Münchner betriebswirtschaftliche Beiträge
               Munich Business Research




The role of general strategy concept...
The role of general strategy concepts
                    in the practice of strategy

                                   ...
1. Introduction

Recently there have been calls for a closer attention to the ways that strategizing in
organisations is i...
pre-selection of possibilities. This pre-selection is the function of structures (cf. Luhmann
1995; Giddens 1984), for exa...
transform ambiguous signals into clear-cut information. Making these assumptions is
         risky because although the re...
standard model of the organisation is nowadays the “reforming organisation”
(Brunsson/Olsen 1993; Brunsson 2000). Ultimate...
general strategy concepts are self-substantiating. Thus, for the manager drawing on such a
concept the reason for adopting...
While general strategy concepts are very attractive for managers under pressure to change
their strategies, they have a fu...
Against this background it seems highly questionable how strategy concepts could be both
general enough as to refer to a w...
Management science, consulting and management praxis […] are highly autonomous
     systems that have developed different ...
is stimulated to develop, or better: to invent, its own concepts and practices. For the strategist
this at first seems to ...
What strategy concept ultimately is invented on the basis of the introduced label cannot be
predicted from outside. In som...
internal process of creating the new concepts in some way or other co-evolves with the
development of the external concept...
In addition to their linguistic flexibility ‘general’ strategy concepts often leave completely
open how they should be imp...
So far we have focused our discussion on the individual organisation drawing on general
strategy concepts. In the followin...
Also the direction of ‘diffusion’ of the general management concepts is more complicated
than mostly acknowledged. While w...
forming an ‘ecology’ of discourses (in analogy to Vickers’s (1968) and Kirsch’s (1997:
chpt.3) concept of an ‘ecology of k...
phenomena, i.e. every discourse observes – and in this sense ‘constructs’ - its environment
differently.5


Following this...
The different discourses are sometimes interrelated in such a way as to mutually amplify their
communications about their ...
applications of general strategy concepts independently of their ‘true’ effects. As Kieser
referring to Brunsson and Olsen...
At this point we want to summarise our re-conceptualisation of the reproduction of general
strategy concepts before we the...
Drawing on Giddens (1990) this issue is often portrayed as one of ‘disembedding’ and
‘reembedding’ of strategy practices. ...
Ultimately the two perspectives might not be so far apart; they merely put different emphasis
on the issue. While the ‘cla...
latter focuses our attention on how different discourses despite their differences still influence
each others strategisin...
References


Abrahamson, E. (1996) “Management Fashion”. Academy of Management Review 21:
     254-285.
Ashforth, B.E. and...
Elsbach, K. (1994) “Managing organizational legitimacy in the California cattle industry: The
     construction of and eff...
March, J. G (1981) “Footnotes to Organizational Change”. Administrative Science Quarterly
    26: 563-577
Maruyama, M. (19...
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  1. 1. Münchner betriebswirtschaftliche Beiträge Munich Business Research The role of general strategy concepts in the practice of strategy David Seidl # 2003-10 LMU Ludwig-Maximilians-Universität München Munich School of Management 1
  2. 2. The role of general strategy concepts in the practice of strategy David Seidl Institute of Business Policy and Strategic Management Ludwig-Maximilian University Munich Ludwigstr. 28 Rgb. 80539 Munich Germany Phone: ++49 (0)89 2180 2988. E-mail: seidl@strategic-management.de Abstract In this paper we analyse the role of general strategy concepts as provided by influential institutions (e.g. business schools or consulting firms) in the strategic practice of business organisations. We analyse why such general concepts are drawn upon, what challenges one is facing when trying to introduce them into an organisation, how the ‘introduction’ can be conceptualised and what consequences this has for the reproduction of the concepts. For this purpose we will draw on new systems theory, neo-institutionalism and discourse theory. 2
  3. 3. 1. Introduction Recently there have been calls for a closer attention to the ways that strategizing in organisations is influenced by macro-social institutions (e.g. Whittington 2002; 2002a; Jarzabkowski forthcoming). Organisations are perceived as part of a wider community made up of other organisations, consultants, business schools and business media. Within this community strategic practices, like strategy tools or general strategy concepts, are produced and reproduced. In other words, organisations are conceptualised as taking part in a general strategy discourse. By drawing on the general strategic practices in their concrete organisational circumstances the organisations are perceived as reproducing the strategic practices. For example, reengineering or lean management are two strategy concepts or practices featuring in the wider strategy discourse. By applying reengineering or lean management to their own organisations managers are perceived as reproducing these concepts. But these concepts are also reproduced by business schools when they teach them to their MBA students; or by the business media when they write about them. Each member of the strategy community contributes to the reproduction of these practices by applying them to their concrete circumstances. Many writers emphasise the importance of analysing this link between the so-called macro and micro context for an appropriate understanding of strategizing. This link between “micro” and “macro” however seems very difficult to conceptualise. In this paper we will try to provide a systems theoretical account of the relation. We will focus particularly on the role of general strategy concepts. Four central questions will guide our analysis: Why are such general strategy concepts drawn upon? What challenges is one facing when trying to introduce them into an organisation? How can the “introduction” be conceptualised? What consequences does this have for the reproduction of the concepts? 2. Strategizing as complexity reduction Organisations are complex systems. They possess more elements than can be practically or even conceptually related to each other (Luhmann 2000). Or in other words, they possess more possibilities than can be (cognitively or practically) realized. Any action within the organisation is thus necessarily selective; it actualises some possibilities leaving other ones unactualised. The greater the complexity the more difficult the selection becomes. If the complexity is too great action becomes paralysed. In order to make action possible complex situations have to be simplified, or better: the complexity has to be reduced. There has to be a 3
