Practice of strategy

THE PRACTICE OF STRATEGY Lez Michael Rayman-Bacchus Ph.D University of Edinburgh July 1996 DECLARATION I hereby declare that this thesis was composed by myself and that the work is Lez Michael Rayman-Bacchus my own. ABSTRACT In moments of reflection, both management teachers and practitioners acknowledge that choices are constrained by the availability of information, the ability to make sense of it, the ability to communicate it. This study of strategy practice in organisations shows that choice is more than constrained; it is also socially constructed. and Everyday strategy is guided by 'taken for granted' practices rooted in social reality; an objective reality that is the product of subjective processes. At the same time, practitioners construct their social reality through practice; through, for example, shared meaning, heritage, the patterning of experiences. These observations are based on a phenomenological study of strategy and innovation in three unrelated organisations all of whom regard innovation as essential for their survival: a bank, a telecommunications service provider, and a business school. The relationship between strategy practice and social reality is inclusive, one reflecting and at the same time shaping the other unceasingly. However the indeterminacy of the shaping process suggests that there is more than rule governed behaviour involved. innovation practitioners both reinforce and elaborate their social reality. In Through interpreting and expressing their social reality through practice, practitioners are necessarily creative; they are interpreting and expressing their social reality through the application of their capabilities. are a limited number of social realities that practitioners might create; social reality is infinitely variable nor universally homogeneous. The ways that practitioners work together and the degree of social control they experience gives rise to four possible archetypical social realities or alternative worlds. Those aspects of reality that practitioners of each socially constructed world take for granted varies qualitatively across an inexhaustive list of factors, including attitudes to rationality and uncertainty, and how to compete and co¬ There not operate. findings suggest that attempts to manipulate social reality fail because organisational designers do not appreciate the extent to which practice is socially constructed. Practitioners may have more influence on their organisation's innovative performance through a better understanding of how they construct social reality, and how strategic choice is embedded in that reality. These ACKNOWLEDGEMENTS I am deeply indebted to my supervisors, Professor James Fleck and Dr Wendy Faulkner, for their advice and encouragement in realising this thesis. I have gained immeasurably from their expertise, helping me to develop my ideas through challenging discussions; developing in me a readiness to draw on a diversity of sources; improving my writing skills through their critical reading of numerous drafts; and giving me an appreciation of the some of the difficulties of managing a research project. Others have helped me develop my ideas. My thanks to Professor David Bloor for our discussions on Wittgenstein's and Mary Douglas' work, Professor Friso den Hertog for reading and commenting on an early draft of my 'research design and method' chapter, and Professor Lefebvre for his suggestions on organisational behaviour. My thanks also to those who shared their time and ideas with me at seminars and informal chats, particularly from: the Research Centre for Social Sciences, and the Business Studies department at the University of Edinburgh; MERIT, and the Faculty of Arts and Culture at the University of Limburg in The Netherlands; the Faculty of Applied Economic Sciences at Limburgs Universitair Centrum in Belgium. I am also very grateful to Kit Gardner and her team in the Business Studies office at Edinburgh and Corien Gijsbers at MERIT for clearing away those administrative and practical obstacles that reared up from time to time. With their help I was able to enjoy my task even more. This study was made possible through the co-operation of staff in the organisations studied. For this I am especially grateful to Robin Browning of the Bank of Scotland, Patrick Hurd of Ascom Timeplex, and David Asch of the Open Business School, for providing me with time and access to their colleagues. In many ways Katerina, my wife, has been critical to the production of this thesis. She has supported me by managing our household, reading various early drafts, and giving me the freedom to think and walk around in a distracted state preoccupied with my own thoughts. This research was funded by the Joi nt Panel of the Science and Engineering Research Council and Economic and Social Research Council. I am very grateful to the Panel for their support and their belief that the marriage of my industrial background and academic research could advance our understanding of the nature of strategy and the management of innovation. CONTENTS List of Figures List of Appendicies x 1 THESIS INTRODUCTION 1 1.1 Personal encounters 2 1.2 The need for innovation 4 1.3 Outline of thesis 6 ix PART ONE: LITERATURE REVIEW AND RESEARCH METHOD 2 CORPORATE STRATEGY AND INNOVATION: a 2.1 Introduction literature review 11 2.2 Defining strategy 13 2.3 Metaphors of strategic management 18 2.4 Environmental determinism and managerial choice 2.5 Innovation and strategy 2.6 33 36 Knowledge and innovation 44 2.7 Conclusions 56 3 RESEARCH DESIGN AND METHOD 3.1 Introduction 59 3.2 Research aim and scope 59 3.3 Epistemological position 60 3.4 Research method 63 3.5 Reflection 78 3.6 Conclusions 83 v PART TWO: THE CASE STUDIES INTRODUCTION 86 4 ASCOM TIMEPLEX 4.1 Introduction 4.2 88 History and size 4.3 Work 88 organisation 92 4.4 Strategic aims 104 4.5 Strategy 107 process 4.6 Innovation 126 4.7 Conclusions 131 5 BANK OF SCOTLAND 5.1 Introduction 5.2 133 History and size 5.3 Work 133 organisation 137 5.4 Strategic aims 146 5.5 Strategy 149 process 5.6 Innovation 160 5.7 Conclusions 166 6 OPEN BUSINESS SCHOOL 6.1 Introduction 6.2 168 History and size 6.3 Work 168 organisation 172 6.4 Strategic aims 175 6.5 Strategy 179 process 6.6 Innovation 189 6.7 Conclusions 197 vi PART THREE: ANALYSIS AND CONCLUSIONS 7 EMPIRICAL AND THEORETICAL BASES OF SOCIAL REALITY 7.1 Introduction 7.2 200 Constructing social reality 206 7.3 Conclusions 222 8 THE SOCIAL CONSTRUCTION OF STRATEGY 8.1 Introduction 225 8.2 Charades 227 never ending construction of reality: from north global payment systems 8.3 The to 8.4 sea petrochemical financing Everyday practice 228 233 256 8.5 Conclusions 9 ACCOMPLISHING SOCIAL REALITY: applying capabilities, interpreting technology-practice, imputing strategic intent 9.1 Introduction 9.2 Exercising And Creating Capabilities 9.3 The 9.4 257 259 interpretive flexibility of technology-practice Strategic Intent 274 289 9.5 Main conclusions 298 10 PLURAL SOCIAL REALITIES 10.1 Introduction 10.2 Choice and social 301 reality 302 10.3 Resonance between this framework and other themes 307 10.4 Alternative social realities: three 308 10.5 General discussion: cases drawing comparisons 10.6 Conclusions 330 341 vii 11 CONCLUSIONS 11.1 Introduction 345 11.2 Deviations from the initial intentions 346 11.3 Main 11.4 findings 347 Implications for practice and management teaching 354 360 11.5 Further research Appendices 363 Bibliography 378 viii LIST OF FIGURES 4.1 Ascom's re-organised divisions 90 4.2 Timeplex Inc. organisation 93 4.3 Timeplex Inc. UK sales organisation 94 4.4 Timeplex Inc. world-wide customer support organisation 96 4.5 Timeplex Inc. European customer support organisation 96 5.1 Bank of Scotland clearing bank structure 135 10.1 Social Choice: typology of social realities 303 a LIST OF APPENDICES 1 Schedule of interview questions 2 Bank of Scotland management 3 Bank of Scotland services division structure 'Project Life Cycle' 364 366 368 4 Open Business School committee structure 370 5 Open Business School management structure 371 6 Open University and School of Management (OBS) mission statements 372 7 Open University philosophy and strategic aims: 'Plans For Change' 375 8 Open University instill project recruitment advertisement: 'New Technology Initiative' 377 1 Thesis introduction The motivation for early 1990s, and pursuing this thesis emerged can experience be traced to two influences and practitioner engaged in as a was my new products and applications. This work risk; but also competitive as a new a long standing desire. One influence business development, conceiving of exciting, perhaps because it carried new wonder why that seemed wanting in stimulating. Over time though attempts to was so. one way or another. The second influence came from different businesses who also seemed to be trying to make These two influences fuelled common sense the process of my experience as a Open Business School. In this role I engaged in discussion with practitioners contribution; to write One manage I looked to the popular management literature for help but that situations. Here too the literature while valuable seemed to raise to answer. lot of business opportunities seemed to be effective only at the margins. I began to creating from many a disciple of Thatcher's enterprise culture of the 1980s I found the fiercely process very tutor for the was gradually during the late 1980s and very a book that some a threats to the continued many long standing desire to make of their questions some own as it tried kind of literary section of society might find useful. theme of these influences involve of their role within their as sense questions about how practitioners make organisation's strategy; how they interpret opportunities and prosperity of their employing organisations; and why, despite formal strategy making and meticulous planning, the future almost always turns out differently to that intended. These issues seem to their customers that innovation is The first section of this a revolve around a belief shared necessary route to prosperity. chapter, 'personal encounters', explores found to be problematic widespread concern among as a to locate the broad aims of by competing firms and some of the issues that I have practitioner. 'The need for innovation' then establishes the organisations for ways of being more innovative, and also helps this research. The last section outlines the 1 chapters of the thesis. 1.1 Personal encounters There are a few have found that an concerns that 'strategy' shaped means this differentiation manifest itself on early reading and the design of this research. First, I different things to different people. It varies both in terms of meaning and relative to abstract my an as individual's role within the organisation. I have people talking past each other, seen or groups seem to agree strategy formulation yet implement those agreements in contradictory or incompatible ways. The strategy concept is not the only thing on which practitioners believe they while their actions tell a different story. agree, Despite the existence of mission statements and the like, interest groups within and outwith the organisation have different and often conflicting interpretations of what the organisation's expertise is, what its current competitive position is, and in which markets and with what technologies it could or should be competing in the future. The extent and nature of such strategy process, yet that other diversity is seldom explored as part of the formal diversity has significant implications for internal coherence amongst things. My second concern, related to the first, is that contradiction, conflict and compromise seems prevalent within formal strategy. Organisational performance is measured in terms of both continual initiatives profit growth and the creation of new business. My experience is that if substantial are set up within an established business, that is If the initiative is set up as a separate a recipe for death of the initiative. entity the risks to its survival do not diminish, rather they change in nature. From the perspective of those directly managing the initiative, their relationship with the larger organisation is one where strategy making and outcomes tend toward unstable coalitions between different interest groups and at times felt a unpredictable changes of direction. As constant tension in relations with the main a within the overall organisation, member of embryonic initiatives I have organisation. These usually revolve around paradoxes; the need to generate cash and the need for investment; maintaining the status quo and new organisational change; predictability and flexibility; operational efficiency and pursuing technologies and markets; exploiting existing internal know-how and pursuing new know-how through links with external bodies. 2 Third, formal strategy seems insensitive to heterogeneity, spontaneity and intuitive judgement, and yet decision outcomes often seem more image of logic and calculus. The practice of strategy coherent guiding principles based on akin to witchcraft than its public appears as a collection of more or less institutionalised beliefs, spurious cause-effect relationships, articulated through 'rules of thumb', and justified through post hoc rationalisation. Decisions about 'normal for the industry', or resource allocation, such as R&D spend, are often justified as 'we've always done it this way'. Logical arguments marshalled to bolster such decisions. The traditional functional are then specialisation (Marketing, Sales, R&D, Production, etc.) is itself an institutionalised 'rule of thumb' resulting in strategic choices being forced to conform accordingly. Fourth, almost all knowledge about 'how to compete in this business' is regarded as objective knowledge, - whether this is current and required expertise, market requirements, competitive position and sources of competitive advantage. As practitioners the accuracy of such knowledge, but rarely question whether we are questions, whether there of making or are fundamentally different ways we often debate asking the right sense of the world. Further, practitioners often know what to do in any given situation but, beyond saying that it is 'commonsense', cannot say how or why they know what is the appropriate action to take. Polanyi (1966) in his study of knowledge accumulation in the natural sciences refers to this phenomenon as creation of tacit 'knowing more knowledge than seems to we can tell' or 'tacit knowledge'. The existence and have poorly understood links with formal strategy and management control systems. For example, practitioners may formally aim to create knowledge, such as extent and nature of such and that described by patents, yet I doubt whether they really understand the knowledge as it is created, nor the manner in which it is perceived organised collectively. Fifth, my sense is that strategy involves spending a great deal of time negotiating and trading support with colleagues informally. Strategy seem to owe more to sometimes informal social and transitory key groups, than to decisions and knowledge acquisition of all sorts political relations, and membership of small, any amount 3 of formal planning. The way that strategy unfolds seems driven by one interest group using politics, knowledge and links with informal networks more effectively than other interest projections, and espoused strategy all activity. In seem to groups. Formal plans, forecasts, be post hoc rationalisations of backstage experience, formal strategy has little chance of success if it is not underpinned my by such backstage activity. Formal strategy is acknowledged yet in seem only partially relevant informing actual outcomes. The concerns listed here are not intended to suggest the existence of widespread conflict and incompetence. Rather, it is to stress that organisations assume the reliability of formal strategy, freedom of strategic choice, and the veracity of their own understanding. Further, there seems to be regard change More as great resistance to internal heterogeneity and change, and a tendency to necessarily generally, strategy an upheaval. seems to be perceived as bringing order, implying a particular pattern of work; it suggests restriction. From all possible technologies a particular selection has been made, Innovation, same of on and from all possible market relations a particular set has developed. the other hand, implies disorder, and a challenge to the existing order. At the time it is the material for creating new patterns. It implies technologies and market relations to choose from. How and the disorder of innovation be reconciled? Taken implications for formal strategy, our can a wider if not infinite the apparent order of strategy together these understanding of it, our range concerns and ideas have assumptions about its effectiveness, and management teaching on the subject. 1.2 The The need for innovation importance of innovation is widely recognised. The British government through the Department of Trade and Industry (DTI) stresses its importance, defining it as: application of knowledge or techniques in new ways or for new purposes [and] is important in every business. It is not necessarily about thinking up new things in the first place but about exploiting opportunities profitably and ahead of competitors ('Innovation: Technology and Change', The Enterprise The commercial Initiative, 2nd. ed., February 1992 ). 4 Popular journals and companies' depends success ability to maintain design, and that newspapers regularly how they on carry manage competitive position is a articles and histories of how innovation. For example, Coats Viyella's seen as dependent generally "western firms will hold more case on to on innovation in quality and the upper end of the market only if they continue to innovate" ('Concentrating the mind', The Economist, February 18, 1995: 81). There are many government community in the hunt for sponsored initiatives to bring together industry and the research more effective ways of boosting the nation's wealth generating capabilities. For example, the Economic and Social Research Council (ESRC) 'Innovation Agenda' (1993), and the Innovation Advisory Board 'Action Programme' (1990). Some of these programmes and projects produce guides and checklists for practitioners, such National Economic as the Development Office (NEDO) Innovation Management Tool kit, published jointly by HMSO and Barclays Bank in 1990. More recently (1996) the ESRC published 'Innovation: A framework for innovation management training'. This material is being provided free of charge to colleges and universities that provide These initiatives tell more practitioners how to make their businesses innovative. In addition to training firms may more draw directly courses in innovation. competitive by being on experts and funds. For example, The DTI's Enterprise Initiative offers both expert help to firms and capital grants for supporting innovation. The government is also urging firms to develop 'strategic' skills in business planning, management information systems, skills in the traditional This research is based means that corporate areas on of R&D, well as enhancing their competitive manufacturing, and marketing. the assertion that firms must compete leaders and their teams change, making non-routine decisions, build as as are through innovation which continually exercised in managing strategic they try to improve competitive performance and competitive advantage by bringing together technological possibilities and commercial opportunities. 5 The aim of this research is to difficulties of provide practitioners with additional insight to the intractable managing innovations, where 'innovation' describes the process of profitably anticipating and interpreting the needs of selection environments through technological possibilities. Technological possibilities here refer to knowledge as artefacts and work processes. new ways of configuring technical The selection environment refers to markets, regulators, competitors, collaborators, and other stakeholder groups. technological configurations (that is novel products and processes) are willing to pay involve? This is a are successful if people for them, but what does 'anticipating and interpreting' opportunities question about the nature of strategy practice, of how these strategic choice, and the hopefully provide In general innovative a scope processes shape for innovation therein. A better understanding of practice will frame of reference that practitioners find useful in evaluating their own situation. The approach adopted here to gain the desired insight to corporate innovation is not to trace the progress of an individual innovation from initial idea through to Instead the focus is on how the a marketable product. organisation's actors, with partial and differentiated knowledge, make and execute strategy faced with the uncertainty and diversity surrounding technological possibilities and selection environments. 1.3 Outline of thesis Drawing on questions the are concerns above I formulated concerned with making sense a number of research questions. All of these of the practice of strategy, with particular emphases being reflected in the individual questions: 1. How do the differentiated innovation as a perceptions of interest groups shape the practice of managing strategic process? How do networks and contacts, both formal and informal, shape perceptions? 2. What are the barriers to achieving both innovation and efficiency, conformity and originality? Is the simultaneous achievement of these positions 6 a contradiction? 3. What heuristics exist (eg., previous decisions, existing formal decision rules and informal practices), and how do these shape (and get shaped by) the strategy process? 4. What is the nature and role of tacit 5. What is the These as knowledge in the strategy process? relationship between the formal and informal strategy process? questions were a starting point for the subsequent literature review and field work, but will become clear to the reader my immersion in the research lead to modified research questions. My interests and interpretation of field work evidence developed in unanticipated ways, resulting in a change in the research questions addressed in chapters 7 to 10: 1. To what extent is the exercise in practice of strategy socially constructed? That is, is strategy objectivity and detached rationality, or an an exercise in subjectivity and imagination? 2. What is the relationship between the practice of strategy and social reality? An organisation's social reality, usually referred to that the impacts on organisational life, as a as its culture, is typically backdrop, and as something that seen as an can element be brought under yoke of strategy. To what extent is social reality under the control of the strategist? 3. Are there discernible and viable alternative reality is socially constructed does not mean socially constructed realities? Accepting that that the possible constructions are infinitely variable, that anything is possible. Is there scope for characterising alternative social constructions? The second group of questions differ from the original in terms of the assumptions and theoretical framework employed. The original questions assumed conception of strategy while the framework. The thesis is new organised questions so as to were a largely positivist addressed using an interpretive show the reader both the content of the final argument made in chapters 7 to 10, and the process of evolution in thinking that led to that final argument. Chapter 2 represents my initial understanding of the issues relevant to the original research questions. Chapters 7 to 10 represents 7 a shift in my assessment of the important issues underpinning the practice of strategy; a shift brought about through engaging in field work and its analysis. This thesis is divided into three parts. describes the research conducted early of research on Part I contains literature review (chapter 2), and a design and method adopted (chapter 3). The literature review in the study, to establish a was platform of knowledge to guide the preparation questions. This review explores the diverse perspectives on the meaning of strategy and strategic management, the role of knowledge creation in innovation, and the extent to which innovation is part of the strategy process. Chapter 3 describes the research design and method used for investigating the diverse perspectives and the role of innovation. A central feature of the research organisations. This differences across was done to provide material for an the meaning of strategy on design is case studies of three evaluation of both similarities and organisations in diverse competitive sectors. This chapter includes epistemological considerations. In particular it is argued that positivist research design is a some phenomenological rather than appropriate for studying differentiated meanings of more strategy, and for making sense of the different ways that practitioners see the scope for innovation. A further personal reflection on the research process is included as a way insight to how practical methodological challenges and the analytical of providing process were managed. Part II reports the three case manufacturer and service histories (chapters 4 to 6): provider, and a a bank, a business school. These written from the interviews described in the 'research telecommunications case histories have been design and method' chapter. Each case history documents the organisation's history and size, its work organisation arrangements and strategic aims, and interviewees' accounts of their strategy record. The three accounts are not processes and innovation presented here in terms of any particular analytical framework, this being the focus of Part III, yet they give a sense of the variety of ways that innovation is managed within the practice of strategy. Part III contains four chapters of analysis (chapters 7 to 10), and the thesis conclusions (chapter 11). Chapter 7 reviews the literature on social reality, 8 a concept that underlines the whole analysis of the three process course cases. This review is in Part III rather than Part I so as to show the of development of my thinking: the notion of social reality became significant in the of the field work, not before. Chapter 8 draws on the case histories to show that strategy practice is a process where practitioners construct their social reality, a reality that at the same shapes practice. The findings presented here time rationalistic are in contrast with the largely perspective of strategy that underpins the earlier literature review of chapter 2. Chapter 9 explores the role of technological knowledge and capabilities in constructing practitioners' social reality. Links reviewed in are also made here between these findings and ideas chapter 2. Chapter 10 suggests that each of the three organisations studied characterised as one of a limited number of possible social realities, and a can be framework for comparing social realities is discussed. The each concluding chapter 11 draws together the main research findings, reflecting the thrust of analytical chapter, implications for practice, and possible further research. The discussion takes in the be more 'personal encounters' discussed above, self-reflexive about their the issues a that practitioners need to knowledge claims, strategic judgements and practice, and they should consider in the practice, its relationship with argue process. The chapter reflect on the nature of strategy socially constructed reality, and the difficulty of designing organisations. The conclusions also highlight that in managing innovation practitioners' shared reality shapes choice but at the same time provides the freedom for innovative practice and outcomes. 