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Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Eero Vaara Helsinki School of Economics and Business Administration Runeberginkatu 14-16 00100 Helsinki FINLAND t. +358-9-43138584 f. +358-9-43138880 email: [email protected] 1999-07-12 Marja-Liisa Kakkuri-Knuuttila Academy of Finland/ Helsinki School of Economics and Business Administration Runeberginkatu 14-16 00100 Helsinki FINLAND email: [email protected] Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Critical Management Studies Conference Strategy stream 1 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Introduction This paper focuses on epistemological issues in strategic management studies. We argue that in spite of a growing interest in epistemological, praxeological and axiological issues there is still a lack of critical reflection in the context of strategic management studies. It is not easy to clearly define the scope and borders of ‘strategic management studies’ in distinction to other management or organization research. ‘Strategic management studies’ are not either an internally coherent body of knowledge (see e.g. Knights and Morgan, 1991; Hatch, 1997; Mintzberg, Ahlstrand and Lampel, 1998). There exists, for example, a crude division of the strategic management literature into ‘practically oriented’normative literature the scientific status of which has been seen as questionable and ‘scientific’ literature dominating the leading journals of the field (e.g. Strategic Management Journal). Critical assessments of strategic management studies indicate that there are major problems that should be tackled (see e.g. Knights and Morgan, 1991; Mintzberg, 1994). These include development of such knowledge that is not really useful for practitioners, spreading of western models without reflection of the cultural contexts and consequences (not only within the particular organization but also spreading unintended consequences with global effects), and creation and strengthening of power structures that result in dominance and exploitation. This paper argues that much of the problems stem from a still prevailing ‘modernist’ orientation of strategic management studies, characteristic of which has been an ‘empiricist’ tendency to value such knowledge that is represented in abstract decontextualized statements and ‘law-like’ causal claims based on empirical regularities without recognition of the theory-ladenness of empirical observations, an ‘enlightenment’conception of the ability of this research program to lead to more effective management and organizational performance, and a ‘positivist’ distinction between facts and values. 2 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? While many management and strategic management scholars do not accept ‘modernist’ epistemological bases, this is not the case with mainstream management research in general or strategic management research in particular. Neither is this the case with research practice, reflected, for example, in actual criteria for publication in leading journals. For example, Numagami (1998) argues that “their conduct is still implicitly dominated by the procedures that would be relevant only if the search for invariant laws were predominant in the social world” (p. 3). For example, case studies in particular receive criticism based on a limited number of cases or limited external validity in terms of statistical generalization. A number of alternative epistemological approaches have been proposed and elaborated to produce more ‘critical’ management research. Interpretive organization and management studies are as such based on anti-positivist epistemological foundations (see Silverman, 1968, 1970; Burrell and Morgan, 1979). In fact, from the 1970s to date, many scholars have drawn ideas from different streams of sociology or social psychology, as manifested in hermeneutics, phenomenology, ethnography, narrative or discourse analysis. Many of these studies have taken a relativist epistemological starting point with a focus on the actors’ and researchers’own interpretations. Of the approaches that have attempted to both savor some ‘real’ foundations of the phenomena to be studied and understand the role of interpretations, ‘scientific’ or ‘transcendental realism’ is worth specific attention because of its conception of causality. Outlined by Bhaskar (1975, 1979) and Harré and Madden (1975), this approach has been brought to organization and management studies, for example, by Tsoukas (1989). According to this view, one needs to distinguish observable events from the processes and mechanisms that produce them. ‘Critical theory’, developed by Habermas (1972) and others, has received significant attention in management studies when considering the consequences of the research conducted and the role of researchers. For example, Alvesson and Willmott (1996) have elaborated this approach and suggested how the ideas of critical theory may lead to better management research and practice. Closely related, for example, ‘feminist’ scholars have also suggested new epistemological bases for management 3 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? research (Calás and Smircich, 1996). Another alternative is offered by proponents of ‘pragmatism’. Developed, for example, in the work of Rorty (1989), the pragmatist epistemology – that does not distinguish ‘truth’ and ‘justification’ – has been considered a viable alternative for ethical organization studies (see Wicks and Freeman, 1998).1 Scholars have also drawn ideas from sociology, such as the work of Giddens (see Whittington, 1992). ‘Post-modernism’ and ‘post-structuralism’ are labels attached to several philosophical approaches that have been specifically important sources for ‘critical’ reflection. Although it is very difficult to summarize these dispersed ideas, most would agree that the basic tenet lies in a critical view on scientific knowledge production and progress. Foucault’s (1973, 1980) ideas have recently been given specific attention in management studies. For example, Knights and Morgan (1991) and Knights (1992) have argued that strategic management could (and should) be studied from the perspective of archaeological, genealogical and ethical account of discourses and social practices. Derrida (1978, 1982) is another new source of inspiration. Knights (1997), for instance, has elaborated how an approach of deconstruction may help to understand how ideas or narratives that do not comply with the dominant logic are marginalized. Rather than looking for postmodern epistemological bases, some organization and management scholars have turned to ‘pre-modern’ ideas (Toulmin, 1990; Cummings, 1996; Tsoukas and Cummings, 1997). Kakkuri-Knuuttila (1996) Tsoukas and Cummings (1997) and have, for example, elaborated ideas of how Aristotelian thoughts could be rediscovered and used in contemporary management and organization research. In order to structure this critical debate in strategic management studies, we concentrate on five crucial epistemological issues: - Universalism vs. contextuality - Conception of causality 1 Our conception of pragmatism echoes in many ways the work of such authors as Rorty but the positions outlined here are not based on or always consistent with this particular philosophical approach. 