the study of Micheland Chen (2004) to the one by Franke et al. (1990) demonstrates that the

32 The two closest ranked journals are the Harvard Business Review with 13% andthe Academy of Management Journal with 12%. Further evidence of the domi-nance of the Strategic Management Journal can be found when referring toStarbuck’s widely cited ranking of social science journals where the StrategicManagement Journal ranks 40th (out of 509 journals). For further informationsee http://pages.stern.nyu.edu/~wstarbuc/cites.htm. Aware of the limitations ofprevious studies of journal influence (e.g., the focus on a single sub-area of re-search over a restricted number of years and the inconsistency in using evalua-tion criteria such as subjective ratings of department chairpersons), Podsakoff etal. (2005) use the ‘objective’ measure of citation frequency to account for theinfluence of management journals. Out of a sample of 28 journals over a timeperiod of 19 years (1981-1999) the Strategic Management Journal shows an in-crease in influence (from rank eight during 1981-1984 to rank four during 1995-1999 in terms of total citation counts in the 28 journals). Based on a surveyamong tenured professors in strategic management, MacMillan (1989, 1991)and MacMillan and Stern (1987) even rank the SMJ as the most outstanding out-let for research in strategic management.

Where to Look for Dominant Logics? 71

SMJ’s lead as the number one journal for strategy research has widened. Agood number of surveys rank the SMJ among the five most influentialjournals in management (Franke et al. 1990; Johnson and Podsakoff 1994).Tahai and Meyer (1999: 279) even conclude their citation analysis with therecognition that the SMJ “has developed as the predominant academicjournal influencing the field of management.” Of course, choosing the SMJas a vantage point comes at the price of neglecting important pieces ofwork from other journals. It is possible that changes in the intellectualstructure of research could occur if articles from a wider range of journalswere included. Nevertheless, since we are looking for mainstream strategyresearch, the SMJ provides a good, if not the most appropriate, object ofanalysis (Furrer et al. 2002: 20).

If we take the SMJ as a point of reference, we need to gain an impres-sion of its underlying intellectual structure. Starting from the hypothesisthat the bibliographic references cited in articles are a reliable indication oftheir influence on scholars’ research, Ramos-Rodríguez and Ruíz-Navarro(2004) identify the most influential publications that were cited in articlespublished in the SMJ.33 Their bibliometric study from the first days of thejournal in 1980 until recently published work in 2000 reveals 50 publica-tions that shaped the intellectual structure of the strategy field enormously.We concentrate on the 20 most cited publications between 1980 and 2000according to absolute and relative citation frequency as a basis for argu-mentation (see Figure 11). Against the background of this study, thesepublications are treated as strategic realities; they reflect scholars’ as-sumptions regarding the nature of strategic management (see section 1.1).

33 There may be a variety of other influences (including colleagues, former profes-sors, life experience) as Tahai and Meyer (1999: 279) note. However, citing anarticle or book represents a public acknowledgement of an influence, whileother factors cannot be measured as easily as citations. In addition, a citationanalysis does not reveal whether the cited document is treated positively in thetext and whether the document is central or peripheral to the content of the ana-lyzed text.


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 fundamentalimportance to recognize these limitations when interpreting research re-sults. Our picture of the 20 most cited documents in strategy research is arather rough one since we neglect changes in influence over time. Theworks we refer to represent the 20 most cited works during the entire 21years covered by the study of Ramos-Rodríguez and Ruíz-Navarro (2004).Of course, there are gains and losses in influence over the length of thestudy period as Ramos-Rodríguez and Ruíz-Navarro (2004: 990) remarkthemselves. Yet, even when adopting a dynamic view, 14 out of the 20documents are still among the top-cited documents when mapping citationfrequency only for the 1994-2000 sub-period. A similar picture ariseswhen looking at the 1987-1993 sub-period (17 out of the top 20) and theearly days of the journal from 1980 to 1986 (12 out of the top 20). Wethoughtfully accept the aggregated picture for the entire period (1980-2000) as we do not want to have a ‘sub-period snapshot’ of the most influ-ential documents, but a well-balanced longitudinal perspective that ac-counts for the fact that dominant logics develop over time and do not sud-denly ‘fall from the sky’. Indeed, our discussion in section 3.3 willdemonstrate that the development of dominant logics is a lengthy process

Where to Look for Dominant Logics? 73

depending on a variety of influences (e.g., the reputation of strategy schol-ars and the unquestioned acceptance of the assumptions that are attached tothe dominant logics).

Besides variations in taste preferences that might account for gains andlosses in influence, there is also a numerical problem. Scholars who pub-lish at an early point in the development of a field have a better chance ofbeing cited. One could resolve this problem by dividing the total numberof quotations by the number of years the document has been published.This, however, is a risky approach since the SMJ not only increased thenumber of issues per year (and thus article output) but also the overallnumber of citations per article.34 This trend combined with the fact that theSMJ started publication in 1980 and consequently does not adequately rep-resent the debates of the 60s and 70s leads to the conclusion that an ad-justment of citation frequency for the years the document has been pub-lished underrepresents the early ‘classics’ of the field. Authors like Ansoff(1965/1987b) or Andrews (1971) would suffer from the fact that they werenot en vogue at the time (a) the SMJ started publishing, (b) the SMJ in-creased its output in terms of issues per year, and (c) authors increased thenumber of citations per article.35

34 The SMJ increased output from 4 issues in 1980 to 12 issues in 2000 and in-creased 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 fre-quency of 88 and has been published for 10 years (1991 until 2000), whichyields 8.8 citations per year for the 10-year period. Andrews’s (1971) book, bycontrast, 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 bibliometricstudy), 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-blazingone for the resource-based view that gained much popularity during the 90swhen there were three times as many issues of the SMJ per year as in the 80sand 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 publi-cation period of the SMJ as Barney (1991) was in the 90s. Andrews’s break-through 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 tobe argued that articles that are commonly associated with a paradigm (e.g.,Barney 1991 with resource-based thinking) get heavily cited as long as theparadigm is en vogue. In the end, this would lead to an overrepresentation of theauthors of the market and resource-based view, as these are the paradigms thatfall into the publication period of the SMJ. Without an adjustment, works thatare published toward the end of the 1980-2000 period ‘suffer’ from the fact thatthey had little time to collect citations.


3.2 Exploring the Dominant Logics of Strategy Research

In the following, we consider the identified 20 documents as those strate-gic realities by means of which we examine whether research in strategicmanagement is based on dominant logics. If SMJ-authors heavily cite thesedocuments and this journal is considered to be the most important outletfor strategy researchers, there is reason to believe that if we show thatthese documents reflect the basic belief structures of the dominant logics,we can assume that the underlying assumptions really are dominant. Itneeds to be recognized that the judgment whether a strategic reality sub-mits to a dominant logic depends on our interpretation. Especially whenconsidering that deconstruction argues that texts can have more than onemeaning, this is a necessary limitation to our analysis. As we are lookingfor underlying research assumptions, we face the problem that premisesscholars attach to their work are often not directly communicated. State-ments like ‘I regard the market to be objectively given’ or ‘I think the stra-tegic concepts introduced in my book are valid independent of their con-text of application’ rarely exist. Therefore, it is crucial to read between thelines and to refer to examples as well as methodological remarks to comeup with a reasonable judgment.

3.2.1 Strategy Context – The Necessity of Adaptation

Recall that the ‘necessity of adaptation’ represents the widely held as-sumption that the environment exists in an objective manner and that orga-nizations need to adapt to this one environment to achieve appropriate‘strategic fit’. Companies make up their environment in the sense that allorganizations are part of one environment. This environment represents thepoint of reference for strategy formation. When looking at the identified 20strategic realities, we stumble over various statements that represent thislogic. Williamson (1975: 20) argues that “I assume, for expositional con-venience, that ‘in the beginning there were markets’.” For him the marketis given in a sense that it provides an origin all actors can refer to. Themarket is ‘there’ regardless of whether organizations are ‘there’. The im-plications of this perspective for strategy are far reaching and mostly high-light the need to achieve a match between organization and environment.Hofer and Schendel (1978: 4) argue that “[t]he basic characteristics of thematch an organization achieves with its environment is called its strategy”and Ansoff (1987b: 24) regards strategy as being concerned “with estab-lishing an ‘impedance match’ between the firm and its environment.” The

Exploring the Dominant Logics of Strategy Research 75

logic behind these statements is the concept of ‘environmental fit’ thatdraws a distinction between environment and organization.

Lawrence and Lorsch’s (1967) contribution outlines a contingency the-ory of organizations by investigating what kind of organization it takes todeal with certain environmental circumstances. By following an open sys-tems approach, they argue that “an important function of any system isadaptation to what goes on in the world outside.” (Lawrence and Lorsch1967: 7) Although, both authors explicitly dismiss an organization theorythat is based upon a single best way of organizing in all situations, the con-tingency 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 struc-ture; the environment demands and the organization reacts accordingly.36

Nelson and Winter (1982: 14) in their contribution An EvolutionaryTheory of Economic Change provide a widely recognized critique of neo-classical economic modeling. In line with evolutionary thinking, they con-ceptualize the market as a ‘selection environment’ that defines the routineswhich determine the conduct of organizations.

“Given a flow of new innovations, the selection environment thus specified de-termines the way in which relative use of different technologies changes overtime.” (Nelson and Winter 1982: 263)

Determination in their model also runs the other way: firms determine themarket to a certain extent. Thus, Nelson and Winter’s (1982: 18) core con-cern is with “the dynamic process by which firm behavior patterns andmarket outcomes are jointly determined over time.” This makes theirmodel a kind of co-evolutionary framework. Although, the co-determinednature of the environment reaches beyond much traditional thinking ineconomics, it is still ‘determination’ that makes the core of their theory. Ina world of determination, regardless whether we conceptualize it as a jointor a simple one-way type, there is only one environment that provides theArchimedean point for strategy formation. Firms may have a saying inconstituting the environment, yet the industry conditions, that are partlythe outcomes of firms’ decisions, are relevant for all market players andconsequently determine their conduct.

36 Strategy scholars have followed this contingency approach as the followingstatement indicates: “The field needs to begin to ask and test scientific ques-tions: if a manager finds conditions X, Y, and Z, then he is most likely to bemore effective if he follows strategy ‘A’ than ‘B’.” (Fahey and Christinsen1986: 169) Hofer (1975) even outlines a contingency theory of business strat-egy.


The environment/organization distinction becomes most obvious whenreferring to Andrews’s (1971) well-known SWOT analysis, wherestrengths and weaknesses refer to the inner dimension and opportunitiesand threats define the outer dimension. Both dimensions are clearly sepa-rated, representing the notion of a boundary surrounding an organizationadapting to its environment ‘out there’. In a similar way, Thompson(1967), who follows an open systems approach, views the environment assomething organizations need to adapt to in order to achieve fit. He arguesthat the organization deals with variables of the environment over which ithas no formal authority or control. This implies that “[t]he organizationmust conform to the ‘rules of the game’ or somehow negotiate a revisedset of rules.” (Thompson 1967: 148)37

The ‘necessity of adaptation’ is also reflected in Chandler’s (1962) stra-tegic reality since he states that

“because all of them [his examined organizations] operated within the same ex-ternal environment, these chapters in the collective history of the industrialenterprise [...] followed roughly the underlying changes in the over-allAmerican economy.” (Chandler 1962: 385, emphasis and annotation added)

Elsewhere in his book he covers the question why strategies come into be-ing in the first place and argues that new strategic moves are necessary torespond to the opportunities and threats created by the environment(Chandler 1962: 15). It is thus reasonable to assume that Chandler viewsthe environment as something organizations need to adapt to while makingsense of their strategy. Based on the work of Chandler, Rumelt (1974) ar-gues that because of certain developments in the environment (e.g., growthof markets and changes in technology) firms face a need to diversify. Di-versification is an adaptive response to the needs of the market.

The ‘necessity of adaptation’ can also be discussed with regard to themarket and resource-based paradigm. Advocates of the resource-basedview implicitly refer to the adaptation-based logic by defining the value ofresources with regard to a company’s environment:

37 Thompson’s (1967) notion of adaptation reaches beyond a simple determinism.He states that “[w]e must emphasize that organizations are not simply deter-mined by their environments. Administration may innovate on any or all of thenecessary dimensions, but only to the extent that the innovations are acceptableto those on whom the organization must and can depend.” (Thompson 1967:148) The environment may be altered, however, only to the extent that the envi-ronment accepts these ‘rules of the game’. In other words, Thompson does notreach beyond the assumption that there is only one environment that is relevantfor all organizations.


“Firm attributes may have the other characteristics that could qualify them assources of competitive advantage (e.g., rareness, inimitability, non-substitutability), but these attributes only become resources when they exploitopportunities 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 re-gards them as such. Although Barney remains remarkably silent on thequestion which environmental characteristics make a resource valuable,other advocates of the resource-based view define ‘customer value’ as thecondition under which resources can be a source of sustained competitiveadvantage. Stalk et al. (1992: 62) argue that a “capability is strategic onlywhen it begins and ends with the customer.” In this sense, the customerbecomes objectified and the organization is once again in search of ‘envi-ronmental fit’. Organizations are thought to possess unique bundles of re-sources 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 toadapt to. He explicitly stresses the importance of ‘environmental fit’ whichhe sees as one important variable in determining the appropriateness of acompetitive strategy (Porter 1980: xix). According to Porter, the industryenvironment determines the competitive rules of the game:

“Industry structure has a strong influence in determining the competitive rulesof the game as well as the strategies potentially available to the firm. Forcesoutside the industry are significant primarily in a relative sense; since outsideforces usually affect all firms in the industry. […] The intensity of competitionin an industry is neither a matter of coincidence nor bad luck. Rather, competi-tion in an industry is rooted in its underlying economic structure and goes wellbeyond the behavior of current competitors.” (Porter 1980: 3, emphasis added)

In Porter’s strategic reality the industry is perceived as an objective struc-ture that circumscribes the actions of organizations located within it. Thereis much about the environment but little about the way organizations createthis environment. Notwithstanding our discomfort with the underlying as-sumptions of Porterean industrial organization economics, it needs to berecognized that Porter also modified the traditional assumptions of the Ma-son-Bain paradigm by allowing conduct (strategy) to influence industrystructure.

“Traditional IO theory took industry structure as exogenously given, and heldthat the firm’s strategy and performance were fully determined by this struc-ture. […] Policy practitioners, on the other hand, have long observed that firmscan fundamentally change the structure of their industry through their actions.[…] However, firms cannot always change industry structure, and thus under-


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 adapta-tion’ because organizations are allowed to change the industry structure bymeans of their actions. Regrettably, Porter does not really take this as-sumption seriously nor allows it to unfold to its full potential. First, he as-sumes that there are certain structural parameters (for instance determinedby technology) that cannot be altered. Hence, industry evolution can takedifferent paths, however only within the ‘space’ provided by these parame-ters (Porter 1981: 616). Second, even though he allows for modificationsof the industry structure, he still believes that the modified structure isrelevant for all market players. The premise of determinism is not aban-doned but weakened by allowing organizations to influence the environ-ment. This, however, does not imply that organizations create their envi-ronment.

A similar way of reasoning applies to Scherer (1980) who is less con-cerned with strategic management but outlines an economically focusedtheory 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 offirm conduct on market structure, it needs to be doubted that he moves be-yond an adaptation-based view. He argues that

“[b]y introducing a much richer complement of independent variables, weshould be able to predict conduct from structure, and performance from con-duct, with greater precision and confidence.” (Scherer 1980: 6)

Scherer does not really challenge the underlying logic of traditional, Ma-son-Bain-type, industrial organization thinking. Although he uses a moresophisticated analysis and emphasizes firm conduct more than Bain (1968)does, there is no critical discussion of the basic premise that market struc-ture determines firm conduct.

In their much-cited contribution A Behavioral Theory of the Firm, Cyertand March (1963: 1) remark that “[i]f the market completely determinedthe firm’s economic behavior, these internal attributes would be little morethan irrelevant artifacts.” At first, this seems to move the authors beyondthe ‘necessity of adaptation’ as they assume that firms have some controlover the market. While Cyert and March outline a theory of the firm, theydo not discuss this issue in any more detail but note that for them the envi-ronment consist most of all of other organizations. Then, the question re-mains if these organizations make up the environment in such a way thatall social actors are parts of one reality. From our perspective it needs to be


doubted that Cyert and March really dismiss this assumption as they out-line a variety of models to predict organizational behavior in the environ-ment. In a world of non-environmental determinism there is no room forprediction of organizational moves because organizations make up theirown environment and do not belong to some overarching ‘market’ that iscontrolled by invariant laws.

A contribution that deserves special attention is the one by Pfeffer andSalancik (1978). In their book The External Control of Organizations – AResource Dependence Perspective, they have much to say about the rela-tion between an organization and its environment. Their basic argumentcan be summarized as follows:

“Because organizations import resources from their environments, they dependon their environments. Survival comes when the organization adjusts to, andcopes with, its environment, not only when it makes efficient internal adjust-ments.” (Pfeffer and Salancik 1978: 19)

At first this sounds much like an argument that is based upon adaptationlogic. Pfeffer and Salancik (1978), however, are quite aware that manyscholars of organization theory tend to view the environment as somethinggiven, an assumption they criticize. Accordingly, they suggest that organi-zations also have an influence on their environment.

“Perhaps one of the most important influences on an organization’s response toits environment is the organization itself. Organizational environments are notgiven realities; they are created through a process of attention and interpreta-tion.” (Pfeffer and Salancik 1978: 13)

Again, we face the question whether the authors really make a case againstthe notion that there is one reality all organizations share or whether theyassume that, even though firms can influence their environment, this envi-ronment remains the focal point for all organizations. On the one hand,Pfeffer and Salancik (1978: 72) take much care to point out that “[t]heevents of the world around us do not present themselves to us with neat la-bels and interpretation” but that organizations give meaning to their envi-ronment. On the other hand, they follow an open systems approach in linewith adaptation-based logic and put much emphasis on the role of con-straints. A position that reaches beyond the ‘necessity of adaptation’ doesnot claim that what happens in an organization “is also a consequence ofthe environment and the particular contingencies and constraints derivingfrom that [one] environment.” (Pfeffer and Salancik 1978: 3, annotationadded) Throughout their discussion it remains unclear whether the envi-ronment really is an organizational construction.


The work of Miles and Snow (1978) explicitly addresses the problem ofadaptation-based logic. They try to reach beyond the rigid view of the or-ganization-environment relationship by arguing that

“[o]rganizations act to create their environment: Until recently, much organi-zational research has been based on the assumption that organizations respondin predictable ways to the conditions which surround them, adjusting their pur-pose and shape to meet market and other environmental characteristics.” (Milesand Snow 1978: 5, emphasis in the original)

At the same time they also claim that organizations need to adapt to theirenvironment to achieve ‘fit’.

“Organizational survival may be said to rest on the quality of the ‘fit’ whichmanagement achieves among such major variables as the organization’s prod-uct-market domain, its technology for serving that domain, and the organiza-tional structure and processes developed to coordinate and control technology.”(Miles and Snow 1978: 19)

This runs counter to their original premise that organizations create theirenvironment. Throughout their book it remains largely unclear whetherthey move beyond adaptation-based research or not. What can be said forsure is that they recognized the problem of conceptualizing the environ-ment as a determining force at an early point in time.

The contribution of Penrose (1959/1995) discusses the relation betweenenvironment and organization in a similar way. Towards the end of herbook, 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 as-sumption that it is not the environment ‘as such’, but rather the environment asthe 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 envi-ronment because the organization creates its environment. Unfortunately,Penrose (1995: 217) does not really uncover the circular relationship be-tween environment and organization as she argues that managers need tointerpret their environment correctly in order not to fail in their efforts.Then the question remains: Who determines whether the environment hasbeen interpreted in a correct way? Regrettably, Penrose discusses these is-sues in no more depth. We can thus only assume that even though she rec-ognized the importance of moving beyond the assumption of a given envi-ronment, there still is a smack of determinism in her arguments; as sheargues herself: “There can be no question that for any particular firm theenvironment ‘determines’ its opportunities.” (Penrose 1995: 217)


Last but not least, Quinn’s (1980) contribution needs to be discussed.Although Quinn is not much concerned with the organiza-tion/environment-relation, he presents determinants of the strategy processsome of which are “dictated by the industry and its environment” (Quinn1980: 43) and consequently cause similarity within one industry. Quinn as-sumes that these determinants have a significant influence on the strategyprocess of an organization. In reverse, this implies that firms need to adaptto these circumstances in order to manage their strategy process in a mean-ingful way. We can thus argue that Quinn (1980) subordinates to the ‘ne-cessity of adaptation’.

To conclude, even though some scholars have challenged the ‘necessityof adaptation’, none of the outlined strategic realities fully reaches beyondthe linear logic between environment and organization. Most scholars thatchallenge the notion of ‘fit’ still present arguments that reveal a conceptu-alization of the environment that is based on the assumption that all orga-nizations are part of one common reality. Yet, a serious treatment of thecircular relation between both spheres would uncover the paradoxicalfoundation of the environment-organization bond. Henderson and Mitchell(1997: 8) put it in a nutshell by contending that strategy research “hastaken primarily an adaptive view of organizational and environmentalchange, arguing that many firms can adapt their strategies and capabilitiesas competitive environments change.”

3.2.2 Strategy Process – The Primacy of Thinking

Recall that the ‘primacy of thinking’ argues that strategies are thought tobe developed as a grand plan based on forecasts and implemented thereaf-ter. The process can be split up into a number of sub-activities which, iffollowed in the right manner, lead to the construction of a successful strat-egy. Thinking is privileged over action because strategies are formulatedthrough a tightly controlled process of human thought. It is believed thatstrategy is initiated by top management and based on a rational analysis ofthe environment and the organization. The strategy process is viewed as anintentionally designed meta-plan forecasting the future direction of a com-pany. Put differently, formulation and implementation follow each other ina linear manner like a cause determines its effect. Bromiley and Papen-hausen (2003: 415) notice that rational optimization has much in commonwith strategy. This implies that authors often make the assumption thatagents identify certain alternatives, evaluate them to then choose ‘the best’of all possible alternatives. This procedure assumes that preferences existin a fully accessible way before decisions are made.


Central to the distinction between formulation and implementation is thepremise that structure follows strategy. According to Chandler (1962: 14),who raised the need for strategic planning by arguing that “structure fol-lows strategy and that the most complex type of structure is the result ofthe concentration of several basic strategies”, changes in the environmentcreate the need for new strategic moves (formulation) which in turn requirean adaptation of the organizational structure (implementation). Only whenthe strategy is known, management can begin to specify the appropriatestructure of an organization.

“It seems wise here to emphasize the distinction between formulation of poli-cies and their implementation. The formulation of policies and procedures canbe defined as either strategic or tactical. Strategic decisions are concerned withthe long-term health of the enterprise. Tactical decisions deal more with theday-to-day activities necessary for efficient and smooth operations. But deci-sions, either tactical or strategic, require implementation by an allocation or re-allocation 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 organi-zational structure is changed accordingly to fit the novel strategic needs.Rumelt (1974: 149) is in line with these arguments (“The data gave strongsupport to Chandler’s proposition that ‘structure follows strategy’”) butadds that structure may also affect strategy. This is because certain struc-tural moves, which occurred due to small (not strategically intended) varia-tions in products, might lead to further diversification activities. That strat-egy follows structure does not imply that the thinking/action opposition isreversed, but that firms are more likely to diversify further than if they hadnot reorganized. Structural reorganization is a ‘nucleus’ for subsequentstrategic moves.

Miles and Snow (1978: 7) agree with the early Mintzbergean perspec-tive that strategy is a pattern in a stream of major and minor decisionsabout an organization’s future domain. Their association with the ‘primacyof thinking’ becomes most obvious if we consider that Miles and Snow(1978) proclaim, with reference to Chandler (1962), that strategy can beinferred 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 aremade at a certain point in time tend to harden to become the relevant as-pects of tomorrow’s organizational structure.

Another author who is commonly associated with the formula-tion/implementation opposition is Andrews (1971) and the proponents ofthe so-called ‘design school’, to use Mintzberg’s (1990a) terminology.


Like Chandler, Andrews sees corporate strategy as an organization processfrom which two important aspects can be separated.

“The first of these we may call formulation, the second implementation. Decid-ing what strategy should be may be approached as a rational undertaking. […]The process described thus far assumes that strategists are analytically objec-tive in estimating the relative capacity of their company and the opportunitythey see or anticipate in developing markets.” (Andrews 1971: 24-25, last em-phasis added)

Andrews advises managers to identify the underlying market opportunitiesand threats as well as the strengths and weaknesses of a company as objec-tively as possible. Based on this information, management produces sev-eral strategic alternatives of which one is to be selected. Mintzberg (1990a:175-179) reminds us of the key premises that underlie Andrews’s concep-tion of the strategy process. First, Andrews understands strategy formationas a tightly controlled and conscious process of thought. Strategy is associ-ated with intentionality because action follows once a strategic alternativehas been chosen. Second, responsibility for that control must rest with thestrategist (usually the chief executive officer).38 Third, strategy formationmust be kept simple. This premise directly refers to the second one be-cause if strategy can be controlled by one mind, the resulting process iskept rather uncomplicated. And fourth, strategies should be explicitly ar-ticulated throughout the organization because an unstated strategy does notrequire actions and thus results in ineffectiveness (Andrews 1971: 110).

A similar rational approach is suggested by Ansoff (1987b). Unlike An-drews, he highlights the influence of staff planners instead of the managerand provides a more detailed and formalized approach to planning sup-ported by a range of analytical techniques (Mintzberg 1991: 463). Not-withstanding these differences, Ansoff puts much emphasize on the linearnature of the strategy process. This is nowhere more evident than in his ac-tion cycle model of strategy development which divides the entire strategyprocess into a number of small steps. Ansoff (1987b: 178) refers to thismethod as a ‘cascade’ that starts from a rather broad choice of the firm’sfuture business areas and progresses to generating specific projects (e.g.,newly developed products or service innovations), which are implementedat the end of the process. This formalized approach has also been appliedby 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 ex-

38 The limitations of this ‘command and control’ model are discussed by Levy etal. (2003: 98) and Stoney (1998: 4).


plicit strategies.” Throughout their book they describe a variety of suchformalized analytical concepts. Considering their numerous references tothe work of Andrews and Ansoff, it is obvious that these concepts arebased on a linear notion of causality.39

Moving to the Porterean market-based view, we rarely find explicitstatements regarding the nature of the strategy process as Porter is moreconcerned with strategy content.40 Nevertheless, at the very beginning ofhis book Competitive Strategy, Porter (1980: xiii) argues that strategy

“may have been developed explicitly through a planning process or it may haveevolved implicitly through the activities of the various functional departmentsof the firm.” (emphasis added)

This seems to place him somewhere in the middle of the deliber-ate/emergent strategy debate as he conceives both forms as an either/or-decision and does not highlight their interrelated nature, as do Mintzbergand Waters (1985: 258). Yet, Porter (1980: xiii) qualifies this statement byarguing that the sum of the different departmental approaches rarely equals‘the best’ strategy for an organization. Because of this, there are significantbenefits to gain from an explicit (and thus planned) approach to strategy.Porter (1980: xiv) sees his strategic reality as a way to predict industryevolution. Prediction means that strategic moves are not left to chance butare deliberately planned. In Porter’s (1996: 77) strategic reality, strategyrequires “strong leaders that are willing to make choices.” Such choices

39 The formulation/implementation distinction is most evident in Ansoff’s bookCorporate Strategy which is divided into two parts: Strategy Formulation andStrategy Implementation. Ansoff’s (1987b) belief in the rational capacity ofhuman beings to forecast – a view from which he rarely deviates (Ansoff 1991)– becomes obvious when considering the advice he gives for diagnosing envi-ronmental turbulence: “The procedure for diagnosing environmental turbulenceis to circle the observed values which best describe the condition of each of theeleven attributes [which cause environmental turbulence]. For purposes of capa-bility diagnosis, the circled values should represent the anticipated condition ofthe environment five to seven years into the future.” (Ansoff 1987b: 207, anno-tation added) Over the years, Ansoff (1979: 31) also critically reflected uponthis mode of thinking but never replaced his basic presupposition of a linearstrategy process.

40 The resource-based view remains notably silent on these issues as well. Eventhough Barney (1991: 113) recognizes that a formal planning system enables afirm to recognize and exploit its resources, he does not provide any precisestatements on the nature of the planning process. He only highlights the role ofinformal strategy-making processes in achieving competitive advantage. Fol-lowing Barney, such informal processes may be of value because they are rareand less likely to be imitated.


position the company and have a horizon of a decade or more (Porter1996: 74).

Quinn (1980) provides one of the best-known critical assessments offormal planning by stressing the notion of ‘logical incrementalism’. For-mal planning is nothing more than a textbook notion because strategiesseem to emerge in quite different ways. In fact, he argues that “the realstrategy tends to evolve as internal decisions and external events flow to-gether to create a new, widely shared consensus for action among keymembers of the top management team.” (Quinn 1980: 15) His empiricalstudy of strategy formation in nine organizations reveals that strategy mak-ing takes an incremental form since effective strategies emerge from a se-ries of strategy formulation subsystems. Because the different subsystemscannot be fully coordinated and each subsystem possesses certain cogni-tive limits, the overall strategy does not evolve in a well-planned way.Quinn’s (1980: 18) point is that “no single formal analytical process couldhandle all these strategic variables simultaneously on a planned basis.”

At first, it seems that Quinn’s notion of logical incrementalism moves usbeyond the ‘primacy of thinking’ because it stresses, similar to Mintz-berg’s (1979) perspective, the non-causal flow of the elements of the strat-egy 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 processbased on a distinction between thinking and action. The ‘logical’ compo-nent of ‘logical incrementalism’ suggests that skillful managers maneuverthe strategy process in a purposeful and effective manner (Quinn 1980:17). As a result, Quinn (1980: 58) assumes that strategy making is stilllargely guided by rational behavior. Even though, formulation is a messyprocess in which different subsystems can hardly be synchronized andQuinn (1980: 145) is well aware that strategy making consists of the in-cremental interaction of formulation and implementation, his notion oflogical incrementalism still assumes that thinking and action can be sepa-rated. Incrementalism assumes that goals (ends) and alternatives (means)are coupled through feedback loops (Fredrickson 1983: 568). Yet, thisdoes not imply that thinking (the formulation of goals) intermeshes withaction (the implementation of alternatives). The interrelatedness of formu-lation and implementation (e.g., by means of feedback loops) is differentfrom a gradual production of a strategy within the course of action. This isnot to suggest that Quinn’s strategic reality assumes strategy to be basedon a clearly identifiable process, but that logical incrementalism cannot en-tirely reach beyond the well-established thinking/action opposition becausethinking and action are still decoupled.


Out of the 20 documents selected for this discussion of dominant logics,the contributions that stem from organization theory and economics do notdirectly touch upon the ‘primacy of thinking’ from the viewpoint of strat-egy, but rather address assumptions with regard to the behavior of men ingeneral and/or its consequences for administrative organization. Since it isreasonable to assume that these general assumptions have inspired the ar-gumentation of strategy scholars, we need to identify the presuppositionsthese contributions follow.

Pfeffer and Salancik (1978) remain notably silent about their assump-tions regarding the nature of the decision-making process. Indeed, theyconceptualize the environment as a source of uncertainty, constraint, andcontingency (Pfeffer and Salancik 1978: 229) and criticize various authorsfor conceiving organizations as rational instruments for the attainment ofgoals (Pfeffer and Salancik 1978: 23). They prefer to view organizations ascoalitions “altering their purposes and domains to accommodate new inter-ests, sloughing off parts of themselves to avoid some interests; and whennecessary, becoming involved in activities far afield from their stated cen-tral purposes.” (Pfeffer and Salancik 1978: 24) Nevertheless, their overallmodel of how environmental effects shape organizations looks considera-bly like a linear process. First, they claim that there is a causal relationshipbetween environmental factors and the distribution of power and control inorganizations; the environment influences the distribution of power andcontrol in organizations and consequently the decisional preferences re-garding the choice of executives and their tenure. The selection of admin-istrative staff in turn influences organizational actions (Pfeffer and Salan-cik 1978: 229). It thus needs to be doubted that the authors move beyond alinear notion of decision-making, although they put much emphasize onuncertainty and contingency.

Thompson (1967: 134) takes a mixed approach to model decision proc-esses. He distinguishes between certain and uncertain cause-effect prem-ises and devotes much attention to the constraints of certainty, yet at thesame time acknowledges the existence of certainty in particular circum-stances. For him organizations are neither rational-machines nor naturalsystems. Although Thompson challenges the belief in rational organiza-tional processes, he does not dismiss the underlying linear process model.This is because he still believes that principles of administration that arederived from the rational model can be applied “to those portions of orga-nizations which are so protected from exogenous variables that the closedsystem is practical.” (Thompson 1967: 145) This raises the question:Which are the parts of organizations that are so protected that rationalityworks and how do we identify them?


A similar critique applies to the contribution of Cyert and March (1963).Aware of the limitations of full rationality, they claim that planning shouldbe avoided “where plans depend on predictions of uncertain future events[and emphasized] where the plans can be made self-conforming throughsome control device.” (Cyert and March 1963: 119, annotation added) Itremains open how we can meaningfully distinguish between both situa-tions. Cyert and March only advise that in the absence of plans, managersneed to solve pressing problems instead of developing sophisticated fore-casts. In either case, managers achieve a reasonable decision situation thatcan be solved and must be ‘managed’ within the scope of the proposedoverall organizational decision-making process. This process represents astep-by-step procedure for dealing with decision problems. Even thoughthe authors allow for feedback loops and organizational learning, the linearcharacter of the model cannot be overlooked: first comes the thinking, fol-lowed by the action.41

Similar to Cyert and March, those strategic realities that are based oneconomic analysis stress the bounded rational character of decision-making (Nelson and Winter 1982; Scherer 1980; Williamson 1975, 1985).The concept of bounded rationality deserves our attention as it upsetsmany of the traditional assumptions regarding decision-making. Boundedrationality is a semi-strong form of rationality that, following the work ofSimon (1957, 1979), considers the fact that humans face certain cognitiveas well as language limits which make it impossible to identify future con-tingencies in an ex ante manner. According to Simon (1957: 198), boundedrationality reflects that

“[t]he capacity of the human mind for formulating and solving complex prob-lems is very small compared with the size of the problems whose solution is re-quired for objectively rational behavior in the real world – or even for a reason-able approximation to such objectivity.”

Bounded rationality considers (a) that complete knowledge of the conse-quences that follow each choice is impossible to achieve, (b) that sinceconsequences necessarily lie in the future, imagination must supply thelack 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 think-ing/action type of perspective, leaves us with a framework that radically down-plays the importance of organizational goals in general. This is why Ortmann(1976: 59) concludes that Cyert and March leave the impression that organiza-tions are goalless and problems are simply solved as they occur. Cyert andMarch (1963: 119) argue: “We assume that organizations make decisions bysolving a series of problems; each problem is solved as it arises; the organiza-tion then waits for another problem to appear.”


anticipated, and (c) that full knowledge of all possible alternatives cannotbe achieved (Simon 1971: 81). The pairing of uncertainty with bounded ra-tionality makes it unfeasible for decision-makers to account for all possibleconsequences – hence: “the future is permitted to unfold” (Williamson1975: 9). The notion of bounded rationality challenges the very essence ofthe ‘primacy of thinking’ because bounded rational individuals recognizethat they cannot foresee all the things that matter to them. It is thus un-likely that people find the mathematically best solution to their problems.Rather, individuals act intentionally rational; they give the best they canunder the limitations they face. The maximizing goal of choice is replacedwith the goal of satisficing; a perfect utility-maximizing choice becomesout of reach.42

Simon’s perspective of rationality highlights that the problem of choiceis one of describing consequences, evaluating them, and connecting themwith behavior. Although he moves from an objective notion of rationality(in which thinking determines action because ‘correct’ behavior maxi-mizes given values in a situation) to subjective rationality (in which maxi-mization is relative to the actual knowledge of the subject), the basic prem-ise of ‘thinking before action’, which is of interest to our analysis, remainsunchanged.43 Simon presents a strong argument by considering decisionpremises to be incomplete and bound to psychological limits, yet his con-clusions are not much in favor of a perspective that highlights the gradualproduction of decision premises in the course of action. For instance,

42 The authors of the economically based strategic realities share this critique. Nel-son and Winter (1982) criticize the economic perspective that often conceptual-izes economic man as a perfect mathematician; they argue that “[t]his affront torealism is not innocuous. It opens the door to full reliance on the notion of fullypreplanned behavior, even in contexts where the level of complexity involved issuch as to overwhelm the aggregate capacity of Earth’s computers.” (Nelsonand Winter 1982: 66) Similarly, Scherer (1980) argues: “Decision makers can-not know precisely how strong and how elastic demand will be in the next pe-riod, let alone ten years hence, or how far labor unions will carry their strugglefor higher wages in forthcoming negotiations, or how rival sellers will react to aprice 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 ‘organiza-tional’ rationality are linked to each other. Simon (1971: 80, 96-109) puts greatemphasis on this topic, yet also remains rather vague in describing their relation.Basically, he assumes that organizations ‘permit’ individuals to approach prob-lems 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 twoways: (1) present behavior, determined by this decision, may limit future possi-bilities, and (2) future decisions may be guided to a greater or lesser extent bythe present decision.” (Simon 1971: 97, annotation added)


Simon’s (1971: 96) model of how individual behavior is integrated intosocial systems involves three principal steps: (1) the individual makesbroad decisions within the limits of the existing organizational policy (sub-stantive planning), (2) the individual establishes more specific mechanismsthat cause day-to-day decisions to conform with the substantive plan (pro-cedural planning), and (3) the individual executes the plan within theframework set by the preceding two steps.

To conclude, although the notion of bounded rationality has been ap-plied by authors of strategic realities (especially, but not limited to, Nelsonand Winter 1982; Scherer 1980; Williamson 1975, 1985) and extendedstrategy process research, the basic conception of a formulated strategythat is implemented thereafter is not fundamentally altered but only limitedin its rational-capacity. Fully reaching beyond the ‘primacy of thinking’implies considering that thinking and action intermesh. Strategy formula-tion, then, can no longer be detached from implementation: both processesare deeply intertwined and mutually inform each other. Yet, this perspec-tive 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 strategicrules 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 marketor the resources an organization possesses are thought to be applicablewithout a deep consideration of the context they occur in. Scholars tend tobelief that there is something like a final origin of competitive advantagethat needs to be discovered. In other words, rules and resources are con-ceptualized as if they are full of meaning (i.e. iterable and as a result gen-eralizable across contexts) and thus able to define their own conditions ofapplication. As indicated in section 1.1, strategic rules try to generalizeacross organizations, while resource-based theories are aware that firmspossess heterogeneous resources yet presume that resources within a firmare given regardless of context. To facilitate orientation, we first discussthe ‘fullness of strategic rules’ and then move to the ‘fullness of strategicresources’.

The Fullness of Strategic Rules

It goes without saying that Porter’s (1980, 1985) contributions provide byfar the most well known rules of strategy. Among Porter’s (1980: 3) “gen-eral analytical techniques” we can find the notion of industry analysis that


attempts to offer the rules of competition.44 Porter (1985: 7) is convincedthat he has listed “all the elements of industry structure that may drivecompetition in an industry.” The underlying logic is not to apply the rulesand thus fill them with meaning, as this would require eventually breakingwith their nature or even reinventing them, but to ‘tick boxes’ workingthrough the long list of determinants that supposedly define the rules of thegame. It is in this spirit that Harfield (1997: 8-9) reports:

“On first reading, my view is that the ‘American East-coast Business Ideals’, asembodied in Competitive Strategy, are not applicable to New Zealand. Compe-tition to gain a dominant market share is about large markets with assumedgrowth, that is not New Zealand, is it? I assume that the few large public com-panies might aspire to this model, but New Zealand is made up of small andmedium size, often family owned businesses where cooperation is as importantas competition. There are factors other than ‘profit above industry average’ as areason for being in business, aren’t there? The only way to find out is to ask themanagers, and listen to their stories.”

Porter does not give reference to the process of applying his rules of com-petition to a context, a context that might force managers to redefine therules, to break with them – not for the sake of breaking, but to appreciatetheir context of application.45

Porter’s second widely shared view is reflected by the rules of achievingcompetitive advantage by means of positioning. Based on an analysis ofindustry structure, he argues that there are two types of competitive advan-tage (lower costs and differentiation) that, combined with the competitivescope (broad or narrow target), yield three generic strategies: cost leader-ship, differentiation, and focus. To achieve a competitive advantage, orga-nizations cannot be “all things to all people” (Porter 1985: 12), they needto make choices. A firm that does not make such choices or even decidesto 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 perform-

44 Porter (1985: 4) even speaks about ‘rules’ while arguing that “strategy mustgrow out of a sophisticated understanding of the rules of competition that de-termine an industry’s attractiveness.”

45 We should note that Porter (1991) has written an article called Towards a Dy-namic View of Strategy in which he separates his own thinking about strategy ina cross-sectional problem (the causes of superior performance) and a longitudi-nal 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 originsof the origins of competitive advantage and acknowledges the importance of thelocal environment in shaping strategy.


ance.” Porter (1980: 40-41) provides long lists of skills that are required toimplement each of the three generic strategies. Again, we find a logic simi-lar to that of the concept of industry analysis: the rules to achieve competi-tive advantage are pre-given and managers are advised to make a choicebetween one of the strategies. Even though Porter (1985: 11) recognizesthat specific actions are required to implement each strategy, he still placesmuch emphasis on the general and prefabricated nature of his genericstrategies.

The ‘tick the boxes’ approach followed by Porter becomes even moreobvious if we consider his famous value chain analysis. A value chain dis-plays the total value a firm creates by conducting its value activities. Porter(1985: 39) distinguishes between primary and support activities and arguesthat the way in which these activities are performed “will determinewhether a firm is high or low cost relative to competitors.” He is wellaware that firms may possess different value chains because their historiesdiffer, but also claims that “every firm is a collection of activities that areperformed to design, produce, market, deliver, and support its products”(Porter 1985: 36) and that “[i]n any firm all the categories of primary ac-tivities will be present to some degree and play some role in competitiveadvantage.” (Porter 1985: 40) Once again, this demonstrates that Porterprovides generalized tools that usually leave some possibility of alteringthe nature of the tool by choosing among a list of predescribed determi-nants prior to application. The value chain needs to be open for modifica-tion to tap its full potential. Here, modification means not adjustmentwithin some predescribed limits but the inevitable enactment within theidiosyncratic context of an organization.46

The toolbox of the strategist is extended when looking at the work ofHofer 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 tech-nology? Information systems considered by Porter (1985: 43) to be a support ac-tivity, often play a major role in firms’ sales activities and their aftersale assis-tance, 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 ex-tent). Inbound logistics is concerned with receiving, storing, and disseminatinginputs to the product. But what about corporations that do not need or have in-bound 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 analy-sis is guided by the notion of an idealized firm which does not always exist, es-pecially if we consider that the nature of firms constantly changes with societaltrends (e.g., the use of the internet).


‘Hofer/Schendel strategy formulation models’ for business and corporatelevel strategy. These models provide a fine-grained view of how to pro-ceed when formulating strategies on both levels of analysis. In the courseof their book, Hofer and Schendel introduce a variety of analytical con-cepts that can be used by mangers to put their proposed strategy formula-tion process into practice. On the business level, for instance, they suggestsix generic strategies that firms can follow. To select ‘the right’ strategy,firms are advised to consider the stage of evolution of the product/marketsegment, its current and desired competitive position, as well as its re-sources. Similar to Porter, the authors argue that any of those six genericstrategies are needed to come up with a business strategy. They do not rec-ognize that these suggestions, however important in guiding managers’ ef-forts in strategy making, need to be applied to a specific context, a contextin which it might be necessary to modify a generic strategy to such an ex-tent that there is no reason to assume that anything like a true standardizedstrategy can exist beforehand.

Ansoff (1987b: 111) follows a similar approach as he outlines a portfo-lio that specifies the combination of available strategic business areas inwhich a firm wishes to achieve its objectives and subsequently defines fourcompetitive (generic) strategies that firms can use to succeed in each ofthese areas. Overall, Ansoff’s approach to strategy is similar to the onesdescribed so far: develop criteria that allow us to distinguish between dif-ferent strategic scenarios in order to offer predefined strategies that canthen be implemented. Ansoff even moves one step further by applying thedifferent components of the portfolio to different types of firms. For ex-ample, managers that look for a strategy for integrated synergistic firmsare given the following advice:

“Since its product-market decisions have long lead times, it needs guidance inR&D, and it must be able to anticipate change. Much of its investment is irre-versible, since it goes into R&D, which cannot be recovered, and physical as-sets, which are difficult to sell.” (Ansoff 1987b: 113)

Ansoff believes that there are certain strategic alternatives managersshould follow under specific circumstances. Again, we do not doubt that itis useful to provide strategists with some generic options of what a strategycould possibly look like. However, it is dangerous to do so without ac-knowledging the process of application.

Andrews (1971) provides yet another example of what it means to de-liver necessary emptiness. His work has popularized the idea of distin-guishing between the external situation a firm faces (its opportunities andthreats) and its internal characteristics (strengths and weaknesses). Today,we rarely find any textbook on strategy that is not referring to this distinc-


tion. Over the years, Andrews’s confrontation of external and internal fac-tors became better known as SWOT analysis and was described as a rigor-ous analytical tool (Weihrich 1982). Needless to say, SWOT analysis over-lays corporate diversity with a generic solution. Neither Andrews (1971)nor any of his predecessors, relate the relevance of the SWOT approach tomanagers’ ability to use and apply this tool to their specific context. Allthat is offered by Andrews (1971: 71) are long lists of factors that couldpossibly be considered during an analysis. What are the results of this ori-entation?

Hill and Westbrook (1997) investigate the use of the SWOT conceptempirically. Their study of 20 companies that conducted a SWOT analysisreveals that all firms produced long lists of vague terms with the help ofconsultants. Only in three instances were these lists used for strategy de-velopment at all. That is why Hill and Westbrook (1997: 50-51) concludethat:

“Our principal conclusion has to be that, from the evidence given above,SWOT as deployed in these companies was ineffective as a means of analysisor as part of a corporate strategy review. […] The relevance and usefulness ofany approach is in part related to the ability of those involved. Unless their un-derstanding of how an application should be made, together with the ability toundertake the work in a rigorous and meaningful way, then the outcomes willbe less than adequate.”

Their study shows that the success of SWOT depends on the competenceof managers to apply, and thus also modify and extend, the original frame-work. Simply ticking boxes and producing long lists of vague terms doeslittle good. After all, Hill and Westbrooks’ study demonstrates that it is notenough just to call for a consideration of the context of application, butmost 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 offilling and thus contributes to the ‘fullness of strategic rules’.

Another widely used concept is Miles and Snow’s (1978) adaptive cyclewhich describes a model of organizational adaptation. Based on Child’s(1972) strategic choice approach, Miles and Snow (1978: 21) argue thatadaptation depends on managers’ perception of the environment. They be-lieve that this process can be broken down into three major problems – en-trepreneurial, engineering, and administrative – that form a cycle whichthe organization constantly has to deal with. Based on this cycle, they out-line 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 designsthe organization accordingly, then the organization may be an effective com-


petitor in its particular industry over a considerable period of time. On the otherhand, if management does not choose to pursue one of these ‘pure’ strategies,then the organization will be slow to respond to.” (Miles and Snow 1978: 14)

The underlying logic is much the same as in the works that have been in-troduced 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 effi-ciency losses. The four archetypes suggested by Miles and Snow (1978:29) possess certain characteristics. Depending on the nature of the firm amanager works in, s(he) needs to choose the right form to be able to pre-dict behavior (Miles and Snow 1978: 30). The four ‘pure’ types ofstrategic organizations suggested by the authors do not account for the factthat 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 ofstrategic realities (viz. Wernerfelt 1984 and Barney 1991) conceptualizeresources as a priori given and thus full of meaning prior to application.Barney (1991: 101) distinguishes between physical capital resources, hu-man capital resources, and organizational capital resources and Wernerfelt(1984) claims that only those attributes of these types of resources that en-able a firm to implement its strategy are called firm resources. The pio-neers of the resource-based view in strategy depict resources as stablebuilding blocks of organizations that can be clearly identified and meas-ured, or, in Wernerfelt’s (1984: 172) words: “anything which could bethought of as a strength or weakness of a given firm.” Resources are ‘real’and exist regardless of context or the observer. Yet, such a conceptualiza-tion does not reflect the messy realities that managers face when applyingresources and thus risks lacking meaning for scholars and practitionersalike. Wernerfelt (1995: 172) himself, in a ten-year retrospective view onhis own trail-blazing article, argues that “’resources’ remain an amorphousheap to must of us.”

There are two other points that support our assertion that resources areconceptualized as given. First, Wernerfelt (1984) argues that resources canbe used in several products and suggests creating a resource-product ma-trix that depicts the importance of a resource in a product. Similarly,Barney (1986) uses the concept of ‘strategic factor markets’ to point outthat firms can purchase resources there. Inevitably, these notions implythat resources are easily transferable and for that reason need to be ‘given’in some way. Second, because most research in the resource-based view isinformed by traditional economic analysis, authors like Wernerfelt and


Barney seem to assume that managers use their resources optimally(Bromiley and Papenhausen 2003). That is, these authors discuss the linkbetween resources and performance in a direct manner, neglecting themanagerial choices that are necessary to put resources into action. Again,if people play no or only a minor role, resources are defined without anyrelation to their application. Even firms with similar tangible resources willhave different performance outcomes depending on how managementchooses to employ resources.

It should not go unnoticed that Nelson and Winter’s (1982) approach toevolutionary economics provides the ground on which much recent re-source-based theorizing rests. Their view of the organization as a set of in-terdependent operational and administrative routines gave rise to the no-tion of dynamic capabilities (Teece et al. 1997: 516). Although, thisconception attaches a ‘dynamic’ label to the discussion, by emphasizingthat competences need to change by means of these dynamic capabilities,the basic problem that dynamism and learning cannot be fixed prior to ap-plication remains. Pfeffer and Salancik (1978) argue in favor of a resource-dependence approach determining an organization’s action from the ‘out-side’. Organizations depend on individual or cooperative actors that con-trol critical resources. In their analysis, the authors focus on the question ofhow resources can be acquired by an organization to avoid vulnerabilityand to ensure survival (i.e. a state in which a supply of resources is as-sured). Whereas this points out that resources are important, their onto-logical status remains unquestioned. Resources are treated as ‘given’ enti-ties that are either supplied or not supplied by the environment.

Penrose (1995) reaches beyond the notion of ‘given resources’ by argu-ing that it is not the resources per se but the context-bound use of these re-sources – the services in Penrose’s terminology – that matter. She providesthe only contribution within our list of strategic realities that truly reachesbeyond a dominant logic, in this case beyond the ‘fullness of strategic re-sources’.47 According to Penrose (1995: 25), resources consist of a bundleof potential services that need to be activated within application; it is notresources per se that are important but only the services resources render.Her distinction between resources and services reaches beyond the existingdominant logic because she recognizes that resources need to be trans-formed into services to be of value to organizations. Regrettably, her in-sights have been neglected by the major contributions of the resource-based view on strategic management (Kor and Mahoney 2004).

47 This is even more surprising if we consider that the first edition of Penrose’scontribution dates back to 1959, a long time before there was something like aresource-based view on strategy.


3.2.4 The Dominant Logics of Strategy – An Overview

Having discussed the three dominant logics of strategy research and theirembeddedness in the 20 most prominent strategic realities, we concludethat mainstream strategy research is dominated by certain logics. Our dis-cussion of the ‘necessity of adaptation’, the ‘primacy of thinking’, and the‘fullness of strategic rules and resources’ shows that the orthodoxy instrategy research still relates to well-established patterns of thought. Figure12 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 thedominant logics. However, with the exception of Penrose (1995), they donot entirely reach beyond the established orthodoxy. Whereas these chal-lenges come from inside the mainstream, there are also a variety of chal-lenges that come from outside the mainstream literature (see section 3.4).Most strategic realities that challenge the identified dominant logics, fromwithin or outside the mainstream literature, provide modified perspectives


on the oppositions (e.g., formulation/implementation); however, they donot confront the deeply held assumptions on which scholarly activity rests.From our perspective, any serious attempt to reach beyond the dominantlogics has to consider their inherent paradoxical nature as a point of depar-ture for further reasoning. To demonstrate that the determinism that is in-herent in the dominant logics (e.g., an objective environment that deter-mines strategic conduct) is based on impossibility (i.e. paradox), we needto expose paradoxical reasoning and show how such reasoning informs fu-ture research.

In conclusion, we argue that knowledge in strategy research possessesan ideological function. That is to say, the interests of a dominant part ofthe research community are represented as the interests of the whole. Wecharacterize this ideology as a functionalistic one that approaches researchconcerns from a positivistic and deterministic stance (Burrell and Morgan1979: 26). This reminds us of the philosophical work of Husserl’s (1970)The Crisis of European Sciences and Transcendental Philosophy in whichhe argues that the rationality of the modern sciences is based upon an ide-alization 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 beclearly represented and expressed by a researcher (Leiss 1975). The im-plicit assumption that is attached to such research is that outdated theoriesare 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 thatthis 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 pre-sented in this chapter, one may be puzzled by the fact that the pluralism ofparadigms in strategy, which presumes a variety of opinions about whatstrategy is or should be, conflicts with the overarching character of domi-nant logics. If there is no generally accepted paradigm to pull together themany issues of strategy research, why do dominant logics remain in thefield as outlined in the preceding section? Does the notion of dominantlogic run counter to our assumption that different paradigms have occurredin strategic management theory thus far? What is the relation betweendominant logics and paradigms anyway?

We believe that the pluralism among strategy paradigms exists only on asuperficial level. Even though resource-based thinking currently dominatesthe field, no serious researcher would simply forgo definitions of market-based reasoning. This pluralism is of a superficial nature because every


paradigm favors almost the same dominant metatheoretical assumptions.These assumptions – largely stemming from the functionalist roots of thefield – run throughout the paradigms as dominant logics. In other words,dominant logics do not represent a paradigm, at least if we understand aparadigm as defined in section 2.2.1, but are attached to the paradigms thatoccurred in the history of strategic management. As a result, strategy re-search not only relates to certain dominant logics, but these logics are alsowell represented by the paradigms of the field.48

Our premise is that even though the paradigms of strategy research maydiffer at first glance, because they focus on such diverse issues as long-range planning of internal functions or the analysis of industry structure,they are stuck in a straightjacket. Even though model problems and modelsolutions differ among paradigms, the assumptions of strategy scholarshave largely converged into a single set of assumptions on a metatheoreti-cal level (Boyd et al. 2005: 853). These assumptions are represented by thedominant logics that we identified in the preceding section; they reflect afundamental belief about how the world works and help to frame researchproblems and the chosen methodology. Regardless of whether we agreewith Daft and Buenger (1990: 82) that strategy research ‘rushed’ into thisconvergence at too early a point in time, the devotion to dominant logicsinhibits intellectual growth by focusing attention on minor research prob-lems and neglecting ‘the big picture’ within which these problems are lo-cated.