9 PARTI Literature Review and Research Method 2 Corporate strategy and innovation: 2.1 literature review a INTRODUCTION Traditionally for precursor to a thesis this chapter would review the whole of the relevant field, as a gathering and analysing empirical evidence in light of the research questions. This thesis breaks with that tradition in order to show the substantive argument and the unfolding of the research development of both the process. To that end this chapter the strategy and innovation literatures that seemed relevant to the initial research surveys questions. In this research there sense was a it is a partial review of the nature of strategy. In the paradigmatic shift in course of the understanding of the nature of strategy. Some my literature that seemed irrelevant at the time of writing this review became central through engagement with the fieldwork. This material is introduced and developed in the analytical chapters 7 to 10. It is located there to reflect an intellectual development that through writing chapter 2, collecting and making continued We may takes view organisational strategy soup is a are knowledge, and capabilities. At any as the context work or social soup from which innovation structured by practitioners' experiences, accumulated time the firm's strategy is emerging, and currently dominant capabilities, This of field work (chs. 4, 5, 6), and cocktail of social, political, cognitive, cultural influences and perspectives. These ingredients ideas. Most of these ideas resources, about reading during and after the field work. shape. This process sense came are as well a source as many of obsolete, novel product, service, and in continual competition with each other for financial and political interpretation and support. chapter, divided into six main sections, reviews both theoretical ideas and empirical on the nature of strategy, presented as and the scope for innovation therein. In this chapter strategy is the framework for innovation. As a starting point section 2 looks for 11 a definition of strategy in terms of 'ends and means' and finds both agreement and disagreement in the literature. Section 3, how strategy process, or 'metaphors of strategic management', then examines three models of is managed: whether strategy reflects total managerial control, is socially shaped. Total managerial control two forms: either the where synoptic or grand plan approach, or or is a 'determinate' strategy, or a much more chaotic take may incremental process practitioners, still in full control of their relationship with their competitive environment, continually adapt to that environment through learning what works. The second model, strategy as a managed and chaotic process, highlights a number of important issues not accommodated by the first two concepts of strategy. In particular the managed chaos model helps to surface the difficulty of separating social values and This model also acknowledges that there knowledge that individuals may are know and means. limits to the amount of information and groups may share. The third model of strategy suggests that an organisation's members see their competitive world in a particular way, and that corporate leaders may symbols, including the preceding discussion choice is use on seek to by manipulating the organisation's manage strategy of language, awards, and sanctions. Section four complements the the nature of strategy by considering the extent to which strategic governed by the external environment or is in the hands of the organisation's leaders. While the nature of innovation remains largely implicit in the previous exploration of the strategy concept, the next two sections bring innovation to the fore. Section 5 explores the relationship between innovation and strategy from five positions. First, 'the innovation in strategy' considers whether innovation is circumstances innovative a means to activity is regarded as fulfilling strategy, under what strategic, and the role of learning in making strategic and non-strategic distinctions. Second, 'Innovation studies' acknowledges of debates: whether innovation should be credited to the lone hero, the team, or a number the environment; to what degree does 'demand pull' or 'technology push' provide adequate accounts of the innovation process; economics and the insight to innovation offered by the evolutionary metaphor. A third position considers how successful initiatives often 12 emerge despite formal and possibly contrary strategic intentions. The fourth aspect 'the innovation in strategy' is the extent to which firms must continually innovate to maintain competitive performance over the short term, and build sustainable competitive advantage the long over term. Understanding how knowledge is created and exploited is critical to making sense of innovation, and this is the focus of section 6. Explored here is the notion that knowledge evolves and accumulates as a hierarchy of patterns, with 'design configurations' subsumed under 'technological regimes' (Metcalfe and Gibbons, 1989), and evidence is introduced that shows technological knowledge more than product knowledge is the critical source of competitive advantage. The 'sociotechnical system' is introduced to show the interdependence between the firm and its competitive environment. Also discussed is the interaction between the firm's and the organisation membership's shared view of the world. An assessment of the nature of this interaction is section argues heterogeneity 2.2 accumulating knowledge, its work organisation arrangements, important since it contributes to the shaping of strategy. Finally, this that innovation is driven as much by environmental variety, including competing firms, as by individual entrepreneurial activity. among DEFINING STRATEGY The word 'strategy' is used rather loosely and ambiguously by practitioners.1 Personal experience and anecdotal evidence suggests that most practitioners and management teaching assume the meaning of strategy to be common and therefore no need to define the obvious. Chaffee, in reviewing the literature on strategy found that "no controversy surrounds the question of its existence; no debate has arisen regarding the nature of its anchoring concept"(1985: 89). 1 Practitioner' here describes particular function or a wide range of professional individuals within the firm rather than position. 13 a reference to any Ends and 2.2.1 Perhaps the most means common interpretation of strategy is in terms of means and ends. For some strategy describes organisational ends only, and concerns what the organisation's leaders want the organisation to be, its basic purpose. Strategy as 'ends' guide choices about which products, services, markets, the allocation of resources and the identification of appropriate capabilities. How the organisation achieves its basic 1992: purpose is an operational issue (Moore, 82). Others regard strategy as the means while objectives describe the ends. They argue that clearly defined objectives guide the firm into the future, rather than strategy. In this case the relationship between strategy and objective is such that strategy making is iterative, trying to match achievable objectives with realistic strategies. This might be seen particular strategy fails to deliver against the objective, because strategy are not possible with the given Within this framework or Still others objective some recognise that managers are as a 'decision rule' making decisions under conditions of partial ignorance. see strategy as both means and ends (Chandler 1962; Andrews, 1987). Chandler example defines strategy as: carrying out these goals (1962: 13). was for seeking to understand how companies in the United States managed the complex situation of their a both operating with limited knowledge the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary He or environmental conditions have become competitive situation. Ansoff (1965) for example regards strategy rule for for or own particular focus on growth within the context of an expanding post-war US economy, with innovations in organisational structure. Furthermore, his findings, that strategy determines structure as much as existing structure influences strategy, suggest that an a 1992: 21). unfavourable (Moore, of their resources, or for example when organisation's growth may be comprehensively analysed in terms of these two 14 axes. Andrews, like Chandler before, intends strategy to encompass both objective setting and strategy formulation. He believes that goals should not be seen as separate from those policies designed to attain them and sees corporate strategy as a pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, and defines the range of businesses the company is to pursue, the kind of economic and human organisation it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities (1987: 18). In this way according to Andrews, corporate strategy is the outcome of strategic management and it is the degree of internal consistency and coherence of the firm's strategic decisions which account for the the "pattern sequences There is plan that integrates or into some strength of its competitive position. Similarly, Quinn offers strategy an as organisation's major goals, policies, and action cohesive whole" (1980: 7). a acknowledgement among these writers that perfect knowledge of their competitive situation, and are managers do not and cannot have therefore uncertain about their competitive situation. Nevertheless words like 'determines', 'intends' and phrases like 'integrates into a cohesive whole' suggest it to be the notion of strategy as a an entirely rational process. In contrast to rational heuristic, others have explored interpretations that fall outside of the 'means-ends' debate. 2.2.2 Differentiated meaning Mintzberg's contribution (Quinn et. al., 1988: 14-18) is perhaps representative of the variety and his ambiguity of meaning attributed to strategy in the minds of practising perspective a managers. single definition is not useful and does not reflect the variety of ways in which it is used by practitioners, researchers and academics. He therefore offers regarding all valid depending as combination of: These different From on the context of application. Strategy plan, pattern, position, perspective, or may be a selection, any one or a ploy. descriptions complement each other, according to Mintzberg, such that plan suggests intention, pattern is about consistency of actual behaviour, position describes the 15 firm's location in a competitive context, and perspective underlines the organisation's members share acknowledges that in a common some ways view of the world, such as sense that an 'the IBM way'. He these alternatives compete with each other, but sees a complementarity as enriching regard the organisational culture as the place where strategy is defined and performed. greater benefit in their our understanding of strategic management. Others Van Cauwenberg and Cool define strategy as "calculated behaviour in non-programmed situations", and is distinct from "administration" which is the management of routine (1982: 246). Strategy is an activity that all levels of management take part in, not just "top management" (1982: 261). For them non-routine situations describe organisational reality a set of incoherent ideas and as practices, and the task of "top management" is "motivating adequate strategic behaviour" (1982: 255). Huff sees strategy as a contested area where disagreement goes beyond differentiated multiple points of view. This disagreement "is not just analytic. It has the strong interests and symbolic content and rich subjective meanings which rise out of different world views and experience" (1983: 167). Her view is based of a graduate school to were necessary to Weick and Daft argue on a study of rhetorical devices used by the Dean and persuade his colleagues and staff that particular actions improve the position of the school. (1983) focuses on social contract between different strategy as the expression of some form of unwritten subgroups holding different perceptions about their organisation's and the subgroup's relationship with the environment. For them strategy is shared set of beliefs that guide action and help the membership to make sense a of both the internal and external environment. Ideas such as these disorder not just that strategy begin to introduce the possibility that there may be complexity and in the environment, but also within the organisation. There is a suggestion is much more of a messy processual affair rather than logical and instrumental. 16 These ideas represent a challenge to the means-ends debate where there is a presumption of systematic and rational behaviour among the firm's Clearly there is no general perception of strategy, or consensus or managers. agreed set of assumptions underpinning the by implication its practice. Hambrick (1983) offers two reasons this: that strategy is multi-dimensional and that it is contextual, varying according to the industry. Perhaps more reflect various and for importantly, the lack of consensus and variety of definitions also possibly competing assumptions about the nature of strategy. Although there is such a variety of meaning associated with the strategy concept, Chaffee (1985: 89) suggests that there is general agreement in some areas. First, the strategy concept can be divided into two interdependent halves; the content (intent, actions), and the by which the content is thought through and acted through which practitioners deal with environment routinely produces many a unstructured and routine. (1985) also notes that there a process changing unanticipated situations, forcing practitioners to This leads to the third Chaffee Second, that strategy is the changing environment. Indeed rethink their strategy. non upon. process area seems to of agreement, that strategy making remains be general agreement on the existence of multiple levels of strategy: corporate (what business to be in), business (how to compete in this business), business to the operational (how should R&D, marketing, information systems, etc. contribute strategy). Lastly, she suggests that writers, that the making of strategy involves conceptual as well as analytical exercises. Some authors stress the analytical dimension more than others, but most affirm that the heart of strategy making is the conceptual work done by leaders of the organization (1985: 90). concur There is no doubt among fundamental researchers and practitioners alike that strategy is access activity of importance to the well-being of the organisation. There is however question the implication that strategy making is necessarily where an to, and control of effective strategy a top down knowledge and information, is regarded process, as a making. For example organisational 'gatekeepers' such 17 as room to especially foundation for sales people clearly have considerable scope for filtering information into and out of their employing organisation. Fincham et. al. (1994) in their study of the relationship between information technology (IT) expertise and innovation in the financial services sector, found that IT experts have considerable scope for their decisions on. Staff of the shaping what senior executives know and therefore base Open Business School share a belief in open access to decision making; to them top down strategy is anathema (ch. 6). simplest strategy making At its or a complex pattern them are or stream may be viewed either as decisions made in advance of action of decisions where intended goals and means of achieving indistinguishable. The next section explores these issues by examining a number of metaphors of strategy making. 2.3 METAPHORS OF STRATEGIC MANAGEMENT Introduction 2.3.1 Many writers have developed categories that characterise the differences and similarities they see in these different views of the strategy process. categories that may The preceding discussion suggest three be helpful in exploring the role of innovation in strategy. In the first case strategy may be seen as a process that is determinate, with managers in full control of their destiny. In the second strategy is likened to managed chaos, with control of events in their environment. In the third strategy is a managers having little social construction, where the language of control is inappropriate, because organisations and their environments shape each other. These alternative processes may offer scope as contexts for examining the innovation process. There are other ways classification based whether outcomes of categorising strategy. For example Whittington (1993: 3) suggests on are two dimensions: whether the process "pluralistic" or is deliberate or emergent, "profit maximizing". His framework produces four types of strategy: classical, evolutionary, processual, and systemic. The first type approximates to strategy as and 'determinate', involving deliberate 18 processes seeking to a maximise outcomes. However, strategy as further division into strategy as determinate seems more useful because it allows the 'grand plan' (Fredrickson's 1983 synoptic approach), and strategy as a rational but incremental approach as in Quinn's (1980) logical incrementalism. The second type of strategy, 'evolutionary', is also about maximising outcomes, but through emergent than deliberate like processes. Whittington's third type, 'processual' strategy, 'evolutionary' strategy, is emergent. However, its outcomes are pluralistic rather than maximizing, for example allowing for both socially responsible behaviour and shareholders find more a return acceptable. Evolutionary and processual metaphors and strategy that as 'managed chaos' acknowledge the emergent more than deliberate quality of strategy. However, strategy as 'managed chaos' suggests that maximising need not be economic, it could be directed to outcomes tend to be some objective. Further, whatever the 'big idea', realised pluralistic, reflecting the role of social values, and the largely disjointed and reactive behaviour process as social by the organisation's practitioners. Lindblom (1959) describes such 'muddling through', based on a his study of a USA public services department. Whittington's fourth type of strategy is 'systemic', and results from deliberate pluralistic outcomes. Whittington suggests that strategic practices reflect a processes and wider social system, such as a national culture; an implicit acknowledgement that strategic practices are socially shaped. While Whittington's typology has merit, the preceding observations suggest various limitations. It is constructs possible therefore to think in terms of three generally distinct theoretical of strategy making. In the first metaphor strategy purposive, and analytical. The learning; either economic way there process may seems to be synoptic or as 'determinate' is systematic, incremental and involving be unbounded objectivity as practitioners pursue goals. The second metaphor of 'managed chaos' conceives of an iterative shaped by social values; it is forward. The third that is reactive, negotiated, satisficing, stumbling metaphor of strategy offers conceiving of either frame suggests a process a proactive or process reactive a very process as different dimension. Rather than in the first two, the social construction that strategy making is rooted in the organisation's culture, evoking notions 19 of organisational symbolism, symbolic mediation of environmental signals, and interpretive frames shared among Strategy 2.3.2 Strategy as the organisation's membership. determinate as determinate likely to be found in be stylised may many, types, although features of both types are as two if not most, organisations. Distinguishing between 'synoptic strategy' and 'logical incrementalism' is useful because it helps to highlight differences and commonalities. The two types three elements: first The process share the notion that strategic management involves managing analysis, then assessing strategic choices, followed by implementation. is rational, objective, and choice is separable from analysis and implementation. They also differ in important ways, as the following examination shows. Synoptic strategy The traditional description of strategy follows firstly that managing manoeuvring a resources well run a machine or military metaphor, presuming enterprise is like conducting a military campaign, (finances, human knowledge, capital equipment), with the aim of gaining and maintaining competitive advantage. A second presumption is that those responsible for the process monitor manipulating organisational process formal This resources levels and environmental forces, constantly appropriately. The third presumption is that the is rational and under control, in the sense that the organisation's members follow a plan. perspective of strategic management is consisting of a sequence external/internal then resource seen as a systematic and continuous process, of activities, starting with the setting of financial objective and analysis, followed by strategy formulation, then implementation, review cycling back to the beginning. There is predictable, and that managers should an concern assumption that environmental change is themselves with continuous improvements in efficiency, tacking their course in line with shifts in market demand. 20 This rational, comprehensive and linear approach has widespread support (Andrews, 1987; Ansoff, 1965; Argenti, 1980), yet it is difficult to see how in practice such an approach can effectively with managing the complexity and dynamics of change since it is based deal on a strongly analytical perspective, taking little account of the "conceptual work" (Chaffee, 1985: 90) of the organisation's practitioners at all levels, involving intuitive leaps and judgements in the face of processes have incomplete knowledge. Indeed Simon (1957) in his study of administrative coined the term 'bounded rationality' in recognition that practitioners individually cognitive limits, and collectively have limits in the information. The clear they share and communicate assumes that practitioners have understanding of threats and opportunities, capabilities, and critical factors in The approach is not tolerant of ambiguity, way a systematic synoptic construct where corporate can a reach agreement of all way. seems to accord with neo-classical economic theories of the firm, leaders motivated by economic objectives, specifically profit maximisation, systematically and analytically assess Knowledge has or no proprietary market demand and adjust supply as necessary. tacit competitive value since all firms draw from a commonly available pool. These theories, developed during the 18th century when almost all firms were owner-managed, offering one or a narrow range of related products, tended to ignore entrepreneurial behaviour in wealth creation. Indeed, observations of discrepancies between the classical economic theory of the firm and present day realities have encouraged re-evaluation of the 'rational-economic man' in their perspective, as noted by Coombs and Richards study of the relationship between firms' strategies and their technology strategies: coupled with the separation of ownership and control of firms, has forced economists to take seriously the scope of managerial action and its motivations (1991: 80). the historical increase in the size of firms relative to markets, The issue of scope managerial choice is discussed below (2.4) for free choice. 21 as part of a broader debate about the a Logical incrementalism explanation of strategic management, based Another on a metaphor of adaptation and open systems theory, puts managers still very much in control of their destiny, pro-actively and continually seeking to make sense of and adapt their organisation to complex environmental forces. In a study during the 1970s, involving about nine very large diversified companies, Quinn (1980) like Lindblom (1959) before him, found that strategy practice in well managed enterprises bore no relationship to the generally prescribed rational formal planning approach. Quinn describes his firms' management of strategy as Strategies in these firms emerged through their corporate leaders. The nature of the process was a consensus among "logical incrementalism". fragmented, evolutionary, and intuitive, where functional departments would actively seek to reduce discord between their own strategies and those of the whole organisation. Managers in 'well-run' firms pro-actively develop strategies and consciously pursue actions in managing the interface between the external environment and internal conditions. According to Quinn the result of the iterative process was an integrated organisational strategy based on the incremental building of commitments, an ability to experiment and learn, and the successful management of organisational politics and psychology. There seems implicit objectively rational to be an programme differentiated values between managers. process argues that the inherent delays of an iterative is advantageous since it allows the accumulation of more and better information for decision results in risk of Quinn able to resolve internal political conflict and making, and allows an a consensus to develop. However while this may be true it also organisation which is slow to respond to change and therefore has the increased loosing the competitive effects of the race. His concept also ignores the possible existence and malady of 'groupthink' (Janis, 1972) within the enterprise; organisation's leaders uncritically follow a a situation where the flawed strategy. Similarly, Johnson (1989) in his exploration of organisational paradigms suggests that logical incrementalism could lead to 22 'strategic drift', where the organisation gradually drifts out of touch with environmental conditions. There is support as "an for the incremental metaphor. For example, Cyert and March adaptively rational system rather than an sees the firm omnisciently rational system" (1992: 117). During the 1970s Mintzberg investigated how corporate leaders' intentions and plans number of decades in a stream compared with what actually happened. He found strategy to be "a pattern of decisions" 'unrealized'. over a (1978a: 935). Strategies may start Equally, strategies may as 'intended', but fail, becoming 'emerge' and become realized. Mintzberg and Waters (1989) later developed these ideas into a comprehensive classification of types of strategies, ranging from completely deliberate or continuum is the 'umbrella' strategy, within which divisional or planned to wholly emergent. Midway on this where corporate leaders set the boundaries departmental strategies are allowed or encouraged to or guidelines emerge through the efforts of other actors. They suggest that the notion of emergent strategy accommodates the role of 'strategic learning' or adaptation; that practitioners learn what works, often finding out what they are good at through reflection. There are many historical examples where innovations may be accounted for in terms of Mintzberg and Waters (1989) classification. For example during the 1970s, Xerox Corp. was particularly active in generating innovative ideas for the then fledgling personal computer market, introducing the GUI (Graphical User Interface) and the mouse. These innovations were rejected by the Xerox corporate leaders because the then intended strategy innovations were picked and up were as emergent innovations they did not fit therefore unrealised. Interestingly these particular by other firms, leading to significant claims to sources of competitive advantage (Apple, Hewlett Packard) and long drawn out copyright claims and counter claims (Apple and Microsoft). 