  4. 4. pre-selection of possibilities. This pre-selection is the function of structures (cf. Luhmann 1995; Giddens 1984), for example rules, norms, goals or resources. Structures do not necessarily eliminate possibilities but they make it possible to handle the possibilities. A norm for example structures the possibilities into norm-conform and norm-deviant possibilities. The norm, thus, “transforms” the original situation with many possibilities into one with two possibilities to select from: conformity and deviation (Luhmann 1995). In this sense the complexity is reduced and the selection as such made much simpler. Baecker (1999) in this sense speaks of a transformation into a “simple complexity”. One important means of reducing organisational complexity is strategy. Strategy reduces the complexity of the organisation and of (its relation to) its environment to a degree that can be handled both cognitively and practically (Schreyögg/Steinmann 1987; Baecker 2003). On a cognitive level one speaks of a reduction of ambiguity (Daft/Lengel, 1985) or the elimination of equivocality (Weick, 1979). For example, a strategy in the form of a goal (more or less) blinds out those possibilities that are not contributing to the achievement of that goal. Every strategy reduces the complexity in a different way; it highlights and blinds out different possibilities. Strategizing in this sense can be understood as the activity of selecting, and selectively combining, forms of complexity reduction. While almost every activity in an organisation in one way or other is involved in some kind of complexity reduction, the selectivity of strategizing is in two respects particular: First, in the field of strategy one is dealing with a complexity that cannot be grasped in its entirety. Not only the environmental but also the organisational complexity is usually beyond the grasp of the strategist. This problem is aggravated as organisational and environmental complexity and dynamism permanently increases (Ernst/Kieser 2003). Second, in addition to not being able to comprehend the entire complexity, one doesn’t possess independent criteria for evaluating the selection. In other words, part of the selection is the selection of criteria for making the selection. Logically this leads to an infinite regress. Ultimately, any criterion is itself part of the complexity reduction (Dietel/Seidl, 2003). Thus, strategizing can be understood as ‘blind’ selection. The strategist neither knows what possibilities he has selected from nor what he has ultimately selected. Schreyögg and Steinmann in a similar vein write: So what planners actually do is to construct a simplified model of the strategic situation. This is done primarily by explicitly or implicitly setting assumptions designed to 4
  5. 5. transform ambiguous signals into clear-cut information. Making these assumptions is risky because although the resulting strategy may be sound, no one can be sure, since there is no way to find ex ante the single correct solution. (Schreyögg/Steinmann 1989: 94; references omitted) What strategy is selected, however, is not irrelevant. Different strategies have very different effects on the organisation. Some might be very successful1, other ones might put the survival of the organisation at risk. In other words, different strategies differ considerably in their effects on the viability of the organisation. Thus, we can summarise, the ‘blindness’ stands in stark contrast with the risk associated with the selection of the strategy. Strategic control as continuous evaluation of the strategy as suggested by Schreyögg and Steinmann (1989) reduces the risk of the selection. It can’t however eliminate it. Often strategic decisions cannot be reversed anymore even if they prove detrimental to the organisation. In face of this situation one would expect organisations to be fairly reluctant to change their strategies while the existing strategies are still viable. At most one would expect rather incremental changes to the existing strategy; in small and thus reversible steps (cf. Quinn 1980; Kirsch/Seidl 2004). 3. The function of general strategy concepts Empirically however one finds that strategists usually experience great pressure both from within and particularly from without the organisation to develop new strategies from time to time. March in this sense writes: The ideology of good management […] associates managers with the introduction of new ideas, new organisational forms, new techniques, new products, or new moods.’ (March, 1981: 573) Continuity in strategic concepts is not very highly valued. A manager who doesn’t develop new strategies is perceived as lacking leadership, creativity and initiative. Thus, in order to prove themselves, managers are forced to constantly look for new strategies. Often the strategy isn’t even completely implemented yet, when already a new strategy is expected. The 1 …whatever ‚success’ means for the organisation. (On the question of defining success see Kirsch 2001) 5
  6. 6. standard model of the organisation is nowadays the “reforming organisation” (Brunsson/Olsen 1993; Brunsson 2000). Ultimately the pressure isn’t so much on doing something “better” than merely of doing something different, something new (which then, of course, has to be presented as “better”). Paradoxically it is particularly of new strategists that initiatives for new strategies are expected; that is to say, of those who have the least grasp of the concrete organisational complexity. Often new CEOs are called into the organisation particularly in order to change the existing strategies. Thus the selection of the form of complexity reduction is based on particular blindness.2 Strategists in this situation ultimately have two options. They can either develop new strategies themselves or they can draw on strategy concepts already existing in the environment of the organisation. Both options have their specific problems. When developing the strategy oneself one has to deal with the problem of finding some point of reference from which to “deduce” the strategy. As we said above this is already part of the complexity reduction. From a logical point of view a systematic development of a new strategy would lead to an infinite regress of reflections (Dietel/Seidl 2003) paralysing any real action (cf. Brunsson 1982). In order to prevent such paralysis the starting point has to be chosen more or less arbitrarily, which then might bear some problems of legitimacy. The further the new strategy is away form the existing strategies the less likely it is to be accepted. Instead of developing new strategies oneself, one can also draw from the stock of general strategy concepts existing in the organisation’s environment. At any one time there usually are lots of such general concepts being developed and propagated by institutions in the organisation’s environment; in particular consulting firms and management schools. Many authors also speak of these general concepts as management fashions (e.g. Abrahamson 1996; Kieser 1997). All of these concepts seem to be particularly geared towards solving exactly such kinds of problems. A major advantage of these general concepts is that they usually provide the rationale for selecting the concept together with the concept. They usually give explicit reasons why one should draw on them. As Kieser writes, “the new principles are linked to highly treasured values – besides efficiency, the enrichment of jobs, the competitive edge of the national economy, full employment, customer satisfaction, flexibility, creativity, innovativeness of the company etc. “ (1997: 58; references omitted). In other words, the 2 One can of course argue that managers who have been involved with the organisation often lose sight of alternatives to the current way of organizing. Thus, somebody from outside might bring in a new perspective. This is certainly true to some extent. It is however questionable whether this can compensate for their lack of experience of the organisation. 6
