THE THEOLOGY OF STRATEGY: KNOWLEDGE IMPLICATIONS
Ian Combe
University of North London, UK
David Crowther
University of North London, UK
Steve Conway
Aston University, UK
Key Words:
Ideology, Strategy, Paradigms, Knowledge
Correspondence address:
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Ian Combe The Business School, University of North London, Stapleton House, 277 - 281 Holloway Road, London N7 8HN Tel: 020 7607 2789 Email: i.combe@unl.ac.uk |
Abstract
In this paper the authors explore the implications of ideologies of strategy becoming embedded into the theology of organisational religion. The various strategy paradigms present in the management literature are discussed and the knowledge implications of adopting different strategy paradigms as rigid ideologies to lead organizations are considered. It is argued that these implications suggest that to obtain both explicit and tacit knowledge, individual strategy paradigms should not be adopted as ideologies, but have to be integrated in ways to benefit the organization within its internal and external environmental context. The implications for the development of knowledge within organizations are considered and a conceptual framework is developed that integrates strategy paradigms to obtain a mix of various forms of knowledge to benefit organizations.
Introduction
The management of any organisation is geberally predicated in the dominant paradigm of the organisation in terms of what is considers as strategically relevant. Such strategy paradigms are applied uncritically to manage organizations and are as the basis of rigid ideologically polar views with little consideration of any alternative points of view (see for example: Firat, 1985; Shrivastava, 1986; Venkatesh, 1985); indeed opposing strategy paradigms are excluded from the discourse of management within the organisation. Rigid ideological thinking in relation to strategy may provide a cognitive explanation (Porac & Thomas, 1990; Hodgkinson, 1997) for structural inertia (Hannan & Freeman, 1984) or lack of response to external environmental change. When experiencing change, this rigid ideological thinking, which we term theological, may not be appropriate for the new environmental conditions in which a company operates. In such circumstance this theology of strategy could have important consequences for companies and could lead to company failure (e.g. Barr, Stimpert, & Huff, 1992).
The theology of strategy can also have important consequences for the development of knowledge within organizations, and this knowledge development is becoming synonymous with success in the current technological era (Carter, Mueller & Swan, 2000; Sanchez, 1995). Whereas the development of knowledge within organizations has important consequences at an organizational level, we support the position taken by Grant (1996) when he states that knowledge creation is essentially an individual activity while the primary role of firms is in the application of knowledge. However, firms can influence the development of knowledge by buying in knowledgeable individuals (Simon, 1991), and by providing the internal and external context for knowledge acquisition, sharing and application. This context is important to the development of knowledge because individuals learn within the context of their own organization. Thus the presence of a theology of strategy in an organization can influence what and how individuals learn within this organizational context. The power exerted through a dominant theology of strategy can also influence what an individual working within the organization conceptualises as knowledge.
There is some empirical evidence to support the influence of contextual factors in the development of strategic thinking; thus factors such as culture (Hitt, Dacin, Tyler & Park, 1997) and past experience (Ireland, Hitt, Bettis, & De Porras, 1987) have been shown to influence strategic decision-making. We therefore suggest that current ways of thinking about strategy within an organization, and the organizational routines built up to support these ways of thinking, can have important knowledge implications.
In developing a theology around any single strategy paradigm an organisation will be forced to live with a restricted knowledge base, because of the limitations inherent in any particular paradigm. In this paper we explore these limitations and also highlight some of the advantages of various strategy paradigms and their knowledge implications. The aim is to explore the knowledge consequences of any theology of strategy. To address the knowledge implications of a theological approach to strategy we firstly discuss the theoretical background by considering the role of paradigms in the development of knowledge and incommensurability between paradigms.