23 Managed chaos 2.3.3 In his study of how US public administrators actually make policy decisions Lindblom (1959) found that the rational the or 'scientific' method wholly inadequate for dealing with was complex problems which administrators encountered. He suggests that the rational- comprehensive method is appropriate only for small scale problem-solving where variables are few and unproblematic. He criticises the determinate (always building an or what he calls the 'root method' edifice from scratch) because it capacities and sources of information that administrators simply do not posses, and is even more absurd as an approach to policy when the time and money that can be allocated to a policy problem is limited, as is always assumes the case intellectual (1959: 80). He describes what administrators 'successive limited the determinate or comparisons' actually do in dealing with complex policy questions or 'branch method' and offers it prescription. His 'branch' metaphor describes as a as realistic alternative to a process of gradual additions changes to the existing circumstances. Lindblom identified four core dimensions of the decision making process which could be used to evaluate the relative merits of both the root and branch methods: the between competing ends, and between ends and makes good policy; and whether strategy a The Under the means; progresses tangle of social values, and inseparable prescribed root approach, objectives analysis of alternative policies or are the scope relationship for analysis; deciding what pragmatically or by design. means clearly identified, and followed by strategies. In other words ends and means are separated. In practice (branch method) there is often disagreement about objectives and their relative importance and in the absence of clear objectives administrators will still have Decision may apply their own, but difficulty deciding how to rank competing and overlapping objectives. making lacks consistency insofar as individuals guide their choice of decision and collectively these 24 may may use their either clash or own value systems to be incoherent. Additionally, individuals' values and The ends and means are locked sense of priorities vary over time and circumstances. together and attempts at separating them result in arbitrary distinctions and decisions. be the While this may in public sector management do private enterprise case managers experience such difficulties? Stakeholders in large firms do have different objectives. Shareholders require dividend payments, corporate customers want lower Marketing managers prices and better quality, and continually want pursuit of market share, while R&D and new projects. Furthermore, between the need to report growth is poor over Objectives are over of the short term means managers over may grow sales in also want additional funds to support existing of business units managers may or profit centres must choose some of that profit. If profit choose not to invest in order to show be that under-investment is a significant contributor to the long term. over time and circumstances that cannot be isolated. apply the depends products and funding in order to variety of things. no clear separation of objectives. often clearly stated but the degree to which they will in practice be dividend payment should pressure groups want a study, in private enterprise there is compromised varies terms require funds for investment, profit growth and the need to re-invest financial performance As in Lindblom's new managers satisfactory financial results yet it poor managers same on many objectives or as they compete both for priority and in Corporate leaders cannot rank investment objectives vice versa, in all situations. It is not certain that firms investment rules during economic recessions and growth periods. It factors. Particular preferences surface with the particular features of different circumstances, so that objectives need "adjustment at the margin" (Lindblom, 1959: 82). Given the conflict between to objectives of profit growth and re-investment managers are forced directly between objectives that "offer different marginal combinations of values" choose (Lindblom, 1959: 82). The risk of upsetting the shareholders by reducing or withholding dividend temporarily in favour of increased capital investment, varies according to whether the firm is seen as offering growth; which proportion of shareholders want capital growth and 25 which proportion wants income; the investment alternatives general state of the open to shareholders; and the As Lindblom notes: economy. attempts to rank or order [objectives] in general and abstract terms so that they do not shift from decision to decision end up preferences (1959: 82). Limited analysis Lindblom notes that analysis in the rational method is comprehensive, is considered. In administrative are by ignoring the relevant marginal every important factor practice important alternative potential policies and outcomes neglected. Administrators will seek to build on existing experience by claiming insight to the future and will minimise choices which carry unpredictable consequences. Marginal analysis is further supported by the tendency to accept new ideas gradually, and the 'newness' in the process. very large firms operating within a very competitive environment with little technological change. More generally, what might regarded be retards Such forms of conservative behaviour can also be found in private enterprise and is generally associated with stable even as marginal analysis by some and as risk taking by others is relative to the history of the firm, technical knowledge and capabilities, leadership style, competitive environment, and the beliefs and aspirations of those in the particular enterprise. Lindblom maintains that the for neglect of possibly important policy options example both long and short term policies and outcomes have neglected, but is still preferable to administrator's decisions are a existing alternatives therefore comes random, equal chance of being prescription of impossible comprehensive analysis. The no less valid in the Lindblom's view that administrators make of an may seem light of such neglect. Support for strategic decisions based on choices at the margin from Simon who notes that: [sic] is content to leave out of account those aspects of and that means most aspects - that are substantially irrelevant at a given time. He [sic] makes his choices using a simple picture of the situation that takes into account just a few of the factors that he regards as most relevant and crucial (1957: xxv-xxvi). administrative reality man ... - 26 Simon also suggests preserve that organisational decision processes are 'composite', rather than the of one individual typically at the top of the hierarchy. officer making the final negotiation or signing the contract, though appearing to decide at least the major questions, is reduced almost to performing a ministerial function. The major decisions were made neither by the board nor by any officer, nor formally by any group; they evolved through the interaction of many decisions both of individuals and by committees and boards. No one [individual] is likely to be aware of all the decisions entering into the process or of who made them, or of the interaction through a period of time that modified decisions at one point and another. decision is almost always a composite process of this sort (Simon, 1957: 222). In the end, the ... Simon's decision process as one Lindblom's central argument of composite decision can and what mechanisms the such as of mutual adjustment 'satisficing' seems to reinforce of 'muddling through'. Simon (1957) suggests that the process be understood in terms of how much discretion individuals enjoy, organisation influence the individual's decision criteria, uses to authority, advice, and training. In short Lindblom maintains that the the process values, or rational-comprehensive method is no more rational than of successive limited comparisons and that the former is impossible because means, and ends are bound together. He proposes his branch method as a better description of practice since it shows the administrator dealing with marginal differences rather than a comprehensive which in any case In the most array appropriate one can never be known and is beyond administrators' individual cognitive capacities. rational-comprehensive method policy is means to a 'good' policy is one which can be shown to be the desired ends. Lindblom suggests that in practice the test of a good that administrators rather than its fitness for achieving ends. can agree on, Demonstrated fitness for purpose a of all possible choices which is a bonus. Furthermore administrators are able to agree on specific policy while holding different ideological positions. As an extreme example, any attempt by the firm's leadership to redefine the pay scales for all staff is likely to lead to significant and collective resistance. However, an individual level, spread out over months is more more 27 small scale negotiations, even down to likely to be successful. Comprehensive objectives of a are only valid if those having to achieve them good policy in the root method is therefore in practice the Comprehensive theory The root method is founded or on with those objectives. The test agree same as in the branch method. 'learning by doing' practitioners' drive to organise specific experience into general categories or effective applying rationalised experience and accumulated knowledge to specific new means of theories about relationships. The assumption is that this provides problems. The difficulty is that of the social world means our poor an understanding of the multidimensional nature that theories about most relationships are at best tentative and easily shown to be inadequate. according to Lindblom for the policy maker to accept that policies and outcomes Far better, can only achieve an approximate result. Therefore a step by step approach is preferred since if most of what is intended for the future is similar to what serious long lasting reduces the Where the doing' or errors are likely to result. Theory is complexity of the task to one was achieved in the past unnecessary then few since the administrator of comparing policy differences at the margin. rational-comprehensive method aims for 'successive limited comparison' describes accuracy a process guided by theory, 'learning by where, policy is not made once and for all; it is made and re-made endlessly. Policy¬ making is a process of successive approximation to some desired objectives in which what is desired itself continues to change under reconsideration (Lindblom 1959: 86). Lindblom's branch method seems descriptive of firms that develop through incremental product changes and manufacturing might describe stable as following technologies, relying an process improvements, and firms which Freeman (1982) 'imitative' strategy. These firms operate in established and on more innovative firms to develop both the technological improvements and markets. Lindblom's analysis highlights the role of social values and the futility of a determinate metaphor. However, his suggested 'successive limited comparison' approach risks producing 28 completely arbitrary outcomes in the face of a fast changing and developing environment, because he denies 2.3.4 An significantly understates the or scope for strategic intent shaping outcomes. Social construction emerging set of ideas about strategy, "emphasizes the importance of symbol manipulation, shared meaning, and co-operative actions of individuals" (Chaffee, 1985: 95). perspective posits This a more sociological view of strategic management in that managers operate on a reality which is socially constructed and manage the organisation by co¬ operative agreements or social contracts, "entered into by individuals with free will" (Chaffee, 1985: 93). Many writers both within and outwith the strategy field, equate organisations with Boulding's (1956: 205) hierarchy of general systems, in which there lower levels are are eight levels. The mechanical, moving up in complexity through the biological, with "symbolic images in human behavior" at level eight, and 'transcendental systems' at level nine. The variables determining the pattern include: language, discourse, laws, roles, ritual, custom, ceremony, norms, folklore, stories, beliefs, myths. These patterns and are by which organisational members make The validity of conceiving of strategic implications the means as a sense are symbolic constructions of their interrelationships. social construction is implicitly supported by Loveridge's study of the implementation of IT to improve services in banking, retaining, and health care. Loveridge notes that managers' subsequent interpretation of IT as having systemic significance is "shaped by earlier 'problem' applications and, often, by the crises that as he triggered the search for earlier IT solutions"(1990: 341). The points out, is that managers' creativity in terms of how IT informed may consequences of this, be used is guided and by their previous learning. Similarly, Metcalfe and Gibbons (1989) in their development of an evolutionary metaphor for technological innovation, note that firms' development options are severely constrained by their knowledge base: existing technological knowledge and ways of organisation. Moreover, Chaffee (1985: 96) notes that 29 "organizations recovering from decline used adaptive strategy, but it was their use of interpretive strategy that differentiated them from organizations unable to recover". Within the to interpretive strategy framework the notions of 'paradigm' and 'symbolism' have attracted considerable attention during the 1980s, as seem evidenced by the number of management articles and books. Paradigms During the last decade, recognition of the interplay between the organisation's political forces, cultural underpinning and cognitive processes has been growing. For example, a longitudinal case study carried out by Johnson (1989) during the 1980s, traced the rise and fall of Foster Brothers, a well known national retailer of, found that the demise of the company paradigm within the company, primarily, men's clothing. Johnson could be explained by reference to which he defined a very strong as: set of beliefs and assumptions, held relatively common through the organisation, taken for granted, and discernible in the stories and explanations of the managers [which played] a central role in the interpretation of environmental stimuli and configuration of organizationally relevant strategic responses (1989: a 45). Certain environmental signals were ignored because they paradigm. Threats to the paradigm, such with the sense core organisation's of discordant beliefs As noted or core values were as of harmony with the political challenges against those most associated strongly resisted. Managers, in seeking to make signals, would either look for make were out ways of re-organising the signals to fit with marginal adjustments to the paradigm. earlier, Johnson challenges the validity of Quinn's (1980) 'logical incrementalism', suggesting that but in fact they managers may are think that they in touch with their own are keeping in touch with the real environment, paradigm. The consequence of this 'strategic drift' is that organisations progressively loose competitive advantage through failure to maintain adequate level of innovation, and market share. Others have accounted for an strategic drift through different explanations. For example, Chandler (1962) noted the 30 resistance to that the changing established strategy and structure; Mintzberg (1978: 941) observed organisation's "momentum of bureaucracy" constrains its ability to respond to environmental change; and Miller and Friesen (1980) observed that inducements before they would destroy the old comfortable 'gestalt'. Whatever the route to strategic drift, most writers that agree managers do not recognise the need for, unwilling to change, until the time when nothing but enterprise back needed strong managers an or are internal revolution will put the the rails. Current headline examples of companies experiencing this on include IBM, Siemens, Eastman Kodak, ICI, General Motors. The observation that enterprises experience periods of evolutionary development and growth interspersed with periods of upheaval and revolution has been accounted for by Hedberg and Jonsson who conceive of strategy organisation's view of the world makers "to re-evaluate the that fit into the new formulation go as 'discontinuous' in that from time to time the through fundamental shifts which then occasion decision importance of their decision variables; and they develop strategies mental frameworks" (1977: 89). They found that when organisations change strategies, sometimes in normal state and always in times of crisis, such change is due to a change in the organisation's world view. Hedberg and Jonsson (1977) further believe that discontinuities are the result of the ongoing interaction between rational analysis and fantasy, will and creativity, the rational analysis itself bounded by the organisation's set of myths or 'metasystem'. A fundamental belief of the decision making process, interpretive school then, is that in order to understand the the necessary focus is not whatever form 'objective reality' may take, but to recognise that decision makers work with realities as reconstructed in their minds. If we the add to this the notion that the human mind is in any case complex and dynamic nature of reality, then this of our seems to raise as unable to fully comprehend described by Simon's 'bounded rationality', ontological and epistemological questions about who knowledge and understanding and how can we 31 know what we we are do know! in terms Symbolism The manner in which organisational actors relate to each other can fundamentally affect formal and informal processes insurance company conflict or and outcomes. In a study of the executive staff of a large US Smircich (1983) found that the CEO's strong dislike for disagreement among as a meeting was a an ethos of keeping problems at bay; 'challenges' but not 'problems'. He wanted his staff to team, reflected in their see ritual that the CEO found useful, but the staff did not. The CEO was themselves slogan of 'wheeling together'. The Monday morning staff eventually replaced but not until the company's financial situation deterioration form of his staff resulted in the staff using language and forms of behaviour which reflected this. The CEO cultivated staff could talk about any accounted for was was dire. The firm's by the collective fear of raising controversial issues, such as questioning inadequate performance of departments. Many organisations consciously try to create symbol systems required behaviour manufacturer of among employees. WL Gore & Associates is high performance products for a diverse range implants, microwave electronics, industrial filtration, sports only Associates, each for being patenting output, with the egg. Gore do one as a way The internal vocabulary a American developer and of applications: medical wear. There are no employees shareholder.2 Each business unit could receive golden name - an of signifying the of the responsible Associate etched on the surface of the 'commitment', 'accountability', 'freedom', 'fairness', 'the graveyard is full of co-ordinators' things around here', and is meant to - conveys very strong messages encourage technological innovation. New Associates are about 'the way we the risk taking associated with guided and taught the meaning and significance of some symbols while other symbols remain hidden in the subconscious of established Associates. This opportunity for interpreting symbols differently can cause real difficulty and be counterproductive by generating dysfunctional individual and sub-group interaction. For The author is drawing on eggs his personal experience of being an Associate of the 32 company. example, Gore has offices in subtly different ways many in each country; interpreted in the national culture, or at least is no countries, and 'the Gore way' formal hierarchy among the European Associates. The British general firms' leaders among seem to seems to be Associates of the German office. There domination' and the German group In that may be interpreted in reflect something of something of the national stereotype. While in principle there hierarchy, only 'leaders' and 'followers', there among ways seems to a very strong are group express concern and almost also strong tensions about 'German question their British counterpart's general competence. seek to use symbolism to create some desired work ethos the staff including the pursuit of excellence, achievement, aggressiveness, competitiveness, deep commitment to the organisation's values. While such behaviour may be encouraged will legitimate and even necessary for recognition, the probability is that respond differently to that intended by rebelling 2.4 The as or retreating with a sense many of inadequacy. ENVIRONMENTAL DETERMINISM AND MANAGERIAL CHOICE preceding review of the nature of strategy has focused been said about the nature of the environment, and the Traditionally strategic choice is largely structure of firms seen as on internal processes. Little has implications for managerial choice. being imposed by the environment. Market (barriers to entry, market concentration, integration) largely determines the conduct (objectives, competitive strategies, investment), which in turn determines industry performance (profitability, growth, allocative efficiency). Firms have some influence, but essentially causation flows from the industry structure (Bain, 1951; Porter, 1980). Some industries when are intrinsically more profitable than others, and firms should be guided by this deciding which markets to enter and how to position themselves. The successful organisation will create competitive advantage by using technological change (seen exogenous find ways as an variable) to improve production efficiency. The innovative organisation will also of creating competitive advantage by changing industry structure, and erecting market entry and exit barriers. Despite the scope for organisational success through innovation, variation between financial and market performance, whether adverse or 33 favourable, is due to industry structure, rather than the implementation of previously formulated strategy. Marris (1963) conceives of choice being divided between the firm and its environment. He locates local strategic choice within the firm. Managers are seen as actively attempting to manipulate the 'immediate' environment (barriers to entry and exit, costs, demand) in pursuit of growth strategies. The motivation for growth strategies is managerial status, prestige, and power. The main obstacles to growth constraints. While the firm is are managerial limitations, demand and supply engaged in manipulating the immediate environment, the 'super' environment (customer commitments to particular products, resistance to advertising, lack of information, The continued industry structure, bounded rationality) remains constant. centrality in management teaching and practice of Porter's (1985) Competitive Advantage testify to the continued dominance of this 'structure-conduct-performance' model of competitive strategy. The implication is that individual firms environment, and firms' Child resources are located within an external and capabilities are of limited strategic significance. (1972) contests the idea that organisational structure and performance is imposed by 'strategic choice' within the firm. An economic constraints of the environment, and locates organisation's politically dominant coalition has considerable strategic choice over both the organisation's internal arrangements, and environmental factors. From Child's perspective strategic choice is a resolution of internal contesting political forces, involving some give and take, and distortion of information. He ignores the extent to which internal practices, and the actions and interactions of people generate shared meanings that shape choice. The organisation remains located in change is Marris' firm seen as a an independent environment, and similarly technological independent variable impinging on managerial limitations noted above, is based strategic choice. on growth is constrained by limitations of managerial eventually calls for resources more Penrose's (1959) proposition that resources and capabilities. Growth managerial services, but is constrained by the time and managerial needed to train and integrate new managers, 34 time that cannot be spent on directly growing the business. During the last decade Teece (1985) and other writers have been stressing the idea that competitive resources of and from how practitioners success comes capabilities, rather than success being a manage the firm's function of industry structure. The role capabilities is explored later in chapter 9, and it is sufficient to note here that the implication of a managers or the environment. assumes managerial freedom to choose. In this choose between market transactions (Coase, 1937; Williamson, 1975) and that is somehow choice in their as alternative ways of strategic development in an external environment passive. There remains the underlying assumption that managers retain free dealings with their competitive environment. Other theories about whether choice is motivated also over buy' theory of the firm also managerial control are based theory of the firm, including Penrose's proposition, is that enjoy hegemony The 'make managers resource by economic, managerial, behavioural, underpinned by an or social responsibility objectives assumed freedom to choose. As Coombs and Richards note: and implement 'strategies' that secure both quantitative for the firms they control. While these theories analyse a variety of market and other forces that shape strategy, there is still an implied space for managerial choice, with the continuing effect of uncertainty and bounded rationality (1991: 80). managers can develop and qualitative growth Taking the 'determinism not versus enjoy unfettered hegemony free choice' debate over as a whole, an organisation clearly does its environment, because that environment is made up of competing firms. In addition, the earlier exploration of the social constructivist view suggests that choice is limited by the organisational paradigm, a position that Metcalfe and Gibbons (1989) supports in their analysis of technological change and competition. Equally though, the apparent success scope of many firms suggest that the environment limits rather than denies for managerial choice. The issue of choice in terms of strategic intent is further discussed in chapter 9 in relation to the social construction of reality. 35 2.5 INNOVATION AND STRATEGY The innovation in strategy 2.5.1 The various theories of strategy provide a useful backdrop against which to assess the relationship between strategy and innovation. Innovation is develop novel products services, or or novel ways project or innovation may be where organisations of working, that prove useful to community, and for which that community is willing to The individual a process pay some the provider. seen as a means or plan since it is commonly argued that firms must innovate (means) in order to maintain competitiveness and growth (ends). For example Freeman's (1982) study shows the importance of industrial innovation to economic growth. While this rather narrow interpretation of 'innovation as means' seems intuitively right, the preceding review of the variety of meanings associated with strategy suggests that the innovation-strategy relationship is significantly more complex. Clearly the means-ends explanation provides only example to account for emergent and sometimes compete Firms may end in itself, a and as it fails for innovation activity which fall outside of, or spontaneous as means to an end, such as the introduction of automation to efficiency, while for others the decision to introduce such equipment is strategic decision demonstrating to the outside world that they are an progressive ready to embrace change. Further, the introduction of new technology to fulfil 'non- strategic' aims may over time assume decision to introduce IT within of partial view of the role of innovation with, intended strategies. intend innovation achieve greater a one strategic significance for the firm. For example, the part of the firm's operation will affect the existing level integration and therefore relations between the and external customers. In new users of the IT resource and its internal trying to resolve the integration problem the firm's practitioners slowly learn to appreciate the strategic complexity surrounding the assimilation of new knowledge. Loveridge (1990) characterises the organisational learning possibly three stages. He suggests that at first practitioners adopt This is followed by a more new process as two, techniques piecemeal. coherent and wider adaptation of techniques 36 as practitioners become more aware of the possibilities. In a possible third stage, IT may move from being centrally controlled to being diffused and controlled by individual operating units of the organisation. Clearly organisational learning influences what practitioners regarded firms that pursue opportunity are the acquisition of new knowledge likely to have a innovative new innovation is directed at political status quo or learning knowledge activity is regarded as as process A strategic rather than operational will attract wider attention within the strategic. Fincham et. al. (1994) found that not all strategic. They found for example, that if a particular IT improving local efficiency and does not challenge the existing distribution of organisational expertise then it strategic and will therefore probably have to justification, such as a strategic. In addition different learning experience since practitioners' expectations of outcomes will be different; the organisation that labels as a as run may not the gauntlet of some narrow be regarded as financial payback evaluation. large part of strategy is concerned with the difficult task of balancing the day to day against the need to demand for cash somewhat long term survival through investment. The arbitrary distinction of strategic and non-strategic innovation and the attendant risk of incoherence in manage secure strategic decisions undermines the ability of corporate leaders to effectively that balance. Many studies have shown that not considers their contribution in relation to the a measure Within the of the in the organisation organisation's strategy; a finding that in itself is degree of internal coherence enjoyed by the organisation as a whole. hierarchy of different types of strategy (corporate, business, operational) specific innovations may labour everyone have differing significance. For example saving change in work organisation, 'local' level of the with its progress. may a specific innovation such be perceived strategic at as an as a operational or organisation where its impact is formed and felt by those closely involved The extent to which the same innovation may be regarded as strategic at the difference the either the 'business' or more innovation makes to profitability, the degree of internal knowledge differentiation, and conflict resolution and broad 'corporate' level will depend on integration achieved within the organisation. It will also depend 37 on where managers are on the learning curve vis a vis the strategic significance of the innovation, and how far the innovation fits the corporate or business leaders' preconceived solutions for managing the organisation's relationship with its external environment. While innovation new ways they are readily conjures images of firms introducing novelty of working, it is probable that most individual innovations often regarded technical up change cites a as improvements and modifications, with only an benefit of the initial technical very infrequent example from petrochemical refining where the cumulative effects of cost reductions due to incremental technical improvements incremental that number of studies that show innovation "as consisting of a steady major innovations" (1982: 7). He quotes result of the are so assimilating unremarkable events. Rosenberg in surveying the history of accretion of innumerable minor as a or change far outweigh the development. Individual improvements, however minor, come application of expertise to both familiar and unfamiliar situations. Such are likely to attract attention when they profitability gains, through productivity or can be shown as qualitative improvements, contributing to or their proponents present them as 'strategic'. 