Rethinking Strategy

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Edited by: Henk W. Volberda & Tom Elfring

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  • Chapters
  • Front Matter
  • Back Matter
  • Subject Index
  • Part I: Theory, Schools and Practice

    Part II: Integration Efforts in the Field

    Part III: The Boundary School: Strategy as a Boundary Decision

    Part IV: The Dynamic Capabilities School: Strategy as a Collective Learning Process to Develop Distinctive Competences

    Part V: The Configurational School: Strategy as a Decision of Transition from One Archetype to Another

    Part VI: New Directions in Strategy: Ways to Synthesize

  • Copyright

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    Dedication

    To our wives and children

    Anna, Lisa and Celine – HV

    Judith, Jasper, Roel and Paulien – TE

    Notes on Contributors

    Henk W. Volberda is Professor of Strategic Management and Business Policy at the Rotterdam School of Management, Erasmus University. He has worked as a consultant for many large European corporations and has published in many refereed books and journals. He is Director of the Erasmus Strategic Renewal Centre, programme director of the Erasmus Institute of Management, Board member of the Rotterdam School of Management, and Secretary of the Dutch-Flemish Academy of Management. He is also Editor-in-Chief of M&O and Management Select, Senior Editor of Long Range Planning, and member of the editorial boards of Organization Science and Tijdschrift voor Bedrijfsadministratie (TBA). He has received many awards for his research on organizational flexibility and strategic change. His book, Building the Flexible Firm; How to Remain Competitive, received wide acclaim.

    Tom Elfring has a chair in Innovative Entrepreneurship at Wageningen University and is Associate Professor of Strategic Management at the Rotterdam School of Management, Erasmus University. He did his PhD research in Economics at the European University Institute in Florence, Italy, and his studies have been published in refereed books and journals. He has been the Director of the PhD programme at the Rotterdam School of Management and Vice-president of EDAMBA.

    Bruce Ahlstrand author of The Quest for Productivity (Cambridge University Press, 1990) and co-author of Human Resource Management in the Multi-Divisional Company (Oxford University Press, 1994), is a Professor of Management at Trent University, Ontario.

    Charles Baden-Fuller has established a reputation on rejuvenating mature firms through his work with CEOs, his academic articles and his book Rejuvenating the Mature Business (Harvard Business Press). He currently works on issues of knowledge management and entrepreneurship in high technology firms, including the practical use of real options and alliance structures. Professor Baden-Fuller holds degrees in Mathematics and Economics from Oxford, Cornell and London Business School of Economics. He is also the current Editor of Long Range Planning, a leading international strategy journal.

    Andy Bailey is a Senior Fellow in the Management Development Division of Lancaster University Management School. His research interests focus on the nature of strategy development, organizational change and processes of increasing individual effectiveness in strategy formulation. He has written a number of papers in the area of strategy process and has worked as a consultant on strategy development and management development with a number of public and private sector organizations.

    Patrice Cooper lectures in Management and Business Strategy at University College, Cork. She is currently pursuing a PhD, concerning leadership and knowledge management. Other research interests include: perspectives on strategy formation, strategic change/corporate transformation and structural change across various industries.

    Thomas Ericson has a PhD in Business Administration from Linköping University. He joined Jönköping International Business School in 1998 as a Research Fellow/Assistant Professor. His research is concentrated on organizational change and leadership with a special focus on social/psychological aspects such as the role of sensemaking in change processes. He is a teacher in organization theory and behaviour.

    Nicolai J. Foss is Professor of Economic Organization, Copenhagen Business School, and Director of the Learning, Incentives and Knowledge Project. His research centres on the understanding of the efficient organization of knowledge and learning processes. His work has appeared in journals such as Organization Science and Industrial and Corporate Change.

    Gerry Johnson is Professor of Strategic Management at the University of Strathclyde Graduate Business School. He is the author of Strategic Change in the Management Process (Blackwells) and co-author of Exploring Corporate Strategy (Prentice Hall) with Kevan Scholes. His main research interests are in the fields of strategy development and strategic change in which he has published numerous papers.