The Theology of Incommensurability
The argument of Kuhn (1970) that knowledge in science is developed through a socio-political process where alternative schools of thought compete to provide evidence for their contrasting theories is well known. Much of the philosophy of science debate in respect to paradigms has been focused on the notion that paradigms are alternative ways of thinking and that some form of incommensurability exists between them. As far as academic discourse is concerned this can be illustrated by an example from accounting theory. In this context it is epitomised by the rise of positive accounting theory (Watts & Zimmerman 1986) and the way in which the acceptance of this theoretical view of accounting knowledge had the effect of silencing alternatives. This effect has been chronicled by Tinker & Puxty (1995) in their book Policing Accounting Knowledge and this discourse provides an excellent example of a paradigm shift which effectively silences opposition (Kuhn, 1970). It is in this way that ontology is determined in such a manner that this ontology equates with theology and inevitably predetermines the epistemology of the researcher. In this paper we take this view of paradigm competition and consider it in the area of strategy; a strategy paradigm provides the framework for current practice and current application of knowledge and knowledge acquisition within an organisation.
We take the position in this paper that any interpretation of events is based upon a theoretical ontology. This ontology has the assumption of a theology to such an extent that an alternative interpretation based upon an alternative ontology becomes impossible (Combe & Crowther, 2000). Thus ontology becomes theology which brooks no question. This point is elaborated by Horkheimer and Adorno (1944: 244) who state that 'The belief that the truth of a theory is the same as its productiveness is clearly unfounded.' All theologies are competing and predicated upon different paradigms. Incommensurability is assumed, such that the advocates of one maintain that there is nothing to learn from any alternative. This source of tension between competing discourses, arising from inevitable power struggles, has the effect of closing down the discourse. Thus Adorno (1973) argues that belief or opinion is presented as fact by the language used to express that belief. Consequently the recipients of this message can accept this presentation of belief as if it were truth. It is in such dialogue that each competing theology seeks to negate the other through the silencing of it within the discourse.
Communicating the theology
The use of power in determining which discourse is acceptable is met at the expense of others, and therefore there is also a tendency towards acceptance of the dominant view (Horkheimer & Adorno, 1944). Interpretations from within a dominant paradigm need to be communicated throughout the discourse in order for ownership of this discourse to transfer from the dominant coalition to the whole. If this communication makes use of the rituals embedded within the established culture then the legitimacy of the discourse is increased and its acceptance into dominant legitimate knowledge is facilitated. Thus even the means of communicating decisions themselves become part of the social ritual of that organisation (Yates & Orlikowski, 1992).
Similarly, Swales & Rogers (1995) consider that the language used is important as it provides a framing context for the communication of decisions in terms of the history and culture of an organisation. The language used by the dominant coalition therefore becomes part of the institutional behaviour of the organisation but also gives power to the coalition as they set the agenda of communication. Indeed, Hanna & Wilson (1984) argue that language is inextricably entwined in power relationships and communication is almost always an attempt to control change. Such language forms an essential part of the culture of an organisation and becomes ritualised as an unquestioned part of the religion of the organisation. Every society nourishes itself through rituals and ceremonies and these rituals recreate our past and speak to us about our future. (Sister Teresa, 1963).
Thus different interpretations within any discourse, while existing, are effectively silenced through the perceived incommensurability of these interpretations with perceived knowledge being based upon the respective power of the various interest groups (Deleuze, 1988). The greater the divergence between the two, the greater is the likelihood of tensions existing and also of these tensions being unarticulated.
A critique of the dominant paradigm
The theology associated with any particular paradigm requires the acceptance of that paradigm and the consequent rejection of alternative paradigms. We take the position in this paper, however, that these paradigms are social constructs and one could equally well attribute a different set of interpretations to the same process or outcome. Indeed a focus upon different facets of the same phenomenon produces a separate paradigm with equal claim to the exclusivity of explanation. What is clear, however, is that the discourse is based upon the partiality of the sources of information and possible self-referentiality and unquestioning adoption of previous truth claims.