  7. 7. general strategy concepts are self-substantiating. Thus, for the manager drawing on such a concept the reason for adopting the concept comes together with the concept. This relieves the managers drawing on the concepts from detailed reasoning (Kieser 1997: 65). In addition to that these concepts often are developed and/or propagated by highly reputable consulting firms. Their reputation can itself serve as a source of legitimacy for the concepts. In other words the legitimacy of the consulting firm is transferred onto the concept itself. Kirsch (1997) in this sense speaks of “secondary knowledge”, i.e. knowledge not about the concept itself but about something connected with it. Similarly to the reputation of the consulting firm legitimacy for the concepts is also often provided through an explicit connection of the concept to academia or science in general. The concepts are either supported by some kind of empirical tests, which as Kieser (1997: 60) writes might be more or less adequate. Or university professors are propagating these concepts bestowing the concepts with legitimacy through their own position (Kieser 1997: 63). In addition to that many of the general strategy concepts are part of a ‘public discourse’ on management. These concepts often become generally accepted norms of good management; they often come to be seen as describing some kind of “best practice”. As the neo- institutionalist studies have shown, such general management concepts often are not only perceived as legitimate forms of management, but they are also expected to be adopted by all organisations. Organisations rather have to justify if they do not adopt them (Meyer/Rowan 1977; Powell/DiMaggio 1991, Abrahamson 1996). For the strategist the choice between developing strategies himself or drawing on existing strategy concepts seems fairly easy to be made. On the one hand he is under pressure to change the strategy; on the other hand there are strategy concepts that are almost forced onto him. Adopting the general strategy concepts, thus, seems a natural thing. The risk associated with the new strategy seems not too great. As Kieser (1997: 63; similarly Astley/Zammuto 1992: 457) writes: Through management fashions managers can fight their fears without having to take the risk of provoking criticism or even ridicule, because they are members of a recognized group. 4. The problem of idiosyncrasies 7
  8. 8. While general strategy concepts are very attractive for managers under pressure to change their strategies, they have a fundamental problem: they cannot account for the idiosyncrasies of concrete organisation. As many authors have pointed out, organisations develop idiosyncratic contexts within with the world is experienced and actions are undertaken. For example Kirsch (1997), drawing on Habermas, argues that every organisation possesses an organisation-specific lifeworld (Lebenswelt); consisting of a specific culture (conceptualised as a set of interpretative schemata), a specific institutional order (conceptualised as a set of taken-for-granted rules) and specific personality structures. This lifeworld is itself manifested in a multiplicity of organisation-specific forms of life and language (“Lebens- und Sprachformen”). The lifeworld determines the way that the organisational members act and interact. Everything going on in the organisation is interpreted by the organisational members against the background of this lifeworld. In this sense new ideas - like new methods, concepts, or systems - coming from outside the organisation only become relevant internally to the extent that they in some way or other can be connected to the organisational lifeworld. This, as Kirsch argues, is very restrictive. Other authors highlighting particularly the recursivity of organisational life take a similarly critical view towards the possibility of external ideas entering into the organisation. Luhmann (2003) even goes so far as to conceptualise organisations as self-referentially closed systems. He writes: Based on the assumption of a self-referential closure, all external references used in the system must be understood as internal operations. Thus, there are no examples of external ‘sources’ of authority… Likewise, no additional criteria, i.e. goals (“Zwecke”), are at play…. There is no such thing as an independent reality that may influence an organization directly. (pp. 32-33; emphasis added) Whatever takes place in an organisation is determined by the operations that have taken place in the past. Or the other way around, every operation determines what other operations will be possible in the future. The organisation in this sense is history-dependent (von Foerster 1991). Through its own history it individualises itself (Seidl 2003: 131). Other authors would speak of path dependence. Thus, for external concepts to be able to be applied internally it would be necessary for them to fit exactly the momentary conditions of that organisation. 8
  9. 9. Against this background it seems highly questionable how strategy concepts could be both general enough as to refer to a wide range of organisations and specific enough to fit the idiosyncratic conditions of each particular organisation. In addition to the problem of general strategy concepts having to be able to account for different organisational contexts, some authors have pointed out that such general strategy concepts are originally embedded in discourses very different from the organisational discourse. Kirsch (2002) in this sense speaks of different spheres of communication which cannot so easily be translated into each other. Academics, consultants and clients speak “different languages” (p. 321), which often are incommensurate. Attempts at translating between the different spheres are usually very “distressing” (p. 321). Similarly Astley and Zammuto (1992) speak of different “language games”. Luhmann in a similar vein speaks of the discourses belonging to different functional systems which follow different logics; in particular: the systems of science, education (in particular in business schools) and economics. Each of these systems possesses its individual code according to which the communications become meaningful. Scientific communications for example are guided by the code true/false while economic communications are guided by the code revenue/expense (Luhmann 1995). In each of the different discourses the strategy concepts possess a different meaning. Communication