Abstract
While the complexity of strategy as a field of study makes it dangerous to push any particular classification scheme too far, some basic differentiations are useful in establishing starting points for deeper analysis. The objective of this chapter is to make sense of strategy research by shaping the contours of the field. By introducing some basic terminology and revisiting various approaches that have been the ‘bread and butter’ of strategy research for the last 45 years, we hope to give a comprehensive, yet not conclusive, overview.
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References
The term strategy derives from the ancient Athenian concept of strategos which is compounded of stratos (an encamped army) and agein (to lead). Cummings (1993) notes that the emergence of the term occurred at the same time as military decision-making complexity increased. The first organized writing about military strategy, which is also considered in the realm of strategic management, is Clausewitz’s (1983) book On War. Within Clauswitz’s writings the distinction between strategy and tactics is of great importance. In his view, strategy refers to the deployment of troops, whereas tactics refers to the employment of the latter.
Andrews (1971) is certainly not the only author who discussed the different dimensions of the concept of corporate strategy. Hofer and Schendel (1978: 5), for instance, discuss ‘the allocation of resources’ as an aspect of strategy. We use Andrews’s classification since most other general conceptions of strategy relate to at least one of his dimensions (see also Oliver 2001; Porter 1996; Whittington 2001).
This definition is quite comparable with the one given by Kuhn in the postscript to The Structure of Scientific Revolutions (starting with the 1970 edition). In the postscript, he explicitly points out that shared beliefs about certain model problems and personal values (which touch upon metatheoretical issues) are part of a paradigm (Kuhn 1996: 184–185). See also the discussion by Lueken (1992: 118–122).
We do not include organization theory as this field is by itself heavily influenced by economics and organizational sociology. Nelson and Winter’s (1982) book on evolutionary economics, for instance, is often referred to in organization theory. Similarly, many theories of organizations owe a lot to sociological concepts (e.g., new institutionalism, see for example DiMaggio and Powell 1983).
Williamson (1991: 76) makes this quite clear: “Strategic ploys are sometimes used to disguise economizing weaknesses. [...] More often, strategic ploys can be used to promote economizing outcomes. [...] The beguiling language of strategizing — warfare, credible threats, and the like — notwithstanding, students of economic organization are better advised to focus on more mundane issues of an economizing kind.”
See also the critical commentaries of Bromiley and Papenhausen (2003), Foss (1996), and Seth and Thomas (1994) regarding the relation between economics and strategy. Rumelt et al. (1994: 25–31) provide a good overview of the taxonomy of economic theories pertinent to strategic management.
Other tools and concepts that fit in the same category for reasons discussed in section 2.3 are: the experience curve (Henderson 1973), research on strategic groups that explored the linkages between resource choices (interpreted as strategy) and firm performance (Hatten and Schendel 1977), and the formalized strategy formulation process model by Hofer and Schendel (1978).
Porter’s (1981: 616) updated version of the industrial economics framework by Bain (1968) moved beyond simple determinism and also allowed for changes in the industry structure by the conduct of firms. Nevertheless, the underlying ontological tradition in which all firms are part of one reality remained unchanged.
Integration has its roots in the philosophy of science debates. Lewis and Kelemen (2002: 258) argue that “[m]ultiparadigm inquiry strives to respect opposing approaches and juxtapose the partial understanding they inspire. Paradigm lenses may reveal seemingly disparate, but interdependent facets of complex phenomena.” See also the remarks of Gioia and Pitre (1990) on multiparadigm theory building.
A similar position has been suggested by Weaver and Gioia (1994) who argue that a “successful multi-paradigm perspective [...] must explain how different theoretical approaches might be related, but must do so (a) while preserving genuine multiplicity (e.g. the relatedness does not involve the reduction of one approach to another) and (b) without uncritically embracing the disunifying ‘paradigms’ paradigm’ (i.e. the increasingly entrenched view of organizational inquiry which — by appealing to the incommensurability thesis — purports unalterably to divide the field into mutually exclusive, contradictory metatheoretical camps).” (Weaver and Gioa 1994: 566, emphasis in the original)
“Identifying substitute products is a matter of searching for other products that can perform the same function as the product of the industry. Sometimes doing so can be a subtle task, and one which leads the analyst into businesses seemingly far removed from the industry.” (Porter 1980: 23) Jemison (1981: 605) highlights other opportunities for cross-fertilization: (1) the relationship in the evolution of industries and organizations or (2) the influence of interorganizational relationships on strategy-making.