To illustrate this point, consider the following example. The ‘necessityof adaptation’ cuts across a variety of paradigms in strategy research. Theneed 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 andSchendel 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 insome sense an ‘origin’ for strategic reasoning and that consequently firmshave 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 acrossparadigms (see also section 1.1 and the glossary). Kuhn (1970: 245) heavilycriticizes researchers for taking too lax an attitude towards normal science: “If[...] some social scientists take from me the view that they can improve thestatus of their field by first legislating agreement on fundamentals and then turn-ing to puzzle solving, they are badly misconstruing my point.” See also the es-says in Lakatos and Musgrave (1970).

How Dominant Logics Come into Existence 99

sity of adaptation’ reflects a deeply rooted assumption that has been fol-lowed by a variety of strategic realities in different paradigms.

To answer the questions posed at the beginning of this section, we notethat dominant logics correspond to parts of paradigms, i.e. their metatheo-retical assumptions. Thus, the notion of dominant logic neither runscounter nor conflicts with the idea of paradigm. It is our firm belief thatunless the dominant logics are challenged, they will continue to govern fu-ture paradigms regardless of whether they favor resource, market-based, orany other kind of reasoning. The question strategy scholars face is whetherthey wish to remain comfortably seated in the fast train that is heading tonowhere as described by Daft and Buenger (1990) or whether they wish tobring this train to a halt, not to reverse its direction, but to take a deepbreath and figure out where they wish to go and how they wish to get therein the first place.

3.3 How Dominant Logics Come into Existence

Having claimed that strategic management possesses three dominant logicsthat are well reflected by the metatheoretical assumptions of its underlyingparadigms, we now face the question of why the field is able to sustainthese logics without getting trapped in a crisis situation that accompaniesrare revolutionary upheavals as described by Kuhn (1996). If strategy re-search manages to ‘blackbox’ many of its presuppositions into dominantlogics, we have to discuss the underlying micropolitical dynamics that helpto nourish conventional wisdom. In other words, we need to ask why suchblackboxing is possible in the first place. By discussing these concerns, wesupplement the more content-based arguments of the preceding sectionswith a discussion about why dominant logics exist anyway and how theyare maintained. This discussion is necessary to understand the ‘political’dimension of scientific practice on which some of our recommendationsfor future knowledge development in the area of strategic management rest(section 8.1).

To show how socio-cultural factors influence the development of beliefstructures, we discuss concepts stemming from the sociology of scientificknowledge and the sociology of science and apply them to strategic man-agement. While the sociology of science is concerned with science as aninstitution, the sociology of scientific knowledge addresses the process ofintellectual legitimization that we define as “the process by which a theorybecomes recognized as a part of a field – as something that cannot be ig-nored by those who define themselves, and are defined, as legitimate par-


ticipants in the construction of a cognitive field.” (Lamont 1987: 586). Le-gitimized theories are often referred to as ‘facts’, that is a piece of knowl-edge which has been collectively stabilized from the midst of scientificcontroversies and is strongly confirmed by later scientific contributions(Latour 2002: 42). Overall, there is widespread agreement that knowledgecan be shown to be socially constructed within scientific controversies.Starting from this social constructivist perspective, we discuss the produc-tion (section 3.3.1) and perpetuation (section 3.3.2) of facts in strategy re-search to finally illustrate how facts that are sustained for a long period oftime are transformed into dominant logics (section 3.3.3). We thus sympa-thize with the claim that there is no such thing as a natural scientific fact, afact that is simply ‘there’ by the force of nature, because scientific knowl-edge in strategic management is the product of a lengthy process of con-struction. What we show in the following sections is that ‘nature does notforce the issue’ (Pinch and Bijker 1984: 420), but that those argumentswhich are often referred to as facts are socially constructed by a network ofdiverse actors (e.g., scholars, editors, funding agencies) and do not appearfrom nowhere.

3.3.1 Producing Facts in Strategy Research

To open the black box of science, we need to consider the social mecha-nisms that curb or foster the incorporation of existing contributions intoongoing discourses. To understand what facts are, we have to understandhow they are made and who made them in the first place. We must studyscience in the making and not ready-made science (Latour 2002). In study-ing the fabrication of scientific facts in strategic management, we followresearchers at the times and places where they do their work. As for mostsocial scientists, a large part of the job is done behind the desk writingjournal articles or books. It is thus reasonable to discuss the role of litera-ture as an essential factor in the production of facts. Our concern is to ex-plore how scholars succeed in producing a document that has the largestpossible impact on the scientific community. As Law and Williams (1982:537) argue, the impact of a paper or book depends on the perceived valuethat other researchers assign to one’s own work. To be legitimized by oth-ers and to gain the status of a fact, a document needs to be reliable andrelevant in the eyes of others. It is thus of fundamental importance howscholars present their ‘product’ to achieve maximum recognition.

To begin with, we have to recognize that the production of facts is a col-lective process. The point is that the fate of what a scholar says is in thelater users’ hands because the status of a statement depends on later state-


ments. By itself a statement is neither true nor false, neither a fact nor afiction, it is made so by others, later on (Latour 2002: 29). It is made moreof 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 inany other scientific field – one needs to gain credibility. Without credibil-ity others will not refer to the research output one offers to the market ofknowledge. We then need to ask: What enhances the scientific credibilityof an article? What does an author do in order not to be ignored by the sci-entific community? If an article gets ignored, it cannot be turned into afact. Even worse, it cannot be rejected; the voice of the scientist remainssilent as if the article never existed.

Latour (2002), who has been at the forefront of studying the dynamicsof science in the making, lists three factors that help to transform argu-ments into facts. First, there is the argument from authority. To impress adissenter one needs prestige, most often the prestige of a major journaland/or the excellent reputation of a university or educational fund. Havingthese allies makes it hard for a dissenter to criticize a piece of literature. Ifone doubts the claim brought forward by the author, one also questions thehonesty, good judgment, and hard work of a large number of well-established people (e.g., journal editors, professors that have supported thework of the author). Who wishes to have so many opponents? Concerningstrategic management, we can state that an author who publishes in theSMJ definitely experiences positive spillover effects of the excellent repu-tation of the journal. MacMillan (1989: 391), after having identified theSMJ as the most outstanding forum for publication in strategy research bymeans of a survey among tenured professors, even claims that

“each field of inquiry has a forum in which the work of scholars in that fieldshould be presented, and if a candidate’s work is accepted in that forum, thensuch work should be deemed scholarly.”

To belong to the ‘club’, scholars need to publish in the forum, which in thecase of strategic management is quite a limited one.

Even more interesting is a look at the affiliations of the authors of the 20most cited documents in the SMJ. At the time their work was published,five authors (Porter, Rumelt, Andrews, Lawrence, Lorsch) were associatedwith Harvard University, while most other authors gained support fromother top universities like MIT (Chandler), Yale University (Williamson[1985]), University of Pennsylvania (Williamson [1975]), Stanford Uni-versity (Hofer), Northwestern University (Scherer), and University of Cali-fornia at Berkeley (Pfeffer). As a minimum, the financial strength andprestige of these institutions supported the success of these authors (e.g.,through granting research funds). This argument is consistent with the em-


pirical findings cited in Park and Gordon (1996: 111) who report thatscholars from prestigious universities were among the top contributors forhigh-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 acontribution that gained authority from any of the abovementioned sourceswill face considerable opposition, even at the very beginning of this en-deavor. An argument based on authority is what Pinch and Bijker (1984:425) call rhetorical closure, that is, the introduction of a ‘knockdown’ ar-gument by means of scientific authority to offer ‘definite’ proof of howthings are, thereby closing a debate.

Following Latour (2002: 33), the second factor that influences thecredibility of a scientific contribution is its reference to former well-knowntexts. The presence and absence of references is often regarded as a directindicator of the seriousness of a paper. Without any references at all, thepaper is ‘naked’; without references to the major debates of a field the pa-per has few chances of being regarded as a legitimate contribution (Adattoand Cole 1981). The reason for including well-known references is rathersimple: to attack a document that is loaded with literature means that thedissenter 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 pa-per that is on its way to becoming a legitimate contribution to a scientificdiscourse can contribute from positive spillover effects provided by the ex-isting prestige of former articles/books. It is easier to convince people bymeans of documents that they already know and trust than to persuadethem of something very remote or even contrary to their current beliefstructures.

What does that mean for strategy research? Phelan et al. (2002: 1163)report that the number of references per SMJ article has considerably in-creased over the last two decades (from a mean of 25 per article in 1980 toa mean of 75 per article in 1999). Hence, there is reason to believe that inthe strategy community the amount of literature clearly is an indicator ofthe seriousness of an article. In terms of reference to well-known texts, wecan state that existing articles in the SMJ clearly give reference to the ‘bignames’ of the field, as demonstrated by the citation index that was intro-duced in section 3.1. Surprisingly, most of the 20 strategic realities thatmake up the list of the most cited documents in the SMJ contain neitherlong 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 strategicrealities had for the (back then) still developing field of strategy. Chan-dler’s (1962) contribution, for instance, refers often to federal documents


and statistics. This changes if we look at the few more recent documentsthat 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 piecesof 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 documentsplay a vital role in enhancing the credibility of strategic realities.

Latour’s (2002) third factor that helps documents on their way to be-coming facts is being referred to by later texts. The assertions that aremade in the article need the support of later articles to make it more of afact. In other words: arguments need to be continuously reproduced to be-come and stay a fact. This is the recursiveness of scientific practice; theprobability of being treated favorably by subsequent articles increases ifthe respective text refers to already well-known pieces of work that in turnenhance their visibility and make it even more impossible to be evaded byfuture scholars. That is why Zimmerman (1989: 458), while offering ad-vice on how to improve the likelihood of publication in major journals, ad-vises authors to target the largest audience possible as ‘marginal’ opinionsare not likely to be referred to by other scholars.

Once an author is referred to by later texts, her/his arguments becomesimplified. A few statements are isolated from the original text to be usedover and over again. Repetition not only enhances the visibility of theauthor but also simplifies the initial argument. For instance, Porter’s(1980) prominent idea of the structural analysis of industries, originallypresented on 31 pages with in-depth discussions of the various determi-nants of the intensity of competition, is usually referred to in the followingway:

“Porter’s (1980) Five Forces Model, by more clearly specifying the various as-pects of an industry structure, provides a useful analytic tool to assess an indus-try’s attractiveness and facilitates competitor analysis. The ability for a firm togain competitive advantage […] rests mainly on how well it positions and dif-ferentiates itself in an industry. The collective effects of the five forces deter-mine 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 struc-ture determines the nature of competition in an industry, and (2) the nature ofcompetition is a major determinant of firm profitability.” (Hill and Deeds 1996:429)

Porter’s argument becomes simplified and is thus easily accessible to awide range of scholars. The Five Forces Model turns into a fact, something


that is not questioned anymore and can be turned into a one-line statement(‘Porter has shown that …’). Of course, most journal articles are writtenunder consideration of space constraints that do not allow for an in-depthdiscussion or even repetition of original contributions. Yet, once an authoris being referred to by later texts and her/his arguments become simplifiedand thus accessible to a wider audience, a new fact is born.

From our anatomy of scientific rhetoric, we conclude that there aremany supportive mechanisms an author can rely on when trying to gaincredibility from the reader. Such mechanisms influence the processthrough which peers come to define a theory and its producer as importantand give rise to what are called facts – knowledge that is little disputed in adiscourse field. We have shown how the strategy field has produced factsby making use of these mechanisms. It is important to recognize that thereis 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 themarketing researcher: collectively stabilized knowledge claims that areconfirmed by later scientific contributions.49

3.3.2 Sustaining Facts in Strategy Research

The term ‘fact’ already symbolizes stickiness. Nonetheless, one may won-der why we cannot simply break out of this vicious circle? Why not simplywrite an article that does not cite any facts at all, an article that just con-tains one’s own thoughts? First, such an article would hardly pass throughany double-blind review process in any of the major journals that are con-sidered to be a ‘good outlet for research’. Second, since the allocation ofresearch funds and tenure-policy is mostly tied to scholars’ list of publica-tions, there is strong pressure to publish in high-ranked journals. To be-come ‘somebody’ in a discourse one needs highly recognized publications.Yet, to publish in a well-established journal one needs to reference thefacts of the field. Communication needs to be accessible by others(Luhmann 1994: 198). Breaking out of this circle is possible as the list ofcritical publications, which can be found in almost every discourse, re-

49 The creation of facts is also discussed by the literature on management fashions(Abrahamson 1996; Kieser 1996; Miller and Hartwick 2002). Yet, whereas theliterature on management fashions deals with publications that are supposed toaddress practitioners (e.g., ‘Total Quality Management’), Latour’s (2002) re-marks focus on the stabilization of facts within the scientific community. Man-agement fashions have a mass appeal even outside the scientific community(Abrahamson 1996), while scientific facts usually are only discussed in thescholarly community.


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 dis-senters?

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 fa-mous. Greater increments of recognition for scientific contributions are as-signed to scientists with considerable repute, whereas scholars who havenot made their mark yet are often neglected or rendered less visible. As aconsequence the credit for scientific work is often misallocated because ifsimilar research findings are communicated by a well-known researcherand by one who is less widely known, it is the first who usually receivesthe prime recognition. Merton (1968: 59) concludes from this that schol-arly contributions have a greater influence and visibility when a scientist ofhigh rank introduces them. The Matthew effect demonstrates that scienceis not a private, but a public business and that the prior repute of research-ers advances the speed of diffusion of their contributions. As a result, par-ticularistic (judged on the basis of certain personal or social attributes) cri-teria 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 self-conforming process that curbs the advancement of knowledge in a field ofresearch. Well-known scholars sustain ‘their’ facts because their state-ments are better recognized by other scholars and become the premiseupon which other researchers build their work. Arguments that are intro-duced by prestigious scholars are more likely to become a fact and keeptheir status over a longer period of time. That is why the ‘second book’ ofan author tends to profit from the success of the first one and, because itoften builds on the premises of the first one, sustains already existing facts.If scholar X writes (for various reasons) a very successful book that intro-duces the knowledge claim Y which becomes a fact, the second book ofscholar X, even though different in focus, is often based upon the basicpremises that were introduced in the first book. Hence, by writing the sec-ond book scholar X not only introduces a new fact, knowledge claim Z, tothe field because of her/his prior success, but at the same time enhancesthe credibility of knowledge claim Y.

In strategy research we can examine the Matthew effect when looking atthe extended list of the most cited documents displaying the 50 most influ-ential documents (Ramos-Rodriguez and Ruiz-Navarro 2004: 989). For in-


stance, after the rapid success of Porter’s (1980) trail-blazing book Com-petitive Strategy, which ranks first in the list, it is not too surprising thatthe successor Competitive Advantage (Porter 1985) ranks third. Overall,Porter appears four times in the list. Similarly, Rumelt’s (1974) very influ-ential book Strategy, Structure, and Economic Performance, which rankssecond 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 recog-nition of Markets and Hierarchies (Williamson 1975) enhanced William-son’s visibility and therefore legitimized the success of The Economic In-stitutions of Capitalism (Williamson 1985).

All of this is not to claim that the works of these authors do not deserveto be in the list because the Matthew effect supported their success. We arewell aware that Porter’s, Rumelt’s, and Williamson’s contributions to thestrategy field represent much needed and innovative discussions that haveinspired and enriched the work of other researchers. Nevertheless, the Mat-thew effect demonstrates that the repeated success of scholarly contribu-tions can be ascribed (at least partly) to her/his eminent status and existingvisibility. Bergh et al. (2006: 92) support this claim. In their empiricalstudy of SMJ article impact, they find that when citing a document authorspay most attention to the author and whether s(he) has already publishedother influential articles and/or books. They also find in their citationanalysis that “if a scholar’s initial work has had little impact, then the im-pact of their later work seems likely to suffer from the same fate.” (Berghet al. 2006: 92) To conclude, the Matthew effect demonstrates that scien-tific success is path dependent; the prior repute of scholars helps to sustainalready existing facts in strategic management and thus makes a critical as-sessment 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 in-stitutional, angle. For this, we need to assess the nature of scientific dis-courses. Fuchs and Ward (1994a, 1994b) distinguish between ‘conversa-tional’ and ‘factual’ fields of scientific practice. As opposed toconversational fields, in which scholars observe one another to see theblind spots of argumentation, constantly reread the ‘classics’ everyone re-fers to, and favor criticism over explanation, factual fields are more closelycoupled, have stronger resources, and professional networks to produce‘objective’ knowledge. In factual fields the theoretical blind spots are pro-tected and rendered more or less invisible because the basic facts the fieldis built upon are not seen as constructions, but as the way reality is or at


least as approaching truth. Factual fields rely on strong institutional pres-sures for conformity and place rather tight restrictions on the amount oftolerated skepticism. Both types of fields produce facts. Yet, while conver-sational fields constantly challenge the knowledge claims that have be-come rigid, factual fields sustain these claims and debate their legitimacyonly sporadically. As a consequence, factual fields show much homogene-ity in their intellectual structure.

From our perspective, strategic management possesses the characteris-tics of a factual field of inquiry. We can observe the homogeneity thatcharacterizes a factual field when looking at the professional network as-sociation, the Strategic Management Society (SMS), which is tightly cou-pled and allows for little heterogeneity in terms of its intellectual strategy.The SMS provides a kind of ‘intellectual umbrella’ for strategy scholarsever since its foundation in 1981. Meyer (1991: 830) even claims that “theStrategic Management Society is our only professional organization whosemeetings are regularly attended by academics, consultants, and CEOs.”The SMS is internationalized with members from over 50 countries: how-ever, there are no local or regional sub-groups. As opposed to other fields(e.g., organization theory), there are few other internationally recognizedprofessional associations that address strategic management.50 Because ofthe missing regional differentiation and the resulting homogeneous charac-ter, strategic management possesses no regional research agendas as otherdisciplines do.51 The missing regional differentiation of the SMS is plas-tered by the strong representation of articles by North American scholarsin the SMJ (the SMS’s official research outlet). When looking at the num-ber of articles by source of authorship, the amount of American-onlyauthored articles increased dramatically between 1980 and 1999. Out of atotal of 994 articles for this time period, 724 were solely authored byAmerican scholars (Phelan et al. 2002: 1164). In addition, out of the 125editors for the journal, 100 hold appointments at North American universi-ties. This raises the question of why the dominance of North Americanauthors has not caused the development of a distinct European professionalnetwork with a related research agenda?

50 As possible alternative, internationally recognized networks we may note theBusiness Policy and Strategy Division of the Academy of Management(http://www.bpsdivision-at-aomconference.org) and the UK-based StrategicPlanning Society (http://www.sps.org.uk).

51 See, for instance, Pilkington and Liston-Heyes (1999) who show that productionmanagement possesses a European and American research agenda. Their argu-ment is based upon a citation analysis demonstrating that European and Ameri-can authors in production management cite from different sub-fields in the lit-erature.


Knyphausen-Aufseß (1995: 263) offers an interesting discussion in thiscontext. He investigates whether there is a difference between NorthAmerican and European strategy research and concludes that even thoughEuropean scholars possess a distinct theoretical research tradition at a gen-eral level, they still import a great deal of ‘mainstream’ American re-search. A regionalized European research agenda is, at best, a project forthe future. We are thus confronted with a self-energizing logic: Europeansimport much of the American research agenda because it is widely ac-cepted and in doing so miss the opportunity to build up their own researchtradition in strategic management. The absence of their own researchagenda in turn fosters the adoption of the existing American mainstream.Ultimately, this brings up the question of why the American mainstream islegitimized among European scholars who supposedly possess their owntheoretical tradition at a general level, as Knyphausen-Aufseß (1995) ar-gues? One plausible answer is that the increasing globalization of scienceand scholarship, Schott (1993) even speaks about ‘world science’, concur-rently fosters its Americanization (see also Kieser 2004). With regard toAustralia, Clegg et al. (2000: 109) argue that research there “is merely an-other field experiment in the global laboratory of universalizing US man-agement theory.” And Hamm (2005: 16-17) remarks that

“[i]n Western science, the peak of the pyramid is usually assumed to be sciencein the US. Western scientists are supposed to follow rather closely what hap-pens in their field in the US, have close connections to their US colleagues andderive many of their hypotheses from the US literature (which would give themat 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 main-stream.”

This is a tough accusation that does not hold for every discourse in the so-cial sciences. Nevertheless, for reasons discussed above there is evidencethat strategy research not only has its roots in America but over time hasalso Americanized scholars from other parts of the world. Strategy re-search 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 alsoneed to take a closer look at the SMJ. To speak only of American main-stream research may be oversimplifying. What do we mean by this whenwe refer to the SMJ? To gain a better understanding of what is consideredscientifically desirable for publication in the SMJ, we should take a look atthe journal’s editorial policy. Schendel, who has been the editor-in-chief


ever since the foundation of the journal in 1980, outlines that policy as fol-lows:

“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 empiricaldata […] 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 implementedover the past 25 years leading to an increase in empirical articles by a 7:1ratio compared to non-empirical work.52 Phelan et al. (2002: 1167) con-clude 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, Schendelet al. (1980) argue that a paper acceptable to the journal should containmaterial that has been tested, or at least is testable, in order to come upwith necessary generalizations. Scholars who wish their work to becomepublished in the SMJ need to comply with this type of research in order toget around the editors who have the function of ‘gatekeepers’ (Astley1985: 508). In consequence, Heugens and Mol (2005: 122) report that ex-isting methodological orthodoxy has a strong bias towards a specializationon quantitative work in US strategy departments and Bergh et al. (2006:

52 Not all empirical work inevitably fosters positivistic assumptions. There is needto distinguish between qualitative and quantitative data analysis. Whereas quali-tative work often relies on single case studies that are investigated by means ofdifferent methodologies (e.g., ethnomethodology), quantitative work is based onlarger sample sizes and mostly quantitative modeling. Using the number of sam-ples as an indicator for quantitative and qualitative work, we can claim thatSMJ-content has been largely influenced by quantitative studies of larger samplesize. Phelan et al. (2002: 1166) find that SMJ-authors using primary data utilize175 cases on average while authors who rely on secondary data use an averageof 1250 cases per study. These findings are in line with Lampel and Shapira’s(1995) claim that strategic management research is dominated by large databaseresearch (for some critical arguments on the use of statistical modeling see thediscussion by Mingers 2003). Shook et al. (2003: 1233) report that general lin-ear models remain the most dominant data analytic technique used by SMJ-authors. The issue of empirical versus non-empirical research pops up everyonce 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 dominatedby 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 temporar-ily limited view of the development of the strategy field.”


91) assert that articles with a high level of ‘methodological rigor’ receivemore recognition in the strategy discourse.

It goes without saying that with such an editorial policy in place there isnot much room to challenge deeply held assumptions. Strategy researchers,at least in the SMJ, have not taken much care to reflect on the intrinsic sub-jectivity of social relations. It seems that Starbuck’s (1982: 8) early appealto be slow and reluctant in claiming to have approximated true objectivityand clear cause-and-effect relations went unnoticed by the strategy field. Inaddition, it needs to be noted that SMJ-articles contain an increasing levelof intrajournal citation. Phelan et al. (2002: 1163) find that by 1999 the av-erage SMJ-article is citing 10 previous SMJ-articles and that SMJ-articlescomprised about 15% of all references in a published article. This makes iteven harder to challenge the deadlocked assumptions inherent to so much,mostly quantitative, empirical work.

Our discussion demonstrates that strategic management possesses thecharacteristics of a factual field of inquiry; the tightly organized profes-sional network (SMS) together with its associated journal (SMJ) supportthe homogenous nature of the field. The SMS and SMJ are dominant(compared to other networks and journals) and dominated (by an empiri-cally-focused research policy). This is not to say that the SMS is a super-fluous institution or that the SMJ is a journal not worth reading, but thattheir tightly controlled character is a factor that should not go unnoticedwhen asking why the field has been able to sustain its facts for a longtime.53 Intellectual homogeneity does not imply that everybody necessarilyagrees with the established assumptions or that all scholars share the sameopinion about what strategy is or should be, but that strategic managementis built upon a set of intellectual presuppositions that are little debated inthe community. Singh et al. (2003) even call for more replication of em-pirical studies to protect against the naïve acceptance of research results.Despite our doubts that a duplication of empirical studies can do any goodto improve the reliability of research results – because each study is situ-ated in a specific context that influences its outcomes and a duplication ofcontexts is basically impossible – it is more dangerous to have an unques-tioned answer than an unanswered question.

53 Pettigrew et al. (2002: 6) put it in a nutshell: “Both SMJ and SMS have had theircritics and there have been periodic questions about the lack of critical reflectionand narrowness of the epistemological, methodological, and theoretical base ofwriting in the field of strategic management. It is now common to talk of thepost-Porter era in strategy, perhaps as we shall see the more general changes inepistemological and theoretical discourse in the social sciences at the beginningof the 21

stcentury […] will collectively push the field of strategy and manage-

ment in some fruitful new directions?”


In this section we have argued that the perpetuation of facts in strategyresearch depends on the factual nature of the field fostered by the institu-tional settings that define what counts as scientifically desirable and thedynamics of the Matthew effect. As any other discourse, strategic man-agement possesses institutions (professional associations and journals) thatlegitimize scholarly work and define what counts as important. Yet, as op-posed to other discourses, strategic management represents a factual ratherthan a conversational field.54 This is because the tightly organized nature ofits professional network and the narrow editorial policy of its major journalfoster a high degree of homogeneity among scholars. In factual fields, thecontinuous legitimization of facts depends on their ‘quality’ that is judgedin accordance with established knowledge claims that are maintained by atightly coupled network of scholars. All of this points to an irony: existingfacts are made stronger through ‘weak’ thinking, that is, the adherence toexisting rules while playing the game (Booth 1998: 9). We are not suggest-ing that path dependency in research is necessarily a bad thing; indeed, allscientific research is in a way path dependent (Kieser and Nicolai 2005) –but that in strategic management research this dependency has created asituation where it is hard to unlock the dominant path to eventually createalternative ones (Garud and Karnoe 2003).

3.3.3 From Facts to Dominant Logics

Having discussed the production (section 3.3.1) and perpetuation (section3.3.2) of facts in strategy research, it is time to ask how facts relate to thenotion of dominant logics. We argue that under certain conditions sus-tained facts can be transformed into dominant logics. For this it is neces-sary to realize that dominant logics are concerned with the assumptionsthat are attached to facts. Therefore, we have to distinguish a controversyabout facts from one about the assumptions that underlie facts. Facts are

54 Compare for instance the international ‘business ethics’ discourse that has nopredominant association, relies on a variety of high-ranked journals (e.g., Busi-ness Ethics Quarterly or the Journal of Business Ethics) and is much concernedwith 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 in-stance the idea of stakeholder dialogues, the assumptions that are attached tothese facts are heavily debated by the community. Mitchell et al. (1997), for ex-ample, suggest that it is not self-evident that managers perceive the attributesthat enable a classification of stakeholders in the same way and thus started adebate about epistemological issues in stakeholder theory.


not dominant logics, but the guiding assumptions of an array of sustainedfacts can be turned into a dominant logic if the assumptions remain un-questioned. Certainly, this is most likely to happen in a factual field of re-search where existing institutional pressures prevent reflection. Facts anddominant logics are different conceptions and to question a fact does notalways mean to question a dominant logic. For instance, we can criticizethe well-established fact that there are five forces that determine competi-tiveness in an industry. Freeman (1983) suggests that one can easily findmore forces (e.g., the power of stakeholders). Yet, to question this factdoes 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: how-ever, there is rarely a discussion of their underlying assumptions (i.e. theattached dominant logics).

Referring back to our distinction between conversational and factualfields of inquiry, it can be claimed that factual fields sustain existing facts,or at best challenge them sporadically, whereas conversational fields notonly question the facts themselves but also their underlying assumptions.As a result, factual discourse fields transform facts into dominant logics bynot questioning their underlying assumptions, while conversational fieldscontinuously debate the underlying research logic and thus inhibit the riseof 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 fora dominant logic. It takes a lot of time and numerous facts with similar as-sumptions to create a dominant logic. For instance, even though Ansoff’s(1987b) and Andrews’s (1971) works explicitly rely on a linear notion of


strategy, the related dominant logic (the ‘primacy of thinking’) did notimmediately appear with the publication of their work. It needed otherpublications that reproduced the fact (Hofer and Schendel 1978; Lorange1980; Shrivastava and Grant 1985) for the dominant logic to slowly, al-most unnoticeably, creep into the discourse. The fact – that a strategyprocess is linear – was even challenged from various angles. Some claimedthat the political dimension is neglected (Pettigrew 1977), while othershighlighted the importance of conceptualizing the strategy process in moreincremental ways (Quinn 1980). Nevertheless, the dominant logic thatthinking comes before action, which is not bound to the strategy processbut a very basic assumption about the causality of life, has not been chal-lenged within the mainstream.

To conclude, dominant logics emerge from scientific facts that are sus-tained for a long period of time. Most importantly, in producing dominantlogics, facts are not only sustained but their deeply held assumptions arenot put into question. This is what Bachelard (1987: 47-50) criticizes whenhe argues that dominant logics hinder scientific progress because research-ers become so used to them that discussing them is too inconvenient or notperceived as useful. In this way, well-established intellectual habits aremore and more appreciated not because of their intrinsic value but becauseof their repeated, unreflective use. As a consequence, assumptions that areattached to dominant logics are treated as if they were clear and straight-forward and no alternatives existed, whereas in fact this clarity is a sociallyconstructed misconception. The socially constructed process of knowledgecreation and perpetuation is based on a complicated system of actors (e.g.,supporters, opponents, editors), institutions (universities, professional net-works, and profit as well as non-profit organizations), and rhetorical de-vices (citation of former texts, authority an article gains from the reputa-tion of a journal). Such a complex interplay of different factors makes ithard to generalize and even harder to apply these issues to a specific scien-tific discourse like strategy (Lamont 1987: 601). Citations make up an al-most endless network of papers and authors that is hard to unravel. Thus,not every established fact nor the success of every much-cited article canbe explained by the factors introduced above; they simply provide a roughguide for navigating the ‘jungle of science’. After all, luck may be a factorthat is hard to account for.


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 thatcritically examine strategy research. Nevertheless, compared to the overallincrease in articles and books on strategic management relatively fewscholars have been prepared to challenge the core beliefs and assumptionsof the field (Pettigrew et al. 2002: 6). We provide an overview of the criti-cal literature to assess what we already know and what we should know.To be consistent in our argumentation, we only discuss those contributionsthat critically assess the assumptions of the dominant logics. This makesour review selective since other critical scholars have raised different is-sues.55

We start by identifying four levels of critical strategy research (section3.4.1). Next, we review those voices that can be ascribed to the first andsecond level of critical strategy research (section 3.4.2 and 3.4.3, for thedifferences between the levels of analysis see section 3.4.1). We argue thatalthough these critiques have provided important insights, they do not fullydismiss the dominant logics. To dismiss the dominant logics one needs toexpose their paradoxical nature; only by recognizing their impossibility(i.e. paradoxical foundation) can one justify their infeasibility for copingwith strategic problems. Accordingly, the third and fourth level of criticalstrategy research correspond to a discussion of the paradoxical nature ofthe dominant logics. The third level (section 3.4.4) argues that criticalstrategy research has to discuss paradox to show that paradoxical reason-ing dismisses the dominant logics. Critical strategy research on the fourthlevel (section 3.4.5) asks how paradoxes can be used positively to informfuture research. In consequence, sections 3.4.4 and 3.4.5 demonstrate whythere is a need to introduce deconstruction as a critical strategy to expose

55 For instance, compare works that criticize scholars’ management-centered per-spective (Levy et al. 2003: 96), the ill-defined nature of the concept of competi-tive advantage (Klein 2001), the neglect of emotions in theorizing (Calori 1998:295), and the disregard of influences from stakeholders (Shrivastava 1986: 368).

Challenges from Outside the Mainstream 115

the paradoxes that are attached to strategy context, process, and contentand 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 ofstrategic management, strategy research has not yet developed a thoroughcritical tradition (Pettigrew et al. 2002: 11). Critical pieces usually appearquite decoupled from one another and have a hard time gaining momen-tum. In the end, most critical practice in strategy vegetates on its own. Toassess the current status of critical practice, we can refer to different levelsof critical strategy research (see Figure 14). These levels represent an ‘es-calation 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 criticizethe narrow ideology on which strategic management rests (see section3.4.2). Usually, those researchers do not distinguish between context,process, and content issues but argue that there is a lack of progress in re-search because scholarly activity has been ensnared by the rituals andparaphernalia of ideology (Daft and Buenger 1990: 82). On the second


level there are those scholars who recognize that context, process, and con-tent research have sustained particular dominant logics (see section3.4.3).56 Certainly, most critical approaches remain on this level. On thethird level, we find those scholars who not only identify a dominant logicbut also ask: Why does this dominant logic exist the first place? On thislevel, critical strategy research recognizes that the dominant logics existbecause of their underlying oppositions; these oppositions obscure theparadoxes that inevitably arise once scholars try to justify the existence ofthe dominant logics. On the fourth level, research appreciates paradox, yetproposes that paradoxes only indicate the limits of knowledge we can haveabout the nature of strategy and thus unfolds the self-contradicting reason-ing in a useful way.

These four levels of analysis relate to this study as follows. The first andsecond level represent existing critical approaches to strategy research andare introduced in the next two sections. Our own critical discussion of stra-tegic management in chapter six rests on the third and fourth level ofanalysis. Since deconstruction begins with an encounter of the paradoxesthat must be overlooked to make dominant logics seem undeconstructible,Derridean thinking primarily addresses the third level of critique. Decon-struction uncovers the paradoxes of strategy research. Yet, deconstructionneeds to be supplemented by other theories if one wishes to move to thefourth level of critique to unfold paradox in order to learn how strategicmanagement becomes possible despite its paradoxical character. If weconsider that there is no study that discusses all four levels of critical strat-egy research with regard to strategy content, process, and content, it is notunreasonable to claim that a systematic critique of the field is conspicu-ously missing from the literature. After all, this study attempts to fill thisgap.

3.4.2 Demanding Reflexivity in Strategy Research

Critical approaches that address the general monotonous tone in the fieldand 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 ‘straight-jacket’, and Daft and Buenger (1990: 83) speak about ‘normal science’. The lat-ter notion may be misleading, at least in the context of this study, as normal sci-ence, when following Kuhn (1996), occurs with a regard to a paradigm.However, the metatheoretical assumptions that are attached to a paradigm needto be distinguished from a paradigm itself.


theorists is published in established journals. Many of the writings still cir-culate as unpublished papers or in edited books. It is thus time to take no-tice of some of these voices. Already 25 years ago, Evered (1980: 541-542) pointed out that he is

“left with a real concern that the field may be sliding in the direction of positiv-ism […] Positivism would be even more disastrous for policy/strategy than forother areas of the social sciences […] The ideal research paradigm is presumedalready known and important inquiry options are closed out too early.”

In a provocative article, Hirsch et al. (1988: 91) discuss the risk of ro-mance with economic models for strategy research. After assessing theproblems with a purely economic view, they conclude that “[i]f and whenpolicy takes such a wholly narrow economic view of organizations, thereshould be less need for either ‘strategy’ or ‘management’.” Recently, Far-joun (2002: 588) even speaks about the predominance of a mechanistic ap-proach.

“Almost from its inception, the strategy field has to a great extent relied on amechanistic perspective on strategy. This perspective, unified by an epistemo-logically coherent base, has gradually moved out of alignment with its context.”

In a similar manner, Daft and Buenger (1990: 91) criticize strategyscholars’ loyalty to one dominant set of assumptions which they feel over-simplify the complexity of strategic issues.

“We have characterized the social science assumptions driving strategy re-search as singular and positivist. Our feeling is that most strategists adherestrongly to a belief in systematic, definable strategy procedures and structuresthat can be described measured, analyzed and compared.”

Bowman (1990: 26) emphasizes the resulting narrow methodological fo-cus. In his view there is no systematic questioning or introspection of theunderlying methodological assumptions.

“Is the bad money of statistical methodology driving out the good money ofstrategic substance? I am not saying we shouldn’t do this kind of work; I sim-ply hope that we don’t continue down this road to the point where 90 percent ofthe empirical work in strategy can be described this way.”

Similarly, Hambrick (1990: 243) argues that there is a clear tendency to-ward multivariate ‘number crunching’ and Bettis (1991: 316) states thatmuch current research is based on concepts developed decades ago on thebasis of analyses of organizations as they and their environments wereconstituted then. Shrivastava (1987: 88) advises us that missing reflexivityin the scientific discourse of strategy also has consequences for practitio-ners because “many strategic management practices and norms are


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 themost exciting practical insights because it challenges the logic of appliedprojects.

What all these voices tell us is that reflexivity is a precondition for mov-ing beyond any established ideology. Reflexivity is needed because itmakes scholars aware of the metatheoretical assumptions that underlietheir work; it produces self-awareness and fosters the engagement with asyet marginalized perspectives. Yet, reflexivity takes different forms(Lynch 2000). Reflexivity can mean to be self-critical of one’s own beliefsand assumptions and thus promotes a kind of self-consciousness and self-knowledge. Certainly, self-awareness is desirable but suffers from the factthat one is often ‘trapped’ in the scientific discourse itself. This makes itimpossible to uncover many of the blind spots of theorizing. What isneeded on all four levels of critical strategy research is a kind of meta-reflexivity, one that requires a form of ironic detachment, a stepping backfrom the object of analysis to have the ability to see and critically revaluewhat others take for granted (Lynch 2000: 30). Meta-reflexivity impliesthat we constantly need to allow the unseen to disrupt the order, to not be-come trapped in habit, repetitiveness, or eventually dogmatism (Weick andWestley 2003). We now discuss the second level of critical strategy re-search (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-basedlogic that accompanies the organization/environment distinction. Knightsand Mueller (2004: 56), for instance, criticize dualisms in strategy and re-mark that the economics-based strategy literature tends to treat industrystructure as objective. Foss (1996: 11) follows a similar line of thoughtwhen stating that in strategy research “there is much about the ‘environ-ment’, but little about the ‘company’.” Lowendahl and Revang (1998: 761)argue that the concept of a boundary surrounding an organization as a unitadapting to an environment ‘out there’ becomes close to meaningless whenconsidering the increasing complexity, both within and outside the organi-zation.


Bourgeois (1984: 586) provides a general critique of determinism instrategic management and argues that when upholding the deterministicperspective, strategizing becomes a reactive waiting game to exploit con-tingencies as they arise in the environment. Shrivastava (1986: 371) arguesagainst the dominance of fixed structures that organizations simply have tofit into because such a structural view of industries overlooks that actorsproactively shape the structure of competition. Smircich and Stubbart(1985) put this argument in more precise terms when arguing in favor ofan enactment perspective of markets. In their view, managers should en-courage multiple interpretations of the environment and not view them ascommunication 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 continuousco-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 isone environment that guides and is guided by organizational conduct. Far-joun’s argument remains stuck in the dominant logic as it denies the omni-present paradox that adaptation to the environment is only possible as self-adaptation. To fully move beyond the ‘necessity of adaptation’, it is notenough to conceptualize the environment as a variable that needs to bemanaged by firms. To give reference to the paradox, we need a conceptu-alization of the organization/environment-relation that considers the envi-ronment as something constructed by the organization because if the envi-ronment is constructed and an organization wishes to adapt to thisenvironment for the sake of strategy formation, it actually needs to adapt toitself.

Strategy Process – Corporate Planning as a Ritual Rain Dance

Out of the three dominant logics, the ‘primacy of thinking’ has gained themost attention of critical strategy scholars. We owe much of this attentionto the work of Mintzberg (1990a, 1994b) and his colleagues. In his well-known book The Rise and Fall of Strategic Planning, Mintzberg (1994a)describes three fallacies of planning: predetermination, detachment, andformalization. While discussing the fallacy of detachment of planners fromstrategy making, he argues that thinking and acting need to be connected.Action and thought must interact if plans are to come alive (Mintzberg1994a: 291). Plans, in Mintzberg’s view, often paralyze people becausethey are too precisely formulated and obsolete once actions are finallytaken. Although we appreciate such a perspective, Mintzberg does not dis-


cuss the deeply held ontological assumptions that led to the disconnectionof thinking and acting in the first place. The gradual production of decisionpremises in the course of action remains unexplored (let alone the para-doxical foundation of decision-making itself). His basic point is fair: post-poning actions while becoming obsessed with planning is dangerous. Yet,this argumentation does not reach beyond the dominant logic; to get to thecore of the dominant logic requires admitting that strategic decisions areparadoxical, yet not fully arbitrary but come into existence under consid-eration of existing path dependencies.

Mintzberg also gained popularity for his definition of strategy as “a pat-tern in a stream of actions.” (Mintzberg and Waters 1985: 257) Conceivingstrategy that way makes it an ex post phenomena, something we can retro-spectively appreciate but are unable to control. So, why should we studystrategy in that way? According to Mintzberg and Waters (1990: 1-2), ac-tions leave traces that can be easier studied than decisions.

“For years, we studied the process of strategy formation based on the definitionof (realized) strategy as ‘a pattern in a stream of decisions’. Eventually it oc-curred to us that we were in fact not studying streams of decisions at all, but ofactions, 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 fromthe thinking/action-opposition, which is favored by classical strategicplanning 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 ontologicalassumptions 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 withoutprior commitment. Action, then, becomes an ill-defined concept becausedecisions seem to play no role anymore; one simply looks back from theperspective of the identified actions to see whether it is possible to identifysome decisions that fit to the actions. This is why Mintzberg and Waters(1990: 5) claim that the commitment that precedes action can be vague andconfusing or is even absent at all. After all, Mintzberg and Waters move tothe other extreme by privileging action over thinking and consequentlyhave a hard time in devoting attention to the intended part of strategy mak-ing (Whittington 2004: 67). The latter may not play the role in strategizing


that is ascribed to it by classical process thinkers, yet it surely plays somerole.

A variety of other scholars have criticized the ‘primacy of thinking’.57

The message of these contributions is that one cannot predict the futureand 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 theweather that follows, but it makes those who engage in it feel that they are incontrol. Most discussions of the role of models in planning are directed at im-proving the dancing, not the weather.”

Whereas these statements tell us that perfect planning is illusive, they donot inquire into the consequences of such a perspective. From the perspec-tive of deconstruction, the consequence would be the recognition that stra-tegic 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 de-velop this idea to tell us how and why this paradox comes into existenceand, at least equally important, how strategists make strategic decisionsdespite paradox. This, however, is necessary in order not to conclude theimpossibility of strategizing. What is needed to advance the discussion isto take the paradox as a point of departure for discussing the rich relation-ship between thinking and action to finally explore how decisional prefer-ences are constituted in the course of action (Ortmann and Salzman 2002:215).

Having discussed existing critiques of the ‘primacy of thinking’, weconclude that, even though a lot of scholars have emphasized the unpre-dictable nature of the future and the resulting impossibility of planning,there is virtually no discussion of the paradoxical foundation of strategicdecisions and the resulting need to conceive of strategies as somethingconstituted through the interplay of thinking and action. Although recentresearch has introduced a variety of strategy process models (e.g., evolu-tionary and political ones, Chakravarthy et al. 2003) and these perspectivesadd valuable insights to our understanding of strategy making, the paradoxon which strategic decisions rest has remained unexplored thus far. Withinthis study, we show that we need to open strategy making for a considera-tion of paradox. Yet, we have to do this without concluding the impossibil-ity of strategy formation over time and/or reducing strategizing to mereluck as Markides (1999: 6) does.

57 See, for instance, Calori (1998: 286), Farjoun (2002: 578), Lowendahl and Re-vang (1998: 762), McKiernan (1997: 795), and Vaara and Kakkuri (1999: 13).


Strategy Content – The Impossibility of (Meaningful) Generalization

It comes with no big surprise that critical strategy scholars have noted thatmost strategy content research is overly concerned with finding generaliz-able results.58 Shrivastava (1986: 369) even argues that there is real pres-sure to find generalizable results, which has led to an uncritical acceptanceof abstracted empiricism. Searching for generality deemphasizes the con-text in which results occur and in which they are supposed to be meaning-fully applied. General findings need to be applied to a context in the sensethat they are turned towards the unavoidable restrictions and special cir-cumstances that every context holds. It is this neglect of the process of ap-plication that we criticize, not the construction of strategic rules and em-phasis on strategic resources. Scholars act as if they were in control ofthings, as if rules and resources could define their conditions of applica-tion, while in fact they deliver emptiness (a necessary and inescapableemptiness).

Concerning strategic rules, Ortmann and Salzman (2002: 211) are wellaware of the necessity of applying generic strategies to a context. They ar-gue that what is needed is an in-depth examination of the relationship be-tween general strategic rules and their process of application. This argu-mentation is also true for strategic resources which are usuallyconceptualized as a priori given, whereas they are only potentials; poten-tials that need to be filled with context-specific meaning through the proc-ess of application (Duschek 2001: 60; Priem and Butler 2001: 33; Steen2003: 7). The paradox that is attached to strategic rules and resourcescomes to the fore when considering these contributions, since their generalcharacter is always already undermined by the need for local modifica-tions. Yet, there are still questions to debate. First, while these scholars tellus 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, becausestrategists unfold the paradoxes in some way and consequently ‘fill’ the re-lated emptiness of rules and resources with contextualized meaning, re-search needs to find out how this filling occurs. Our remarks in section 6.3will consider these issues.

58 See Borgeouis (1984: 588), Franklin (1998a: 318), Göbel (1997: 12), Knights(1997: 5-7), Parnell (2002: 2), Seidl (2003a: 6), Shrivastava (1986: 369), Statlerand Roos (2002: 10-11), Thomas (1998: 11), and Vaara and Kakkuri-Knuuttila(1999: 5-7).


3.4.4 Paradox and Dominant Logics

Having introduced the first and second level of critical research, we moveto the third level of analysis that, together with the fourth level, reflects ourcontribution to critical strategy research. Regardless of whether we agreewith Popper (1970: 53), who argues that science is essentially critical, weneed to ask why the dominant logics, that various critical strategy scholarsacknowledge (section 3.4.3), should be disclaimed? Addressing this ques-tion, some scholars (Gharajedaghi and Ackoff 1984; Lowendahl and Re-vang 1998; Sarason and Huff 2005) have claimed that the altered societalconditions of our epoch make the three identified logics less appropriatefor further research. While we appreciate these perspectives and believethat certain altered societal conditions make the identified dominant logicsless appropriate for thinking about strategic management, our answer tothe question why the dominant logics should be disclaimed rests on a dif-ferent line of reasoning. As indicated in section 1.1, we suggest that thedominant logics of strategy research should be rejected because they ob-scure their own impossibility (i.e. paradoxical foundation). To discusswhat critical strategy research at the third level of analysis implies, we out-line the relation between dominant logics and paradox in more depth. Thiswill help us to better understand the argumentation in chapter six and toassess the contribution that this study makes to critical strategy research ingeneral.

The third level of critical strategy research suggests that dominant logicscome 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 dominantlogics are able to obscure their own paradoxical foundation. How can thisbe? Recall that a paradox occurs if two mutually exclusive elements occurat 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 op-positions apart, research establishes one end of the opposition as an ‘ori-gin’. For instance, within the ‘necessity of adaptation’, the environment isdefined as ‘the origin’; the environment is the reason (viz. origin) for or-ganizations’ strategies. The appraisal of an ‘origin’ for strategic reasoningneeds 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 theenvironment really is ‘the origin’ for strategic conduct.

As will be shown in the following chapter, deconstruction proposes thatwhenever we try to uphold oppositions, we obscure paradox. In otherwords, there is no final, self-defining ‘origin’, but what the dominant


logics establish as an ‘origin’ already depends on its apparent opposite (i.e.the other element in the opposition). We cannot pull both apart. Decon-struction demonstrates that, strictly speaking, both elements of the opposi-tion come into existence at the same time. If this is the case, there is para-dox. 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 cur-rent set of beliefs – they recognize that the ‘origins’ they try to establishbring about paradox. In the light of paradox, the dominant status of thedominant logics disappears as the ‘necessity of adaptation’, the ‘primacyof thinking’, and the ‘fullness of strategic rules and resources’ are shownto be impossible and thus lose their ground for argumentation. The domi-nant logics are dominant only as long as they obscure paradox. Once para-dox is accepted, the relentless search for ‘origins’ within strategic reason-ing comes to a halt and scholars see the unity of the distinction thatunderlies the oppositions that make up the dominant logics.59

It is vital to recognize that neither this study nor deconstruction in gen-eral criticizes the existence of paradox; paradoxes inevitably occur oncewe try to justify ‘final truths’ or ‘definite origins’. Paradoxes tell us that tothink in categories of ‘truth’ and ‘origins’ is impossible (i.e. paradoxical).We criticize that, because of the fundamental assumptions of the dominantlogics, strategy research has not recognized paradoxes as necessary limitsto reasoning. Of course, our argumentation is based on one specific per-spective (i.e. deconstruction) and cannot claim to be itself generally valid(see section 1.2). After all, this would contradict our own assumptions. Al-though 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 apossibility of establishing an ‘origin’ for strategic reasoning results in oneof the alternatives of Albert’s (1985) Münchhausen trilemma (see section1.1). If metaphysical solutions are unacceptable, then paradox has to beaccepted (Czarniawska 2005: 128; Hofstadter 1987).

59 Czarniawska (2005: 130) describes this in a less formalized way: “The image ofhuman beings as rational decision makers controlling the environment requires alinear vision of the world, in which conflict and ambiguity are temporary aberra-tions to be removed by the next rational action. Much can be said about thepractical advantages of such a vision of the world; as usual, however, focusingon certain aspects forces us to gloss over others. In this case, the inherent para-doxicality of human and social life is the victim.”


3.4.5 Strategy Because of and Despite Paradox

On the fourth level of critical strategy research, the paradoxes that are ex-posed by research on the third level are used as ‘inputs’ for a reconceptu-alization of certain assumptions in strategic management. As indicatedabove, every paradox brings about impossibility. To show that this impos-sibility can be creatively employed by future research and is by no means‘the end of strategic management’, research on the fourth level demon-strates that every paradox only indicates the limits of knowledge we cangain about the nature of strategic phenomena (e.g., strategic decisions instrategy process research). As will be demonstrated in chapter five, para-doxes can be unfolded through deparadoxification (see section 5.2). De-paradoxified paradoxes are not about reintroducing conceptual oppositions(that result in dominant logics) but means to explore how both ends of anopposition are recursively related and thus supplement each other. Our ar-gumentation in chapter five explains these issues in more detail.

To conclude, this study discusses the third and fourth level of criticalstrategy research and thus adds new insights to already existing critical ap-proaches. To move to the third and fourth level of analysis, we need a the-ory perspective that guides our discussion. We need a theory perspectivethat exposes the paradoxical foundation of arguments that are based on ap-parently non-rejectable truth claims. In the following chapter, we introducedeconstruction 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 thedominant logics.

4 Deconstruction and the (N)either/(N)or

The work of Derrida is often associated with and discussed in the realm ofpostmodern philosophy. To understand the broader context of Derrida’sphilosophical thinking, we need to examine the discourse around postmod-ern philosophy (section 4.1.1). Since most applications of postmodern phi-losophy refer to organization theory, yet not to strategic management, wereview the existing literature (section 4.1.2), since these writings have aninfluence on the implications of a deconstructive analysis of strategy re-search. Based on these remarks we develop an in-depth understanding ofDerrida’s notion of deconstruction and its relevance for the social sciences(section 4.2). Because deconstruction has been applied to questions of or-ganization theory, but not strategic management, we look at and classifythe existing literature (section 4.3), as these writings have an impact on ourown deconstructions in chapter six. Finally, to prepare the ground for anapplication of Derrida’s thinking to strategy research, we define strategicmanagement 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 labelfor academic discourses. We do not wish to elaborate on the usefulness ofthese linguistic endeavors, but focus our analysis on what entered philoso-phical debates under the umbrella of postmodernism and/or poststructural-ism. Although the existence of these ‘post’isms’ in philosophical dis-courses assumes that we can distinguish both terms, we have to agree withAgger (1991: 111) that a clear distinction is not possible as differentauthors cut the theoretical pie in any number of ways. To aggravate thesituation, philosophers, who are often associated with either one or evenboth terms – the popular among them being Foucault, Lyotard, Deleuze,and Derrida – did not identify themselves as poststructuralists and/orpostmodernists (Münker and Roesler 2000: IX). Therefore, we will not

128 Deconstruction and the ‘(N)either/(N)or’

elaborate further on the postmodern/poststructural distinction, but focus onthe basic tenets of what is ‘commonly’ referred to as postmodern philoso-phical thinking. Inevitably, this discussion needs to include remarks onmodern thinking as only such a distinction can help us to better understandthe debate.

The fact that the abovementioned authors did not identify themselveswith ‘post’isms’ points to an important insight: postmodernism is not aproperly formulated theory, and neither are the philosophical approachesof its advocates (Weiskopf 2003b: 11). Philosophical postmodernism is adiverse field of study with no clearly definable methods and models. Thisdoes not mean that the label postmodernism is meaningless, as Alvesson(1995) claims.60 Rather, it highlights the necessity of discussing the con-tours of the field to make sense of proposed arguments and to cope withthe theoretical heterogeneity by ‘inventing’ postmodernism within our ownwriting. At its best, (post)modernism represents a fairly underspecifiedparadigm within the field of philosophy.

Notwithstanding our discomfort with the underspecified nature of themodernism/postmodernism debate, we need to look for ways to differenti-ate both discourses. Oversimplifying battle cries like “modernism is total-izing and controlling” (Cooper and Burrell 1988: 94) and postmodernismcan be associated with the “death of reason” (Power 1990: 110) give noreference to specific arguments and risk ending up as empty clichés. In-stead, authors like Koch (2003: 75), Kirsch (1997: 548), and Giddens(1987: 196) propose to approach the discussion on the basis of ‘central is-sues’ to find some common ground.61 An overarching concept for such is-sues is provided by what Welsch (1996) calls a radical critique of a unifiedconception of reason. According to Welsch, postmodern thinking trans-forms reason from an Enlightenment-based unified conception of rational-ity as a source of knowledge to a pluralistic one. Whereas modern philoso-phy assumes that a natural order exists which can be discovered by reasonin order to represent and control social conditions, postmodernism destroysthis faith in rationality by no longer viewing reason as a distinctive human

60 Alvesson (1995) claims: “The term pomo [postmodernism] has perhaps receivedtoo many attributions already able to function as a fertile point of departure oreven as a reference in discussions of the various themes currently carried outunder the umbrella of pomo.” (Alvesson 1995: 1064, annotation added) “Themessage in this paper can be summarized under this slogan: The word pomo hasno meaning. Use it as seldom as possible!” (Alvesson 1995: 1068)

61 Koch (2003: 66-84) also introduces other criteria to distinguish modern frompostmodern philosophy, for instance by giving reference to key authors, phi-losophical traditions (e.g., phenomenology), and the form of the debate (Is thedebate reflected from a modern and/or postmodern angle?).

The Meaning(lessness) of Postmodernism 129

faculty anymore. A critique of reason and affirmation of plurality sets theframework for thinking about the contributions of a diverse set of post-modern philosophical concepts, most of them stemming from French con-temporary philosophy. Within this framework, we identify four central is-sues that relate to the works of Lyotard, Foucault, and Derrida and act asthe ‘battle field’ of the modernism-postmodernism debate within philoso-phy: a consideration of the discursive nature of society, the assessment ofthe relation between knowledge and power, a discussion of the role of thesubject, and a debate about epistemological and ontological questions (seeFigure 15).62 These central issues are discussed now.