across these systems is not possible. As Luhmann and Fuchs (1989) write, in order to transfer a scientific communication into a discourse within a different functional system it would be necessary to transfer also the entire background of theories in which the communication is embedded. And even if that was possible, the meaning of the communication would be a different one as the entire complex would be interpreted according to a different logic. Organisations are not interested in scientific truths as such; they are mostly interested in performance improvements. This however is not part of scientific reasoning (Kieser 1999; Nicolai 2003). As Nicolai points out, even where science deals with the question of performance it is dealt with in a scientific way that cannot be transferred to individual organisations. Kieser (1999) in this sense speaks of a ‘decoupling’ of the scientific and the practical discourses. One could even speak of consulting forming a separate system following a specific system logic. Luhmann and Fuchs (1992: 215) in this sense speak of an eigen-language (“Eigensprache”) of consultants. Astley and Zammuto (1992) describe organizational science and managerial practice as different “language games”. This as Kieser writes, leads to communication barriers between them: 9
  10. 10. Management science, consulting and management praxis […] are highly autonomous systems that have developed different criteria of success and different languages; because of that they have erected considerable communication barriers between each other. (Kieser 1999: 77; my translation; see also Kieser, in print) Thus, to summarise, the transfer of general strategy concepts into concrete organisations seems in two respects particularly problematic. First, the individuality of organisations seems to exclude the possibility of one concept fitting several organisations. Second, the general strategy concepts are usually embedded in scientific, educational or consulting discourses, which differ considerably from the concrete organisational discourses. A transfer of the concepts from one discourse into the other, thus, seems problematic. In contrast to our theoretical reservations toward the transferability of general strategy concepts, empirically these concepts seem very well widely distributed. The same concepts are analysed in academic journals, taught at business schools, discussed in consulting circles and applied to business organisations. Examples abound: portfolio management, lean management, quality circles, business process reengineering, boundaryless organisation, fractal company… How can this be explained? What we observe here, as can be argued, is just a seeming diffusion of strategy concepts. These ‘general’ strategy concepts are not, and cannot be, introduced into individual organisations. Rather, what we find in the different organisations are very different concepts and related practices. The impression of the diffusion of the general strategy concepts, however, is created through the organisations’ using the same (complexes of) labels for their practices. In other words, the concrete practices behind the labels in different organisations are very different. But why then are the same labels attached to the different concepts? In order to answer this question we have to go back to the starting point of our discussion. There we identified the dilemma of strategists having to come up with new strategies from time to time although not having a clear picture of the organisational complexity. Because of that, drawing on the general strategy concepts discussed in the organisation’s environment seemed a natural solution. However, what ultimately is drawn upon is not the strategy concept as such but the (complex of) labels attached to it. In other words what is transferred is not the concept but the label. Instead of the strategy concept being applied to the organisation the organisation 10
  11. 11. is stimulated to develop, or better: to invent, its own concepts and practices. For the strategist this at first seems to contradict the original purpose of drawing on the general concepts, i.e. to take the bourdon of having to develop the new strategy himself. However, the strategist mostly isn’t aware of his own contribution to the invention of the strategy. He rather is under the illusion of just applying the general concept. This provides him with the necessary confidence for making his ‘blind’ choices. How can we conceptualise this process of organisations inventing their own strategy concepts? As we pointed out above, the same semantics have different meanings in different contexts or within different language games. In this sense the transfer of a label from one discourse into another, in our case from a scientific or consulting discourse into the organisational discourse, goes hand in hand with a re-interpretation of that label. Internally this introduction is experienced as an ‘irritation’ that leads to system-specific reactions to it. In other words, the organisation starts developing new practices trying to accommodate the new labels. Whenever organisations proclaim to be applying a new strategy concept one finds long discussions – initially amongst senior managers, later also amongst other members of the organisation – about the interpretation of the labels and how they can be related to the existing organisational practices. In these discussions new (organisation-specific) concepts are developed from organisational practices already in place. The use of the same label for the organisation-specific concept however gives the impression of a direct correspondence with the external concept. The invention of the new strategy in response to the proclaimed introduction of the new concept isn’t however completely arbitrary. Rather, the labels and ‘sub-labels’ guide the development of the new concept, however, the way that it is guided depends itself again on the existing organisational practices. In other words it is again the organisation that constructs a guide from the labels. Kieser (1997: 59) quoting Champy (1994: 99) in this sense writes: [T]he manager who wants to implement a new management concept ‘joins a journey whose duration no one really knows and for which there are no maps’. As Luhmann (2003) points out anything coming from outside the organisation is processed in a system-specific way. 11
