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SMS Berlin 2016 Cultural Perspectives on Strategic Management

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Strategic Management Society 2016 Conference
Berlin, Germany
Sunday, September 18
Session 253 - Cultural Perspectives on Strategic Management
Track J

Session Chair
Joel Gehman, University of Alberta
Krsto Pandza, University of Leeds

Session Panelists
Shahzad Ansari, University of Cambridge
Rodolphe Durand, HEC-Paris
Candace Jones, University of Edinburgh Business School
Michael Lounsbury, University of Alberta
Richard Whittington, University of Oxford

This session aims to spark conversations between scholars at the intersection of strategic management and organization theory. In particular, we hope the event will generate awareness of, stimulate interest in, and set direction for research at the SM-OT interface. Especially, the panelists will address potential connections between perennial strategy topics such as resources, capabilities, innovation, competition, governance, nonmarket strategy and strategy process and practice and topics of central interest to organization theory such as institutional logics, organizational forms, legitimacy, creativity, framing and categories. Panellist will identify the most promising questions that could benefit from integrating strategy and organizational theory concepts as well as discussing possible challenges of such a theoretical bricolage.

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SMS Berlin 2016 Cultural Perspectives on Strategic Management

  1. 1. Cultural Perspectives on Strategic Management Joel Gehman and Krsto Pandza SMS Berlin, September 18, 2016
  2. 2. Goals for the session? 1) Spark conversations between scholars at the intersection of strategic management and organization theory 2) Identify the promising questions that could benefit from integrating strategy and organizational theory concepts 3) Discuss possible challenges of such a theoretical bricolage
  3. 3. To help this process Please jot down thoughts or questions for the question and answer period
  4. 4. Our panelists Shazhad Ansari, University of Cambridge Rodolphe Durand, HEC Paris Candace Jones, University of Edinburgh Michael Lounsbury, University of Alberta Richard Whittington, University of Oxford
  5. 5. Cultural Perspectives on Strategic Management Shaz Ansari University of Cambridge SMS 2016 Berlin
  6. 6. Rich and growing body of work • Strategy about process • Strategy about practice • Strategy about temporal work • Strategy about leveraging logics as resources and managing institutional complexity • Strategy about managing stakeholders • Strategy about navigating paradoxes
  7. 7. Promising avenues: Fields and ecosystems Fields: “those organizations that, in the aggregate, constitute a recognized area of institutional life: key suppliers, resource and product consumers, regulatory agencies and other organizations that produce the similar services or products” (DiMaggio & Powell, 1983) p. 148). Ecosystems: Dynamic and co-evolving communities of organizations, customers, competitors, suppliers, producers, financiers, trade associations, standard bodies, labor unions, governmental and quasi-governmental institutions, and others who create and capture new value (Moore, 1996).
  8. 8. Promising avenues (Framing and innovation) • Non essentialist view of disruptive innovation; reframing involves a change in emphasis from the “disruptive” aspect of the innovation that upstages established incumbents, to the beneficial aspect of the innovation that can enhance the value generated for and by various incumbents within the ecosystem (Ansari, Garud, Kumaraswamy, 2016 in SMJ)
  9. 9. Challenges of theoretical bricolage • Specialized reviewers and vocabularies • Discomfort with terminology from “other side” or with what is perceived to be presenting “old wine in new bottles” • Perceived novelty for scholars in both camps • Fusion versus intercalation of concepts
  10. 10. Our panelists Shazhad Ansari, University of Cambridge Rodolphe Durand, HEC Paris Candace Jones, University of Edinburgh Michael Lounsbury, University of Alberta Richard Whittington, University of Oxford
  11. 11. Strategy/O.T. rudy durand HEC Paris
  12. 12. Strategy : performance; novation What if performance is not the right DV? What if novation is not the right IV? Durand R., Rao H., and Monin P. (2007) Code and Conduct in French Cuisine: Impact of Code-Changes on External Evaluations, Strategic Management Journal, 28 (5): 455-472 Durand R. and Vaara E. (2009) Causation, counterfactuals, and competitive advantage, Strategic Management Journal, 30: 1264-1284 Philippe D. and Durand R. (2011) The differentiated impacts of conforming behaviors on firm reputation, Strategic Management Journal, 32: 969-993 Durand R. and Vergne JP. (2015) Asset Divestment as a Response to Media Attacks in Stigmatized Industries, Strategic Management Journal, 36: 1205- 1223