4 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? - Conceptualizations and narrative rationality - Relation of scientific knowledge and practice - Value-laden nature of knowledge and ethical implications of research Following an old Aristotelian idea of ‘endoxa’ (Aristotle, 1984), that is ‘beliefs of reputable persons’ or ‘best knowledge available’, this paper draws from various epistemological approaches when building pragmatic positions for future research on strategic management. The idea is to develop such positions that are both able to tackle much of the criticism provided but also provide reasonable bases for strategy research, reflecting the Aristotelian idea of ‘saving the appearances’. This leads to the elaboration of pragmatic positions that may help strategy researchers to produce knowledge that is both relevant for practice and reflective in terms of its societal implications. We conclude by arguing that future strategy research does not have to follow any particular ‘ism’ but can be based on both traditional Aristotelian concepts and recent postmodern considerations. Critical epistemological issue #1: Universalism vs. contextuality The modernist-positivist epistemological foundation is built on knowledge of the ‘general’ nature of phenomena. In the context of strategic management, this has promoted the view that the objective of research is to reveal and provide ‘universal’ knowledge of strategy processes, strategy formulation and the consequences of different strategic choices. As a result, much of the discussions concerning strategy have been characterized by a high level of abstraction. There are great problems with this attempt to strive for as universal knowledge as possible. A general criticism of social sciences is that looking for similarities and general features in different socio-cultural settings leads to an ignorance of the contextual nature and embeddedness of social phenomena (see e.g. Granovetter, 1985). It seems specifically correct to criticize positivistically oriented strategic management research for its decontextualized and ahistorical grasp of reality, since 5 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? it seldom shows any interest in the culturally and historically limited conditions under which organizations operate (see e.g. Whitley, 1984; Knights, 1992; 1997). In fact, there are a great deal of examples of strategic management research that have been adopted across the globe without critical reflection of how the knowledge developed in particular contexts may or may not be relevant for others. For good reasons, especially the U.S. cultural dominance should be viewed with a critical eye. As such, the call for culturally and historically sensitive research is no news for management scholars. Interpretive research approaches are usually based on methodologies that favor local presence and representations of local knowledge. In fact, by concentrating on the actors’ interpretations, they focus on the social construction of the organizational and management processes at particular contexts (see e.g. Burrell and Morgan, 1979). There is also a stream of more historically oriented management research that has as a starting point a recognition of the contexts of these processes (see e.g. Pettigrew, 1973). Many postmodernists have also lately emphasized the importance of historical contingencies, locality, uniqueness and particularisms (e.g. Knights, 1992; 1997). For example, Foucault’s genealogical approach can be interpreted as a search for historical conditions that help to understand the development of particular types of practices and thus the specific dilemmas faced in particular situations (see e.g. Knights, 1992). This approach has also an in-built criticism in the sense that it emphasizes that the particular ideas are (almost arbitrary) products of the particular circumstances but are no necessarily particularly relevant for other contexts. Some of the more radical postmodernist scholars have gone as far as taking a position that all the knowledge is local and that one should not strive for any type of generalizations. This position is, however, untenable as it provides no reasonable basis for arguments concerning similarities or differences in terms of the relevant social structures or actual practices. In fact, notions such as ‘uniqueness’ or ‘particularism’ require, for their full comprehension, understanding of the more general, to which the particular is compared to.2 2 It should be noted that the argument for locality can also imply suppressing normative research. For example, Löwendahl and Revang (1998) claim that giving advice to managers is not the task of strategic research, since the concept of advice "by definition requires a generalist perspective where a 6 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? A pragmatist epistemological position is to see strategy work, strategy formulation processes and strategic decision making as activities which are firmly rooted in the particular historical-cultural settings. While the mainstream of strategy research has paid little attention to these conditions when searching for universal knowledge, there are fortunately streams of research that have taken a more historicalcontextual epistemological starting point. Traditionally, the studies that focus on the strategy processes have been less ahistorical and more culturally sensitive than the mainstream research (see e.g. Pettigrew, 1992). Of the more recent approaches, it is worth noting efforts to conceptualize strategy work as social practice. Whittington (1993, 1996), for example, has developed such views based on the ideas of Giddens. What is interesting is that, according to the ‘structuration’ idea, this perspective provides a basis that takes into account both the existing social structures and the processes through which the actors (re)create the structures in strategy work. Consequently, it provides a basis where one can examine how particular institutions guide the strategy work and how the strategy processes may reproduce specific institutions or power structures. However, it also possible to study how actors may in specific conditions be able to be free themselves from the established social structures and ideologies and create novel ideas and new practices. Here one confronts the ontological question of what is the role of discourse. Scholars have lately provided perspectives which take the ontological position that strategy is discourse (see e.g. Barry and Elmes, 1997; Hendry, 1999). While certainly not wanting to play down the role of discourse, we want to promote the view that social practices include both more concrete or tangible sociocultural elements and the discursive ones. Consequently, one can specifically examine the discursive elements in strategy work but it would be a mistake not to acknowledge the linkage to the more concrete sociocultural practices. postmodern reality asks for particularist solutions. As a result, the need to avoid normative conclusions may be at the core of postmodern research." (p. 769). This point should not be adopted as such because we clearly have several notions of advice depending on our view of the relation between theory and action. Thus we believe that the issue is not whether to conduct normative research or not but rather what kind of normative research. 7 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Critical issue #2: Conception of causality The modernist-empiricist conception of research has emphasized the role of law-like causal statements. These are also assumed to have predictive power, which may help practitioners to make better decisions once the laws have been discovered.3 A focus on the discovery of law-like causal statements is very popular in strategy studies. A glance at the empirical studies made clearly indicates that research settings focusing on explanation of ‘success’ or ‘performance’ by different ‘strategies’and ‘success factors’have been extremely popular. There are, however, great problems with these kinds of studies. First, in the social world, regularities are difficult to observe. This is because there are many types of processes and mechanisms at play influencing the observed outcome (see e.g. Bhaskar, 1975; Harré and Madden, 1975; Cartwright, 1983; 1989). Thus an observed regularity could have been caused by other processes and mechanisms than the one presumed. Respectively, because of the many other possible processes and mechanisms, it is often very rarely that one can observe the presumed causal mechanism create the expected