Strategic management decisions within any organisation are based upon a rational approach; this rational approach is however determined by the dominant paradigm within that organisation. Rationalism, for example, has been a dominant strategy paradigm for many decades. This is not surprising considering that strategic management as a discipline 'grew up' during periods of moderately predictable external environments and increasing complexity of organizations (Ansoff, 1979). These are the conditions that rational strategy was developed to help deal with (Mintzberg, 1973). Social interactive factors, however, also support rationalism in strategy, and researchers have highlighted a creeping rationality (Fredrickson & Inquinto, 1989) as organizations develop because of the institutional frameworks set up to borrow money for investments to implement strategic decisions. Decision-makers, have to be, at least partially accountable for the rationality of their decisions. Thus rationality can become self-referencing and unquestioning, even when the conditions that the rational planning paradigm was developed to deal with, are no longer present.
Accounting is an example of a rational approach to strategic decision making that by its nature creates an image of the organisation, of the decision making within the organisation, and of the future of that organisation. This is achieved though the use of the language of accounting and the perceived certainty attached to that language. One of the purposes of such accounting is to continually recreate the myth of organisational existence as certainty in the uncertain world. This certainty is of course a myth and one important function of accounting therefore is to act as a myth creation mechanism for the organisation. One of the purposes of myth making is to remove temporality from the perception of the onlooker (Levi Strauss, 1966). Removing temporality has the effect of conflating the past and present into the present and to make this present contiguous with the future. In doing so the uncertainty of images made through accounting from one period to the next is disguised within the omnipresent organisational myth based upon the eternal present. Rationality and predictability through using accounting information within the metanarrative myth of organisational immutability therefore seems reasonable within any discourse of organisational reporting.
These issues are an important source of reflexivity. This paper addresses the issue that some strategy paradigms dominate and can be used as the basis of ideological stances (Firat, 1985; GrØnmo, 1985), so that context - dependent truths may be extended out of their realm and accepted as universal (Firat, 1985). In short, a strategy paradigm can become the theology to guide the organization.
When considering multiple paradigms in the past, researchers have developed frameworks to help conceptualise the different views, concepts and theories present in the management literature (Arndt, 1985; Astley and Van de Ven, 1983; Burrell and Morgan, 1979; Whittington, 1993). They each constrict their framework by dividing the paradigms on a restricted number of dimensions operationalised in 2x2 matrices. While such frameworks are a useful and powerful way to discriminate between the relevant paradigms, they are restricted in the number of dimensions used to discriminate. They therefore invariably offer a simplified view of the complexity present. Also by emphasising the differences with bi-polar semantics, these frameworks may further reinforce a fragmented reductionist view. Implicit in these frameworks is division if not incommensurability. What is missing is the identification of the commonalities between the paradigms present in the literature. These frameworks accordingly rate low on any measure of integration.
Another problem more specific to the strategic management literature is that this literature has historically been largely based on behaviour and its consequences. What managers do, what strategies they can employ, and performance consequences, rather than their implicit core assumptions and beliefs that could form a basis of a theology of strategy. Consequently, frameworks such as those presented by Hart (1992), Mintzberg (1973) and Mitzberg, Ahlstrand and Lampel (1998) based on the contrasting roles of managers in the strategy-making process do not lend themselves to a theological investigation of strategy paradigms.
THEORETICAL STRATEGY PARADIGMS AND KNOWLEDGE IMPLICATIONS
Theoretical strategies for knowledge management are no different from other strategies, in so much as they advance core assumptions and beliefs that largely go unquestioned due to their implicit nature. To investigate the implications of adopting a strategy paradigm as a theological position, we outline the advantages and disadvantages of these strategy mind-sets and the implications for knowledge. To aid this investigation we use an integrational framework developed by Combe (1999). This framework, grouping paradigms into schools of thought based on their core assumptions and beliefs, is now used to highlight the core assumptions and beliefs associated with each and the knowledge implications of adopting any single paradigm as a theology. We profile fifteen different theoretical strategy paradigms considered within five schools of thought: Rationalism, Developmentalism, Determinism, Probabilism and Chaos.