  12. 12. What strategy concept ultimately is invented on the basis of the introduced label cannot be predicted from outside. In some cases organisations will accomplish a fundamental change. In other cases the existing structure will hardly be affected; what is taking place instead is merely a re-labelling of the existing practices. In this sense Brunsson and Olsen note with regards to reforms in general: It is quite possible not only to launch, but also to implement reforms at the level of talk […] Consistency between the talk of the reformers and the reformees makes the reform seem implemented (1993: 87). Thus, it might be that the actual organisational practices remain unchanged despite the new labels. For the strategist under pressure to change the strategy from time to time the change of label might be enough as long as the illusion of an associated change of practices is preserved. Such practices of just changing the labels have been widely observed (e.g. Brunsson 1989, Ashforth/Gibbs 1990; Elsbach 1994). While this is often portrayed as intentional deception there are many cases where the involved actors themselves believe that they have changed the organisational practices. Through the new label they experience the same practice differently. In order to conceptualise the process of ‘general’ strategy concepts giving rise to the invention of a system-specific strategy concept we can draw on the concept of the ‘co-evolutionary knowledge creation’ by Kirsch and Eckert (Kirsch/Eckert 2002; Eckert 1998). According to this view knowledge is never transferred from one person to another. This is not possible as knowledge is always context specific. Rather what is happening is that when a person draws on ‘external’ knowledge in actual fact he constructs new context-specific knowledge. As Kirsch and Eckert (2002: 336; my translation) write: Any transfer of knowledge implies a context-specific new production of knowledge […]. Applied to the case of ‘general’ strategy concepts this would mean that whenever such concepts are made use of inside an organisation they are in actual fact newly constructed according to the organisation-specific context. Thus, the internal and the external concept are different concepts. This, however, doesn’t mean that there is no correspondence between the internal and external concepts. Rather - as expressed with the word “co-evolutionary” - the 12
  13. 13. internal process of creating the new concepts in some way or other co-evolves with the development of the external concept. The system-specific re-invention of the ‘general’ strategy concept is, however, only possible if the organisation finds some point of connection to the label. That is the different labels and sub-labels must in some way or other be open to be interpreted according to the existing organisational practices. Indeed, one finds that the most popular strategy concepts leave great “room for interpretation”. Many authors have commented on the ambiguity and vagueness of general strategy concepts (e.g. Kieser 1997; Ernst/Kieser 2003; Clark/Salaman 1996; Astley/Zammuto 1992). While some authors see this ambiguity fairly critically, other authors have pointed out – in accordance with our line of reasoning - that only by being ambiguous and vague there is a chance of ‘general’ strategy concepts to be able to be ‘fitted’ to the concrete organisational practices. Also Astley and Zammuto emphasize the flexibility of concepts created through linguistic ambiguity. Linguistic ambiguity […] gives conceptual terminology great flexibility of application, allowing words to take on new meanings in the context of a different language game. (Astley/Zammuto 1992: 453) A particularly important linguistic device for increasing the flexibility of the concepts is the use of metaphors. Many of the ‘general’ strategy concepts are put in the form of metaphors (cf. Kieser 1997; Ernst/Kieser 2003; Astley/Zammuto 1992): reengineering, lean management, fractal company, network organisation etc. The important point about these metaphors is that they taken for themselves are almost devoid of meaning and only develop meaning in the concrete context to which they are applied. As Debatin (1995:97) points out, the meaning of a metaphor is recursively created in the interaction with the other semantic field - in our case the organisation to which it is applied to. What becomes particularly clear in the case of metaphorical concepts is that it is the organisation itself that determines – by way of bestowing the metaphor with meaning – how it is guided by the strategy concept. For the organisational members however it seems as if the concept is coming from outside together with its particular meaning. 13
  14. 14. In addition to their linguistic flexibility ‘general’ strategy concepts often leave completely open how they should be implemented. In other words they leave it to the organisations to make with it what they want. Kieser in this sense writes: Ambiguity is also created by the lack of a precise description of the implementation process. (Kieser 1997: 59) [Usually] the author [presenting a new management concept] does not instruct the manager, instead he simply points out outstanding solutions that were achieved by extraordinary managers. (Kieser 1997: 58) Thus, what the strategists do with the general strategy concepts is completely left open. The less there is in way of concrete descriptions of how to implement the strategy concepts the easier it is to re-invent a corresponding internal strategy concept. To summarise our argument so far; the idea that organisations apply general strategy concepts to their concrete organisational practices is illusory, as, first, such general concepts cannot account for the idiosyncrasies of individual organisations, and, second, the discourses in which these concepts originally are embedded follow a different logic than the organisational discourses. However, while the concepts themselves cannot be transferred the labels and ‘sub- labels’ attached to them can very well be. Thus, rather than introducing a new strategy concept strategists introduce new (complexes of) labels which give rise to the invention of a context-specific new strategy concept. This reinvention of the strategy concept usually remains latent. That is to say, the strategists themselves are not aware of the difference between their own and the general strategy concept. The context-specific re-invention of the strategy concept is facilitated by ‘general’ strategy concepts usually being vague and ambiguous. Particularly important in this respect are metaphorical labels as their meaning is dynamic in that their meaning is determined by the concrete context to which they are applied. 5. The reproduction of general strategy concepts 14
  15. 15. So far we have focused our discussion on the individual organisation drawing on general strategy concepts. In the following we want to widen our focus and analyse the relation between all actors involved in the production and reproduction of ‘general’ strategy concepts. Assuming that every organisation invents its own strategy concept, one might ask: what is it that actually gets reproduced? Or when people speak of management fashions (e.g. Abrahamson 1996; Kieser, 1997): what is the fashion if every organisation is inventing its own concept? The picture gets even more complex if we acknowledge that the discourse outside the organisation isn’t a homogenous one. Not only do we have to distinguish between scientific and consulting discourses as two different discourses, but the two are themselves not homogenous. Rather, science and consulting are themselves made up of many different discourses. As Kuhn (1962) and others have argued we have to distinguish different scientific communities that are formed around different scientific paradigms. These paradigms shape the scientific discourses. The relation between the scientific discourses is one of incommensurability. This incommensurability between different co-existing paradigms in organization and management theory has been noted by many academics (see e.g. Burrell/Morgan 1979; Burrell 1996; Scherer 1998). The important point about the incommensurability is that elements of one scientific discourse cannot be transferred into another one. With regard to our general strategy concepts this means that the ‘scientific meaning’ of the concept is not the same throughout science. Rather, we again have to acknowledge that the ‘same’ concept is a different one in the different scientific discourses. For the consulting discourse the same holds true. Instead of one discourse we are dealing with multiple consulting discourses often following very different logics. Kirsch and Eckert in this sense write: [O]ne cannot assume a single consulting discourse. Rather, one has to acknowledge the multitude of different consulting traditions. (Kirsch/Eckert 2002: 335; my translation, original emphasis) Thus, even in the field of consulting we cannot assume that the ‘same’ concept is the same across different discourses. 15