2,5.2 Innovation studies Many early theories of innovation have focused review of the on the lone entrepreneur. McGuire in a relationship between innovation and culture observed "a hero theory of innovations and progress" (1964: 233), exemplified by Schumpeter (1947) who credited entrepreneurs as the driving force behind innovation and wealth creation. McGuire presented Mitchell (1949) precedence over accumulation of as representative of an opposing view that gave the external environment the entrepreneur. In this 'environmental theory' the driving force is the "the knowledge and the 'times'" (McGuire, 1964: 233). Many others have since countered the hero theory, saying that credit belongs to the team, that to the process. 38 many people contribute Attempts at understanding the directions, some taking an process taking place within the firm come economics perspective while others adopt from a more a number of behavioural approach. Nelson and Winter (1977) suggest that the classical economics production function model is too limited While it may it takes innovation as given in seeking to explain economic growth. be possible to show correlation between R&D spend and capital investment for example, nonetheless it remains clear chain of as a cause a fact that R&D is not an independent variable, a a partial view. This has recognised by Freeman (1982) who coined the term of 'coupling' explaining the key is there and effect between R&D and innovation. Explanations of 'demand-pull' and 'technology-push' provide only been nor reason as a way why firms in the SAPPHO study (SPRU 1972) innovators. The aim of that study was to were of successful identify the characteristics of success and failure of innovating firms. The contribution of Freeman and project SAPPHO has been immense in providing insight to the attributes necessary for successful innovation: effective in-house professional R&D, patenting for commercial protection and negotiation, paying close attention to the needs of the potential users and if necessary their early involvement and education, sufficiently strong entrepreneurship to co-ordinate marketing, R&D, production, good communication with the appropriate scientific community and with customers. Surprisingly there example, there was inconclusive evidence to support various 'common sense' notions. For seems to directions unfamiliar to be little correlation between failure and attempts to innovate in the firm. drive toward shorter lead-times sufficient to achieve effective technical success. Competitive pressures (external factor) and the associated (internal factor) may be necessary but neither factor alone is Success depends on spotting and meeting user needs through development, and internal communication (among R&D, manufacturing, marketing). Further, Freeman notes that, for those who believe in the amenability of innovation to planning techniques, no relationship was found between success and the capacity to set and fulfil target dates for particular stages for the project plan, nor in the general approach to planning of the innovators (1982: 123). 39 The implication of this observation is that synoptic strategic management, and possibly logical incrementalism discussed earlier, either inhibit innovation Such chief executive, and processes are needed to make key figures identified (technical innovator, business innovator, product champion) relate to the firm's unfolding strategy. For example, how within the the context of and resources of the individual innovation. In addition however, we need to know more about how the activities of various actors incidental to organisations' successes. insight is valuable because it indicates what a success or are large firm generate, select, develop ideas into profitable innovations within competition between obsolete, current and new expertise, both technological managerial; the influence of professionalisation of particular bodies of expertise; the pervasive effects of socio-political diversity and interdependence within the firm. We also need explore these issues in the context of the firm's relations with other institutions. Motivated to show by a desire to guide USA policy thinking on why some economic sectors seemed greater productivity growth than others, Nelson and Winter (1977) proposed an evolutionary theory of innovation. They believe that sectoral differences in technological progress could be better understood in terms of the evolved relationships within particular sector. For example, there is a aerospace, a vast among institutions difference between agriculture and quite apart from their respective technologies, in terms of funding processes, regulatory mechanisms, and the influence of market and non-market actors. Accepting that there are important sectoral differences, Nelson and Winter (1977) also to say that regardless of sector, there is seems that while it is essential character to innovation generally driven by purposive investment, it is different dimensions. Innovation takes diversity. It is an a process place in a one processes. It of uncertainty in setting of organisational complexity and transcending the organisational boundary and is, stochastic, evolutionary, ... involving a continuing disequilibrium. At any time there is coexistence of ideas that will evolve into successful innovations and those that will not, and actual use of misjudged or obsolete technologies along with profitable ones. Over time selection operates on the existing set of ... technologies, but new ones continually toward equilibrium (1977: 48). are seem introduced to upset the movement 40 There is uncertainty in: choosing technologies; technical direction within set; at the level of the individual project; and whether or not a given technology the market will accept the product. In seeking to 'couple' technological possibility and environment selection, practitioners achieve emergence a state of continual competitive imbalance due to the constant of new technological platforms and shifting expectations of market and market factors. Nelson and Winter and outcome are surrounded by an regard the process as 'stochastic' because project choice almost infinite selection of alternatives; there is inability to reliably quantify cost and benefit; there non- are no an reliable search mechanism to help separate good and bad projects; and the selection environment has the power to accept or reject projects. 2.5.3 Intended and emergent strategy There is an assumption that in formulating and implementing strategy managers have already analysed technological possibilities, commercial opportunities, and the organisational resources and capabilities. Burns and Stalker, in their well known study of technological innovation noted that different changing environmental conditions and stable conditions require organisational forms. Moreover they suggest it is the task of managers to design the appropriate form: there is an overriding management task in first interpreting correctly the market and technological situation, in terms of its instability or of the rate at which conditions are changing, and then designing the management system appropriate to the conditions, and making it work (1966: viii). Underpinning this description is a sense of managing strategic change systematically. Also implicit is that organisational development depends on leaders' ability to anticipate and separate out in advance successful from unsuccessful initiatives. Langrish et. al. (1972) in attempting to identify why of winners of the some firms were more successful than others carried out Queen's Awards For Industry. In trying to move a study beyond the omniscient practitioner they concluded that the successful 'coupling' of technical possibility and market opportunity is an emergent process: 41 Perhaps the highest level generalisation that it is safe to make about technological innovation is that it must involve synthesis of some kind of need with some kind of technical possibility. The ways in which this synthesis is effected and exploited take widely differing forms and depend not only on systematic planning and the 'state of the art' but also on individual motivations, organizational pressures and outside influences of political, social and economic kinds. Because the innovation process extends over time, it is important to retain continuous sensitivity to changes in these factors and the flexibility to perceive and respond to new opportunities (Langrish et. al., in Freeman 1982: 126, 127). Mintzberg and McHugh in their analysis of Honda's post "strategies which grow were not initially like weeds in anticipated but strategic implications, others are a a war garden" (1985: 195). Novel ideas competing with approved projects for financial resource are some with supported and championed, and political support. Further clouding the straightforward formulation and implementation of strategy are various forms of fear of the unknown implications of the new. Whether or not all the resistance, often due to a analysis has been done, managers where to steer their may emerge by-product of the organisation's strategy, blind alleys. Many weeds mere growth observed that resources and still have to make somewhat arbitrary decisions about capabilities. Sustaining competitive advantage 2.5.4 There is both interdependence and tension between the need to achieve continual improvement in competitive performance while at the capabilities which provide sources same time seeking and building of sustainable competitive advantage. This means that corporate leaders must constantly balance the immediate demand for positive cash flow with the critical need to invest in the is believed to be a demand over Regardless of this dilemma, building of a knowledge base and capabilities for which there the many long term. firms seem to face another; innovate or perish. In their study of the post innovation performance of firms, Georghiou et. al. (1986) found that innovating firms regarded imitation over the as a real threat to their benefiting from their long term. Further, according to Georghiou et. al., 42 own efforts the challenge to the innovating firm is to respond, but in doing so, it commits itself to a sequence of post-innovation improvements which are a necessary condition for it to retain or expand its market share (1986: 3). Individual innovations are at risk from Metcalfe and Gibbons calls "revealed process competitive action in two respects. One is what performance", consisting of technological "product and attributes" (1989: 165). Competing products characteristics as well are selected for their performance the economic value attributed to that revealed as performance by the selection environment. Less obvious yet a of a significant source of imitation and comparative improvement is the notion knowledge base that transcends the organisational boundary. Fincham et. al. (1994) observed that the introduction of IT based innovations in similar or one bank was soon followed improved IT innovations from competitors. Fincham et. al. found that the ability of short time or week of months largely due to the free movement of IT professionals within and - was improve each others revealed performance in competitors to imitate on around the financial services sector. As a rich source of a comparatively new environment line. A similar own are induced to dynamic move may - and unique technology offering among across the organisation- be observed in the American 'silicon valley' where between companies frequently, business. This must contribute to the rate of competition very competitive advantage, IT is undermining attempts to build sustainable advantage because of the rate of circulation of IT personnel engineers by or are encouraged to start their technological change and fierceness of microprocessor developers. Mitigating against the threat of imitation is evidence that competitive performance is difficult for potential competitors to replicate, partly due to 'causal ambiguity' (Lippman and Rumelt, 1982), including the invisibility of the innovator's tacit knowledge (Senker, 1993), and the uncertainty surrounding a firm's source of competitive advantage, such as how it is making efficiency gains. Rumelt (1984) similarly found that 'isolating mechanisms' such information asymmetries and property rights inhibit imitation. 43 as 2.6 KNOWLEDGE AND INNOVATION Strategy is a learning process creating new knowledge, changes in work organisation, ambiguity and uncertainty in meaning. Researchers increasingly explain innovation in terms exploitation of a knowledge base (Teece, 1988; Metcalfe and Gibbons, of the creation and 1989; Faulkner and Senker, 1993). What counts constrained and facilitated about how to compete, by previous knowledge, its political value, existing rules of thumb and the capacity to absorb various ideas that seek to valid strategy and knowledge may be as explain innovation new as an knowledge. This section reviews evolving knowledge base, crystallising technological regimes, design configurations, products and services, and supported by an organisational paradigm. This section also explores the extent to which knowledge bases both common and unique to firms, giving rise to diversity among as are firms and their innovation opportunities. 2.6.1 Evolution and innovation Metcalfe and Gibbons (1989) offer a theoretical sketch of the relationship between technological change and the long term competitive performance of the firm and, in passing, define may knowledge as 'structured information'. They further suggest that while "information exist in data banks, knowledge can only exist in the mind of individuals" (1989: 167). They seek to explain technological variety across firms, how the selection environment operates, and the behaviour of firms. They base their analysis on the evolution metaphor because, they argue, the elements of variety, selection and heredity provide powerful insight to their notion that economic change is due to economic different and variety which in turn is caused by the environment selecting between competing technologies. Their discussion of technological change have the characteristics of inevitability, akin to Nelson and Winter's (1977) 'natural trajectories'. This is clear from their call for a shift in focus from treating innovations 44 as discrete events to "treating innovations in terms of an evolving flow of developments within the confines of a technological agenda" (Metcalfe and Gibbons, 1989: 161). 2.6.2 The Technological regimes, configurations, and sociotechnical systems organisational knowledge base manifests itself as the 'revealed performance characteristics' of the firm's between products and products and processes competition operates directly service The selection environment chooses directly and knowledge indirectly. In the firm's ability to manage many industries knowledge. Noteworthy is the industry which accounts for at least 40% of GDP of most western nations' economies. For can on on processes. example, in the air travel business, competitive advantage goes to firms that demand, explicitly demonstrate knowledge about prices, connecting routes, alternatives, etc. Information is the firm's product, but knowledge about how to manage that information is their more source the vendor must of advantage. In addition, the bring knowledge to the fore in telecomm sophisticated the product the an overt way. consultancy, technical support, to the fast growing trend telecomms facilities to more among Examples range from firms who have large internal delegate the management of their communication needs to one of the equipment suppliers. Furthermore, as selection environments evolve (for example, developments in IT and telecommunications, user requirements, regulation) the continued success of many firms requires the co-evolution of their technological knowledge and work organisation practices. Included in that co-evolution is the development and maintenance of links with particular elements of the selection environment, such as user led rather than manufacturer led innovation (von Hippel, 1988), and industry-public sector knowledge flows (Faulkner and Senker, 1993). Metcalfe and Gibbons propose of three levels. that competition between technologies operate in Fundamentally different technologies or 'technological regimes' a hierarchy may compete, for example coax-cable versus optical fibre signal transmission. Within one 45 technological regime, for example optical fibre, alternative 'design configurations' compete, involving different combinations of signal transmission media, such as monomode or multi- mode, and signal carrier source, such as laser or light emitting diode. The characteristics which bind various design configurations together while the components as a regime is a common knowledge base, of the design configuration include "facts, hypotheses, operating procedures (know-how and know-what), and design parameters" (Metcalfe and Gibbons, 1989: 161). Metcalfe and Gibbons argue their that products compete within a scope for firms to differentiate themselves is least when design configuration, due to a largely common knowledge base, and greater when their products compete between regimes. Relatedly, Coombs and (1991) Richards' case studies suggest that technological rather than product knowledge is of competitive advantage. They that technology key source and expertise" (1991: 171) influence product development in levels of aggregation, and may aggregate may around products be or more or argue a as "bodies of knowledge variety of ways, at different less firm specific. First, knowledge and expertise projects in different ways: individual products, product groups of varying complexities, and experimental technologies. Product hold in common some the a groups for example, aspect of their revealed performance, such as engine fuel efficiency, or processing speed of a microprocessor. Second, the notion that technical change follows broadly predictable pattern or trajectory suggests an industry level technological trajectory encompassing the knowledge bases of groups of firms. Third, while firms within share certain firms may capabilities, they also possess a a sector proprietary knowledge and expertise. In this way have individual trajectories of knowledge that manifest themselves in the revealed performance of their products, and in the particular or idiosyncratic way that the firm's capabilities and technologies develop. Drawing the on this distinction Coombs and Richards found that "there is required technology base of firms to expand at and that They "systemic environmental forces" argue a a general tendency for faster rate than their product portfolio", seem to account for this tendency (1991: 172). that firms need to understand the technologies of their suppliers and customers, at 46 their own expense, in order to offer competitive products Richards observe, this differentiated products carry or development between services. As Coombs and a firm's technologies and its strategic implications: increasing pressure to manage their access to a wide base of public and semi-public knowledge, and to use the knowledge strategically. To use it strategically, however, they need to increase the private, firm-specific character of that knowledge, and this creates some tensions and problems (1991: firms come under 172). One problem the firm faces is defining the nature of its knowledge base, and distinguishing between different kinds of evidenced by the different knowledge. Defining the categories is not straightforward ways as that Winter (1987) and Dosi (1988), and Fleck and Tierney (1991) categorise knowledge. Coombs and Richards suggest that Whelan's categorisation (1989, cited in Coombs and Richards, 1991: 83) of technologies is useful here: critical, enabling, strategic. The first category is technology (ies) that is capabilities; the second is less proprietary and third is of a source new may competitive advantage and be common to a sector, may grow out of either of the first two. Coombs and Richards do not address the danger of applying such a may source such as IT; the and eventually become part profound difficulty and typology. Proprietary knowledge and expertise typically exists distinctive mix of both critical and destroying the the firm's distinctive core to enabling technology, and to attempt a as a separation risks of advantage through arbitrary distinctions of technology. Practitioners like simple guides to action but it is clear that firms do not evolve by adding new knowledge in a rational-analytical is circumscribed way. Rather, that which it is willing and able to assimilate by its existing tacit and firm specific knowledge, by its organisational structure, communication and decision making processes, by its ability to access and absorb public knowledge, and by the cognitive limits of decision makers and information handlers. Knowledge accumulation is further shaped by the informal social network which transcends formal hierarchies and organisational boundaries, where knowledge is against individuals and institutions. 47 a currency used by and Nelson and Winter suggest that in beliefs about what is feasible or at a technological regime what matters is "technicians' attempting" (1977: 57). Similarly Metcalfe and least worth Gibbons note that, the knowledge base of a business unit coalesces around a design configuration, and that the organizational structure builds within it a growing commitment to this design configuration, both limiting and shaping how the organization reacts to external technological developments (1989: 168). Metcalfe and Gibbons suggest that firms' choices practitioners' socio-cognitive commitments like as are at well the as an same time constrained by its independent 'technological agenda'. opposite positions but elsewhere they note that "a great deal depends These seem firm's expectations of the agenda for change, and thus operates" (1989: 188). They seem to on on a the design configuration in which it be suggesting that there is a technological agenda that is independent of the firm, and that practitioners commit to this agenda through the establishment of practices and learning what works. For them the firm resides within this independent technological agenda. This is evident from their comments that technology strategy viewpoint this evolutionary framework raises interesting questions for any firm. Do management know the full extent of their technology set, how it is currently partitioned, and where they stand within it? Have they a correct perception of the characteristics which consumers value in the product and of their relative valuations? Are they aware of the imminent changes in this structure of economic valuations? (Metcalfe and Gibbons, 1989: from a 189-190). Many firms do interpret market wants and needs by improvements within the constraints of a design configuration, while others adapt by moving from technological regime to another. However, combining existing areas many one firms also of knowledge to create entirely design configuration seem to new be redefining or or regimes, building competitive advantage by using their capabilities to distance themselves from each other. For example, Sony's integration of electronic and mechanics to produce portable goods. Sony and other innovative firms technological agenda is not given but self aware, seem to open to consumer have become increasingly (mecatronic) aware definition. Organisations also that the seem to be more recognising that their own socio-cognitive commitments and culture shape their choices. 