Fig. 15. Central Issues of Postmodern Philosophy

62 This classificatory framework is contingent and is based on the authors that areused as a ‘common ground’ to identify the central issues. For instance, we couldhave also included the debate concerning the possibility of ethics in whichHabermas (1996a, 2001), who we refer to as an advocate of ‘reflexive modern-ism’, tries to establish a moral basis for society at large by seeing the lifeworldas an integrating concept for his basic theoretical categories ‘action’ and ‘dis-course’. He assumes that an understanding across different discourses can bereached via communicative rationality. The unity of reason can be identified inthe presuppositions faced by actions that are oriented towards reaching under-standing about moral conflicts. Lyotard (1988) counters this argument by claim-ing that any moral position is the product of an ethical discourse which is, how-ever, just one among many possible discursive species. A postmodernconception of ethics faces competing merits of different ethical conceptions thatcould each be consistent with their own discourse rules, but incompatible withone another.


The radical critique of reason, which makes totalizing theoretical conceptsimpossible, is reflected by each of the four issues. However, the mostcommon notion of postmodernism is associated with Lyotard’s (1999)claim regarding the ‘collapse of grand narratives’ that addresses the dis-cursive nature of society.63 The central question for him is how knowledgecan be legitimized. In his argumentation he follows a language-games ap-proach in which knowledge is based on a diverse set of discourses. He ar-gues that modern knowledge acquires its legitimacy through reference togrand narratives (e.g., the idea of Enlightenment, Lyotard 1999: 42-43).All discourses, then, need to submit to the legitimization criteria providedby the grand narrative – a universal discourse becomes possible. Postmod-ern knowledge rejects the legitimacy of these grand narratives and favorsan incommensurable coexistence of different discourses.64 No one dis-course is privileged because each one possesses its own legitimization cri-teria for knowledge. A universal legitimization across different discoursesis revealed to be impossible. The validity of knowledge becomes localizedwithin each discourse and the plurality and fragmented nature of dis-courses need to be accepted. Consensus is just a temporal state within a lo-cal discourse, but never its goal (Lyotard 1999: 190). Similar to Lyotard,Foucault (1982) argues that truth claims are relative to the discursiveframework within which they originate. Discourses follow historical-contingent rules that exist independent of the conscious speaker. The pro-duction of truth is not based on an accurate representation of reality butcan only be understood in its historical context.

Within his later analysis of discursive practices, Foucault (1980a) dis-cusses the relation between power and knowledge. Whereas modern think-ers supposed that power and knowledge can be treated as separate analyti-cal entities (Weber 1972: 28), Foucault argues that knowledge is integralto the operation of power. He perceives knowledge to be constituted in andthrough discourses and understands power as a positive social force not re-siding in commodities but discursive relations among social actors. Poweris not bound to individuals or institutions but relational by nature: a power-

63 The reason for the widespread association of Lyotard with postmodernism isdue to the name of his book La Condition postmoderne (The postmodern condi-tion, [Lyotard 1999]) and his attempt to clarify the meaning of the phrase (Lyo-tard 1997a). He admits that the term, as he used it, was misunderstood by manycritics as well as advocates (Lyotard 1997b; Reese-Schäfer 1995: 121-122).

64 Lyotard (1999) distinguishes, for instance, the denotative discourse (in whichthe true/false distinction is relevant) from the prescriptive discourse (workingwith the just/unjust distinction). Incommensurability between these discourses isjustified by supposing that different discourses have different purposes (e.g., tocome up with moral judgments or to persuade other people).


ful subject is created in the course of exercising power. Foucault (1995) es-tablishes a relation between power and knowledge by considering power tobe a creative force that inevitably creates knowledge in actu. For Foucault,power is coupled with the desire to know because power produces knowl-edge in the sense that it gives rise to discourses that run through society.Conversely, knowledge can be seen as the operation of power becauseknowledge defines ‘truth’ which provides the basis for social action andintervention – the operation of power. Knowledge, which is perceived asfalse, does not affect actions and therefore represents no power. For Fou-cault, knowledge formation and the exercise of power are not neutral as theone always contains the other. Or put differently: knowledge and power donot exist independently.65

Giddens (1987: 204) identifies the discussion of the role of the subjectas another important topic within the debate. Modern thinkers like Des-cartes (1641/1992) presume a unified subject that is fully conscious of it-self, perceives the world in an objective way, and has the capability to actrationally. This idea of the subject believes in a static, centered, and in-control notion of being in which individuals remain self-identical throughtime and space. Postmodern thinkers de-center the subject to show theways in which it cannot have full autonomy of cultural or social (or anykind of) discourse. The subject is not something limited and autonomousbut a product of history. This is why Giddens (1987: 213) claims that hu-man beings do not make history, but history makes human beings. Con-trary to the notion of a subject whose consciousness precedes and governsall social operations, ‘truth’ is not something that can be discovered by asubject as an accurate representation of reality, but that truth is producedwithin a system of discourses that exist independently of the conscious in-dividual (Foucault 1982). The Cartesian cogito remains ‘empty’ and isfilled by the discourses that emerge within history. Foucault thereforestresses that consciousness is not a given but emerges in a diverse set ofdiscourses, and that consciousness is not indivisible but the product of adiscontinuous social process. This is why Foucault (1980b: 117) suggeststhat

65 Foucault (1980a: 51-52) states: “Now I have been trying to make visible theconstant articulation I think there is of power on knowledge and of knowledgeon power. […] The exercise of power itself creates and causes to emerge newobjects of knowledge and accumulates new bodies of information. […] The ex-ercise of power perpetually creates knowledge and, conversely, knowledge con-stantly induces effects of power. Knowledge and power are integrated with oneanother, and there is no point in dreaming of a time when knowledge will ceaseto depend on power.”


“[o]ne has to dispense with the constituent subject, and to get rid of the subjectitself, that’s to say, to arrive at an analysis which can account for the constitu-tion of the subject within a historical framework.”

This does not mean that postmodernists deny the existence of a physicalsubject. It is only the self-constituting character that is questioned by thenotion of de-centering. Giddens (1987: 206) sums up the position of a de-centered subject by recognizing that Descartes’s claim ‘I think, therefore Iam’ is disqualified in a number of ways.

“The ‘I’ is not immediately available to itself, deriving its identity as it doesfrom its involvement in a system of signification. The ‘I’ is not the expressionof some core of continuous selfhood that is its basis. The ‘being’ suggested inthe ‘I am’ is not given through the capability of the subject to use the concept‘I’.”

Epistemological and ontological questions, which represent the last cen-tral issue, are often regarded as ‘the’ central topic within the modernism-postmodernism debate. To contrast both mentalities, we can refer to mod-ernism as symbolizing epistemological and ontological realism by favoringan ideology of representation in cognitive styles and language-theoreticallogic. It was Descartes (1637/1960, 1641/1992) who introduced this styleof thinking by tearing the world into the res cogitans (the mental nature)and the res extensa (the corporeal nature). This Cartesian conception seesthe subject as sovereign and autonomous able to describe and grasp reality‘out there’ on the basis of its analytical intellect. Only those things that canclearly be perceived in the corporeal nature are considered to be true. Thisultimate rationalistic view can also be applied to language-theoretical ar-guments, which act as the basis for the postmodern critique. A modernconception of language assumes that a direct linguistic representation ofreality is possible because there is a one-to-one correspondence betweenforms of representation (e.g., words or symbols) and an objective, externalworld. It is assumed that language fully describes reality since the structureof language directly relates to the meaning of the world. These strong on-tological commitments carry with them epistemological consequences be-cause any theory of knowledge needs to entail some theory of the nature ofreality. Epistemological modernism, of which positivism is a part, arguesfor the existence of realist knowledge based on empirical observations.Modern science portrays the world as true and fully observable, makingtheories attempts to mirror reality (Chia 1996: 47-51). Within this objecti-vist view of science, progress depends on the cumulative discovery ofscientific facts.

Postmodern thinkers like Derrida (1999a) criticize these assumptionsfrom a language-theoretical perspective by claiming that language cannot


represent an objective reality. Words (signs) do not refer to an external ref-erent but only to other – and always different – words. For instance, toknow what ‘cost leadership strategy’ means, we need to know what costleadership is not (i.e. its difference to ‘differentiation strategy’, ‘focusstrategy’, etc.), but ‘differentiation strategy’ and ‘focus strategy’ also lackmeaning and are only defined with regard to yet other signs. There areonly differences and differences of differences and so on. Differences al-ways change; we can never get to the bottom of meaning (see also section4.2.3). Depending on the context in which a sign is used, there can be aninfinite number of meanings. Language does not provide a stable structureon which meaning can rest but defers meaning from one linguistic sign toanother. Consequently, there is no essence on which to base the meaningof a certain sign because the latter obtains its meaning only from other –and always different – signs. Meaning in a postmodern sense rests on aninfinite play of differences among signs; an objective signification of real-ity by language becomes impossible.66

This perspective results in what Chia (1995) calls an ontology of ‘be-coming’ in which the ephemeral nature of reality is accentuated. This anti-representationalist view of language rejecting the notion that language canfully describe an objective reality also has epistemological consequences.Postmodern knowledge is conceptualized as contingent in nature and notbased upon a universal legitimization. Researchers can no longer claimauthority for the meaning and truth of their investigations because researchproduces nothing more than texts for which there is no solid ground. Ac-cepting this view of knowledge indicates that we cannot think of scientificfacts as hard and ‘ready made’ final solutions to our problems. We ratherneed to agree with Latour (2002) that scientific statements are a product ofa power-laden negotiation process among actors (see section 3.3.1). Truthclaims are not the result of a logical process, which determines factual re-lationships through empirical research, but a temporal and social phe-nomenon. What we call ‘true’ may hold in a specific interpretative com-

66 This notion of language has consequences for the de-centering of the subject. Ifconsciousness is a result of signification, no subject can derive its identity en-tirely 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 thedifferences in language. Derrida (2002: 70) argues in this context “that the sub-ject, and first of all the conscious and speaking subject, depends upon the sys-tem of differences […].” Since these differences are in a state of flux, a subjectwith a stable identity and unified consciousness becomes out of reach. Postmod-ernism assumes that our world is made up of language and that individuals canonly ‘know the world’ through the differences that our language creates(Hassard 1999: 176).


munity of knowledge producers and consumers, but can just as well be re-jected by other communities as non-valid (Gergen 2002: 73-75). A post-modern understanding of knowledge stresses the localized and unstablecharacter of science.

To conclude our discussion of postmodern philosophy, Welsch’s (1996)treatment of postmodernism as a radicalized critique of reason is reflectedby all of the discussed central issues. Central to our critique of modernismis not only the assertion that reason itself is pluralized, but also that thispluralization is embodied in the concept of difference. We discussed thisthinking in differences with regard to four central issues: (1) that dis-courses gain their identity only in difference to other discourses, (2) thatknowledge is constituted by different discourses and relates to powerwhich is relational by itself, (3) that the subject is a product of differencesin language, and (4) that the meaning of language cannot be grasped be-cause the latter is made up of a play of differences between signs. If weunderstand postmodernism in this way, as a style of thinking which isbased on difference, we realize the intellectual proximity to other theories,especially Luhmann’s (1994) outline of social systems theory which basesthe identity of a social system on the distinction between system and envi-ronment. Since this overview must leave the broad philosophical basesfrom which different authors draw support unexplored, we (a) need to ac-knowledge that the discussion around postmodern philosophy in generalcannot be adequately reproduced here and (b) need to recognize that thediscussed authors have contributed to more than one of the identified cen-tral issues.

These remarks on the modernism-postmodernism debate leave us withthe question of how we are supposed to assess the relationship betweenboth discourses. Do postmodern claims dismiss or extend modern ideas?Does modernism maybe even come to its end with no subsequent theoreti-cal offerings at all? Whereas Gmür (1991) finds advocates for all threeconceptual relations, we characterize the relation between both styles ofthinking from a postmodern perspective by perceiving them as mutual sup-plements. Lyotard (1997b: 45) has described this supplementary logic asfollows:

“A work can only be modern if it is first postmodern. Thus understood, post-modernism is not modernism at its end, but in a nascent state, and this state isrecurrent.” (translation A.R.)

Modernism is nothing but a consequence of the suppression of the post-modern mentality (et vice versa). That is why postmodernism acts as thevery condition for the articulation of modernism (Chia 1995: 580). Not-withstanding this relationship, we have to admit that a certain degree of


meaninglessness remains attached to both terms. Therefore, the only wayto make sense of the discussion is to develop specific versions of bothterms without excessively relying on platitudes. We have developed suchan understanding for the specific needs of this treatise to appreciate andunderstand Derrida’s argumentation later on. Before we enter the discus-sion on deconstruction, we need to look at the treatment of postmodernideas within organization theory. This will help us to better understand andclassify the intellectual context of subsequent arguments with regard tostrategy research.

4.1.2 Postmodernism in Organization Theory

While section 4.1.1 described postmodern philosophy in general, we nowdiscuss how scholars within the field of organization theory have usedthese ideas. We focus our analysis on organization theory, since (a) post-modern thoughts have mostly been applied to organization studies but notto strategic management and (b) several of our implications of a decon-structive analysis in chapter six refer to ‘postmodern organization theory’.Postmodernism entered organization studies in the late 80s and early 90swith a series of articles by Cooper (1989), Burrell (1994, 1988), and Coo-per and Burrell (1988). Parker (1992) shaped the contours of the debate bytreating postmodern ideas in an epochal sense (How do we recognize apostmodern organization?) and an epistemological sense (How can we usepostmodern philosophy to see organizations in a different way?).

The epochal orientation examines the changing structural characteristicsof organizations. Clegg (1990), for instance, argues that postmodern orga-nizations move beyond the bureaucratic, hierarchical, and rationalizedform of organizing that Weber (1972) was concerned with. Clegg arguesthat due to changes on the societal level like globalization and the avail-ability of information technology, organizations move towards a new his-torical epoch characterized by flexibility, de-differentiated labor, and net-work-based forms of organizing. Even though these remarks onorganizational design are labeled postmodern, they are still based on a re-alist epistemology because authors such as Clegg (1990) still search forfeatures of the external world that confirm their hypothesis of a new his-torical epoch of organizations.

Because our understanding of postmodernism is based on philosophicalquestions, we focus on the epistemological discourse. Similar to the debatearound postmodern philosophy, the field of epistemological postmodernorganization theory is heterogeneous and hard to classify. Several articlesand books make postmodern philosophy a subject of organizational analy-


sis.67 When looking at these books and articles, one can identify three ‘cen-tral issues’ that roughly, yet not conclusively, represent the work of schol-ars: organization as processes of organizing, organizational members asde-centered subjects, and contextual dependency of organizational actions(see Figure 16). These issues do not represent genuine postmodern con-cerns but are well-established subjects within organizational analysis. Kie-ser (1998), for instance, while developing a constructivist perspective onorganizations, highlights the contextual dependence of interpretations.Similarly, Weick (1979) has shifted our attention from the clear-cutphenomenon ‘organization’ to the many-sided processes of organizing thatgive rise to the former. Postmodern organizational studies enrich these dis-cussions by interpreting their concerns from a different perspective to shedlight 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 organiz-ing), if meaning is not a steady-state phenomenon because language is am-biguous by nature, there is no reason to assume that organizations consistof a stable set of structures (e.g., rules) that can be adequately described. Astructure-determined view is well reflected by the assumption of modernorganizational theorists that social entities and their properties can be iso-lated for the sake of systematic analysis. By contrast, postmodernists un-derstand organizations as an emergent, linguistically constructed phe-nomenon consisting of an evolving network of actors. There is not theorganization, only processes of organizing. Chia (1995: 579) portrays or-ganizing as depending on an ontology of becoming in which “reality isdeemed to be continuously in flux and transformation and hence unrepre-sentable in any static sense.” Postmodern organizational analysis focuseson the underlying (often invisible) processes that apparently stabilize orga-nizations. It was Weick (1979: 3) who first examined such stabilizingprocesses by defining organizing as “a consensually validated grammar forreducing equivocality by means of sensible interlocked behaviors.” Withinhis definition Weick draws our attention to equivocality that pervades allorganizing and accordingly represents the inevitable status of disorganiza-

67 See the articles by Alvesson and Deetz (1997), Calás and Smircich (1999), Chia(1995), Gergen and Thatchenkery (1996), Hassard (2002, 1999, 1994), Kilduffand Mehra (1997), Knights (2002), Kreiner (1992), Parker (1992), Weik (1996),Weiss (2000), and Welge and Holtbrügge (1999). There are also several bookswhich discuss postmodern philosophy within organization studies, for instanceChia (1996), Hassard and Parker (1993), Holtbrügge (2001), McKinlay andStarkey (1998), Schreyögg (1999), and Weiskopf (2003a). A summary and criti-cal discussion is given by Koch (2003). Studies with a focus on deconstructionare excluded as these are discussed in section 4.3.


tion. Disorganization is a status of ‘no meaning’ and ‘no structure’ moti-vating organizing processes to construct manifestations which we then la-bel organizations.

Fig. 16. Central Issues of Postmodern Organizational Epistemology

The second central issue of postmodern organization theory is the ideaof seeing organizational members as de-centered subjects. Whereas mod-ern thinking conceptualizes managers and employees as autonomous, self-evident entities with a secure unitary identity, postmodern studies see sub-jectivity as a heterogeneous effect of discursive settings. Organizationalmembers become a producer and an effect of a power-laden network ofdiscourses. The focus of analysis shifts to examining the process by whichindividuals are rendered knowable. Chia (1996: 154) argues that this viewmoves 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 modelof 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 organizationalauthority is depersonalized and relational by conceptualizing authority as a


matter of social interdependence (Clegg 1994). Power is inherent in orga-nizational discourses and structures different forms of knowledge that inturn delimit ‘what can be said’ and ‘what people are’ (Linstead 1993: 63).Knowledge becomes a powerful device because it aids in defining sub-jects.

This Foucauldean view of a production of the subject by correlativeelements of power and knowledge has been applied by Townley (1993,1998) to show the functional orientation of traditional human resourcemanagement 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 uncov-ered, and who is to be motivated through the exercise of correct procedures ofrecruitment, selection, appraisal, training, development, and compensation.”(Townley 1993: 522) “Rather than thinking in functional terms of [these prac-tices], in this [Foucauldean] perspective an emphasis is placed on how HRMemploys disciplinary practices to create knowledge and power. These practicesfix individuals in conceptual and geographical space, and they order or articu-late the labor process.” (Townley 1993: 541, annotation added)

Obviously, Townley is not concerned with examining the predefined prac-tices of autonomous actors (e.g., HRM managers), but the heterogeneousand power-laden network of social relations that gives rise to the body ofknowledge labeled ‘HRM’. This body of knowledge defines individualsand thus makes them analyzable and describable.

The last central issue of our conception of postmodern organizationalanalysis, the contextual dependency of organizational actions, is rootedonce again in the critique of the philosophy of presence which we dis-cussed with regard to ontological and epistemological questions in the pre-ceding section. While modern organizational studies treat the presence ofobjects as unproblematic and believe in the capacity of language to repre-sent them (e.g., contingency theory takes the situational factors as ‘given’),postmodernists highlight their indeterminacy of meaning. The objects ofanalysis (e.g., resources) gain meaning only with regard to a situation. Inother words, there is a contextual dependency of organizational actions.Because the existence of multiple meanings makes generalizations impos-sible, postmodern organization theory appreciates the contextual, affirmsambiguity, and accepts the paradoxical (Schreyögg and Koch 1999: 18).To conclude, the three ‘central issues’ influence our analysis in chapter sixwhen we inquire into the implications of a deconstructive analysis of strat-egy research.

Deconstruction in a Nutshell? 139

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 ofpostmodern philosophy is Derrida’s notion of deconstruction. We presentthis approach, or at least what we conceive it to be, as straightforward asthe twists and turns of his argumentation permit. Because of these twistsand turns, Derrida is often accused of writing in an incomprehensible, im-penetrable way that refuses a fixed system of theoretical propositions.68 Torespond to these critiques, we need to realize (a) that Derrida’s terminol-ogy deliberately changes in almost every text that he writes because de-construction resists any clear-cut definitions, (b) that it is not Derrida’s in-tention to come up with a self-contained system of thoughts since thiswould imply a structure that is conceptualized in terms of a ‘center’ thatacts as a fixed point of reference (Derrida 1976: 422-442), and (c) that de-construction never exists in the singular; there is not the deconstruction asan identifiable method. Deconstruction, like any other term, remains ‘to-come’.69

68 Rorty (1977: 674) writes about Derrida: “Sometimes he talks as if there weresome common project (Heaven knows what) on which he and Condillac, Hum-boldt, Saussure, Chomsky, Austin et al. were engaged, and as he has argumentsfor the superiority of his own views over theirs. At other times, he seems to dis-dain internal criticism of his competitors, and simply exhibits the way in whicheach of them commits the great sin of the Western intellectual tradition […].” Injudging Derrida’s style we should remember that demanding conventional aca-demic coherence is against the genuine logic of deconstruction which arguesthat knowledge is not already clearly structured for us (Cooper, 1989: 481).

69 “Deconstruction in the singular cannot be simply ‘appropriated’ by anyone oranything. Deconstruction are the movements of what I have called ‘ex-appropriation.’ Anyone who believes they have appropriated something like de-construction in the singular is a priori mistaken, and something else is goingon.” (Derrida 1995a: 141).


We start our analysis with a discussion of what deconstruction aims toachieve. We demonstrate that deconstruction is concerned with a critiqueof a metaphysics of presence (section 4.2.1). To show how deconstructionapproaches this critique, we illustrate its underlying ‘method’ (section4.2.2). Because our own deconstructions frequently refer to Derrida’s as-sertion that there is a constant dissemination of meaning, we discuss hisexemplary deconstruction of the sign that discloses the instability of mean-ing (section 4.2.3). Since an application of deconstruction to strategicmanagement moves us into the territory of the social sciences, we discussthe possibility of applying the overly philosophical ideas of deconstructionin this context (section 4.2.4). Because the goal of this study is to exposeparadoxes, we elaborate how deconstructive thinking uncovers paradoxesand how it deals with these logical contradictions (section 4.2.5). We closeby revisiting some arguments against deconstruction (section 4.2.6) to fi-nally discuss whether Derrida should be called a postmodern thinker (sec-tion 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 phi-losophy as he resists any classificatory schemes for his work. Yet there isneed to start somewhere. Following Welsch (1996: 247), we view Der-rida’s writings primarily as an attempt to criticize the metaphysical em-beddedness of Western thinking. This gives rise to the question: What ismetaphysical thinking aimed at in the first place?

“The main question of metaphysics is, according to Heidegger, that of the ori-gin of entities: why is there something rather than nothing? Faced with thisquestion, Western metaphysics answers with the Leibnizian principle of suffi-cient 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 andbeliefs about the nature of reality – concepts such as being, causation, andtime. The metaphysical question aims to discover the ultimate essence ofsomething; this essence is an origin that comes logically first and is inde-pendent of what comes after.

It is this belief in a last and generally binding origin of things that Der-rida’s philosophical approach criticizes. Of course, to speak of ‘things’ anda general critique of metaphysics does not expose any specific arguments.Rather, we need to ask: (1) How does Derrida approach his critique ofmetaphysics? and (2) What metaphysical phenomena is he criticizing in


particular? The first question is methodological and asks for the way ofthinking that is used by Derrida. We introduce this way of thinking as de-construction (section 4.2.2). The second question aims to discuss argu-ments that result from an application of deconstructive logic. Derrida’smajor concern is a critique of the metaphysics of presence that representsthe desire for immediate access to objective and self-defining meaning.The idea of a metaphysics of presence suggests that everything has to havea determined meaning by privileging that which is and forgetting to pay at-tention to the conditions of that appearance. Every identity (e.g., of an ob-ject or a word) is thought to exude a presence that is always there, a pres-ence that is full of meaning and represents an undeconstructible origin. ForDerrida (1977: 12), this metaphysics of presence refers to

“[…] the historical determination of the meaning of being in general as pres-ence, with all the subdeterminations which depend on this generic form andwhich organise within it their system and their historical sequence (presence ofthe 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], theself-presence of the cogito, consciousness, subjectivity, the co-presence of theother 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 estab-lish 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 formulatedstrategy that is self-defining and from which implementation can be de-rived. Similarly, the ‘fullness of strategic rules and resources’ suggests thatbecause rules and resources are supposed to be generalizable, they are‘full’ of meaning (and therefore self-defining) and determine their own ap-plication.

Derrida’s questioning of metaphysics contains a metaphysical characterin itself. A critique of metaphysics from an out-of-metaphysical perspec-tive would require terms, theories, and a way of thinking that are freedfrom all metaphysical thought. Derrida does not claim that he possess atheoretical framework allowing him to simply leave metaphysics behind.In fact, he argues that it is pointless to totally renounce metaphysics, if onewishes to question metaphysics (Derrida 1976: 425). His thinking operatesfrom within metaphysics, at the margins of metaphysics to expose its in-herent ambiguity by making explicit its principles (Derrida 2003a 28;Derrida 1986a: 37; Lucy 2004: 77). He does not deny that one can start atan origin, but emphasizes the impossibility to find a final justification forthis origin (Derrida 2003a: 281).


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’ somewherewhich means that deconstruction needs something to address. For Derridathis something is ‘the text’. If we speak about deconstruction, we speakabout deconstructing texts. But what does Derrida mean by ‘the text’?Does deconstruction only target written texts and is thus literary theoryrather than an approach applicable to a wider set of questions?

In the standard sense one can distinguish between a text (e.g., a book, anewspaper) that is created and real things (referents) in the world (e.g., ananimal, a chair). Then, we can say that everything the world holds belongseither to the side of representation (text) or the side of presence (the realworld). Derrida’s understanding of text differs from this classical view.For him there are no non-textualized ‘real’ things that exist fully detachedoutside 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 represen-tation of reality as representation assumes that there is something prior totextuality (presence):

“I wanted to recall that the concept of text I propose is limited neither to thegraphic, 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’ im-plies all the structures called ‘real’, ‘economic’, ‘historical’, socio-institutional,in short: all possible referents. Another way of recalling once again that ‘thereis nothing outside the text’.” (Derrida 1995a: 148)70

For Derrida, the referent is just another text. The claim that there is nothingoutside ‘the text’ means that it is impossible to reach a state where a textrefers 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 refer-ence 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, [thetext] is not limited to the paper which you can cover with your graphism. It isprecisely for strategic reasons [...] that I found it necessary to recast the conceptof text by generalizing it almost within any limit that is. That’s why there isnothing ‘beyond the text.’ That’s why South Africa and apartheid are, like youand me, part of this general text. [...] That’s why deconstructive readings andwritings are concerned not only with library books, with discourses, with con-ceptual 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)


“[t]hat [there is nothing outside ‘the text’] does not mean that all referents aresuspended, denied, or enclosed in a book, as people have claimed, or have beennaïve enough to believe and to have accused me of believing. But it does meanthat every referent, all reality has the structure of a differential trace, and thatone cannot refer to this ‘real’ except in an interpretative experience.” (Derrida1995a: 148, annotation added)

So, if we speak about deconstructing a text, we do not exclusively referto written documents but also to categories of politics, ethics, history, and– not to forget – strategic management. Even if we were sitting in a strat-egy meeting rolling our eyes on the comments of others’ suggestions, wewould be using a sign, as our gesture could be treated as text. Text in thisnew sense may be best understood as the world as such – an interpretativeexperience. 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, advo-cated by writers like Wittgenstein and Chomsky, we are aware that ourworld is made up of language and that we can only know the worldthrough language. Or, as Wittgenstein (1959: 149, emphasis in the origi-nal) puts it, although in a metaphysical sense: “The limits of my languagemean the limits of my world.” Even radical constructivists like Maturanaand Bunnell (2001: 37) recognize that the objects our world is made up ofare not simply there but created through language. Derrida follows thisview by arguing that any text, and with it also categories like truth ormeaning, is embedded in the structure of language (Lilla 1999: 192). Hisown approach to language outlined in Of Grammatology is based upon thenotion 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 ofcognition would not be what it is without language, since the objects ofconsciousness and the words that are used to indicate them form an insepa-rable weave (Bennington and Derrida 1994: 107, for a similar point seealso Feyerabend 1988: 159). Everything we can know is text; this text isconstructed of words (signs) in relationship.

Certainly, one could argue that since Derrida thinks of the world as atext that is shaped by language, he reduces the ‘real mundane objects’ inthe world to language. Does Derrida collapse the distinction betweenwords and things by indicating that things are words? Schalkwyk (1997:388) notes that this is not the case, because Derrida only points to the factthat 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 aretextualized. This is not to deny the existence of referents, but to assert that


referents achieve meaning through language only: things are not ‘things’,but just another text. A ‘real’ cat, for instance, is not in itself ‘outside thetext’ as we can attribute values and meanings to it that are open to interpre-tation. Any reference to the cat would still be another reference. Surely, thecat is also ‘real’ in a sense, but its ‘reality’ is, as Lucy (2004: 144) re-marks, “not […] something that could exist outside of claims to know thatit exists.” Following this position, it is impossible to find an extra-textualposition from where to find meaning. Things are part of ‘the text’ just aslanguage is part of it; but that does not mean that both are the same. Text isan interweaving of the woof of language with what we call ‘the world’(Schalkwyk 1997: 388). This imbrication of language and the world is thefoundation for world-disclosure. After all, Derrida’s understanding of textdemands to rethink the effects of reference in general, not to suggest thatthere 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 themetaphysical character of texts? Derrida’s answer to this question is re-flected by the notion of deconstruction. To understand deconstruction, wefirst need to realize that we are not facing a coherent theory with a set ofprinciples, but a diverse way of thinking that is hard to grasp. According toDerrida, deconstruction is not an analysis, a method, an act or an opera-tion.71 As to the question of what deconstruction is, Derrida states, "I haveno simple and formalizable response to this question. All my essays are at-tempts to have it out with this formidable question.” (Derrida 1985: 4)72

Deconstruction, as Weiskopf (2003b: 11) remarks with reference to Der-rida (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.” (Derrida1985: 2) However, “if we were to pretend for a moment that Derrida has amethod […] his method would be deconstruction.” (Wood 1980: 506) See alsothe remarks by Norris (2002: 1) and Derrida (1983: 42) himself.

72 “All sentences of the type ‘deconstruction is X’ or ‘deconstruction is not X’ apriori miss the point, which is to say that they are at least false. As you knowone 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 theoriginal) “[D]econstruction is not a doctrine; it’s not a method, nor is it a set ofrules or tools; it cannot be separated from performatives, from signatures, froma given language. So, if you want to ‘do deconstruction’ – ‘you know, the kindof thing Derrida does’ – then you have to perform something new, in your ownlanguage, in your own singular situation, with your own signature, to invent theimpossible and to break with the application, in the technical, neutral sense ofthe word.” (Derrida 2000a: 22, 24)


we can say anything about deconstruction at all, then it is that deconstruc-tion strongly affirms what is to come by helping us understand how mean-ing, which we tend to view as fixed and self-defining, constantly(re)emerges in new contexts. Many enemies of deconstruction criticize thatsince there is no formalized definition of what deconstruction is, Derridaoffers an obscure concept and eventually is an obscurantist thinker. Der-rida’s response to these accusations is simple: “Deconstruction is first andforemost a suspicion directed against just that kind of thinking – ‘whatis…?’ ‘what is the essence of…?’ and so on.” (Derrida and Norris 1989:73). Our idea to explain deconstruction ‘in a nutshell’ points to a contra-diction; deconstruction itself is all about cracking nutshells to reveal theambiguous nature of reality.

Taking a rather unconventional approach to ‘define’ deconstruction, wecan look it up in a dictionary. The 1989 edition of the Oxford English Dic-tionary (OED) gives the following definition:

“Deconstruction [f. DE+CONSTRUCTION]: (a) the action of undoing the con-struction of a thing, (b) Philos. and Lit. Theory. A strategy of critical analysisassociated with the French Philosopher Jacques Derrida (b.1930), directed to-wards exposing unquestioned metaphysical assumptions and internal contradic-tions in philosophical and literary language.” (cited in Royle 2003: 24)

Although this definition is rather short, it stresses at least two importantaspects. First, deconstruction is a strategy of critical analysis – althoughDerrida would refuse to speak of an analysis – that aims to uncover un-questioned assumptions of discourses. ‘Strategy’ is a good term to use herebecause a strategy is less determined than a method, if we understandstrategy as a moderately emergent phenomenon. A thinker who has amethod knows how to proceed, while the one who follows a strategy has tomake judgments and thus takes more responsibility (Royle 2000: 4). Sec-ond, the definition emphasizes the role of internal contradictions. Withinthis study, these contradictions are considered as paradoxes. As we shallsee, paradox is at the heart of deconstruction. Despite these advantages, adrawback of this definition is its focus on philosophy and literary theory.Because of Derrida’s understanding of text, deconstruction is not limited tothese discourses but affects all categories that we call ‘real’.

Royle (2000: 11) gives a more advanced definition by arguing that de-construction is

“not what you think: the experience of the impossible: what remains to bethought: a logic of destabilization always already on the move in ‘things them-selves’: what makes every identity at once itself and different from itself: alogic of spectrallity: a theoretical and practical parasitism or virology: what is


happening today in what is called society, politics, diplomacy, economics, his-torical reality, and so on: the opening of the future itself.”

Royle addresses the broad character of deconstruction that is always al-ready at work in ‘things themselves’. This seems to be an important lessonbecause via deconstruction we do not make up, or invent, or create thingsin a new way. Deconstruction has always already been there. What re-mains to be done is to learn to think of things (e.g., strategy) as always be-ing in deconstruction. Like the abovementioned OED definition, Royleplaces great emphasis on the role of the impossible, the contradictory thatdeconstruction is concerned with. He also gives reference to the destabiliz-ing effects that come to the fore once we look at a text from a deconstruc-tive 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 de-construction may mean.

A good way to do this, without immediately turning deconstruction intoa method, is to look for a pattern in Derrida’s own deconstructions. Ac-cording to Derrida, identifying the central conceptual oppositions of a textexposes its metaphysical character; one pole of the opposition is classicallyconceived as original, authentic, and superior, while the second is thoughtof as secondary or even ‘parasitic’. Concepts are textualized in a way thatone is always seen as ‘pure’ and full of meaning, whereas the other is just aderivative of the former defined in terms of a lack of presence.73 To under-stand the necessity for deconstruction therefore means to recognize that

“in a classical philosophical opposition we are not dealing with the peacefulcoexistence of a vis-à-vis, but rather with a violent hierarchy. One of the twoterms 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 pro-ceeded in this way, conceiving good before evil, the positive before the nega-tive, the pure before the impure, the simple before the complex, the essentialbefore the accidental, the imitated before the imitation etc. And this is not justone metaphysical gesture among others, it is the metaphysical exigency, thatwhich has been the most constant, most profound and most potent.” (Derrida1995a: 93, emphasis in the original)

73 Prominent examples from Derrida’s own deconstructions include the opposi-tions signified/signifier (see also section 4.2.3), presence/absence,speech/writing (Derrida 2003a), and to use/to mention (Derrida 1995a). Almostall of Derrida’s texts refer in some way (be it explicit or implicit) to oppositions.


The desire of the Western culture to view the essence or logos of a con-cept (e.g., the essence of ‘being’ or ‘truth’) in a way that something elseappears as secondary is what Derrida (2003a: 10-12) calls logocentrism. Aphilosophy favoring logocentric thinking conceives an order of meaning asexisting in itself, a metaphysical foundation. Logocentrism represents ametaphysics of presence as what is considered to be secondary is alwaysconceived to be absent, whereas the origin is present in the sense that it isself-defining without reference to the other. The Cartesian cogito, for in-stance, appeals to presence as the ‘I’ is conceptualized as resisting radicaldoubt 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 ‘neces-sity of adaptation’ conceives ‘the environment’ as originary and ‘the orga-nization’ (defined as the absence of the environment) as secondary. ‘Theenvironment’ does not only come before ‘the organization’ but is alsoprivileged over it. However, we cannot define ‘the environment’ withoutany recourse to a notion of ‘the organization’. There is no ‘environment’on its own just regarding the essence of itself. ‘The environment’, there-fore, can never be present to itself in the total absence of ‘the organiza-tion’.74

Logocentrism is the primary target of deconstruction as a deconstructivereading identifies the logocentric assumptions of a text by tracking downthe binaries and hierarchies it contains. An attack of logocentrism alsomeans that every deconstruction is necessarily a deconstruction of themetaphysics of presence. Thus, deconstruction, which is itself a hybridterm made up of the opposition construction and destruction, is an attemptto dismantle the hierarchical oppositions that govern a text (Derrida 1986a:87). Dismantling does not mean destroying the oppositions, but showingthat by acknowledging their mutual dependence one can create somethingnew. By disclosing the supplementary logic among the concepts, decon-struction demonstrates how a logocentric text always undercuts its own as-sumptions. Derrida (2003a: 250) argues that the supplement, which is theformerly suppressed concept, is something that gives rise to the conceptthat is apparently thought of as the ‘origin’ (see Figure 17). The concern isto show how the concept that logocentrism deemed to be a derivation ofthe ‘origin’ is necessary for the ‘origin’ to mean anything at all. There isno self-defining origin because the formerly excluded concept re-enters

74 In other words, there can be no self-presence because the present’s presencenecessarily involves the reference to the non-present (Wheeler 1999: 1006). “Itcould be shown that all names for reasoning, principle, or center […] have al-ways described an invariant of presence.” (Derrida 1976: 424, translation A.R.)


and acts as a constituting factor for the former (Girard 1992: 27). Bothconcepts interpenetrate and inhabit each other. This is where deconstruc-tion starts: in being suspicious about concepts like ‘origin’, ‘final reasons’,and clear ‘cause-and-effect relations’ (Ortmann 2004b: 5). Within thisstudy, we question the self-defining origins that are represented by ‘theenvironment’ (strategy context), ‘strategy formulation’ (strategy process),and ‘strategic rules and resources’ (strategy content).

Fig. 17. Derrida’s Supplementary Logic (adopted and modified from Dupuy andVarela 1992: 3)

For Derrida (2003a: 249-251), the supplement holds two meanings atonce. On the one hand, the supplement is a surplus, a complement that en-riches the original concept. The supplement supplements a lack (of mean-ing) of the ‘original’ concept – a lack (i.e. an emptiness) that cannot beavoided. This emptiness is a necessary consequence of the denial of ametaphysical origin that would be self-defining and thus full of meaning.On the other hand, the supplement can also substitute the origin; it caneventually ‘take-the-place-of’ the original and thus make up for somethingmissing. The two characteristics of the supplement are needed for the con-cepts to interpenetrate and constitute their meaning in a mutually depend-ent process. Both meanings of the word indicate that the supplement issomething exterior that is alien to the apparent origin. It is not known bythe plenitude, but nonetheless necessary for its existence.

The logic of the supplement entails a disruption of what we think weidentify with ‘the origin’ and ‘the derivation’. If a supplement is both asurplus that enriches a plenitude and an extra that makes up for something


missing, the very nature of a supplement is dangerous. This is why Derrida(2003a: 141) calls the chapter in Of Grammatology that deals with sup-plementary logic “… This dangerous supplement …”. The supplement isdangerous because it fills a void of meaning of the ‘original’, a filling thatimplies a constant modification. We can never be done with the ‘effects’ ofthe supplementary logic because the supplement haunts (Royle 2003: 50).Take the example of strategic rules that we described as ‘empty’. Emptyrules represent a void of meaning that is filled in and through application.Application, of course, is the supplement to strategic rules; application fillsstrategic rules with meaning. Yet, this filling is always ‘dangerous’ in thesense that in the process of application strategic rules are modified; amodification that can be ‘silent’ (and thus not recognized by actors) ormore 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) ar-

gues that a simple overturning (a replacement) does not move deconstruc-

tion beyond its original territory because one remains within the decon-

structed 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 bi-

nary structure. Derrida (1986a: 87-89) calls these two movements of de-

construction, 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 summa-

rize 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 ines-capable in-coming of the other into the constitution of any concept (Caputo1997: 42). Formerly oppositional concepts turn out to be mutually depend-ent and constitute each others meaning in a constantly ongoing supplemen-tary process. That is why deconstruction is all about moving from an ei-ther/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 ofdeconstructive thinking (Derrida 1986a: 52-82, see also the discussion byLagemann and Gloy 1998: 55) as well as Culler’s (1982: 154) remarks on sche-matically summarizing deconstruction.


To recapitulate our way of argumentation up to this point, we need toconsider that far from excluding the world from language or reducing itentirely to language, Derrida advocates an imbrication of language and theworld. The resulting weave is what he labels ‘the text’. To deal with themetaphysical embeddedness of this text, Derrida discloses and decon-structs its hierarchically structured binary oppositions. Deconstructiondemonstrates that the meaning of each end of the opposition is not self-defining but depends on its counterpart. The inclusion of meaning into theanalysis raises particularly two questions: Why is there no stable meaningwithin ‘the text’? Why can the origin not just be full of meaning? Thesequestions require discussing how meaning is itself constituted and howlanguage and the world interrelate to make a text meaningful. Derrida’sanswer to these questions is that language is itself subject to deconstruc-tion and that because language and ‘the text’ are interwoven this decon-struction has serious consequences for the way we conceptualize the mean-ing of different ends of an opposition. In what follows, we discussDerrida’s deconstruction of the linguistic sign to argue against the meta-physical character of language in the epoch of the logos. This exemplarydeconstruction offers a new understanding of the constitution of meaningthat 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 oflanguage as a system of signs (e.g., words). By deconstructing Saussure’s(1967) view of the sign, Derrida develops an approach to understand in anew way the nature of language and with it the constitution of meaning.The deconstruction of the sign is just one exemplary deconstruction we canrefer to. However, because of the interrelated nature of language and theworld 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 somebasic linguistic terminology. In a general sense, a sign is comprised of asignifier (the sound image of a word) and a signified (the mental conceptthat relates to that sound image). Both elements are indispensable to theconstitution of a sign as a signifying unit that describes its referent existingin the outside world (see Figure 18). Whereas conventional wisdom em-phasizes that each sign represents a referent ‘in the real world’, structural-ism, as advocated by Saussure (1967), criticizes this view by arguing thatsigns have no direct connection to their referent but only unite a signifierand a signified.


Fig. 18. Basic Linguistic Terminology

According to Saussure, the relationship between signifier and signifiedis arbitrary, which means that there is no naturally given necessity that thesignifier ‘DOG’ automatically refers to a mental concept of a dog (i.e. thesignified). The meaning of ‘DOG’ has nothing to do with the characteris-tics 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 iden-tity of a sign is constituted negatively through differences to other signs.We have to be careful to interpret Saussure in the right way. Arbitrarinessdoes not mean that the signifier-signified relationship is haphazard. When-ever someone uses the signifier ‘DOG’ it is not just a matter of chance asto what others might interpret it to mean since the meaning of the signifiedis fixed by historico-institutional agreements. It rather accounts for the factthat there is no a priori reason why ‘DOG’ should signify a four leggedbarking animal (Lucy 2004: 121).76

What Saussure’s argument comes down to is the idea that the soundsthat form words in language have no direct connection to the physical ob-ject that they designate. Even though Saussure thinks of the relationshipbetween signifier and signified as arbitrary and thus seems to move beyond

76 It remains largely unclear whether Saussure believed in an arbitrary nature ofthe signified. This would leave open the possibility of thinking of different kindsof 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 tobelieve in an arbitrariness of the signified when considering “that Saussure him-self in the Course in General Linguistics stresses that the ‘same signified’ existsboth for the French ‘boeuf’ and for the German ‘ochs’.”


the logocentric assumption that signs objectively represent their referents,Derrida (2003a) argues that Saussure still believes in a natural bond be-tween signifier and signified. He bases his argumentation on Saussure’s(1967: 28) claim that spoken language is more intimately related to ourthoughts than written words. Following Saussure, speech is more naturalthan writing and thus enables access to ‘present’ and full meaning. Derridaargues that this assertion runs counter to Saussure’s own fundamentalprinciple of the arbitrariness of the sign. If signs are arbitrary eschewingany objective reference to reality, it cannot be claimed that a certain typeof sign (the spoken) could be more natural than another (the written). Thisis why Derrida (1986a: 54) claims that the concept of the sign remainsproblematic 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 asindependent of the signifier while the signifier is treated as dependent. Themeaning of the signified is self-defining and originary, whereas the mean-ing of the signifier can only be fixed with reference to the (already exist-ing) signified. According to this logic, the signifier exists only to give ac-cess to the signified and thus submits to the concept of meaning that thesignified inhabits (Culler 1982: 99). If it is true that no sign can signify onits own because meaning is a product of differences, as Saussure claims,then this conception of the sign as a clearly structured symmetrical unitthat gives access to some already existing meaning runs counter to Saus-sure’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 con-ceived as empty packing, whereas the signified contains the full meaningof the sign (Welsch 1996: 252). In the Saussurean perspective, the signifierdirectly yields its corresponding signified like a mirror yields an image(Eagleton 1997: 111). This is why Derrida (2003a: 38) speaks of a tran-scendental signified. Such a transcendental signified acts as an ‘anchor’ fora text to fix its meaning in an objective and thus determinable sense. Ac-cording to Burns (2000: 14), the signified in Saussure’s sense exists as apure concept in a timeless world outside of language before it ‘falls’ intothe words of any particular linguistic system. Saussure’s concept of thesign affirms the idea of logocentrism by proposing a self-defining originfor meaning. This is where the metaphysics of presence becomes visibleonce again. Meaning in the Saussurean sign is present as it comes into be-


ing as a signifying unit by itself in its own right (Bennington and Derrida1994: 33).

In Derrida’s (2003a: 129, 1986a: 56, 1976: 425) view there is no tran-scendental signified. The distinction between signifier and signified is notfixed because the signified is nothing more than an effect of an endlesschain of signifiers, or put differently: in Derrida’s understanding everysign is a signifier whose signified is another signifier.77 The Saussureansignified/signifier opposition is overturned.

“From the moment that one questions the possibility of such a transcendentalsignified, and that one recognizes that every signified is also in the position of asignifier, the distinction between signified and signifier becomes problematic atits root.” (Derrida 2002: 19, also Derrida 1986a: 56-57)

We can think of the following example to illustrate this point. If we wishto know the meaning (signified) of a word (signifier), we usually use a dic-tionary to look it up. However, all we find are yet more signifiers whosesignifieds we need to look up again ad infinitum. The process is not onlyinfinite but also circular since signifiers transform themselves into signi-fieds and vice versa. For example, the phrase ‘four-legged barking animal’operates as the signified of ‘DOG’ but is itself composed of several signi-fiers with their own signifieds. The signified becomes the result of an end-less chain of differences among signifiers. Or, to put it in a deconstructiveterminology: the signifier acts as a supplement of the signified. The for-merly original term (signified) turns out to be a product of its seeminglyopposite (signifier). It is impossible to arrive at a final signified that is notalready a signifier in itself (Sarup 1989: 35). Meaning has no final originas no sign can ever be fully defined by itself. Instead the meaning of a signis caught up in a play of differential relations with other signs. As soon asthere is meaning, there is difference. The differences that create the ‘spac-ing’ between signifiers are what matters in the context of signification. InDerrida’s view of language, signifiers do not reveal some sort of corre-sponding objective mental image that supply their meaning, nor do the ref-erents in the external world to which they refer (Giddens 1987: 204). Thetraditional doctrine of metaphysical realism in which there are clear-cutword-world relationships that provide the notions of truth and reference tothe ‘real world’ is consequently overcome.

77 Derrida (2003a: 129) states “The fact that the signifier […] has always been inthe 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 non-existence of the signified. Rather, the signified is a product of signifier-effects(see also the discussion by Lucy 2004: 144-145).


The dictionary example points to an interesting insight. Since meaningis defined differentially, relative to the meaning of other signs, the mean-ing of a sign is dispersed along the whole chain of signifiers (Derrida1986a: 67). Meaning is, as Giddens (1979: 30) notes, “created only by theplay of difference in the process of signification.“ A sign is constituted bythe traces78 of other signs it needed to exclude in order to be itself. Thesign, therefore, bears these traces within itself. In contrast to the Saus-surean perspective, the signifier-signified relation does not refer to the signas a signifying unit but to traces and traces of traces. This assertion impliesthat meaning is never fully present in a sign because it depends on what thesign is not (the traces of the other signs). The meaning of a sign is consti-tuted on the basis of the trace within it.79 This trace ties the sign to thewhole chain of non-present signifiers. To assume the presence of a signwould mean to establish an ideal (objective) meaning that antedates theconstitution of traces. In this sense a metaphysics of presence would be apresence without difference (Derrida 2001: 29). It is impossible to get to apoint where a signifier no longer refers to other signifiers but to an objec-tive meaning. ‘There is nothing outside the text’, means that ‘the text’ isthe weaving of differences and traces that constantly (re)emerge in newcontexts (Derrida 1986a: 67).

Derrida’s rejection of the Saussurean code model indicates that the itera-tion of a sign cannot be programmed or predicted. Surely, it is possible toiterate a sign as it can be used over and over again. However, it is impossi-ble to use a sign twice in the same context. There is an infinite number ofcontexts making a repetition of exactly the identical context (in which thesign was used in the first place) unattainable (Bennington and Derrida1994: 97). Signs constantly contain new meaning when used in a differentcontext. This is because, the repetition of signs in a new context createsnew differences that alter and simultaneously defer the presence of their

78 The term ‘trace’ may be misleading at this point. Derrida uses this term to avoidspeaking of (absent) signifiers which would implicate him in a linguisticism. Heperceived 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, noelement can function as a sign without relating to another element which is itselfnot simply present. This linkage means that each ‘element’ [sign] is constitutedwith reference to the trace of the other elements of the sequence or system itcontains. This linkage, this weaving, is the text, which is produced only throughthe transformation of another text. Nothing, either in the elements or in the sys-tem, is anywhere simply present or absent. There are only, everywhere, differ-ences and traces of traces.” (annotation added)


meaning.80 Derrida (1999a) calls this combination of differing and defer-ring différance.81 The iteration of a sign is never ‘pure’ but always differentand forever new – driven by the creative force of différance (Derrida1999b: 325). For Derrida, the possibility of repetition requires a mix ofsameness and difference.

The neologism différance can be thought of as the antagonist of thetranscendental signified that paralyzes the deferment of meaning and con-tributes to the establishment of a metaphysics of presence. The doublemeaning of the term, uniting the two verbs ‘to differ’ and ‘to defer’, pointsout that differences among signs are held not only in space but also intime: to differ is at the same time to defer (Derrida 1999a). Concerning thespatial dimension, différance represents the creation of differences (‘to dif-fer’) among signs and thus helps to negatively define the sign’s meaning.As stated above, this meaning is never present but dispersed along thechain of signifiers. Hence, différance also states that the meaning of a signcan never be present, original, or full, but is constantly postponed (‘to de-fer’). Derrida (1986a: 67-70) sums this up as follows:

“This chaining process means that each ‘element’ [sign] is constituted from thetrace of other elements it carries in itself. […] Diffèrance is the systematic playof differences, of traces of differences, of the spacing [the spatial dimension] bymeans of which elements are related to each other. […] The ‘a’ of différance,however, also implies that this spacing is a temporalization, a detour, a defer-ment, by means of which […] the relation to presence, a present reality of beingis 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 de-ferring 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 valueonly from its inscriptions in a chain of possible substitutions [supplements], inwhat is to blithely called a ‘context’. (Derrida 1985: 4, annotation added).Therefore, “[d]econstruction does not exist somewhere pure, proper, self-identical, 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 toanother (Derrida and Norris 1989: 73).

81 In French, the ‘a’ of différance remains silent when pronounced and can only berecognized in the spelling. Différance only exists in writing – an allusion to thespeech/writing opposition. The noun ‘différance’ contains the verb ‘différer’which has a twofold meaning in French: to differ and to defer. Différance is apolysemantic term which emphasizes that one has constructed something thatcontinually breaks up in a chain of different substitutions (Rorty 1977: 677).


that can never be grasped. Derrida shows that there may be numerous le-gitimate interpretations of a text because meaning is always ‘in the com-ing’. Différance acknowledges that the constituting differences of meaningdo not appear from nowhere and are not the product of a closed Saussureanlinguistic system, but owe their identity to différance. The ongoing move-ment of différance upsets the idea that there can be something like fixeddifferences that call the pure meaning of a sign into existence. If we acceptthat 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 objec-tive meaning, we see that différance runs all the way through ideas liketruth or presence. Différance comes before being; similarly: a trace comesbefore the presence of a sign – a trace marks the absence of a presence.

The deconstruction of the sign that is discussed within this section fol-lows the general deconstructive pattern as introduced in section 4.2.2. Theunderlying opposition signified/signifier, stemming from the Saussureansign model, is criticized by Derrida for privileging the signified as beingtranscendental. In deconstructing the opposition, Derrida overturns its hi-erarchical structure by claiming that the signified is the product of differ-ences among an endless chain of signifiers that act as its supplement andthus shows that it is impossible to separate the signified from the signifier.Derrida thus challenges the Saussurean idea of difference, which assumesthat for meaning to be created the signs X and Y need to be clearly distinctfrom each other, and instead argues that such pure difference is not possi-ble because X already contains Y, as it is partly defined by it. It is bymeans 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 decon-struction, it alters all other principles of the conceptual structure of meta-physics (Bennington and Derrida 1994: 45). Because of the natural insta-bility of language there is no reason to assume that one can come up with afixed and transparent meaning of a text; indeed any text remains ‘open’. If‘the text’ runs through all categories of our life and the meaning thatemerges in this text cannot be fixed but is constantly reshaped by dif-

82 Derrida (1981a) calls this ambivalence of texts dissemination. Every ‘reading’of a text contains new meanings because every ‘reading’ takes place in a newcontext (see section 6.3.1). From the moment a text comes into being, dissemi-nation destroys its determined, hegemonic character. Dissemination strongly af-firms the anti-unity of meaning. Derrida (1995b: 224) therefore claims: “As forthe '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 bythe name 'dissemination'. If one takes the expression 'plurality of filiations' in itsfamilial literality, then this is virtually the very 'subject' of 'Dissemination’.”


férance, we need to admit that différance is always and everywhere atwork. There is no predefined limit to the applicability of différance. AsCaputo (1997: 104) claims:

“Derrida also generalizes what was originally a linguistic model in Saussure sothat différance is not restricted to language but leaves its ‘mark’ on everything– institutions, sexuality, the worldwide web, the body, whatever you need orwant. […] like language all these structures are marked by the play of differ-ences. […] Wherever one is, one is placed within a play of differences, ‘re-ceived’ or ‘inscribed’ within différance […].” (emphasis in the original; simi-larly see also Agger 1994: 503 and Ortmann 2003a: 100)

Because there is différance, there is the impossibility of pure presence inthe sense of an absolute meaning. For Derrida this logic takes the form of alaw, a law that not only affects writing or speech but also experience ingeneral. This is why he claims: “I shall even extend this law to all ‘experi-ence’ in general if it is conceded that there is no experience consisting ofpure presence but only of chains of differential marks.” (Derrida 1995a:10, emphasis in the original) As will be shown later on, the deconstructionof the sign and its consequence (i.e. différance) has serious implicationsfor our identified oppositions. The meaning of one end of an opposition(e.g., the environment) is not self-defining, objective, and clear, but owesits existence to its supplement (e.g., the organization). Because there is notranscendental signified in general, ‘the text’ of strategic management can-not 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 betweenthe 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 isrelentlessly at work, all the conceptual oppositions that refer to a meta-physics 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 theterritory of the social sciences. The notion of différance is, as the quote ofCaputo at the end of the preceding section shows, also relevant in the so-cial context. But how are we supposed to think of deconstruction with ref-erence to the continued existence of social order? Obviously, the work ofDerrida is not genuinely rooted in social theory, however his way of think-ing can be potentially used in this context (Agger 1994: 501-505; Agger1991: 114; Leledakis 2000: 175; Ortmann 2003a: 88). To make use of de-


construction in the social sciences requires once more a discussion of Der-rida’s understanding of text, this time however in another context.