  16. 16. Also the direction of ‘diffusion’ of the general management concepts is more complicated than mostly acknowledged. While we so far have analysed the issue as if the ‘diffusion’ of the general strategy concepts was unidirectional, from the consulting to the management practice, the actual practice looks quite different. Very often consultants draw on strategy concepts developed in concrete organisational contexts (Kieser 1997; see also Whittington et al. 2003); or to be precise: consultants invent new concepts in reaction to developments in concrete organisations. In addition to that consultants often revise and develop further their general strategy concepts in the interaction with the organisational practice. Kirsch and Eckert in this sense write: [T]he image of the consultant as knowledge producer and the focal organisational practice as recipient of this knowledge is increasingly abandoned in favour of a symmetrical relation of the two observers. (Kirsch/Eckert 2002: 336; my translation) Similarly, the relation between management practice and science has to be viewed symmetrically. Many strategy concepts discussed in scientific discourses were originally stimulated through management practice. Galbraith famously wrote: I know of no new form of organization that was invented by organization theorists while advancing theory. Instead, the researchers record what the inventive practitioner creates and give it labels like grids, systems 4, or matrix organization. (Galbraith 1980: 162; on this issue see also Kiser 1995) These scientific discourses, however, then might stimulate again the organisational discourses leading to new strategy development there (cf. Astley/Zammuto 1992: 454). We can generally say that all discourses can, and do, stimulate each other. The relation between all types of discourses, i.e. scientific discourses, consulting discourses and organisational discourses, as well as the different discourses within science, consulting and organisational practice should thus (a priory) be conceptualised as symmetrical. Although the different discourses are clearly differentiated from each other they are at the same time highly interrelated. In this sense we can conceptualise the different discourses 16
  17. 17. forming an ‘ecology’ of discourses (in analogy to Vickers’s (1968) and Kirsch’s (1997: chpt.3) concept of an ‘ecology of knowledge’3) in which the different discourses are interrelated in such a way as to mutually stimulate each other. Vickers (1968: 34) writes about the concept of ecology: [The ecologist] develops first the idea of interdependence. In a field of variables so closely and mutually interrelated, any change anywhere will in some degree affect the whole. The entire field of different organisational, scientific and consulting discourses is not viewed as one single (macro-) discourse but as an ecology of many different (parallel) discourses which stimulate each other but are autonomous with regard to their logic of reproduction. The important point about the concept of the ecology is that it forces us to think in circles (cf. Kirsch/Eckert 2002). Developments in one discourse (might) give rise to developments in other discourses, which ultimately again (might) stimulate developments in the initial discourse. In order to conceptualise the way that the different discourses stimulate each other, we suggest conceptualising them as observers (cf. Luhmann 1995; Kirsch 1997; 2003; Von Foerster 1981) - to be precise, as communicative observers: The participants of such discourses observe (i.e. perceive) what is going on outside the discourse. When they try to communicate their observations within that discourse the perceptions have to be transformed into communications that conform to the logic of that particular discourse. That is to say, the participants give rise to ‘corresponding’ communications that are determined in their form and their meaning by the logic of the specific discourse. In this sense the resulting communication can be said to be a product of the discourse rather than the individual person involved in it (cf. Hendry/Seidl 2003)4. To the extent that this is the case we can speak of the communicated observation as the discourse’s observation. Or in other words, a discourse observes its environment by producing communications about it. Due to their different logics different discourses produce different communications about the ‘same’ environmental 3 In contrast to Kirsch (1997), however, we do not assume a ‘pool of ideas’ or ‘pool of knowledge’. 4 As communication always involves at least two persons – one that produces the utterance and the information and the other one who contributes the understanding - the communication cannot be reduced to the product of one person. Rather, a communication (or better: communicative event) is the product of the interaction of these persons or, in other words: their discourse (Luhmann 1997: 81). 17
  18. 18. phenomena, i.e. every discourse observes – and in this sense ‘constructs’ - its environment differently.5 Following this suggestion, we can also speak of discourses observing each other. A scientific discourse might for example observe what strategy concepts feature in a consulting discourse (e.g. a scientific article analyses the strategy concepts presented by consultants at a consulting seminar). Or a consulting discourse might observe what strategy concepts are communicated about in a specific scientific discourse (e.g. consultants speak at a consulting seminar about the strategy concepts presented in a scientific article). Or a consulting discourse might observe what strategy concept is communicated about in another consulting discourse (e.g. consultants from one consulting firm discuss the strategy concepts of another consulting firm). The important point here is that the different discourses do not ‘import’ the communications of the other discourses, but they produce their own construction of the other communication. In other words the communication in one discourse about the communication within another discourse is not a copy but a completely different – however corresponding – construct. In addition to observing each other the different discourses can also