48 The scope for redefining different configurations' (Fleck J., 1993) their areas can of knowledge and creating also be particular requirements. Drawing on seen where users examples from robotics, and computer aided or openness surrounding the implementation of a particular technology against The openness 'technological attempt to adapt a technology to production management (CAPM) Fleck shows the 'looseness' state new in the developing user requirements. of a configuration exists because of the particular problems, capabilities, organisation. According to Fleck such historical development, and expectations of each openness "offers great opportunities for innovation at the level of the whole configuration user itself, rather than only in terms of secondary or incremental innovations" (1993: 18). A related concept is Pinch and Bijker's (1984) 'interpretive flexibility'. In their study of the development of technological artefacts, they show that interested parties do attribute different meanings to the an same 'facts' and artefacts, and that there is more than one way of designing artefact. Metcalfe and Gibbons provide a sense of the diversity both within and between technological regimes and therefore the variety of ways in which knowledge and its appropriability unfold. may They suggest that regimes differ according to the proportion of knowledge which is discovered by scientific or empirical means; they differ in the division of knowledge between codifiable, publicly available, and tacit form, specific forms; and, they differ according to their dependence on other knowledge bases that are generated outside the industry (1989: 164). The analysis of technological development as consisting of both continuity (regimes and design configurations) and change (changing revealed performance characteristics of artefacts) is useful because it does facilitate of an analysis of innovation generation, development, and mutation rather than self-contained events. Their environment ongoing process consisting of individual insight further highlights the problems of rationalistic models of neo-classical economics and determinate strategy, not afforded a as a process as an where creativity and variety in creativity is place in rationalistic analysis. Firms actively engage with the selection seeking to identify and redefine segments in terms of their perceived technological capabilities. Working against the firm 49 - as noted earlier - is that room for competitive differentiation becomes to more marginal across similar design configurations due greater overlap of knowledge bases. This engagement with the selection environment spurs the concurrent development of new and hybrid design configurations and market segmentation in the short term and The notion of firm might a 'sociotechnical engage new technological regimes in the long term. system' (Hughes, 1983) offers a way of representing how the with its selection environment. This concept usefully highlights that the boundary between the firm and its environment is negotiated rather than given and independent. Hughes' study of the development of national electric power networks between 1880-1930, in Britain, Germany, and the USA, shows that many influences electrical engineering know-how - - beyond shared in the development of these national electrical systems. National power networks did not come about through the heroic energies of some lone inventor-entrepreneur, rather through institutions and a 'seamless web' of complex interactions between technological artefacts: political preferences, load factor calculations, capitalist economics, social values, competitors, and "electric power systems, like so users. much other technology, Indeed Hughes are both causes argues that and effects of social change" (1983: 2). Like the seamless web that binds Hughes' sociotechnical system together, Fleck's 'technological configuration', and Pinch and Bijker's 'interpretive flexibility' also suggests the impossibility of separating the definition of artefacts from their socio-economic context and, by extension, the arbitrariness of drawing a boundary around the firm and its artefacts. 2.6.3 Knowledge, work organisation, and 'world-view' Metcalfe and Gibbons also studied the links between the how variety in revealed performance and "organizations structure and articulate their knowledge base" (1989: 167). They suggest that how knowledge is co-ordinated and divided within the firm determines how well such knowledge is exploited. For example, while the development of specialisation has advantages (learning economies, and there are also inherent ways of coping with human cognitive limits and partial ignorance) disadvantages of reduced flexibility in both individual and 50 organisation. It seems specialisation is time as a seems likely that firms to a source a greater or lesser extent do recognise that of competitive advantage in the short term. However, the to dull the consciousness that loyalty to a passage narrowly defined technical base, such particular design configuration, carries the risk of competitive disadvantage in the medium and long term through substitute configurations and technologies. According to Metcalfe and Gibbons the organisation co-ordinates knowledge through "structure to communicate, filter and encompasses a theory are for distinguishing significant from insignificant ... gives the organization always incomplete there is room a regard the organisation structure seem to agent (an "operator") transforming individual knowledge into collective knowledge. The effective are world view". Further, since knowledge "for conflict... and hence for variety in policy, strategy and behaviour" (1989: 167). They as an a pool knowledge ". In addition this structure "framework for thought, events; a framework which and of use of knowledge should be others. Politics and the Also, as a major determinant of structural form but there organisation's history also tend to have a significant influence. firms' knowledge evolves it is contestable whether the organisational structure keeps pace or more importantly whether its members structure which is effective. are able to interpret and anticipate a form of Creativity, which is another issue but is interdependent with effectiveness, will be greatly influenced by such choices as the amount of centralisation versus decentralisation, the amount of formal rules considerations are based on the dubious versus autonomy. All of these assumption that firms are able to critically and self¬ consciously articulate their accumulated knowledge; that they know what they know. Clearly the fusion of individual perspectives with different communication and decision which ways of organising and attendant making patterns, largely account for the diversity of ways in organisations both interpret and are interpreted by environmental agents, such as competitors, markets, non-market institutions. It is reasonable therefore to conceive of the organisation different as synthesiser of a variety of individual knowledge, and to knowledge bases and differing abilities to change those bases. see why firms have The importance of organisation, communication and decision making patterns is supported by such studies as SAPPHO where innovating firms are said to owe their having success to good communication links between R&D, marketing, production, and the role of product champions and entrepreneurs. The prominence given to vision in hand, with the rest of the of the collective decision leader pushing ahead heroically, a organisation generally in compliant mood, disguises much making that supply individuals with their perspective on the world, sharing of knowledge, mutual respect, and adjustments to accommodate differences of perspective. This is especially true where specialist knowledge is able to influence strategic decision making through command of sufficient organisational power, such as the role of IT experts in banking (Fincham et. al., 1994). Metcalfe and Gibbons the mix of (1989) note that the firm's uniqueness of capabilities that comes from specialisation and the manner in which knowledge is organised can help explain phenomena like 'not invented here'. New knowledge is also likely to be rejected by various parts of the organisation if it is perceived as a or resisted negative change. Kotter and Schlesinger (1989) in their analysis of organisational resistance note that such resistance take several forms: for parochial self-interest, misunderstanding and lack of trust, low tolerance change, different assessments of the problem and organisation of knowledge ventures also and depends can or opportunity. The mix of specialisation also explain the difficulties experienced with joint technology transfers though this is on may a more complex issue. For example, success compatibility of 'world view', and the degree of preparatory exploration and integration of expectations of the parties before attempting to access each other's knowledge base. The consequence of developing around here', in areas of internal momentum a strong and enduring commitment to 'the range do things specialisation, communication and decision making, is that along a particular path or an design configuration is maintained. The development of knowledge and revealed performance particular way we are unconsciously committed to of options. This technological paradigm will tend to dismiss emerging competitive design configurations. As Metcalfe and Gibbons note, 52 as a irrelevant over time the firm invests heavily in its organisation and knowledge base and "from this inheritance of the past come the chief sources of delayed adaptation to changed circumstances" (1989: 168). One manifestation of the on to seem manage paradigm is in the procedures and decision rules which the complexity of even to share this a limited range a firm relies of strategic options. Nelson and Winter view, referring to such decision rules or 'heuristics' as, activity that has a goal, and a set of procedures for identifying, screening, and homing in on promising ways to get to that objective or close to it. The procedures may be characterised in terms of the employment of proximate targets, special attention to certain cues and clues, and various rules of thumb an (1977: 52-53). While the use of decision rules and environmental directions, help apply order to multifarious organisational, technological they also limit the assessment of possible important choices (Lindblom, 1959: 84) and thus guide creative thinking. As noted earlier, in some cases 'groupthink' may the members' alternative develop as "people [become] deeply involved in a cohesive in-group, when striving for unanimity overrides their motivation to realistically appraise courses groupthink behaviour might lead to the impression that all firms firms whose continued survival reflect the are depends on distinctiveness of the firm's any case propose a way knowledge base and how it of making its interpretation be described raw as a strong many an uses organisations shared belief in and competitive advantage Recognising that the notion of a knowledge base is processes, pathogenic. Rather, all co-operative behaviour between its individuals, precisely because they have anticipation of some future scenario. In transform are diversity of those attitudes to varying degrees. Furthermore, successful innovators may rules, mindset and of action" (Janis, 1972: 9). A focus on decision comes from the that knowledge. abstraction, Metcalfe and Gibbons more concrete. Any given design configuration consisting of knowledge elements which the firm brings together to materials into products and processes. For example, what materials, what the order of assembly. They suggest three generic components; elements, level of skill, and how the skills firm to form a are 'dominant firms combine these employed. These three components are uniquely blended by each competence'. It is the uniqueness of the way in which individual knowledge elements and skills which gives 53 a firm its revealed technological performance and competitive advantage. Their attempt to make concrete the notion of a knowledge base has multiplied the difficulty of assessment, not reduced it. 'Elements' and skills Nevertheless, their and are use as is the uniqueness of the blend. of 'elements' add further texture to the often referred to 'public, tacit proprietary knowledge'. For example, where design configurations overlap, resulting in common elements these public domain is of little cannot use The contextual and difficult to frame public knowledge, although the possibility that it are use to it. Tacit elements firms who are firm are unaware specific and proprietary. willing to absorb new Environmental firms may be absorbed by was unfamiliar as a new variety and scope for firm creativity Gibbons'(1989) suggestion that because of their socio-cognitive commitments intuitively right, yet earlier, firm and manifest likely in the long term to lead its competitive sector. experience great difficulty in trying to seems one knowledge and adjust their dominant competence in line with environmental stimuli, is more Metcalfe and that its people interact reject it. All other variables being held constant, the firm which skill while another firm may 2.6.4 way knowledge bases in universities, government, customers, suppliers, competitors, etc. A 'foreign' element is able and be in the of its significance and therefore knowledge base of the firm also develops according to the with other external may that there areas. one was no move between regimes or design configurations of the surprises from the SAPPHO studies, as mentioned correlation between failure and firms pursuing innovations in The extent to which the evidence conflicts with the theory does need closer investigation. One argument might be that while Metcalfe and Gibbons' observation is true for most firms, their view does not account for the characteristic of creative talents and a willingness to engage technological environment. Further, writers innovative firm; its in experimentation, to combine and redefine their on entrepreneurship typically point out the distinguishing characteristic of the entrepreneur opportunities and configure their an resources to as an ability to identify or create profit exploit that opportunity ahead of competition. 54 There is a sense of the emphasis being on the lone entrepreneur looking for that gap in a largely homogeneous landscape. In exploiting the evolutionary metaphor Metcalfe and Gibbons (1989) define that landscape as a are selection environment that is bounded same. heterogeneous in many respects. by their socio-cognitive commitments, this does not Indeed scope Although firms' choices mean that all firms are the for generating novel and economically useful solutions is inherent to the diversity of members' knowledge bases within a selection environment. Each firm (including competitors, collaborators and customers) carries different experiences, capabilities and competitive advantages, and expectations. As Metcalfe and Gibbons observe: unless firms have identical innovation opportunity sets they will not all end up with the same trajectories of innovation. Nor can identical opportunity sets be expected. Location in different design configurations, different perceptions of the agenda for innovation, different resource bases, and different abilities to innovate will all create variety of innovative response, even for firms within the same selection environment. Variety in creativity shapes the selection set [and] generates the possibility of selection (1989: 188). ... In Peteraf's review of the literature "cornerstones of on 'a resource based view' of the firm she notes four competitive advantage": "that the underlying production are heterogeneous across resource bundles and capabilities firms"; the importance of creating barriers to competition, through for example 'causal ambiguity' and 'isolating mechanisms' as noted earlier; the existence of the 'imperfect mobility' of valuable assets such as key staff; and 'ex ante barriers to competition', such as being able to identify an opportunity ahead of competition (1993: 185). Peteraf's work reinforces the importance of variety in the selection driver of opportunity. Her organisation of the literature into the four environment as a cornerstones is also useful in firms have scope to cornerstones that post enrich thinking about the nature of the innovation be creative in a may an Successful innovation perspective her Georghiou et. al. (1986) and Metcalfe and Gibbons' (1989) observations innovation improvements improvements number of ways. From process. are important. Her work offers be made. For example, ex post and a ex ante ways guide to where those of anticipating and blocking competitive action; and of enhancing the imperfect mobility of tradable 55 resources and capabilities, by perhaps of collaborative more or less dependence on 'cospecialized assets' (Teece, 1987) relationships. Looked at this way the innovation process is much than generating ideas, screening more them, eventually leading to the timely introduction of a novel and useful artefact, with continuous performance improvements to the product The innovation process environmental 2.7 manufacturing or process thereafter. is multifaceted, and is sustained by individual firm creativity and heterogeneity. CONCLUSIONS Strategy, whether determinate chaotic and emergent, is the or process whereby practitioners and capabilities of their enterprise, and the enterprise's relationship manage the with its competitive environment. For many organisations the price of continued membership resources of that environment is the need for incessant efforts in creating and maintaining competitive advantage. The key to competitive advantage is about changing the basis of competition in the organisation's favour; of conceiving of new ways of competing that confer financial and technological advantage. In short, managing innovation and critical best way. preoccupation of the As this review and the managers case - in the broadest sense - is a central of an organisation's strategy. However there is studies in Part II show, the scope no for innovation is multifaceted, and the way that innovation is managed within the context of strategy varies, not least because the context itself varies. Managing innovation becomes increasingly complex strategic choice is constrained by a as we acknowledge that the scope for host of factors: knowledge of all relevant facts about the competitive environment remains incomplete, and in any case there is evidence that practitioners cannot deal effectively with all the possible information if it were available. Furthermore, practitioners' perception of the competitive world may be out of tune with the actual nature of that world. 56 Practitioners' possibilities capabilities in bringing together market opportunities and technological are constrained. This constraint exists because organisations accumulate knowledge in particular patterns, typically shaped by its work organisation arrangements and its paradigmatic view of the competitive world. This does not firms is constrained in a uniform way. mean that the development of Firms differentiate themselves from each other through their efforts to create and apply proprietary knowledge. This results in among a diversity firms' knowledge bases such that the innovation possibilities remain uncertain. The variety of influences (environmental and internal), the diversity of outcomes of their interrelationships, and the pattern and rate of change (both internally and externally), always that there is scope means for novel couplings between technological possibilities and market opportunities. This uncertainty of influences and outcomes also maintains a tension between strategic intent and outcomes. To reiterate, my view of strategy at this point in the research fieldwork, is that it is a process process, and leading of constrained rationality; practitioners are independent and largely hostile environment; technological knowledge has refer to its 'accumulation', like depositing objectivity such that one may one's bank account. Staying with the banking metaphor, firms amounts of may up to the dealing with an a solidity and more money in accumulate different knowledge in different 'Whelan' accounts: critical, enabling, strategic. The practitioner's task of managing innovation is complicated by the degree to which their view of reality is misguided. This The case was my studies of Part II support view of reality before embarking all three metaphors of strategy to on some the fieldwork. degree: determinate, managed chaos, and social construction. The Bank of Scotland evidence seems to support the determinate metaphor, and strategy in Ascom Timeplex could be described as managed chaos, construction cases, even though there is evidence of a corporate grand plan. However the social metaphor proved most compelling and this observation led to noted earlier a framework for understanding all three revision of the original research questions (1.3). Indeed as (1.3 and 2.1) this chapter is other material that addresses the as a new a partial review, with chapters 7 to 10 introducing research questions noted in 1.3. This separation has 57 been maintained to highlight that ideas held before the field work were overturned through engagement with empirical data, the writing of this chapter, and continued reading during the field work. Although the social construction metaphor is addressed in this chapter it acquired greater significance of strategy I tried to make as uniqueness perspective each on a unique mix of determinacy and chaos, but this raised the question of how came about; and each could be said to have the world, but again the organisation why that of the fieldwork evidence. As noted above the practice in each of the three organisations seemed distinctive: strategy in each could be said to consist of this sense was so was same prepared me for a new of Reality, provided reality, I realised that arose. different paradigm one could a or The observation that practice in distinctive and taken for granted by the staff, and a curiosity about interpretation of strategy. In parallel with the fieldwork I continued to read. One book, Construction question a Berger and Luckmann's (1966) The Social key. Drawing see strategy as an on their account of the pattern of everyday everyday activity, patterned by practitioners' social interactions; interactions that tend to be taken for granted and unsurprising for those involved. Interestingly, not only did the evidence make of their ideas, but their ideas also made this situation is that the sense analyses in Part III captured in what, for me, emerged as an in light in light of the evidence. The consequence of argues centrally that the practice of strategy is socially constructed. A further consequence of embracing is sense a social constructivist perspective acceptable definition of strategy as practice (p. 231). That is, strategy choice ordinarily shapes, and is shaped by, practitioners' everyday and shared understanding of their competitive situation; choice is structured by assumptions, routinised behaviour than detached as well as through experimenting and dealing with the unfamiliar, rather analysis and statements of intent. 58 3 Research 3.1 This Design and Method INTRODUCTION chapter consists of five sections. The first section outlines the aim and research as a precursor to sections describe my consistent with that arguing for a argue epistemological approach, based for a on a case discovery which this research took, and a a research design and method that seems phenomenological rather than positivist analytical approach. The final two sections fieldwork and its of this particular epistemological approach. The next two epistemological position, and position. I scope study research method, and are a personal reflection conclusion. The first on covers analysis, and is intended to help make the research a grounded theory the process of aspects of the process more transparent. 3.2 RESEARCH AIM AND SCOPE The aim is to assess the ways that strategic choice in the strategic management of technological innovation is contested and constrained. More specifically the intention is to examine the role of certain differentiated underlying and interrelated features of strategy practice: meaning, paradoxes, heuristics, tacit knowledge, and informal networks. Strategic management is commonly prescribed and analysed as a sequence of stages: 'strategic analysis', 'strategic choice', and 'strategy implementation'. The focus of this research is to develop a better understanding of the notion 'strategic choice'. The traditional view of strategy presents research suggests strategic choice that strategic choice is as a component more in a recursive process. This fundamental, and in practice underpins both 'analysis' and 'implementation', and 'organisational change' 59 more broadly. Strategic choice involves a 'contest' between interest organisations. Different interest groups groups, both within and between often have different perspectives and assumptions, for example about what constitutes strategy, about the nature of the competitive environment. or They also have partially divergent interests with respect to strategy and politically, using informal and formal In any case, strategy means to secure so will behave their interests. itself involves dealing with paradoxes. Most obviously, there are the apparently conflicting demands between short term profitability and survival, and long term investment and growth. Also, organisations environment in a situation of seem determined to increase control profound uncertainty. Such paradoxes are over their another reason why strategy practice seems marked by contests. It of seems likely that the influence of each options is not limitless but rather decision group narrow. is constrained in There a variety of ways. The are two reasons range for this. First, firms' making tend to be governed by heuristics; that is, previous decisions, existing formal decision rules and informal accumulate in practices guide particular directions as or focus decisions. Second, knowledge organisations embrace new areas seems to of innovation. Moreover, much of the requisite knowledge is tacit and not articulated in a public form. These factors, individually and collectively, significantly influence what counts may as valid strategy and relevant knowledge (technological, organisational, commercial). Through these considerations research questions and were developed to shed light 3.3 EPISTEMOLOGICAL POSITION This research aims to make on a schedule of interview questions (see appendix 1) the nature of strategy and the role of innovation. sense of strategy as a social phenomenon; to explain both the variety in, and the meaning people attach to, their experiences and expectations. This aim is not concerned with diagnosis; with identifying problems of social behaviour and proposing solutions to them. Furthermore this research as assumes the 'natural' world. Individuals and groups that the social world is not as material behave according to how they interpret their 60 situation. This research does not conceive of human behaviour and as objective phenomena that can individuals and groups, and some no law-like causal link between the behaviour of external or environmental stimuli. The organisation's relationship with its external environment does not exist Any causal relationship, is grounded in 'natural' link. customers, and other interested be read off like instructions or as concrete, be accurately measured. proposition here is that there is The relationships parties. 'The best a as some concrete, independent or collective belief among competitors, way to compete in this business...' cannot imperatives from the material world. Competitors invest in technology to gain competitive advantage because they believe there is a link between technological expertise, artefacts, and competitive advantage. This centrality of a collective belief is not to suggest that social relationships ephemeral, over or are time for are somehow divorced from the material world. Organisations do develop reputations being say, innovative, socially responsible, secretive, and so on. Companies do develop technologies and products that customers find useful, and unregulated behaviour among competitors and consumers can cause The social and material worlds are bound irreparable damage to the material environment. together in other ways, through for example symbolism. In the world of cosmetics, competitors with the help of their advertising agencies promote their 'fine fragrances' and deodorants based on a shared belief that consumers attach symbolic value to particular smells. The product is access 'femininity' or 'masculinity'. During the last Monopolies and Mergers Commission (MMC) suppliers who Often the argue a gave material vehicle that helps customers year a British industry regulator, the their support to those cosmetics that the value of the product lay in its symbolic value. symbolism is attached not just to the product itself, but also to its price, and the kind of retail outlet that makes it available. Consumers are name, packaging, willing to pay a premium for branded fashion accessories because such products contribute to an image of themselves that the convenient way and purchaser wishes to cultivate. Business lunches of saving time and re-fuelling the body. They reaffirming social relationships. 