outcome. Consequently, studies finding a link between particular strategies and financial performance may simply bark at the wrong tree. Intended strategies may lead to apparent similarities in financial performance trends, but the effects may be results of the unintended consequences. Apparent success may also often be the result of positive demand development rather than particular strategic choices. Second, there is the question of direction of causality in such studies. There are many studies that tend too take it for granted that it is the particular strategies that produce the financial performance, if such a link is found. However, it could often be vice versa. The positive financial performance could create such organizational 3 The idea of causality as a form of regularity derives from the Humean (see e.g. Hume, 1955) criticism of the notion of cause as a necessity. The weaker part of his criticism fails simply because Hume does not to distinguish between logical and natural necessities, a distinction which was already made during the 14th century discussions on natural necessity but that one hardly finds in the Aristotelian scriptures. Hume's more convincing argument is based on the empiricist presupposition that knowledge is based on observation. Since we cannot observe causes, but merely events following one another, causality is not a notion referring to reality, but merely a habit of mind formed as a result 8 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? behavior that would be manifested in the strategies (see e.g. March and Sutton, 1997). This is often likely to be the case with studies that concentrate on particular fashionable strategies and financial performance. These studies easily fall into the trap of not realizing how organizations with financial resources are the ones that can afford to invest in fashionable models of operation. Third, there is the problem in the strategy field that especially in industrial competition success often requires ‘a competitive advantage’ or ‘edge’ that distinguishes the company from the others in the field (see e.g. MacIntyre, 1981; March and Sutton, 1998; Numagami, 1998). This means that there ‘success’ is not likely to be caused by particular strategies but many different types of choices, which evidently is not often visible as an empirical regularity. Furthermore, it might also be the case that if and when competitors imitate the successful companies, this competitive advantage disappears, and so does the empirical regularity. Fourth, such law-like statements are also problematic if they are given without specifying their range of validity. Unfortunately, it is often the case that generalizations, whether deterministic or statistical in form, are stated without specifying under which conditions they hold. Fifth, related to the previous point, there are problems of using the invariant laws as a basis for prediction because the findings may be relevant only for the particular historical setting. Sixth, even when such regularities are found, they are often at such an abstract level that they are not very useful for practitioners. The modernist-empiricist conception of causality as empirical regularities is thus extremely problematic. This leads to two alternative epistemological positions. The first is to discard causal rhetoric altogether. Many simply question the existence of causal relations in the social realm on the whole. According to Winch (1958), "The central concepts which belong to our understanding of social life are incompatible with concepts central to the activity of scientific prediction" (p. 94). Since causal notions are part of the latter, they are, according to this view, thus conceptually incompatible with notions relevant for social life.4 This is similar to the widely held of observing regularly concomitant occurrences. 4 Winch formulates his strongest point against causality in the sphere of human action as a criticism against views of motives as dispositions. Winch writes: "N's reasons must be understood in terms of 9 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? argument that distinguishes ‘explanation’ and ‘understanding’ (von Wright, 1971). According to this view, explanations involve causality but understanding does not. This view has been (often implicitly) shared by those management researchers adopting interpretative methodologies for studying organizations (see Burrell and Morgan, 1979; Burrell, 1996). In brief, adopting the hermeneutic approach has usually implied epistemological rhetoric where ‘causality’ has no role. This is the position favored by many postmodern scholars emphasizing the need for knowledge that is ‘local’, ‘contingent’or ‘unique’, as elaborated in the previous section. However, the positions that give no room for any type of causal knowledge are also problematic. It is very difficult to be able to do without any notions such as ‘cause’ or ‘explanation’, which are an essential part of our language, when talking about social phenomena (see e.g. Salmon, 1998). This is especially the case in strategic management research that is very much based on the idea of examining the effects of different types of intended or unintended, planned or emergent strategies (see e.g. Mintzberg and Waters, 1985). The other alternative is to adopt a different conception of causality (for a review of different notions of causality, see e.g. Salmon, 1998). Interestingly, the common sense discourse does not identify regularity, prediction and causality in the positivist-empiricist manner. The common sense discourse uses often terms such as ‘powers’, ‘forces’, ‘mechanisms’, ‘tendencies’ and ‘trends’ when speaking about causality which are to be logically distinguished from regularities. What is important is that researchers adopting a ‘scientific realism’ epistemological stance have developed an alternative notion of causality that is similar to this common sense discourse (Bhaskar, 1975; Harré and Madden, 1975; Cartwright, 1983, 1989). These views have found some response also within management research (Tsoukas, 1989). Scientific realism gives a natural way of distinguishing between causality, the accepted standards of reasonable behaviour current in his society, not in terms of dispositions" (1958, p. 81). Dispositions are understood as causal factors. Where Winch fails is his insistence on the internal nature of social rules, based on the internal relations between ideas which form the core of social rules (p. 123). This is in no way incompatible with a causal analysis of motives. Motives in the form of internalized social rules can be regarded as causal factors that move human beings. This is not in contradiction with the fact that beliefs and desires gain their meaning in the wider context of social rules. Winch himself comes close to this very same idea when stating that "Historical trends are in part the result of intentions and decisions of their participants (p. 93). 