    Paula Kirjavainen is a Post-doctoral Researcher at the Institute for Executive Education, TSEBA, where she is leading a multi-client research and development project on strategic competence management.

    Christian Koenig Associate Professor at ESSEC, received a Masters degree from Harvard University and his PhD from the University of Paris-Dauphine. He has been working on alliance strategies in an international context and on organizational issues related to globalization. As the current Director of the ESSEC MBA programme, he is also involved in innovations in management education. He is the co-author of Perspectives en Management Stratégique, vol. 4.

    Joseph Lampel is a Reader in Management at the University of St Andrews, Scotland. He is a founding member of the Institute for Research on Emergent Policy Processes, and a senior fellow of the International Project in the Management of Engineering and Construction.

    Michael Lawless is at Duke University where he researches and teaches strategic management and management of innovation. His research has been published in AMJ, SMJ, Management Science and Organization Science among other journals. He was Chair of the TIM Division of the Academy of Management, co-founded the Journal of High Tech Management Research, and has held editorial positions at AMJ and Organization Science.

    Joseph T. Mahoney is Associate Professor of Business Administration at the University of Illinois at Urbana-Champaign. He received his PhD in Business Economics from the Wharton School of Business, University of Pennsylvania. His current research interests include vertical co-ordination, transaction costs theory, resource-based theory and dynamic capabilities.

    Anders Melander is a Research Fellow/Assistant Professor at Jönköping International Business School. He has a PhD in Business Administration. His research focuses on the role of industrial wisdom in strategic change and the strategic network as a vehicle to achieve strategic marketing development.

    Leif Melin is Professor of Management at Jönköping International Business School. He is also Head of the Department of Entrepreneurship, Marketing and Management and responsible for the PhD programme. He has a Master of Political Science from Lund University and a PhD in Industrial Marketing from Linköping Institute of Technology, Linköping University. He has published his research results in several books and journals and in the periodical book series ‘Advances in International Marketing’.

    Henry Mintzberg is Cleghorn Professor of Management Studies at McGill University, Montreal, and Visiting Scholar at INSEAD in Fontainebleau, France. He is the author of many books and articles, including Strategy Safari (with Bruce Ahlstrand and Joseph Lampel). He is currently writing a book entitled Developing Managers, not MBAs.

    Johannes M. Pennings is Professor of Organization Behaviour at the Wharton School, University of Pennsylvania. He received his PhD from the University of Michigan. Prior to his current status, he was affiliated with Carnegie Mellon University and Columbia University. His recent research has involved the role of human and social capital for innovation and performance.

    Patrick Regnér is Assistant Professor of Business Policy and Strategy at the Institute of International Business at the Stockholm School of Economics. He received his PhD in 1999, based on his dissertation ‘Strategy creation and change in complexity: adaptive and creative learning dynamics in the firm’.

    Ron Sanchez teaches, publishes and consults in the areas of competence-based strategic management and technology strategy. He has degrees in psychology, comparative literature, architecture, engineering, and management, and received his PhD in Technology Strategy from MIT. He has published several books on the competence-based perspective in strategic management, as well as numerous papers in leading strategic management, marketing, and technology management journals.

    Paul J.H. Schoemaker is Research Director of the Emerging Technology Program at Wharton School, University of Pennsylvania, where he also serves as Adjunct Professor of Marketing. Dr Schoemaker is the founder and Chairman of Decision Strategies International, Inc. His numerous articles and books have been published in over ten languages.

    J.-C. Spender is Dean of the Business and Technology Division at SUNY-FIT, New York. Initially trained as a nuclear engineer and computer salesman, he received his PhD in Corporate Strategy from Manchester Business School in 1980. He also served on the faculties of City University (London), UCLA, Glasgow and Rutgers. He has taught in Japan, New Zealand, Finland, Norway and Sweden.

    Janine Stiles is Head of Strategic Management at Henley Management College. Her research interests over the past seven years have been in strategic alliances and value-added partnerships, developing more recently into issues associated with public/private sector partnerships. Her publications include a number of articles and book reviews in business journals, co-authorship of a book on finance for the general manager and contributions to a number of edited business texts.

