orgtheory.net

the strategy in strategy research

Brayden

The BYU and the University of Utah business schools held their annual joint conference on strategy this weekend. As usual, it was an interesting conference with speakers presenting on diverse topics coupled with excellent discussion. The moment that stands out to me from the weekend was a question that followed a presentation by Nicolai Foss, an organizational economist from Copenhagen and a blogger at our evil twin-site (see his own thoughts on the conference here). Nicolai’s presentation was an excellent discussion of the fundamental assumptions underlying a property rights view of organizational strategy. His talk provoked a somewhat agitated question from a prominent senior strategy scholar, “But what does this tell us about how to win?” And there you have it, the defining feature of strategy research – how can we tell organizations what to do in order to succeed in the market? People in the room started nodding their heads vigorously, even while I twisted in my seat uncomfortably.

I think the scholar’s question summed up nicely what makes strategy different from general organizational theory (including organizational economics) – strategy research focuses on the determinants of high performance, pure and simple – but it also pointed to the weakness of strategy. There is a much simpler formula for getting published in strategy than there is in other areas of organizational research. The bar that one must meet is not to produce a theoretical innovation/contribution; rather, if you want to be a successful strategy scholar you just need to find new ways to address performance problems, adding new twists to old questions about relationships between performance drivers and performance outcomes. This doesn’t mean that strategy scholarship is completely divorced from organizational theory. Some of the most productive strategy scholars out there move back and forth between the two areas of research (in fact, there may be a competitive advantage gained by being an expert in both areas) and graduate students in strategy are taught to look for the performance implications that organizational theorists have ignored in their own work. This is also a downside of the training program in strategy. It teaches students to be overly-focused. To use the common strategy terminology, there may be too much exploitation and not enough exploration in strategy research. And this may be the most serious problem that strategy scholars face – if the only dependent variable of interest is performance, there is no incentive for scholars to return to the fundamental questions/assumptions of organizational theory.

And THAT is why organizational theory is not dead and never will be dead (despite hearing this comment at every management conference I attend). Strategy scholarship needs organizational theory. They need us much more than we need them. It is the engine of creativity in management scholarship. Organizational theory provides the basic building-blocks for all good research in strategy. (Nicolai’s work stands out as a good example of this!) So the next time you hear that organizational theory is dead from your strategy friends, just throw that in their face and see what they say.

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Written by brayden king

March 3, 2008 at 4:23 pm

Posted in academia, brayden, strategy

5 Responses

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  1. It is axiomatic that organizations that are good at exploitation are seldom if ever any good at exploration and vice versa. Why should we assume that scholars and scholarly networks should be any different? One possibility is that that the key to effective execution in organizations is the careful coordination of interpersonal relationships and the sequencing of activities, which occurs after real options have been struck, presumably because they are ‘in the money.’ Exploration is concerned with creating options, which calls for very different forms of cooperative and collaborative relationships. Perhaps, what scholars do is always more like the latter than the former.

    The claim that organization theory is moribund derives from the intuition that few if any of the EB options it offers are in the money.

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    Fred Thompson

    March 3, 2008 at 5:52 pm

  2. Brayden: I agree with your sentiment. (I heard about the death of org theory at least in one instance during the conference — its now a quite common remark.) I think this matter will continue to be brought up (its part of the “make orgs research more relevant/practical”- movement), but clearly there will always be a critical need for both: some ‘basic science’-type of orgs research (org theory, org econ) and research which in turn informs more practical work on org performance and ‘winning.’ (The recent heavy push toward the latter in part has made some question the ‘relevance’ of the former.)

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    tf

    March 3, 2008 at 6:50 pm

  3. Brayden, Thx for your comments. Frankly, I think the “senior scholars'” question showed a complete lack of understanding of what I had been talking about (and it left me completely dumbfounded). The whole point of the talk is that whether you will or will not win is (also) dependent on the structure of transaction costs in an industry. But I have to accept that I just wasn’t successful in communicating this. Well, next time …

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    Nicolai Foss

    March 3, 2008 at 7:21 pm

  4. Teppo, I think you and I heard the “org theory is dead” comment at the same time on Saturday. I’m beginning to think it’s a mandatory comment at any organizational research conference, whether it be the strategy scholar poking fun or the org. theorist lamenting our demise.

    Nicolai – I definitely agree with you that one important implication of your talk was to point to the contingency of performance outcomes. A strategy’s effectiveness depends a lot on the property rights regime in which the organization is based. But that sort of “comparative strategy analysis” is rare, isn’t it?

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    brayden

    March 3, 2008 at 8:02 pm

  5. […] paper on the role of property rights in strategy — a Medium Think project, at least — wasn’t universally well received by some management scholars in the audience, presumably because it was too general and abstract. […]

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