61 are are more than a also rituals for establishing These One examples show that the world is not simply divided into the social and the material. gives meaning to the other in context. Since the research task is to find out how practitioners interpret their situation, then in-depth interviews with practitioners and observations of their situations standard questions seeking 'yes or no' responses are more a wide cross-section of appropriate than surveys using (Yin, 1984; Easterby-Smith et. al., 1991). However, while interviews and observations may be appropriate techniques for soliciting meaning, they do have limitations. Unavoidably the researcher makes many assumptions that underpin the questions asked. Some of these assumptions are explicit, but many others are hidden from the researcher. The researcher's come, own assumptions, values, experience, and general anticipation of things to will colour the questions asked and how the answers are interpreted. For example my research questions reflect the assumption that firms are largely free to compete with each other, compared to the situation of operating in a centrally planned economy. Again, the researcher might formulate questions, and solicit of strategy to be about researcher accepts or s/he is say being engaged in a in a way that assumes the practice calculative struggle to control an independent environment. In another example, the degree to which the external and opens up or managers answers ignores is sensitive to the gendered division of labour in organisations either avenues for investigation. While the researcher aims to remain guided by the 'taken for granted', 'radical humanists' that the researcher is unavoidably imprisoned by their or own aware that 'radical structuralists' might perspectives on the nature of organisations (Morgan, 1980). The social interaction of the interview process meanings. For example, in terms that of were some interviewees consistent with what were a cover. They though I was either a own symbolic relationships and suspicious of my stated aims, and responded they thought I people admitted that initially they thought just generated its my story consultant was really doing. In Timeplex a about doing academic research or someone couple was from the company's head office, tasked with investigating them. They were ready to see subterfuge because there was already a climate of distrust and uncertainty within the organisation due to redundancies in 62 Other interviewees initiated actions the recent past. some our interview discussions. The Dean of the as a direct result of issues raised during Open Business School said that as a result of discussions, he took steps to improve communication between the centre (Walton Hall) and the Regional Offices. I. (unintended) effects, these did not appear to cause any While the interviews had some significant changes in the way that interviewees intervention was localised and temporary researcher as lasting. The basis for this claim is that them to change the way no one or the organisation as a whole behaved. My rather than substantial and long suggested that the research interviews caused they worked. Many people said that the questions made them think about their situation, often in ways they had not considered before, and where the organisation am unaware such 3.4 as a was going. However I of anything more substantial happening, re-organisation. RESEARCH METHOD 3.4.1 The case study The research method used different types was the case study. While some writers distinguish between of case study (Yin, 1989; Hertog, 1994a), this research reflects elements of those methods. Different options seem to characterise different stages in the Hertog (1994a: 5) describes four alternative options: 1. the pure process. description of a social phenomenon, 2. the solution of a definable social problem, 3. the development of a theory, and 4. the testing of a theory. to reflect two main epistemological positions and research traditions. One tradition is Glaser and Strauss' (1967) notion of 'grounded theory', an The four alternatives seem essentially inductive approach. The other is Yin's (1984, 1989) perspective, reflecting the testing of a hypothesis, and a deductive approach. With the former method the researcher 63 tries to generalise from the particular, while with the latter s/he starts from a general proposition and tries to apply it to the particular. This research project formally began with the posing of a set of open ended research questions. While they the social as a practitioner, and around the research base of the social way hypotheses, they did carry assumptions about the nature of phenomena I wished to investigate. These assumptions experience some were not area. a more were the product of specific and selective study of the literature in and I therefore entered the research process with a 'unique' knowledge phenomena of strategy and the management of innovation. This position is from the unbiased unattainable for any open minded observer of Glaser and Strauss; a position that is researcher given their particular baggage of assumptions and experiences. The resulting knowledge and expectations deployed in this research to the the were arguably more choosing of instruments by Yin's positivist experimenter. Later in the research post-fieldwork and analysis stage seemed to be juxtaposing old ideas that looked as a akin process, mixture induction and deduction; if they might shed light on the new situation under investigation, rather like Schon's (1963) description of the cognitive processes underlying the creation of as new ideas. In other words, I have mixed traditions within the case the research process from unfolded. 'Reflections' below (3.5) give an account study method of how I moved expectations to observation then to 'theory'. Although these issues highlight the epistemological difficulties of the nevertheless an case appropriate instrument in certain situations. In particular, for investigating contemporary social phenomena in context, where the phenomena-context blurred boundary is (Yin, 1989: 23), shifting and symbiotic. Importantly for the content of this research, Hertog (1994a: 5) suggests that the history study method, it is as an requires an influence on case study approach should also acknowledge the role of the future. Making sense of strategic options being pursued today appreciation of the historical events and situations that helped shape strategy practice today. 64 In this research the project, organisational strategy making, the on-going relationship between organisation and its external environment, and the relationship between history and the contemporary are central issues. In seeking to make sense of the nature of strategic choice in the context of practice, the case study method provides an appropriate investigative framework, because it takes account of these conceptual issues. Sources of evidence 3.4.2 The main sources of evidence at the organisational level direct observations. Additional evidence was limitations of position'), the of also collected, cuttings, public industry reports. press going back and plans, public one or two years. Despite the interviewing and observation acknowledged earlier (3.3 'epistemological use of interviews is recognised study usually being purpose was semi-structured interviews and collected from internal reports performance accounts, promotional literature and Some archival evidence were an as appropriate for case study research, this type enquiry into social affairs (Yin, 1984). It is appropriate where the of the research is to solicit the meanings that individuals attach to their situation, in social contexts that have not been structured in advance by the researcher (Easterby-Smith et. al.t 1991). Again direct observation is still recognised as a valuable way of enriching understanding of both the material and social context, and the social phenomenon being studied (Yin, 1984). Some of the following discussion is informed by such observational evidence. Organisations chosen Initially I approached nine organisations that met my organisations who regarded technological innovation This provided scope criteria; that is, large complex as central to their future development. for initial screening to eliminate those organisations likely to be problematic (for example, likely to drop out later changes). In the event three organisations were on, or going through major internal studied for this research. Three rather than 65 one was chosen in the hope that such an arrangement More than three would have demanded These three organisations were very different markets. Furthermore, common on more time and effort than was available. different, using different technologies and serving they had supply chain. They did hold in innovation in and around their would enable comparative analysis. no transactional relationship, such common a expertise or competence base. The three organisations Timeplex, the Bank of Scotland, and the Open Business School. Ascom Timeplex (AT), or Division of Ascom, is a being part of a belief that their future survival depended Ascom a as were manufacturing enterprise, using expertise competences in telecommunications networking and management information technologies. AT provides communication network products and technical services to international a organisations, particularly financial services companies. My initial contact was Director, with whom I had worked as a peer in a previous organisation. He agreed to co¬ operate but could not promise co-operation from his peers or subordinate managers. He arranged introductions from which I negotiated interviews, and found little resistance except for two refusals and there were one prevented from co-operating by his superior's tactics. From this case eleven interviewees including: UK Managing Director, Directors of Sales, Marketing, and Customer Support, and The Bank of Scotland expertise along with Customer Support and engineers. in IT and banking. BoS provides financial products and services to organisations in Scotland and England. One of my supervisors, James Fleck, a group of researchers had carried out research in the Bank previously (Fincham et. al., 1994). This experience, and few of the Bank's senior managers to my facilitated my managers (BoS), part of Bank of Scotland Group pic, is a clearing bank, using or competences individuals and seven a a couple of years positive predisposition among a host institution, the University of Edinburgh, contact's willingness to co-operate. There were ten interviewees: The General Managers of several Divisions: Management Services, International, Card Services, Domestic UK Banking, Centrebank, Accounting and Finance. Within Management Services three additional staff were interviewed, and one other within Card Services. 66 The Open Business School (OBS), also called the Faculty of Management of the Open University, is a business school, using competences in educational technology (distance teaching and learning) and communication media. OBS provides products and services (courses and associated support) to individuals and organisations, primarily in Britain but also expanding in continental Europe. Having worked the last five years I had already developed a as a part-time tutor with the OBS for good relationship with some members of staff. Indeed, I had worked with the Dean before he took office, and his support no doubt contributed to the ease of access. There were twenty four interviewees including: OBS executive (Dean, External Relations, Course Production, Course School Secretary), individual academics engaged in Representatives of Open University The Institute of Educational groups course Presentation, Research, writing, and administrative staff. that OBS depended on were also interviewed: Technology (IET/OU), Business Development Management Organisation (BDMO/OU), Open University (Pro-Vice Chancellor for strategic planning), and Regional Staff. Interviews Initially I met with access to their cases was this internal 'sponsor', the individual with sufficient authority to grant organisation. The discussion started with the research aims and that the sponsor research my would use my me expectation the first meeting to fully satisfy themselves that the proposed something that the organisation would co-operate with. However, in all three introductory meeting slipped imperceptibly into the researcher/interviewee relationship. This initial discussion also helped identify which individuals should be interviewed first identified (selection criteria listed below). Additional interviewees develop a solicited individuals' picture of the observed performance of the three organisations, I experiences and views through semi-structured in-depth tape recorded interviews. That is, in each interview we focused on a similarly during these first discussions. In order to through were single issues from various angles, series of open ended questions (see appendix 1). For example interviewees 67 were asked to discuss their understanding of the concepts of strategy and innovation, and the relationship between the two. Interviewees why these were chosen were examples, and they as asked to give examples of innovation and also asked to explain the strategy of their were department and their organisation. The three organisations with interviews spread over organisation, I prepared interviewed sequentially, the first nine months of 1994. From the interviews in each an account that aimed to reflect organisation's interviewees. How this evidence below were was a collective perspective of each organised and analysed is discussed (3.4.3), Part II presents the evidence as coherent accounts, and Part III consists of analyses of the accounts. A total of forty five interviews individuals interviewed 1. were were conducted, each selected for a one 60 to 90 minutes long. The number of reasons, including: They led departments directly responsible for the development, production, delivery, and support of product and/or service to customers. 2. They were regarded as key staff (apart from Departmental heads) who took part in decision making. 3. Their views were highly regarded by or formal contributor to strategy 4. They were peers even though they might not have been making forums. on this basis resulted in a substantial difference in the number of interviewees between the OBS (24 individuals) and the other two BoS and 11 from AT. Furthermore positions of individuals structures and work organisations, with 10 from although BoS and AT produced similar numbers, the were not comparable. This represents differences in authority organisation, and in particular it shows differences in the way that individuals have scope to are regular willing to be interviewed. Identifying individuals formal a influence organisational strategy examined below. 'Reflection' below processes. Some of these issues (3.5) explores whether this range of interviewees 68 and their views are sufficient to contribute to an understanding of organisational strategy practice. Variety in organisational attitudes to Variation in the way access that these organisations treated the researcher contributes to understanding of the differences in their strategy making to convince the Divisional me. Unlike the Ascom Timeplex colleagues, my sponsor said he was it he keen to arrange a might be possible some managers were as a precursor to may on behalf me access to management be discussed and these meeting with the Bank's General manager, were confidential. and suggested "that time in the future", after I had spoken with the Divisional Managers. My impression is that such key Bank see I did not have sponsor's co-operation. Speaking unable to grant meetings, because clients' financial situations was managers, Managers of the value of my research to them, the interview. However, there were limits to my Nor my Managers in addition to himself. He then contacted them and suggested that they make themselves available to of his Having explained to the research aims, he identified immediately that I needed to Bank of Scotland sponsor five Divisional processes. an closer, In contrast, access to Ascom as access would be in the other two Timeplex staff was more likely if my relationship with cases. more negotiated. Directors were willing to talk, and appeared to be quite open in sharing their opinions. More subordinate managers were much more guarded initially, with their willingness to co-operate being dependent certain amount of in the negotiation between For example, although organisation, I had to meet his subordinate the research would be useful to them. themselves that I Their us. sense of was Perhaps my sponsor was a managers en masse more was not critically, they wanted to satisfy saved organisation. 69 Director and convince them that legitimate, that I had not been sent by Head Office to suspicion and conspiracy on a up for me; it was spy on them! endemic to the couple of AT people refused to be interviewed, perhaps because of the ambiguity A surrounding their department's role in the about their future. I did not observe any company, since at that time there was some doubt internal meetings to discuss the direction and performance of the business, because these were meetings took place in the USA, although there exceptional and accidental in AT. Such was growing interest in having such meetings in the UK. Access within the third any meeting. I memos organisation, OBS, was even was very open. left alone to look through for relevant information. In addition, I a was I could talk to anyone and attend filing cabinet of internal reports and invited to observe a two-day internal strategy review process, consisting of various workshops and discussions, and also observed a School Board meeting. I attended a small presentation given by electronic strand) who were tasked with of the a working-party (the recommending how the OBS should develop in view burgeoning availability of new media, such as CD ROM, and trends in information management. The differences in access seem to be due to a number of factors, and provide a window on organisational attitudes and strategy making. Some of the variation in attitudes to granting me access, between OBS, AT, and BoS is probably due to the strength of personal relationship between likely that the managers to to researcher and the organisation's 'gatekeeper'. It also senior people, particularly Directors, more shareholders and other among staff practised at defending and showing accountability are clearly the preserve of the Management Board: a group of largely consisting of the General Managers of the Bank's Divisions. What individuals lower down the managers managers public bodies. Strategy issues affecting BoS about ten individuals and more seems willing than subordinate discretion and knowledge about the issues. This difference also be due to Directors being determined were more discuss the organisation's business. Indeed Directors and senior probably have may very me as hierarchy learn about the Bank's strategy is by the Management Board, and filters down through the hierarchy. Middle and those below have a narrow and 'managed' knowledge of the Bank's strategy 70 and outcomes, and the managed in the sense company and influence is In OBS power senior managers. Their knowledge is very that it is acquired second-hand through their superiors, typically through notice boards, individuals to variety of views held by the reports, staff presentations. very widely dispersed, and there is scope for wide variety of a directly influence strategy formulation and implementation. For example, strategy issues affecting OBS is decided by open committee. Meetings of the Board of the School of wish to Management are attended by dozens of interested staff. Staff attend because they actively participate in strategy development. Most attendees they want to know what is going right to be involved, or to on. say Furthermore, by being there they be heard. Perhaps in the footpaths to maintain their right of way, same way little are or nothing, but demonstrating a that ramblers in Britain 'police' OBS staff attend meetings to reaffirm their many right of access to OBS's strategy making. While there is a hierarchy in AT, Individual managers power power and influence is distributed in complex ways. and engineers routinely seek out opportunities to develop and influence. In the BoS formal power as exploit and influence is concentrated at the top of the hierarchy. Although different part of BoS, could claim expertise and such or use it as a power lever, Management Services and their IT expertise, respect for the Bank's hierarchy is overwhelming. Each organisation also took premises of OBS I out I was used his office with all staff as a free to my different attitude move Not freedom of movement. While was clearly more initially escorted subsequent visit. In contrast at the Bank I me everywhere, this was never was Perhaps less obvious is that these attitudes and left to wander around provided with relatively processes are open access 71 access relaxed with on my own. surprisingly these organisations have different attitudes and strategy making was the important to both AT and OBS, wearing identify cards and departmental doors being controlled by card the researcher. I on about unsupervised. On occasions when the Dean was base. Security devices. However, while AT staff each over my processes. reflected in their treatment of in OBS, managed access in BoS, negotiated in AT. The preceding discussion the variation of treatment shows and a that comparative observation of the organisations' treatment of the researcher is evidence in access on itself. 3.4.3 Analysis A structured Given the approach epistemological position outlined earlier, and the gather empirical evidence, This enables 1991: a my use of qualitative interviews to preferred analytical approach is based on 'grounded theory'. holistic, intuitive, and inductive process of discovery (Easterby-Smith et. al., 106). Strauss and Corbin (1990) offer a comprehensive set of procedures and techniques for analysing qualitative data. Easterby-Smith et. al. (1991) also offer approach to grounded theory, but their approach is more and or interpretation is an iterative (Easterby-Smith et. al., 1991: 108), and demands "openness and flexibility" (Strauss Corbin, 1990: 26, 144), Strauss and Corbin's procedures are so detailed that the mechanics of analysis threaten to overshadow the possibilities for have tried to remain true to the method, in terms of and structured loose with much less detailed prescription. While both approaches recognise that analysis process a "striking a balance between being creative, analytical openness process, and intuition. I theoretical sensitivity, and doing 'good science'" (Strauss and ... Corbin, 1990: 10), but have not applied, for example, a detailed axial coding to the data. I found their approach useful as a guide rather than as a formal procedure to be adhered to in moving between the main components they suggest. Strauss and Corbin which two to seem to regard creativity and good science points need clarification. First, good science providing a as as opposites, in relation to used here means being committed faithful account and robust analysis of interviewees' meanings; respecting the principles of validity, reliability, and generalisability. The notion of objectivity inappropriate since the focus of the research is social processes, on making rather than for example establishing 72 a sense seems of people's understanding of statistical correlation between firms' net profits and total investment over time. Second, being creative making novel connections between existing ideas and the useful light on still be good science; situation that shed new and the phenomenon. In the interests of checklist has new can doing 'good science' Easterby-Smith's et. al. (1991: 108) research proved helpful because its structure is sufficiently loose to facilitate creativity: 7. Familiarisation with the trying to write an account empirical information. This was a function of two tasks. One was (case study) of the organisation from the interviewees' perspectives. The other came later, in trying to write an analytical account from my perspective. 2. Evaluating the data in light of previous research, theoretical ideas, personal experience, discussions with others. This meant seemed not relevant, research area, now important were revisiting many articles and books. Ideas that previously often because they were discussed in a different context from this seemed very relevant. Equally, some ideas that seemed initially to be left undeveloped because they did not empirical evidence. Undoubtedly these change about the research process and its content, an seem to further understanding of the processes represent personal learning, both example of the latter being a growing appreciation of the value of the social constructivist perspective and the sociology of knowledge. 3. Identifying interview or otherwise forming coherent ideas through 1 and 2 above. During the period I noted any ideas and themes that occured to list of ideas during the analysis, elaborating abandoning many. 4. some, me at the time. I re-visited this finding similarities between others, and Cataloguing and recording concepts identified in the transcripts. This 3, but as was an extension of noted earlier I did not apply the detailed coding procedure of Strauss and Corbin (1990). 73 5. Linking. I began trying to write coherent accounts around the emergent themes, and sharing those themes through discussion with in this area, peers and supervisors. I have spent perhaps because it demanded greater emphasis links between empirical material and theory that study accounts without some creativity: making lot of time numerous whole seemed coherent. Writing case conscious analytical structure resulted in confusing accounts. drafting This then gave way to as a on a an analytical account. Thinking through the analytical arguments helped in redrafting more coherent case studies. More coherent case studies in turn exposed ideas for further developing the analysis. Through drafting, moving backwards and forwards between and links case stories and developed between the 6. Re-evaluation and case material and its analysis. cycling through all of the above. Rather than following cycling through of the analysis to analysis, and discussions with others, stronger arguments process, my structured emphasis has slowly cycled from stage 1 through stage 5, but not in an ordered way. For example, in linking empirical models a material with general (stage 5), I have engaged in stage 2 activity, revisiting previous research and ideas. Organisation of evidence Implicit in any process of analysis is the organising and interpretation of the evidence. Initially, at the start of the fieldwork, the intention categories, and then to performance for an as compare was to organise the evidence in three and contrast them: espoused performance, revealed used by Metcalfe and Gibbons (1989), and observed performance. Evidence espoused strategy could be drawn from published information and supporting interview statements, including claims to financial performance, market position, innovations, performance characteristics of technologies, products and services. However, as the evidence seemed many increasingly explicable in terms of a social constructivist perspective, espoused factors such revealed as product and financial performance, seemed definable performance (see for example 4.4.2 and 6.5.3). As MacKenzie shows in his sociological analysis of technical change "economic phenomena such markets as are not just 'there' - as prices, profits and self-sustaining, self-explaining - but exist only to the extent that 74 certain kinds of relations between people exist" (1992: 37-38). Similarly the particular features of evident; artefacts embody social preferences. These an artefact are not self examples form part of a wider analysis in chapter 9. This inseparability of revealed and espoused performance meant that the former was no longer an appropriate category of evidence. Distinguishing between espoused and observed performance depended judging what the significance was of finding any on assessing and inconsistency between documented evidence and the interview statements and observations. When interviewees between their distinction understanding of how strategy worked and was regarded as position, and this support Evidence was also 1. The decision distinguished formally declared strategy, this a observed. On other occasions observation supported or corroboration was also taken as an espoused observed evidence. organised into that which described: making process, (espoused and observed), 2. The organisation-environment relationship (espoused and observed), 3. The relationship between the organisation's history and its contemporary strategy practice. As noted of above, these ways of organising the evidence have been influenced by my reading previous research and theoretical ideas. The evidence is organised this way to answer the question 'Why and how does strategic choice constrain organisational development?' The analyses in Part III of the thesis show that strategic choice as well as corporate intent are shaped by practice and the organisation's ontological assumptions. 