10 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? regularities and prediction. Causes are inherent and potential properties of structures, often called forces or mechanisms. They may actualize or not, depending on relevant conditions. Regularities result, for instance, when one or more forces actualize in the same set of conditions. A pure case of regularity is to be found in the ideal world which supposes the functioning of one force only ceteris paribus. But one and the same regularity may, in principle, actualize under many different conditions by different combinations of forces. Thus the mere existence of a regularity need not guarantee the existence of causal relations or mechanisms. There are two basic reasons why predictions are difficult to achieve in this view of causality. For one thing, we may not know what structures with their inherent mechanisms are interacting in the situation in question, and we may not know under what conditions they are acting. However, if we can assess how the present forces will develop and what their mutual strength will be, we shall be in a much better position for predicting. The most interesting point for us in this connection is that this type of thinking does not presuppose regularities for the possibility of prediction. Regularities may be useful for prediction, but not always. Especially when the environment is undergoing deep changes, it does not seem wise to base one's predictions on regularities, but rather on one's knowledge of relevant forces and the assessment of their relative strength.5 Critical issue #3: Conceptualizations and narrative rationality The positivist-empiricist tradition has ignored the theory-ladenness of empirical observations. Ignoring the role of interpretative or constructive processes is at the very heart of critique of positivist-empiricist social science. While more organizationally oriented management research has been able to draw upon various types of interpretive schools (see Burrell and Morgan, 1979), this is not the case of mainstream strategic management research. Here often the ‘naive realist’ orientation has favored the view that has given little room for considering the processes through which researchers and practitioners socially construct reality. 5 ‘Tendencies’ can from this perspective seen as changes in the relative strength of forces, not as 11 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Conceptualizations should be evaluated critically. Most agree that it is important to be able to conceptually ‘capture’ the ‘essential’ features of the phenomena in question. Sayer (1989), for example, by applying Marx’s term ‘chaotic conceptions’, criticizes such work that does not recognize the important social structures in question. From this perspective, one can, for example, criticize the traditional view in management literature that sees the management as a unified change agency and the personnel as the subjects of change efforts without paying attention to finer grained divisions among managers or personnel. However, as pointed out by postmodernist reflections, the conceptual and theoretical models in strategic management discourse, as in other fields, necessarily provide simplifications of the phenomena in question. For example, analyses drawing from Foucault have emphasized that the concepts developed in particular contexts are bound to the limitations of those particular historical-cultural conditions (see Knights, 1992, Tsoukas and Cummings, 1997). This perspective calls for criticality in terms of understanding the ‘usefulness’ or ‘applicability’ of particular concepts or discourses in other contexts. For strategic management research, it is interesting to consider the implications of the historical roots of much of the rhetoric used. Many of the key concepts, such as ‘strategy’ or ‘tactics’ come from the military vocabulary and reflect, whether we want it or not, certain ideological connotations. It also the case that contemporary postmodern organizations are characterized by external and internal complexity that make them as such differ from ‘traditional’ organizations (see e.g. Löwendahl and Revang 1998). This undermines the basics of traditional strategic thinking as adaptation to the environment, or as designing the organization and buffering core operations to face the turbulence of the environment. As the hierarchical, bureaucratic form of organization collapses, for example, ‘the machine metaphor’ looses its grip and the notion of strategic apex looses its reference both as a center of information and as a center of power and authority. Conceptualizations are also often characterized by problematic dualisms or dichotomies (see e.g. Knights, 1997; Calori, 1998). For example, the strategic empirical regularities. 12 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? management literature tends to hold on to such divisions as ‘analysisimplementation’, ‘thinking-acting’, ‘rational-emotional’ or ‘management- organization’. In view of providing knowledge that is useful for practitioners, especially the distinction of analysis and implementation is problematic (see e.g. Mintzberg, 1994). This is the traditional view of strategic management literature that emphasizes the role of specific strategic analysis and decision making in order to develop understanding of the organization and its environment and to choose a correct strategy or course of action. This has also been closely linked to an in-built normative effort to provide practitioners with tools to conduct such analysis. While this focus has undoubtedly benefited practitioners in focusing attention on the ideals or planning and analysis, it has also proved to provide an unrealistic picture of how ideas are turned into actions, how top management is able to lead or influence the organization, bottom-up processes where ideas originate from the initiatives, experiences or skills of people who are not members of top management or formally in a position of strategizing, or the environment’s impact on the ‘realized’ strategies. The dichotomy of thinking and acting is also problematic (see e.g. Grand, von Krogh and Pettigrew, 1999). Especially in the strategic management literature, this separation has continued to provide a view where the work of the strategists is often only described as thinking. This view clearly promotes the view that strategy work is mostly cognitive work and discards such features as political action in organizational processes. In addition, the separation of rationality and emotion has created problems (see e.g. Calori, 1998). There is a clear tendency in strategic management studies to label emotions only as organizational processes and to recognize feeling as a source of reason. Finally, the very basic distinction of management and organization in management studies is very problematic. This easily leads to the view that decision making or strategizing is only done by the people belonging to (usually top) management while the others constituting the organization or personnel are supposed to follow these strategies. The problems with this conceptualization relate to viewing management as a coherent whole, a lack of appreciation of the ideas that come from lower down in hierarchy and to an unrealistic assumption of the division of work in contemporary organizations. We suggest that this prevailing overly 13 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? simplistic view may, in fact, help to understand the common experiences that many strategic projects seem to lead to disappointments or clear failures.6 It is also important to recognize the role of narrative rationality. Lately, there has risen an interest in the narrative nature of much of human and social knowledge (Geertz, 1973, 1988; Bruner, 1986, 1990; Lyotard, 1979; Czarniawska, 1997; Tsoukas and Cummings, 1997). This view emphasizes that stories and narratives are important means through which knowledge is being stored and shared. Narratives provide a possibility to appreciate contextuality, historical contingencies and particularisms, which have been called for by many criticizing the current state of management research. For strategic management research, this implies that often the interesting stories that highlight contextuality and specific choices made in those contexts have the greatest impact and relevance for practitioners (see e.g. Czarniawska, 1997; Barry and Elmes, 1997). Interestingly, this narrative rationality may also explain much of the popularity of the books written for practitioners. Many of these books that have not gained much scientific acceptance contain interesting descriptions of often firsthand experiences written in ways that dramatize particular events, choices and outcomes. Conceptualizations are thus inherent with problems that are very difficult or almost impossible to remedy by individual researchers. We promote the pragmatist view that recognizes these problems but