observe how they are being observed by other discourses and how other discourses observe each other. In this sense we get a dynamic picture of mutual observations between the different discourses in the course of which the different discourses create, refine, revise, change and recreate different constructs in their different contexts. While any discourse is involved in a network of mutual observations with other discourses, in our specific case the different discourses have a common point of reference: the general strategy concepts. The different discourses observe each other with regard to (apart others) particular general strategy concepts. The labels attached to these concepts serve as orientation for the observations. Thus, the different concepts of the different discourses are treated as the same due to the same labels (and sub-labels) being attached to them. To the extent that the different discourses are perceived as treating the same concepts (due to using the same labels) the illusion of these discourses forming one (macro-) discourse about the same concepts is created. The participants of the different discourses in this sense are perceived as contributing to a (macro-) discourse on the particular concepts, while in actual fact they are just reproducing their specific (organisational, scientific or consulting) discourses. 5 Ultimately observation is construction (Spencer Brown 1979) 18
  19. 19. The different discourses are sometimes interrelated in such a way as to mutually amplify their communications about their respective strategy concepts – resembling an amplifying feedback loop (Maruyama 1963). In this sense, if one discourse observes that another discourse communicates about the (allegedly) same strategy concept this might encourage a more intensive treatment in the initial discourse. This again might, if observed by the second discourse, increase their efforts and so on. As noted above, the effects of this amplification also depend on the way that the different discourses observe each other. For example the discourse of a reputable firm is more likely to stimulate communications in other discourses than the discourse of an unknown organisation. Often the observation is even indirectly; one only observes other discourses observing other discourses. For example, an organisation might observe a scientific discourse (e.g. a scientific article) that observed a consulting discourse (e.g. a McKinsey report) observing that a particular strategy concept featured in a high percentage of organisational discourses (e.g. ‘60% of US companies have been reengineered’) . This, then, might increase the own efforts at ‘implementing’ this concept also in the own organisation (i.e. they invent their own strategy concept to which the particular label can be attached). To the extent that such mutually amplifying processes can be observed the literature speaks of the development of a ‘management fashion’ (e.g. Kieser, 1997; Abrahamson 1996). Ernst and Kieser write about such processes: The wave of a management fashion gains momentum through adoptions. The more companies that are reported as having achieved competitive advantages through the implementation of a management concept […] the higher the propensity of non-adopters to get on to the band-wagon […] (Ernst/Kieser 2003: 14-15) This mutual amplification is supported by the fact that the evaluation of different strategy concepts proves very difficult, if not even impossible. Apart from the problem of selecting an appropriate performance measurement (cf. REF.) the number of factors involved in the organisational processes is usually so high that the strategy concept’s contribution to the performance outcome cannot be calculated.6 Kiser in this sense write: “An ‘objective’ evaluation of some exactness of a complex restructuring project is impossible” (Kieser 1997: 67; see also Nicolai/Kieser 2002; Ernst/Kieser 2003). This fact combined with the strategists’ having to justify their strategic choices tends to produce predominantly positive reports about 6 This has to do with the problem of complexity noted at the beginning of the paper. 19
  20. 20. applications of general strategy concepts independently of their ‘true’ effects. As Kieser referring to Brunsson and Olsen (1993) writes: The managers who initiated a restructuring programme have a fundamental interest in presenting it in seminars or magazines as a successful application of a new management concept, as an additional reference case. (Kieser 1997: 67) Sometimes (more and more often) the mutual amplification of communications about strategy concepts in the different discourses is also actively encouraged - one could almost say: engineered - by certain interest groups (particularly strategy consultants) who profit from the ‘dissemination’ of certain strategy concept (or better: the dissemination of certain labels for strategy concepts). This includes in particular the encouragement of mutual observations between different discourses (on other mechanisms see Kieser 1997): On the one hand they offer themselves as ‘observational intermediaries’ in that they (selectively)7 observe the application of certain strategy concepts in a number of organisations and offer this observation to other organisations. For example, they present success stories about concrete organisational applications. On the other hand they create spaces for (selective) mutual observations of different discourses, for example in the form of seminars in which experiences with certain strategy concepts can be ‘exchanged’.8 Such seminars tend to have an amplifying effect as they additionally support the efforts in the different discourses. As Kieser writes: Events like this do not serve enlightening, critical discourse. They are the opposite: rituals of confirmation, sometimes even celebrations […] The central function of a seminar or congress ritual is to confirm the participants’ convictions that they are on the right track. (Kieser 1997: 65) Often such amplifying feedback processes gain considerable momentum until they finally slow down when the concepts are either replaced by new concepts or the strategy labels simply lose their attraction (on reasons for the down-turn of management fashions see e.g. Kieser 1997; Abrahamson 1996). 7 These observations are mostly ‘selective’ as they only observe predominantly ‚positive’ cases. 8 The seminar itself can be seen as a discourse which again stimulates developments in the discourses the participants of the seminar originally came from. 20