3.4.4 Evaluation The sentiment embodied in an inherent Thorngate's "impostulate" (1976: 406) is a useful way of seeing compromise in trying to achieve simultaneous generality, reliability, and validity. In his assessment of the extent to which social behaviour is 75 shaped by a given historical context, Thorngate suggests that "it is impossible for simultaneously general, simple or a theory of social behaviour to be parsimonious, and accurate" (1976: 406). Drawing Thorngate's ideas, information is most relevant in its own context, on what Thorngate might call 'accurate', becoming increasingly inaccurate as it is separated from its context. Here 'accurate' does not building means mean getting the facts of some objective and concrete reality. Instead it an account that as far as possible reflects interviewees' meanings and understanding of their situation. With regard to generality, the three case studies could not be selected as statistical representatives of a population. Indeed, trying to draw general conclusions from the three cases might compromise individual parsimony means Thorngate's impostulate is the case story compromise generality and research process. Furthermore, to achieve simplicity or making judgements about what information to include and exclude, and deciding how to structure the could accuracy. a is also part of this process. Achieving simplicity accuracy. valuable way of articulating the constraints surrounding the Indeed the tensions between accuracy, centrality of judgement making in the analytical parsimony, and generality highlights process. Thorngate does not distinguish between statistical and theoretical generality. Interpreting Yin's ideas appear to on generalisation (1984: 39), the appropriate frame of reference for this research is how well the cases the support theory, rather than how representative they are of a population. "If the reality of case way to does not confirm the theory, then the theory must be adjusted generalisation" (Hertog, 1994a: 12). Indeed Thorngate's (1976) conclusion as presented generalisation. Clearly, are better described a consequence are triangulation, triangulation of studying or paves own argument the and generalising to theory than statistical seen as either statistical strengths and weaknesses in studying multiple 1994a: 8). The research as the theory of distinguishing between statistical and theoretical generalisation is that validity must also be There ... more than one versus or theoretical. single case studies (Hertog, organisation (Fox's {1990} space Easterby-Smith et. al. {1991} data triangulation) improves robustness of the design, but does not offer a universal improvement of validity, reliability and 76 generalisability. The variety of situations offers opportunity to improve generalisability to an theory (Yin's external validity, 1984), but this variety also makes it an difficult to support argument that is consistent and coherent across all three cases (Yin's internal validity, 1984), which may accept another seems to scope echo Thorngate's proposition. The extent to which each organisation the account written from their perspective, of the measure as well validity of the research. Nevertheless as my space analysis is perhaps triangulation is useful comparative analyses. It reveals diversity of social behaviour, and provides because it enables for drawing similarities. Triangulation of theory (Easterby-Smith et. al., 1991) has been on more of the research various aspects space. very useful in shedding light In particular, Douglas' (1982) 'group/grid' construct developed from studying primitive communities has helped make sense of the differences in organisational strategy practice in terms of alternative social realities. The analysis of organisational social reality in chapter 10 is based on Douglas' social anthropological studies. Similarly, studies from the sociology of knowledge has helped explain the socially constructed nature of strategy and these concepts practice and the uncertainty surrounding innovation underpin the analyses in chapters 8 and 9. Reliability is problematic since, should be able to how far such an processes, as with an experiment, it implies that other researchers replicate one's results by following the expectation is appropriate in has considerable scope to a same procedures. It is questionable phenomenological study where the researcher interpret the evidence; each researcher draws on a distinct range of knowledge and capabilities. Furthermore the evidence itself - social relations and situations remains dynamic, rather than as - does its relation to the researcher. Perhaps because of these difficulties, inspite of them, the solution is to make the research procedures as transparent as possible, accepting that both knowledge and the social context that gives meaning to that knowledge are not static phenomena, and that there will always be a tacit element that defies documenting. This is easier said than done. For example the periodic public arguments between competing research teams about the feasibility of cold fusion is in part due to the difficulty of replicating the first team's tacit knowledge. This is why I have chosen to 77 procedures followed, describe the formal as well as reflect on that process. The reflections represent additional markers along the journey that researchers may use to assess their progress. 3.5 This is further enhanced by examples of issues taken from the three cases. REFLECTION 3.5.1 The research process The choice of research of the literature on questions reflect my personal experience as a practitioner, plus some strategy and innovation, and discussions I took part in during the first year of the research. Different aspects of my research questions seemed to be in danger of evaporating throughout the fieldwork. For example, many of the issues around the research questions were not important to interviewees. I continually had to balance forcing the discussion to comply with my assumptions and biases, and allowing the interviewees to develop their accounts in their own terms. Managing the interview in this semi-structured way was necessary since I was trying to elicit the meanings interviewees attach to the notions of strategy and innovation. In this respect my questions were a starting point and not an attempt to test any theories (Hertog, 1994a). At other times interviewees would try to to hear. They wanted to get the example, on more than one answers give the kinds of answers that they thought I wanted right, approval from the interviewer. This was no right answer, demonstrate their knowledge. For occasion when asked to explain what they thought strategy innovation meant, interviewees seemed to there or to was give a tentative answer and wait for some or sign of usually countered by reassuring the interviewee that and that what really mattered was their understanding of such terms. The detailed research the richness and questions were to some extent variety of interviewees' answers; always negotiable but I did not expect the variety in their interpretations of the 78 questions. Over the nine month interview period, themes and patterns began to although at times I felt saturated with information and ideas. As the interview emerge, programme progressed to completion I felt that I had valuable material that did not conform with prior conceptual frame. Although I heard my supervisors when they suggested that my many my underlying assumptions about the nature of strategy might be brought into question, I not prepared for the confusion that was of possible themes. Furthermore, there be adequately addressed in one thesis lay in the way was assumptions and the richness my topics covered by the questions than could hour interview. I began to appreciate that more than list of questions! Starting during the fieldwork I entered remain open were more a one or two answers to my significant changes in the emerging between of a period of intellectual struggle that has led to I conceive of strategy. The struggle minded to empirical data on one hand, while on was between trying to the other hand I was unconsciously committed to particular epistemological and ontological assumptions. I began to review my own assumptions about the nature of strategy and reality. I could not organise the evidence without a acknowledging conceptual framework was a confusion that were was conceptual framework. At the emerging but the overall shape evidenced in my attempts to perspective of interviewees. Writing that some an account accounts with differing emphases from the The confusion is same was and induction. It is inductive in the sense studies, and am of beforehand. The process theory to the specific A common intellectual framework meant some chaotic, and one could produce clearing through discussion and the parallel writing of case study material, process appears to case far from clear. The result material. analysis, and research design. This specific time pieces of write coherent accounts from the without separating relevant from irrelevant information was same making that I sense am be a tangle involving both deduction trying to generalise to theory from the of the fieldwork in terms that I had not conceived is deductive in the sense that I trying to adapt and construct am cases. objection to induction is that there is no such thing (Phillips and Pugh, 1987). While accepting this principle, 79 my as unbiased observation experience in this study is that despite consciously prepared conceptual filters, my and emerge, my conceptual filters Part III of the thesis represents a ideas in Have I done The intention in this within the different and unexpected picture did being reshaped. The analytical perspective taken in synthesis of empirical data and the re-visiting of various light of that fieldwork evidence, and vice 3.5.2 versa. enough? study was to build a picture at the level of individual interest organisation, for example the main departments of Sales, practice of strategy, and their are a This would enable intra- and compare or R&D, and groups compare their perceptions of the whole organisation's strategy. inter-organisational comparisons. In addition, I considered supporting the interviews with the techniques of cognitive mapping and shadowing of some interviewees, but these latter two techniques were abandoned before they were used, because the reality of fieldwork proved quite different from what was of the desired and the resource Firstly, it was would take time and money was not a than was a very poor gap between understanding case or even one organisation, available. A pilot exercise of cognitive mapping straightforward technique, and would demand considerable skill and was not Shadowing required extensive periods practical. In the cost achievable showed clear that cognitive mapping and shadowing of three, experience to exploit. I judged that this skills. was expectations. Indeed the implications of achieving the desired. more showed that it reality of what my on the occasion to start developing the requisite site (days at a time) and this was not of AT this would have required much international travel, with major implications. In other words, while the additional material would be useful, there also real resource were limitations. Second, the achievement of a quantitatively comprehensive coverage of all interest groups or constituencies, would require a very large number of interviews because potentially many interest groups come there are together at other internal groups many levels of analysis. Apart from functional groupings, (working parties, task forces, committees); external 80 groups (competitors, customers, suppliers); and groups that cross the organisational boundary (standards committees, collaborative programmes, formal and informal relationships among professional but groups such as sales and engineering). Some of these change membership at irregular intervals, while other groups are long standing groups are temporary (Sluijs, 1994). Many of the interviewees did belong to impossible for them to wear one a number of groups, and it proved difficult or even hat only during the interview. Some interest groups were loosely coupled networks (customers/sales/technical support), others tightly bound hierarchies, for example physically close teams in BoS's Branch Staff support, and AT's network monitoring Some interest room. groups are closer than others to particular strategy issues, while the relative importance of issues change over time. This would happen during new product introductions for example. In focusing also a In danger of failing to see on the 'elements' of the whole there is how the elements fit into the whole (Hertog, 1994b). dealing with this multiplicity and inseparability of groups the important issue find a way of representing their number, but to explore differences and similarities of meaning, both within and structured in the using open across the three organisations. Since the interviews were semi- ended questions, the nature of interviewees' relationships with others organisation and their understanding of their organisation's strategy examined. In the was not to exploring differentiated meaning I sought to do as processes could be Faulkner and Senker did in design of their study of linkages between public sector research and industry: "important issues were addressed from ... different angles so that any inconsistencies or ambiguities arising could be examined" (1994: 676). Third, and related to the previous point, since it was impractical to separate out interest groups, the question arises within the constraints of have whether my resource range of interviewees is sufficient. I believe that (time and money) and access (it varied), the interviewees qualitatively represented the views of enough constituencies to negate the potential weakness of each as to quantitative representation. This judgement is based organisation I reached a on my observation that in point where the interviewee would suggest speaking to 81 an individual that I had already interviewed evidence had been collected confirming views my sense than introducing more their on was or new planned to interview. Another sign that enough that additional interviewees material to my were increasingly understanding of their differentiated organisation's strategy. Fourth, in all three organisations I aimed to get a fair representation of the views of those with influence strategy making. This resulted in a wide variation in the number of on interviewees per organisation, from ten to twenty four. This difference worried time. Should I find reached a more people to talk to, 'natural' closure? Should I go to people of AT, or or had the interview programme me for some in the BoS the USA and talk to the Engineering Design would the views of UK based staff suffice? Have I talked to too many people in the OBS, in effect wasting effort? Behind my concern was the assumption that I should speak with roughly the same number of people in each organisation, to maintain the validity of the research design. I did eventually conclude that this assumption evidence of the different decision was simplistic, and that the variety of numbers in itself was approaches of the three organisations. For example, at BoS I studied making at the level of the Bank of Scotland Clearing Bank. At this level the main interest groups meant the Divisions reporting to the Bank, and in particular their General Managers and Deputy General Managers. I also interviewed managers an additional three junior within the Management Services Division (MSD). MSD is the Bank's R&D house, responsible for applying IT expertise to meet the needs of the Bank's Operating Divisions. I wanted to compare the views of more junior Divisional managers, Power and influence seeing this as a way managers in MSD with the views of the Bank's of combining some (both formal and informal) in the Bank depth with breadth. was concentrated in the Management Board, constituted of the Divisional Managers. More junior staff had narrow view of either their Division's deferred or the Bank's questions about the Bank's strategy previously been responsible for one up a very approach to strategy development, and the hierarchy. All Divisional Managers had of the other Divisions, and had been reshuffled during the last twelve months. In most interviews these managers 82 compared their current position with their General had the previous responsibilities. Such reflections allowed limited comparison between Managers' views of each others positions. It showed that they held in common, or opportunity to share, a range Divisions. These Divisional General of different experiences of managing the various Managers had each had with their subordinate managers As mentioned earlier,1 concentrated among a access to more in common with each other than in their respective Divisions. strategy making in OBS was very open, while in BoS it few at the top of the hierarchy. It is this variety in approaches to strategy making that results in the variety and numbers of interviews in each Having said that, I am was conscious that I have also made a judgement, organisation. in consort with the organisation's interviewees, about where to draw the line that effectively includes and excludes contributors to the interview programme. 3.6 CONCLUSIONS The research process as a time' I experience it whole is only linear as a rational reconstruction of history. In 'real mixture of muddling through and cycling back, making intuitive as a leaps between writing methodology and doing analysis, all within accepted procedures called researcher. one supplanted by chapter 2 and vice seems to new questions that versa. assess arose Chapter 2 remains thinking an on strategy, important marker for two and second, it provided epistemological position, from 3.4.2 Sources of evidence: reasons. me First, it with the its analytical value in light of fieldwork. Keeping the arguments in focal issues identified within the 1 describe the nature of strategy. in thinking about the empirical data in light of chapter 2 separate from those in chapters 7 to 10 the shift in my new important feature of this research is that the initial research questions identifies the mainstream opportunity to broad framework of research proposal, that is itself somewhat fuzzy to the Perhaps significantly, this also As noted earlier were a a a seems an appropriate positivist to an way interpretive perception. The original research questions proved to be variety in organisational attitudes to access. 83 of highlighting a starting point rather than a of this thesis defining framework, for both the collection of evidence and its analysis. Part III gives an account of my subsequent understanding of the nature of strategy practice. The account is not offered is offered as my no were ambitious for the limited process, difficulty support adequately addressed in were sense of strategy practice; it more a one or two other available: than one PhD; the one person, a scope few months, of the research questions of questions could not be range hour interview, and cognitive mapping and shadowing a learning process in itself, about having to make where I have had to make choices in my areas that there is often resources practical diverged from the ideal. choices where the were make and limited funds. The necessarily dropped. This represented There way to the empirical evidence. experience of the research could without the 'correct' interpretation and expression of the relationships between events and situations that make up My intentions as a gap between the "theoretically desirable ... research method, recognising and what is practically possible" (Buchanan et. al., in Nelson (1990) unit 1: 18), and have been opportunistic. For example, I wanted to gain felt this would add of familiarity with those access to organisations without using personal contacts, because I credibility. I could somehow claim greater objectivity through the absence any of the organisation's members. In the event I gained access only to organisations where I had personal contacts. This also meant that interviewees who knew me, whether directly or through my contact, were more inclined to be candid and open in discussion. Finally, to stress a point raised earlier about generalisability, the aim of this research is Van Maneen describes come to terms with the as qualitative research: "to describe, decode, translate and otherwise meaning, not the frequency, of certain more or less naturally occurring phenomena in the social world" (Easterby-Smith, et. al., 1991: 71). 84 PART II The Case Studies Introduction to Part II Part II consists of the accounts of three thesis. The three organisations Business School. The purpose are: organisations that form the basis of my fieldwork and Ascom Timeplex, the Bank of Scotland, and the Open of these accounts is descriptive rather than explanatory exploratory (Yin, 1984), and this distinction defines the or of appropriate structures. An range 'unsequenced' structure (Yin, 1984) is used here meaning that the order of the sections is not critical. Each account is divided into six areas: history and size, work organisation, strategic aims, strategy processes, innovation, and conclusions. While an unsequenced structure might imply that the evidence is easily compartmentalised, personal judgement has played significant part in the composition of these accounts. Where clear by respecting some fit to more than could be made more chronological order between particular parts of the account, then this has been done. While most material divides seems an account a one area. For easily into separate areas, some evidence example, while innovation is described separately, it also features in various other sections. Furthermore, not all of the evidence is included in each composition where such evidence be of readable All three was innovation in their own managers think about and practice strategy and in-depth interviews with staff from the main functional come Access to the three areas across each from direct observation, documents publicly available, and from internal documents made available to was irrelevant; the account had to organisation. These profiles have been built primarily from organisation. Some of the picture has also toward or length. profiles in Part II show how individual judged to be repetitive me. organisations varied in important ways, and this experience in itself goes understanding why these organisations differed. Access to the Open Business School unrestricted. I and files allowed were to was able, if not encouraged, to talk to many people, and internal memos made available. Access to the Bank of Scotland attend management because of the Bank's was also good, but I was not meetings because of customer confidentiality, and probably general reluctance to allow outsiders into such fora. Access to Ascom 86 Timeplex UK was good too, but time and expense prevented access to R&D and manufacturing staff in the USA. All organisations the process are in a state of transition, and these three changes to its structure and the future. The Bank of Scotland is in turn services exception. Timeplex is in of evaluating its performance and work organisation, and implementing fundamental Branch is are no being changed from shop, and a range place to carry out on financial transactions to a sort deliver distance These these are telephone and other remote access media, and experimenting with innovative areas of ways to courses. long term projects, intended to produce fundamental changes and improvements to organisations' competitive positions, and their exact nature will evolve progress. a learning in the of financial technologies for financial transactions. The Open Business School is assessing the electronic communications and storage on making radical changes. For example the role of the emphasis is being put more of technologies that it will draw This means that much of the detailed shelf life and the accuracy case with these fundamental of some of it will gracefully degrade changes, and these enduring features example, chapter 10 'plural social realities' presents the projects material gathered and presented here has over be enduring features of the practice of strategy that there appear to as a are are time. Nevertheless, unlikely to disappear drawn out in Part III. For brief and different account of each organisation, aiming at explanation and exploration rather than description. The reader is encouraged to the compare explanatory power the accounts in Part II with those of chapter 10 of the latter. 87 as a way of assessing Ascom 4.1 Timeplex INTRODUCTION The story focuses on strategy UK based managers earlier practice within Timeplex Inc., from the perspectives of eleven and engineers, interviewed during the summer of 1994. As discussed (3.4.2), these interviewees either manage or are regarded by their peers as playing a key role in the performance of the main functions of General Management, Sales, Customer Support, and Human Resource Management (HRM). The account also draws available information, work including organisation arrangements into six areas: newspapers were and company on publicly brochures. Other information on provided by the interviewees. This account is divided history and size, work organisation, strategic aims, strategy process, innovation, and conclusions. The account highlights the extent to which the practice of strategy is shaped by individualistic and territorial view of the world. In this world avoiding them, and 4.2 a preoccupation with the use an embracing risks rather than of power and influence is a way of life. HISTORY AND SIZE Group 4.2.1 Ascom The parent of Timeplex, the Ascom Group, is merger very young, being formed in 1987 from the of three Swiss telecomms companies; Autophon AG, Hasler Holding AG, and Zellweger Telecommunications AG. Initially the Group consisted of four business divisions Corporate Networks, Public Networks and Mobile Radio, Terminals, and Diversified Operations. 88 Ascom is proud of its record of growth through technological innovation: Targeted expansion and diversification have led to an impressive growth in sales world-wide. Major strategic alliances have strengthened the group's capabilities and competitive position. rapid technological change, Ascom continues to invest a substantial proportion of its turnover in research and development. This reinforces the group's reputation for high quality products and service which has been built up over many years (Ascom: A Company Profile, ref. AUK/4/93). At a time of Group financial performance 4.2.2 Soon after its global launch Ascom began struggling to deliver on its promise of growth: of three domestic suppliers, had make significant strategic mistake in trying to become internationally competitive in too many product areas. The dash for growth detracted from the important task of unifying management from the predecessor companies, so when in 1992 many operations turned sour and liberalisation cut into sales to the Swiss PTT, Ascom was slow to retrench ('Ascom slides deeper into the red', Financial Times, 26.4.94). The directors admitted the group, a merger a mounting losses (in 1992 -SFr. 46.4m, 1993 -SFr. 336.7m), the Group reorganised Due to into three Divisions; Telecommunications, took a Enterprise Networks, Service Automation, and minority stake in two joint ventures; Public Networks with Ericsson and Radiocom (Fig. 4.1). In addition the Group sold "peripheral activities, such with Bosch as cable television, hearing aids and microelectronics components". ('Statute change makes sale of Ascom stake As part likely' Financial Times, 8.3.94). of the Ascom reorganisation O'Connor was recruited to the position of President of Timeplex, a business of self contained organisation within the Ascom group with global aspirations. The Timeplex Inc., amounting to annual sales of about £300m in 1993, is the sale of data communication equipment, telecomms networks, and supporting services. The USA accounts for about 70% of product sales. Outside the USA, Europe is the next significant territory, and within Europe the UK turnover of £35M accounts for about 70% of sales. Timeplex UK employs about 150 people. 