still does not take an overly skeptical position that would render meaningful scientific work impossible. We also want to stress that it is important not to forget that much of the descriptive and explanatory power of conceptualizations and narrative presentations are dependent on their ability to provide valid descriptions of the organizational processes. This very basic question is often considered insignificant in radical postmodern literature that only emphasize the aesthetic properties and ideological connotations of concepts and discourse. However, in terms of developing meaningful knowledge, it is rather clear that those 6 These simplifications are often manifested, for example, in the organizational processes followed by major strategic decisions. Frequently, for example, the ‘strategic benefits’ of mergers and acquisitions turn out to be overestimated and the organizational problems experienced underestimated by the managers (see e.g. Buono and Bowditch, 1989; Haspeslagh and Jemison, 1991; Vaara, forthcoming). Much of these problems seem to relate to the fact that the dominant conceptions in mergers and acquisitions provide overly simplistic models for decision makers (see Vaara, 1998). 14 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? conceptualizations and narratives that most accurately and illuminatively describe ‘real’organizational phenomena are of the most value. Critical issue #4: Relation of scientific knowledge and practice The modernist conception of the relation of research and practical action is based on the idea of application of law-like statements with clear predictive power in practical settings. This is consistent with the ‘enlightenment’ notion that increasing knowledge leads to better understanding, and in the case of management science, better and more effective control of organizations and improved performance. There are, however, problems with this conception of the adoption of scientific knowledge for practice. As discussed in the previous sections, there are great problems with aims to provide universal knowledge and to strive for law-like causal statements. In addition to the problems already reviewed, one should note that there are great difficulties of using any observed regularities as bases of prediction. These relate to the possibility of innovation in human action (see e.g. Winch, 1958; MacIntyre, 1981). We cannot predict our own decisions, since this would presuppose the decision already being made. The same holds for technological innovations the prediction of which would require the innovation already being discovered in some form. More importantly, this is the case with social action as in organizational decision making or economic competition. It is very difficult to anticipate the actions of others and even more difficult to anticipate their effects on own actions. Many also argue that these problems of prediction are particularly severe in the postmodern era because of unprecedented organizational and environmental complexity (see e.g. Löwendahl and Revang, 1998). There are also many scholars coming from different traditions who have emphasized that the contribution of management research may largely lie in providing different conceptual tools for practitioners (see e.g. Calori, 1998; Numagami, 1998; Löwendahl and Revang, 1998). It also appears to be the case that many 15 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? practitioners mostly value different types of conceptual models that may help them cope with the particular challenges that they are facing.7 In addition, there are problems with the nomothetic model according to which the application of general rules or statements is a fairly unproblematic, straightforward procedure which require no specific intellectual capacities except the ability to connect general notions to particular instances (see e.g. MacIntyre, 1981; Knights, 1992; Alvesson and Willmott, 1996; Tsoukas and Cummings, 1997; March and Sutton, 1998). There is also more recent management and organization literature concentrating on how actors adopt, use or create knowledge that clearly illustrate how the modernist conceptions provide an oversimplified and an unrealistic picture of these processes (see e.g. Schon, 1983, 1987; Orr, 1990; Brown and Duguid 1991; Nonaka, 1994). These studies clearly indicate that competent practical action requires ‘practical knowledge’ that is very different from the general abstract knowledge of the ideal of modernism. For strategic management research, it is especially important to recognize that the realized strategies are often more results of internal innovations, bottom-up processes or evolution of competitive fields rather than outcomes of top management-led strategies. These problems have, in fact, inspired rather skeptical statements concerning the possibility of the nomothetic model to provide knowledge that is useful for practitioners (see e.g. MacIntyre, 1981; March and Sutton, 1997). MacIntyre (1981), for instance, argues that the conception of management research as successful in producing law-like regularities with strong predictive power is a fiction, and accordingly, the notion of managerial expertise an illusion (p. 102). Since managerial expertise an illusion, a more realistic attitude would lead into an awareness of the modest competence of managers, realizing the limitations of social scientific generalizations. However, according to MacIntyre (1981), claims of this kind do not achieve power and authority within bureaucratic organizations. March and Sutton (1998) provide similar arguments. After discussing current problems 7 At the same time, one should be sceptical towards the academic merit and consulting practices that easily lead to an overflow of new concepts. For example, March and Sutton (1997) have argued that the newer concepts appear the better. In fact, many of the management fashions seem to be characterized by a rediscovery of old ideas wrapped in new packages. 16 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? within management and organization research, they conclude that much of the critique on the nomothetic model is no news for most of the scholars. However, the nomothetic model still prevails in research and consulting practices. This is because the academic merit and consulting practices are based on prestige that is founded upon generally applicable research results and advice. This critique clearly implies that the modernist-nomothetic model is not likely to provide knowledge that is most useful for practitioners. This calls for new assessments of the role of researchers as advisors of organizations and managers. One perspective advocated by many coming from different research traditions is to clearly see the role of researchers as providers of new conceptual models and ideas that provide means for a reflective dialogue in the specific research setting or in society in general (see e.g. Numagami, 1998; Löwendahl and Revang, 1998). There are, however, other views that advocate more conscious participation in the social processes that one studies – in stark contrast to the positivistic ideology of seeing researchers as neutral observers (see e.g. Calori, 1998). For those conducting action research, the starting point is that of making the researcher a part of the social change processes (Eden and Huxham, 1996).8 The underlying assumptions of action research though vary greatly in terms of whether the goal is simply to help managers to achieve predefined goals without much reflection of the role of the researcher. The ethnographic research tradition, in turn, provides a perspective which emphasizes the need of reflexivity concerning the researcher’s relation to the target organization and its effect on the research results (see e.g. van Maanen, 1988; Hammersley, 1992). The postmodernist perspective, as reflected in the interpretations of Foucault or Derrida (Knights, 1992; 1997), claims that researchers are in any case participants in organizational processes. This happens, if not in more concrete form, then at least in the form of participation in production and reproduction of organizational and management discourse. 