On a metatheoretical level, we have a variety of under or even unexplored possibilities. Giddens’s theory of structuration is just one possibility (Ortmann and Sydow 2001b). Luhmann’s social systems theory provides a frame of reference as well (Knyphausen-Aufseß 1995). Apart from social theories, we may also make use of perspectives that highlight different epistemological and ontological alternatives like constructivism (Mir and Watson 2000). In addition, we should also look within organization theory where metatheoretical frames that favor a weak ontology, such as Weick’s (1979) sensemaking approach, can be found and have already been applied to strategy research (Schneider 1997; Stensaker 2002; Weick 1987a).
The separation between the three dimensions is subject of debate. Whereas scholars like de Wit and Meyer (2004: 6), Moore (1995: 22), and Pettigrew (1987: 657) highlight the interrelation of the different facets, Schendel (1992b: 2) is more in favor of a distinction reaching beyond analytical purposes by “contrasting process and content research as opposites, as a dichotomy.” Interestingly, Schendel (1992a: 2) argues some months later in another editorial comment of the Strategic Management Journal that the dichotomy is not real because process needs to be seen as an integral part of content.
Chandler (1962: 14) argues in favor of this proposition by stating that “[t]he thesis deduced from these several propositions is then that structure follows strategy and that the most complex type of structure is the result of the concentration of several basic strategies.” Chandler’s maxim is based on an investigation of the disappointing diversification activities of four large American corporations (e.g., General Motors and Sears Roebuck). He concludes that the problem for those early diversifiers was not strategy, but structure. Only when moving from the established centralized structure to a multidivisional one, these corporations were able to fully leverage diversification strategy. In Chandler’s (1962: 314) words, “[u]nless structure follows strategy, inefficiency results. This certainly appears to be the lesson to be learned from the experience of our four companies.”
For different reviews of the large body of strategy process literature see Chakravarthy et al. (2003), Chakravarthy and White (2002), Fredrickson (1983), Huff and Reger (1987), Lechner and Müller-Stewens (1999), and Van de Ven (1992).
Hoskisson et al. (1999) claim that over time strategy content research oscillates between the market and resource-based perspective like the swing of a pendulum. While early strategy scholars like Chandler (1962) or Ansoff (1987b) focused on firms’ internal strengths and managerial capabilities, the rise of the industrial organization paradigm in the 1970s and 1980s led the pendulum to swing to the other extreme to come back to its original internal focus with the rediscovery of the resource-based approach by writers like Barney (1991) and Hamel and Prahalad (1990) in the 1990s.
Porter (1980: 36), for instance, states that cost leadership is a valuable alternative if a firm has a “high relative market share or other advantages, such as favorable access to raw materials.”
Giddens (1984: 21) discusses the difference between both forms of rules. “Rules which are’ stated’, as [regulative] above are interpretations of activity as well as relating to specific sorts of activities: all codified rules take this form, since they give verbal expression to what is supposed to be done. But rules are procedures of action, aspects of praxis.” (annotation added) Wittgenstein’s (1967: 81) argumentation is very similar: “[A]lso obeying a rule is a practice. And to think one is obeying a rule is not to obey a rule.” (emphasis in the original)
Barney’s (2002, 1991) characteristics represent yet another ‘empty’ strategic rule. Then, one may ask why we not simply analyze the resource-based view as yet another strategic rule. As indicated in section 1.1, the underlying dominant logic (i.e. the ‘fullness of strategic resources’) is not concerned with the fact that resource-based reasoning is itself based on strategic rules that are generalizable across organizations. Fullness, here, refers to the way in which resources are defined within an organization. Because resources are defined as ‘given’ by the dominant logic, they are thought to be full of meaning before any application within the organization.
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(2008). Strategic Management as a Field of Study. In: The Paradoxical Foundation of Strategic Management. Physica-Verlag HD. https://doi.org/10.1007/978-3-7908-1976-2_2
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