If the world is textualized via language as claimed in section 4.2.2 andthe structure of language is not stable by itself as discussed in section4.2.3, we can argue that other social structures share the same fate. Similarto a written text, the social text is subject to différance. Yet, we can saymore about the relation between ‘the text’ and the social world, if we con-sider that social action always happens in a context. Then, we can specifythat

“[t]he phrase which for some has become a sort of slogan, in general so badlyunderstood, of deconstruction (‘there is nothing outside the text’ [il n’y a pas dehors-texte]), means nothing else: there is nothing outside context.” (Derrida1995a: 136, emphasis and annotation in the original)

Derrida (1989b: 873) specifies this by arguing that the statement ‘there isnothing outside context’ means that “there is nothing but context.” Mean-ing cannot be determined regardless of context; we always find ourselvesin a context (Derrida 1979: 81).

Contexts and texts comprise the entire ‘real-history-of-the-world’ inwhich ‘things’ happen and meaning is created (e.g., the political, social,historical, etc.). Does this imply that text and context are simply two sidesof 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 astrategy meeting creates text (e.g., by his utterances, gestures, appearancein general) that belongs to a specific context (the strategy meeting). There-fore, Derrida’s assertion that there is nothing outside context is based uponthe belief that contexts consist of elements of text. Consequently, contextsdo not exist as a pre-linguistic given but are themselves textualized. A con-text represents the textualized set of circumstances that surround situationstexts are embedded in. Accordingly, Giddens (1987: 209) claims thatmeaning is constructed by the intersection of the production of signifiersvia différance with the context (e.g., an event) they occur in. The (social)world is embedded in a constant movement of contextualized interpreta-tions of text.

The interrelation of texts and contexts implies that one of the definitionsof deconstruction would be, as Derrida (1995a: 136) remarks, to consideras far as possible the incessant movement of the recontextualization oftexts. To understand Derrida’s idea of context together with his claim thatrecontextualization is a never-ending process, we need to address a puz-zling question: “Are the prerequisites of a context ever absolutely deter-minable?” (Derrida 1982: 310) If this were the case, we could create the


same context twice and recontextualization would be perfect iteration. Yet,there is an infinite number of possibilities that can shape contexts. No con-text permits saturation since ‘the-real-history-of-the-world’ is contingentand ensures the boundless nature of contexts (Bateson 1985: 372-378;Ortmann 2003b: 29). Hence, meaning is not only context-bound becauseof the ambiguous nature of language, but contexts themselves are bound-less 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 tofurther description and thus further specification. This is to say that there isno fundamental limit to what can be included in a given context. No con-text permits saturation and therefore cannot be described in isolation or befully portrayed. Second, every attempt to describe a context can be graftedonto this very context, producing a different context that moves beyond theprevious description. Each attempt to give a detailed description of thelimits of a context therefore displaces those limits (Derrida 2001: 32). Bothunderstandings of the boundless nature of a context highlight its arbitrari-ness and contingency.

This finding gives rise to a question that is important with regard to or-ganizations: If contexts are boundless and their specifications are contin-gent, how are organizational actors supposed to think of the unlimited na-ture of contexts? What do they do to specify their contexts? People inorganizations specify (mark) contexts through their actions and communi-cations 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 con-text-markings (Ortmann 2003b: 29). In organizations we come across a va-riety of context specifications: the email that invites us to a meeting (‘Nounauthorized entry!’), the clothes we are wearing (‘Today is casual Fri-day!’) or the gong on the shop floor (‘Lunch break!’). Contexts are not agiven natural ground upon which to base interpretation but constructed in acomplex network of social relations. Strategies, for instance, represent theattempt to mark future contexts in a meaningful way through social actionand communication. This is the crux of the matter: strategic managementdoes not only deal with existing contexts and context-markings but tries tohandle the contingency of future contexts.

All of this has far-reaching implications for our understanding of societyin general and organizations in particular. If contexts are boundless, an ap-plication of deconstruction to strategic management focuses on the unpre-dictable, unforeseeable, new effects that pop up in the reproduction of so-cial life. This points to the impossibility of perfect iterations. Just as the


meaning of signs is altered in the course of their application in differentcontexts, the meaning of strategies is not fixed as well. The force of dif-férance does not suddenly come to a halt. Every reproduction means modi-fication. The iterated object might be similar, as Maturana and Bunnell(2001: 37) remark; however, it is never the same since no context can beperfectly reproduced.

This implies a renunciation of a metaphysics of presence (this time alsowith regard to the social). To believe in a ‘present meaning’ would implythat whatever is at stake derives from a ground that guarantees an unde-constructible identity; an identity that is always present, ready to glow inthe luminosity of presence regardless of its context of application. The de-construction of the social emphasizes that there can be nothing pure andfull of meaning that can serve as a foundation for an objective world-disclosure. In an even more generalizing sense, Giddens’s (1984: 16-28)notion of social structure opposes presence. He highlights that structure ex-ists only as memory traces. Social structure is nothing that exists ‘exterior’to individuals to constrain their actions but is constraining and enabling atthe 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 thatsocial systems, as reproduced social practices, do not have ‘structures’ butrather exhibit ‘structural properties’ and that structure exists, as time-spacepresence, only in its instantiations in such practices and as memory traces ori-enting the conduct of knowledgeable agents.” (Giddens 1984: 17)

Understanding social structures in Giddens’s way shows that the ideas ofdeconstruction can be utilized in the context of social theory. ApplyingDerrida’s work to social theory and strategic management in particularthus means considering Giddens’s way of argumentation. Even thoughstructuration theory owes a great deal to the work of Derrida, the adoptionof some of the central ideas of deconstruction did not happen without criti-cal reflection by Giddens himself. In section 4.2.6 we revisit some of hiscentral objections to Derrida’s thoughts.

Since we have introduced the basic lines of argumentation of decon-struction and demonstrated that it can be applied to strategic management,we are now in the position to ask for the consequences of deconstructivethinking. As indicated in section 1.1, one major consequence that is ofrelevance within the context of this study is deconstruction’s avowal toparadox. As will be shown next, deconstruction affirms paradox.


4.2.5 Deconstruction and Paradox

We have discussed deconstruction as a way to undermine hierarchicallystructured oppositions within a social (con)text. A deconstruction elicitsconcepts that cannot be adopted into such binary structures. Deconstruc-tion turns oppositions into supplementary relations and by doing so ex-poses paradox, because the supplementary relation can, when attempting tojustify one pole of the opposition as a metaphysical ground, be treated as asimultaneous occurrence of both ends of the opposition (Derrida 1998b).This simultaneous occurrence exists only as long as we look for a finalorigin on which to base one end of the supplementary relation. To illustratethis point, consider the following example. Within scientific inquiry schol-ars 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 theproblem. This solution is treated as a derivation from the problem. Hence,scholars privilege the problem and treat the solution as something secon-dary, something that ‘follows from’. A deconstruction of the oppositionshows that the solution, far from being a pure derivation, constitutes theproblem. The problem becomes fully defined only through the solution.While looking for a solution, people need to consider the problem (at leastto a certain extent) but also define the problem.

The deconstruction of the problem/solution opposition shows that bothconcepts are linked through a supplementary relationship; while lookingfor a solution, people consider the problem yet also define this problem. Ifwe try to get to the bottom of the problem/solution puzzle (i.e. if we try tojustify why we start scientific inquiry with ‘the problem’ or eventually alsowith ‘the solution’), we end up in a paradox. To search for a solution isparadoxical because the search is concerned with something new, but be-cause of its novelty, we don’t know where to look. If we knew exactlywhere to look for a solution, we would no longer face a problem. Theparadox arises if we allow both ends of the opposition to occur simultane-ously. The co-presence of both ends of an opposition appears once we tryto justify one pole as a self-defining origin. A problem, for instance, isnever fully present in a way that it is able to define itself. To fully definethe problem we need the solution, and to find the solution we need theproblem; we cannot have both, problem and solution, at the same time.The deconstruction of the problem/solution opposition, like any decon-struction, exposes a logical contradiction – a paradox that Derrida callsaporia. At first, every paradox is paralyzing and inhibits action. Yet, aswill be discussed in chapter five, there are ways to deal with paradoxicalreasoning. Because of its importance for the arguments of this treatise, we


first discuss the notion of paradox in general to then turn to Derrida’streatment of paradox.

What Is a Paradox Anyway?

Etymologically, the term paradox derives from the Greek and reflects whatis contrary to (para) received opinion of belief (doxa). In its most generalsense, paradox means a contradictory assertion. Cameron and Quinn(1988: 2) argue that a paradox “is the simultaneous presence of contradic-tory, even mutually exclusive elements” that disenable choice between twopoles. Within this treatise, we follow a similar definition by Ortmann(2004a: 18) who argues that paradoxical reasoning is reasoning wherebythe enabling and constraining conditions of a line of argument coincide. Inother words, paradox (aporia) occurs when reason either contradicts itselfor experience.83

A paradox that occurs when reason leads to self-contradiction is dis-cussed by Baggini and Fosl (2003: 108). Consider the following statement:‘This statement is false.’ The paradox comes about if we ask whether thissentence is true or false. If it is true, then it is false. But if it is false, it istrue. So the utterance is both true and false at the same time. Epimenides’sliar paradox takes a similar form. If someone asks ‘If I say I am lying, am Itelling the truth?’, (s)he utters a falsehood as long as (s)he is lying. This isno 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 thetruth’, (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 notgo unnoticed that the term aporia is usually used to describe a difficulty, per-plexity 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 anawareness of opposing or incompatible views on the same theoretic matter.” Bycontrast, paradox is about a logical contradiction that arises because the ena-bling and constraining conditions of a line of argument coincide. Paradox is de-fined in a narrower sense than aporia. An aporia is about thought-provokingcontradictions, while paradox contains two contradictory propositions to whichwe are led by seemingly sound arguments. We focus our analysis on the for-mal/logical treatment of paradox and not on informal or rhetorical notions. In-formal types of paradox occur for interesting and thought-provoking contradic-tions of all sorts (Poole and Van de Ven 1989: 563), while rhetorical types ofparadox occur if the author concludes something contrary to what has been ex-pected (Lado et al. 2006: 117). For a discussion of the nature of paradoxes seeBaggini and Fosl (2003), Clark (2002), and Sainsbury (1988).


arises because the original statement is both true and false since if it is trueit 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 canalso contradict experience. Consider the following example by Zeno ofEla: In a race of Achilles with a tortoise, Achilles gives the tortoise a headstart. Although the tortoise is slow, it moves at a constant speed. In thetime it takes for Achilles to reach the point of the tortoise, the tortoise willhave moved on (call it point A). If Achilles moves to point A, the tortoisehas moved on again and is now at point B. It seems like Achilles cannotovertake the tortoise. This is paradoxical, because apparently there seemsto be nothing wrong with our reasoning, but from our mundane experiencewe know that Achilles will overtake the tortoise easily. So we either acceptthat our reasoning is wrong (although we do not know why) or accept thatovertaking is not possible (although we know it is).

Every paradox leads to contradiction that cannot be resolved by usingstandard rules of logic. A paradox is always the unity of a distinction, thesimultaneous occurrence of two horns of an opposition at the same time(Luhmann 1995c: 46). In the first example, the distinction true/false ap-pears as a unity leading to indecision. The same holds for the second ex-ample in which we think our reasoning is true, but at the same time need toadmit that from our experience this cannot be. In this treatise we refer toboth forms of paradox, as the paradoxes of strategy research can be de-scribed as self-contradicting reasoning and reasoning contradicting expe-rience. For instance, when referring to strategic rules, we cannot say thatwe follow a rule – if our reasoning defines a rule as something that needsto be iterable – because we have to modify the rule with regard to everyreplication. Self-contradicting reasoning occurs because rule-following andviolation seem to be necessary at the same time. This paradox can also bedescribed as reasoning contradicting experience. We know from Derrida’sreasoning that a perfect replication of a rule in different contexts is impos-sible. Yet we also know that we follow rules within our everyday life.Again, we face paradoxical indecision: we either claim that Derrida’s rea-soning is wrong (even though we can give no reason why) or accept thatrule-following is impossible (while from our experience we know it isnot).

Deconstruction and Paradox – The Unavoidability of Undecidables

For Derrida, paradox refers to the ‘blind spots’ or puzzling moments ofmetaphysical arguments that cannot be explained by using standard rulesof logic. Deconstruction begins with an encounter of these ‘blind-spots’that must be overlooked to make presence seem undeconstructible (Lucy


2004: 1-2). According to Derrida (1998b: 23-36), a paradox describes asituation in which we do not know to which side of the opposition to turn.Since paradoxes are inevitable and not reducible, Derrida speaks abouttheir necessary endurance. To experience a paradox means to endure itsun-logic with passion, or even more: ‘a passionate suffering’. At least weneed to try to experience the impossible (although the impossible itselfprevents access [Derrida 1991: 33]) and give justice to its existence: weneed to try not to become paralyzed but to get to know the necessary limitsof reasoning (Derrida 1992a: 16).

Why then does deconstruction not inhibit action; after all, a paradox isabout impossibility? The paradoxes that are uncovered by deconstructionare only impossible in a narrow sense. Their impossibility is limited to theestablishment of a presence that is self-defining and originary. This is whythere can be no metaphysics of presence; any such status results in para-dox. After all, this fits our argumentation: the dominant logics of strategyresearch claim that there is a presence of meaning (e.g., the objective envi-ronment or the ‘fully present’ strategic rule), while we contend that this ar-gumentation results in paradoxical indecision that has been overlookedthus far. In consequence, the impossibility that is attached to a paradox oc-curs only if we try to establish a full and self-defining origin in our think-ing (Powell 2006: 59). .

Consider the following example to illustrate this point: A strategic rulesubmits to a metaphysics of presence, if we believe that it can be perfectlyiterated. In this way, the meaning of the rule is ‘full’ of meaning, self-present, and determines its application. Deconstruction shows that such aconception of strategic rules is impossible (in fact paradoxical) becauserules are inevitably modified within their application (see section 6.3.2).Hence, the impossibility of paradox is limited to the self-defining nature ofone end of our oppositions, yet this self-defining nature is exactly what thedominant logics propose. It is paradoxical that the environment defines it-self and determines organizational strategic conduct, that strategic deci-sions fully justify themselves and determine strategy implementation, andthat strategic rules and resources foresee their conditions of use and deter-mine their application. If we accept impossibility as a limit to our reason-ing and explore ways to unfold paradox, we can use paradoxes creatively.For instance, if we say that generic strategic rules necessarily differ fromthemselves once they are applied (at least in part), we not only circumventthe paradox but also show how strategizing despite paradox becomes pos-sible.

Although paradoxes are insoluble, they represent necessary illogical-ities. They demonstrate that the ‘truths’ that the dominant logics claim to


have established are based on self-contradictory reasoning; to merely ac-count for the possible means to perpetuate the belief in foreseeable causali-ties (Derrida 1998a). Yet, paradox cannot be uncovered by the dominantlogics themselves, but only once we allow deconstructive arguments tocreep into our analysis. The altered set of metatheoretical assumptions thatcome along with deconstruction permit us to show to what extent tradi-tional reasoning in strategic management is based on (but at the same timeobscures) paradox. These assumptions illustrate that strategies are not aproduct of a rational calculation that gets by without any human considera-tions, a machine-like metaphysical scenario in which paradox is simplyoverlooked. To give rise to its own impossibility, any paradox must invokethat which is outside of the subject’s control (e.g., an ‘open’ context or acontingent future).

Derrida has an unusual way of addressing and highlighting paradoxeswithin his writings. Because deconstructive thinking reveals the impossi-bility of fixing one side of an opposition as privileged and self-defining, itneeds to pay special attention to concepts that favor a both/and-logic toportray moments when meaning cannot be satisfactorily decided. Derrida(1995b: 86) terms these concepts undecidables because it becomes unde-cidable to which side of the opposition to turn to. Undecidables functionfrom within oppositions and undermine them. They represent the unity ofthe opposition and cannot be reduced to oppositions, because they disor-ganize them without providing a solution in the form of a Hegelean Aufhe-bung (Derrida 1981b: 43). A prominent example for an undecidable is theterm différance which means to differ and to defer at the same time. Dif-férance helps us to underscore the paradox that arises according to the de-construction of the sign. This paradox refers to the presence and absence ofthe meaning of signs. On the one hand, to say that a sign is, is to say that itdiffers. On the other hand, to say that a sign differs means that insofar as itdiffers, it also defers its meaning endlessly. The existence of two contra-dictory meanings within a single term lies at the heart of undecidables.Undecidables constitute the ambivalent sphere in which opposites are op-posed and in which the meaning of one term relates back to the other. Theresulting concept of rationality no longer issues from a logos that repre-sents the ‘real’ essence or truth of things, it yields no better theory of truth,but is “an intellectual predisposition specifically attuned to the aporiaswhich arise in attempts to legitimize truth claims.” (Chia 1996: 19)


4.2.6 Deconstruction – Critical Arguments

Deconstruction is often equated with destruction and annihilation ratherthan the dismantling of deeply entrenched, metaphysical structures ofthought. It is not uncommon to portray Derrida as an anarchist, nihilist,and relativist destroying our beliefs in values, institutions, and even truthitself (Caputo 1997: 36). Any serious discussion of Derrida’s ideas re-quires hearing the arguments of these critics. When looking at contempo-rary philosophical and sociological discussions, one can identify at leastthree objections that are worth mentioning: (1) deconstruction is subject toa performative contradiction, (2) deconstruction favors a relativism ofmeaning in the sense of an ‘anything goes’, and (3) deconstruction pro-motes a retreat into ‘the text’ and neglects referents in the ‘real’ world.

The first objection, the existence of a performative contradiction, israised by Habermas (1990: 185) who argues that Derrida’s own tools ofthought (constituted by the language he uses) are themselves imbued witha metaphysics of presence. Language, which is the only available mediumto uncover the insufficiency of logocentric thinking, already possesseslogocentric characteristics. In line with this argumentation, Steiner (1990:173) argues that because deconstruction does not hold a meta-languagethat can divorce itself from différance, Derrida’s propositions with regardto the nature of language cancel each other out. One cannot think about theconstitution of meaning through language in a ‘safe’ manner, if there is nometa-language that acts as a point of reference. Derrida claims that mean-ing can never be fully grasped yet writes and speaks to be understood – atleast in some way (Lilla 1996: 401).

Derrida is aware of the fact that he does not possess a non-metaphysicallanguage that would allow him to simply step out of conventional thinking.He recognizes that “it is pointless to renounce the concepts of metaphysicsif one wishes to refute metaphysics itself.” (Derrida 1976: 426, emphasisin the original, translation A.R.) Thus, he knows very well that he cannotdo without metaphysical concepts like reason and truth. Yet, he puts theseconcepts in a new context to transform and reinterpret them (Forget 1991:52). These contexts not only give rise to another way of understandingmetaphysical concepts but also rest on a different (deconstructive) logic ofsensemaking. The dream of an all-encompassing context devouring alltruth claims is not a Derridean dream, although it is perceived by Haber-mas 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 thatDerrida’s work implies that “any interpretation is inevitably a false inter-pretation, and any understanding a misunderstanding.” For Habermas


(1990: 197) this is further evidence for the “relativism of meaning thatDerrida is after.” If language really is structured by différance, there can beno 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 textbecome radically shaken. The notion of truth becomes out of reach, mak-ing a consensus among people impossible. Other scholars have gratefullytaken up Habermas’s claims. Steiner (1990: 175) asks why authors shouldgo through the trouble of writing and readers through the trouble of read-ing if understanding cannot be reached. Similarly, Lilla (1999: 188) arguesthat deconstruction stands for a neutralization of all assessment criteria(e.g., in science) to leave judgments to the random mood of people. Doesdeconstruction mean that you never have to say you are sorry because truthand validity claims are discounted?

Derrida (1995a: 137) has explicitly denied being a relativist. He doesnot question the concept of truth as such, but rather a singular, all encom-passing, and final truth. Texts, therefore, do not have no meaning, but toomany meanings to fix them in a comprehensive way. This is because‘truths’ can only appear in language and relative to a context of interpreta-tion. In addition, language, context, and interpretation hold certain charac-teristics that prohibit the achievement of one truth: language does notpurely represent the referent as the ‘thing in itself’, contexts for interpreta-tion are boundless and infinitely extendable, and interpretations always re-fer 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 shapestheir meaning in ever new contexts. Hence, no interpretation can claim tohave captured the truth but only a truth in context.

“This way of thinking context does not, as such, amount to a relativism, witheverything that is sometimes associated with it (skepticism, empiricism, evennihilism).” (Derrida 1995a: 137)

If deconstruction seeks not to destroy meaning and truth but exposestheir production as context dependent, we need to ask whether consensusand understanding can be achieved in such a state of affairs. Derrida(1995a: 145) knows very well that stabilizations within language, in thesense of a consensus to achieve understanding, are not impossible per sebut relative, even if they sometimes occur to be immutable. This relativityis a temporal and contextual stabilization of a predominant interpretationof a text. Yet, the relativity of this stability is, as Ortmann (2003a: 80) re-marks, by no means relativism. Deconstruction does not subvert truth, nordoes it claim that ‘anything goes’. Instead, it points to the destabilizing ef-


fects that necessarily occur if one wishes to put an absolute truth intowords.

The last objection is that deconstruction promotes a ‘retreat into thetext’. Giddens (1987: 199, 208, 210 and 1979: 36) argues that Derridaviews language in isolation from the social environments of its use. Over-whelmed by the significance of language, deconstruction neglects the partsof the world that remain silent to make them part of an all-encompassingunderstanding of text. In Giddens’s view deconstruction fails to relate ‘thetext’ to an ‘exterior’ world in which social action takes place. Is decon-struction imprisoned in ‘the text’? We can surely not deny that Derridareconceptualizes ‘the text’ in a broad sense. If we recall that speech, ac-tion, 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 traceand the only way to experience reality is by interpreting these traces(Derrida 1995a: 148). We cannot say that deconstruction neglects the realworld but textualizes it. Textualization means world-disclosure – a disclo-sure that is based upon ‘texted’ contexts.

Giddens is right by claiming that Derrida has failed to explicitly link thenotions of text production and social action, but is too enthusiastic in be-lieving that language and text production are “[dragged] away from what-ever connections of reference it might have with the object world.”(Giddens 1987: 204) The German poet Stefan George (1868-1933) hasbrightly formulated Giddens’s acquisition in the last two lines of his well-known poem The Word: “So, I renounced and sadly see: Where wordsbreak off no things may be.” Again, Derrida does not suppose that lan-guage has the power to create or wipe out objects, but that différance gen-erates the slippery meaning we ascribe to these objects. Of course, as Gid-dens remarks, these differing and deferring effects of language do notoccur in some detached universe but in social practices that are embeddedin contexts. Derrida makes a first step in this direction by explicitly payingattention to the notion of ‘context’, which is nothing but a product of (so-cialized) text production. To expect from Derrida an extension of his un-derstanding of text to questions of social theory would disregard his pri-mary field of study: philosophy.

4.2.7 Résumé – Derrida, a Postmodernist?

Derrida (1999c: 263) has never sought or welcomed the label ‘postmod-ernism’, like any label whatsoever. For him, the word ‘post’ implies that


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. Neverthe-less, when referring to the framework of postmodern philosophy (section4.1.1), we can identify parallels between deconstruction and philosophicalpostmodernism. 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 con-ception of reason but who pluralizes and marginalizes the latter (Welsch1996: 245). Deconstruction contributes to the ‘radicalized critique of a uni-fied conception of reason’ that we identified as a framework for postmod-ern philosophy. Within this framework, Derrida contributes to three of thefour ‘central issues’: regarding epistemological and ontological questionshe contributes to a denial of a linguistic representation of reality, regard-ing 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 ideathat there must be differences between discourses.

The denial of a linguistic representation of reality is well reflected inDerrida’s work. He claims that the signified cannot exist as independent ofthe signifier to represent reality in a one-to-one manner. The signified isjust an effect of the differences among signifiers. Meaning is not foreverfixed in a signified but the result of the play of differences in the process ofsignification. Meaning constituting differences exist only in the constantprocess 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 atranscendental signified – and on the level of the referent – through the re-nunciation 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 sub-ject. Within deconstruction the subject is de-centered because it is itself aproduct, but not a master, of différance (Derrida 1986a: 70; Derrida 1982:11). The subject has no authority for meaning and truth anymore. Derridademystifies the fully conscious subject by claiming that no identity canever be identical to itself, but is constituted in and through the differencesof language. The ‘I’, as Giddens (1987: 206) remarks, cannot be conceptu-alized as being directly available to itself, but derives its identity from thesystem of signification it is involved in. The human self becomes a signify-ing subject only by entering into a system of differences to speak aboutsigns that need to be interpreted. The subject is not a pre-existing and fullydefined entity that comes to interact with other such entities; rather it isconstituted in the process of signification (Leledakis 2000: 187). Subjects


are not the master of the significatory process but its product, because theyare enabled to speak through the system of differences that constitute lan-guage. A self-conscious subject could be ascribed to a metaphysics ofpresence, as its identity would be self-defining and thus independent of theplay of differences.

The third central issue, the rejection of the idea that there can be grandnarratives that justify knowledge, is also represented in Derrida’s philoso-phy. Deconstruction’s disavowal of a metaphysics of presence emphasizesthat differences are constitutive not only for signification, but for existencein general (Giddens 1987: 202). Derrida rejects any kind of totalities topoint to their relational and non-universal nature. According to the notionof différance, meaning is never present, an objective truth not available,and knowledge not justifiable regardless of context. The validity of knowl-edge is localized depending on the context of its occurrence. From thispoint of view, a universal legitimization across fragmented contextualizeddiscourses turns out to be impossible. To conclude, Derrida’s contributionto the three central issues enables us to locate him in the discourse ofpostmodern philosophy. This is not to say that his work is postmodern perse as many ad hoc classifications, which identify postmodernism with plu-rality in general, assume. To which extent we can label Derrida’s position‘postmodern’ depends upon the (contingent) criteria we use to make senseof postmodern philosophy. After all, we have provided just one possibleway to approach this question.

4.3 Deconstruction within Organizational Analysis

Although deconstruction has not been extensively applied within thebroader field of business administration so far, scholars of the field of or-ganization theory have adopted some of its central ideas. In the following,we look at and classify the existing literature, as these writings have animpact on our own deconstructions in chapter six. Because scholars of or-ganization theory are predominantly used to thinking in binary opposi-tions, it is difficult for them to understand that deconstruction turns againstoppositions (Knights 1997; Ortmann 2003a: 134-137). Oppositions likestructure/agency, individual/organization or micro/macro-level underlievarious organization theories and are only slowly dismantled (e.g., via anapplication of structuration theory, Giddens 1984). Organizational analysiswhen viewed as a deconstructive practice rejects conceptual oppositionsand 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

Deconstruction within Organizational Analysis 171

applications of deconstruction in organization studies that are classified inFigure 19. The depicted framework distinguishes three different foci of ap-plication that can be attributed to those authors who have used deconstruc-tion in organizational analysis.

Fig. 19. Deconstruction in Organizational Analysis

First, deconstruction can be applied as an analytical tool for a ‘literaryanalysis’ of written texts within organization theory. The aim is a decon-struction of oppositions within a particular publication to show that theneglected term actually is constitutive of the privileged one. Second, it ispossible 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 aca-demic discourse has attached to certain concepts (e.g., organizational or-der, decisions) are criticized. By deconstructing these oppositions (e.g., or-der/disorder), researchers reveal the paradoxes that occur when one startsto base these oppositions on a metaphysics of presence. Third, it is possi-ble to apply deconstruction as an epistemological and ontological frame ofreference. Scholars following this approach try to establish a ‘deconstruc-tive perspective’ for conducting organizational analysis, but do not basetheir arguments on particular oppositions. Certainly, the three forms of ap-plication are not clearly separable; they overlap, often within the samepiece of work.

Regarding the first focus of application (i.e. deconstruction of opposi-tions within a particular publication), Kilduff (1993) applies deconstruc-


tion in his fine-grained reading of March and Simon’s (1958/1993) bookOrganizations. He ‘opens’ this particular text for the reader to see the pat-tern of conflicting relationships. By referring to the opposition non-machine/machine model of the employee, Kilduff (1993: 17) shows thatthe non-machine model is privileged for being able to capture what Marchand Simon label bounded rationality. Yet the deconstructive reading of thetext demonstrates that March and Simon simultaneously denounce and glo-rify the machine model as they still understand the human mind as a com-puter that can be programmed to perform tasks. Deconstruction traces theself-contradiction that resides in March and Simon’s text. That is whyKilduff (1993: 21) states that March and Simon

“both accuse their predecessors of treating the employee as a machine and fillthe absence they claim to have found in the literature with an updated machinemodel.”

In Kilduff’s view the assumption that human behavior can be programmedreappraises the machine metaphor that March and Simon wanted to aban-don in the first place. The formerly rejected concept, the machine model ofthe employee, is thus not abandoned by the book Organizations, but onlyreappraised. If the new model of the employee is as mechanical as the oldone, March and Simon’s original opposition cannot be perpetuated any-more. Even though Kilduff reveals the paradox in March and Simon’s text,he does not discuss how the seemingly secondary term, the machinemodel, constitutes the favored non-machine model. Simply showing thatthere is no such thing as a non-machine model of the employee in Marchand Simon’s book does not exhaust the full potential of deconstruction.The conceptual integration and separation of both terms through a supple-mentary relationship would have been a necessary next step.

The second focus of application (i.e. a deconstruction of dominantlogics) is reflected by Cooper’s (1986) discussion of the opposition orga-nization/disorganization with regard to the academic discourse of organi-zation theory in general. Starting with the assertion that many scholarswho deal with organizations tend to follow a dominant logic by treatingthem as ordered systems, Cooper (1986: 305) suggests that the work of or-ganizations is focused upon “transforming an intrinsically ambiguous con-dition into one that is ordered so that organization, as a process, is con-stantly bound up with the contrary state of disorganization.” Refusing thetraditional view that organizations appear to be an already formed order,Cooper introduces a non-static boundary concept that actively differenti-ates between system and environment, a kind of différance so to speak.Accordingly, order is a nascent state in the process of organizing (Korn-berger 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 differentiatingpossible and necessary, a state of disorder that pervades all social organi-zations. Cooper (1986: 316) calls this state the ‘zero degree of organiza-tion’ and conceives it as

“a theoretical condition of no meaning, no form, of absolute disorder which onemight call the primary source of form or organization, if the concept of ‘pri-mary’ and ‘source’ did not call to mind the sense of an absolute origin whichwas itself organized.” (Cooper 1986: 321)

This zero degree of organization represents a surplus – what Derrida callsa supplement – that is necessary for order to exist. Disorder and chaos donot destabilize organizations but enable them to be formed in the firstplace. It is this paradox, the simultaneous existence of order and disorder,which emerges from Cooper’s deconstruction. Disorganization is a neces-sary state for organizations to occur in the first place; disorganization is asupplement without which it is not possible to speak or even write aboutsomething like ‘organizational order’ in the first place.

Similar to Cooper, Ortmann (2003a: 151-162), while deconstructing theopposition social role/application, also refers to the discourse of organiza-tion theory and not to a particular publication. According to the accepteddominant logic, roles reflect generalized behavioral expectations that are apriori given and thus assigned a presence of meaning that privileges themover their own application. This, however, cannot be true as an iteration ofany role underlies the force of différance that ensures its constant and in-evitable modification. Every application of an organizational role implies,strictly speaking, its (necessary) violation – not in the sense of non-compliance but as a new enforcement of the role. The underlying paradoxis obvious: role takers have to follow and destroy their role at the sametime; they have to (re)invent the role in every situation. Roles are con-stantly supplemented by their own application, an application that wasoriginally thought of as a derivation. Cooper’s (1986) and Ortmann’s(2003a) deconstructions of dominant logics reveal paradoxes. Indeed, thediscussion of the paradoxes that deconstruction uncovers is most obviouswithin the second focus of application (yet not entirely limited to it).84

84 Ortmann and Cooper are not on their own in the sphere of deconstructing ‘thetext’ of organization theory. Chia (1994) offers a deconstruction of conventionalassumptions in decision-making. To avoid a replication of arguments, we do notdiscuss this particular deconstruction any further (see the comprehensive discus-sion in section 6.2.2). See also Ortmann’s (2003b) remarks on the deconstruc-tion of rules (also section 6.3.2) and Cooper’s (1989) deconstruction of the for-malist and expertise model in the study of bureaucracy.


Referring to the third focus of application (i.e. deconstruction as an epis-temological and ontological frame of reference), Chia (1996) uses decon-struction as a strategy to obtain a different understanding of the assump-tions underpinning organizational thinking in general. Whileconceptualizing organizational analysis as a ‘deconstructive practice’, hedistinguishes between upstream and downstream thinking. Downstreamthinking is identified with privileging the epistemological position of rep-resentationalism, the belief that organizational thinking can accurately de-scribe and represent reality ‘as it is’. Organizations are taken to be discreteand identifiable objects existing ‘out there’ that readily lend themselves toanalysis (Chia 1996: 4). This mode leads away from process-oriented theo-ries of how ‘truth’ in and about organizations is produced.

To overcome these problems, Chia proposes an upstream mode of orga-nizational analysis which highlights the contextuality of actions and viewsorganizations not as things but as an emergent process. This process isbased upon the premise that linguistic constructs (like organizations) can-not be objectively described because reality is not static and representable(Chia 1996: 172). Chia refers to deconstruction as a way to show thatmeaning structures in organizations are never fixed, and hence representa-tional, but subject to différance and thus unstable. This has far-reachingconsequences regarding our treatment of organizations.

“What deconstruction offers, therefore, is an alternative way of understandingorganizational analysis as a form of deconstructive practice intended to resistthe seductions of using readily available concepts and categories that providethe intellectual bases for traditional knowledge formation.” (Chia 1996: 192)

Chia suggests that organizations are not the supposedly ‘pure’ phenomenawe are searching after, but that the very possibility of representing some-thing like ‘the organization’ (e.g., by a researcher) already needs to be seenas problematic (see also Moriceau 2005).

All three foci of application reveal important insights into the study oforganizations by questioning taken-for-granted assumptions. As will beshown throughout the chapters to come, deconstruction can also be appliedto strategic management. Our treatment of deconstruction in strategicmanagement corresponds to the second focus of application; we decon-struct dominant logics that occur within ‘the text’, which in this context isbetter understood as the academic discourse, of strategic management. Forus, this academic discourse (i.e. ‘the text’) is represented by strategic re-alities (see section 1.1) that reflect scholars’ assumptions regarding the na-ture of strategy. These clarifications sharpen our understanding of the rela-tion between dominant logics and strategic realities: dominant logics arepatterns of invisible assumptions that occur in the academic discourse (i.e.

Strategic Realities as Text 175

‘text’) of strategic management while strategic realities make these as-sumptions more visible. In this sense, strategic realities stand for ‘the text’that we address within this study. Because this assertion is central to relat-ing our argumentation to Derrida’s work, we discuss it in more depth inthe following section.

4.4 Strategic Realities as Text

What do we deconstruct within this study? As noted above, we treat strate-gic management as a text that is created and sustained within a scholarlycommunity. Ideology, to come back to the starting point of our analysis,inscribes itself in signifying practices – the discourse of strategy – and isinscribed in ‘the text’ scholars generate and refer to (Belsey 1980: 42). Inthis sense, strategy research corresponds to a field of meaning that opensitself up for deconstruction. This field of meaning ‘hosts’ three dominantlogics that we discussed in section 3.2. These dominant logics are made upof a variety of theories and frameworks that reflect certain assumptionsabout strategy and are thus part of scholars’ strategic realities. For in-stance, Porter’s (1985) famous notion of competitive advantage or Hoferand Schendel’s (1978) perspective on strategy formulation represent spe-cific strategic realities that are supposed to aid practitioners.

Strategic realities describe ‘the text’ that is produced by scholars tomake sense of the problems of strategic management. Deconstruction aimsat the meaning that is assigned to such central conceptions as ‘strategic en-vironment’, ‘strategic rules’ or ‘strategic resources’ within these strategicrealities. By conceiving strategic management as a text, we refer to theconstitutive orders of knowledge and power that identify strategy researchas a science. This knowledge does not exist by itself: it refers to, but doesnot represent, the ‘real’ world of strategizing within organizations. Howcan this be?

From our discussion of Derrida’s understanding of text, we know thatthe distinction between signs and referents in the outside world cannot bemade anymore because there is nothing beyond the system of differencesthat constitutes meaning. Strategic management efforts in organizationsare, like the written texts on strategy, constituted by a system of differ-ences and hence subject to the force of différance. Strategic managementtheory is text in the same way that a ‘real’ organization – with its strategicresources, strategic rules – is text. As Derrida (1986b: 168) explains:

“That is why deconstructive readings and writings are concerned not only withlibrary books, with discourses, with conceptual and semantic contents. They are


not simply analyses of discourses […] They are also effective or active (as onesays) interventions, in particular political and institutional interventions thattransform contexts without limiting themselves to theoretical or constative ut-terances even though they must also produce such utterances.”

Deconstruction is not simply a matter of discourse, of displacing the se-mantic content of the discourse; it goes through social structures and insti-tutions (Derrida and Norris 1989: 71-72). When deconstructing a strategicreality, we do not solely deconstruct some idealized conception existing inthe scientific discourse, but at the same time ‘the text’ that is actively pro-duced in organizations while strategic realities are experienced.

For instance, Hamel and Prahalad’s (1998) notion of core competencesis a well-established strategic reality within ‘the text’ of strategy research.In experiencing and referring to this reality, strategists produce text, whichmakes up the social context of application and is open to interpretation.This is to say that the theoretical conception of a core competence is asmuch subject to différance as its application and experience in the ‘real’world. The deconstruction of strategic realities, then, focuses attention onan ideology that extends from the discourse of strategy research to theworld of work. Strategic realities entail strategy as a research discipline inacademia and the practice of strategizing in organizations.

In summary, referring to Derrida’s disseminated idea of text, strategicmanagement can be regarded as a text on two, interrelated levels. First, thediscursive settings and constitutive orders of knowledge that arise from theresearch of scholars in their attempts to develop strategic realities are tex-tual. And second, the experience of these strategic realities in a social fieldof practice is textual as well. We cannot limit our deconstructive reading ofstrategic management to any of these plateaus, as this would imply that wetreat ‘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 notalready a text.” The scientific discourse that holds the ‘idea’ of strategicmanagement is not an entirely different and clearly separable domain fromthe ‘real’ world of strategizing. This is why we described deconstruction asa theoretical practice (section 1.2), a practice that does not come to a haltat the ends of a scientific discourse but reaches from the world of academiato the one of strategists in ‘real’ organizations.

Within the realm of this text of strategic management, deconstructionbegins with an encounter of the unavoidable paradoxes that have beenoverlooked by the dominant logics. Deconstruction equips us with a set ofmetatheoretical assumptions that uncover paradox. As will be shown inchapter six, whenever we use deconstructive logic to reflect on the desireof 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 thatthere is a paradox that has been neglected up to this point. In this sense, thedominant logics deny their own impossibility. After all, deconstructionshows us that a metaphysics of presence (that the dominant logics try to es-tablish) is impossible (i.e. paradoxical).

We do not criticize the existence of paradoxical reasoning within strate-gic management but its obscuration by traditional research. From a decon-structive perspective, paradox cannot be avoided when we start looking fora final origin of our reasoning. Once we learn to appreciate paradox as anecessary limit to reasoning in strategic management research, we (a) real-ize that the dominant logics aim at impossibilities and consequently (b)have to demonstrate that paradoxes can be unfolded and that strategizingbecomes possible despite its paradoxical core. While chapter six exposesthe paradoxes that have been obscured by the dominant logics and thusdemonstrates that their reasoning results in impossibilities, we also need toshow what strategists and theorists can learn from this impossibility andhow they can strategize despite paradox. Thus, the next chapter illustrateswhat paradoxical reasoning means for strategic management and how de-paradoxification 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 strate-gic realities that comply with the dominant logics. Whereas chapter threeoutlined the need to expose paradox and thus to dismantle the dominantlogics and chapter four introduced the possibility of doing so by discussingdeconstruction, this chapter asks for the consequences of paradox with re-gard to the creation of future strategic realities. It is necessary to discussthe consequences of paradox before we present the deconstructions inchapter 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 impor-tance and usefulness of paradoxical reasoning for creating future strategicrealities. We demonstrate that paradoxical reasoning is not only necessaryto dismantle the identified dominant logics but provides other advantagesas well. This enables us to understand why scholars can profit from a con-sideration of paradox. If scholars can profit from paradox, we need to askhow they can embed paradox into their strategic realities (section 5.2)? Toembed paradox, though, is not easy because we identified a paradox assomething impossible. Consequently, we have to ask: Is strategic manage-ment impossible and how should we embed something that is impossibleinto future strategic realities? This question exposes an essential tension:Although we give good reasons for the existence of paradoxes (impossibil-ity), we can observe the practice of strategy within organizations (possibil-ity). Strategic decisions are made and strategic rules are applied. So, whereis the paradox? Either our reasoning is wrong (although we provide goodexplanations for our arguments) and there are no paradoxes, or strategistssomehow manage to cope with paradoxical indecision. From our perspec-tive, the second issue is the case: paradoxes are omnipresent, but strategistsconstantly deparadoxify and thus preserve their capacity to act. To outline


the implications of a deconstructive analysis later on, we discuss how de-paradoxification happens. The final remarks in section 5.3 combine ourdiscussion of the value of paradox (section 5.1) and the necessity to de-paradoxify (section 5.2) by outlining how the creation of future strategicrealities is possible because of and despite paradox and thus paves the wayfor our analysis in chapter six.

5.1 Strategizing Because of Paradox

Paradoxes have a poor reputation, both within science in general and espe-cially in strategic management (Ortmann 2004a). Our discussion of thedominant logics revealed that strategy scholars eschew paradox becausethey are in search of elegant and precise strategic realities: the environmentdetermines strategic conduct, strategy implementation follows formulation,and rules and resources are generalizable. All of this calls for unambigu-ousness and not logical contradiction. Whenever paradox is invoked inwritings on strategic management, it is treated as an anomalous, irregularphenomenon that should be avoided at any expense (Bowman 1980). Whyshould scholars not neglect paradox when building strategic realities? Whyshould they, even contrary to conventional wisdom, take paradox as ameaningful 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 cannotneglect paradox because we miss the metaphysical ground upon which tobase ‘final origins’ (Derrida 1992a). Any disrespect of paradoxical reason-ing calls for a metaphysical ground from which justifications spread out.Whenever we try to ‘prove’ that the strategic environment is objective orthat strategic rules are perfectly generalizable (which would displace para-dox), we need some sort of justification; in fact we need a final justifica-tion (an Archimedean point). Albert (1985: 13) argues that such a finalground cannot be found because one would end up with the uncomfortablechoice between an infinite regress, a logical circle, or a dogmatic interrup-tion of the justification process at an arbitrary point. To avoid the first twoalternatives 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. Inconsistenciesare at the heart of argumentations that are based on ‘final origins’ and‘definite truths’ and there is no reason why we should ignore this (Pooleand Van de Ven 1989: 562). Whereas this line of reasoning tells us that the

Strategizing Because of Paradox 181

dominant logics cannot be sustained because of their inevitable impossibil-ity, 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 factthey obscure a great deal of the complexity we face (Czarniawska 2005).To analyze the complexity and equivocality of social life, we have to em-bed paradox into our theories of strategic management. In a world wheremanagers cannot rely on ready-made solutions paradox is valuable becausecontradiction is the home of creativity (Fiol 1995: 71). Whenever peoplefeel puzzled, for instance because they suddenly realize that the strategicconcept they apply is in need of modification and consequently tells themless about the nature of competitive advantage than they expected, theyhave to be creative to work out solutions. Creativity is of importance tostrategy as strategizing is often considered to be largely about originalityand craft (Mintzberg 2005: 93).

Second, paradox enhances the way strategy scholars build their strategicrealities. Because a great deal of strategy research is about ‘puzzle solving’and the perpetuation of facts, scholars try to perfect parts of their strategicrealities (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 thetheorizing process dominates researchers’ thinking. Scholars are focusedon ironing out problems, testing them adequately, revising them, and de-fending them against criticism. Consequently, they end up in a state of‘trained incapacity’ to appreciate aspects not mentioned in her/his strategicreality because all that is looked out for is consistency with less and lesscorrespondence to the multifaceted reality of strategizing itself. The recog-nition of paradox can guide us out of the box of consistent theorizing tolearn to appreciate tensions that guide, stimulate, and advance more en-compassing strategic realities (Lewis and Kelemen 2002). Paradox forcespeople 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 strategyscholars: equivocality. Often, the recognition that something is paradoxicalis 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 precondi-tion for paradox and that paradox also contributes to equivocality. Accord-ing to Weick (1995: 27), equivocality refers to the problem that there aretoo many meanings resulting in confusion. This, of course, is perfectly inline with deconstruction. The discussion in section 4.2.3 showed thatmeaning is always in a state of flux and can never be finally determined.To demonstrate how paradox and equivocality are interrelated consider the


following example: In section 4.2.5 we introduced a paradox that occursaccording to the relation between a problem and its solution. If we assumethat the world is non-equivocal, the paradox disappears. Then, we could‘fix’ the meaning of the problem and its solution; the problem would de-termine its solution. When acknowledging that strategic management is allabout reducing equivocality and ambiguity to give an organization direc-tion for the future (section 2.1), it becomes clear that strategy scholarsshould not neglect paradoxical reasoning because it is at the heart of thephenomena they are interested in.

These three issues show that a consideration of paradox is needed to ac-cept the complexity strategists have to deal with. Strategic managementloses an important resource for developing future strategic realities if weobscure paradox and act as if the dominant logics were undeconstructible.Any disregard of the limits that are indicated by paradoxes is purchased atthe price of remoteness from the reality practitioners and scholars jointlyface. 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 activi-ties, and as such, necessitates radically different notions of management.”Yet, if we wish to ‘manage’ paradox, we face a considerable tension: Onthe one hand, the impossibility that a paradox establishes is inevitable andcannot be analyzed away. On the other hand, we know that strategic man-agement is possible (e.g., strategic decisions are made). This raises thequestion 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 andactors usually find themselves paralyzed resulting in an inability to act.The consequential prescription is clear: eliminate paradox wherever possi-ble, for if you do not do so you are either mad or an artist (Czarniawska2005: 129). The urge to ‘solve’ paradox stems from the insight that para-dox violates logic: two opposing statements within the same line of argu-mentation are not logical. But, what can we do in the light of paradox? Inline with a considerable body of literature (Luhmann 1988; Ortmann

Strategizing Despite Paradox 183

2004a; Poole and Van de Ven 1989), we suggest that actors can strategizedespite 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 resourcesutilized. This does not imply that deconstruction is a waste of time, but thatdeconstruction uncovers the limits of knowledge we can possibly gainabout the nature of strategizing. If we consider these limits as a regulativeidea, we can unfold (deparadoxify) paradox. In this way, paradox even in-cites action because strategists start thinking about how to cope with apuzzling situation. Practitioners, while working on strategic problems, canproactively consider paradoxes and thus alter the way they deal with strat-egy context, process, and content (see chapter six). Yet, before we outlinehow strategizing despite paradox becomes possible with regard to strategycontext, process, and content, we need to understand ways of deparadoxi-fication (Akerstrom Andersen 2001). From our perspective, deparadoxifi-cation needs to be considered within future strategic realities that scholarscreate to ‘guide’ those strategic realities that practitioners generate in theirattempts to handle strategic problems.

Deparadoxification is not about avoiding paradox but interrupting self-contradictory reasoning to circumvent the purity of paradox and to suggestmeaningful ways ahead. Deparadoxification implies offering ways to un-fold paradox so that the self-contradictory moments of reasoning do notappear visibly as paradox (Luhmann 1990a: 137). Because deconstructionexposes paradox (see section 4.2.5) yet does not explicitly show how todeal with paradoxical reasoning (Derrida 1992a, 1998b), our remarks ondeparadoxification are not based on deconstructive reasoning. Like a para-dox that guides us to the limits of knowledge, Derrida operated at the mar-gins of philosophy and other discourses. As Teubner (2001: 32) remindsus, Derrida does not shy away from the precipice of paradox; he deliber-ately enters the dark worlds of paradoxical reasoning with passion to post-pone the question of possibility to an indeterminate future. When lookingat the literature on deparadoxification (Akerstrom Andersen 2001;Czarniawska 2005; Luhmann 2000; Ortmann 2004a; Vos 2002) one canidentify particularly two ways to deparadoxify: temporalization and boot-strapping.85

85 Ortmann (2004a) identifies a variety of other ways to deal with paradoxical rea-soning (e.g., spatialization of paradox). To deparadoxify via spatializationmeans that the two conflicting ends of the opposition are not decoupled overtime but in space. In this way, the simultaneous presence of the mutually ex-cluding ends of the opposition is dispersed. For instance, one group of strate-gists deals with strategy formulation and another with implementation.


The Temporalization of Paradox – The Role of Fictions

Temporalization reflects a detachment of the conflicting ends of an opposi-tion in time. Thus, the conflict is postponed into the future. To preventparalyzation, people act with a sense of naivety to reflect upon their ac-tions later (Vos 2002: 30). For instance, the justification of a decision isparadoxical because one cannot know ‘the good reasons for the decision’until action (which is actually supposed to be guided by the decision) hasbeen carried out. What do strategists do in the absence of good reasons?Usually, they work with assumptions, scenarios or visions. Statementslike: ‘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 pro-visionally deferred. At first glance, this approach sounds simple: ‘Just doit!’; Spencer Brown (1979: 3) would have said “Draw a distinction!”. Oncloser examination, this naivety turns out to be what Ortmann (2004c)calls the establishment of an As If, a necessary fiction. Fictions, here, arenot essentially about a deliberate inconsistency of talk, decision, and action– something that Brunsson (1989) calls organizational hypocrisy – but re-flect inevitable and often unrecognized anticipations that practitionersmake to perpetuate their capacity to act. If we cannot come up with a finaljustification for a decision prior to action, we often act as if we had goodreasons on which we can rely.

As Ifs obscure the naivety that guides our operations, if we try to getaround paradox. Yet the naivety that is attached to an As If could be inter-preted as decisionism, which is the perspective that justifications can neverbe completed but instead need to be interrupted by decisions that are them-selves not justifiable and thus arbitrary. Is the establishment of an As If ar-bitrary? Ortmann (2004c: 207-210) offers a good reason why As Ifs are notdecisionistic. If fictions regulate our social life, they need to be acceptedand have to demonstrate their viability within social praxis (see alsoWatzlawick 2002: 14-15). The belief that is part of the anticipation may becontingent but is not arbitrary. Luhmann (1988: 154) stresses this point aswell by arguing that deparadoxification depends on conditions of socialacceptability that change with the transformation of a social system andsociety at large. Strategists experience this test for social acceptance everyday when the workforce, unions or analysts reject their strategic fictions orwhen 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 needof modification. As Ifs are necessary to preserve the capacity to act despiteparadox, but the meaning of a strategy remains a matter of retrospectivefulfillment. Fictions do not ‘solve’ paradox; they render it invisible andhelp us to temporarily ignore the paradoxical foundation of an operation.


Bootstrapping and Paradox – When Fictions Are Fulfilled

Another possibility for dealing with paradox rests on self-referential rea-soning itself. While paradoxical reasoning is about contradicting self-reference, there is also the possibility of displacing paradox in the sensethat self-referential reasoning is not contradictory anymore. The concept of‘bootstrapping’ claims that social actors often create the foundation oftheir own operations (Barnes 1983). Certainly, this is a self-referential op-eration, though one that is non-contradictory. Bootstrapping stands for op-erations that create the foundations that make these operations possible inthe first place (Kauffman 1998: 423; Ortmann 2004a: 25). Similar to aself-fulfilling prophecy, bootstrapping links the ends of an opposition inrecursive loops. For instance, a strategist describes her/his environment ashostile and thus makes this environment hostile. To start these recursiveloops, the paradox needs to be displaced again. Most of the time this hap-pens via temporalization. For example, ‘We define our strategy as an inno-vation-minded one’ reflects a fiction. Bootstrapping emphasizes that thisfiction is likely to be fulfilled and then acts as the ground for the nextround of strategizing. The major difference between bootstrapping andtemporalization is that bootstrapping explicitly highlights non-contradictory self-reference and thus could be described as a special caseof temporalization (i.e. a fulfilled fiction).

To better understand the bootstrapped nature of social life, we need toreflect on an exemplary bootstrapped operation. For this we have to con-sider the performative part of our language.86 Barnes (1983: 526), follow-ing the speech act theorists Austin (1980) and Searle (1983), directs ourattention 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.” (em-phasis added)

To use a performative speech act means to perform an action that carvesout reality (e.g., nominating, firing or adjourning). Performatives do some-thing to a state of the world rather than describing it; they form reality. Topronounce an entity an X makes this entity an X. This is self-referentialand thus a bootstrapped operation. By performing speech acts, we makeour reality into a reality we then refer to. In other words, speech acts createwhat they refer to. An X is whatever the individual calls an X. The boot-

86 Performatives are just one possible type of bootstrapping. Hofstadter (1987:315), Kauffman (1998: 422-423), and Ortmann (2004c: 56-61) give yet otherexamples (e.g., bootstrapping in evolutionary biology or in computing).


strapped character of performative speech acts has consequences for ouranalysis.

If we consider the world-disclosing role of language (i.e. speech acts) asdescribed in section 4.2.3, it is not improper to think of strategic rules, re-sources, decisions, and descriptions as coming in part into existence bymeans of performative speech acts. Strategic management constantly re-lates to performatives – managers announce a merger or formulate a strat-egy. Consider the following example: Similar to strategic decisions, strate-gic rules face the paradox that they are supposed to guide applicationwhereas their meaning can only be fixed within application. Hence, thereis no self-defining origin that allows us to think of the rule as being self-present and the cause of itself. If there is no self-defining origin fromwhich a rule can emerge, but we know that rules exist, we have to discusshow they come into being. One possibility of thinking of the constitutionof strategic rules is to describe their application as a bootstrapped opera-tion that is based on performatives. Then, strategic rules, which are actu-ally supposed to guide strategic action and thus ‘strategy talk’, become es-tablished through performative speech acts (‘strategy talk’) and the relatedimplied actions. Although the underlying paradox tells us that there is nofinal origin from which a self-defining rule can appear, we can describe theconstitution of strategic rules as a bootstrapped operation based on perfor-mative speech acts (see Figure 20). The paradox (‘for a rule to mean any-thing there needs to be application, yet for application to come about thereneeds to be a rule’) is turned into a bootstrapped operation as long as weidentify the constitution of strategic rules with performative speech acts(‘strategic rules are established through speech acts that are actually sup-posed to be guided by these rules’). Thus, to analyze what strategists saycan add more to our understanding of strategy than analyzing chunks ofperformance-related data (Hardy et al. 2000).