8 Ironically, it is often the case that even those researchers in this field who are involved in active consulting with many companies do not use these connections as a priori form of evidence or try to hide these connections in empirical reports if the research is indeed based on such encounters. 17 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? The pragmatist view is to acknowledge the role of researchers as participants is the social change processes in question but not to exaggerate the potential influence. This perspective accepts that the role can be very different depending on the circumstances and that one role is not a priori better than the other. What is, however, important is reflexivity in terms of constant evaluation of the role of the researcher and its impact on both the research results and the organizational processes at hand. 18 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Critical issue #5: Value-laden nature of knowledge and ethical implications of research A specific characteristic of the positivist model of science is that it aims at objective value-neutral knowledge. Positivism, as linked to the enlightenment optimism, sees science as a means towards progress but does not contemplate the possible unintended consequences of ‘progress’. Research can accordingly only provide ‘instrumental’ or ‘technical’ knowledge that is then used by the practitioners. As positivism implies an understanding of science as value-free activity, it thus not able to provide a meaningful foundation for ethically conscious strategic management research. Even a most cursory reading of the strategic management literature (e.g. Long Range Planning, Harvard Business Review or Strategic Management Journal) reveals that there is little reflection upon the ends of strategic management, the inherent value-ladenness in this literature, or its ethical grounds. This is not to say that there would not be excellent critical pieces of ethical analysis in management or wider social science literature but merely that a lack of value-based or ethical reflection is a major characteristic of current strategic management research.9 9 Why should strategic management scholars then pay specific attention to the political or ethical consequences of the research conducted? First, ‘strategic management’ is about decisions which have important societal consequences. Not all the central decision makers in this world are necessarily following the particular models developed by strategic management research. However, it appears that corporations are gaining more power in this respect compared to other institutions, such as the nationstate (see Korten, 1996). It also seems that ideas and discourses developed in the ‘corporate realm’ are also adopted in other spheres. For example, in Scandinavia, during the last few years, such public organizations as government offices, universities, schools or hospitals, which previously had little to do with the management practices of the private sector, have been eagerly adopting, for better and for worse, precisely the most fashionable models of ‘strategic management’. Second, ‘strategic management’ is about making decisions that often have rather direct influences on the stakeholders of the companies and the competitive situation. In fact, for example, mergers and acquisitions are phenomena that fundamentally reshape particular industries (see Whittington, 1993). This development also has its down-side, often manifested in increase of corporate power at the expense of competition. This development, which is often not in the interests of customers or suppliers, is something that is rarely examined in strategic management studies, adopting the perspective of the merging corporations and usually its top management. Third, strategic decisions also have rather direct influences on the people working with the organizations. While many observers have, from an historical perspective, come to the conclusion that the development during this century has not been all that negative from the perspective of the employees and that many management practices, for example, developed in the human resource management literature, have created positive effects by emphasizing employee motivation, this is not the view shared by all. In fact, some sceptics argue that often even the rhetoric specifically dedicated to ‘empowerment’ is a tool of domination (see Willmott, 1993; Alvesson and Willmott, 1996). 19 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Unfortunately, the strategic management literature seems to promote primarily the increase of corporate power, increase of shareholder value or improved organizational effectiveness with little consideration of how these relate to such concerns as personnel satisfaction, gender or racial equality, global distribution of wealth, environmental responsibility or sustainable growth. In fact, the ‘corporatization’ and ‘globalization’ trends may be directly conflicting with such concerns, as discussed, for example, by Korten (1996). For instance, it is easy to see how the organizational performance and employment concerns are contradictory aims in the recent fads to ‘re-engineer processes’ (see e.g. Grind and Case, 1998) or ‘create synergies in mergers and acquisitions’ (see e.g. Buono and Bowditch, 1989; Vaara, forthcoming). Similarly, it is self-evident how ‘creation of shareholder value’ and, for example, ‘equal distribution of wealth’are conflicting goals. The proponents of critical theory have probably most clearly advocated the epistemological position that rather than neutral observers researchers should be seen as active participants is social (and societal) change processes. In a sense, proponents of the critical theory share the idea of enlightenment that comes from cumulation of knowledge with positivists but rather see it as ‘emancipation’. For example, Alvesson and Willmott (1996) coin the program of ‘CT’as follows: “In sum, the intent of CT is to foster a rational democratic development of modern institutions in which self-reflective, autonomous and responsible citizens become progressively less dependent upon received understandings of their needs, and are less entranced by the apparent naturalness or inevitability of the prevailing politico-economic order. To this end, CT encourages the questioning of ends (e.g. growth, profitability, productivity) as well as the preferred means, such as dependence upon expert rule and bureaucratic control, A counter-argument for these ethical deficiencies of strategic management research is that perhaps it not the role of strategic management studies to examine these ‘other effects’ or ‘consequences of unintended strategies’. These questions could rather be studied by management researchers specializing in personnel issues or environmental questions, or by critical sociologists. However, there are important counter-counter arguments. First, if these ‘other voices’ or ‘unintended consequences’ of strategies are not addressed, strategic management studies as social activity lie on a very problematic moral ground per se. For example, Alvesson and Willmott (1996) claim that “As the political quality of management practice is denied or trivialized, consideration of the personal, social and ecological costs of the managerial methods of enhancing growth, productivity, quality and profit is largely ignored.” (p. 37). Second, if strategic management studies limit themselves to only to the particular managerialist perspectives, the understanding created of the social phenomena to be studied is likely to be distorted and poor, as elaborated in the previous section. Third, strategic management scholars should in any case acknowledge these orientations in order to be able to develop grounds for an ideal division of work and cooperation across disciplines that has often been argued for but difficult to achieve (see e.g. Knights and Willmott, 1997). 