  13. 13. In my view, every firm’s choice equals a selection-criterion choice that increases or relaxes the selective pressure on competitors. In other words, a Selection Preserving Choice maintains established rules of action and puts pressure on competitors to conform to the current model of competition, whereas a Selection Transforming Choice requires the firm’s competitors to react to new selective rules and criteria. Most markets are mediated (e.g. cultural, experience, hedonistic, financial products) and ribbed/filled with norms and categories
  14. 14. Durand R. (2012) Advancing strategy and organization research in concert: Towards an integrated model? Strategic Organization, 10 (3): 297-303. Vaara, E., & Durand, R. (2012). How to connect strategy research with broader issues that matter?. Strategic Organization, 10(3), 248-254 My recent research investigates the normative and cognitive pillars of strategic choices
  15. 15. OT into Strategy • What do performance and its measures mean really? How do firms strategically create markets and institutionalize metrics to measure their performance? Logics: Thornton, Jones, Lounsbury, Greenwood, Ansari…. Materiality: Mckenzie, Millo, …. Categories: Bowers, Chae, Pontikes, Porac, Smith… • Why and how do firms position themselves and participate in institutional processes, and how do their choices influence the conditions for their competitiveness? Movements: King, Soule, McAdam, McDonnel,… Institutionalization: Ansari, Hiatt, Patterson, Sine, …
  16. 16. Strategy into OT • Why, how and when do institutional and strategy factors drive an organization in selecting the use of its resources? And what are the consequences of these outcomes for those institutional orders and logics that prevail within the field or industry? • Systematic inclusion of both economic and institutional determinants of organizational conformity/deviance, and of their consequences.
  17. 17. Examples Durand R. and Jourdan J. (2012) Jules or Jim: Alternative conformity to minority logics, Academy of Management Journal, 55(6): 1295-1315 Durand R., Szostak B., Jourdan J. and PH. Thornton. (2013) Institutional logics as strategic resources, E. Boxenbaum and M. Lounsbury (eds), Institutional Logics in Action, Part A, Research in the Sociology of Organizations, Volume 39A, 165–201 Durand, R. and P-A Kremp (2016) Classical deviation: Organizational and Individual Status as Antecedents of Conformity, Academy of Management Journal, 59: 65-89 Paolella, L. and Durand R. (2016) Category Spanning, Evaluation, and Performance: Revised Theory and Test on the Corporate Law Market, Academy of Management Journal, 59: 330-351
  18. 18. Our panelists Shazhad Ansari, University of Cambridge Rodolphe Durand, HEC Paris Candace Jones, University of Edinburgh Michael Lounsbury, University of Alberta Richard Whittington, University of Oxford
  19. 19. OT and Strategy • OT’s focus on cultural, historical dynamics and material practices of industries and entrepreneurial strategies illuminates substitution effects and when complementarity versus competitiveness are enacted 0 5000000 10000000 15000000 20000000 25000000 30000000 35000000 0 200 400 600 800 1000 Year 1884 1887 1890 1893 1896 1899 1902 1905 1908 1911 1914 1917 1920 1923 1926 1929 1932 1935 1938 ENR ArchRec Apparent consumption (Metric Tons)
  20. 20. Engineers Imitate & Substitute; Architects Reinvent & Extend Ingall’s Bldg 1903 Monadnock Bldg, Halobrid & Root, 1896 d House 1876, Chester NY 1, rue Danton, Paris. 1892. Hennebique. Unity Temple, 1909 du Rancy Perret, 1922 Fallingwater, Wright 1936
  21. 21. Our panelists Shazhad Ansari, University of Cambridge Rodolphe Durand, HEC Paris Candace Jones, University of Edinburgh Michael Lounsbury, University of Alberta Richard Whittington, University of Oxford
  22. 22. Cultural Perspectives on Strategic Management: Bridging Strategy and Organization Theory Michael Lounsbury SMS 2016, Berlin
  23. 23. Theoretical Prelude: Institutional Theory a la 1980s v Culture foregrounded in Institutional theory which asserted that firms aim to be similar to peers to gain legitimacy and avoid penalties associated with deviance (DiMaggio & Powell, 1983) v Isomorphism (corecive, normative, regulative) became the master theoretical frame for the study of diffusion through the 80s and 90s (Strang & Soule, 1998) v Many Critiques: v Depicted later adopters as passive and “a-rational” v Culture is everywhere, but unitary and dominating v By opposing rationalistic accounts, it maintained a false distinction between institutional (culture) and technical forces v Neglects Practice Variation and messiness of practice and action