We suggest that a reliance on only one of these theoretical paradigms by its whole-sale acceptance by managers can lead to an uncritical ideology within an organization in relation to its strategies. An alternative argument is developed in this article: that theoretical paradigms can be integrated in practice. We further suggest that managers should configure the advantages of different strategy paradigms to benefit their organizations, dependant on the contextual factors faced by the organization.
The main features of these theoretical strategy paradigms and the advantages and limitation for managing knowledge are as follows:
Rationalism
This school of thought emphasises the human brain’s capability to receive, organize and interpret information. This cognition attempts to reduce and rationalize complexity to try to make sense of the environment. Thus one focus of attention can filter out the background "noise" from other sources of attention. The capacity to provide internal explanations by analysis of phenomena present in the environment, and to forecast these phenomena deliberately and proactively into the future are the main tenets of this school of thought. This school can be found implicitly in many concepts, theories and perspectives. Four major paradigms are evident in the literature. These are:
This emphasises a hierarchically imposed, normative model of in-depth analysis, planning, implementation and control. This perspective has its roots in the writings of Fayol (1916/1949) and is dominant in much of the strategic management literature (e.g. Sloan, 1963; Ansoff, 1965). The rational planning paradigm may be an appropriate way of thinking about strategy in relatively complex and reasonably predictable environments (Fredrickson & Mitchell, 1984; Fredrickson, 1985; Mintzberg, 1973). In these environments, this paradigm's strength lies in analysis of explicit knowledge such as accounting data and trend data because this is supposed to provide reasonable safe guidelines for the future.
However, weaknesses arise due to hierarchically imposed planning procedures. Gathering data in this way is limited when tacit knowledge is important to the organization, because this type of knowledge does not lend itself to straightforward analysis. Furthermore, the enforcement of too much control due to hierarchically imposed planning procedures might not be appropriate for some contexts, as this can lead to a lack of empowerment and alienation of the workforce. This control is unlikely to be tolerated in highly knowledge intensive contexts.
Another limitation of the rational planning paradigm is that it is focused mainly on predicting the future based on internal interpretations of the external environment, and these interpretations can be biased. Cognitive biases can be the result of culture (Hitt, Dacin, Tyler & Park, 1997) and/or past experience (Ireland, Hitt, Bettis & De Porras, 1987) and these biases can result in inaccurate predictions especially during periods of unpredictable change. In these situations rational planning can become ineffective.
The characteristics of Modernist thought in an organizational context, according to Alvesson and Deetz (1996), are the instrumentalisation of people and nature by scientific thought. Thus there are three interrelated aspects of modernist thought that need to be considered in relation to knowledge: people, nature and the possibility of instrumentalisation or control.
Critical theorists have implied that strategies can be introduced for reasons of control and domination of the workforce (Knights & Willmott, 1987). However, in some large organizations requiring a high degree of standardization, some control and dominance may be inevitable. However, strategies for knowledge management dominated by the modernist paradigm are likely to break down in more complex relational service contexts, where empowerment of staff is required and standardization of service is of little value to customers.
The modernist view is anthropocentric as it focuses on the utilitarian value of products for the benefit of human lives by controlling nature through scientific technologies (Firat & Shultz, 1997). However, many products are not purchased for their utilitarian value but for their symbolic value (Combe & Crowther, 1999). Consequently, modernism's focus on the product and product attributes may be myopic, and this may have serious consequences for a company managing knowledge from this perspective. Theorists such as Alvesson and Deetz (1996) suggest that modernist thought is based on a false premise of control, which is illusory. They also provide the most damning criticism of modernist thought when they point to the disastrous consequences for the environment and the alienation of the workforce when humans try to control nature and people for their own ends.