    Howard Thomas is Dean of the Warwick Business School at the University of Warwick in England; formerly he was Dean (1991–2000) and the James F. Towey Distinguished Professor of Strategic Management at the College of Commerce and Business Administration at the University of Illinois at Urbana-Champaign.

    Frans A.J. van den Bosch Professor of Management, received his Masters in Economics from the Erasmus University Rotterdam and a PhD from Leyden University. He is a Fellow of the Erasmus Research Institute of Management (ERIM). He has written and contributed to several books and over 80 articles in scientific journals. Among others, his scientific papers have appeared in Corporate Governance, European Management Journal and Organization Science.

    Gilles van Wijk is Professor of Business Policy at ESSEC. Since 1995, he has been Dean of the faculty. He holds a PhD in Management of Organizations from Columbia University, and a diploma in Physics from the Swiss Federal Institute of Technology in Zurich. His research interests include trust, strategic alliances and entrepreneurial strategy.

    Preface

    As we have entered the 2000s, strategy as a field of study has fallen on hard times. Thoughtful members of the academic community are increasingly arguing that the concepts and tools of analysis that formed the backbone of the strategy literature during its major growth, need a basic re-evaluation in order to pave the way for new ideas. At the same time, changing competitive environments are forcing companies in almost every sector to re-examine their strategy. There seems to be a growing consensus among managers that the path to future success leads away from traditional prescriptions advocating top-down control, formal planning and industry analysis. Managers and practitioners are heralding strategy revolution as the new hallmark of organizational excellence. Moreover, the popular business literature on strategic management is replete with prescriptions and directives with regard to successful strategic recipes: downsizing, re-engineering, strategic alliances, strategy innovation, revitalization strategies, etc.

    Despite all these signposts for rethinking strategy, there has been relatively little accumulation of theory. Instead of progress in terms of shared concepts and paradigms, there seems to be academic disillusionment with the value of strategy literature and schools of thought. Managers in today's competitive environment are engaged in strategic experiments without the guidance of appropriate theories of strategic management. We believe that the need for strategic theorizing during the 21st century is greater than ever. Of course, numerous management gurus have convincingly promoted the ‘one and only’ strategic recipe based on experience with one or a few successful firms. However, is it true that the object of strategic management is so variable and is changing so rapidly that new concepts and research findings are obsolete before they can be applied? In our opinion, closer scrutiny will reveal much less variety and much more continuity in strategic management. Numerous so-called ‘new’ concepts are old wine in new bottles. We do need new directions in theory and managerial practice, but not new words for the same phenomena.

    In this book, we derive new directions in strategy; not on the basis of a random selection of successful firms but on the basis of a systematic treatment of paradigm or schools of thought in strategy. Our aim is not to increase fragmentation in the field further, but to contribute to strategy synthesis. This collective endeavour started in 1995 with the international workshop, ‘Schools of Thought in Strategic Management: Beyond Fragmentation’, organized by the Rotterdam School of Management in collaboration with the European Institute of Advanced Studies of Management. Well-known scholars in the field, experienced academics as well as fresh PhDs starting in the subject presented and discussed papers on the following topics:

    • conceptual studies on defining and categorizing schools of thought in strategic management
    • quantitative and qualitative empirical studies on how firms, CEOs, business unit managers or venture managers form strategies; these empirical studies were based on surveys, theoretical case studies and longitudinal case studies
    • conceptual studies on fragmentation in the field of strategic management
    • studies on various methodological perspectives in strategic management
    • integration efforts in strategic management
    • conceptual and empirical studies on emerging schools in strategic management.

    Besides presentations and lively debates about state-of-the-art strategic management, some scholars were asked to give a personal view and reflections on new directions in the strategy field: Henry Mintzberg on schools of thought, Gery Johnson and Michael Lubatkin on strategy classifications, Charles Baden-Fuller on shifting firm boundaries, Howard Thomas and Ron Sanchez on developing dynamic capabilities and Hans Pennings and Michael Lawless on the role of configurations in strategic management. Besides disagreement on methodological approaches and selection of dominant concepts, there was some consensus on agendas for future research directions in strategic management.