The performative character of strategic management has been widelyneglected so far. Strategists often do things to the world: The market po-tential that is announced by the CEO is made the point of reference forstrategy formation (strategy context). Synergy effects are taken as reasonsfor a merger and are thus treated as the justification for a strategic decision(strategy process). Porter’s five forces framework is classified to be thestrategic rule relevant to the corporation (strategy content). On closer ex-amination, we see that the performative effects of speech acts are muchlike a fiction (Ortmann 2004c: 50). We act as if the reasons at hand arerelevant, and this makes them reasons. We act as if Porter’s framework canhelp us with the content of our strategy, and this makes Porter’s frame theinput for strategy content. The strategy turns out to be whatever strategists


identify to be their strategy. This is far from being arbitrary. As statedabove, 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 self-reference that is not contradictory. Performative speech acts, which reflectbootstrapped operations, temporalize complexity and thus ‘transform’paradox into a recursive step-by-step (Ortmann 2004a: 26). According toHofstadter (1987: 137), recursive relations are not paradoxical becausethey consider time to a greater extent. A recursive definition is not solelydefined by itself but through a ‘simpler’ version of itself. Giddens (1984)gives a good example: the duality of structure, which conceptualizes struc-ture as the medium and outcome of the conduct it recursively organizes,refers to structure in a dynamic way. The structural properties of socialsystems are not caught up in paradox, because a ‘simpler’ version of struc-ture 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 thereseems to be no ground on which people could base their actions. Thisground is missing because the paradox demands that actors consider twocontradicting issues at the same time. Temporalization and bootstrappingshow 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 peo-ples’ capacity to act. Temporalization bases this ground on a fiction,whereas bootstrapping emphasizes that this ground is often self-created. Ofcourse, every fiction is a self-creation, yet not every fiction is fulfilled inpraxis. To announce a strategy creates a ground from which further actionscan unfold, yet this does not necessarily imply that this announcement


constitutes the strategy. If fictions are accepted by other actors and at leastpartly fulfilled, we look at a bootstrapped operation (i.e. we announce orproclaim a strategy and thus make our announcement a strategy). To graspthe role of deparadoxification within a study that addresses deconstruction,we need to discuss the relation between deparadoxification and Derrida’ssupplementary logic.

Deparadoxification and Derrida s Logic of Supplementarity

What first looks like an insoluble paradox turns out to be gradually formedin and by recursive loops. This recursiveness can also be described by re-ferring to Derrida’s (2003a) logic of supplementarity. Yet, as described insection 4.2.2, for Derrida the logic of supplementarity describes a situationthat points towards paradox. It is the encounter with the impossible (withthe paradoxical) that the supplementary logic primarily aims at (Derrida1998b: 16), although the logic itself can be also be used to describe recur-sive relations (Dupuy and Varela 1992; Girard 1992; Ortmann 2003a).Derridean supplementarity turns into a paradox if we analyze both ends ofthe underlying opposition to occur at the same time. We thus have to re-spect that deconstruction is primarily about exposing paradox and the un-decidable moments of argumentation, yet can also be employed to unravelthe inherent recursiveness between the poles of an opposition (see Figure21). To uncover this recursiveness, we need to enrich the supplementarylogic with analytical tools that help us understand how recursivenessemerges out of paradox. Temporalization and bootstrapping represent toolsthat allow us to show how a paradoxical relation is turned into a recursiveone (see chapter six).

Fig. 21. Two Disguises of the Logic of Supplementarity

Strategic Realities Despite and Because of Paradox 189

As depicted in Figure 21, every paradox is a problem of time, if we con-ceive of time in its most radical way (Luhmann 2000: 132). Deparadoxifi-cation techniques do not deny paradox “but displace it temporarily andthus relieve it of its paralyzing power.” (Teubner 2001: 32) They demon-strate that we oscillate between the poles of an opposition, which are para-doxical only as long as we look for the unity of the distinction (Weizsäcker1976). Oscillation, the constant movement between both ends of an oppo-sition, 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 para-dox and should value it for a variety of reasons (section 5.1) but also thatparadoxes only indicate the limits of knowledge we can possess about stra-tegic management and that there is need to deparadoxify (section 5.2). Thisdemonstrates that we have to incorporate both paradox and deparadoxifica-tion into our strategic realities; we need to build strategic realities becauseof and despite paradox. We have to construct strategic realities because ofparadox since deconstructive logic suggests that paradoxes unavoidablyoccur once we look for final origins (e.g., an objective environment). Toremind ourselves that these origins are impossible and to not get trapped inthe outlined dominant logics (section 3.2), we need to include paradox.Likewise, we need to construct strategic realities despite paradox, as wecannot conclude the impossibility of strategic management if variousauthors have empirically observed practitioners’ work on strategic prob-lems (Chelsey and Wenger 1999; Liedtka and Rosenblum 1996). To con-clude that strategic management is impossible neglects that firms engagein this social practice.

What we label ‘The Deconstruction of Strategic Realities’ in chapter sixshows that strategic realities exist because of and despite paradox (Figure22). On the one hand, our deconstructions of the strategic realities withinthe dominant logics have to uncover the paradoxes that strategy researchhas overlooked thus far. This, of course, is the classical task of any decon-struction. On the other hand, our deconstructions also aim at deparadoxfi-cations that transform paradox into non-contradictory recursive relations.Although Derrida himself always tried to push his own analyses in the di-rection of paradox to show that a self-defining origin that acts as a finalmetaphysical cause is impossible to reach, we believe in accordance with avariety of scholars (Dupuy and Varela 1992; Girard 1992; Ortmann 2003a)


that deconstruction can also help us to develop new conceptions that‘bridge’ the underlying oppositions to show their recursive connection. Asnoted at the end of section 5.2, to employ Derrida’s deconstructive logic inthe 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 wereoutlined in the preceding section and (b) selected insights from other theo-ries (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 meaningfullyconnect organization and environment (strategy context), strategy formula-tion and implementation (strategy process), as well as strategicrules/resources and their application (strategy content). Connecting opposi-tions in a both/and-way does not mean integrating them into a coherentwhole in order to ‘solve’ paradox. Scholars who look for synthesis disserv-ice theory and practice by obscuring the anxiety that arises from the co-presence of oppositions (Clegg et al. 2002: 488).

Our analysis points towards the challenge of creating strategic realitiesdespite 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-encapsulatingtheories 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 experi-ence of aporia, that is, of something that does not allow passage” and alsostresses that “the aporia can never simply be endured as such.” (Derrida 1993:78)

Strategic Realities Despite and Because of Paradox 191

theory and to develop new insights if theorists search for and work with incon-sistencies, contradictions, and tensions in their theories, and in the relationshipbetween them.”

To work with contradictions and inconsistencies is not an easy task be-cause to ‘push’ paradoxical reasoning to its limits brings about impossibil-ity. The following chapter has to address this tension between ‘the impos-sibility of paradox’ and ‘the empirical reality of strategy making’. In linewith Clegg et al. (2002: 486), we believe that any treatment of paradoxneeds to positively regard the co-presence of opposites but also explore therecursive relationship between both poles without immediately assuming adead end. This, then, is the primary task of ‘The Deconstruction of Strate-gic 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 thispoint. Chapter three argued that strategy scholars are skilled in creatingoppositions that govern the field in an almost unnoticed way and thus ledto the establishment of dominant logics. Oppositions exist because manywidely used strategic realities look for ‘origins’ (e.g., a formulated strategyin strategy process research). Yet ‘origins’ cannot be fully justified; any at-tempt to rationalize the purity of an ‘origin’ results in paradox. Hence, op-positions prevent the discussion of paradoxes that are unavoidably presentand in consequence lead to dominant logics. Based on these insights, chap-ter four introduced deconstruction as a kind of metascience that challengesand surpasses the metaphysics of logocentric systems, i.e. strategic reali-ties that in our case form ‘the text’ to be deconstructed. This text imposesan order on reality by which a subtle repression is exercised. By disman-tling strategy’s logocentric oppositions, deconstruction uncovers the para-doxes that occur once a metaphysics of presence is left behind. Chapterfive argued that to merely uncover paradoxes is not enough; any exposureof the impossibility that paradox brings about needs to be supplemented byremarks on deparadoxification. Paradoxes only represent necessary limitsto our knowledge about strategic management, but we should not concludethe impossibility of strategic management. We concluded that this chap-ter’s subject (i.e. ‘The Deconstruction of Strategic Realities’) must showthat strategic realities are created because of and despite paradox. To con-sider paradox means to link both ends of an opposition together, yet with-out concluding contradictory self-reference (Poole and Van de Ven 1989:567).

Our premise that ‘The Deconstruction of Strategic Realities’ has to con-sider paradox and deparadoxification is reflected by the method of argu-mentation that guides the analysis throughout chapter six. Figure 23 de-picts this method of argumentation and illustrates that the deconstruction


of strategic realities with regard to strategy context, process, and contentconsists of four parts. In the first part of each deconstruction (sections6.1.1, 6.2.1, and 6.3.1) we begin with a discussion of ‘blind spots’. As no-ticed in section 1.1, the dominant logics cannot see that they cannot see theparadoxes because of their underlying metatheoretical assumptions. Weexpose these blind spots and introduce different assumptions from the per-spective of deconstruction. In fact, we revisit concepts like complexity(strategy context), double contingency (strategy process), as well as the in-saturable 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, and6.3.2) we apply the metatheoretical assumptions that were discussed in thefirst part to deconstruct the identified dominant logics. Each deconstruc-tion exposes a paradox, something that is impossible. The discussed para-doxes demonstrate that the dominant logics of strategy context, process,and content aim at impossibilities and therefore cannot be sustained anylonger. The third part of each deconstruction (sections 6.1.3, 6.2.3, 6.3.3)applies the deparadoxification techniques that were identified in chapterfive and demonstrates how we can theorize in strategic management de-spite the paradoxes that we identified.

The Deconstruction of Strategic Realities 195

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 con-text, process, and content. To discuss the implications of each deconstruc-tion, 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 ofthe paradoxical nature of strategy context, process, and content but also il-lustrate that paradoxes can be unfolded over time. We first discuss theseterms from a ‘theoretical’ perspective to show what scholars can learnfrom deconstruction and then outline ‘practical’ implications that demon-strate what practitioners can take away from our discussion. Although bothimplications are based on Derrida’s way of thinking, we complement hisremarks with selected ideas from other theories (e.g., Weick’s [1995] sen-semaking approach or Schütz’s [1967] conception of the social world).This approach is feasible, since Derrida never applied his thoughts to or-ganizations in general or strategic management in particular.

When looking at the complete structure of analysis that underlies ‘TheDeconstruction of Strategic Realities’, we see that it reflects the need tobuild theories in strategic management because of and despite paradox (seesection 5.3). The discussion of the blind spots and the resulting paradoxesrepresent the first two parts of each deconstruction; both parts discuss theexistence of strategic realities because of paradox (see the first grey box inFigure 23). Whereas the first two parts show that strategic realities relate toand exist because of paradox, the last two parts of each deconstructionshow that paradoxes are conceptual limits to our knowledge about strategyand that we can build strategic realities despite paradox (see the secondgrey box in Figure 23).


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 thebelief that firms are part of an all-encompassing environment. The envi-ronment is seen as an ultimate point of reference to which firms have toadapt to while formulating their strategies. In the following, we discussmore closely why such a conception of the organization/environment rela-tion obscures paradox. To unfold our reasoning, we must assume for amoment that the paradigm of adaptation was right: organizations adapt toan objective environment that displays the ultimate form of complexity.88

If the ‘necessity of adaptation’ were right, the environment would repre-sent a definitive point of reference that tells organizations how to identifythemselves and their strategies. Accordingly, the identity of an organiza-tion (and thus the identity of an organization’s strategy) is a matter of pureadaptation to the environment. The environment yields an identity for anorganization’s strategy that is not a product of the organization but of theenvironment. 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 toitself.

Pondering about the possibility of such a ‘pure’ identity, an identity thatsimply is the product of some higher authority (i.e. the environment), Der-

88 Because deconstruction argues for the irreducibility of meaning, Derrida(1995a: 118-119) has explicitly linked the problem of meaning and context tothe fact that ‘the text’ represents the complexity of the world (see also Cilliers2005: 259). Knowledge about referents always remains provisional. Luhmann(1995b: 24) gives a more formal definition of complexity: “A definition ofcomplexity follows from this: we will call an interconnected collection of ele-ments ‘complex’ when, because of immanent constraints in the elements’ con-nective capacity, it is no longer possible at any moment to connect every ele-ment to every other element.”

Strategy Context – Beyond the Market Given 197

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 ofsupplementarity. Identity is not a static concept, not something that im-poses itself on us from the ‘outside’. Identity is a constant reinvention. ForDerrida, the enormous complexity that resides in ‘the text’ prohibits thecreation of any fixed or given identities; to fix an organization’s identitywould be similar to claiming that meaning could be conclusively deter-mined. The identity of an organization (and its strategy) is a product of the‘play of differences’; these differences are not stable but change con-stantly. Every difference is also a deference of a self-present identity intothe future; every identity is subject to différance.

Because of the complexity that structures ‘the text’, there can be no pre-determined meaning. Indeed, the meaning of an organization’s identity isalways moving, it is never fully ‘there’. Derrida (1992d: 9) argues in thiscontext 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 at-tained; only the interminable and indefinitely phantasmatic process ofidentification endures.” Identity is identification – a never-ending processthat is well described by Alice in Wonderland who states that “at least Iknow who I was when I got up this morning, but I think I must havechanged several times since then.” (Carroll 1994: 43-44, emphasis in theoriginal)

To move Derrida’s rather abstract argument closer to our concerns, wehave to ask how identification occurs. If we trust Derrida (1992d) that con-stantly changing differences constitute identity, identification results fromthe continuous processing of selections to reduce complexity. Organiza-tions have to reduce complexity to perpetuate their capacity to act. If theyfail to make selections and thus do not reduce complexity, there is no pos-sibility of fostering the process of identification anymore (because in theabsence of differences any distinction between environment and organiza-tion disappears). As discussed in section 2.1, organizations cannot practi-cally realize all alternatives that are ‘offered’ by the environment.89 Strat-egy is all about the reduction of complexity by selecting alternatives. The

89 Strictly speaking, the alternatives that identify an organization do not rest in theenvironment. If they were to rest in the environment, the latter would be a kindof pool of all possible alternatives. Yet the environment only comes into beingwhen alternatives are activated (when differences are made) by the organization.With regard to Derrida (2002), alternatives reside in the general text, a text thatin Luhmann’s (1995b) conception of social systems is called ‘Welt’ (see alsoLuhmann’s [1995a] own remarks on Derrida’s conception of text).


differences that are drawn in the process of identification bring the catego-ries ‘the environment’ and ‘the organization’ into existence. In fact, theenvironment is what the organization is not. If complexity reduction is atthe heart of strategic management, we cannot neglect that organizationsmake selections (Seidl 2003b, 2000).

If organizations propel identification by creating differences, they lackwhat Ashby (1956) calls requisite variety. Following Ashby’s Law of Req-uisite Variety, we have to take as many control variables as there are ex-ternal variations.

“This is the law of Requisite Variety. To put it picturesquely: […] only varietycan destroy variety.” (Ashby 1956: 207, emphasis in the original)

According to this law, an organization has to establish a point-to-point cor-respondence to the environment to remain in control. Yet because theprocess of identification relies on differences that reduce complexity, or-ganizations lack this requisite variety that would allow them to react toevery state of the environment. If an organization were to succeed in estab-lishing such a point-to-point correspondence, the organization/environmentdistinction would be cancelled out; there would be no difference betweenenvironment and organization anymore, as both possess the same level ofcomplexity. In Derrida’s terminology: both categories would no longer betextualized. Organizations can never capture the entire environmentalcomplexity, because every attempt to come into existence requires a dis-tinction that sorts something out. If distinctions act like a kind of filter, theenvironment turns out to be a construction from the side of the organiza-tion. In consequence, we need to give up the assumption that organizationsadapt to an environment that exists independently of them, because there isnothing an organization can adapt to but its self-construction of the envi-ronment.

This makes the ‘necessity of adaptation’ an improper point of departurefor theorizing, as a constructed environment cannot be objectively given toact as a point of reference for adaptation (every adaptation to a constructedenvironment already is self-adaptation). The ‘necessity of adaptation’ ne-glects that every organization misses the requisite variety that is required torefer to an environment that exactly suits the organization. Only with apoint-to-point correspondence in place would perfect adaptation be theo-retically possible. Because of the missing requisite variety organizationspossess no formal criterion to check whether they have adapted yet. Theorganization’s inferiority in terms of complexity is due to the necessary butlimited number of selections it needs to make in the process of identifica-tion.


We will briefly summarize our argumentation by highlighting the twomajor points of our discussion. First, an organization’s identity, which in-fluences the development of its strategy, is never simply given (for identityalways already is identification). Second, this process of identification canbe described as an active operation (i.e. the establishment of differences bythe organization). These differences bring ‘the environment’ and ‘the or-ganization’ into existence. Indeed, the environment turns out to be whatthe organization is not. The differences that organizations draw reducecomplexity because every difference acts like a kind of filter. In conse-quence, the organization constructs its own environment. Yet a constructedenvironment provides no point of reference for adaptation because it nolonger exists independent of the organization. Consequently, neither theenvironment nor the organization represent the ‘essence’ of strategizing,an absolute point of reference for the strategy context that ‘is itself’ by vir-tue of its being.

In conclusion, the problem of complexity reduction is at the heart of ourthinking about strategy context. The creation of an organization, and espe-cially strategizing within an organization, is just an answer to the problemof 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 identifica-tion that is based on the creation of differences that reduce complexity.Strategic approaches that find their conceptual foundation in adaptation-based logic (e.g., Porter’s objective rules of an industry sector) seem to ne-glect this argument. This blind spot of adaptation-based strategy contextresearch 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 meta-physics of presence that belongs to the claim of an objective strategy con-text.


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 demonstratethat adaptation-based logic, while trying to ‘prove’ that that the environ-ment acts as a kind of origin for strategic reasoning, obscures a paradox.Adaptation-based strategy research can be criticized for the denial of aparadox that arises once we consider the lack of requisite variety that anyorganization necessarily faces. In other words, if the ‘necessity of adapta-tion’ tries to show that the environment is a kind of origin for strategic rea-soning, it obscures the fact that organizations lack requisite variety andconsequently make selections, reduce complexity, and thus construct theirown environment. This lack of variety gives rise to a paradox that will beexplained in this section.

Because Derrida never explicitly focused or discussed categories like‘the environment’ or ‘the organization’, we need look for a discussion ofsimilar categories within his writings. From our perspective, Derrida’s(1987b, 1981a) understanding of the relation between inside and outsidecan help us to discuss the underlying paradox. This inside/outside-debatefits our remarks on strategy context, because we usually think that the en-vironment is something outside whereas the organization is something in-side. Derrida (1987b: 45) contends that the common distinction betweeninside and outside is an essential metaphysical thought that is especiallyrevealed in the study of art.90

90 The discussion of the inside/outside opposition runs through many of Derrida’sdiscussions. In Dissemination he writes about hymen, the virginal membrane,that stands between the inside and outside. Hymen, similar to the frame, “is anoperation that both sows confusion between opposites and stands between theopposites at once.” (Derrida 1981a: 212, emphasis in the original) Hymen is anundecidable term that represents fusion but by the same token also upholds thedifference between inside and outside.


“This permanent requirement – to distinguish between the internal proper senseand the circumstance of the object being talked about – organizes all philoso-phical discourses on art, the meaning of art and meaning as such, from Plato toHegel, Husserl and Heidegger. This requirement presupposes a discourse on thelimit between the inside and outside of the art object, here a discourse on theframe.” (Derrida 1987b: 45, emphasis in the original)

The frame distinguishes between inside and outside but is not ‘given’ in away for us to simply accept the difference. Rather, the frame occupies asort of ‘non-space’ between inside and outside and thrives on its simulta-neous presence and absence. The frame is not naturally imposed but con-structed through differences that are never complete but perpetuated bydifférance. Such as there is no pre-defined limit to ‘the text’, there can beno natural boundary around what we believe to be inside. Of course, theperformance of a frame seems rather unproblematic in a painting, wherethe frame seems more ‘given’ but is always recreated by the observer. Inother 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 thepure 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 supple-mentarity of the parergon. To be recognized as a work, the ergon needs tobe set off against a background. This distinction is by no means naturallygiven but an active operation of framing. Derrida calls this active framingwork parergonality and thus supports his argument that the ergon needs tobe understood as an effect of the parergon. To understand the relation be-tween inside and outside as parergonal (framing) means to give referenceto its undecidable nature in which neither inside nor outside are simply‘present’. The inside supplements and thus constitutes the outside. Therecan be no outside or inside just on their own as this would imply a meta-physics of presence; the outside is in the inside, whereas the inside also isin the outside.92

91 The outside, here, is not merely understood as the wall on which the work hangsbut the general text in which the art object is created or constituted (Derrida1987b: 61-62).

92 One may argue here that parergonality is restricted to the discourse about art ingeneral. Derrida (1987b: 61), however, makes quite clear that the frame is “atthe invisible limit to (between) the interiority of meaning (put under shelter bythe whole hermeneuticist, semioticist, phenomenologicalist, and formalist tradi-tion) and (to) all the empiricisms of the extrinsic which, incapable of either see-ing or reading, miss the question completely.”


If we apply this kind of thinking to the relation between environmentand organization, we can argue that the environment exists only because ofthe organization, while at the same time the organization cannot existwithout its environment. The apparent purity of the environment is con-stantly supplemented by the organization that actively frames its own envi-ronment. The supplement is added to compensate for a lack in what isthought to be complete; the organization always adds a new dimension tothe environment (Cooper 1986: 315). That is why the conception of theenvironment cannot be fixed or grounded in a notion of presence. Therecan be no strategy context that is simply derived from an objective andself-present environment, but only a strategy context that is based on therelation between organization and environment. Applying Derrida’s think-ing to strategic management demonstrates that the strategy context issomething that is ungrounded (viz. has no origin from where to start rea-soning).

These arguments enable us to demonstrate that adaptation-based logic isbased on a paradox. If it is true that the environment consists only becauseof the organization (i.e. it is a construction of the organization), every ad-aptation to the environment is only possible as self-adaptation. This leadsinto a vicious circle: the organization can only be adapted to the environ-ment if the environment is adapted to the organization. The implications ofthis finding lead to paradox: you cannot distance yourself from the envi-ronment for the sake of strategy formulation and at the same time producethis very environment. While looking for strategic fit, organizations needto describe the environment that exists regardless of them (as otherwisethey could not establish distance), whereas in fact the environment existsonly because of the organizations. The strategic environment cannot existat the same time because of and despite an organization. You cannot adaptto something (and take it as a reference point despite yourself) that at thesame time exists only because of your own existence (see Figure 24).


Fig. 24. The Paradox of Adaptation and the Strategy Context

Certainly, one could claim that even though the environment is an orga-nizational construction there is at least something one can adapt to (i.e. theconstruction of the environment by the organization). At least, an organi-zation could observe its own construction of the environment and thenadapt to this construction, could it not? Of course it could; but it cannot doso in an objective way; the organization cannot fully observe its own exis-tence. This argument can be explained as follows: To observe the con-struction of the environment means to observe the organization that con-structs the environment (because the construction does not simply exist onits own). Yet if an organization really wants to achieve a perfect fit it needsto attain full knowledge of its constructed environment, which requires thatthe organization needs to observe itself in a perfect way. This, however, isnot possible. Every self-observation of an organization contains a blindspot because during a self-observation an organization cannot observe thatit is observing itself. In other words, self-observation is paradoxical be-cause the organization/environment distinction, that the organization inevi-tably needs to make to reduce complexity, cannot be used to observe whatis observed by this distinction. The same distinction cannot be used twiceto observe something different. In consequence, each attempt to describethe environment (which is a construction from the side of the organization)by means of self-observation remains at least incomplete and contains ablind spot. Hence, organizations cannot ‘check’ whether they have adaptedbecause the necessary self-observation is paradoxical. Contact with ‘my’


environment is only possible through self-contact, which requires a self-observation that has a blind spot.93

These remarks suggest that the impossibility of the paradox that we un-covered is limited to a description of an objective environment. Becauseevery organization describes itself when it describes its environment, but aperfect self-observation is impossible due to the blind spot that inevitablyoccurs, we must conclude that organizations cannot identify an objective,fully present point of reference that they could use for adaptation. In otherwords, organizations cannot describe their environment despite their exis-tence, because it is the organization that is ‘in the way’. This limitedness ofthe paradox is in line with Derrida’s (1992a) reasoning because he sug-gests that the impossibility of a paradox is limited to the establishment of ametaphysics of presence that is self-defining and based on an ‘origin’. Yetto suggest that an objective description of the environment is impossibledoes not mean that there can be no strategic descriptions at all.

Certainly, there are strategic descriptions of categories like opportunitiesand threats as well as strengths and weaknesses. But the consequence ofthe paradox is that we cannot assume any kind of causal relation betweenenvironment and organization.

“[S]ince elements and structures, situatedness and semantics are performancesof the system, too much ‘of its own’ enters into the ‘adaptation’ for one to inferan increased compatibility of system and environment as a result. Paradoxi-cally, precisely its own part in the process of structural adaptation may preventa system from successfully stabilizing itself within its environment in the longrun.” (Luhmann 1995b: 351)

The environment does not act as a self-defining cause for the structural ex-istence 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 your-self as something else based on the same distinction that made it possible toidentify yourself.” (Vos 2002: 218) This paradox occurs because an observercannot observe the spot behind the foundational distinction of a system bymeans of the same distinction. This is why every observation has a blind spot,because during an observation the distinction that enables the observation can-not be observed. Identity when observed by the organization itself is paradoxi-cal: the organization only is itself because it uses the distinction of being itselfand not being itself in order to distinguish itself. This paradox is a timeless iden-tity, because observations of identity are paradoxical when they are extractedfrom time. One way to deparadoxify this situation is by means of ‘simply’ start-ing to operate (e.g., through an As If) to postpone the question about the unity ofthe distinction. Of course, one could argue that a second-order observer can un-cover this blind spot. This, however, does not solve the problem since the sec-ond-order observer would face her/his own blind spot.


the organization. This does not imply that the environment does not influ-ence the organization; it only means that the environment does not deter-mine it. It is not being suggested that organizations do not face an envi-ronment, but that this environment constitutes no metaphysical groundwhich strategic reasoning can use as a source for adaptation.

We can conclude that Derrida’s (2003a) deconstructive logic helped usto expose a paradox with regard to strategy context research. Organizationsthat strive for adaptation face paradoxical indecision: to adapt to some-thing they need to describe an environment that exists regardless of them,while at the same time this environment only exists because of them. Ofcourse, organizations can observe part of their own environmental con-struction, yet they cannot fully observe this construction: this is becauseobserving the environment implies observing oneself, which is not fullypossible due to the blind spots involved. This paradox demonstrates thatthe adaptation-based logic of the ‘necessity of adaptation’ aims at an im-possibility (i.e. a paradox). The ‘necessity of adaptation’ obscures theparadox because the observation of the environment and the processing ofcomplexity are not regarded as problematic. From this perspective, thedominant logic cannot be sustained any longer, because the ‘core’ of thelogic (i.e. the belief in adaptation and strategic fit) aims at a metaphysics ofpresence that remains impossible.

As indicated in chapter five, the exposure of a paradox needs to be sup-plemented by a positive use of paradoxical reasoning for the sake of creat-ing other strategic realities. The paradoxical foundation of the organiza-tion/environment relation implies that we have to think of thecircumstances that shape strategy in a different way. In the following sec-tions, we explore this way of thinking by showing (a) how the relation be-tween ‘the environment’ and ‘the organization’ is deparadoxified by stra-tegic actors and (b) that we can gain important insights from adeparadoxified understanding of strategy context.

6.1.3 The Deparadoxification of Strategy Context

To outline any implications at all, we have to explore how the strategycontext becomes possible despite the paradoxical nature of adaptation.From a theoretical perspective, strategizing is paralyzed by paradoxical in-decision: organizations cannot refer to their environment for the sake ofstrategy formulation despite themselves when they are constructing thisenvironment at the same time. Yet from a practical perspective, organiza-tions seem not too paralyzed. They somehow manage to identify theirstrategy context, although, strictly speaking, they cannot because of the


underlying paradox. Even though the paradox is only a theoretical limit toour knowledge and organizations do not usually demand an objective de-scription of their strategy context, the question remains how strategistsdeal with an environment to which they need to refer themselves and fromwhich they need to achieve distance, all while looking for a point of refer-ence for the strategy context. If adaptation cannot be achieved, on whichfoundation do organizational members base their strategy context? How dothey identity the strategy context when they have no perfect environmentto which they can adapt?

To become operational, organizations deparadoxify this situation bymaking use of time. As indicated in chapter five, the temporalization ofparadox is one possible approach for dealing with contradictory self-reference. This is not to say that temporalization is the only way to depara-doxify, but it is a widely used one with regard to questions of strategy con-text (Vos 2002). Because the paradox of adaptation tells us that strategistscannot 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 referencepoint existed (e.g., ‘Let us act as if our strategic environment is highlycompetitive.’). Although it is impossible (i.e. paradoxical) to find a fullydeterminable point of reference for adaptation, the As If temporalizes theunderlying paradox and thus preserves managers’ capacity to act.94 Facedwith the indecision of the paradox – the need to achieve distance fromsomething that is created by oneself – managers can identify their strategycontext by acting as if there were a strategic environment (whereas in factthey are looking at their own construction of this environment). Theground 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 authoritythat imposes exactly this assumption. As Vos (2002) suggests, the differ-ences that the As If is based on underlie a sense of naivety.

Naivety does not imply arbitrariness. In particular, there are two reasonsfor this. First, every As If needs to be accepted by other actors (within theorganization and in the market). In other words, strategists are not able toidentify every environment they want to identify. The fiction needs to becommunicated and objectified within social praxis to be of relevance forfuture sensemaking processes (Berger and Luckmann 2000; Ortmann2004c: 124). Second, the contingency of the As If is path-dependent, mean-ing that its establishment does not happen in an unconditioned way. In-

94 Indeed, the temporalization happens because organizations first look at their en-vironment because of them (i.e. their construction) and then treat this construc-tion as if it existed despite them. In this sense, the paradox does not disappearbut remains invisible and is deferred into the future.


deed, former notions of the strategic environment have an impact uponthose that follow; in this sense As Ifs are recursively related. Of course, at acertain point in time (usually in the very early stages of the development ofa firm or after a crisis) every description of the environment is open to re-vision (Arthur 1994; Sydow et al. 2005). Yet after a while, already estab-lished environmental constructions restrain future choices. Identified‘strengths’ remain ‘strengths’ and ‘opportunities’ keep on being ‘opportu-nities’.

Certainly, few practitioners would admit that their strategy context isbased on fictions, fictions that are the product of organizational membersand not ‘demanded’ by the environment. To legitimize certain strategicmoves by claiming that ‘the environment demanded us to do this’ usuallyfinds easier acceptance ‘within’ the organization and ‘the market’. The AsIf that acts as a nucleus for the identification of the strategy context usuallyremains unnoticed from the perspective of the strategist. Yet, from the per-spective of an observer, we need to admit that the absence of an objectiveenvironment permits the establishment of a reference point that takes theplace of the As If.

To conclude, the paradox of adaptation clarifies that there is no refer-ence point within the strategy context that firms can use for adaptation.Deparadoxification helps us to understand what strategists do in the ab-sence of such a reference point and how they create a non-metaphysicalground on which the strategy context rests. Inevitably, the resulting strat-egy context is ‘imperfect’; there is no ‘origin’ on which to base strategy.No organization can perfectly observe its environment because of and de-spite itself to then find a point of reference for adaptation; the paradoxicalnature of adaptation prevents access. To speak with Luhmann (1995b:208), the deparadoxified strategy context represents “the world after thefall from grace.” In the following section, we illustrate the ‘theoretical’ and‘practical’ implications of this discussion. These implications need to showthat, based on the As If, strategists link environment and organization inrecursive loops. As indicated above, an As If reflects a starting point foridentifying the strategy context (e.g., ‘If we act as if we face a highly com-petitive environment, our major strength is our short product-to-markettime.’). The question then is how such recursive loops between environ-ment and organization appear and what we can learn from them.


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 thescholarly community. The basic question we need to ask is: What happenswith the As If ? If the fiction provides a ground from which further sense-making processes can unfold, we need to know more about the process ofidentification that underlies managers’ understanding of the strategy con-text. To discuss this issue, we should (re)consider the following aspects:The As If is based on differences that are drawn by practitioners within or-ganizations. Because of these differences, managers regard certain aspectsof the unordered general text (Derrida 2003a) as relevant; they kind of sortinformation out which then makes up their construction of the environ-ment. This construction, though, is what they subsequently experience as aconstraint (i.e. ‘the environment’). In other words, the environment is aself-created constraint from the side of the organization (see also parts insection 6.1.1).

What is important for us is that the argumentation that was just de-scribed is well reflected by a single concept: enactment. The theoreticalnotion of enactment refers to the ideas of Weick (1979: 130) and “capturesthe more active role that we presume organizational members play in cre-ating their environments which then impose on them.” Enactment reachesbeyond the idea of pure notional constructions; it is activity to enforce astate of the world.95 Enactment does something to the world. Although cer-tain environmental aspects sometimes seem imposed by the environment –

95 Weick (1979: 164) argues: “The concept of an enacted environment is not syn-onymous with the concept of a perceived environment, even though citations ofthe concept would suggest that it is. If a perceived environment were the es-sence of enactment then the phenomenon would have been called enthinkment,not enactment. We have purposely labeled the organizational equivalent ofvariation enactment to emphasize that managers construct, rearrange, single out,and demolish many ‘objective’ features of their surroundings.” (emphasis in theoriginal) Daft and Weick (1984: 288) even speak of a new type of organization:“These organizations construct their own environments. They gather informa-tion by trying new behaviors and seeing what happens. They experiment, test,and stimulate, and they ignore precedent rules, and traditional expectations.”


for instance when considering formal and informal regulations – it is theorganization that directs its attention toward them. By engaging in activity,organizations isolate and combine these regulations and thus regard themas relevant (or not relevant) to their environment. According to Weick(1979: 154):

“Once something has been isolated, then that is the environment momentarilyfor the organization and that environment has been put into place by the veryactions of the employees themselves.” (emphasis in the original)

An As If reflects an attempt to enact a strategic environment. Strategistsstart drawing lines between events and objects in the ‘real’ world so thatthe strategy context appears meaningful. The enacted strategy context iswhat they then experience as a constraint. Organizations, as Weick (1979:v) argues, draw the lines that they themselves stumble over. Enactmentteaches us that the strategy context is not ‘given’ but ‘becomes’. Thisprocess of becoming is one of ongoing differentiation to appropriate orderout of disorder; environment and organization arise as categories becausethey result from an active operation (Cooper 1986). Similarly, Cunliffe(2001: 352) argues that managers ‘author’ the shape of their environmentand by doing so create a sense of their own identity. Hence, enactment in-fluences the organization (i.e. its identity) and the environment (i.e. its en-acted landscape).96 Based on the notion of enactment, how should strategyscholars think about the relation between organization and environment?

Because the organization is as much inside the environment as the envi-ronment is inside the organization (Cooper 1986: 303), we propose to con-ceptualize the organization/environment relation as supplementary sensuDerrida. To grasp the supplementary nature of the organiza-tion/environment opposition, we suggest portraying the relation betweenboth spheres by means of framing. Framing is itself an undecidable term,because the frame is at the limit separating inside from outside (or outsidefrom inside). The frame remains undecidable, caught between organizationand environment, inside and outside (Derrida 1987b: 61). A frame neitherbelongs to the organization nor to the environment. Framing draws our at-tention to the interrelatedness of both spheres: the organization creates itsenvironment while at the same time this environment constrains its future

96 Organizations cannot enact any reality that they choose. People experience lim-its 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 con-straints and people cannot simply forget about what they used to believe. Sec-ond, enactment is a collective process and whatever is enacted needs to be so-cially accepted. Individuals can introduce their enactments to other people, butwhether and how they are accepted remains an empirical question.


actions and thus identity. There is no environment or organization as such,but whenever an environment is framed the organization is framed as wellet vice versa. That is why the frame has no place of its own, belonging ei-ther 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 framesthe environment of an organization (because of fictions, people regard cer-tain aspects of an apparently unordered state of the world as important).On the other hand, As Ifs also give the organization identity and thus con-strain future sensemaking processes (because they serve as plausibleguides for subsequent actions and interpretations [Weick 1979: 229]). Theresulting supplementary relation is depicted in Figure 25. This treatment ofDerrida’s supplementarity reflects our belief that this logic can also be in-terpreted in a non-paradoxical sense (see section 5.2). According to Der-rida (2003a), the supplement constantly ‘adds something’ to the originaland eventually also ‘takes-the-place-of’ the original. As indicated byWeick’s (1979) remarks on enactment, the organization constantly carvesout new dimensions of the environment; the organization frequently addssomething to the void that the environment leaves. Both, the organizationand environment are unstable and underlie the force of différance. Most ofthe time, of course, the enactment just adds-on: it highlights new facets ofthe environment. Rarely, does the organization carve out a completelynew, enacted landscape and consequently ‘takes-the-place-of’ the envi-ronment.

Fig. 25. The Framing of Strategy Context


Whereas the idea to treat the organization/environment-relation in a re-cursive way (i.e. in our case as ‘framing’) has also been acknowledged byscholars in the field of organization theory (Kieser 1998; Ortmann 1995:107; Weick 1979, 1995), the strategic management community remainednotably silent and at best discussed the implications of this finding in animplicit way (Harris and Ruefli 2000).97 In a sense, this is unfortunate be-cause there are a variety of more precise ‘theoretical’ implications that thenotion of a framed strategy context brings about. We would like to high-light particularly the consequences for the strategy/structure debate, sincewe identified this discussion as belonging to strategy context research (seesection 2.3.2).

The basic question is whether ‘structure follows strategy’ (Chandler1962) or ‘strategy follows structure’ (Hall and Saias 1980; Rumelt 1974).In this debate, structure is equated with internal efficiency, whereas strat-egy represents external effectiveness. Chandler’s dictum means nothingmore than that the environment specifies the strategy and the organizationhas to adapt accordingly by adjusting its structure. From the perspective ofa framed strategy context, the assumption that internal structure followsexternal strategic intent overlooks that, at the same time, internal structurealso enacts the external strategy. Strategy-making is constrained by the

97 Although Smircich and Stubbart (1985) opened a debate about the general na-ture of the environment in strategic management, their plea for a considerationof enactment remained largely unheard. Henderson and Mitchell (1997: 6) putin a nutshell: “[R]esearchers interested in characterizing the environment havetypically been content with very simple models of the firm while researchers in-terested in the internal dynamics of firms have usually been content with verysimple models of the environment.” Most scholars rely on models where the di-rection of causality is unidirectional. Ingram and Baum (1997) suggest thatfirms learn from their own operating experience in the market and thus shapetheir internal capabilities accordingly. Firms learn from their own or others’ ex-perience in the market. Arguing the other way around, Tripsas (1997) showshow existing competences shape responses to technological change. Her workpoints towards the relationship between organizational competences and envi-ronmental conditions, yet it remains unidirectional in its argumentation becausethe influenced environmental conditions impose on the organization like con-straints. Peteraf and Shanley (1997) and Ocasio (1997) discuss the interactionsof competition (environment) and managerial work (organization). In fact,Peteraf and Shanley (1997) argue that the formation of strategic groups resultsfrom managerial cognition rather than ‘real’ differences in a firm’s characteris-tics. These groups are perceived as constraints to further strategizing. Ocasio(1997) shows that firm behavior is the result of how firms channel and distributeattention of their decision-makers. Firms enact their environment, which thenimposes on themselves (see also Grimm 1996).


way organizational members make sense of their environment. Structurenot only follows but also enables strategy.98

Today’s structure, by limiting the enactment of the environment, influ-ences tomorrow’s strategy in the same way that today’s strategy, by con-straining the internal way of operation and demanding new administrativebehavior, limits tomorrows structure. Structure affects the scanningmechanisms of organizations that drive the enactment of the environment.For this reason, management’s strategic choices not only shape the organi-zation’s structure, but structure also influences what is regarded as(un)important and thus the strategic direction of a corporation (Miles andSnow 1978: 7-8). Once again, organizations define the lines that theystumble over.

In a Derridean sense, structure supplements and thus adds a new dimen-sion to strategy which can, but does not have to, lead to a new strategicorientation. Structure supplements strategy, because when enacting the en-vironment people constantly recreate their reality. Enactment adds a newdimension to strategy, since enactment as argued above, has a great deal todo 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 existingstrategic orientations. Although, Miles and Snow (1978) discussed the in-terrelated nature of strategy and structure quite early, deconstruction en-ables us to see that we face an opposition that is based on a supplementaryrelation. In this way, one central task for strategic managers becomes theencouragement of new strategic directions (e.g., by fostering multiple in-terpretations or creating test markets) to fully leverage the creative force ofthe supplement. To conclude, the strategy/structure-debate is not irrelevantbut based on inaccurate questions. Strategy scholars, by trying to identifyan Archimedean point, attempt to find reasons why strategy or structureare supposed to be at ‘the beginning’ of a chain of causation. From the per-spective of deconstruction, strategy and structure are supplementary andmutually inform each other (Ortmann 2003a: 134, for a similar point seealso Gaitanides 1985).

98 Fredrickson (1986: 281), for example, suggests that strategic decisions are af-fected by the centralization of an organization’s structure because of the cogni-tive 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 andshaping of strategic projects, it is also possible to posit that strategy followsstructure.”


Managing for a Framed Strategy Context

Having outlined more ‘theoretical’ implications of our discussion of strat-egy context by emphasizing the need for framing, we now discuss whatstrategists can take away from the notion of framing. Indeed, we ask howpractitioners can manage for framing. In the following, we particularlydiscuss three aspects (i.e. a reinterpretation of the SWOT framework, thevalue of counter-assumptions, and the need to look at regulation in a recur-sive way) as these issues are frequently considered to address managerialconcerns with regard to strategy context research (Beardsley et al. 2005;Hill and Westbrook 1997).

First, framing implies rethinking classic tools like SWOT. In fact, envi-ronmental analysis is managerial analysis et vice versa. The recursive rela-tion between organization and environment prohibits a strict distinction be-tween both spheres without acknowledging the influence of ‘the other’ thatDerrida (2003a) places so much emphasis on. For instance, getting toknow opportunities and threats from outside inevitably means getting toknow oneself, since the self rather than ‘the environment’ enacts thesecategories. Many strategic managers tend to look at and blame ‘the envi-ronment’ when looking for explanations of their situations, whereas theyshould look at themselves and their actions and interactions that bringabout reality. As Weick (1979: 152) argues:

“If people want to change their environment, they need to change themselvesand their actions – not someone else. Repeated failure of organizations to solvetheir problems are partially explained by their failures to understand their ownprominence in their environments. Problems that never get solved, never getsolved 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 arguethat if organizations want to change their strengths and weaknesses, theyneed to change their enacted environments. This is because mentalschemes that enact an environment shape and are shaped by the identity ofan organization and affect the perceived strengths and weaknesses. To alterone’s environment can result in different strengths and weaknesses. Beercompanies, for instance, believed for a long time that diet beers could notbe sold (because of the missing ‘taste’). Only an ‘unwisely’ acting corpo-ration tested the assumption and introduced diet beer. By doing so, thefirm not only created one of the most significant product innovations in thebeer industry and changed the competitive environment but also revised itsown strengths and weaknesses.

Second, if the strategy context is a product of framing effects, managersshould be less concerned about what is typically regarded right and wrong


within an industry. Rather, they should test their own assumptions periodi-cally by acting as if counter-assumptions are viable (Smircich and Stubbart1985: 732). Experimenting and testing are undervalued activities in strate-gic management, since frameworks like Porter’s industry analysis or port-folio analyses often act like straightjackets and do not allow for the crea-tive destruction of currently held assumptions. Enacting an environmentrequires forgetting; or, in more mundane words: learning requires unlearn-ing. Framing strategy context implies as much the creation of organizationand environment as their destruction.

Third, based on our conviction that the strategy context is framed, wecan also show the implications for the nature of regulation in strategicmanagement. When writing about regulation, strategy scholars usually as-sume that there are laws or other regulatory frameworks that constrain theway business is done (Beardsley et al. 2005). To a certain extent this istrue; firms need to comply with regulatory schemes that impose uponthem. This, however, is only half of the story, because the environment,characterized here by existing regulations, is enacted by organizations. En-actment implies that managers make something out of the regulations thatsurround 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 opportunitiesfor themselves.

Why does the notion of framing lead us to the claim that regulativeframeworks are influenced by organizations? For this, reconsider that wediscussed framing as a more general concept to express the supplementaryrelation between organization and environment. This supplementary rela-tion 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: “Enact-ment is the performative enforcement of something that ‘counts as’, thatthereby comes into effect.” Enactment means to create something, to carveout reality, not solely as a pure notional construct, but through activity, anactivity that has consequences. Such consequences can be ‘used’ to the ad-vantage of firms. Following Weick (1995: 162), enactment can result inthe active ‘manipulation’ of the environment; it enforces a state of theworld and brings reality into being. The environment does not imposelimitations on organizations, but organizations impose these limitations onthemselves.

“Limitations are deceptive conclusions but, unfortunately, people don’t realizethis. What they don’t realize is that limitations are based on presumptions ratherthan action. Knowledge of limitations is not based on tests of skills but rather


on an avoidance of testing. On the basis of avoided tests, people conclude thatconstraints exist in the environment and that limits exist in their repertoire ofresponses.” (Weick 1979: 149, emphasis in the original)

When applying this line of thinking to the common understanding of regu-lation, we have to admit that it is not only regulation that regulates, but thatthe regulated sphere (viz. the firm) has a certain influence on regulation.Following Ortmann and Zimmer (2001), we call this exertion of influenceon regulation recursive regulation.

By influencing regulating instances on the national and supranationallevel, organizations create the foundation on which they base their subse-quent actions. Recursive regulation is a bootstrapped operation; it influ-ences institutions that organize political, economic, and social interactions.When discussing recursive regulation, we mean the intended modificationof supraorganizational, formal institutions like laws or property rights(Ortmann and Zimmer 2001: 310-311). Deliberately influencing formalinstitutions entails shaping a regulatory framework, which organizationsthen experience as constraints to their behavior. Weick (1995: 165) givesan example by referring to the daylight savings time coalition:

“This coalition, consisting of people representing convenience stores, fast foodchains, greenhouses, and makers of sporting goods, lobbied to the U.S. Con-gress to move the start of daylight savings time from last Sunday in April to thefirst. This effort, which was successful, created extra hours of evening daylight,which in turn led more women to visit convenience stores and restaurants ontheir way home because they felt safer, led gardeners to think of spring earlierand to purchase more plants quickly, and led people playing sports to begintheir season earlier.”

This coalition found that regulation not only runs from the regulating in-stances to firms, but also the other way around. In the spirit of the Derrid-ean supplement, recursive regulation adds a new dimension to existingregulations, which, in an extreme case, can also mean to replace them en-tirely.

In a pragmatic sense, recursive regulation requires that managers moreexplicitly reflect on practices like lobbying and the overlap of posts be-tween business and government. These phenomena are usually consideredto be sleazy and ethically questionable. Thus, recursive regulation asksmanagers to include ethical reflection in their thinking about strategyformation (Crane and Matten 2004: 399; Hosmer 1994; Meznar et al.1990). In summary, our discussion of recursive regulation shows that adeconstruction of strategy context is not a mere theoretical endeavor but isalready rooted in everyday strategic practice.


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 beliefof a variety of strategy scholars that thinking (strategy formulation) comesbefore action (strategy implementation). Although most scholars do notoverly believe that the strategy process is purely linear, but rather highlightits political and incremental character (Chakravarthy et al. 2003), thereremains the deeply held assumption that thinking comes before action. Todiscuss the dysfunctional nature of the ‘primacy of thinking’ and to dem-onstrate that this dominant logic obscures a paradox, we first need to ex-pose the blind spot that underlies the detachment of thinking and actionfrom the perspective of deconstruction.

Of course, if the ‘primacy of thinking’ asserts that the future is to a cer-tain degree determinable, any notion that disregards this dominant logicmust be based on the conviction that the future is to a large extent indeter-minable. We can only plan in the light of what we already know. But whatdo we know about the future? Derrida (1995b: 386) claims that the futureis something monstrous, something that we neither can nor should predict.

“[T]he future is necessarily monstrous: the figure of the future, that is, thatwhich can only be surprisingly, that for which we are not prepared, you see, isheralded by species of monsters. A future that would not be monstrous wouldnot be a future; it would already be a predictable, calculable, and programmabletomorrow. All experience open to the future is prepared or prepares itself towelcome the monstrous arrivant, to welcome it, that is, to accord hospitality tothat which is absolutely foreign or strange, but also, one must add, to try to do-mesticate it, that is, to make it part of the household and have it assume thehabits, to make us assume new habits.” (Derrida 1995b: 386-387, emphasis inthe original)

What does Derrida mean by the phrase ‘monstrous arrivant’? Royle (2003:111) argues that, like the word ‘arrive’, ‘arrivant’ has to do with whatcomes to the shore. A monstrous arrivant comes to a threshold, a border –

Strategy Process – Beyond the Notion of Feasibility 217

one that points towards the future – to surprise us. That is why, we, andespecially we as strategists, need to welcome this monstrous arrivant, sinceno strategic decision would be possible without the singularity that is at-tached to this arrivant.

For Derrida (1992b: 200), deconstruction is about “the opening of thefuture itself” because, as remarked in chapter four, a deconstructive think-ing necessarily destabilizes any context. In fact, this destabilization is anecessary condition for the dangerous monstrosity of the future. As Der-rida (1977: 5, emphasis in the original) claims: “The future can only be an-ticipated in the form of an absolute danger. It is that which breaks abso-lutely with constituted normality and can only be proclaimed, presented, asa sort of monstrosity.” In a certain sense, this is also true for strategy. If thefuture were not a dangerous one, there would be no need to become in-volved in something like strategic management. Indeed, if we were able tocalculate the future, regardless by which analytical tool, there would be noneed for strategic management anymore. This is not to suggest that fore-sight is completely impossible, but that foresight is not a linear calculation.

Strategic management has tried to tame these monsters without recog-nizing that a future that is forced into the straightjacket of a plan is not afuture anymore. In the absence of uncertainty, strategists only face a com-putational exercise. This, however, runs counter to the very idea of strate-gizing 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 ofstrategizing to be concerned with non-routine problems that cannot besolved in a predetermined manner. If the future is conceived to be calcula-ble, there is no need for planning (and strategists) anymore. We couldleave the task of strategic management to computers that enforce pro-grammable decisions. This results in yet another contradiction: if we thinkof the future as something ‘manageable’, there is no future anymore. Thisis why Derrida (1989a: 80) argues that “[m]onsters cannot be announced.One cannot say: ‘here are your monsters’, without immediately turning themonsters into pets.”

When considering our remarks in chapter four, we can understand whyDerrida thinks in such a way. Here, we have to recall the deconstruction ofthe sign and think about its implications. To announce a monster would fixthe meaning of the future; to say ‘the future is about…’. However, as weknow, meaning is always in a state of flux because it is subject to dif-férance. There is no such thing as a self-present meaning of the future thatcould operate outside of the play of differences. Because there is no out-side-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


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 ofthe future, is always in the coming. To look at the future in a determinableway is like assuming that there is some ‘present’ meaning, something thatstops différance from occurring.

Although Derrida’s (1977, 1992b) emphasis on the indeterminable na-ture of the future provides the basis for our critique of the ‘primacy ofthinking’, we can sharpen our understanding of how ‘monstrosity’ relatesto strategic management by discussing the notion of ‘contingency’. In itsmost general sense, contingency refers to the fact that something might ormight not occur. Kant (1787/1995: 124) even equates contingency with co-incidence and emphasizes that there is no God-given necessity that thingshappen. If we put this in more concrete terms and agree with Luhmann(1994: 47) that contingency describes that things can also be otherwisepossible, that there is no predetermined way of history but always the pos-sibility of alternatives, we need to concur that defining something as con-tingent means that everything is neither necessary nor impossible(Luhmann 1992: 96).

“Contingency means that being depends on selection which, in turn, implies thepossibility of not being and the being of other possibilities. A fact is contingentwhen seen as selection from other possibilities which remain in some sensepossibilities despite a selection.” (Luhmann 1976: 509, quoted inVanderstraeten 2002: 84)

Contingency does not imply arbitrariness (Ortmann 1995: 23), because ar-bitrariness means that everything is possible, while contingency states thatthings could have also happened in another way. This ‘being otherwisepossible’ does not mean otherwise in an arbitrary way, but otherwise in amore or less restricted ‘space of possibilities’. Every new step appears tobe otherwise possible, but only against the background of what has alreadybeen determined in the course of social life. Contingency implies forcedfreedom; we cannot foresee the future because there is no way to prede-termine one’s own actions.99

Contingency is a helpful concept since it allows us to explicitly considerthat strategic decisions need to factor into the behavior of other market

99 While this study is concerned with the intersection of contingency and the fu-ture, contingency also relates to the past, because humans have infinite ways ofrecalling (i.e. narrating, memorizing) the past (Gumbrecht 2001: 53). Contin-gency also interferes with the present in the sense that our descriptions and ac-tions could always be otherwise possible, an argument that, as far as descrip-tions are concerned, gained much popularity under the label ‘constructivism’(see Czarniawska 2000; Erdmann 1999; Hejl and Stahl 2000).


players. Strategies are never built in a vacuum but are all about the actionsof other organizations. This brings us right to the concept of double con-tingency that considers that the actions of organizations are mutually de-pendent and that no firm can have full knowledge of what the other mightdo (Morgenstern 1935: 344). Since strategic management particularlyneeds to get by without a safe ground, because it is all about paving waysinto an uncertain future (section 2.1), double contingency should be at theheart of our thinking about strategy formation.

Luhmann (1995b: 123) reminds us that double contingency cannot beneutralized or even eliminated; social interaction needs to be conceived asthe confrontation of at least two autonomous actors (ego and alter). Doublecontingency is not a consequence of the mutual dependence of social ac-tors, as Parsons (1951) assumes, but of the confrontation of at least twoautonomous social actors that have the capacity to make their own selec-tions with regard to one another. This is because contingency means thatfacts are selected from a range of possibilities, whereas the non-selectedpossibilities still remain (in some sense) possible despite their non-selection. In the case of double contingency, alter’s contingent behaviordepends on ego’s while at the same time ego’s contingent behavior de-pends on alter’s. This is the basic condition of possibility for social actionas such (Vanderstraeten 2002: 81). Because of this immanent circularity ofthe conditions of double contingency, social actions are made indetermin-able.