Taylor’s (1911) reductionist view of scientific study aimed at maximum specialization is prevalent in the Functionalist paradigm. Morgan (1986) considers that Taylor’s (1911) views can be still found today in the routinized operational focus of organizations such as McDonalds. Weber (1947) promoted a similar rational specialist view within the bureaucratic organization by recognizing the growing need for experts with technical knowledge. Obtaining knowledge within this paradigm is supposed to be efficiently achieved through formal methods of auditing of routines and operations. Therefore the functionalist approach can be found in analytical techniques such as value chain analysis (Porter, 1985) and services blueprinting (Shostack, 1984). This bureaucratic approach to knowledge acquisition and management is unlikely to be sustainable as a source of competitive advantage in certain highly competitive environments. Bureaucratic systems would have difficulty in coping with continuous changes due to innovation and in acquiring and managing knowledge in complex relational exchanges such as experienced in professional services. Furthermore, by focusing on individual functions in minute detail, knowledge is gained about these functions and not how these functions ultimately come together to form a holistic picture.
Follett’s (1924) views, much influenced by Gestalt psychology, form the roots of a holistic view of organizations, where the focus is on an overview of the organization together with the advantages of human co-operation over human conflict. Thus the holistic paradigm can be identified in the network literature, in an attempt to reduce risk by co-operation and relationships with others. It is also present in the stakeholder literature, where there is a consideration within strategies of balancing many demands on the organization. The network literature is especially influential in relation to knowledge, because networks have been seen to increase knowledge especially in some technological sectors. The holistic paradigm also implies that knowledge is best achieved through co-operation rather than through individualistic means. From this perspective knowledge management is best achieved through philosophical means rather than a functional approach. The knowledge implications of adopting this paradigm is the focus on a particular type of knowledge in the form of relationships in systems and configurations that may be identified to reveal new possibilities (Miller, 1996; Nonaka, 1988).
The main advantages of the rational school are that it addresses the issues of cognitive analysis and proactive management and choice within the firm, and rational accountability to other stakeholders. However, the organizational behavioural literature such as Cyert & March (1963) and Simon (1957) argues that these advantages are based on the false premise of perfect rationality that does not exist due to cognitive limitations (Miller, 1956). Another limitation is that this school requires some degree of stability within the internal and external environments for the analytical aspects of rationalism to be effective. The increasing demands of hyper-competition within a global information economy suggest that this stability may be lacking at present.
Developmentalism
This school of thought emphasises developmental education and change both at an individual and organizational level. This school of thought is built on the capacity of humans to learn from undertaking tasks such as production processes and planning of strategy, and to adapt by learning from past experience. The main focus is on the building of knowledge, resources and internal capabilities within the firm whether this is done proactively or a consequence of other activity. Therefore, as far as this school of thought is concerned, knowledge is the major basis of strategy and critical for the success of organizations.
Three major paradigms are evident in the literature. These are:
This evolutionary perspective is focused at the organizational level of analysis rather than the individual decision maker, as it considers that adaptive evolution of organizations occurs through learning. Therefore, it is considered by some writers, such as Hannan and Freeman (1989), to be more applicable to organizational evolution than the alternative Darwinian theory which emphasises passive unchanging organisms being selected by the environment. At the level of the individual decision-maker, Lamarkian theory advances the hope that individuals can be leaders of evolution and adaptive change. The literature on leadership seems dominated by universal generalisations from "gurus" and prescriptions based on autobiographical accounts (see Blois, 1992; for a critical appraisal). Learning from the experiences of chief executives autobiographical accounts may be useful, but regard must be taken of the contexts where certain styles of leadership may be appropriate.
The process developmental perspective focuses on both organizational and individual learning. This learning is brought about by undertaking production processes that enable learning curve effects, or management processes such as planning. Thus a major focus of this paradigm is on so-called 'learning by doing' (Arrow, 1962). The developmental aspects can be emphasised by also experiencing and reflecting on the learning experience. The process developmental paradigm suggests that knowledge is the basis of successful strategy. Companies can learn to be successful by focusing on continual improvement over the long term. Learning can create a problem, however, because it can help one objective or one manager at the expense of others (Miller, 1996). There are also different types of learning such as experiential and structural learning (see Miller, 1996, for a review) and these have implications in regard to the development of different forms of knowledge.