20 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? the contrivance of charismatic corporate leadership, gendered and deskilled work, marketing of lifestyles, etc.” (p. 17). They specifically call for organizational action that is based on the process of critical self-reflection and want to see people come aware of different types of domination embedded in management practices. While many agree on the position that researchers should acknowledge responsibility as social change agents, there is, however, a question concerning whether this means adopting the view that there are general ethical principles or whether the considerations should be situation specific. For example, critical theory can be interpreted as a program that especially seeks to promote the position of the employees. It is, in fact, often labeled as anti-management since it usually reflects the distinction between those that rule (to be criticized) and those that are ruled (to be helped). Similar general principles can also be found, for example, in feminist oriented research. A contrast is provided by many others that argue that ethical principles are very difficult and therefore favor more situation specific understandings (see e.g. Toulmin, 1990). This emphasis on locality of ethical questions is also the position usually adopted by post-modern scholars. We argue here that a position that combines both more general and situation specific considerations is worth striving for. This position is consistent with pragmatist views of research as ‘practical experimentation’ that is never perfect but is still worth doing (Wicks and Freeman, 1998). Interestingly, this position is also consistent with old Aristotelian ideas. Of the many key ideas of Aristotle, the distinction of three types of knowledge – ‘episteme’, ‘techne’ and ‘phronesis’ – in Nichomachean Ethics is particularly relevant for this purpose. In brief, ‘episteme’ consists of deductions from basic principles. ‘Techne’ is craft knowledge about how to make things. ‘Phronesis’ is the highest level of knowledge which combines these previous two and deals with what is good for human beings and the ability to put that in practice. As noted earlier, the influences of strategic management research are not only limited to the propensity of decision makers to follow the strategic models or recommendations of researchers. This research may also influence the society in 21 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? more subtle ways, for example, in developing particular types of discourses that constitute social (also power) structures (spread, for example, by universities, consultants or business press). The writings of Foucault and Derrida, in particular, have inspired authors within organization and management studies to critical assessments of the power implications of management discourses (see e.g. Knights, 1992, 1997). Central for the understanding of the ethical grounds is accordingly the examination of the development of the discourses and social practices of strategic management over time across different historical and cultural contexts (see e.g. Knights, 1992; Knights and Morgan, 1995; Tsoukas and Cummings, 1997). This reveals how management as a science has developed into a particular type of discourse and how strategic management has become a particular kind of institutionalized discipline within management studies. From this perspective, as most of the research on strategic management is related to the problems of making important decisions in (usually corporate) organizations, governing organizations or solving particular types of organizational problems, it is difficult to escape these historically and culturally specific ideologies and power structures that have formed the basis of this discipline. It is important to note that an essential part of these dominant concepts and discourses are such ‘dualisms’that tend to privilege one side over the other (see e.g. Knights, 1997). This easily leads to ‘logocentrism’ where theories, concepts, narratives and ideas that do not comply with the dominant logic are discarded or marginalized. In the context of strategic management, it is not too difficult to reveal dualisms such as ‘means-ends’, ‘rationality-irrationality’, ‘objective-subjective’, ‘universal-particular’, ‘quantitative-qualitative’, ‘owner-employee’, ‘managementpersonnel’, or ‘masculine-feminine’. The point to be made is that many of the issues or ideas that would be important in terms of developing ethical consciousness are easily forgotten or marginalized in the dominant discourse. Specifically important is the distinction of means and ends. This separation of ‘means’ (strategies) and ‘ends’ (success) is problematic as it places all the responsibility for goal formulation for the managers. Ironically, in the modernist- 22 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? positivist model, the capacity of managers to find the best for the organization is seldom questioned. From a postmodernist perspective, this distinction may also be seen as an inevitable result of the development of the managerial discourses from the need to solve managerial problems and an example of the most problematic dualisms that characterize strategic management discourse. Interestingly, Aristotle does not make the distinction of means and ends or facts and values (see also Tsoukas and Cummings, 1997). In Aristotelian philosophy individuals and objects are defined in terms of their purposes or the roles that they are expected to fulfill. For strategic management practice, this might mean understanding that good strategic managers do what strategic management professionals are expected to do. However, the ethical implication is not that researchers should be satisfied with the status quo where a good manager is one that mainly thinks of organizational down-sizing or shareholder value. According to Aristotle, it is, in fact, important to take into consideration individual decision making situations, what constitutes a good life, and what is good for the society. Central in creating these ‘norms’of what ‘good’ conduct is the community (‘polis’). It is not far fetched to claim that it is consistent with his ideas that in contemporary society researchers take up the role of active participants in creating these norms by critically evaluating what is ‘good conduct’from a wide societal perspective. What kind of strategic management studies could then meet this challenge of avoiding the means (strategy) and ends (success) distinction? Clearly not studies of success strategies or factors that are inherently problematic in terms of the causal relations found and do not provide a possibility for ethical reflection. This rather calls for studies that focus on how the managers make decisions in different contexts, how managers think and act, how strategies are being developed and how they emerge in organizations including symbolic aspects, studies of internal politics, studies of institutionalization of strategies and management fashions, and other studies of the processes where strategies are being produced. Postmodernists emphasize that ‘truth’ in scientific work is an effect of powerknowledge relations rather than as such an outcome of successful scientific endeavor. This means that any ideas or models that are being developed by strategic 23 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? management research should be viewed with a critical eye as they, perhaps more than anything else, reflect and reproduce specific ideologies and power structures. This therefore calls for questioning attitudes so that researchers can understand what types of political or ethical consequences the particular models that they deal with imply. This approach is, however, far