The implications of the acknowledgement of double contingency arefar-reaching. In terms of strategic management, social action in the situa-tion of double contingency is always indeterminable and cannot be madeotherwise by means of sophisticated strategic analyses. Even though wenever face a situation of ‘pure’ double contingency (Vanderstraeten 2002:84), because we always act against the background of what has alreadyhappened, the basic problem that is attached to double contingency re-mains: no organization can have full knowledge about its own conduct andthe strategic actions of other actors. After all, isn’t this what strategy is allabout: 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 futureand our extension of his remarks with regard to the notion of (double) con-tingency demonstrate that we cannot replace real actors by variables andreal time by the order of these variables (Abbott 1991: 230). Each reduc-tion of uncertainty is a constructed reduction and this is also true for ana-lytical tools such as scenario planning or game theoretical concepts that re-cently have gained much popularity in strategic management


(Brandenburger and Nalebuff 1995; Lindgren and Bandhold 2003). Con-tingency disenables the metaphysical ground on which rationalized strate-gic decisions seemingly rest. In the following section, we show how a con-sideration of contingency helps us to uncover a paradox that arises oncewe attempt to establish a metaphysics of presence with regard to the rela-tion between decision and action. Our remarks thus give reference to thecall for conceptual research by Langley et al. (1995: 265) who argue that“the relationship between decision and action can be far more tenuous thanalmost 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 ofpresence that underlies our thinking. While looking at the classic think-ing/action opposition, it is obvious that ‘thinking’ is defined in a self-sufficient way. This logocentrism classifies thinking (strategy formulation)as being full of meaning and action (strategy implementation) as its neces-sary consequence. Thus, strategic decisions have ontological priority overaction. How does deconstruction approach the hierarchical structure thatresides in the thinking/action opposition? Derrida (1995b: 147, 1992a: 24)starts by acknowledging the monstrous, double-contingent nature that un-derlies the future. He asserts that to make choice real, one needs to acceptthat the future cannot be certain, because if the future were certain, therewould be no choice anymore. If strategic choice only is real in the light ofuncertainty, why then is ‘real’ choice paradoxical?

To answer this question, we have to get back to the supplementary logicthat 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 tothe ‘original’ (i.e. thinking) – a surplus that can turn out to be dangerousbecause it modifies the decision premises that justified the decision ‘in thebeginning’ (Derrida 2003a: 249-251). Decision premises are not entirelythe outcome of thinking but are completely constituted in the course of ac-tion. Not until the decision has finally been executed can one decidewhether and how contingency has been fixed and what justification waschosen. Action constantly supplements, in fact ‘gives-new-meaning-to’,thinking in a way that makes it impossible to fully justify a decision a pri-


ori. The justification one chooses prior to action cannot ‘stand in’, at leastnot 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 withregard to action, but action needs a decision to come about. Decisions areimpossible in the sense that the preferences, which give the good reasonswhy the decision is carried out, are fully constituted in actu only (see Fig-ure 26). Because the meaning of a decision is constituted in the course ofaction, we need to make decisions if, and only if, they are impossible tojustify. The condition of the possibility of a decision, that is its justifica-tion, implies at the same time its impossibility since there is no full justifi-cation until the decision has finally been executed. No decision can reach afinal definition (i.e. justification) since it potentializes other decisions. Inthe words of Derrida (1995b: 147-148):

“These are the only decisions possible: impossible ones. […] It is when it is notpossible to know what must be done, when knowledge is not and cannot be de-termining that a decision is possible as such. Otherwise the decision is an appli-cation: one knows what has to be done, it’s clear, there is no more decision pos-sible; what one has here is an effect, an application, a programming.” (emphasisin the original)

The very nature of decisions excludes any form of constraint that wouldenable us to make calculable decisions.

Because of paradox, strategic decisions deserve their name only if theycontain the ‘ghost of the undecidable’ (Derrida 1992a: 24-25). Every (stra-tegic) decision remains caught in a ghost that represents the undecidabilityof an open future.

“The undecidable is not merely the oscillation or the tension between two deci-sions; it is the experience of that which, though heterogeneous, foreign to theorder of the calculable and the rule, is still obliged – it is obligation that wemust speak – to give itself up to the impossible decision, while taking accountof law and rules. A decision that didn’t go through the ordeal of the unde-cidable would not be a free decision […] That is why the ordeal of the unde-cidable that I just said must be gone through by any decision worthy of thename is never past or passed, it is not a surmounted or sublated (aufgehoben)

100Culler (1982: 86) refers to Nietzsche to show that our traditional view on cau-sality may be misleading. Nietzsche argues that the concept of causal structureis not something given but the product of a reversal (chronologische Umdre-hung). 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 aquite similar sense, Chia (1994: 788) discusses the concept of causality andtalks about the ‘actionality of decision’ and the ‘decisionality of action’. The ac-tion already is in the decision and the decision is in the action.


moment in the decision. The undecidable remains caught, lodged, at least as aghost – 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 thusmakes it impossible to arrive at fully justified decision premises that de-termine action, makes us recognize the ghost that is inherent to every eventof decision. For Derrida (1995a: 116), undecidability implies that no com-pleteness of a decision is possible. Every decision is structured by this ex-perience of the undecidable, the limits of decidability, to finally become adecision. The point here is not whether decisions exist or not, but to ques-tion a telos that is present to and identical with itself. Whenever we decideupon 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 isfrom the moment we surrender to the undecidable nature of decisions thatthe very question of how decisions come into being can be posed (Derrida1995b: 147).101 Apparently, there is no moment in which a decision can be

101The 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 unde-cidable nature of decisions acts as the presupposition of the possibility of everydecision as such.


called present. That is why Luhmann (1995c: 51) argues that “the futurenever becomes present; it never begins but always moves away when weseem to approach it.” If contingency were fixed, the future would be pre-sent, 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 processof fabrication or it has been made and is therefore ‘gone’. That is why, ac-cording to Derrida (1989a: 79), monstrosity can only be recognized after adecision, when it has become the norm. However, once it has become thenorm, it is no longer monstrous. The very idea of a justifiable decision isinfinite – it is irreducible to itself and owes its existence to ‘the other’ (ac-tion); the other, that constantly supplements, possesses a singularity that isforever new and different. Because différance is all about a deferral ofmeaning that makes ‘presence’ impossible, a monster never presents itselfbut always remains ‘to come’. According to Derrida (2000b: 534),“[d]ifférance is a thought which wishes to yield to the imminence of whatis coming or about to come.” At first, this sounds devastating for anyonewho tries to think about strategic management. Yet, on closer examination,the monstrosity of the future turns out to be the very condition of strategiz-ing as such. As Mintzberg (1994a: 276) asks: “How can we know that astrength is a strength without acting in a specific situation to find out?”

People often wonder why decisions are impossible if they make deci-sions every day. Strategists in particular are perceived as strong leaderswho make the hard choices in business (Porter 1996: 77). Like any para-dox that deconstruction exposes, the impossibility of decisions is limited tothe establishment of a metaphysics of presence; in this case presence refersto decisions that are self-defining to then determine action. Accordingly,decisions are not impossible per se, but their reasonable justification be-comes out of reach. The contradiction that underlies the undecidability ofdecisions arises from the desire to fully justify a decision prior to action.On closer examination the paradox of decision-making turns out to be aparadox of justification in decision-making (Ortmann 2003a: 145-147).However, particularly strategic decisions call for justification because theyinclude considerable resource commitments and are irreversible(Mintzberg et al. 1976: 246; Schilit 1990: 436).102 Because of time and re-

102By contrast, on the routine level, decisions are usually less reflected upon andreached relatively quickly (Selten 1990: 652). The impossibility that the para-dox brings about is thus most visible when there are non-routine (strategic) de-cisions that need to be safeguarded against antithetic perspectives (e.g., fromcritical stakeholders). A strategist, who can give no reasonable justification whya strategic move is necessary, be it in front of the supervisory board or at theshareholders meeting, not only risks her/his job but also lacks institutional sup-port.


source constraints, strategists are usually comfortable with adequate rea-sons for these decisions. This, of course, defies the underlying paradox. Ifstrategists do not find these reasons, which act as bridges over the cleft ofcontingency, they mandate external consultants or apply analytical tech-niques (e.g., scenario planning) to at least keep up the appearance of a ‘ra-tional’ decision.

To conclude, the paradox that underlies strategic decisions demonstratesthat the dominant logic (i.e. the ‘primacy of thinking’) aims at a metaphys-ics of presence that remains impossible. Of course, as already recognized,the paradox remains a theoretical limit with regard to our reasoning aboutstrategy formation. Not even the classical linear strategy process models(Andrews 1971; Hofer and Schendel 1978; Lorange 1980) demand a fulljustification of strategic decision prior to action. Nevertheless, they arebased on the premise that action follows thinking, a premise that is upsetby the paradox. Thus, it is not important for strategy process researchwhether this paradox exactly represents those strategic realities that com-ply with the dominant logic, but what we can learn from the necessary lim-its of knowledge about strategy formation that the paradox uncovers. Todemonstrate what we can learn from the paradox, we need to move to adiscussion of deparadoxification to then outline detailed implications ofour deconstruction.

6.2.3 The Deparadoxification of the Strategy Process

Taking up Pettigrew’s (1992a: 10) call for more explicit thinking about theassumptions that underpin strategy process research, we believe that theo-rizing has to start with a consideration of paradoxical reasoning to thenshow how strategies unfold despite paradoxical indecision. To show howstrategizing becomes possible despite the paradox of undecidability, weneed to discuss the deparadoxification of the strategy process. To grasphow the strategy process becomes deparadoxified, we should first of allrecognize that a variety of authors have studied how managers make stra-tegic decisions (Mintzberg 1976; Schilit 1990). Regardless of the ongoingdebate whether strategic decisions can be identified at all (Langley et al.1995; Mintzberg and Waters 1990), we have to admit that strategistssomehow manage to get around the paradox. To put it metaphorically,strategists manage to build bridges over the ‘abyss of contingency’. Ourdiscussion of deparadoxification needs to identify these ‘bridges’.

Of course, the easiest way to circumvent the paradox right from the be-ginning is to not desire fully justified strategic decisions. Aware of theirbounded rationality and influenced by time and resource constraints man-


agers usually look for satisfying justifications (Simon 1971). In this case,the paradox seems less ‘visible’ because people act as if ‘whatever-reasons-they-have’ will do. The extent to which strategists realize thatthere is such a thing as a paradox – or, from their perspective a decisionthat is ‘tough to make’ – depends on the importance of the decision. Incases where a significant strategic investment is needed or a considerablenumber of resources are applied, there is a necessity to find not only somesort of justification but also the justification. To not lose their capacity toact, managers temporalize the paradox by acting as if their justificationswere somehow ‘real’ and adequate, as if they had something they can relyon (Ortmann 2004c: 208). To temporalize the paradox means to first createa ground for action by proceeding as if the ‘good reasons’ for the decisionwere 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 canobserve them. Strategic plans, for instance, represent an As If. Yet, and thisis a vital difference, when a researcher looks at a plan from the perspectiveof an As If, s(he) reconceptualizes the role of the plan from a different an-gle. A strategy scholar who observes a plan as an As If treats it as an ‘ex-cuse to act’. Plans, from our perspective, are a pretext for action, they helpstrategists to negotiate a part of their reality that then comes back and im-poses on the organization. Ironically, we have to agree with the ‘primacyof thinking’: yes, plans are important, but not for the reasons that moststrategy researchers think. Weick (1979: 11), in the tradition of Cohen andMarch (1974), has described this very well:

“[P]lans become excuses for interaction in the sense that they induce conversa-tions among diverse populations about projects that may have been low-priorityitems. The interaction may yield immediate positive results, but such outcomesare usually incidental. Much of the power of planning is explained by the peo-ple that it puts into contact and the information that these people exchangeabout current circumstances. When people meet to plan for contingencies fiveyears away, contingencies that seldom materialize, they may modify one an-other’s ideas about what would be done today. But that is about all that can beaccomplished.” (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 sig-nals 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 pre-cise as plans, are also much about fictions. Especially in small entrepre-


neurial firms, the individual vision of a leader often replaces formalizedplans (Mintzberg and Waters 1985: 260). Likewise, ‘scenarios’ provide aselection of multiple grounds that organizations can base their actions on(Wack 1985). In addition, on the more personal level, individuals oftenmake assumptions about ‘what-the-corporate-strategy-means-to-them’ andthus base their actions on As Ifs. These kinds of fictions, of course, arelikely to modify/extend/corrupt existing plans. ‘Visions’, ‘scenarios’, andindividual assumptions should be valued for the same reason as plans:mostly they are excuses to act and thus necessary to foster strategic sen-semaking. As Ifs provide a ground from which strategizing unfolds and de-fers paradoxical indecision into the future. Understanding this ground asfictional implies not understanding strategy formation merely as an ana-lytic task, but to refocus analyses on the role of confidence in the fiction.Strong beliefs can bring events into existence. This makes strategic man-agement more of a motivational problem than an attempt in forecasting(Weick 1987a: 225).

To understand the strategy process as resting on As Ifs also emphasizesanother issue that is widely neglected by scholars who treat plans as un-problematic: the matter of path dependency. Schreyögg et al. (2003: 267)suggest that it is a common assumption in strategy process research thatplans are developed with regard to the belief that strategists can ‘startanew’ every time a planning process starts. This, however, is not the case.Although As Ifs are in principle contingent, they are influenced by previ-ous assumptions that hardened into a certain ‘path’. Hence, an As If is al-ways influenced by former decisions and occurs in the more or less re-stricted space of already existing strategic paths. In short, history matters!Porac et al. (1995), for instance, illustrate how organizations in the Scot-tish knitwear industry were limited in their ability to establish new strate-gic orientations due to already existing mental schemes. In a similar sense,Ortmann et al. (1990) find that existing strategic assumptions reflect a cer-tain ‘stickiness’ because their reorientation would imply a reallocation ofpower within the organization, which, of course, is not favored by thosewho already possess power. Path dependency demonstrates that As Ifs, al-though contingent, do not emerge from ‘nothing’; their formulation is re-stricted by existing cognitive patterns and and/or power relations (see alsoPrahalad and Bettis 1995, 1986).

Our discussion up to this point has already demonstrated (a) that As Ifsdeparadoxify the strategy process, (b) that As Ifs can be interpreted asplans 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,


otherwise we would look at self-fulfilling prophecies. Like a decision can-not determine action, a fiction can only inform (but not determine) futurestrategizing. Fictions are constantly modified in the course of strategizing(Mintzberg 1994). Some modifications pass by unobserved or are skillfullyhidden; others are more obvious and turn out as a ‘change in plans’. As Ifsare subject to an everlasting process of ‘becoming’ that is based on collec-tive actions in social praxis; they are of relevance only if social actors col-lectively embed their effects into their daily activities. Such collective ac-ceptance does not occur suddenly but is shaped by the process of socialreality construction. According to Berger and Luckmann (2000: 58), col-lectively accepted reality constructions gain the status of objectified insti-tutions once the actions of agents are reciprocally typified. To become so-cially relevant, fictions need to be objectified; they need to be accepted bythe 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 re-lated deparadoxified understanding of strategy formation. The underlyingquestion of this discussion is: What do strategists ‘do’ with the As If thathelps them to circumvent paradox? Any As If is only a stimulation for fur-ther strategic sensemaking and is reworked/modified/supplemented withinthe course of strategizing. Our ‘theoretical’ implications will show howscholars can conceptualize a strategy process that constantly reworks As Ifsand thus deeply links formulation and implementation, whereas our ‘prac-tical’ implications illustrate what managers can do to ‘manage’, or at leastguide, 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 ac-tion. If we consider Derrida’s (2003a) remarks on supplementarity, we cangive a reason for the non-determinable nature of an As If. Because strategicactions 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 asense that thinking and action intermesh; thinking (i.e. the As If) in a senseinforms action, but action also modifies (and thus constitutes) thinking.Such an understanding implies a non-paradoxical understanding of Der-rida’s supplementarity relation; a perspective that takes the As If as astimulus and then outlines the gradual production of the strategy over time.To conceptualize such a process, we refer to Derrida’s (2000a) interest in


improvisation.103 The term improvisation fits our analysis since it is unde-cidable and highlights the rich interplay between formulation (thinking)and implementation (action). Although Derrida (2000) emphasized theneed for improvisation, he never formally developed a definition. Sinceimprovisation has not been applied substantially to strategic managementbut only with regard to organization theory, we supplement Derrida’s re-marks with comments by authors who discuss improvisation within orga-nization theory.104

Much of the literature on organizational improvisation is based on thejazz metaphor (Kamoche et al. 2003; Weick 1998; Zack 2000). Like injazz, where musicians create music real-time while continually adjusting tothe changing interpretations of other group members, organizational im-provisation is about producing something (e.g., a strategy) on the spur ofthe moment. Weick (1998: 544) refers to Berliner’s (1994: 241) definitionof improvisation as

“reworking precomposed material and designs in relation to unanticipated ideasconceived, shaped, and transformed under the special conditions of perform-ance, thereby adding unique features to every creation.”

According to Weick (1993b: 348), organizational improvisation is aboutcontinuously reconstructing processes and designs; the creation of some-thing while it is being performed. Improvisation accounts for the fact thatthe acts of composing and performing are inseparable and that order in or-ganizations is constantly changing, as members have to react in a sponta-neous way. Irby (1992: 630) puts it in a nutshell by arguing that improvisa-tion is “thinking in the midst of action”. If we apply these insights tostrategic management, we need to recognize that decisions and actions notonly interrelate in the sense that one informs the other, but both spheres are

103Pondering about the possibility of improvisation, Derrida (2000a: 10) remarkswith a sense of irony in an interview: “The question was: ‘What is improvisa-tion? Is an improvisation possible?’ I had to improvise of course, and I said‘No, an improvisation is absolutely impossible’, and went on speaking for halfan hour, I think. And today, I remembered this when you asked me to say some-thing and I agreed on the condition that it would be totally improvised; that wasthe contract.” (emphasis added)

104There has been almost no discussion of strategy as improvisation up to thispoint. Exceptions are the articles by Crossan et al. (1996) and Perry (1991) that,however, treat improvisation in a rather unconventional way without payingmuch attention to the convergence of thinking and action. Weick (1987a) alsooutlines improvisation as a ‘substitute for corporate strategy’, yet overempha-sizes 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.


deeply intertwined. As Orlikowski (1996: 63) remarks, improvisation con-siders strategy not as a drama staged by deliberate directors with prede-fined scripts. Rather, improvisational strategy slowly unfolds as people dowhat they are supposed to do (their job) and also do what they are oftenprohibited to do (the informal gossip about ‘how-things-work-out-around-here’). To further discuss strategy as improvisation, we follow Cunha’s etal. (1999: 302) definition of improvisation in general and define strategicimprovisation as the conception of strategic action as it unfolds that is en-forced by organizational members and draws upon existing As Ifs. To pro-vide an ordered discussion of strategic improvisation, we explain the vari-ous elements of this definition.

Strategic Improvisation Draws on As Ifs: Every improvisation needs tostart with something to improvise around. If there is no material thatstrategists can use for improvisation, there is no possibility of improvising.The necessity to draw on existing materials addresses the common misun-derstanding that improvisation is anarchic and thus of no value to strategyscholars. Weick (1987a: 229) argues that improvisation contains some or-der, which, however, is underspecified. Like in jazz or in improvisationaltheater, improvisation does not occur from nowhere but needs somethingto improvise around. Jazz consists of variations of a theme, improvisa-tional theater starts with a situation, and strategy starts with an As If. Im-provisation means to make something out of these fictions as action un-folds in a spontaneous but historically contextualized way. If weunderstand strategizing to be about working out responses in real-time(Crossan and Sorrenti 1997: 156), there is less possibility of deploying so-phisticated analytical tools or analyzing large chunks of data; one has totackle the issues at hand with whatever is currently available.

Strategic Improvisation Reflects a Conception of Strategic Action as itUnfolds: This part of the definition highlights that the preferences onwhich strategic decisions rest do not exist prior to implementation but areconstructed in the course of action. If preferences are fully constituted inactu, there is no need to assume that strategy formulation determines im-plementation (Moore 1995: 23). In fact, implementation constantly sup-plements the As If (see Figure 27). Decision premises and thus the meaningof strategy are gradually produced over time. Strategic improvisation sug-gests that strategy making is thinking within (and not prior to) action. Thisis not to claim that strategic decisions do not exist anymore, but that themeaning of these decisions can only be fixed in a retrospective manner. Inanalogy to Weick’s (1979: 133) organization formula, we might ask: Howshould 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


before we see what we are doing? (Ortmann 1997: 54) Strategic improvi-sation is planning as action unfolds, the quick and unpredictable oscillationbetween thinking and action that occurs when initial strategic fictions areconstantly redefined, modified, supplemented or even replaced (Mintzberg1994).105

Fig. 27. Strategy Formation as a Recursive Improvisational Process

Strategy as improvisation teaches us that strategies come into being asaction slowly unfolds. Strategizing, then, is not a matter of pure thinking,but each strategy is fully constituted in the course of action. This, ofcourse, highlights the role of the Derridean supplement, which in this caseis action. The supplement constantly haunts the ‘origin’; there is no timewhere strategic actions do not occur. The world does not suddenly come toa halt once managers start to plan (Huff and Huff 2000). Customers areserved, products are produced, and the world changes. Considering that

105Ortmann and Salzman (2002: 221) agree with this conception and argue that“[t]he process of implementing and executing strategies, far from being less im-portant and a mere derivation from the strategy is, instead, actually part of theprocess of constructing the strategy.” In a similar manner, Weick (1987a: 230,emphasis in the original) states that “[t]he thread that runs through this chapteris that execution is analysis and implementation is formulation.” Ortmann(1997: 46), while discussing the famous text of Heinrich von Kleist The Grad-ual Production of Thoughts in Talking, even generalizes this argument. Think-ing and action are always connected in a recursive manner, and not only instrategy. This insight is also discussed in the context of knowledge. Tsoukas(2000), for example, encourages scholars to think of ‘knowledge as action’.


‘official planning programs’ are supposed to last between six to twelvemonths (Chesley and Wenger 1999), there is no reason to believe that ac-tions do not occur during this time. Action cannot be postponed becausemeaning 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 notto say that there are no plans, but that plans cannot fix meaning and thatwhatever a plan actually means can only be fixed retrospectively becausereflection cannot but refer to the past.

While the supplement constantly ‘haunts’ the origin, it modifies andsubstitutes. What is planned is always already in need of modification – amodification that reinscribes thinking into the strategy process. This makesstrategy implementation not a mere derivation of formulation (see similarEisenhardt and Brown 1998; Ortmann and Salzman 2002). On the con-trary, implementation is part of strategy formulation. In the midst of ac-tion, people ponder about strategic issues; they discuss, dismiss, defend,attack, and modify what they think is a plan. Modifications, here, are not tobe confused with ex post strategic controlling where plans are adjusted.Rather, modifications happen constantly and are unavoidable, because thedeferring and differing force of différance makes it impossible to think ofstrategy 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 formu-lation and implementation are recursively connected and the strategy con-tent is quickly adjusted in the midst of strategy making. Formulated strate-gies are not ‘pure’ – in Derrida’s words: self-present – but come intoexistence by giving reference to their counterpart, not necessarily in a visi-ble way but at least as a trace (Derrida 1977: 61).

Does this imply that there is no such thing as deliberate strategy forma-tion anymore? To conceptualize the strategy process solely as a just-in-time endeavor does not reflect the empirical reality in a variety of organi-zations. Of course, there are cases in which strategy formulation and im-plementation seem to be related in a linear manner, although much of thisclassification is a retrospective appraisal. While the exact form of the strat-egy process remains an empirical question depending on a variety of fac-tors (e.g., company size or leadership style) and we certainly have to admitthat there is a continuum of possibilities as outlined by Mintzberg and Wa-ters (1985), this does not make improvisation a useless conception. Thedegree of improvisation in a strategic planning process depends on theforce 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


substitution). Strategies can be slightly modified in the course of imple-mentation. In this case it seems as if the linear perspective holds (although,strictly speaking, it does not). If, however, a strategy is substituted, thesupplement replaces the ‘original’ As If.

Strategic Improvisation is Enforced by Organizational Members: Im-provisation can be a collective or individual undertaking. Obviously, stra-tegic improvisations can start on the individual level, for instance, if astrategist recognizes the need to promptly adjust resource allocations ac-cording to new market conditions. Yet, since strategy is a phenomenon thatconcerns the entire organization (see section 2.1), improvisations need tomanifest themselves in the shared social practices of organizational mem-bers. An improvisation that is only relevant to a small group of people, butignored by the rest of the organization, will not make its way on the strate-gic agenda. To gain strategic momentum, improvisations need to be ac-knowledged by others and thus ‘move’ in some way through the organiza-tion. For instance, a brilliant idea for a new product or service can be bornduring a coffee break conversation, which, however, is of no strategicvalue until the improvisation gains some momentum within the organiza-tion.

To understand how improvisations are embedded in social practices, itis worthwhile to disassemble the process of organizing. Weick (1979: 89)argues that this process consists of interlocked behaviors between two ormore people. The development of a collective structure through inter-locked behavior among individuals occurs through so-called mutualequivalence structures that rely on consummatory acts (concluding ac-tions) and instrumental acts (initial activities that allow the consummatoryacts to occur).

“A mutual equivalence structure comes into existence when my ability to per-form my consummatory act depends on someone else performing an instrumen-tal act. Furthermore, my performance of my instrumental act has the function ofeliciting the other’s instrumental act. If this pattern holds, and if I keep repeat-ing my instrumental act, then the two of us have organized our strivings into amutual equivalence structure.” (Weick 1979: 98)

Organizations are full of mutual equivalence structures as nobody operatesin a vacuum. The actions of people depend on one another and this mutualdependence interlocks their behavior in a way for collective structures tooccur. If people depend on one another to do their job, they need to com-municate which in turn allows them to move improvisations through theorganization (e.g., through stories). Because of interlocked behaviors, im-provisations also gain momentum through ‘snowballing’. The snowball ef-fect occurs, when some people show commitment to an improvisation,


which then leads to escalation (Staw and Ross 1978). A does it because Bhas already done it and C only waits for A to do it. What is important isthat improvisations need to be socially accepted to make it onto the strate-gic agenda.

Having discussed the three parts of our definition of strategic improvisa-tion, we can conclude that improvisation within strategy assumes thatstrategists act their way into understanding. Does this imply that the strat-egy process is completely disorganized or even chaotic as Eisenhardt andBrown (1998) propose? As already mentioned, the degree of perceived or-der depends on the force of the supplement (to add/to substitute) and re-mains an empirical question. Even within a strongly improvised strategyprocess there is some degree of order, an order that is underspecified andoften not immediately visible to agents. The literature on organizationalimprovisation calls this kind of order ‘minimal structures’ (Kamoche andCunha 2001; Pinnington et al. 2003). Such structures provide a minimumframework of commonality that people use as a rough guideline for orien-tation while being in midst of the turbulence of improvisation. In the fol-lowing, we explain the relation of minimal structures and strategizing inmore depth.

Following the work of Langley et al. (1995: 270), we characterize suchminimal structures in strategizing as issue streams. Issue streams reflectthe everyday practice of strategizing, because strategy meetings are usuallyorganized around issues rather than decisions. In strategy, well-known is-sues can be, for example, a merger, an initial public offering or a diversifi-cation into a new market segment. These issues persist in some form for aconsiderable time and do not suddenly disappear if a strategy meeting isfinished. Issues flow through the organization and often intersect withother issues (see Figure 28). Strategizing is about improvisation aroundthese 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 aworkshop) but also arise informally (e.g., a lunch break conversation).Conceptualizing the strategy process as an improvisational practice aroundissue streams yields a variety of advantages. First, issue streams can ‘ab-sorb’ the often unplanned and thus emergent character of strategic events.A lunch break conversation may retrospectively turn out to be about anongoing issue stream. Likewise, an officially scheduled meeting on issueA may turn out to be about no strategic issue at all. Second, issue streamsallow us to acknowledge that there is not the one strategy in an organiza-tion but instead a variety of, often parallel, issue streams. Third, issue


streams also reflect our conviction that strategic events are not arranged ina linear manner but ‘simply happen’ in a rather disorganized style that weretrospectively make sense of. Last but not least, issue streams can be un-derstood as being enabled by fictions. This allows us to link our remarkson the As If with regard to strategy process research with the conception ofstrategic 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 inter-connectedness currently exists (Langley et al. 1995: 270), we wish to ex-amine these three linkages briefly. Sequential linkages should not be con-fused with reintroducing linear planning through the backdoor. Rather, asequential linkage simply suggests that there are strategic events that coverthe same issue at different points in time. Lateral linkages, in which anevent that appears under issue A effects issue B, couple events that affecteach other across different issue streams. Laterally connected events arelikely to share common resources (e.g., management time). Resources usedwith regard to one issue stream almost inevitably affect the resourcesavailable in other issue streams. Precursive linkages also consider cross-issue connectedness but cut across different times. An event that occurredunder one issue can affect subsequent events on other issues within thesame organization. For instance, one event may evoke novel problems thatturn out to be relevant for future events in other issues streams.


To understand strategizing as improvisation around issue streams canmeaningfully inform future process research, since it recognizes the mini-mal structures that link strategic events (and thus provides order) and, be-cause of its underspecified nature, allows for improvisations to occur (andthus reflects the recursively organized nature of formulation and imple-mentation). Improvisation around issue streams takes into account that ineveryday organizational life people tend to think in categories of issuesrather than decisions. Issues reflect the minimal and often incompletestructures that organizational members use as a rough guideline for theiractions.

To conclude, strategic improvisation fits the demands of today’s com-petitive environment in which the general environmental predictability isdown to a minimum and markets often call for immediate response (Kimand Mauborgne 2005). Failing to respond in the moment is likely to resultin lost opportunities (Crossan and Sorrenti 1997: 156). Our conceptualiza-tion of strategy as improvisation shares some aspects with already well-known perspectives on the strategy process (e.g., the mix of deliberate andemergent elements [Mintzberg and Waters 1985] or the connection of for-mulation and implementation [Chakravarthy et al. 2003]). Yet, strategy asimprovisation also underscores so far unacknowledged or at least widelyneglected issues (e.g., the role of the supplement in adding and eventuallyreplacing strategies, the focus on issue streams in providing minimal struc-tures or the discussion of As Ifs as the necessary material for strategic im-provisation).

We encourage other scholars and practitioners to imagine the strategyprocess as a recursively related loop between formulation and implementa-tion (Broich 1994; Langley et al. 1995: 270). Strategy as improvisation al-lows us to embed the practice of strategizing into the everyday activities oforganizations. Finding out what a strategy is all about is not a purely cog-nitive act but most of all an empirical question to be settled in the contextof action. This moves strategy formation beyond any metaphysics of pres-ence: the strategy is not, the strategy becomes. Such a picture of the strat-egy process may look delusive to many scholars, as it reduces the notion offeasibility. Yet strategy as improvisation considers the messy realities thatorganizations have to cope with.

Managing for Strategic Improvisation

What does improvisation mean for practitioners? We believe that improvi-sation cannot be prescribed and that managers cannot suddenly turn theirorganizations into improvisational ones. Nevertheless, the literature on or-ganizational improvisation (Cunha et al. 1999; Weick 1998; Zack 2000)


suggests some general conditions that are likely to positively influence im-provisation in organizations. First, improvisation implies that there shouldbe less investment in front-end loading (Weick 1987a: 229). From an im-provisational perspective it makes no sense to try to anticipate everythingin advance, since people start to alter these analytical frameworks as soonas there is need. If there is a convergence between conception and execu-tion (Moorman and Miner 1998), strategizing relies more on generalknowledge, a large and diverse repertoire of skills, trust in institutions, theability to do a quick study, confidence in strategic fictions, and last but notleast the candidness to accept alterations.

Second, improvisation asks practitioners to consider every employee asa strategist. Whereas formal planning overemphasizes the role of special-ists and top management (Levy et al. 2003), strategic improvisation con-siders the fact that strategy is often made without anyone realizing it. Cros-san et al. (1996: 23) tell the story of Honda’s entry into the US motorcyclemarket. Honda used bigger motorcycles to make its way into the marketbut underestimated the more demanding driving conditions that caused un-expected engine failures curtailing sales of the big bikes. Yet Honda hadalso brought smaller motorcycles to the US, which were solely used foremployee transport. A Honda employee riding her/his smaller motorcycleencountered a customer in a parking lot. The customer wondered about thesmaller motorcycle, expressed interest and thus caused the successful in-troduction of smaller motorcycles into the market enabling Honda to estab-lish a 63% market share in the American motorcycle market in just fouryears. This parking lot conversation illustrates improvisation because it (a)was unplanned, (b) caused immediate reaction, (c) was not driven by anexecutive but a ‘normal’ employee, and (d) blurs the distinction betweenformulation and implementation.

Third, improvisation does not imply that traditional tools are no longerof value and should be discarded. Many tools permit temporary orientationin a game that is constantly changing its parameters. Improvisation doesnot mean conducting no strategic analysis anymore or leaving everythingto chance, but understanding the value of tools from a different perspectiveand acknowledging that tools are not enough (Mintzberg 1994; Quinn1980). Danger arises when executives use planning tools in too rigid away, when they draw a too definite a line between formulation and imple-mentation and thus act as if there is no need for improvisation, as if every-thing is under control. In a world where the future is monstrous in a Der-ridean sense, survival depends on improvised solutions that are oftenrestricted by inflexible strategic plans. Conventional planning tools should

Strategy Content – Beyond Simple Generalizations 237

be understood as frameworks that help to formulate convincing As Ifs thatthe organization uses for improvisation.

In summary, the distinction between pure planning and purely emergentstrategies is misleading, because the distinction between formulation andimplementation is undecidable (Brews and Hunt 1999). By taking theimpossibility of strategy formation as a conceptual limit for theorizing, wedemonstrated how improvisation shapes firms’ strategies despite theirparadoxical foundation. Transforming the underlying paradox into a recur-sive relationship between thinking and action allows for a certain degree ofintention (viz. strategic fictions) but at the same time considers the gradu-ally constructed nature of strategic preferences by means of improvisation.The justification of strategy remains a retrospective undertaking and ourreflections on future ways of action always refer to what anyone will haveperformed (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 scholarsconceptualize strategic rules and resources as if they were full of meaning,and thus generalizable, whereas in fact they are empty, waiting to be con-textualized in the process of application. As indicated in section 3.2.3, stra-tegic rules are thought to be generalizable across a variety of organiza-tions, while strategic resources are usually treated as generalizable within afirm. Camillus (2003: 97), for instance, argues that “normative guidelinesthat possess wide if not universal relevance are obviously invaluable to de-signers of planning processes and systems.” Taking a more critical attitudeGrandy and Mills (2004: 1162) state that “[t]he assumption and acceptancethat these typologies ‘fit’ all organizations in all industries is remark-able.”106 The orthodoxy seems to be to rely on principles that praise ana-

106A similar point is raised by Numagami (1998: 4) who argues that “[l]awlikeregularities in social phenomena are not regularities ‘out there’, but are createdand recreated by human conduct, consciously or unconsciously.” Miller andHartwick (2002: 26) even argue that generalizability is a characteristic of allmanagement fads and suggest that “[f]ads claim universal relevance, proposingpractices that adherents say will apply to almost any industry, organization, orculture – from General Motors to government bureaucracies to mom-and-popgroceries. But few management approaches are universally applicable, and at-tempts to implement a mismatch approach can do more harm than good.”


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 thequestion why oversimplifying generalizations with regard to strategy con-tent are neither desirable nor possible.

For any principle, be it a strategic rule or a strategic resource, to be gen-erally applicable, one would need not only to anticipate its context of ap-plication completely but also to regulate this very context (see section4.2.4). One would need to be able to foresee and manage the context ofapplication of a strategic rule/resource so that generalizations become at-tainable. A truly generalizable strategic rule would need to include all con-textual features (e.g., with regard to the country or industry in which thefirm operates). Likewise, a resource that is thought to be valid regardlessof the context of application within an organization has to disregard con-textual features (e.g., the characteristics of the people who apply the re-source or their understanding of how to handle it). Can we ‘manage’ thosecontexts? According to Derrida, contexts always remain open and thusnon-saturable. In fact, deconstruction implies paying the sharpest attentionpossible to context, acknowledging its limitless nature, and giving refer-ence 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 realitythat imposes on people, but produced, in fact enacted, through actions andinterpretive strategies. People, while making sense of their world, fix whatbelongs to a context and by doing so draw distinctions, which cannot bejustified in advance. Contexts are not a simple natural ground on whichmanagers can base their strategic activity but emerge because of their ac-tions and related interpretations. Accordingly, contexts always remainopen to further descriptions, as there is no pre-described limit of whatmight be included.107 Distinctions can always be drawn differently. For in-

107Franck (1992: 636) describes this problem by referring to the problem of theframe-axiom. For instance, “if I paint my house red in situation S1, then thecolor of the house in situation S2 should be red. The activity, rearranging thefurniture, that I conduct in situation S2, results in situation S3. Which colordoes the house have in S3? Of course red, since rearranging the furniture doesnot alter the color of the house. Though, logically this possibility remains. Thatis why I would need a frame-axiom stating that rearranging the furniture leavesthe color of the house unaltered. However, where are the limits of this frameaxiom? From a formal-logical perspective, rearranging furniture could changeeverything I know about the world. Hence, if I want to describe this situation, Iwould need a limitless number of frame-axioms.” (Franck 1992: 636-637, trans-lation A.R.).


stance, when talking about suppliers, do we include sub-suppliers ormaybe even sub-sub-suppliers as well? Which competitors do we regard asimportant? Who is a competitor for my product or service anyway? Thesequestions need to remain open and can only be fixed with regard to thespecific situation at hand.

The context of application of a strategic rule and resource is open in yetanother way. Any effort to describe/codify a context (e.g., ‘the project’ or‘the industry’) already yields another context that escapes the previousformulation (Culler 1982: 124). In other words, any attempt to describe thelimits of a context make possible the displacement of those limits. Con-texts always draw upon previous contexts, which are themselves embed-ded in still other contexts (Dixon and Jones 2005: 243). This inter-contextual character entails that there is no stability that allows us to com-pletely iterate a context without modification. While discussing the quote‘I have forgotten my umbrella’ that appears in Nietzsche’s unpublishedwritings, Derrida (1995a: 63) argues that

“[a] thousand possibilities will always remain open even if one understandssomething in this phrase that makes sense (as a citation? the beginning of anovel? a proverb? someone else’s secretarial archives? an exercise in learninglanguage? 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 imaginationwander for short distances, etc.?).”

The meaning of this short phrase remains open not only because there isdissemination of meaning per se, but also because every reading placesthis text into a new context and thus allows other contextual specificationsto occur. Of course, some contextual factors are less relevant than othersand we possess schemes that guide our enactment of contexts (Weick1979: 133-136), but Derrida makes the point that any specification of con-text remains contingent. In Derrida’s (1979: 81) view, the ‘totality’ of con-text is unmasterable, both in principle and in practice.

The limitless nature of the context of application is the condition ofstrategizing as such. Without the ceaseless destabilization of any context –the possibility of the unanticipatable – there is no need for something likestrategic management. In consequence, the condition on which most stra-tegic rules and conceptions about resources rest becomes self-defeating. Ifthese principles could really be applied to each company in every situation,we would end up in a situation where only violating these principles en-ables firms to distinguish themselves from their competitors to createcompetitive advantage. Take the example of Porter (1980), who advisesmanagers to choose between cost leadership, differentiation, or a focusstrategy. If these rules apply to everyone in the industry, strategizing no


longer implies doing things differently, which following Porter (1996) isthe essence of strategy, but doing the same things as your competitors.Hence, the only way to become different is to disobey these rules, whichmeans to end up in a ‘stuck-in-the-middle’ situation that, according to Por-ter, should be avoided.

In the end, the blind spot of the ‘fullness of strategic rules and re-sources’ is to neglect the dissemination of meaning. Because contexts areopen, they never determine the meaning of a strategic rule or resource. In-deed, if meaning is related to context, there can be no ‘proper’ context thatprovides proof for a final meaning. We cannot generalize around strategicrules and resources, at least not without recognizing that whatever is atstake needs to be put into a context and consequently needs to be trans-formed with regard to the specific circumstances at hand; that is to say notwithout the recognition that “dissemination affirms the always already di-vided generation of meaning.” (Derrida 1981a: 268) Dissemination dis-closes the contingency of meaning, not to question every strategic princi-ple, but to insist that whatever we call strategic cannot exist as a universaltruth. That is why deconstruction is a strategy without finality (Derrida1982: 7), a strategy that intervenes into whatever happens and thus trans-forms anything at stake (e.g., a strategic rule) – a transformation that bringsabout 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 asthe blind spot of the ‘fullness of strategic rules and resources’. Based onthese remarks, we now demonstrate that the argumentation of the ‘fullnessof strategic rules and resources’ obscures a paradox that makes the domi-nant logic a less proper point of departure for theorizing. Indeed, the fun-damental oppositions that strategy content research faces (i.e.rule/application and resource/application) cannot be sustained once weconsider the unsaturable nature of contexts. To unfold our argumentation,we need to discuss the repeatability of strategic rules and resources, be-cause in order to generalize rules and resources need to be perfectly re-


peatable. A strategic rule is only generalized if the advice that is offered bythe rule can be applied (and thus repeated) in a variety of contexts acrossorganizations. Likewise, a strategic resource can only be treated as gener-alized if it is applied exactly in the same way in a variety of contextswithin an organization. Put differently, for application of rules/resources tocome about there needs to be repetition.

Of course, repetition is possible in some way. In section 2.3.4 we classi-fied strategic rules as codified interpretations of generalizable (i.e. repeat-able) procedures of action and strategic resources as manifestations of tan-gible or intangible transformative capacities. Codified interpretations ofstrategic rules reflect regularities of the type ‘If X, do Y’ that are supposedto be followed by a variety of organizations. Certainly, different managersin different organizations can repeat (i.e. apply) the codified statement of astrategic rule that is provided by some strategy scholar. Likewise, manifes-tations of resources (e.g., a machine or a patent) can be applied and thusrepeated in a variety of contexts within one firm. Yet, for generalizationsto be valid, strategic rules and resources need to be not only repeated insome way, but in a perfect way. Every deviation destroys generalizability.We then have to ask: Is a perfect and unaltered repetition of the intendedmeaning of a strategic rule possible? Can we apply a generic strategy twicein the same way? And with regard to resources, is a perfect repetition ofthe use of a manifestation of a resource possible? Can we apply ma-chines/patents/business contracts etc. twice in the same way?

Derrida (1995a: 117) discusses the question of repetition (iteration) insome depth. According to his argumentation, the perfect repetition that isneeded to make generalizations valid is impossible. This, however, doesnot mean that Derrida totally questions and abandons generalizations; therelation between singularity and generalizability is quite special in Der-rida’s thinking. Deconstruction does not neglect the general but tells usthat “[t]he singular is in fact always bound up with the general.” (Royle2003: 120) Each time a manager applies Porter’s generic strategies, s(he)creates something singular, unique, unlike everything else that has existedso far, but at the same time also refers to the general, the same that crossesall attempts to strategize by means of Porterean logic. Every application ofa generic strategy is a strategy in itself and an example of generic strategiesin general. Every repetition produces a difference that alters and defers themeaning of strategy content. Différance is at the heart of repeatability andensures that the meaning of rules and resources is never fully present.

This interplay of sameness and difference conditions singularity andreminds us that repetition is never pure but always leads to alterations. AsLucy (2004: 59) argues, “[t]o repeat something is to alter it, to make a dif-


ference.” The alteration of the meaning of a rule or resource is already rep-resented within these concepts, constantly contaminating their purity(presence). If strategy content were present, it would be a presence withoutdifference, which is impossible (Bennington 1989: 84). This repetition-as-difference enables and limits strategic rules and resources to make usaware that nothing can exist only for itself in a state of self-presence. Whatpermits pureness to occur is ‘this dangerous supplement’ (Derrida 2003a)which constantly adds a new dimension of meaning to the ‘origin’. In ourcase, the supplement is application – the action that is required for strategicrules and resources to mean anything at all. We cannot refrain from apply-ing strategic rules and resources, as this would make them unessential. Yetapplication means modification and thus partly destroys rules and re-sources.

The impossibility of perfect repetition points towards paradox. We can-not replicate strategic rules and resources in their purest sense, which is tosay without modification. The condition of their possibility (which is theiriteration), already modifies, alters, perverts, sometimes even replacesthem.108 Strategic rules and resources do not apply themselves; people ap-ply them within a specific context, a context that cannot be perfectly regu-lated a priori but remains open and thus calls for adjustment. Strategistsneed to regulate and get by without regulation. To follow a strategic ruleand to apply to a strategic resource in a pure way, preserving their ‘origi-nal’, intended meaning, is impossible. As Derrida (1992a: 23) argues withregard to just decisions:

“[F]or a decision to be just and responsible, it must, in its proper moment ifthere is one, be both regulated and without regulation: it must conserve the lawand also destroy it or suspend it enough to have to reinvent it in each case, re-

108Ortmann (2003a: 207) remarks that the discussion of rules and resources actu-ally contains a double-paradox. They not only provide generalized principlesfor specific contexts but at the same time are also thought to be generalizablewithin the scope of a corporation (i.e. applicable to all occurring contexts), al-though not beyond the corporation (as this would cause an imitation of thecompetitive advantage). Thus, strategic rules and resources offer uniqueness asa 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 un-dertaking, hopeless insofar as it is aimed at generalizable singularity.” Ironi-cally, we face a situation in which most strategic rules and resource-conceptspromote uniqueness (viz. ‘make your corporation special’) but offer generalprescriptions (viz. ‘that is how everybody needs to do it’). For instance, genericstrategies are supposed to be valid ‘inside’ all organizations, but are supposed toalso provide a distinct and unique competitive advantage ‘outside’ the firm (seealso Vos 2005: 367).


justify it, at least reinvent it in the reaffirmation and the new and free confirma-tion of its principle. Each case is other, each decision is different and requiresan absolutely unique interpretation, which no existing, coded rule can or oughtto guarantee absolutely. […] It follows from this paradox that there is never amoment that we can say in the present that a decision is just […].” (first em-phasis added)

The supplement ‘forces’ the meaning of strategic rules and resources to becontextualized, to be valid for a single case only. But contexts, as indicatedin the preceding section, are open and unsaturable and cannot be regulatedin advance, at least not in a perfect way. This is the ground from which ourreasoning regarding strategy content needs to unfold: strategizing is aboutapplying strategic rules and resources (Ortmann and Sydow 2001a: 438),an application which cannot purely reproduce because it always alreadycalls for modification. Strategic rules and resources cannot account fortheir own interpretation by agents in situ; they cannot regulate their ownconditions of application. In other words, we cannot understand strategicrules and resources as a generalized way for becoming idiosyncratic (Fig-ure 29). To think of perfectly repeatable strategic rules/resources means toestablish a metaphysics of presence (i.e. an ‘origin’ that is self-definingand does not need any application to create meaning).109

109Giddens sets up this paradox as well by arguing that “no course of action can besaid to be guided by a rule because every course of action can be made to ac-cord with that rule. However, if that is the case, it is also true that every courseof action can be made to conflict with it.” (Giddens 1984: 21) Yet he also re-solves this indecision by suggesting that this paradox holds only as long as wethink about codified interpretations of rules. If rules are procedures of action,aspects as praxis, one looks at their constant enactment and reproduction in so-cial practices (that includes modification and manages to get by without perfectreplications). Wittgenstein (1967: 81) remarks in a very similar sense: “Thiswas our paradox: no course of action could be determined by a rule, becauseevery 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 madeout to conflict with it.” Barnes (1995: 202) remarks, “nothing of the rule itselffixes its application in a given case, […] there is no ‘fact of the matter’ concern-ing the proper application of a rule, […] what a rule is actually taken to imply isa matter to be decided, when it is decided, by contingent social processes.” (asquoted in Tsoukas 2000: 109, emphasis added)


Fig. 29. The Paradox of Strategic Rules and Resources

Based on this paradox, Ortmann (2003b: 33) draws our attention to theunavoidable necessity of rule modification. He claims that rules are inevi-tably modified, and for resources things are not much different (Ortmann2003a: 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 mean-ing of a resource is not necessarily a bad thing, but often indispensable toaddress the context they face. When talking about deviations from strategicrules and resources, we do not focus on deliberate violations (for instance,when a strategic rule like cost leadership is given a twist to legitimize childlabor), 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 modi-fication. Yet it shows the need to study how managers adjust strategic rulesand resources (McKiernan 1997: 794).

While this line of argumentation seems comprehensible for strategicrules, it is less clear for resources. Modification with regard to resourcesdoes not imply altering their manifestations (e.g., as a machine) but themeaning people attach to them. The meaning, though, is of special impor-tance. With the recent debates on the knowledge-based view of the firm(Grant 1996; Kogut and Zander 1992), the meaning of resources seems tomove to the heart of resource-based thinking. Of course, a machine can beused more than one time, but the meaning that is attached to this machineand the way it is used is in a constant state of flux. Whether, how, and inwhich way a machine is applied is, of course, a question of context. Inother words, what is at stake is the meaning that is attached to tangible andintangible resources and not their mere physical qualities (e.g., as ma-chines, patents or IT systems). Hence, it is paradoxical to replicate the un-altered meaning of a strategic resource, since the supplement (application)brings about new facets of meaning, but at the same time acts as the condi-tion of the possibility for resources.


The paradox that strategic rules and resources are unable to define theirown conditions of application has been widely neglected by empiricalstrategy content research thus far. Nevertheless, some scholars have ac-knowledged the consequence of the paradox (i.e. generalizable statementsabout ‘what constitutes a good strategy’ are impossible). Pfeffer (1994: 3-4) shows that one cannot simply adhere to Porter’s five forces frameworkto make out competitive advantage because competitiveness is a dynamicconcept that changes over time. He argues that when identifying the fivetop performing US firms for the 1972 to 1992 period, which according toPorter should be in industries where patent protection of product or servicetechnology could be achieved, one ends up with a list of organizations thatoperate in industries characterized by massive competition, horrendouslosses, widespread bankruptcy, and almost no barrier to entry. The point isnot to believe that Porter offers a false analytical tool, but that the generalnature of his framework does not offer a reasonable explanation of com-petitive advantage in every industry. The corporations Pfeffer identifiesdid not get their competitive edge from any of the five Porterean forces butfrom the way they managed their workforce, a factor that may be includedin strategic analysis by supplementing existing frameworks sensu Der-rida.110

To conclude, the ‘fullness of strategic rules and resources’ aims at im-possibility. It assumes that strategic rules and resource are generalizableand thus can be repeated (i.e. applied) without modification. Yet applica-tion is not a secondary operation that can simply be deduced; applicationacts as a supplement that may be restricted (but not determined) by exist-ing meaning structures but leads to a modification that not necessarily runscounter to the ‘original’ but puts it into context and thus preserves peoples’

110With regard to organizational rules in general, the study by Orr (1996) revealsthe impossibility of conceiving rules as determining their own application. Inhis ethnographic observation of field service personnel repairing office ma-chines, he points out that such work is resistant to rationalization, because thenecessary expertise cannot be easily codified in rules. While observing the workof service personnel, he realizes that the documentation, which is supposed tohelp the technicians, “is composed of representations, which inherently affordmultiple interpretations and uses, and instructions, which require interpretationsby their users in the context of their application. As Suchman writes, followingGarfinkel, ‘Indexicality of instructions means that an instruction’s significancewith respect to action does not inhere in the instruction, but must be found bythe instruction follower with reference to the situation of its use (Suchman1987: 61). […] There is also a certain amount of resentment of the diagnosticprocedures; as one technician told me, technicians like to think they have moreon the ball than just following directions.” (Orr 1996: 110)


capacity to strategize. Like signs, which are unstable and only gain mean-ing in and through social praxis (Derrida 2002), to know a universal rule orto apply a resource by itself in no way guarantees that its generality is en-abled in the context of application. The supplement always undermineswhat we think is generally valid. Like a parasite, the social practices ofpeople constantly recontextualize and revise strategic rules and resources.That is why Derrida (1995b: 234) remarks “deconstruction is always a dis-course about the parasite.”

6.3.3 The Deparadoxification of Strategy Content

As indicated in the preceding section, the uncontaminated iteration of stra-tegic rules and resources is impossible. Yet we all know that strategistssomehow deal with this paradox. Deephouse (1999), Lozeau et al. (2002),and Zbaracki (1998), for instance, investigate how strategic rules becomeapplied. Likewise a variety of authors have empirically observed that man-agers refer to resources (Henderson and Cockburn 1994; Lorenzoni andLipparini 1999). So, where is the paradox? To discuss this question, weneed to recall that the paradox that we identified with regard to strategycontent research states that a perfect repetition of the meaning of strategicrules and resources is impossible. In practice, though, strategists usuallyneither demand nor desire a pure iteration of strategic rules and resources;they are aware that strategic rules formulated by strategy scholars need tobe adjusted to fit their context. They also accept that the meaning of thoseresources that are vital for their company change over time. In otherwords, practitioners simply modify the meaning of the rule or resourcewithout caring much about their uncontaminated iteration.

Yet, to conclude from this that the paradox is not of relevance is mis-leading. Although strategists do not demand a perfect iteration of strategicrules and resources, they still want to apply not just any rule/resource butthe intended rule/resource. That is to say, that there are limits to modifica-tions. To obey Porter’s (1980) generic strategies means to give reference tohis work, to apply those characteristics that he identified as being relevantwithin any of the generic strategies. There are limits to deviations andwhatever is thought to be general needs to stay at least recognizable underits proper name (Derrida 1995a: 9). ‘Cost leadership’ cannot mean justanything, but needs to give some reference to the intended meaning thatPorter (1980) had in mind. This is even more important, if we consider thatthe contextual interpretation of a strategic rule or resource needs to be so-cially accepted. For example, others need to recognize the proposed costcutting measures as being part of a ‘cost leadership’ strategy. In a time


where strategic management also has a signaling function to otherstakeholders (e.g., stockholders, institutional investors or NGOs), signifi-cant modifications of strategic rules and resources need to be justified withregard to their intended meaning. This then makes the paradox more visi-ble and strategists eventually look into the ‘eyes of the impossibility’ thatparadoxical indecision brings about.111

This brings us to the question of deparadoxification. How do strategistscircumvent the paradox of iteration? To escape paralyzing indecision,strategists temporalize paradox; they act as if their interpretation of thestrategic rule or resource is relevant, whereas they know – or at leastshould know – that this interpretation cannot represent an uncontaminatediteration. This As If obscures paradox and demonstrates that formulated(written or oral) strategic rules and statements about how resources are un-derstood have the character of a fiction. Faced with the paradox, strategistsact as if their interpretation is valid; they act as if the meaning that they as-cribe to labels like ‘variety-based positioning’ (Porter 1996: 66) or ‘com-petence-based leadership’ (Hamel and Prahalad 1998: 189) correspondswith the intended meaning. This, then, establishes a ground from whichfurther strategic action can unfold. Any formulation, of course, is guidedby a sense of naivety. Those in charge cannot know in which way and towhat extent the meaning of their formulation becomes modified in praxi.To treat strategic rules and resource as if they were meaningful preservesstrategists’ capacity to act despite the underlying paradox.112

111To 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 meansto acknowledge its ‘own character’ (that which identifies it). Yet, as Derrida(1977: 111) remarks, the identification of propriety requires the existence ofsignifying elements that are shared with others (and are thus improper). One canonly identify propriety by giving reference to its impropriety (that which makesthe proper identifiable for everybody).

112If we consider that those formulations that deparadoxify strategy content arebased on performative speech acts, we can emphasize the bootstrapped charac-ter of formulated strategic rules and statements about resources. Recall that abootstrapped operation creates its own grounds; performative speech acts bringinto existence what they refer to. Of course, strategic formulations become es-tablished through performative speech acts. Managers announce a ‘cost leader-ship’ 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 performativeformulations, that are actually supposed to guide strategic actions, come intoexistence because of the ‘actionality’ of performative speech acts (see section5.2).