  21. 21. At this point we want to summarise our re-conceptualisation of the reproduction of general strategy concepts before we then attempt to contrast it with the ‘classical’ social practice perspective (see figure 1). We have suggested conceptualising the ‘organizational field of strategy’ (Whittington et al. 2003) as an ecology of different (organisational, scientific and consulting) discourses. While the discourses are autonomous in that they reproduce themselves on the basis of their idiosyncratic logics they are related to each other through mutual observations; observations of the communications of other discourses, observations of one discourse of how it is being observed by other discourses and observations of how other discourses observe the mutual observations of third discourses. All these observations are constructions of the respective discourses and, thus, lead to idiosyncratic developments in these discourses. The labels (or complexes of labels) that are attached to the different strategy concepts in the various discourses serve as orientation for these mutual observations. By different discourses attaching the same labels to their idiosyncratic strategy concepts the illusion of shared strategic practices is created. Externally this illusion provides legitimacy; internally it facilitates the invention of new (organisation-specific) strategy concepts, as the invention is experienced as ‘application’ of an established general strategy concept. In contrast to our conceptualisation, the ‘classical’ social-practice perspective on strategy (e.g. Whittington 2002; 2002a; Whittington et al. 2003; Jarzabkowski 2003; forthcoming) assumes - in our terminology - a unified macro-discourse on strategy on the societal level. This macro- discourse provides a “stock of practices” (Whittington 2002a) - in our specific case here: general strategy concepts - that strategists in their local and situated praxis draw upon. In other words, strategists apply – ‘use’ or ‘consume’ (de Certeau 1988) – the general strategy concepts to their concrete organisational circumstances. While any application is a ‘creative’ application, in which the strategy concept is interpreted in a context-specific way, there is no doubt that it is the same concept that is applied. The ‘practice’ (here: the general strategy concept) and the ‘practice-in-use’ (Jarzabkowski forthcoming) are conceptualised as different categories, nevertheless it is the same practice that ‘features’ in the practice-in-use. In this sense when strategists draw on such general strategy concepts they reproduce (or amend) that very concept. Whittington writes: As they follow, synthesise or interpret these strategic practices, strategy practitioners reproduce, and occasionally amend, the stock of practices on which they will draw in their next round of strategising praxis. (Whittington 2002a) 21
  22. 22. Drawing on Giddens (1990) this issue is often portrayed as one of ‘disembedding’ and ‘reembedding’ of strategy practices. The ‘stock of strategic practices’ is conceptualised as disembedded from the concrete praxis in which it was developed. When these disembedded practices get drawn upon, they get reembedded into a new local and situated praxis. The more similar the praxes in which the practices get embedded are, the more similar the outcome of the practice-in-use will be (cf. Brown/Duguid 2001). But even if the praxes are very different it is still the same strategy practice that is embedded. ‚Classical’ practice perspective Systems perspective Discourse III Macro-discourse Discourse I Stock of disembedded strategy concepts Recursive irritations Discourse II reembedding reembedding disembedding through the use of identical labels Discourse IV Discourse I Discourse II Discourse III Figure 1: ‘Classical’ practice perspective and systems perspective Thus, comparing our conceptualisation above with (our description of) the ‘classical’ social practice perspective the most important difference seems to be that the latter assumes a stock of disembedded general strategy concepts which get applied to the different strategy discourses, while we see this as illusion.9 Any strategy discourse – whether scientific, organisational or consulting - is idiosyncratic and produces its own strategy concept; there is no higher, ‘trans-discoursive’ level or meta-discourse providing disembedded strategy concepts to be drawn upon in the concrete praxis. There is neither an exchange of general strategy concepts between different discourses; only the (complexes of) strategy labels are ‘exchanged’ leading to the (re-)development of the system-specific concepts.10 9 However, from our perspective, we agree with the existence of an internal ‘stock of practices’ within the organisation, but not beyond its boundaries. 10 If one still wanted to stick to the ‘classical’ practice perspective, one could at most conceptualise the (complexes of) labels as the disembedded practices that are drawn upon in the different strategic praxes. This would also fit with the conceptualisation of practices as ‘texts’ and the application of these practices as context- 22
  23. 23. Ultimately the two perspectives might not be so far apart; they merely put different emphasis on the issue. While the ‘classical’ practice perspective emphasises the identity of the strategy concepts and then goes on to analyse how the concepts-in-use differ in the different contexts, we emphasis the difference between the strategy concepts and then go on to analyse what types of ‘correspondence’ there exist between the different concepts.11 Nevertheless the different emphasis tends to focus the researcher’s attention on different aspects of strategising processes. 6. Summary and conclusion In this paper we have presented a new perspective on the role of general strategy concepts in the practice of strategy. We started off with a description of strategising as an activity of complexity reduction. This reduction is necessary in order to make organisational action possible. Due to the risk associated with new strategies strategists tend to prefer drawing on concepts already established amongst their peers. Externally this provides them with legitimacy and internally with courage for action. However, the introduction of such general strategy concepts into the organisational practice, as we argued, is due to the idiosyncrasies of the organisational contexts not possible. Instead of introducing the general strategy concept strategist inadvertently develop new (context-specific) strategy concepts, to which they, however, stick the same label. Moving to a higher level of analysis we suggested conceptualising the ‘organisational field of strategy’ as an ecology of many different discourses that mutually observe each other with regard to their strategy concepts. As the different discourses use the same label for their own strategy concepts the illusion of an identity of the different strategy concepts is created. Based on this illusion the different discourses stimulate their respective activities regarding the development of their own strategy concepts. We finished with a comparison of the presented perspective with the ‘classical’ social practice perspective on strategy. The two perspectives seem to offer complementary approaches to the same issue, however highlighting different aspects of it and, consequently, leading to slightly different research questions. While the latter focuses our attention on how the same concepts lead to different processes in the different discourses, the specific ‘reading’ of these texts (cf. La Ville/Mounoud 2003). 11 Compare in this respect the distinction between input-type description and closure-type description by Varela (1984). 23
  24. 24. latter focuses our attention on how different discourses despite their differences still influence each others strategising. 24
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