    • In a pre-paradigmatic field such as strategy we should appreciate pluralism, as theories and concepts from various related and non-related disciplines have really expanded and enriched the knowledge base of strategic management.
    • The field of strategic management is well beyond the classification stage and some focusing is now due in the field's steady evolution. From an academic standpoint, the integration of various complementary strategy perspectives along certain lines (the role of the strategist, type of rationalities, considering time) should be stimulated.
    • To overcome the fragmentation–integration dilemma, real progress in the strategy field may be achieved by synthesis in certain problem areas: redrawing firm boundaries (boundary school), developing dynamic capabilities (dynamic capability school) and finding new viable configurations (configurational school).

    After this inspiring conference, we thought that we should really do something with these ideas. We also invited some scholars who had not been able to attend the workshop for their suggestions. J.-C. Spender provided us with ideas on strategy as a professional field, Paul Schoemaker was willing to reflect on integration efforts and Nicolai Foss laid down the foundations of the boundary school in strategic management. With the assistance of Thijs Spigt, we developed a road map for a volume on fragmentation, integration and synthesis in strategy. The outcome is, we think, not an ordinary edited volume but a structured effort to show new directions in strategy. As a result, this book is not only interesting for strategy scholars and PhDs new to the subject, but also extremely helpful for students of strategic management. Moreover, reflective practitioners and managers can use the theories and tools provided as a basis for new sources of competitive advantage.

    Starting with the pluralism in strategic management (Part I), we continue with a consideration of various efforts of integration (Part II). Subsequently, we show various attempts of strategy synthesis: the boundary school (Part III), the dynamic capability school (Part IV) and the configurational school (Part V). Finally, we reflect on these multiple directions of strategy synthesis (Part VI).

    A volume such as this comes about only through the combined efforts of many people, not least of whom are the authors. We thank them for their willingness to write and rewrite chapters in this book, and to reflect on and review other chapters in the book. In particular, we want to thank those who wrote the commentaries: Henry Mintzberg, Paul Schoemaker, Nicolai Foss, Charles Baden-Fuller, Ron Sanchez, Howard Thomas and Johannes M. Pennings.

    We are also indebted to Thijs Spigt, who was the ‘speed boss’ of this project. Thijs had to send out many letters and make an uncountable number of phone calls. It is true to say that he was the driver that kept us on the road to completion of the project.

    Of course, our colleagues in the Department of Strategic Management and Business Environment of the Rotterdam School of Management also deserve recognition for their valuable suggestions. We especially want to thank Frans van den Bosch, chair of our department, for his support of this project.

    This book was also enriched by the many pleasant and stimulating discussions we had with students in the Strategic Management Major of the Rotterdam School of Management. The class discussions on schools of thought in strategic management as well as the presentations of group projects helped us to fine tune our line of reasoning and forced us to simplify and clarify the arguments made. Moreover, our colleagues Wynand Bodewes and Stelios Zyglydopolous, with whom we taught the introductionary Strategic Management course, provided us with helpful comments. In addition, the many interactions with managers participating in MBA executive and in-company programmes on strategy proved to be extremely useful in developing this volume. Also, the academic debates we had with peers in the field, as well as comments from reviewers, served as the impetus for progress.

    We would also like to acknowledge the efforts of Wil Geurtsen for her endless help in composing the final manuscript. Without her editing skills, this would have been an impossible mission. Also, Martijn Bax, Marijn Hoff, Imke Lampe and Marten Stienstra were of great help in finalizing the reference list. Furthermore, we want to express our gratitude to Claire Roth, Kiren Shoman and Louise Wise of Sage, who showed great patience and gave us much autonomy as well as helpful directions during production of this book.

    Finally, we are grateful to our closest partners in this endeavour: our wives and children. This work would not have been accomplished without their unconditional support. We dedicate this joint work to them.

    Henk W.VolberdaTomElfring
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