To facilitate orientation and pave the way for the discussion of implica-tions, we will briefly show how strategic rules and resources relate to thefictions that deparadoxify strategy content. Concerning strategic rules, wepropose that in an initial sense they can be understood as strategy scholars’codified interpretations of strategic activity. Then, a manager who refers tothese codified statements and interprets them establishes a fiction and con-sequently acts as if her/his interpretation corresponds with the ‘initial’meaning of the rule. This fiction temporalizes the paradox. Of course, thefiction still represents a certain emptiness. Strategists do not knowwhether, how, and in which way the fiction is socially accepted and em-bedded in the strategizing routines of their organization. Similarly, strate-gic resources represent manifestations of transformative capacities. Thesemanifestations (e.g., a license or a machine) can be used more than once;yet the meaning that is attached to these manifestations changes with everyapplication (e.g., a license can be used to produce slightly different goodsat different locations with different people who have different knowledgeabout how the license is supposed to be applied). Accordingly, the mean-ing that is attached to manifestations of resources cannot be perfectly iter-ated; this is paradoxical. To deparadoxify this situation, those who apply aresource can act as if their interpretation of the resource is valid and some-how corresponds to its proper nature. Certainly, the underlying As If is afiction that is ‘filled with meaning’ in and through the conduct of organiza-tional members.

The As Ifs that are needed to deparadoxify strategic rules and resourceshelp us to understand how managers deal in practice with the impossibilityof generalizing strategic rules across a variety of organizations and strate-gic resources within a particular firm. The As Ifs temporalize the paradox;they defer it into an indeterminate future. Of course, we should suspectthat practitioners are seldom aware of the As If that underlies their thinkingabout strategy content. Yet, even though practitioners usually do not de-mand perfect iterations, their application of a formulated strategic rule ormanifestation of a resource is based on a fiction. Fictions are inevitablesince managers cannot know whether and in what way the strategic rulethey regard as important or the resource they have identified as a strengthis applied (and thus modified) over time. In the following, we take the ex-istence 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 theAs 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 re-alized in praxis.


6.3.4 Implications of the Deconstruction of Strategy Content

Iterability – The Emptiness and Fullness of Strategy Content

Recall that the paradox that, strictly speaking, makes generalizations withregard to strategic rules and resources impossible is based upon Derrida’s(1991: 83-84) claim that every repetition also brings about alteration. Rep-lication is the possibility of singularity; this is paradoxical (and thus im-possible) only if we look at an uncontaminated iteration. Derrida (1995a)discusses this interconnectedness of repetition and alteration with regard tothe term: iterability. Iterability, as Derrida (1995a: 7) suggests, comes fromthe Latin iter (‘again’) and the Sanskrit itara (‘other’) and is the logic thatties repetition to alteration. Iterability asks us to think replication andmodification together to consider that reproduction already is the possibil-ity of singularity. Whatever is at stake remains identifiable within andamong organizations, but only in, through, and in view of its alteration(Derrida 1995a: 53). The structure of iteration implies both identity anddifference. Conceiving strategic rules and resources as being reproducedby 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 thesameness that makes strategic rules/resources in some way repeatable. Infact, according to iterability, organizations base their strategies on an in-dispensable emptiness, which is necessary for repetition, and a gradual fill-ing of this emptiness to take specific circumstances into account (Ortmannand Salzman 2002: 212). They consider general (empty) strategic prescrip-tions and modify (fill) these prescriptions over time. Emptiness, then, rep-resents the repeatability of rules and resources in principle, while fullnesscharacterizes ‘the other’ that each context brings about and without whichno rule or resource gains meaning in praxis. Emptiness implies that strate-gic rules and resources can be repeated and act as a ground for strategiz-ing, whereas fullness points out that this repetition fills rules and resourceswith contextualized meaning and modifies them to account for the specificcircumstances at hand. The question is: How are strategic rules and re-sources filled with meaning?

To theoretically conceptualize the process of filling, we need to demon-strate how ‘empty’ strategic rules and resources are ‘filled’ in the course ofapplication. Of course, the underlying relation is supplementary in a Der-ridean sense: ‘empty’ rules and resources are ‘filled’ (and thus modifiedand eventually replaced) until the next round of strategizing where the ini-tial filling needs to be reworked according to novel contextual circum-stances. In the following, we describe this supplementary relation and its


implication in more depth. To organize this rather long discussion, wehave structured our argumentation into five parts (see Figure 30).

Fig. 30. Outline of the Discussion of Emptiness and Fullness

Strategic Concepts-in-Use and CompetencesTo discuss the supplementary relation between ‘empty’ strategicrules/resources and their gradual filling within the course of application,we need to be able to contrast emptiness from fullness. So far, our defini-tion of strategic rules (as codified interpretations of scholars’ observationof strategic activity and resources as manifestations of transformative ca-pacities) cannot conceptually grasp ‘fullness’. This is because these defini-tions of rules and resources only refer to their necessary emptiness. In fact,codified interpretations of rules and manifestations of resources disregardtheir process of application. To contrast emptiness from fullness, we needa conception of strategic rules and resources that gives reference to theirapplication. Our existing definitions need to be supplemented by an under-standing that grasps the fact that strategic rules and resources become as-pects of praxis. Figure 31 contrasts the different definitions.


With regard to the market-based view, we contrast ‘empty’ strategicrules from ‘full’ strategic concepts-in-use. Following Giddens’s (1984: 21)understanding of rules in general, we define strategic concepts-in-use asprocedures of action that are applied in the enactment of social practices.Formulated strategic rules are thus only special types of strategic concepts-in-use (viz. their codified interpretations). The notion of strategic concepts-in-use reflects our belief that every strategic rule, once applied by manag-ers, becomes an aspect of praxis. That is to say, codified interpretations ofstrategic rules can only be filled with reference to the conduct of people. Astrategic rule gains meaning when people start to apply it in the course ofsocial action.

Fig. 31. Emptiness, Fullness, and Objects of Analysis

With regard to the resource-based view, we contrast ‘empty’ resourcesfrom ‘full’ strategic competences. We define strategic competences as thedeployment of resources over time (Freiling 2004: 31; Ortmann 2005a: 34;Penrose 1995: 25). The competences that are yielded by resources onlycome 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 goal-and market-oriented way. This is only possible in case of available action-related competences. They unfold the potential of resources […].”

Of course, the idea of competences is by no means a novel one. For in-stance, Prahalad and Hamel (1990: 82) identify competences as the collec-tive learning in the organization. One may wonder, then, why we still criti-cize resource-based reasoning for its neglect of the process of employing


resources, if strategic competences already highlight the employment ofresources. When taking a closer look at the competence-based literature(Freiling 2004; Prahalad and Hamel 1990; Stalk et al. 1992: 62; Tallman2003), it becomes obvious that, despite the emphasis on the deployment ofresources, competences are still seen as generalizable. Prahalad and Hamel(1990: 83), for instance, argue that competences have to be transferableand Freiling (2004: 31) argues that competences are repeatable. Yet, ifcompetences can be transferred and are repeatable, they cannot representidiosyncratic circumstances (Ortmann 2005a: 34). Competences, as de-ployed resources, cannot be a priori ‘given’.

Emptiness and Fullness and the Lifeworld of OrganizationsHaving introduced the notions of strategic concepts-in-use and compe-tences, we can now discuss how we understand emptiness and fullness ingeneral. Faced with the emptiness of general strategic rules and resources– or a deparadoxifying As If about them – strategists have to ‘fill’ this nec-essary emptiness with meaning. The process of filling gives reference tothe in principle repeatable strategic rules and existing resources and con-siders the context that calls for modification. Fullness is about a contextu-alized understanding of whatever is thought to be generalizable; it bringsabout strategic concepts-in-use and competences. Any fullness, though,has to be emptied to factor in inevitable recontextualizations. Emptyingimplies discarding and unlearning strategic concepts and competences thatare currently in use; it is about the necessary forgetting of whatever is con-textualized. Emptying a strategic concept-in-use or competence implies re-considering its underlying generalizability. Far from being a mere theoreti-cal construct, this ‘looking back’ at strategic rules and resources happensin ‘strategy reviews’ when strategists reflect on their understanding of cur-rently deployed strategic concepts and the significance of strategic compe-tences (see Figure 32).

Fig. 32. The Emptiness and Fullness of Strategy Content


Emptiness and fullness allow us to explore in more depth the relationbetween strategic rules and concepts-in-use as well as resources and com-petences. But with regard to what conditions does fullness occur? Whenadopted by an organization, strategists embed rules and resources into theirorganization-specific lifeworld (Lebenswelt) and by doing so carve out themeaning of strategic concepts-in-use and competences. We use the termlifeworld with reference to Schütz (1962: 231-233) and its later adoptionby Berger and Luckmann (2000: 17). Although Schütz’s remarks primarilyconcern society at large, we interpret his idea of the lifeworld with regardto organizations. According to Schütz, the lifeworld is the paramount real-ity within which the self suspends all modes of disbelief. The lifeworld iswhat we take for granted as everyday reality. People in organizations usethis lifeworld as a ‘home base’ for their orientation. The lifeworld acts asan archetype for our experience of reality (Schütz 1962: 233): to a largeextent it reflects the regularities that people procure. The organizationallifeworld is also reflected by a certain cognitive style and specific ways ofusing language. All organizations have their specific way of ‘talking’(Czarniawska-Joerges and Joerges 1988) and a certain common-sensemode that all people share. This common-sense mode identifies an organi-zation and influences the way people interact. Fullness is always a fullnessthat can only be achieved with regard to the lifeworld of an organization.

Once embedded in and applied to the lifeworld of an organization, stra-tegic rules and resources gain meaning. What does it mean to possess a‘given’ bundle of resources like knowledge and certain high-tech ma-chines? For Sony it implies becoming good at ‘miniaturization’, for 3Mhaving a competence with ‘sticky tape’, and for IBM becoming good at‘integrated data service’. What does it mean to choose cost leadership ordifferentiation as relevant strategic rules? Cost leadership at Tesco is dif-ferent from cost leadership at Ryanair. Strategists have to modify, corrupt,and even replace the empty codified interpretations with contextualizedmeaning in praxis.

Of course, ‘fullness’ with regard to the lifeworld can never imply self-presence in a Derridean sense. We cannot stop différance from occurring,to suddenly face a fixed center from which our reasoning unfolds. Therecannot be full meaning, only meaning in the moment. The moment, how-ever, is never fully present (Derrida 2003a). Fullness is by itself in a con-stant state of flux. Consequently, considering strategic concepts-in-use andcompetences as stable within the lifeworld of an organization bears the riskof reintroducing these categories as general means for specification, whilespecification can neither be determined nor foreseen by some meta-competence or meta-rule. While this is true from a theoretical lens, we


should not forget that much strategizing is based on routines that possess arelatively stable character (Zollo and Winter 2002) or whose exactmodification is not all that relevant within the course of strategizing. All ofthis leaves the question of how emptiness is filled unaddressed. We nowexamine the process of filling through which rules/resources are trans-formed into aspects of praxis.

Phenomenological Remarks on the Process of FillingTo understand how ‘empty’ strategic rules and resources are given mean-ing, we have to consider that the organizational lifeworld holds a variety ofinterpretative schemes by which people understand their context and makesense of their world (Schütz 1962: 233). Mundane examples of suchschemes are symbolic orders, value systems, and stories that actors shareto coordinate and assign meaning to their actions (Gilbert 2003: 131).Empty strategic rules and resources refer to contextualized interactionswhereby meaning gets mediated by communication and under considera-tion of the interpretative schemes that actors possess.

We propose, following Duschek (2001), to understand the application ofinterpretative schemes by referring to Schütz’s (1967) phenomenologicalconception of the social world. According to Schütz, our reflective graspon 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 itback to typical characteristics that are familiar to us. As Schütz (1967: 83)explains, “the lived experience that is to be classified, refers […] back tothe schemes on hand, and fixes its specific essence.” These schemes are in-terpretative schemes within which actors have organized the experiencesof their past. According to Schütz (1967: 84), interpretative schemes are

“the completed meaning-configurations that are present at hand each time in theform of ‘what one knows’ or ‘what one already knew’. They consist of materialthat has already been organized under categories.”

Interpretative schemes are anchored in the specific lifeworld of an organi-zation. Schütz (1967: 81) makes quite clear that interpretative schemes re-sult partly from our own past experience and partly from what others havetaught us. This means that schemes are tied to the unique experience of anorganization and are bound to its specific circumstances. Every particularexperience of a general strategic rule or resource, then, is referred to a gen-eral type that is part of an interpretative scheme rooted in the lifeworld.

Schütz uses the term type to emphasize that interpretative schemes con-sist of a variety of types that allow people to experience the unique interms of broader, well-known categories. Typification, which is the proc-


ess of ascribing a general type to a particular experience, applies to all kindof objects and human beings. Organizational members classify whateverthey experience in the ‘here-and-now’ as specific and context-bound in awell-known scheme (type) and thereby make these experiences in someway knowable to them. Typification is used because in everyday organiza-tional life the particular characteristics of a context, which make this con-text totally unique and not repeatable, are not always all that relevant(Duschek 2001: 75). This makes typification the abstract act by which thespecificity of a situation is detached from the particularities of its contextand reduced to its ‘typical’ (viz. for the organizational lifeworld knowable)characteristics. We thus experience the singularity of the situation througha typified interpretative scheme.113

By typifying, one is attuned to the continuities of experience and tendsto disdain special instances and unique detail. This leads to what Schützcalls idealizations, which spread through our experience of the organiza-tional 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 soweiter) 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 oc-curs. Interpretative schemes provide a roughly coherent complex of mean-ing by which organizations interpret present experiences, make them un-derstandable, and to a certain extent decontextualize them to plan theircourses of action.

We are now in a position to describe the process of filling more pre-cisely. Usually, the emptiness of a strategic rule or resource is introducedby specific ‘labels’. When applying a strategic rule, strategists have to fig-ure out what ‘Cash Cow’, ‘Total Quality’ or ‘transaction costs’ mean thistime. Similarly, when applying a resource, people need to figure out whattheir ‘core competence’, ‘market knowledge’ or the ‘availability of top ex-perts’ mean in the specific situation that they face. These labels occur withregard to the specific lifeworld of an organization. To make sense of them,

113Schütz (1964: 285) gives the following example: “Strictly speaking, each expe-rience is unique, and even the same experience that recurs is not the same, be-cause it recurs. It is a recurrent sameness, and as such it is experienced in a dif-ferent context and with different adumbrations. If I recognize this particularcherry tree in my garden as the same tree I saw yesterday, although in anotherlight and with another shade of color, this is possible merely because I know thetypical way in which this unique object appears in its surroundings. And thetype ‘this particular cherry tree’ refers to the pre-experienced types ‘cherry treein general’, ‘trees’, ‘plants’, ‘objects of the outer world’.” (emphasis added)


there are long discussions about what it means to have a core competenceor what precisely a Cash Cow represents for the organization in its currentcontext. Within these discussions, labels are decontextualized, becausepeople refer ‘this-particular-notion-of-core-competence’, which exists inthe ‘here-and-now’ of the lifeworld with its unique meaning, to pre-experienced types like ‘competences in general’, ‘competition’, and ‘re-sources’. 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 thetechnical dimensions of TQM with the everyday realities they encounter in on-going organizational processes.” (emphasis added)

By embedding strategic rules and resources in their lifeworld, organiza-tions overcome the compatibility gap (Lozeau et al. 2002) between generalassumptions and the idiosyncratic context at hand. People include the typi-fied meaning-configurations of concepts-in-use and competences into their‘stock of knowledge at hand’.

By applying typified schemes, people construct concepts-in-use andcompetences without giving reference to each and every particular charac-teristic of the individuality of their lifeworld. The resulting understandingsof concepts and competences are thus conveyed into the lifeworld andcarry with them the presumption (idealization) of their applicability untilcounter-evidence occurs. The singular grasp of a strategic rule or resourceis transformed into an anonymity that is valid in the organization only(Schütz 1964: 40). The resulting ‘full’ notions of concepts-in-use andcompetences act as idealizations that are applied routinely in the spirit ofSchütz’s ‘I-can-do-it-again’ without recognizing every detail that a contextholds.

Understanding the application of strategic rules and resources based oninterpretative schemes moves us beyond the dichotomy of ‘entirely emptystrategy content regardless of context’ and ‘entirely filled strategy contentwith regard to a unique context’. That is why Schütz (1964: 42) calls them‘mediating typifications’. In fact, rules and resources are filled with regardto the organizational lifeworld, but not with regard to every unique contextthat pops up in the course of strategizing. Whenever strategy content isfilled it conserves a sense of generalizability, as for organizations it is im-practical to regard the precise circumstances appearing in time-space. Yet,at the same time, strategy content is also turned towards the exclusivity ofan organization. This is why the inclusion of Schützean ideas reflect Der-rida’s (1991) iterability – the ‘strange’ recurring character of rules and re-sources and their modification. Of course, Derrida would question the ex-istence of idealizations throughout time and space, as every iteration brings


about a slight (often unnoticed) modification. Schütz’s ideas, however,help us understand that even though these slight modifications exist, peo-ple often disregard every precise detail that the particularities of organiza-tional life bring about; people work, chat, discuss, argue, and follow theirroutines (Segal-Horn 2004: 141).

To conclude, the phenomenological interpretation of the process of fill-ing demonstrates more precisely how managers cope with the inevitableemptiness of strategic rules and resources. Schütz’s ideas supplement Der-rida’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-in-use and competences can gain relatively stable meaning (because they areidealized), how do these idealizations change over time? Existing con-cepts-in-use and competences need to change as organizations face novelsituations that make existing interpretations inappropriate. Indeed, what-ever is filled also needs to be forgotten (‘emptied’) to create room for in-terpretations that fit progressing contexts. That is why the next section dis-cusses the dynamic interplay between fullness and emptiness.

Emptying and Filling as Situated LearningAny concept-in-use or strategic competence has to change over time. Ex-isting contextualizations are likely to result in incompetence (Argyris1986); after a while they are applied to avoid surprise, embarrassment orthreat eventually resulting in organizational inertia. Inertia reflects an or-ganization’s inability to apply distinctive interpretative schemes to updatetheir strategy content regarding new situations. To change concepts-in-useand competences is tough, as the ‘taken-for-granted’ (idealized) characterof our everyday knowledge has to be altered (Nonaka and Takeuchi 1995:45-46).

To reconfigure meaning that has been attached to competences and con-cepts-in-use requires learning, if we interpret learning as the developmentof new contextualizations in the lifeworld. Yet, for learning to come aboutthere also needs to be unlearning – a process through which people discardoutdated strategic concepts-in-use and competences (Hedberg 1981: 18).Unlearning is indispensable to embed novel experiences in different cogni-tive patterns. To empty a concept-in-use or competence can be interpretedas unlearning; it implies discarding existing contextualizations of strategycontent to clear space for prospective fillings. According to this perspec-tive, emptying (unlearning) paves the way for new fillings (learning) toemerge. We thus agree with Prahalad and Bettis (1995: 10) who argue that“strategic learning and unlearning […] are inextricably intertwined.” (seealso Nystrom and Starbuck 1984: 58) This reflects the supplementary rela-


tion between emptiness and fullness. To fill ‘empty’ strategic rules and re-sources there needs to be learning (i.e. the development of new idealiza-tions). 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 compe-tences to allow for a new round of filling.

Although learning and unlearning enable us to conceptually grasp thedynamic interplay between emptiness and fullness, there is one importantquestion that remains unanswered: How do people know when andwhether their current concepts-in-use and competences are outdated? Howdo they know when to (un)learn? Weick and Coutou (2003) and Langerand Moldoveanu (2000) address this question and argue that in order to al-ter existing interpretations people need to draw novel distinctions thatmake them aware of their context; they need to be in a state of alertnessand lively awareness regarding events occurring around them (Albert1990: 154). To recognize the need for unlearning means to be opposed tothe non-reflected application of existing modes of behavior. In otherwords, people have to identify the singularity of a new situation and expe-rience this singularity (‘What is new about the recent pro-ject/product/initiative?’). With regard to our phenomenological discussionof emptiness and fullness, to (un)learn means to critically reflect idealizedtypifications of strategic competences and concepts-in-use regarding theirappropriateness (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 attentionpossible to contextual features, one cannot generalize with regard to the in-terplay of emptiness and fullness (Easterby-Smith et al. 2000; Messner etal. 2005: 6). Put differently, no generalizable meta-learning competencecan ensure that outdated interpretations of strategic rules and resources aredisregarded. This competence, like any competence, is at best a potentialthat has to be activated with regard to a context. In consequence, the inter-play between learning and unlearning, and thus also between emptinessand fullness, is situated. The situated nature of learning has been promotedby a variety of scholars (Brown and Duguid 1991; Brown and Duguid2001). 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 theirparticular social and physical circumstances.”

Situated learning gives the sharpest attention possible to the social, cul-tural, and physical context that affects how and what organizations learn.


To understand the dynamics of emptiness and fullness as a process of situ-ated learning stresses that a change of the idealized ‘stock knowledge athand’ is by itself a process that is bound to context and not generalizable.Forgetting existing contextualized notions of strategy content is as muchcontext-bound as adding new idealizations by reinterpreting strategic pre-scriptions according to novel circumstances.

This, of course, is a plea to treat any kind of meta-learning-competencewith great care. Such competences suffer from the same problem as theapparent ‘fullness of strategic rules and resources’: they are thought to begeneralizable, yet can only provide potentials that have to be activatedwith regard to a specific situation. Without recognition of this insight, re-search is likely to engage in a relentless search for meta- and meta-meta-competences that relegate the search for competitiveness to the fringe of aninfinite regress. (Un)Learning understood as the dynamic interplay be-tween emptying and filling can be achieved only in situ.114

114This insight is interesting with regard to the recent development of a dynamiccapability view. According to dynamic capabilities, it is not a competence perse that renders competitive advantage but the way it is actualized with regard tochanging market conditions and organizational circumstances. Teece et al.(1997: 516, emphasis added) define such capabilities as “the firm’s ability to in-tegrate, build and reconfigure internal and external competences to address rap-idly changing environments.” Thus, dynamic capabilities represent firms’ abil-ity to empty competences and to refill the latter according to varying contexts.For instance, while product-related knowledge can be classified as a compe-tence, an organization that possesses dynamic capabilities develops routines toreconfigure 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 underly-ing competences.Notwithstanding these conceptual advantages, there are also critical aspects thatbecome evident from the perspective of a deconstructed resource/applicationopposition. First, whereas Teece et al. (1997) tell us what dynamic capabilitiesare, they tell us nothing about how firms reconfigure their competences. Sec-ond, it remains unclear how firms develop dynamic capabilities (Helfat andPeteraf 2003: 997; Moran and Ghoshal 1999: 409). Eisenhardt and Martin(2000: 1107) still conceptualize such capabilities as ‘given’ and argue that onecan identify them quite easily. In fact, they argue that “dynamic capabilities canbe duplicated across firms” so that a ‘best practice’ exists which all firms canuse as a benchmark. If dynamic capabilities are generalizable across firms, theyexist in an a priori manner, but not with regard to the specific lifeworld of anorganization. The development of competences is as much based on situatedlearning as the development of the development of competences. If learning issituational, the learning of learning cannot be generalizable.


Implications of the Discussion of Emptiness and FullnessThe outlined supplementary relation between emptiness and fullness aswell as our phenomenological interpretation demonstrate that strategyscholars can learn a lot more from deconstruction than the exposure ofparadox. To summarize what other scholars can take away from our dis-cussion, we integrate our key points into a short conclusion. The conclu-sion 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 anelaborated understanding of the relation between resources and compe-tences. To discuss this relation, strategy scholars should consider the workof Penrose to a greater extent. According to Penrose (1959/1995), firms donot create value because they possess resources but only due to their effec-tive and efficient use.

“Strictly speaking it is never resources themselves that are the ‘inputs’ in theproduction process, but only the services that the resources can render. Theservices 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 waysand in combination with different types or amounts of other resources providesa different service or set of services. The important distinction between re-sources and services is not their relative durability; rather it lies in the fact thatresources consist of a bundle of potential services and can, for the most part, bedefined independently of their use, while services cannot be so defined, thevery word ‘service’ implying a function, an activity.” (Penrose 1995: 25)

Competences portray such services, because they reflect an organization’sability to organize, reflect, co-ordinate, and govern tangible and intangibleresources in time-space. This makes competences unique combinations of‘lifeless’ resources.

However, the simple ability to make productive services (i.e. compe-tences) available from resources is not enough. To stay competitive, firmsstrive for the ability to constantly reconfigure competences. As Penrose(1995: 137) explains:

“Even when a firm enters a new field armed with a revolutionary innovationand is able to ward off competition with patent protection or other restrictivedevices, it must expect that in time it will be overtaken if it fails to continue todevelop its advantage.”

Penrose asks us to think of the services yielded by resources not as some-thing that happens once, but to recognize that constant renewal of theseservices is part of the competitive process. To conclude, a stronger consid-eration of the work of Penrose (1995) should make strategy scholars awarethat (a) resources are potentials and consequently that (b) the process of re-


source application and modification should be of greater interest to strate-gic management than it has been so far. It seems only of secondary impor-tance whether scholars identify ‘quality’, ‘financial strength’ or ‘good rela-tions to the government’ as key resources. Theorizing has to focus on howpeople generate and reconfigure competences out of these resources.

Remarks on the Market-based View: A similar line of reasoning appliesto strategic rules that represent the market-based perspective in our treat-ment of strategy content. Strategy scholars need to realize that managerstend to overestimate the value of strategic rules. As Starbuck and Nystrom(1984: 59) explain, “[m]anagers often get in trouble by trying to followprescriptions that have been formulated by someone else in a differentsituation.” Consequently, the work of strategy scholars should not be lim-ited to defining strategic rules, but investigating what people make of theserules, how they make sense of and customize them to fit the idiosyncrasiesof their context. Certainly, scholars’ advice to managers should not be thatit is unimportant which strategic rule to choose, but that this decision is (a)contingent and (b) only an initiator for strategic sensemaking. From ourperspective, these issues deserve more attention in the current scientificdebate (for exceptions see Lozeau et al. 2002 and Rigby 2003).

Our discussion also shows that the emptiness of strategic rules and re-sources is not a shortcoming of current theorizing, but a precondition tomake them fit into the idiosyncrasies of organizations. From our perspec-tive too few strategy scholars acknowledge the emptiness of strategic rules.Nicolai (2004: 954) argues that the neglect of this insight leads to the im-pression that knowledge about strategy passively flows from the domain ofresearch to the one of practice. Organizations can adopt the labels of stra-tegic rules (e.g., ‘differentiator’), but their strategic concepts-in-use neces-sarily differ. This insight has two implications for researchers. First, schol-ars who research the ‘successful’ application of strategic rules often focuson labels (see for example Marcus et al. 1995) and thus gain the impres-sion that general strategic rules are applied effectively. Second, those whoresearch how consultants introduce general strategic rules can contributeby acknowledging that if organizations possess their own lifeworld,‘empty’ strategic rules (like the ones introduced by consultants) can at bestcause perturbations that lead to organization-specific reactions (see alsoSeidl 2006).

Our comments on the resource-based and market-based perspective arenot supposed to imply that strategic rules and resources are unimportant.Consider the example of chess. As a beginner chess player, one finds a va-riety of books that offer very precise rules, explaining how chess is sup-posed to be played and even how experienced players can improve their


performance. Yet the question of how, where, and in which way theserules shall be applied need to remain unanswered and depend on how onemakes sense of them. This makes these rules neither unimportant nor obso-lete.

Managing for the Iterability of Strategy Content

The preceding section discussed the emptiness and fullness of strategicrules and resources as a consequence of their iterability. We argued that ifstrategic rules and resources really are modified every time they are ap-plied (i.e. repeated), we have to understand the supplementary relation be-tween ‘empty’ strategic rules/resources and their application as a constantmovement between emptiness and fullness. Now we must inquire into the‘practical’ consequences of this discussion. What can organizational mem-bers do in their efforts to strategize to consider the more theoretical ideasthat were presented throughout our discussion of emptiness and fullness?Of course, there is no checklist-type catalog of recommendations. Never-theless, there are some issues that can help practitioners not to disregardthe issues that have been discussed. To organize the discussion, we distin-guish between two sets of ‘practical’ advice. First, we recommend thatstrategists gain a different understanding of strategy content in general.Second, we advise managers to develop a different understanding of peo-ple within developing strategy content. Of course, both sets of advice inter-relate and are distinguished for analytical purposes only.

A Different Understanding of Strategy Content in GeneralWe encourage managers to view their strategy content as being shaped byquasi-experimentation. ‘Quasi’ because we cannot randomly choose stra-tegic rules and resources to define strategy content, strategic rules and re-sources have substance and to believe that ‘anything will do’ may turn outto be a costly and delusive endeavor. ‘Experimentation’ because we cannotforesee what rules and resources may mean in the lifeworld of an organiza-tion. Benders and Bijsterveld (2000: 61) conclude from their empirical ob-servation of the adoption of lean management that the action undertaken inthe name of the concept became completely decoupled from the concept’soriginal intent and were experiments on their own. Likewise, in his empiri-cal study of firms’ adoption of TQM, Zbaracki (1998: 620) argues thatmany of the TQM efforts looked like experiments. Experiments are usuallyconducted when facing uncertainty to find out whether something will ful-fill the desired purpose. Managers who understand the development ofstrategy content as quasi-experimentation take uncertainty and the unsatur-able nature of contexts serious. They are prepared to corrupt strategic rules


and resources and see the process of filling as experimentation. Thesemanagers neither offer nor accept ‘strategic truths’.

One possibility to put strategy as quasi-experimentation into practice isto emphasize the role of stories within strategizing.115 Story-based knowl-edge integrates the general and the particular and thus allows strategists toexperiment.116 Organizational knowledge is often reflected by stories thathighlight the discursive and contextualized nature of strategy (Barry andElmes 1997: 430; Boje 1991a; Weick 1995: 127). Stories provide manag-ers and workers with clues about how to encounter new situations andtrigger novel actions that lead to competent modifications of existing con-cepts-in-use and competences. Allowing stories to unfold helps people tounderstand the particularities of their lifeworld, since stories reflect “thecomplex social web within which work takes place and the relationship ofthe narratives, narrator, and audiences to the specific events of practice.”(Brown and Duguid 1991: 44) Stories are storehouses of past problems aswell as diagnoses and thus media by which interpretative schemes areshared (Brown 1997: 349). Listening and making sense of stories go handin hand with storytelling. Strategists who are able to formulate strategies asconvincing stories integrate general knowledge of strategic rules/resourceswith the idiosyncrasies of a particular context. In this case, stories not onlyfoster but also reflect prudence. Strategizing is about narration, yet narra-tion can also be a strategy.

Conceiving strategy as made up of stories that ‘flow’ through the orga-nization allows managers to extend the clarity they may have achieved inone area (e.g., market definition) to adjacent areas that are less orderly.This seems to be of special importance since strategic concepts-in-use andcompetences affect different parts of the organization. Consequently, theirfilling occurs alongside a variety of, often unconnected, issues (e.g., R&Dand distribution). Based on this, Weick (1995: 128) argues that stories pro-vide cues (viz. indicators) that act as a pretext for updating existing inter-

115Other possibilities that put a more practical twist on strategy as quasi-experimentation are: to foster the development of communities of practice(Wenger et al. 2002), to make managers aware of the need to disregard existingdefense routines (Stacey 2003: 113), and/or to teach managers that arguing anddebating are not an obstacle to the development of strategy content (Weick1995: 185).

116The literature on stories and storytelling in organizations is diverse and cutsacross a variety of sub-fields (e.g., HRM – see for example Denning 2001; con-sulting – see Boje 1991b; and change management – see Czarniawska-Joergesand Joerges 1988). It is thus surprising that stories have not made their way intothe strategy discourse yet (for laudable exceptions see Barry and Elmes 1997and Hardy et al. 2000).


pretative schemes. Communicating strategy by stories and understandingstrategizing itself as influenced by stories is more practical than one mightthink. Usually, people find it easy to relate to stories. Individual life con-sists of a variety of characters, plots, and scripts, all of which can be foundin stories (Fleming 2001: 35). Strategists are not primarily analyzers anddecision-makers, but they listen to and present stories that help peoplemake sense of the stream of unexpected events.

A Different Understanding of People While Developing StrategiesWhereas our remarks on strategy as quasi-experimentation called for a dif-ferent 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 theprocess of application of strategic rules and resources. Nevertheless, thiscannot be just any application, but must be a competent application; the in-terpretation of the strategic rule and resource needs to suit the organiza-tional context. Of course, managerial competency cannot be acquired likesome asset. This is not a weakness of our argumentation. On the contrary,it puts the filling of strategic rules and resources where it belongs – inpraxis.117 We cannot say all too much about peoples’ competency inpraxis, as most of this remains a matter of contextualized, single case-based empirical research (Orr 1996). However, ‘not too much’ does notmean ‘nothing’. One possible way to understand practitioners’ competencyin applying strategic rules and resources is to emphasize a ‘competency offorgetting’.

As indicated in the preceding section, filling always implies emptyingbecause contexts are not stable (Derrida 2002). Strategic concepts-in-useand competences need to be reworked quite frequently. To rework strategy

117Speaking with Aristotle (1962), we can be even more precise: the filling of stra-tegic rules and resources is not only a matter of praxis but peoples’ practicalwisdom (phronésis) within this praxis. Practical wisdom is about knowing whatis good for humans in general and competently applying this knowledge to par-ticular circumstances (Oliver et al. 2005; Tsoukas and Cummings 1997: 665).In terms of strategy, phronésis implies that it is not enough to know about stra-tegic rules and resources, but to have the ability to put them into practice inconcrete situations. Phronetic strategizing highlights case-based knowledge andpractical rationality, leading to a concern with fine-grained contextual factorsthat occur in situ (Wilson and Jarzabkowski 2004: 16). We find a similar treat-ment of practical wisdom in Kant’s Critique of Judgment, where Kant refers tothe power of judgment (Urteilskraft) as “not merely the capacity to subsume theparticular among the general (whose idea is given), but also in reverse, to findfor the particular the belonging generality.” (Kant 1996: 22, translation A.R.)

A Résumé – The Neither/Nor of Strategic Realities 265

content, people need to learn to forget and discredit what they believe.Discrediting emphasizes the need to purposely turn one’s back on what hasworked so far. Weick (1993a, 1996b), for instance, argues that firefightersare most likely to get killed in their 10th year on the job, when they thinkthey have seen everything. At that time, they are less open to new informa-tion that would allow them to update their interpretative schemes. Typi-cally, discrediting means a refusal to accept a given stock of knowledge astrue. Weick (1979: 221, emphasis in the original) even urges managers “totreat memory as a pest!” To discredit concepts-in-use and competences isa vital competence, because already existing interpretations of strategycontent tend to be very sticky and are usually reinforced by path-dependentprocesses (Zbaracki 1998).

To practically rethink the role of people requires stating more preciselywhat practitioners should discredit. We suggest that managers have to dis-credit their idealized understanding of existing concepts-in-use and compe-tences. To make this understanding somewhat visible, we can turn to theidea of ‘strategy maps’ (Kaplan and Norton 2004; Wright 2001). Accord-ing to Kaplan and Norton (2004: 45), a strategy map is a visual representa-tion of strategists’ mental pictures of strategy content. Strategy maps ex-plore the manifold relationships that interconnect a company’s objectives.Needless to say, there is not the appropriate strategy map. Indeed, strategymaps are all about filling an empty idea (viz. mapping) with contextualizedcontent. When referring to strategy maps, our focus is not so much onvisualizing strategy for the sake of it, but to highlight that the very activityof mapping enables people to see new conclusions and thus helps themdiscredit what they believe to know. Discrediting makes the point that any-thing that is done to a strategy map can also be undone to change it. Bydiscrediting strategy maps we do not mean that people have to refuse astrategy map altogether. Rather, people need to question the accuracy andreliability of their understanding of concepts-in-use and competences. Af-ter 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 withregard to strategy context, process, and content? Each of the three decon-structions shows that (a) many authors have neglected a paradox so far, aparadox that shows that the identified dominant logics (i.e. the ‘necessityof adaptation’ with regard to strategy context, the ‘primacy of thinking’with regard to strategy process, and the ‘fullness of strategic rules and re-


sources’ with regard to strategy content) are aimed at an impossibility; andthat (b) based upon this impossibility, we can reconceptualize researchwith regard to strategy context, process, and content in a way that consid-ers paradox as a limit to our reasoning yet does not conclude impossibility,but rather demonstrates supplementarity. In this sense, each deconstructionhas ‘destroyed’ something (i.e. a dominant logic) and created somethingnew (i.e. a supplementary relation). That is why the term ‘deconstruction’is itself made up of the words destruction and construction. Figure 33 out-lines this relationship between destruction (i.e. creating strategic realitiesbecause of paradox) and construction (i.e. creating strategic realities de-spite 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 discus-sion of a blind spot. Indeed, we suggested that the exposure of these blindspots is a precondition for discussing the paradoxes. Because of these blindspots, the dominant logics could not see that they could not see paradox.With regard to strategy context, we demonstrated that, since strategizingmeans complexity reduction (see also section 2.1), organizations only facea construction of the environment (because they sort alternatives out). Yet,if this is true, organizations have no reference point for adaptation any-more. With regard to strategy process, we illustrated that strategizingmeans to prepare a firm for the unknown. However, because of the contin-


gency of social life, we can never entirely grasp the future. If the futureremains necessarily uncertain, we cannot fully justify the premises of stra-tegic decisions prior to implementation. With regard to strategy content,we argued that strategic management is supposed to make firms differentform their competitors. However, firms can only make themselves differ-ent if they consider the idiosyncrasies of their context – a context that isalways unbound. Because contexts are unbound, generalizations are lesslikely to be possible. Overall, we discussed the concepts of ‘complexity’(strategy context), ‘contingency’ (strategy process), and ‘the unbounded-ness of contexts’ (strategy content) from Derrida’s perspective.

As a next step, we used the insights from the discussion of the blindspots to expose paradoxes. Each paradox demonstrates that the metaphys-ics of presence that the dominant logics try to establish is impossible toachieve; there is no origin from which our reasoning can safely unfold.Concerning strategy context, we argued that companies cannot regard theenvironment as existing despite them but need to do so for adaptation tooccur. This, of course, is a consequence of the recognition of complexity;without the insight that strategic management reduces complexity, we can-not 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 be-cause the meaning of the underlying decision premises is fixed in thecourse of action. In consequence, strategic decisions are necessary, if theyare impossible to (fully) justify. For implementation to come about thereneeds to be strategy formulation. Yet the meaning of a formulated strategydoes not exist without implementation. Concerning strategy content, ourdiscussion of the unlimited nature of contexts showed that generalizationswith regard to strategic rules and resources are impossible. In fact, to gen-eralize means to be able to perfectly repeat a rule or resource. But becausecontexts are not determinable, such perfect iterations are unachievable. In-deed, every repetition of a strategic rule or resource brings about a modifi-cation.

After we discussed the paradoxes, we demonstrated that the impossibil-ity that each paradox brings about does not imply ‘the end of strategicmanagement’. On the contrary, we argued that the impossibility occurs asimpossibility only if we try to get to the bottom of existence by demandingan objective strategic environment (strategy context), a final justificationof a strategic decision (strategy process), or a pure iteration of strategicrules and resources (strategy content). Based on this insight and the re-marks in chapter five, we demonstrated how scholars and practitioners candeparadoxify the apparently impossible situation. In fact, we made use of


one particular way of deparadoxification: the temporalization of paradoxvia fictions. Scholars and practitioners get around paradox (most often inan unnoticed way) by acting as if their constructed environment provides apoint of reference (strategy context), as if their justification of the strategicdecision is fully valid and thus able to inform strategy implementation(strategy process), and as if their interpretations of strategic rules and re-sources somehow correspond to their generality (strategy content). TheseAs Ifs endow strategy scholars, but most of all practitioners, with a non-metaphysical ground from which further theorizing can unfold. Thisground is non-metaphysical because it rests upon rather ‘naïve’ assump-tions, but no final truths.

Based on these deparadoxifications, we outlined detailed implicationsfor ‘theory’ and ‘practice’. We argued that Derrida’s (2003a) supplemen-tary logic cannot only be used to discuss paradox, but also to show the re-cursive linkage between the poles of the underlying oppositions (i.e. envi-ronment/organization with regard to strategy context, formulation/imple-mentation with regard to strategy process, and strategic rules and re-sources/application with regard to strategy content). Starting from the be-lief that each supplementary relationship becomes in principle possible be-cause of the As If that displaces the paradox, we illustrated how strategycontext, process, and content can be reconceptualized as resting on sup-plementary relationships. To describe these relationships, we offered un-decidable terms (i.e. ‘framing’ for strategy context, ‘improvisation’ forstrategy process, and ‘iterability’ for strategy content). Regarding strategycontext, framing shows that the environment depends as much on the or-ganization as the organization depends on the environment. Concerningstrategy process, improvisation works against the Cartesian split betweenmind and matter. Not only are strategy formulation and implementationdeeply intertwined, they also exist in a mutually supportive way. With re-gard to strategy content, iterability points out that strategic rules and re-sources are in some way repeatable, however when repeated also changeand distort their meaning. Iterability moves strategy content beyond aNewtonian fixation obsessed with causal logic and general laws to arguethat it is more important what people do with given strategic rules and re-sources – how they make use of their potential – than which rule or re-source is considered to be of importance.

These undecidables move theorizing from an either/or to a neither/nor-mentality revealing the unity of the differences those prominent opposi-tions consist of. Strategic realities, both in ‘theory’ and in ‘practice’, con-stantly face this undecidable nature. Undecidables disrupt the oppositionallogic, which is fundamental to hierarchical structures; they skim across


both sides of an opposition but do not appropriately correspond with ei-ther; they exceed the clearly defined boundaries of the oppositions andchallenge the very tenets of metaphysical thinking. While for Derrida un-decidable terms remain unresolved concepts that illustrate the contradic-tions inherent to any kind of determinism, we have shown that there is away to acknowledge these contradictions, not to finally resolve them, butto use them as a limit for strategic reasoning in order to consider strategiz-ing as a relentless oscillation between the poles of oppositions. As academ-ics, we should have the sovereignty to draw our distinctions in favor ofundecidables, because “[w]ords of this type situate perhaps better than oth-ers the places where discourses can no longer dominate, judge, decide: be-tween the positive and the negative, the good and the bad, the true and thefalse.” (Derrida 1995b: 86, emphasis added)

7 After Derrida – Strategy-as-Practice

Having discussed the deconstruction of strategic realities with regard tostrategy context, process, and content and outlined detailed implications ofour analysis, we now show how our remarks can be connected with themost recent research in the field of strategic management. This is impor-tant because scholarly work in general, and a critical study in particular,needs to be accessible to other researchers; others have to be given the op-portunity to relate similar pieces of work to the key conclusions of a trea-tise. Because the three deconstructions underscore the significance of situ-ated managerial activity, we relate the implications of our study to therecent discussions of a practice perspective on strategy (Jarzabkowski2005; Johnson et al. 2003; Whittington 2002a, 2002b). Of course, the de-constructions in chapter six already point to the importance of practice.Yet what is different – and this is where chapter six and seven vary – is asystematic discussion of strategy practice by embedding our remarks in anexisting research framework.

We start by demonstrating how the deconstruction of strategic realitiesleads to practice-based strategy research (section 7.1). Because scholars inthe social sciences have discussed the term ‘social practice’ with regard toa 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 inconsideration of existing conceptual work regarding Strategy-as-Practice,we outline a research framework that contains a taxonomy of terms schol-ars can use to study strategy from a practice perspective (section 7.3). Wemove on with an exemplary application of this framework and demonstratehow it helps us to understand one particular phenomenon (i.e. communitiesof strategy formation), which is of relevance to Strategy-as-Practice (sec-tion 7.4). Finally, we give a short conclusion of what it means to do strat-egy research ‘After Derrida’ (section 7.5).

272 ‘After Derrida’ – Strategy-as-Practice

7.1 From Deconstruction to Strategy-as-Practice

When looking at the deconstruction of strategy context, process, and con-tent, there is one common issue running through all discussions: the impor-tance of the situated activity of people (see Figure 34). In the following, wedistinguish mere human activity (praxis) from social practices. Practicesare routinized patterns of activity while praxis represents the whole of hu-man action (Jarzabkowski 2005: 8). In consequence, the practices that or-ganizational members perform are embedded in praxis (see also sections7.2 and 7.3). In which sense do strategy context, process, and content referto 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, strate-gists actively influence and shape what they subsequently perceive as theirrelevant environment. Strategy context is influenced by what people do;enacting strategy context is not something passive but an activity. What welabel ‘environment’ and ‘organization’ are constructed in the social prac-tices that people perform. Regarding strategy process, the deconstructionof the ‘primacy of thinking’ points to the importance of conceiving strat-egy formation as a stream of improvisations within issue streams. Improvi-sation shifts the focus from understanding the strategy process as a macro-level phenomenon, assembled by formulation and implementation, to amicro-perspective highlighting the importance of the everyday doings ofpeople. To conceptualize strategy as improvisation implies that strategyformation does not merely happen at the desk of the CEO, but is a constantprocess of reworking strategic fictions within the social practices that peo-ple perform. Again, the focus is not on conceptualizing some abstract proc-ess model that is remote from managerial activity, but to explore thedetailed and situated activities that reflect what actually gets done in theeveryday work of strategists.

The deconstruction of ‘the fullness of strategic rules and resources’(strategy content) demonstrates that strategic rules and resources gainmeaning (i.e. are ‘filled’) in the process of application. Focusing on appli-cation implies centering attention on the daily activities through whichpeople make their strategy content meaningful. To make strategy contentmeaningful is not a passive operation, but only happens in and through ac-tivity (i.e. the strategy practices in praxis). Strategists act, and in doing socreate the material that they use for sensemaking; it needs the situated ac-tions of people to create meaning, not merely a process of thinking. Onceagain, the center of attention is on the contextualized doings of people thatbring about strategic concepts-in-use and competences.

From Deconstruction to Strategy-as-Practice 273

Fig. 34. From Deconstruction to Strategy-as-Practice

If we look for a common ground regarding the deconstruction of strat-egy context, process, and content, we can suggest that they highlight theneed to study strategy as an activity, something that people do in the socialpractices they perform. This insight is in line with the findings of strategyscholars who have recently called for the development of a ‘practice per-spective on strategy’ (Jarzabkowski 2005; Johnson et al. 2003; Whitting-ton 2002a, 2002b). Consequently, we suggest treating the deconstructionof strategic realities as one possible theoretical approach to give emphasisto the need for a practice perspective on strategy.118 Deconstruction uncov-ers the need to study strategy practices in praxis in order to explore the de-tailed processes of organizational life that relate to strategic outcomes(Johnson et al. 2003: 3). To take the implications of a deconstructiveanalysis seriously, scholars have to ask what situated practices people per-form when they strategize, where they do this, when they do this, whichorganizational members are involved, and, most important, how such prac-tices are performed. Answering these questions implies shifting focus froma perspective concerned with the problem ‘Why do we do strategy?’,which resulted in a plethora of models about competitive advantage, to ad-dress the question ‘What do we do when we strategize?’.119

118Other possibilities to underscore the need for a practice perspective on strategyare discussed by Whittington (2002b), who refers to Giddens’s (1984) structura-tion theory, and Jarzabkowski (2004), who refers to de Certeau’s (1988) theoryof everyday life.

119Understanding strategy as consisting of practices occurring in praxis does notimply merely focusing on strategy process issues, as the word practice mightindicate. Traditional process research focuses on the organization as a wholeand is less concerned with related managerial activity (Whittington 1996: 732).


What are the contributions of a practice perspective on strategy? First, afocus on strategy practices allows us to study strategy in its micropoliticaland historical context to pay attention to existing power relations and theidentities of the actors involved (Knights and Morgan 1991). Second,Strategy-as-Practice allows us to refocus research from cross-sectionalmacro-analyses, in which firms are treated as black boxes, to concentrateon the ‘real work’ of people. In pursuit of their aims, strategists engage ina variety of practices that are worth studying. Third, and from the perspec-tive of this study probably the most important contribution, to researchStrategy-as-Practice disregards the opposition between strategy processand content. As indicated in chapter two, strategy context is usually notseen in opposition to process and content, since process and content cannotbe meaningfully investigated without any reference to context (et viceversa). Nevertheless, strategy process and content research are often con-ceptualized as an opposition (Ketchen et al. 1996; Moore 1995). From theperspective of Strategy-as-Practice, both the formation of strategy (processfocus) and the outcome of strategizing (content focus) occur in and refer topractices. Certainly, scholars can focus their investigation of strategy prac-tices on either content or process issues. Nevertheless, whenever one isstudying the improvisations that happen within the strategy process, one isalso studying the enactment of strategy content.

To conclude, deconstruction is one perspective which shows that thequestion ‘What constitutes a winning strategy?’ is not answerable in prin-ciple, but only with regard to the situated practices of people. We cannoteliminate the difficulties of defining competitiveness by gathering morecross-sectional data about entire companies, but need to start studyingwhat strategists do, how they do it, and in what situations they do it. Likein medicine, where no practitioner or researcher can make meaningfulstatements without some knowledge of anatomy, strategic managementshould take its anatomy more seriously. Yet, to explore the anatomy ofstrategy, we first need to know what represents a social practice in generalto 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 merelyincorporates the flow of human activity, the concept of practices withinthis praxis deserves some explanation (Jarzabkowski 2005: 8). If socialpractices are important to strategic management, we need to know what a

‘Social Practices’ – What’s in a Name? 275

practice is. Rouse (2001: 190) observes that this question arises with someforce because of the diversity of issues included under the term. AlthoughDerrida’s work, when applied to strategic management, points to the im-portance of a practice perspective, he never explicitly discussed the con-cept of ‘practice’. That is why we have to turn to authors who have definedthe term ‘practice’. We find such authors in a stream of research that is of-ten classified as ‘practice theories’ (exemplary see Barnes 2001; deCerteau 1988; Giddens 1979, 1984; Latour 2005; Schatzki 2001, for anoverview see Reckwitz 2002). Based on these authors, we describe anidealized conception of practices. To organize the discussion, we discusstwo aspects of practices that are relevant to our discussion of strategy prac-tices later on: (1) their regularized yet situated character and (2) their so-cially recognized nature.

First, regarding their regularized and situated character, Giddens (1976:75) characterizes practices as “regularized types of acts.” Practices areregularized types of behavior – repeated (routinized) patterns of activity.For instance, practices are regularized ways of consuming, learning, work-ing, or strategizing. Whereas regularized means repeated and repetitionalways refers to a certain sense of generalizability, our discussion in sec-tion 6.3.3 showed that repeatability implies modification over time. Prac-tices are shared patterns of behavior that are repeated over time and occuras 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 thateven individually performed practices connect the person with the underly-ing macrosocial structure (Giddens 1979: 56). The socially recognized na-ture of practices is inseparable from the question of whether practices rep-resent shared phenomena. Take the following examples: a strategist whoregularly prepares a PowerPoint presentation for the monthly strategy re-view is conducting a practice; a team of managers meeting every Fridayafternoon in the cafeteria to discuss and reflect on what has happened inthe previous week also follows a practice. Is the first practice, which is car-ried out solo, no practice at all? Barnes (2001: 21-26) discusses this ques-tion and suggests that, while it is true that some practices are carried out inisolation, all practices have a shared character. This is because in order toprepare the presentation, the strategist needs to have learned what goesinto the presentation, s(he) needs to be sensitive to what other practitionersare doing, and s(he) must continuously interact with fellow participants to


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 in-telligibility and mutual susceptibility that something identifiable as a sharedpractice can be sustained.”

The only difference between these two exemplary practices is that in thesecond example the interactions for the maintenance of the practice aremore concentrated and immediately apparent, while in the first example in-teractions are more spread out.120

Based on these two characteristics, we define a practice as a sociallyrecognized, repetitive but situated pattern of activity in which bodies aremoved, objects are handled, subjects are treated, things are described, andthe world is understood (see also Reckwitz 2002: 250). Practices are setsof regularized but situated bodily performances that are intertwined withways of understanding the world. Consider the practice of playing soccer,which requires body movements (e.g., running and kicking) as well as cer-tain interpretations (e.g., of the rules of the game). The definition alsopoints to the importance of things (objects) that are used when carrying outa practice. Conducting a practice often implies handling objects in a spe-cific way (e.g., a ball in soccer). The proposed definition of a practice isuseful in that it allows us to discuss more precisely how strategy context,process, and content ‘happen’ in practices (see section 7.3). It also empha-sizes more clearly that there is a difference between ‘practices’ (i.e. sharedroutines of behavior) and ‘praxis’ (i.e. the, often uncoordinated, flow of ac-tivity, Whittington 2006: 619).

7.3 Strategy-as-Practice – Towards a Framework

We have shown that deconstruction calls for a systematic discussion andconsideration of peoples’ practices that carve out strategy context, process,and content (section 7.1). We have also looked at selected insights fromthe practice-based literature to find a definition for the term ‘practice’ (sec-

120The social character of practices is also emphasized by Schatzki (2001: 3) whoargues that practices can be types of discursive activity. Language, then, charac-terizes 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 in-trinsically involved with that which has to be done: the constitution of languageas ‘meaningful’ is inseparable from the constitution of forms of social life ascontinuing practices.” (emphasis in the original) See also the discussion byReckwitz (2002: 254-255) and Yanow and Tsoukas (2005: 5).

Strategy-as-Practice – Towards a Framework 277

tion 7.2). In this section, we draw upon this definition to outline a concep-tual framework that will allow us to study strategic management as a phe-nomenon that is based on practices in praxis (Jarzabkowski 2003; Johnsonet al. 2003; Pye 2005; Whittington 2002a, 2004). To research strategy as asocial practice, we need a taxonomy of terms and concepts that enable usto better understand what a strategy practice is and how it relates to thework of strategists. In the following, we introduce a classification schemeto guide research that takes the idea of Strategy-as-Practice seriously. Bydoing so, we aim primarily to advance future theorizing ‘After Derrida’ inthe field of strategic management. To do so, we must ask: How can we re-search strategy as a practice? A good point of departure for discussing thisquestion is Whittington’s (2002b) distinction between strategy praxis,practices, and practitioners.

Strategy praxis is what is actually done, i.e. the work of strategizing inorganizations. The praxis of strategists consists of formal and informalstrategic activity that is reflected for instance by strategy meetings, topmanagement 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 stra-tegy. Of course, as Jarzabkowski et al. (2006: 6) remark, the notion ofstrategy praxis alone is too sweeping and ambiguous to come up withmeaningful research results. One needs to identify further analytical pointsto concretize what happens within strategy praxis.

The concept of strategy practices is useful in substantiating the ratherbroad nature of strategy praxis. Strategy practices are the ‘done thing’, inthe sense of repeated patterns of activity with regard to a specific aspect orissue of strategy. In other words, within their strategy praxis, practitionersdraw upon strategy practices to construct what is then perceived as a firm’sstrategy. Strategy practices can be derived from the larger social fields inwhich an organization is embedded (e.g., consultants promote ‘empty’strategic concepts or there are certain industry-specific practices such asroutines of environmental scanning, Porac et al. 1995). Yet strategy prac-tices can also be developed by an organization without any formal refer-ence to institutions ‘outside’ the firm. Jarzabkowski (2003) suggests thatstrategy practices are habitual operating procedures. In her empirical studyof three UK universities, she identifies three exemplary practices: directionsetting, resource allocation, as well as monitoring and control. Eventhough other firms may have similar practices in place, the organizationsthat Jarzabkowski (2003) studied did not derive these practices from ‘out-


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 butinvestigates how organizations put them into use. The issue is not whethera firm has a strategy practice, but what it does to make this practice ‘alive’.Jarzabkowski (2005: 10), for example, quotes the strategy director of atelecommunications company who discusses the use of the Value ChainAnalysis (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 linearlike that. But value chain’s handy. People recognize that. You know, you put upthe five or six boxes in an arrow and it makes sense. It’s a communicationthing.”