The critique of traditional economics developed by Penrose (1959) is considered by many writers (e.g. Wernerfelt, 1984) to be the historical influence of the resource based view. This critique considers that traditional economic theory gives no notion to an internal process of development leading to cumulative movements of growth in firms. Thus for Penrose (1959) the firm was seen as a collection of productive tangible and intangible resources that provide services to production processes. From a resource based view, the focus of strategy should be on building difficult to imitate resources. Consequently, from this perspective companies should focus on difficult to imitate 'knowledge' resources such as knowledge of innovation, design and service, because these are more difficult to imitate than other resources.
The main advantages of this school lie in addressing the issues associated with adaptive evolution of the firm in a way that holds up the hope that management and workforce can influence adaptive change, growth and long term survival. This school also addresses the role of the individual in providing skills and knowledge that are useful to the firm, to the mobility of labour and to society at large.
Difficulties associated with this school arise from the never-ending capacity to absorb more information, knowledge, capabilities and other resources. The window of opportunity can close before knowledge and capabilities are built up. Thus there is a need to balance the conflicting demands of exploration for more knowledge and capabilities, and the exploitation of existing knowledge and capabilities (Levinthal & March, 1993; Penrose, 1959). Another potential problem associated with this school is that its devotees can be focused too much on internal learning issues, and thus lose sight of changing customer needs externally.
Determinism
This school considers that events are determined by preceding events, therefore freedom of choice is illusory. The application of determinism in strategic management, suggests that management has a passive role and is largely unable to influence change and long term survival. However, a more balanced view might consider that although the external environment acts on internal company resources in a deterministic fashion, these resources have been built up through past experiences and learning by a non-Darwinian process.
Darwinian theory suggests that the origin of adaptations lies in natural selection acting on hereditary variations that are in their origin non-adaptive (Maynard Smith, 1975). Therefore, the natural environment is the adaptive force acting on many variations of organisms, only the organisms that fit with the environment survive. Therefore the external environment is the ultimate selecting force and the individual does not possess the capacity to adapt itself. In an organizational context this view of evolution considers that environmental change, resource specificity and structural inertia (Hannan & Freeman, 1984) emphasises selection. This view is prevalent in the population ecology literature.
From this perspective, knowledge management is of little value, because the external environment ultimately determines success of organizations. In the age of the computer, knowledge about a mechanical typewriter is unlikely to be useful. Therefore, from this perspective knowledge management should not be considered in isolation, but integrated with corporate and business strategies to provide a wider picture. However, due to resource specificity and structural inertia even strategies at another hierarchical level may not be effective in response to change. The answer to these problems may be a maintenance of organizational flexibility (Evans, 1991; Sanchez, 1995).
The main advantage of this school is that there is a comprehension of the influence of links between the external environment to the internal environment. The disadvantages are that it undermines the effectiveness of rational choice, learning and proactive development by management.
Probabilism
This school is based on the importance of the dynamic interactive nature of the environment. This school emphasises modification to strategy by interaction with other factors. Externally these may be due to changing competitors offerings and changing customer needs, whereas internally strategy is realized through interaction with cultural beliefs and political forces that cause barriers to change. This interaction means that strategic management needs to take account of interactive contingent effects.
Five major probabilistic paradigms are present in the literature:
The focus of the ecological paradigm is on the dynamic and interactive nature of competition for external resources. Much of the empirical research utilizing this paradigm in an organizational context, focuses its activity at the population or industrial level (e.g. Carroll, 1985; Boeker, 1991; Ingram, 1996). This approach has been useful for its longitudinal evolutionary perspective to indicate variables influencing founding and failure of organizations. Further work developing the implications of the concepts of competitive exclusion and niche width at the organizational level to aid strategic management could be a suggested way forward (see Baum, 1996; for thorough review).