from easy. What is a specific problem for researchers is that this critical epistemological base does not really provide any “firm” or “comfortable” foundations. Knights (1992) coins this problem as follows: “He [Foucault] refuses to let “comfortable” assumptions and practices alone, whether these support a conservative or critical account of organizational or social life. Instead, he is forever questioning ideas and turning upside down the institutions that support these ideas. Because critical theorists of management tend to cling precisely to these 19th-century ontologies and to the humanist faith in liberation that grounds them, they are too profoundly threatened by a project that continually undermines knowledge, including the knowledge that it has produced” (p. 520-521). While this reflection should be taken seriously, we suggest that it is combined with a pragmatist view that accepts the imperfect nature of research knowledge but still sees research as an effort worth making (see e.g. Wicks and Freeman, 1998). This means, as in postmodernism, rejection of the privileged status of science. Science is rather seen as one moral technique for coping with the world. According to this view, what science could (and should) do is to develop ‘pragmatic knowledge’ that is useful for the specific purpose at hand. This, however, requires constant reflection of the value-ladenness of concepts and terms and understanding of the consequences of promoting particular ideas or models. 24 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Towards reflective pragmatism? We have outlined significant epistemological problems that modernist-oriented strategic management research is faced with. We have also proposed new pragmatic approaches that provide means to redirect research towards such studies that are more relevant for practical decision making and are ethically conscious. This has led to sketches of epistemological positions, which are provocatively contrasted with the dominant modernist and radical postmodernist stances in the table below. 25 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? Pragmatist positions for strategic management studies Epistemological questions Dominant modernist stances in strategic management research Radical postmodernist stances Reflective pragmatist positions Universalism vs. contextuality Strive for general abstract knowledge Focus on contextuality, historical contingencies and particularisms Appreciation of contextuality, historical contingencies and locality without discarding meaningful generalizations Conception of causality Search for invariant causal laws based on empirical regularities Disregard of causal rhetoric Conception of causality as capacities and powers inherent in social structures Conceptualizations and narrative rationality Disregard of conceptualization Focus on discourses as basis of social construction of reality Recognition of conceptual simplifications and narrative rationality Relation of scientific knowledge and practice Researchers provide universal knowledge for practitioners; researcher and researched roles are distinguished Researchers are seen as (re)producers of managerial practices and discourses Recognition of the role of researchers as participants in social processes with an emphasis on reflexivity Value-laden nature of knowledge and ethical implications of research Researchers are seen as neutral observers Researchers are seen as (re)producers of managerial practices and discourses Recognition of the role of researchers as social change agents and (re)producers of managerial discourses with an emphasis on reflexivity 27 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? In this paper, we have searched for ‘middle ground’ between clearly problematic modernist epistemological stances and radical postmodern positions. We have specifically attempted to take a step forward from untenable positivist positions while not falling into radical constructivism that would not provide any convenient way to talk about ‘real’ phenomena. We have also tried to step away from disguises of value-free research while not building a negativist or anti-management attitude that often characterizes, for example, critical theory (see e.g. Alvesson and Willmott, 1996) or post-structuralist (see e.g. Knights, 1992, 1997) oriented research. Following principles already established by pre-modernists, we have tried to encourage ‘both-and’ positions and methodological plurality, recognizing the limits of particular research efforts and science in general. The epistemological positions, in fact, encourage both more traditional research in search of more general structures, mechanisms and practices in strategy processes and, for example, very situation-specific hermeneutic analyses of the construction of practices in strategy work. Both are clearly needed. The epistemological positions also invite both theoretical/conceptual analyses and empirical work where the researcher is actively involved in the strategizing processes that one studies. Particularly interesting conceptual developments are approaches that link strategy processes to social practices and discourses. Specifically promising empirical research approaches are action research and ethnographic methods that provide possibilities for open engagement in a dialogue with the research subjects. Such pluralism does not, however, imply acceptance of any type of research. Clearly, the requirement of reflexivity is a fundamental issue that should be taken seriously in any research efforts on strategic management. A common theme in which these pragmatic positions echo more radical postmodern stances is the rejection of such managerial rhetoric which does not serve very well any practical purposes and leads to ethically questionable practices. The sole function of this type of rhetoric may, in fact, be the promotion of the power positions of the managerial profession. MacIntyre (1981), for instance, describes in his work After Virtue the relation between managerial expertise and organizational 27 Critical epistemological issues in strategic management studies: Towards reflective pragmatism? research by noting that the power position of the manager "requires for its vindication a justified conception of social science as providing a stock of law-like generalizations with strong predictive power". MacIntyre thus sees that the justifications and requirements offered by philosophy of science for social scientific research yield a legitimization for the power position of managers through the results of such social research. Likewise, Alvesson and Willmott (1996) state a conspiracy-theory type of idea that it may be precisely the function of abstract scientific management research to create and legitimize “an image and ideal of managers as impartial experts whose prerogative is associated with, if not founded upon, scientifically respectable bodies of knowledge, and not because there is any realistic prospect of this research addressing, let alone solving, the problems or deficiencies of management” (p. 27). It should be emphasized that the position elaborated here is not to discourage research on strategic management, as might be the conclusion of some critiques of this field. In fact, it seems to be the case that in order not to surrender to the powerful trends of liberalism, corporatization and globalization, the need for strategic thinking is greater than ever. In conclusion, this paper has been an attempt to developed pragmatic stances towards problematic epistemological questions. Future research does not have to be based on any ‘ism’. One problem is that such ‘isms’ may be linked with particular images that are not politically unproblematic for all the researchers. Another is that trying to follow a particular ‘ism’ may very difficult, and by doing so researchers easily only produce further debates concerning purism. 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