This quote indicates that the use of the practice is at least as vital as thepractice itself. Strategy practices are enacted over time; they are altered ac-cording to the uses to which they are put and thus not only transformthemselves 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 thecharacter of practices and some of which refer to strategy. Usually, muchstrategizing is about interaction and collaboration since knowledge ofstrategy is too multifaceted for an individual to cover. While the work ofsenior executives is quite well understood (Hambrick 1989; Pettigrew1992b), the work of strategy consultants and informal participants (e.g.,middle management or in-house strategy staff) has received little attention.

121Whittington (2002b: 3-4) argues regarding strategy practices that “[a]t the en-

terprise level, these might be the routines and formulae of the formal strategy

process, laid down in corporate cultures; at the wider societal level, these strat-

egy practices might be the working through of accepted analytical tools, or even

due notions of appropriate strategy-making behavior, as promulgated by legisla-

tion, 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 ac-

tion regarding strategy in and between organizations, whereas strategic prac-

tices 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).


Strategic management would benefit from a much broader definition of theterm ‘practitioner’. From our perspective, practitioners are those peoplewho make strategy in their activities, often, but not exclusively, by draw-ing on strategy practices. Figure 35 relates strategy praxis, practices, andpractitioners and depicts a conceptual framework to study Strategy-as-Practice.

Fig. 35. A Conceptual Framework for Analyzing Strategy-as-Practice (adoptedand modified from Jarzabkowski et al. 2006: 8)

As illustrated in Figure 35, what we label Strategy-as-Practice occurs atthe nexus between strategy praxis, practices, and practitioners. It is unfea-sible to fully isolate any of the three elements in order to study them ‘juston their own’, however, because empirical research needs to be focused itis likely to relate to a combination of the elements instead of addressingthem altogether (indicated by the categories A, B, and C in Figure 35).Based on this framework, we now discuss possible routes of research thatare likely to occur with regard to Strategy-as-Practice and also highlighthow existing strategy research already informs this emerging agenda.

Strategy Practitioners and Strategy Practices (A): Research in this di-rection foregrounds the practitioners and the practices that s(he) uses in thedoing of strategy. Studies that reach in this direction ask, for example:What kinds of practitioners are influential in transferring and applyingstrategy practices? Samra-Fredricks (2003: 149) examines how one practi-


tioner succeeds in convincing his colleagues of a new strategic direction byreferring to the rhetoric of portfolio analysis (i.e. transforming operationsfrom a ‘cash cow’ back into a ‘star’). This study shows that language is anundervalued resource when it comes to understanding how people usestrategy practices. The link between strategy practices and practitioners notonly highlights the need to research how actors make use of strategy prac-tices in general but also how practitioners shape these practices throughwho they are and what resources they draw upon. Who a person is andhow this person identifies her/himself is innately linked to how that personacts and makes use of strategy practices. After all, the relation betweenstrategy practitioners and strategy practices can also be investigated in thereverse direction: the use of strategy practices also influences the personalidentity of practitioners since certain aspects of a practice (e.g., ‘down-sizing’ when following a divestment strategy) can influence how a personthinks of her/himself.

Strategy Practices and Strategy Praxis (B): Investigations that examinehow strategy practices and praxis influence each other can follow two linesof reasoning. First, it is possible to research how standard practices (e.g.,predefined planning procedures) impact the strategy praxis within organi-zations (Regnér 2003; Whittington 2006). In his empirical study of eightoil companies, Grant (2003: 507) finds that the highly formalized planningpractices that were used in the 1970s and 1980s are increasingly replacedby more informal discussions. While there are still planning systems (i.e.strategy practices), the impact of these systems on everyday strategy praxishas changed considerably Second, it is possible to investigate how strategypractices emerge from the undifferentiated strategy praxis in organizations.Jarzabkowski and Wilson (2002), for instance, empirically show that strat-egy practices often emerge from situated strategy praxis. Their longitudi-nal perspective of strategizing within a university demonstrates how strat-egy praxis was strongly grounded in embedded strategy practices (e.g.,direction-setting routines) which had case-specific meanings. These prac-tices became accepted as the known ways of doing strategy and actingstrategically within the context of the university. As Whittington (1996:732) remarks, “knowing the ‘done thing’ [i.e. the practices] locally is es-sential to be able to get things done.” (annotation added)

Strategy Praxis and Practitioners (C): The relation between strategypraxis and practitioners’ activity within this praxis is best described by re-ferring to Weick’s (1979, 1995) sensemaking approach. The question ishow practitioners make sense of their daily strategy praxis and in whatway this is consequential for the firm. Not surprising, most studies that fo-cus on the interplay of strategy praxis and practitioners’ role within this


praxis refer to sensemaking theory. Rouleau (2005), for instance, describeshow middle managers produce mental models out of their daily strategypraxis and how this process is anchored in their existing knowledge aboutstrategy praxis. Rouleau’s (2005) study demonstrates how practitioners as-sign meaning to the undifferentiated stream of experience that their strat-egy praxis is about. For example, the study illustrates how middle manag-ers make sense of the firm’s new strategic orientation in daily informalconversations and more formal strategy meetings. In a quite similar way,Balogun and Johnson (2005, 2004) study how middle managers makesense of a top-down strategy initiative. Their findings exemplify that prac-titioners’ everyday experiences (i.e. their strategy praxis) and the gossip,stories, jokes, and conversations they share with their peers about theseexperiences modify the intended top-down initiative and lead to unin-tended outcomes.

To conclude, the discussion of the framework shows that selected piecesof existing empirical strategy research contribute to our understanding ofStrategy-as-Practice. Even though the clarity that is achieved by the differ-ent areas (A, B, and C) is of a more analytical nature and does not enableus to ‘pack’ research into ready-made boxes, the framework fosters orien-tation and shows which questions can be discussed by future research.Discussing these questions means taking the consequences of deconstruc-tion seriously. Practice-based strategy research considers deconstruction inthat it proposes that strategizing is neither ‘abstract’ nor remote from whatpeople are doing, but rather that strategy happens in what people do. Strat-egy context, process, and content are shaped through the interplay of strat-egy praxis, practices, and practitioners. Regarding strategy context, theframing of organization and environment often happens in well-establishedstrategy practices (e.g., framing effects occur while resources are allocatedand budgets are discussed). Concerning strategy process, the numerousformal and informal strategic meetings/workshops/conversations that makeup improvisational strategy represent strategy praxis and can eventuallybecome institutionalized strategy practices (e.g. a routinized lunch breakconversation can turn out to be a practice). Regarding strategy content,many ‘empty’ strategic rules represent strategy practices that are adoptedand modified by practitioners (Whittington 2002b). In a similar way, com-petences are usually conceptualized as routinized behavior occurring inpraxis (Teece et al. 1997: 516).

Considering the limited amount of research, the Strategy-as-Practicefield has to be opened up to new conceptual thoughts within the outlinedresearch fields (A, B, and C) as well as empirical testing of these ideas. Tooutline one possible particular and exemplary conceptual idea, we discuss


the notion of ‘communities of strategy formation’ in the next section.122

Research on such communities can be located in section A of Figure 35since it primarily links strategy practices with the work of practitioners.Communities of strategy formation allow us to study more precisely howstrategy practices are shared and reflected upon. The idea of communitiesof strategy formation is based upon the widespread literature on communi-ties of practice (Brown and Duguid 1991; Lave and Wenger 1991; Wenger2004) that represent ‘loci’ where practices are shared, elaborated, ad-vanced, 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 prac-tices. This is especially important from the perspective of deconstruction,since the remarks on strategy context, process, and content revealed thatstrategic activity in praxis (and its performance in particular practices) isconstantly reworked. The question is: Where are strategy practices re-worked? To rework a practice there needs to be reflection and an exchangeof experiences. But where does this exchange occur? So far, Strategy-as-Practice scholars have paid little attention to this research question. Thefollowing remarks attempt to fill this research gap by outlining the concep-tual idea of ‘communities of strategy formation’. The focus on strategypractices and practitioners (section A in Figure 35) does not imply that re-search on communities of strategy formation has nothing to say aboutstrategy praxis, but that the focus of inquiry is on the (re)construction andsharing of practices by practitioners.

Our idea of communities of strategy formation rests upon the more gen-eral thought that ‘communities of practice’ represent informal, contextual-ized loci where practices are shared and reflected upon. The term ‘com-munity of practice’ implies “participation in an activity system aboutwhich participants share understandings concerning what they are doing[i.e. which practices they follow] and what that means in their lives and fortheir communities.” (Lave and Wenger 1991: 98, annotation added) Com-munities of practice are the social fabric of knowledge (Wenger 2004: 1).Here, we focus on knowledge about strategy. Communities are groups of

122Other areas that have not yet gained sufficient attention in the Strategy-as-Practice research community are: (1) the way practitioners are prepared forstrategy praxis (relating to section C in Figure 35) and (2) the way existingstrategy practices are abandoned (relating to section B in Figure 35).

‘Communities of Strategy Formation’ 283

people who share a passion for a bundle of practices and who interactregularly to learn how to do them better; they refer to informal social struc-tures whose members are bound to what they do together “from engagingin lunchtime discussions to solving difficult problems.” (Peltonen andLämsä 2004: 253) The informal character underscores the self-organizednature of communities of practice. Although communities can be ‘culti-vated’ (Wenger et al. 2002) and supported in their work, their informalcharacter makes us think of a world that is messy and constantly evolving.Communities of practice are composed of people who interact on a regularbasis around a common set of issues, interests, or needs that are reflectedby their work practices. To relate the basic idea of communities of practiceto strategic management and to show what communities of strategy forma-tion are about, we discuss communities of strategy formation as relating tothree core elements of the Strategy-as-Practice agenda: a strategy praxiswith regard to which a community of practitioners shares strategy prac-tices.

The praxis creates a common ground and identity for a community.When discussing communities of practice with regard to strategy, thispraxis is, of course, strategic activity. In strategy, and in most other genericfields (e.g., innovation management), the praxis is likely to be clustered.Accordingly, there is not ‘the’ community that is concerned with strategypractices, but a variety of communities addressing different practices. Thepraxis guides the questions practitioners ask while being in the community.Within the community of practice literature, practices denote a set of regu-larized 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 re-fer to patterns of behavior necessary for doing strategy (e.g., with regard toa strategic concept) reflected by the stories, cases, and documents thatpractitioners possess.

The last structural element, the community of practitioners, reflects theneed 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 ora database. It is a group of people who interact, learn, build relationships,and develop their knowledge about the domain in general and the practicein particular. Interaction does not necessarily mean face-to-face conversa-tions, although according to Wenger et al. (2002: 34) direct conversationsare necessary to sustain the community over time, but can also be based onteleconferences or regular document sharing. Members of the communitydo not necessarily need to be formal strategists but often represent linefunctions. In strategy, this approach can be very useful since strategicmanagement is usually considered to be detached from the actual work of


people. A community, then, can bring together formal strategists’ knowl-edge and ‘common’ managers’ experience of a strategy practice.

Our description of communities of strategy formation shows that suchcommunities represent loci where strategists reflect, advance, and learnabout their practices. Whereas the practice itself is usually performed inthe everyday strategy praxis, a community enables practitioners to shareexperiences and extend their ideas about this practice. Take the example ofthe Balanced Scorecard, which represents a standardized strategy practiceused by many organizations. While most practitioners, who are either di-rectly or indirectly concerned with the practice ‘Balanced Scorecard’, un-dertake the implementation of the concept within their department, acommunity is the place where these people share experiences, learn fromeach other, eventually modify the practice, fill it with new meaning, andbegin to abandon outdated interpretations. Communities ‘host’ mostly in-formal discussions about practices: they give practices shape and continu-ally serve to recreate knowledge associated with practices.123

As indicated at the beginning of this section, the idea of communities ofstrategy formation fits particularly well with the implications of a decon-structive analysis. Regarding strategy context, communities reflect practi-tioners’ enactment of the environment. Because communities emphasizeinteraction, interpretation, and the ongoing processes of sensemaking andstorytelling of those who participate in the work-in-progress, they help

123If communities are mostly informal, there is the question of whether and howmanagement can do anything about their existence. Aware of the limitations ‘tomanage’ a community of practice, Wenger et al. (2002: 49) suggest ‘cultivat-ing’ communities instead. Cultivating means designing for aliveness, not bydictating formalized structures, but by bringing out the community’s own inter-nal direction and character. Cultivating a community implies guiding this insti-tution to realize itself to become ‘alive’. As Wenger et al. (2002: 53) state,“’[a]live’ communities reflect on and redesign elements of themselves through-out their existence.” To design for aliveness, managers can ensure that thecommunity has sufficient resources (e.g., time and technological infrastructure)and they can stimulate discussions within the community by bringing in infor-mation from outside the community. Instead of forcing participation, cultivatinga community means providing opportunities for interaction and participation tokeep the peripheral members connected. Communities of strategy formation,like any other community of practice, are living things that cannot be deliber-ately designed in a formalized way without risking their existence. For an in-depth discussion see Wenger et al. (2002: 49-64) as well as Wenger (2004). Thediscussion about how to cultivate communities of practice, which are self-organized systems, could also benefit from perspectives that considerautopoietic systems thinking and its implications for management practice (foran overview see Bakken and Hernes 2003).

‘Communities of Strategy Formation’ 285

strategists to enact their environment. As Brown and Duguid (1991: 52)explain, communities are “continually developing new interpretativeschemes of the world because they have a practical rather than formal con-nection to the world.” These interpretations are constructed through circu-lating stories that shape the meaning of an organization’s environment. Acompetitor or regulation may be seen from a different angle when experi-ences are shared, stories told, and interpretative schemes updated. Con-cerning strategy process, communities retain knowledge in living waysand understand learning as a task of improvising around practices in praxis(Peltonen and Lämsä 2004: 255). In communities, learning about strategypractices is about improvisation. There is no predescribed way accordingto which communities have to function: strategists interact and thus acttheir way into understanding. Hence, we can think of the gathering ofcommunities of strategy formation as parts of the wider strategy formationprocess.

Fig. 36. Communities of Strategy Formation and Deconstructive Analysis

With reference to strategy content, we suggest that a large degree of thefilling of empty strategic concepts and the development of competenceshappens in these communities. A community concerned with the BalancedScorecard or Lean Management informally shares knowledge about thesepractices 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 ofconcepts and enable strategists to reflect on the development of compe-tences because they promote situated learning (Brown and Duguid 1991:47). Learning in communities is situational in the sense that practitionerslearn with regard to local conditions and in informal ways (e.g., by sharing


stories). The central issue in situational learning is not that somebodylearns about a practice but within the practice that a community shares.Figure 36 depicts the contribution that communities of strategy formationmake to a deconstructed world of strategy research.

To conclude, communities of strategy formation occur where practitio-ners feel the need and have the passion to share and reflect upon strategypractices. The observations of Wenger et al. (2002), Orr (1996), and Tyreand 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 re-searched the collective strategizing by a project community, Jarzabkowskiand Wilson’s (2002: 357) empirical observation of a community in thecontext of a university, and Hendry’s (2000) empirically grounded concep-tualization of strategic decisions as discourse within a community of prac-titioners, provide evidence that communities of strategy formation exist.Although these pieces of work can be interpreted as resting on the idea ofcommunities of strategy formation, they are not based on a conceptualframe. The outlined conceptual idea of communities of strategy formationcan thus inform future empirical investigations by providing a more ex-plicit link between the literature on communities of practice and Strategy-as-Practice.

7.5 Doing Strategy Research After Derrida

Against the background of this study, Strategy-as-Practice is yet anotherstrategic reality. To view strategy as consisting of practices in praxis re-flects specific assumptions regarding the nature of strategy. In fact, thisstrategic reality conceptualizes strategy “as socially accomplished activity,constructed through the actions, interactions and negotiations of multipleactors and the situated practices that they draw upon.” (Jarzabkowski et al.2006: 4) To conceive Strategy-as-Practice gives reference to the role ofdeconstruction. Like deconstruction, which is never passive but alwaysabout an active intervention into existing structures (Derrida 1995b), strat-egy is about activity; it is an active involvement in the flow of organiza-tional activity to prepare a firm for the unknown. Doing strategy research‘After Derrida’ assumes that strategy is not something organizations pos-sess, like a property out of nowhere, but something people in these organi-zations do. To conduct strategy research without any reference to practicesin praxis is like trying to develop managerial recommendations without anunderstanding of the underlying processes and activities. For strategy

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scholars this implies placing greater emphasis on the “unheroic work ofordinary practitioners.” (Whittington 1996: 734)

To study strategy as a situated activity helps us to gain a deeper level ofexplanation of strategic issues. For instance, to study the daily activities ofpractitioners who are officially or unofficially in charge of strategy canhelp us to better understand how unintended outcomes (Mintzberg 1994a)come about or how actors become trapped in micro-political battles (Petti-grew 1977). We do not claim that all of this is entirely original. Mintzberg(1973), for example, already investigated what managers do (e.g., tele-phone calls and meetings) and how these activities contribute to specificoutcomes. Yet, while mainstream strategy research has moved away fromsuch interest in the doings of people, Strategy-as-Practice attempts to bringit back to centre stage (Chia 2004: 29). To achieve this ‘practice turn’ instrategic management, more conceptual and empirical research on the de-tailed micro activities that make up strategizing needs to be conducted.The outlined conceptual framework (section 7.3) can guide future researchin different yet connected directions. Of course, there is need for balance:not all strategizing refers to institutionalized strategy practices but is oftenrepresented by rather uncoordinated activities that ‘simply happen’ instrategy praxis.

With regard to future investigations, the challenge will be not only totheoretically conceptualize practice-based phenomena (e.g., ‘communitiesof strategy formation’) but also to start examining them empirically. This,of course, poses a methodological challenge that the Strategy-as-Practicecommunity needs to accept.124 Empirical strategy research in an ‘After-Derridean’ context implies actually looking at how people do strategy andthus immersing oneself in the messy and fluid realities of strategizing. Thisis not an easy task. But, who said that strategy research is easy?

124In terms of methodology, ethnomethodological ideas (Berard 2005; Garfinkel1984; Garfinkel and Sachs 1990; Maynard and Wilson 1980) seem one possiblealternative for conducting empirical research with regard to the Strategy-as-Practice research agenda. For ethnomethodologists, social structure is not visi-ble by virtue of its links with physical structure but becomes observable as amanner of speaking. Macrostructure is a practical achievement of people whosesayings and doings make relevant collective categories (e.g., strategy practices,Coulter 2001: 34). Not much different, microanalysis looks at how actors enactthese categories by becoming engaged in conversations. In consequence, eth-nomethodology blurs the distinction between the macro and micro; in bothcases research refers to what people say. For the Strategy-as-Practice agendathis implies taking the study of single speech acts (Schegloff 1987) and epi-sodes 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 somethingnovel in any treatise, it is impossible to state where and how to search untilone finally hits on something that appears meaningful. If the outcome werepredetermined, one would not need to search in the first place. The sense abook makes can only be fixed and discussed in a retrospective manner.Within this study we have come across a variety of issues, which we willnow reconceptualize in order to display their contributions. Even thoughchapter six and seven discussed detailed implications of our deconstructivereading of strategic management, there is still the need to condense thecore messages of this study. Section 8.1 takes a retrospective perspectiveand presents the central findings of our discussion, whereas section 8.2 isprospective in that it outlines what kind of scholarship can support the cen-tral findings. In this sense, section 8.2 tells us what scholars can do to takethe core findings (section 8.1) of this study seriously.

As noted in chapter two, we do not believe that it is worthwhile to createdisintegrated paradigmatic islands within strategy research; nor are wesuggesting that deconstruction provides ‘the’ one best way for conductingscholarly work. Deconstruction, as used in this study, is about enrichingand supplementing existing strategic realities and eventually creating newones. In this sense, deconstruction is about gestures. A gesture is an ex-pressive act of courtesy and respect to others; it is “a notable or expressiveaction: 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 ThirdNew International Dictionary 1993: 952-953) Sections 8.1 and 8.2 offer avariety of ‘gestures’: (a) as acts of friendship to extend, modify, rethink,and discuss strategic realities and (b) as requests to bring about a differentway of strategy research, not necessarily to replace it but to enhance and


deepen it. In the following section, the key findings of this study are ex-pressed 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 treatisefor the nature of scholarship.

7.1 Retrospect – Rethinking Strategic Realities

Gesture One: “Strategic Realities – From Dominant Logics to Strategy-as-Practice”: The ‘common thread’ that runs through this study is the notionof strategic realities. Strategic realities reflect the constructed world ofstrategic management, both in theory and practice. This study has beenmostly concerned with scholars’ strategic realities and their underlying as-sumptions. We demonstrated that a great deal of current theorizing instrategy research rests on strategic realities that favor a dominant set of as-sumptions (i.e. dominant logics). These dominant logics reinforce them-selves because authors (often implicitly) adopted them. For instance, Por-ter’s (1980, 1985) well-known strategic reality had a significant effect onGhemawat’s (1986) strategic reality which promoted ‘sustainable advan-tage’. To identify scholarly work within strategic management as strategicrealities instead of ‘theories’ or ‘frameworks’ has the advantage that theterm ‘strategic reality’ stresses the constructed nature of strategy research.In this sense, nature does not force scholars to look at strategic manage-ment in a specific way; they make assumptions and thus ‘construct’ theirworld of strategy (Pinch and Bijker 1984: 420). Scholars’ strategic realitiesdo not represent a ‘natural necessity’.

We argued that the dominant logics that underlie most strategic realitiesare dominant because they neglect their own paradoxical nature. Thosestrategic realities that reflect the dominant logics try to establish a meta-physics of presence; they are in search of a final origin from which theirreasoning can spread out. By applying Derrida’s deconstructive logic, wedemonstrated that the search for this origin results in paradoxical indeci-sion. Accordingly, the dominant logics aim at impossibilities and thereforehave to be dispensed with (at least from the perspective of deconstruction).Our discussion of the paradoxes that arise with regard to the ‘necessity ofadaptation’ (strategy context), the ‘primacy of thinking’ (strategy process),and the ‘fullness of strategic rules and resources’ (strategy content) en-abled us to outline a different perspective on strategy context, process, andcontent (see chapter six). This perspective can be described as our strate-gic reality, which is not necessarily superior to, but is at least differentfrom ‘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 strate-gic reality: Strategy-as-Practice. In summary, the ‘journey’ of this studycan be traced with reference to the concept of strategic realities. One keyfinding of this treatise is that to capture the multiple faces of strategicmanagement one needs to allow for the emergence of different strategicrealities. From our perspective, this presupposes the discussion of paradox.The next ‘gesture’ will substantiate this claim.

Gesture Two: “Creating Strategic Realities Because of and DespiteParadox”: Another key finding of this study is the need to build strategicrealities because of and despite paradox. If we want to have a broader pic-ture of strategizing in organizations by allowing different strategic realitiesto emerge (see ‘gesture’ one), we need to consider paradox within thecourse of the creation of strategic realities. Scholars have to build theoriesbecause of paradox since strategic management is dominated by an ideol-ogy, a prevailing cluster of assumptions (Starbuck 1982: 3). To build dif-ferent strategic realities that widen our understanding of strategic man-agement, we need to reach beyond this ideology. The identified paradoxesimply that the dominant logics, which make up the ideology (see section1.1), aim at impossibilities and are thus not a valuable point of departurefor strategy research. At first this seems to narrow down the scope of pos-sible strategic realities and thus our understanding of ‘strategic manage-ment’. Yet, we should not forget that these paradoxes are bound to our de-constructive 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 col-laboration across different sets of assumptions (section 2.2). From our per-spective, theorists should consider paradox to learn how to reach beyondthe current ideology that is governing our field and thus achieve a morebalanced perspective of strategic management (Lado et al. 2006).

Whereas theorizing because of paradox enables us to ‘see’ the limita-tions of the field’s underlying ideology, it would be false to classify strate-gic management as impossible (i.e. paradoxical). Strategy is one of themost intensive and expensive activities that organizations are involved in(Whittington 2001). It absorbs a full cast of players and thus cannot beclassified as impossible. In consequence, theorists not only have to buildstrategic realities because of but also despite paradox. Strategic realitiesthat acknowledge paradox (i.e. the impossibility of ‘origins’) thus have todeparadoxify themselves. To deparadoxify helps theorists to shake off de-terministic views in order to account for the messy realities strategists facein their everyday activities. As demonstrated throughout the discussion inchapter six, what first seems impossible (i.e. paradoxical) turns out to be


gradually produced by operations that are connected through supplemen-tary loops. Strategy scholars can respect supplementarity by consideringthe importance of the ‘And’. The ‘And’ connects – for instance, organiza-tion 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, doesand does not do, that is perhaps, before any enumeration of all possible titles ofthe 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, theconstant need to consider undecidables as the medium by which scholarsare reminded that this thing that they call ‘strategy’ is always associated,completed, supplemented, and accompanied by ‘the other’ (that which weused to ignore – e.g., ‘application’ or ‘implementation’). In summary, inline with other scholars (Huff 2001; Ortmann 1995; Ortmann and Sydow2001a; Vos 2002) we call on strategy researchers to place greater emphasison the role of recursive relations.

Gesture Three: “As If – The Fictional Character of Strategic Manage-ment”: 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, proc-ess, and content (see chapter five and six). As Ifs temporalize paradoxesand thus preserve peoples’ capacity to act, to a certain extent in ‘theory’but most of all in ‘practice’. Temporalization means to move the impossi-bility of the paradox into an indeterminate future where it is less trouble-some. Although temporalization is just one possible way to deparadoxify,we highlighted its importance with regard to the paradoxes of strategy con-text, process, and content. Unfortunately, few conceptual or empiricalstudies in strategy research have discussed the role of fictions so far (for alaudable exception see Ortmann 2004c). In consequence, this study showsthat we need more research regarding those fictions that deparadoxify stra-tegic management.

When researching fictions in strategic management we need to be care-ful what we are talking about. The fictions that deparadoxify strategy con-text, process, and content are usually necessary anticipations of the future;they are not so much about a more or less deliberate ‘hypocrisy’, the in-consistency between talk, decision, and action (Brunsson 1989). The As Ifsthat we are concerned with are often not realized as such, actors do notrecognize these fictions as fictions and/or take them for granted (Ortmann2004c: 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 para-doxes. To do this kind of research, we need a more worked out conceptualframework for studying fictions in strategic management. Such a frame-work would represent a highly valuable strategic reality that can be basedon existing work regarding fictions in organization theory and other disci-plines (for an overview see Ortmann 2004c).

Gesture Four: “The Supplementarity of Strategy Context, Process, andContent”: Every As If directed us to a different understanding of strategycontext, process, and content. Once the underlying paradoxes are depara-doxified, we were able to see that deconstruction does not merely promoteimpossibility but supplementarity (i.e. recursiveness). Every paradoxmerely indicates the limits of knowledge we can gain about strategic man-agement, whereas supplementarity – the constant interplay between the‘origin’ and that what used to be marginalized – emphasizes that strategycontext, process, and content are in a constant state of flux. To conceptual-ize this relentless movement between the ends of the underlying opposi-tions (e.g., environment/organization or formulation/implementation), wedeveloped and described undecidable terms (i.e. ‘framing’ for strategycontext, ‘improvisation’ for strategy process, and ‘iterability’ for strategycontent). In this sense, another key finding of this study is that strategycontext, process, and content are based on a both/and-logic. This logic re-flects the fact that the meaning that is produced at the nexus between bothpoles of the underlying oppositions can never be satisfactorily decided.

Concerning strategy context, framing describes the active operation ofdrawing distinctions that carve out organization and environment. When-ever strategists frame their environment by appropriating order out of dis-order (e.g., by regarding a certain group of people as relevant customers)they also frame their own identity. The frame operates at the margin be-tween organization and environment; the organization enacts its environ-ment and thus shapes its own identity (Weick 1979, 1995). ‘The’ environ-ment does not exist as a category just for itself, a category that couldpossibly act as an ‘origin’ for adaptation. Regarding strategy process, stra-tegic improvisation describes planning as action unfolds, the modificationor eventual replacement of strategic fictions within the course of strategiz-ing. Strategic improvisation highlights that the strategy process is most ofall about situated activity. Strategy formulation is as much about activityas strategy implementation is; actions cannot be postponed. Accordingly,there is a supplementary relation between formulation and implementationin the sense that the supplement (i.e. action/implementation) constantlymodifies and constitutes whatever was formulated. Plans are excuses foraction; they make actions appear to be under control (Mintzberg 1994a;


Ortmann and Salzman 2002; Weick 1979). Concerning strategy content,iterability explains the interconnectedness of repetition and alteration withregard to strategic rules and resources. Based on iterability, we describedthe interplay between ‘empty’ strategic rules/resources and their applica-tion as a process of filling. Of course, this filling gives reference to thesupplementary relationship between ‘empty’ strategic rules/resources andtheir application. The supplement (i.e. action/application) always modifiesthe necessary emptiness that is attached to strategic rules and resources. Inconsequence, strategic rules and resources cannot be generalizable or evena priori given; they gain meaning in and through action. This shifts the re-search focus from the traditional concern with the ‘drivers’ of competitiveadvantage to an investigation of strategists’ activities that revive abstractcategories like ‘cost leadership’ or ‘distinctive capabilities’. To conclude,one key finding of this study is that supplementarity is at the heart of re-search on strategy context, process, and content.

Gesture Five: “Researching Strategy as a Practice in Praxis”: Thesupplementary relations that strategy context, process, and content arebased on emphasize the importance of activity (see also section 7.1). Wediscussed this insight in chapter seven where we connected our findings toa stream of research that emerged recently: Strategy-as-Practice (Johnsonet al. 2003; Jarzabkowski 2005; Whittington 2002b). Accordingly, our re-search provides a theoretical foundation for this young field of inquiry. Weoutlined and discussed a research framework – composed of strategypraxis, practices, and practitioners – that can guide future research onStrategy-as-Practice. Thus, another finding of this study is that strategy re-search that takes the insights of the deconstruction of strategy context,process, and content seriously has to focus on the detailed and situated ac-tivities of practitioners that do strategy. Doing, here, is not raised to a levelof abstract categorization as traditional strategy process research does(Chakravarthy and White 2002; Pettigrew 1977) but refers to the practicalperformance of strategy in the actions and interactions of people. In thissense, organizations do not have a strategy; they do strategy.

Most importantly in the context of this study, Strategy-as-Practice blursthe distinction between strategy context, process, and content. The threedimensions can be conceptualized as relating to strategy practices inpraxis. For instance, many of the ‘empty’ strategic concepts that are avail-able from management gurus or consultancies represent strategy practices(i.e. they refer to patterns of activity that need to be enacted). While fillingthese practices, practitioners have to improvise to make the practices sen-sible in the local context of their organization (Whittington 2006). Thisimprovisation, of course, represents parts of the wider strategy process and

Prospect – Fostering Engaged Scholarship 295

also contributes to the framing of strategy context since the discussionsthat are needed for the enactment of the practice shape the perception ofthe environment and identity of a firm. In summary, this study showed thatdeconstruction 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 emergedfrom: praxis.

7.2 Prospect – Fostering Engaged Scholarship

In the light of the findings of this study, we have to ask: What can we do toconsider practically the presented key findings within our research? Tooutline a different way of strategy research is one thing, to actively con-sider it in research praxis another. The question is: What kind of scholar-ship do we need in order to produce knowledge about strategic manage-ment that takes into account the key findings of this study? As indicated inchapter seven, we believe that strategy research ‘After Derrida’ has to in-vestigate strategic management as a situated activity in organizations. Toresearch this activity it is not enough to simply do ‘desk’ or ‘database’ re-search; there needs to be more collaboration between theorists and practi-tioners (Johnson et al. 2003; Mintzberg 2005). So far, much knowledgeabout strategy is either produced in a detached way from practice and/orpractice is exclusively seen as a place where data is gathered.

To overcome this theory/practice dichotomy, Van de Ven (2006: 4) hascalled on researchers to foster ‘engaged scholarship’ which he defines

“as a collaborative form of inquiry that leverages the different perspectives andcompetencies of key stakeholders (researchers, users, sponsors, and practitio-ners) in producing knowledge about a complex problem or phenomenon. En-gaged scholarship draws upon knowledge of practice, values, and policy as wellas scientific knowledge in various disciplines to develop models that can bebrought to bear on specific problems in the world.”

Engaged scholarship promotes a different understanding of the value ofscience itself. Most strategy scholars still think that science is like a ‘marchtowards some truth’ that can be discovered by developing precise hypothe-ses that are validated through rigorous research. Engaged scholarshipviews strategic management as a ‘phronetic science’ (Oliver et al. 2005).Unlike orthodox science, where the researcher and the researched are dis-tanced and the focus is largely on generating testable hypotheses and pro-positional theory, phronetic science is about generating practical knowl-edge by being concerned with and getting involved in conduct, conduct


that can only be observed with regard to particular circumstances (Calori2002: 878). This, of course, demands that we become involved in strategypraxis and consider reflective practitioners as co-authors of theories.Phronetic science is not about generating ‘the truth’ about some kind ofphenomena but about gathering contextualized knowledge.

The following five ‘gestures’ outline how we think engaged scholarshipcan be undertaken. They specify Van de Ven’s (2006) more general ideawith regard to different areas that affect the nature of scholarship (e.g.,methodological focus of research). Surely, these ‘gestures’ do not offer acomprehensive discussion of the nature of scholarship as one could includeother topics as well (e.g., the way doctoral programs are designed). Yet,the five issues that we chose to discuss relate particularly well to strategicmanagement and were thus selected as a nucleus to foster future debates.Rethinking scholarship is crucial to produce conceptually and empiricallythe kind of knowledge about strategy that this study has only started tocreate.

Gesture One: “Does Anybody Listen? – Relating Theory and Practice”:According to Van de Ven (2006), engaged scholarship is about relatingtheory and practice. If strategy research ‘After Derrida’ draws uponknowledge of practices and emphasizes the activities that people performwhile doing strategy, we have to better integrate practitioners’ concernsand 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 theway we theorize. At first, this seems almost self-evident. Yet, especially instrategic management, the theory-practice link is quite fragile; there is dis-satisfaction on both sides. A variety of strategy scholars express concernsthat most of the research is irrelevant to what is going on in firms (Bettis1991; Tranfield and Starkey 1998). Regardless of what is stated in editorialpolicies, most scholars write more or less for each other. In consequence,practitioners question the usefulness of research and think of scholars asbeing in an ‘ivory tower’ (West 1990). Practitioners often feel that re-search is not designed to understand the problems they face. Although thisissue is severe, it has received little attention in the academic discourse.

Of course, the entire issue of research’s ‘practical relevance’ is beyondthe scope of this study. Nevertheless, we would like to offer two exem-plary points that are worth considering when trying narrowing the gap be-tween academia and practice. First, strategy scholars need to dispense withthe belief that academic knowledge flows in an unhindered way into prac-tice. There needs to be a debate about the applicability of knowledge.Without this debate, the pressure to produce relevant research results in


practical irrelevance, because the concept of application itself remains un-questioned (Nicolai 2004: 971; Starkey and Madan 2001: 4). Second, weneed to change the way we conduct strategy research. This can be done byco-producing knowledge with practitioners. There are virtually no articlesthat 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, mayproduce enactive research in which a quasi-perfect unity of time-space and ac-tion-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 theireveryday doings and interactions (Geertz 1973), can help us value howthey identify with their practices and whether their perspectives fit withour strategic realities. If the question of what strategy is about cannot beanswered in principle, but only with regard to situated practices, we needgreater collaboration with those who do the work of strategy. Producingsuch ‘thick’ descriptions requires rethinking the methodologies used.

Gesture Two: “The Altered Role of Methodological Rigor”: Engagedscholarship is about pluralistic methodology. If strategic management is acomplex and multifaceted phenomenon, like our remarks throughout thisstudy indicate, we need to explore these different facets. For this, we needa more balanced methodological focus where the insufficiency of invariantlaws in strategy research is acknowledged (Numagami 1998) and the valueof case-specific, qualitative studies is enhanced. As discussed in chapterthree, the strategy field has a strong focus on quantitative data analytictechniques (Bergh et al. 2006: 93). Phelan et al. (2002: 1165) identify aclear trend toward greater quantitative empirical content in the StrategicManagement Journal, while conceptual papers and single case studiesseem to fall of the agenda. Shook et al. (2003: 1233) even find that, con-trary to some predictions, the use of general linear model techniques (suchas regression) has increased over time. Similarly, Bowen and Wiersema(1999) argue that the current methodological focus has resulted in an ob-session with cross-sectional methods that embody the implicit assumptionthat model parameters are stable across firms and over time.125

125Especially when considering the recent rise of the RBV, where only those firmswith unique competences are assumed to have a competitive advantage, large-sample and cross-sectional techniques are unlikely to be able to disentangle thevariety of effects associated with competences. Another problem is the questionof unobservables. The resource-based tradition has introduced concepts like dy-namic capabilities or organizational competences. These phenomena cannot bestudied through sending out questionnaires (Godfrey and Hill 1995).


As shown in chapter six and seven, problems and concepts in strategicmanagement have clear firm and time-specific components; there are notruly general solutions to strategic problems. This is not to suggest that weabandon all large-scale quantitative empirical research, but that we (a) re-flect on the results such research offers more critically, (b) recognize that itis not enough to conduct research on organization but also in organiza-tions, and hence (c) complement quantitative results with in-depth, longi-tudinal, single case-based investigations that take into account the contextin which a firm operates (Duncan 1979: 424). If solutions really are localand context-specific, researchers have to get out to see what is happening(Lowendahl and Revang 1998: 765) and co-produce knowledge with prac-titioners in the field.

To value the context specificity of strategic management in organiza-tions, single case-based qualitative research needs to find its way back onthe agenda. While strategy research in the 1960s was greatly concernedwith discussing single case studies, the strategy field should renew this fo-cus to make use of improved data gathering and data analytical techniques.More recently, ethnographic and fieldwork methods have proven to bepromising alternatives for producing ‘thick’ descriptions that are oftenbased on informal stories and organizational ‘gossip’ (Rouse and Daellen-bach 1999: 490).126 These methods provide a different perspective becausethey (a) make the researcher an active participant in organizational life and(b) do not aim to discover what really happens but investigate the waypeople momentarily construct strategy in the context of their organizations(Cunliffe 2001: 355). A renewed focus on qualitative work may have yetanother advantage. Quantitative mathematical models are often inaccessi-ble to practitioners, whereas qualitative studies enable scholars to talk tomanagers in words that are meaningful to them (Välikangas 2003). To talkto managers in meaningful ways, we as scholars should learn to drop someof our heavy methodological tools (Weick 2001, 1996a).

Gesture Three: “That’s Plausible! – How to Evaluate Strategy Re-search?”: Because engaged scholarship is about valuing context specific,qualitative, case-based research, we have to ask how such research can beevaluated. Evaluation of ‘thick’ descriptions of strategy praxis is tough be-cause results hardly relate to the traditional criterion for testing theories:validation. According to validation, hypotheses are created and tested to beeither confirmed or suspended. But is validation a useful criterion anyway?

126Ethnographic methods range from semistructured and unstructured interviewsover unobtrusive ‘shadowing’ techniques to participant observations (seeBernard 1994). This puts narrative studies (Czarniawska 1998, 1997) and con-versation analysis (Schegloff 1987) on the agenda.


Weick (1999) suggests that validation is an insufficient criterion for evalu-ating research, since it (a) distances the hypotheses from its generation, (b)displaces the role of the theorist since the ‘environment’ seems to decidewhether the theory is true or not, and (c) eventually leads to trivial theoriesbecause the process of theory construction is hemmed in by strictures thatneglect the usefulness of theories altogether.127

Weick (1999: 516) suggests concentrating instead on the process oftheorizing rather than evaluating the theory itself. Instead of validating‘true’ theories, strategy research needs to suggest novel relationships andconnections that had previously not been suspected. This brings the theo-rist back into the picture because the theorist, not the environment, nowcontrols the survival of conjectures. Weick argues that the selection crite-rion used by theorists to retain conjectures should be ‘plausibility’. Schol-ars need to ask whether conjectures are plausible. When theorizing isdriven by concerns for plausibility rather than concerns for validity, con-jectures that are generated in the process of theorizing need to be judgedwith regard to different criteria (in fact, criteria that operationalize ‘plausi-bility’). What are examples of such criteria?

First, conjectures need to stimulate interest by challenging existing be-liefs (Davis 1971; Shrivastava 1987: 79). Conjectures that completely dis-confirm or affirm current beliefs and assumptions are unlikely to create in-terest. Interest is a selection criterion during the process of theoryconstruction, because disconfirmed beliefs are opportunities to learn some-thing new or to discover something unexpected (Weick 1999: 525). Sec-ond, conjectures can also be selected according to aesthetic criteria. Ele-gancy, which is a criterion enjoyed by mathematicians, can engenderfeelings of beauty that allow conjectures to be retained. Overall, Weicksuggests that theory is not testable against some ‘hard’ reality, whichwould tell us whether our hypotheses are true or not. The complexity ofthe social world makes theory construction in the social sciences a difficulttask. When evaluating strategy research, we should be aware that theoryconstruction is more about imagination than ‘proving’ validity. To buildbetter theories, theorists have to think more creatively and recognize thattheir own thinking depends on pictures, metaphors, and mental maps of theobject of study (i.e. strategy).

127Weick (1999: 519) argues: “Most existing descriptions of the theorizing processassume that validation is the ultimate test of a theory and that theorizing itself ismore credible the more closely it stimulates external validation at every step.Thus, a dual concern with accurate representation and close correspondence be-tween concepts and operations is evident virtually from the start in any theoriz-ing activity. These concerns can be counterproductive to theory generation.”


This altered picture of evaluating strategy research has important conse-quences for the editorial policy of the major (and minor) journals of thefield. Almost certainly, pressures will continue to mount for ‘quick anddirty’, ‘close-to-the-market’ output (Gopinath and Hoffman 1995: 577;Willmott 1993: 706). Calori (2002: 881) notes that suspicion towards a dif-ferent epistemological stance reduces the chance of entry in (North Ameri-can) ‘A’ journals and academic careers become more uncertain. Journalsthat are identified as ‘top’ publications usually have scholars on their edi-torial boards who require the work to be published to meet the higheststandards of ‘scientific rigor’ (Podsakoff et al. 2005: 486). Rigor, here, re-fers to established theoretical perspectives, orthodox research methods,and the need to show that hypotheses were validated or not. Yet, whatcounts as rigorous research is not God-given but a product of lengthyprocesses of ‘fact’ production (section 3.3) and the training of research-ers.128

If scientific rigor is a socially constructed phenomenon, scholars can ac-tively influence this process. Editors need to encourage authors to follow‘non-traditional’ perspectives, both in terms of methodology and the deliv-ered content. A promising way to achieve a different editorial policy is toopen editorial boards of North American journals for authors from otherparts of the world where ‘scientific rigor’ is defined in other ways. Cleggand Ross-Smith (2003) argue that the dominance of North American jour-nals, together with the capacity of their editors to shape what gets pub-lished, is overwhelming. In addition, Baruch (2001) notes that non-NorthAmerican scholarship is significantly underrepresented in these journals.The major journals of the field need to open their agendas (a) for criticalconceptual strategy research that builds on hitherto underrepresentedmetatheoretical perspectives and (b) for empirical studies that seriouslyconsider non-traditional methods and give us deep insights into singlecases of strategy making to – in a Derridean sense – supplement and ex-tend existing research.

128In their recommendations regarding doctoral education in strategic manage-ment, Summer et al. (1990: 368) give the following advice: “Both ‘Philosophyof Science’ and ‘Quantitative Analysis’ are crucial to understanding and evalu-ating research in Business Policy and Strategy, so those areas deserve immedi-ate attention. A ‘Design and Methods’ course should typically follow the abovetwo, and many students will require additional work in econometrics or otherquantitative fields.” In consequence, students of strategy are trained very earlyin their careers about what it means to conduct ‘rigorous’ research. We do notsuggest that no quantitative training has to be offered, but rather that a balancededucation between quantitative and qualitative methods has to be achieved.


Gesture Four: “Teaching Strategic Management – ‘Are You Telling theTruth?’”: Engaged scholarship does not only imply doing research that isengaged with regard to practice but also equipping those who will be prac-titioners 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), wedefine the purpose of teaching as telling students about ‘the truth’. Thepedagogical assumption is that we can distinguish between what is trueand what is false to let students know about the object of knowledge as itis. Derrida’s radical rejection of a final truth (différance) has far-reachingimplications for the way we teach (about strategy).

First, we need to reflect on what we teach to students. The strategictools that we provide presume that students have almost perfect informa-tion about what is going on in their ‘environment’ and ‘organization’. Thisleads to the illusion of ‘being in control’ of things. If there is no truth andthus no perfect information (e.g., about the industry one operates in), weneed to tell students that it is not the tools themselves that will help themwith strategizing but the way they make sense of, enact, extend, and mean-ingfully modify these tools. Students need to be aware that homogenizedtools are only frames of reference but do not embrace any universalisticstrategic philosophies.

Second, to be able to apply strategic tools meaningfully, students needto possess more than just well developed analytical capabilities. This im-plies rethinking whom we teach strategy to and thus the traditional selec-tion criteria for entrance to business schools. Indeed, as Mintzberg (2005)argues, the well-known and widely applied GMAT scores offer an insuffi-cient picture of students.

“GMAT stands for Graduate Management Admission Test, and it assess one’sability to give fast answers to little numerical and verbal problems. […] Sincehow well you do depends on how well everyone else does, you had better pre-pare by buying a special book or taking a special course, because that is whateveryone else is doing. […] So instead of practicing management, the would-bemanager practices tests. Good managers are certainly intelligent, and theGMAT certainly measures intelligence, at least formalized intelligence. […] Sothe GMAT constitutes a useful but insufficient screening device, more useful,in fact, to identify successful students than managers. The latter have to exhibitall 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’, ‘in-tuition’, ‘telling stories’, ‘creating plausible fictions’, and most of all ‘on-


the-job experience’. Mintzberg (2005: 243) suggests that rethinking MBAapplication procedures implies (a) that true management education shouldbe a privilege earned by leadership performance in practice and (b) thatorganizations themselves should suggest candidates and support them.Certainly, managers need some kind of undergraduate education that pro-vides a basic stock of knowledge (e.g., regarding typical line functiontasks). The question, however, is whether management, and strategic man-agement in particular, should be taught at the undergraduate level at all?Mid-career managers are better equipped to understand strategic problemsand the limitations/opportunities of tools and theories that they get to knowin 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 theirGMAT score but because of their performance in practice, it makes nosense to teach strategy in a lecture-type manner. Experienced managershave stories to share and often first-hand knowledge about concepts. In-stead of leveraging this knowledge, many strategy courses still rely oncases because case teaching has been found more effective than lectureteaching with regard to attaining cognitive skills and motivational aims inthe classroom (Böcker 1987; Summer et al. 1990). The case-method,though, has serious drawbacks. Usually, cases are used to bring studentscloser 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 prac-tice. The case method reduces strategizing to decision-making and analysisby training students to analyze large chunks of given data. Once again,students believe to be in control. But strategic managers do more than de-cision-making; they create events, experience, test, bargain, argue, and ne-gotiate.

We are not suggesting that cases no longer be used. Compared to tradi-tional lecture-type teaching, cases involve students and expose them to thecomplexities of strategic realities in organizations. Yet, under the premisethat strategy is taught to experienced managers, one can do better than dis-cussing cases. Mintzberg (2005: 246-266) suggests that the classroomshould leverage managers’ experience. By experience he means naturalexperience that has been lived in everyday life on and off the job, whilecreated experience (e.g., through role plays) can at best be supplementary,but not central, to the education process. Teaching strategic managementneeds to be about experienced reflection, where managers bring theirknowledge to the classroom and faculty introduces concepts and theories.Reflection takes place where both spheres meet: experience about strategyconsidered in the light of conceptual ideas.


Gesture Five: “Engaged Scholarship? – Engaged Practice!”: Engagedscholarship rests on a stronger collaboration between theorists and practi-tioners. Although collaboration can be fruitful, because the accepted defi-nition 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 ‘ges-tures’ demonstrated what scholars could do to close the gap between stra-tegic management and strategy praxis (e.g., with regard to the methodol-ogy used, the evaluation of research, and/or the way strategy is taught),this ‘gesture’ is about practitioners’ role in engaged scholarship. Most im-portant, engaged scholarship needs reflexive practitioners who treat uni-versal prescriptions of the kind ‘How to really achieve a competitive ad-vantage’ with great care and a critical attitude. Like in medicine, wherethere is no universal drug against all diseases, the deconstruction of strat-egy content has shown that there is no general solution that applies to allkind of strategic problems in every company. As Mintzberg (2005: 250-251) explains, theories should be used

“not because they are true but because they are useful – under particular cir-cumstances. […] Situations vary enormously. What we should be doing in ourmanagement classrooms, therefore, is drawing out the implicit theories thatmanagers have in their mind […] and offering alternate theories, competing ex-planations of the same phenomena, so that managers can interpret their experi-ence from different perspectives.” (emphasis in the original)

Strategists who are sensitive to engaged scholarship (a) do not follow thelatest management fad that promises to be valid for each and every com-pany,129 (b) do not perceive themselves as rational agents (Hurst 1986: 26),and (c) recognize that the people who apply strategic concepts are moreimportant than the concepts themselves. These kinds of practitioners fosterengaged scholarship because their reflexive awareness of the strategypraxis they operate in fosters the co-production of knowledge about strate-gic management with scholars. Reflexive practitioners are stimulated bystrategy scholars to build their own strategic realities (and do not passivelyconsume ‘empty’ prescriptions made by other scholars and/or strategists ina different context).

129The very latest management fad – Blue-Ocean-Strategy – is about creating newbusiness segments by deliberately neglecting the frontiers of the more tradi-tional business (Kim and Mauborgne 2004). Faced with the question whichcorporations can especially profit from Blue-Ocean-Strategy thinking, W. ChanKim, one of the promoting professors of this concept, replies: “The approachcan be implemented by all corporations – regardless of the industry they are in.”(Kim and Mauborgne 2005: 52, translation A.R.)


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 limita-tions (section 1.3) as well as its underlying intent. Our intent was to pro-voke additional thought, research attention, and concern for the ideas pre-sented. As indicated throughout this text, we do not wish simply to replacesome apparently ‘old-fashioned’ logic by some ‘new’ one. Reflexivity –one, maybe the, major topic of this treatise – is not a means to produceprivileged knowledge (Lynch 2000). Reflexivity is the recognition that anunquestioned answer can be more dangerous than an unanswered question;it is about uncovering tensions between different positions. The commonthread running through this study – ‘Strategic Realities’ – exemplarily re-flects a tension between that which is ‘strategic’ (as a concern for the fu-ture which always remains to be thought) and that which is ‘real’ (as aconcern for the very moment, that which is real, but never ‘here’ as anevent that we can adequately grasp, [Derrida 2003b]). Discussing and writ-ing about scholars and practitioners’ strategic realities implies questioningany metaphysics of presence that classifies strategic management as some-thing that is simply ‘there’; any strategic reality – be it the one of scholarswho think about strategic management or the one of practitioners whopractice 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 decon-struction.130 Deconstruction is always already at work in works (Derrida1986c: 123) and each deconstruction speaks with a single voice (Derridaand Norris 1989: 75). We have to think of strategy as being always alreadyin deconstruction: this is what this study has done. Of course, strategicmanagement can be influenced by writings (e.g., Derrida’s writings). Yet,this does not ipso facto make it ‘deconstructive’. The deconstruction of

130Even Deconstruction has become a management fad. Promoted by the BostonConsulting Group, the Deconstruction of value chains is about the dissolutionof traditional boundaries of industries, companies, and businesses. When gasstations 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 betweenboth notions, as d/Deconstruction is always itself reiterated and thus subject todeconstruction.

But, Beyond... – The End and the Beginning 305

strategic realities is not something brought in from the outside, although itmight sometimes appear as if this were the case. Deconstruction already isat 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. De-construction in strategy has always already begun (Derrida 1987b: 19).

This treatise has emphasized many research opportunities for futurescholarly work, both with regard to strategic management itself (see espe-cially chapter seven) but also concerning research about strategy research.Whereas there is an ever-increasing body of empirical work regardingstrategy context, process, and content, too few studies actually question theway such research is undertaken. Future studies that discuss the way wetheorize about strategic management can, for instance, deconstruct otherprominent oppositions (e.g., top manager/employee or resource/market-based view, Ortmann 2003a: 134), investigate the way we produce domi-nant logics more closely, or discuss the underlying methodologies and pos-sible alternatives in a much more comprehensive way. After all, if wereally want to establish a different kind of strategy research, the concept of‘engaged scholarship’ deserves more discussion. Without modification ofthe institutions that shape the strategy discourse (e.g., journals’ editorialpolicies and strategy departments’ tenure procedure) real change with re-gard to the content of the discourse is unlikely to occur (Knights andMorgan 1991).

So, how to end this book? Certainly, every deconstruction can be decon-structed! Writing is never neutral but always requires interpretation. Nei-ther authors nor readers have privileged access to the meaning of texts. Inthis sense, a book is always beyond our control. It carries a burden ofmeaning that constantly escapes, slips away, and breaks out. We then haveto ask: Can there be an end to a book? Derrida (1977: 18) refers to the ideaof the book as a “natural totality” that is alien to the différance of meaningit 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 deconstruc-tion. 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, what-

ever is aporetic does not permit ‘immedi-

ate 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 analy-

sis aiming at unraveling the self-

contradictions inherent in ‘texts’. Decon-

struction 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 dif-

ferent from itself.

Différance Signs never have a fixed meaning. The it-

eration of a sign creates new differences

and by doing so simultaneously defers the

presence of meaning. Because of its dou-

ble meaning (to differ/to defer), différance

implies that there can be no present (objec-

tive) 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 as-

sumptions and basic belief structures

scholars refer to when theorizing in a field

of inquiry. In an unnoticed way, they pre-

dispose 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 pro-

tect 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 en-

forced by organizational members. Strat-

egy 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 modifica-

tion. Because of iterability, there is no

pure replication of strategic rules and re-

sources. 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 ad-

here 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 ap-

pears as secondary.

Paradox The simultaneous presence of contradic-

tory 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 impossi-

bility, there are ways of deparadoxifica-

tion.

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 re-

source 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. Re-

peated 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 re-

flect 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 ‘world-

of-strategy’. Strategic realities reflect the

belief that ‘strategy’ does not fall from the

sky, but is a product of contingent deci-

sions regarding a specific set of assump-

tions.

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 self-

present beginning. The term ‘supplement’

is itself undecidable and means to add on

and to replace/substitute.

Paradigm Universally accepted scientific achieve-

ments that for a period of time provide

model solutions and model problems to a

community of scholars. Paradigms also in-

clude certain metatheoretical assumptions

and thus represent a Weltanschauung.

‘The Text’ Not a book! ‘The text’ includes all possi-ble referents in the world. Referents aretextualized through language in context.Hence, everything we can know is text,that is constructed through signs in rela-tionship. We may suggest that ‘the text’ isthe imbrication of language and the world;an interweaving of the woof of languagewith what we call ‘the world’.

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Leadership & Management

management of networks

banking management

management science issn

university hamburg university

party logistics relationships

physicaverlag heidelberg

hamburg germany

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