Management within the ecological paradigm suggests that organizations should pursue a differentiation strategy from competitors. To exploit a niche before a competitor fills it. To achieve this companies may use the concept of positioning to identify a niche and to differentiate from competitors. Due to the contingent nature of strategy, the timing of entry of new products and services is also important from the ecological perspective.
March and Simon (1958) and Lindblom (1959) were amongst the first to critique the purely rational approach to policy formulation by suggesting that it assumes "perfect" intellectual capacities, sources of information, time and money. These factors are always limited to a greater and lesser degree. The complexity of the problem was for Lindblom (1959) the key factor in determining the limited usefulness of the rational approach. Lindblom’s (1959) suggested response was an incremental view in which decision making is remedial, proceeding in small steps not to far from the status quo. This does not necessarily imply that decision making should be merely tactical, as this approach can be led by a rational strategy that is adaptive (Mintzberg, 1973) and incremental (Quinn, 1980). This perspective is also associated with the manager addressing multiple conflicting goals, and a political dimension to decision making (Mintzberg, 1973) which can form barriers to change. (See Wilson, 1992; for an overview of planned versus emergent change)
From the process (emergent) perspective management needs to consider two main issues concerning the implementation of strategies. The first is the political implications of hoarding knowledge, because this issue can be controversial and can lead to an alienation of staff. The process emergent paradigm considers that hierarchically imposed plans are likely to be modified by interaction with political forces within organizations. Consequently, strategies emerge by this interaction. This emergent strategy may not necessarily be a problem for management because a strategy may emerge and be implemented that takes account of contextual factors within organizations. This may result in more effective strategies within the context of organizational reality. This paradigm implies that strategy need not be developed but will emerge as managers identify and react to circumstances. It creates the problem however that this concentration upon emergence will obfuscate the forward planning nature of strategy formulation and may occlude the development of radical strategy.
According to Camerer (1991), Game Theory is the analysis of rational behaviour in situations involving interdependence of outcomes. Implicit in Game Theory is the presence of some degree of rationality, adherence to rules of the game, some knowledge of the other players and convergence to equilibrium. Whilst some might question some of these implicit assumptions, Game Theory holds up the hope of behavioural prediction by modelling how others are likely to play the game. Probabilistic prediction of competitors' responses within a dynamic changing environment would inevitably be very welcomed by many strategic decision-makers. From this perspective, managers should advance 'follow the leader' strategies to ensure equilibrium with their main competitors, and build a reputation for retaliation and holding grudges to ensure 'mutually assured destruction' (MAD) (Whittington, 1993).
In achieving rational cognitive explanations for behaviour, research has tended to minimize the effects of the settings in which the behaviour occurs (Foxall, 1992). Thus the behavioural perspective has received less attention. This paradigm, also associated with the behaviourist writings of B.F. Skinner, attributes action to external factors to the individual such as reward and punishment stimuli in a probabilistic fashion. Thus the behavioural perspective is the antithesis of cognitivism (Foxall, 1992). Strategic management within the behavioural paradigm suggests an interactive trial and error strategy based on positive and negative feedback from consumers.
As open systems theory considers the importance of the external environment to organizations, so other writers consider that organizations are socially embedded (See Whittington, 1993; for a review). Thus strategies have to be studied in their social, economic and political context, and therefore Whittington (1993) argues strongly against considering strategy out of context. This paradigm considers that universal prescriptions to strategic management are unlikely to be effective.
The main advantage of this school is that it recognizes the issues of interaction and exclusion in a dynamic competitive environment. A recognition that the company is not isolated from the moves of its competitors, the behaviour of consumers or its social context is important. It also incorporates environmental complexity and speed of reaction to customer needs and competitive moves, which are consistent with the relentless pressures on firms in competitive markets. While this school seems to recognize the dynamic interactive nature of competitive business, it can lack the analysis of Rationalism and the long-term view of Developmentalism. Others, especially those associated with the Chaos school, would also suggest that ecological equilibrium either does not exist or will not exist for long in the business environment. These could be considered to be the main disadvantages of this school.