  24. 24. Optimal Distinctiveness v The proliferation of isomorphism theory gave rise to a core paradox at the interface of strategy & organization theory: how do firms strategically manage competing pressures to be both “like” and “different from” organizational peers (Durand and Calori, 2006). v In contrast to isomorphism theory, strategy emphasizes firm difference by establishing valuable, rare and inimitable resources to gain competitive advantage (Barney, 1991) v Building on Brewer’s (1991) ideas about how individuals forge unique identities amidst strong normative pressures to conform, scholars have argued that firms need to engage in strategies that achieve optimal distinctiveness—the extent to which audiences perceive this tension to be appropriately reconciled. In turn, audience perceptions are theorized to affect performance outcomes (e.g., Deephouse, 1999; Lounsbury & Glynn, 2001—a core idea in the Cultural Entrepreneurship approach).
  25. 25. Institutional Theory & Optimal Distinctiveness Research in SMJ, 1980-2015
  26. 26. Optimal Distinctiveness v Research has highlighted how OD affects v financial performance (Deephouse, 1999) v resource acquisition (Lounsbury and Glynn, 2001) v corporate governance (Zajac and Westphal, 1994) v firm and stakeholder attention (Ocasio, 1997) v reputation (Basdeo et al., 2006) v The majority of OD publications in SMJ have been grounded in Deephouse’s (1999) idea of strategic balance, focusing on stable, institutionalized contexts and single OD points: v operationalized as an intermediate level of strategic deviation; he measured it as the degree of deviance from a mean industry attribute position (asset strategy of banks). He found a significant, curvilinear relationship between the mean deviation of commercial banks and their financial performance in the Twin Cities area.
  27. 27. Optimal Distinctiveness v Opportunity for a renewed approach to OD & engagement between Strategy & OT (Zhao, Fisher, Lounsbury & Miller, forthcoming SMJ). v In contrast to isomorphism, new developments such as the Institutional Logics Perspective (Thornton et, al., 2012) & the Cultural Entrepreneurship literature (Lounsbury & Glynn, 2001; Garud, Gehman & Giuliani, 2014; Pandza & Thorpe, 2009 have focused more explicitly on agency, heterogeneity, and dynamic social processes v Builds on the “toolkit” conceptualization of culture (Swidler, 1986) and engages practice approaches (e.g., Lounsbury & Crumley, 2007; Smets, Greenwood & Lounsbury, 2015; Seidl & Whittington, 2014; Whittington, 2006) v Although some markets may exhibit relatively static, single OD points, such cases may be rare, and many markets may bear multiple OD points because of multipoint competition (Fuentelsaz and Gómez, 2006), multiple strategic groups (Peteraf and Shanley, 1997), multiple logics etc. v A renewed approach to OD, and the OT/Strategy interface should focus on temporality (Gray, Purdy & Ansari, 2015 AMR), multiple audiences, and the active co-construction of varied OD points
  28. 28. Implications for Category Research v Category research is one of the highest growth areas at the interface of OT & Strategy, but most research has focused on the categorical imperative (isomorphism) and its scope conditions v We need more attention to OD & the social processes of categorization (see forthcoming RSO volume by Durand, Granqvist &Tyllström—From Categories to Categorization: Studies in Sociology, Organizations and Strategy at the Crossroads v How (and how much) can actors deviate from norms? v How and under what conditions is deviance rewarded? v How much variability in a category is acceptable? v How does intra-category variability lead to category change or new category creation?
  29. 29. Logics, Categories & Optimal Distinctiveness v Variability inside categories may be importantly shaped by logics connected to diverse actors and/or audiences v For example, Jones, Maoret, Massa & Svejenova (2012) showed how the logics of commerce, state, religion and family, associated with the clientele (audiences) of architects consequently shaped the formation of the “modern architecture” category v Plural logics & category expansion resulted in multiple conflicting exemplars within the category (e.g., minimalist functional vs. eclectic/organic) v A renewed OT/strategy research agenda might examine how these kinds of socio-cultural processes affect the construction and dynamics of different optimal distinctiveness points in a category
  30. 30. Our panelists Shazhad Ansari, University of Cambridge Rodolphe Durand, HEC Paris Candace Jones, University of Edinburgh Michael Lounsbury, University of Alberta Richard Whittington, University of Oxford
  31. 31. 0 200 400 600 800 2002 4 6 8 2010 12 14 Jean Lave and Etienne Wenger Wanda Orlikowski Dave Knights and Glenn Morgan Google Scholar citations to “Strategy as Practice” p.a. Strategy as Practice: Origins in (the fringes of?) Organization Theory ‘Strategy as something people do, with stuff, in society’ Or Strategizing activity as expression of institutionalized practices
  32. 32. Planning Processes & Performance Processes of Strategic Change Organization and Strategy as Process Practices & Institutions Processes of Practice Change Practices as Work and Entrepreneurship e.g. Ansoff (1990) e.g. Petttigrew (1985) e.g. Langley & Tsoukas (2010) e.g. Fligstein (1985) e.g. Fligstein (1993) Processualists Institutionalists Ontological Convergence on Activity e.g. Fligstein (2001)

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