Chaos
This school considers that management has to address complexity and unpredictability. The application of this school of thought in a management context can suggest that the consumer is unpredictable and fickle therefore rational strategy is of little value. Whereas another paradigm emphasises the inter-connectedness of phenomena so that a small change in one area can produce amplified chaos elsewhere. To overcome chaos organizations can focus internally on the internal responses to unpredictability such as creative individualism, reactive speed and organizational ideology, rather than traditional ideology.
This paradigm of the chaos school seems to emphasise the chaotic elements of business rather than directly applying Chaos Theory. Therefore, there is a focus in the post-modernist marketing literature on fragmentation of societies and global individualism. Consumers are considered to be unpredictable, often subscribing to multiple highly contradictory value systems and lifestyles (Firat, Dholakia & Venkatesh, 1993). Strategy in these circumstances could involve merging the customer and the producer. Therefore, postmodernist writers, such as Firat and Shultz (1997), promote the trend towards customization to individual's self images, and the relationships and partnerships required to offer a customizing process, rather than a particular product.
From the postmodernist perspective the features of products are less important than the images conveyed by them. Thus customers purchase a pair of Nike training shoes, for example, not so much for their utilitarian value, but for their symbolic value (Crowther & Combe, 1999). Therefore from a postmodernist perspective, strategists need to re-consider the nature of knowledge. In an era of global hyper-competition knowledge of symbolic issues seems to be more important than utilitarian product knowledge.
According to writers such as Stacey (1991) business systems model chaotic systems. Therefore there is a need to focus on non-linear amplifying feedback mechanisms that are extremely sensitive to initial conditions. At a critical point, equilibrium is punctuated by chaos. Thus mangers need to recognise the inter-connectedness of organizational processes, so that there is an understanding that a decision taken to alter one process can cause amplified chaos elsewhere. However, as patterns of order are intertwined with disorder it is possible to predict some aspects of the future over the short term. The implications for strategic management are twofold. The first is to recognize this inherent long-term unpredictability and to consider the systemic nature of organizational reality. This systemic nature suggests that managers should not expect control and should not separate management issues because they are all inter-connected. The second is to focus on relatively stable aspects of the environment and the prediction and planning of strategy over the short-term only.
The main advantages of this school are that it recognizes the issues of unpredictable change that are especially pertinent as organizations contend with a move from national industrial economies to global information economies. The main difficulties associated with this orientation lie in developing solutions to deal with chaos. As Chaos Theory predicts, change at the societal or organizational level is not continually chaotic, but can enter into more predictable periods where other orientations may be more helpful.
Table 1, below, summarises the strategy schools of thought and adds the implications for knowledge management.
STRATEGY PARADIGMS and KNOWLEDGE MANAGEMENT
The previous discussion highlighted advantages and disadvantages of the various paradigms associated with strategy. Our thesis is that managers within organisations are governed, in their decision making, by that paradigms which has assumed precedence in their organisation. Indeed we argue that this paradigm assumes the nature of a theology which thereby becomes the single way to develop strategy and at the same time prevents consideration of alternative viewpoints. Indeed the nature of this theology is that any consideration of an alternative paradigm amounts to heresy – and of course heresy cannot be tolerated.
In considering the nature of the tenets of the various paradigms we have sought to demonstrate that inherent within each are strengths but also weaknesses. The necessary knowledge for strategic decision making is determined by the paradigm while other knowledge is considered to be extraneous. This necessary knowledge of course differs between paradigms and so when it is excluded from the organisational theology it is not included in the analysis leading to that strategy formulation. Knowledge is socially constructed by an organisation based upon its theological beliefs. We argue therefore that organisations tend to make strategy based upon an incomplete dataset and a partial view of the world. In a rapidly changing environment therefore there is a distinct danger that the best strategic decisions are not just ignored but are not even recognised. It is for this reason that we advocate an integrationist approach to strategy which values a heretical approach to analysis rather than the rigidity of orthodox theology.
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