89 President [F. Sutter] 1 1 Chief T'nol'gy Chief Officer 1 Dev'p't Officer [E. Hafner] Telecomms [A. Sutter] Enterprise N'wks Div'n Joint Ventures Service Aut'm'n Div'n Div'n Public N'wks [E. Ami] [W. O'Connor] [U. Althaus] Corp. Staff Chief Finan. Officer [H. Mey] 1 Ericsson [W. Kreis] Radiocom Kries and Emch Corporate Management Committe. All Officers except are Bosch members of the [U. Emch] Fig. 4.1 Ascom's re-organised Divisions (April 1994). Timeplex's main market is financial services organisations that have trading offices around the world, such as banks, share trading houses, and insurance companies like TSB, Baring Securities, and Hoare Govett. Timeplex also markets its services to the growing number of organisations that are 'outsourcing' the management of their own telecommunications networks, in particular, monitoring, maintaining, and upgrading their systems as necessary. These organisations have internal national and international telecomms networks linking their many of a also offices around the world, and they networks management use Timeplex products claims that "25 of the top wide ... rely on are looking for ways of reducing the overhead department. National telecomms carriers like British Telecomm as part of their own portfolio of products and services. Timeplex 100 companies in the UK, and over 2, 600 organisations world¬ Timeplex solutions" (Ascom: A Company Profile, ref. AUK/4/93). 90 Timeplex UK 4.2.3 Timeplex Inc. has offices around the world, of which Timeplex UK is the biggest outside of Timeplex UK is that of a modern American high technology the USA. The ambience of company, but without technicians In keeping with the fashion offices in a Fridays when on plan and is full of executive means on offices for managers. The or or bringing going to other a four floors, and office car cover park around the main a pager and, depending 'smart card' for identification and on been around for the building. eating place where staff may congregate informally. sandwiches, often be seen or buying them from the vending machines congregating just outside the front door or, if it is outside the building. one more than about 15 years, modem but a private venture few remember how Timeplex entered the product called Link, providing Wide Area Network (WAN) over a network. By current standards Link is regarded basic, but when it entered the market in the early 1970s there was so as a 1969, manufacturing and selling modems. None of the current staff have integration of voice, data, and image It a good and bad old days in the USA around market with position, access to Timeplex Inc., with headquarters in Woodcliff Lake, New Jersey, began compare. space local restaurant. A non-smoking policy has been imposed, with the raining, huddled under The a common your own can very dresses Furniture is modern upmarket work stations and carries everyone All staff carry result that the smokers 4.2.4 everyone 'dresses down' by wearing casual dress. The modern red brick and glass company cars. in their offices, restaurant no provided, are in their thirties and forties. 'hi-tech' American companies, everyone one-person upmarket notebook computer. Lunch secretaries, administrators, desks, and modern leather couches in reception. Managers have a good range of executive toys There is among many Langley, Berkshire mix of open entrance young: in their twenties and thirties; senior managers are are formally, except is American staff. The staff are any was as nothing else to successful with financial houses that Timeplex could not make enough of 91 them; "we Service were making so much money it was coming out of our ears" (Oattes, UK Field Manager). However, things began to change when UNISYS bought the company. Interviewees remember that because it during the 1980s UNISYS was a very Langley to "make product range. good cash generator. UNISYS closed Timeplex's UK R&D facility in sure The struggling financially, and acquired Timeplex was that it squeezed company was every drop of revenue" from Timeplex's existing eventually bought from UNISYS about five years ago (1989), and became Ascom's Corporate Networks Division, renamed Enterprise Networks under the reorganisation. Some say that UNISYS sold Timeplex because it generating cash; that UNISYS had drained Timeplex and sold the empty From a having the only multiplex product in a new was no longer carcass. market, Timeplex today is far from being in commanding position, both in terms of market position and technological edge. Their largest competitor, Newbridge Inc. made that year. Today many seems facility has so to be as manufacturing capability that a as necessary facility would give them and would allow them to respond more for managers a more and engineers regard a UK R&D revival of the company's fortunes. They feel credibility with the UK and European market effectively to local market conditions. WORK ORGANISATION Timeplex Inc. has its own operational facilities in Sales, Customer Support, Manufacturing, Engineering Design Centres, and its HR of Timeplex's investing heavily in Timeplex, the UNISYS closure of the UK R&D and 4.3 some 'steam driven'. Although Timeplex Inc. changed ownership, far not been reversed. Most UK UK based profit in 1993 than Timeplex's turnover for customers' engineers talk disparagingly about products, describing them and Ascom more own divisional supporting functions of IT, Finance, and (Fig. 4.2). 92 President [W. O'Connor] 1 VP Worldwide VP Worldwide Cust Services Sales VP Manuf VP Design VPs Fin - [J. Park] -HR UK - -IT [Alan Davis] Other national territories LAN Business Unit WAN Business Unit Advanced Technologies Business Unit I AVP Internat'l AVP North America Services Customer Services [W. Richard] [T. Blast] AVPs Professional Serv - - Educational Serv Fig. 4.2 Timeplex Inc. organisation (April 1994). 4.3.1 Two empires Timeplex Inc. derives income from contracts, and the a mix of product sales, customer technical support sale of Professional Services. The last hope for the future rather than a source is very small and represents a pillar of current income. Timeplex UK is essentially responsible for Product Sales (Fig. 4.3). The Customer Support function while sharing the UK offices is directly responsible to the International Assistant Vice President of Customer Support, W. Richard (Fig. 4.2). 4.3.2 The UK Product Sales Division Managing Director, Davis is responsible for sales, marketing, finance, and HR (Fig. 4.3), and reports to the Vice President of Sales who resides in the USA. The sales globe is divided into a mixture of nationally based Timeplex sales offices (UK, Germany, France, Belgium), Distributors (e.g., The Netherlands, Italy), and Affiliates (third parties) such 93 as Olivetti in Latin America. Customer charges' Sales for but it 'cross any Hammond show that she reports to the VP HR Support are obliged to support the Sales organisation, services provided. The two reporting lines above S. the Financial Director for day to day operations, and to (USA) for HR policy directives. MD UK Sales VP HR (USA) [A. Davis] I UK Sales [D. Shaw, Dir] I I T Mktg Comms Fin. Dir. [M. Valliant, Dir] 10-15 Fieldsales HR Manager [S. Hammond] Fig. 4.3: Timeplex Inc. UK Sales organisation (April 1994). Distributors and Affiliates 4.3.3 A small proportion of Timeplex's product sales is done through distributors. Distributors sell Timeplex products but generally do not provide customers with Technical support that support, Customer such Support any technical support. is provided directly by Timeplex. Where Timeplex is not able to provide as South America, Affiliates managers are contracted to support Timeplex products. feel that Timeplex's competitive advantage is that it sells and supports most of its products directly, with distributors accounting for a small proportion of business. They hold that this advantage will help Timeplex re-establish itself. Indeed, Humphries, manager weakness may of the Customer Response Centre (Fig. 4.5) suggests that Timeplex's be that it uses distributors to sell its products, because distributors are generally not sufficiently competent to provide technical support. He thinks that "the expectations created by the sales pitch is sometimes not met by the realities especially in the multinational arena", where the customer is Timeplex has no presence. likely to have offices in parts of the world where Furthermore, supporting individual distributors world-wide by 94 sending engineers at short notice half-way round the world is expensive. Instead, by contracting with an dealing with just one partner. for Affiliate to cover say, Choosing example Olivetti, could also mean all of South America, Timeplex a partner can save money by with complementary products and services, that the Affiliate's engineers can fix Timeplex's products. While using distributors is viewed Division see competitors distributors use weakness by Customer Support, the Product Sales potential opportunity. Shaw, UK Sales Director, notes that distributors because of the high cost of dealing directly, especially the high He aims to increase product sales, and he technical support costs. effective way as a as a sees distributors of achieving that aim. He believes that Timeplex should make as an more use of distributors, because direct selling by Timeplex personnel is not cost effective in the new low value/high volume modem market. If Shaw's analysis of the is correct, then this competitive advantage is really a new market that Timeplex faces disadvantage. Clearly the source of Timeplex's competitive advantage is contested. Customer 4.3.4 Customer Support Division Support is Timeplex's other main income source. Its head office is in Clearwater, USA, and is divided into three geographic regions: the Americas; the Pacrim (Pacific Rim); and are Europe, the Middle East and Africa (Fig. 4.4). The markets in the Middle East and Africa very small so these regions are 'bundled' with Europe for geographical convenience. Hurd, the Director responsible for Europe, Middle East and Africa, is based in the UK, and manages a budget of about £22M. He reports to the Assistant Vice President of International Services, Richard, who is based in Clearwater. The 'Europe, Middle East and Africa' Customer Support Division consists of ten teams national Field Service resources. Three are departments (Fig. 4.5). Four of these are operations of which the UK represents the largest commitment of business channels Professional Services), are: or (distributors, multinational projects, European though this latter is likely to be scrapped. The other three departments Technical Services, the Customer Response Centre, and European product support. 95 AVP International Services [W. Richard] Director, Director, Latin America Pacific Rim Director, Customer Support: Europe, Director, Africa, Mid East, Multinational Distributors Services [G. Neidinger] [P. Hurd] Fig. 4.4: Timeplex Inc. world-wide Customer Support organisation (April 1994). Director, Customer Support Europe, Africa, Mid East, Distribs [P. Hurd] 1 M'gr, Europe LAN Multinational M'gr & WAN M'gr [P Cecil] Support M'gr, Europe Services Internat'l Tech Prod Support [T. Blewett] [K. Stubbs] Distributors [B. Silverberg] Project M'gr [I. Braidwood] Internat'l Cust Response Centre [P. Humphries] Prof Services M'gr, Europe National Service M'grs: -UK [B. Oattes] France - Germany - I Response TAC ENMC - Centre Belgium [B. Silverberg] Notes. Ian Braidwood is also Manager of Escalations for which he reports to Patrick Hurd directly. Phil Cecil 'shares' his reporting between Patrick Hurd and Gail Neidinger, Director of Multinational Customer Support. Fig. 4.5: Timeplex Inc. European Customer Support organisation (April 1994). 96 M'gr Customer Response Centre In about 1993 Richard introduced his vision (or with the Sun'. It was to consist of three strategy) described by Humphries as 'move global remote Customer Response Centres at Clearwater, USA; Langley, UK; and Hong Kong. The aim was to provide a full 24 hour support service for customers who have operations in all comers of the globe. Humphries thinks that Richard the global was response advised by the external consultants, Booze, Allen, Hamilton to set network. According to Humphries it is a up tried and tested approach used by others, and these consultants would have got the idea from talking to people in Timeplex competitors. and its Richard gave Humphries the freedom to achieve the 'move with the sun' vision as he saw fit. Humphries reorganised his department at Langley, creating three task units, reflecting increasingly sophisticated levels of technical support. The least technical is the Response Centre where initial calls from customers visit a customer site are taken, and where the need for an engineer to normally originates. The next level of technical sophistication is the Technical Assistance Centre (TAC), which provides customer engineers with technical support by telephone. The third and quite embryonic task unit is the Enterprise Network Management Centre (ENMC) which provides new services to customers. Before ENMC existed, technicians rotated through Humphries to wide, that so a a variety of tasks, of varying level of complexity. Richard's vision enabled group the tasks into TAC and ENMC. Humphries said that "the job became too strategic decision maybe was we need to do it in way". The technical problems being dealt with and different to warrant their Customers that manage their were a different perceived as way, so we evolved in sufficiently numerous separation. own networks will call on Timeplex for assistance from time to time, and TAC staff support them. However customers increasingly were asking Timeplex to take on the whole job of managing their networks on their behalf; from straightforward fault management, to network performance measurement (failure rates, locations, nature of faults, 97 etc.); to configuration management (say, adding to or changing the network to accommodate new offices). This work involves engineers using electronic equipment to directly monitor customers' networks with little or no telephone interface with ENMC. Sometimes customers, like Sun Alliance, manage a customer; their this is the work of network during office own hours, supported by TAC, and hand over to ENMC after office hours. Humphries sees the core business of the Customer Response Centre management, performance measurement, and three tier system core In areas of fault business, but feels unable to staff the TAC and ENMC units to the level that he feels is necessary Richard's vision without extra the three configuration management. He thinks that his is what is required to support the because he has been told that he "cannot have as more for a good 'quality' service, heads"; he is expected to achieve resources. Humphries' view, achieving Richard's vision did require a change in the way that certainly the Langley Customer Response Centre has operated. Historically a skeleton TAC staff have been "at their desks" carries overtime payments. staff not during the evening and night, which requires extra staff and Under the new strategy, Humphries will concentrate his TAC during the day shift, which is when their services will be in greatest demand, and will put any "expensive TAC TAC support shift. engineers on night shift". Any calls after the day shift, requiring will be diverted to either Clearwater or Hong Kong, whichever is in daytime Twenty four hour global TAC coverage will be maintained by seamless hand-overs between the three centres. In addition to responding to customer needs, Richard's vision can generate savings. However, the implementation of Richard's strategy of moving with the Sun is going to take some time according to Humphries. Many staff had misgivings about the strategy. They afraid that jobs at Humphries Langley would be lost if another centre argues were set up that the threat is not that another centre will overall, but that there will be toward fewer TAC staff and a open, were in Hong Kong. resulting in less work change in the mix of competencies required at Langley, more lower level qualified technicians to deal with the customer initially. In Humphries' view this change cannot happen immediately. "I couldn't do that 98 today, it wouldn't work, I He mean I can't just get rid of history, well qualified people in here". prefers the longer term approach of recruiting less technically qualified people to replace some of the expensive TAC people For historical and cultural reasons as they there is move on. a small Customer Response Centre in Paris. Humphries believes that in order to get French business, potential customers, Telecomm, will want to offices in Paris somewhere are near more convincing and impressive than London". Furthermore, on Timeplex's ability to sell Humphries is not sure for local Centres with his three hubs concept. some more being able to demonstrate capability locally coverage. France local demonstration of capabilities. He thinks that "big plushy going to be Europe will depend provide global see a say as outfit in England, services well as across being able to how Richard intends to reconcile this need As Humphries noted, that Richard is selling to the world is that there are three centres; Hong Kong, Clearwater, Langley. All the other centres like Paris may satisfy the local cultural needs, but they don't form part of this shell, which should never be replaced. the story 4.3.5 New All R&D takes are divided product introductions place in Engineering Design Centres in the USA. R&D facilities in the USA geographically (Acton, Massachusetts; Woodcliff Lake, New Jersey; Dallas, Texas; Westwood, California). This geographical spread is the result of acquiring established facilities, through buying small companies. Their location is not determined by Timeplex's production arrangements, UK staff seem have a its markets which to know little about what goes on Woodcliff Lake, Nor do nor are in any case global. in each Engineering Design Centre, except which is the main contact for UK personnel for product development issues. they know how these Centres fit into the rest of Timeplex. Each facility different seems to reporting mechanism, and differing product development priorities. Interviewees think that the extent to which the work of these centres probably knowm only at the apex of Timeplex Inc. 99 overlap or diverge is Woodcliff Lake has three Engineering Business Units, each focusing on one of three 'strategic communication technologies': LAN, WAN (or Transport), and Advanced Technologies. UK market in market managers and engineers perceive that products are designed with the US mind, and then modified in varying degrees to meet European and other non US requirements. Davis feels handicapped by having to sell in the UK, products designed for the US market. All R&D and Manufacturing takes place in the USA. Perhaps 'market-led' for the local US rest of the world, insofar as new product development is market, and 'technology-pushed' with respect to Europe and the European customers seem to have much less influence on product design than US customers. However, the existence of differing communications technical standards between the USA and other markets with local market New products Sales. Before requirements is progress a new a test a certain minimum compliance from Engineering Design to Manufacturing, then general release to product is released in the market, technicians from Manufacturing, post-production activity to test and whether the that necessary. Engineering Design, and Customer Support is means new come together to form prepare a new a 'staging process'. This product for the field. Here technicians product meets the intended performance specification, and try to simulate field conditions. Stubbs, as European Product Support Manager, engineers get sufficient training to support He takes his steer from new ensures that the European Customer Support products as they Marketing, where he learns of planned triggers him into co-ordinating the necessary are new taken up by customers. product launches. This technical support. Stubbs starts by interpreting product design information to establish what function the product will perform. He is responsible for co-ordinating the European product release schedule, identifying any special equipment and tools needed, produce technical documentation, training courses, presentations, and lectures. He also "contributes to the installation and maintenance philosophy", which describes how Timeplex staff must support. 100 manage the process of product Before a new product emerges in the market place, Stubbs "looks at the strategy of supporting a new prepares a Customer Support Plan (or strategy) in conjunction with European country managers. This plan is "The Bible", and is used to resolve customer support questions that cannot product, what the product does and how we log and procedure. The be dealt with within the framework of the escalation escalation manner. log is a prioritised list for dealing with customers' technical problems in The Bible also contains a product overview, sales installation, maintenance, and escalation and stock a orderly list of departments involved with pre- paths, tools, logistics (identifying stock items published during a window of time between a new product leaving Engineering product becoming generally available. During this window there is where all departments service the product. Any deficiencies in being able to support the new are asked to assess right, "at least in theory", qualifies Stubbs, before the new internal product must then new product is shipped. All departments must then formally declare their "Ability to Support" the Another document, an their state of readiness to sell and release process be put an levels), reference documents. The Bible is and that intend to support it". He then new product. the Technical Service Guide, is also generated to accompany the new product. The Product Support group in Clearwater, with input from Stubbs, carry out a Serviceability and Maintainability Evaluation (SMA) where, they take a product, strip it down to its basics and rebuild it, a bit like a Haynes Manual for a car. We look at how long it takes, what's involved in loading new software, in changing various parts of the box, things like that, and this is all logged in a report. And that then goes to form the basis of a document called The engineers, which when used in conjunction with the manuals helps them to install and service the kit, tells them how to take it to bits, various useful commands for diagnostics, cable diagrams, pin-outs, a listing of the hardware and software modules, revision levels, all that sort of thing (Stubbs). Technical Service Guide which 4.3.6 Accounting for we issue to revenue Departments accountable for sales and profit are described as Design Centres, Manufacturing, Sales, and Customer Support 101 Business Units. Engineering are all Business Units, each having a profit and loss (P&L) responsibility. This arrangement generates its own inter¬ departmental tensions and idiosyncrasies. For example Shaw, UK Sales Director, described the situation where if he included in to ask were Engineering Design for product, UK Sales would then be presented with a Shaw finds this situation ridiculous. Shaw and different the a particular feature to be quotation for doing the work. Engineering Design are clearly working from assumptions about how internal relations should be managed. Shaw is looking into Timeplex hierarchy for treating the relationship As noted earlier, Sales. Sales source some solution to his problem, while Engineering Design a as a seems to be market transaction proposition. Timeplex Inc. has two main sources of income, the main one being Product performance is measured in terms of 'sales order value'. The second income is Customer Support, whose performance is measured in terms of contribution to overheads. That is, the price paid by the customer for technical support minus the cost of that support. Quite often Sales will call on Customer Support to visit a customer, perhaps to help secure some new Sales for the business or keep visit, and show it as 'sales order value' is unaffected some old business. Customer Support will 'cross charge' part of the Customer Support revenue. The Sales Division's by the internal 'cross charge'. In this situation Customer Support, and therefore Timeplex, appears to have generated additional income from an internal transaction. from support contracts held with customers Most of the Customer Support income after the initial sale of products. This is recurring income with depending on comes a life of five to ten if and when the customer decides to update their system. Unless years, a customer replaces older equipment with Timeplex products, that recurring income is lost forever, until the next time the customer decides to any recurring revenue opportunities, and between UK Sales and Customer or update. The initial product sale then is critical to may go some way Support, discussed later. 102 toward explaining the tension Management information 4.3.7 Managers like Oattes, UK Field Services Manager, and Humphries, Customer Response Manager, feel frustrated by what they Centre see as severe weaknesses in the provision of accounting and management information. For example, apart from have little efforts. knowledge about how much revenue a few specific cases, is generated through their departments' They also have little idea about the costs incurred because they leave the tracking of everything, for example overtime payments, to the accounting function. Nevertheless, year as part in of the budgeting cycle each manager has to project an departments, such as information. Furthermore, managers a cost on the judgement of other Marketing and Professional Services. The latter they get by periodically raking through the regular print outs, but they have generally not effective use no way of checking the accuracy in the way. is and generates a healthy 54% margin. Humphries argues engineers reduce the need for site visits, saving about £0.5M as some regards Humphries' department So far the account shows a as a profit seem to be getting For example, the cost of sending Oattes' Field Services engineers to site costs recognition of this, for example then as of their time. pleased with this but the company's accounting conventions about £8M p.a. Director of the regard getting sensible information from the reports Humphries feels "encouraged", by his boss Hurd, to think of his department centre. He every expected annual increase throughput and associated costs. The former they get by relying service they a company that his remote p.a., but there is no form of financial credit. Indeed the Financial as a cost centre. with a dynamic and turbulent history: rapid expansion fight for survival caused by the relative decline in its capabilities, and exacerbated by technological advances and market growth by competitors. The division of labour between Sales and Customer Support, and its accounting practices and information management system are sources of tension and conflict. The following sections focus on how staff understand the company's strategy, and how they see 103 the need and scope for innovation. Do the tensions and conflicts of the 4.4 4.4.1 already noted get in the way of strategy, or are they an integral part practice of strategy in Timeplex? STRATEGIC AIMS Ascom's aims Timeplex does not appear to provide any separate public statements about its aims and competitive position. Ascom's A Company Profile describes the aspirations of the Group as a whole, and each company is identified in terms of its product offering. Timeplex is described in terms of its technologies and markets served. The implication be that the applies equally to Timeplex. Ascom's strategy Ascom's declared strategy seems multifaceted. One statement emphasises market growth: "further progress and growth in its business strategy around the world". Another statement in the innovation and seems to core markets continues to be the group's essential same document emphasises reliability: "Ascom group's focused strategy wherever it operates, internationally, nationally, and locally" is to: respond to customers' needs with speed, high-level technical expertise, innovative flair, world-wide support services and - most importantly - with outstanding dependability (Ascom: A Company Profile, ref AUK/4/93). Clearly for Ascom market growth strategy and technological innovation, 4.4.2 are inter-dependent. Defining Timeplex's strategy Shaw, UK Sales Director, is critical of Timeplex's corporate strategy. According to him, the Ascom directive to O'Connor of networks market place but not "growth before profit" now. may be fine in the old high value He questions the degree to which the USA corporate management understand that strategies for local markets differ from the US view of the world. In his view they are slow to recognise that high value contracts consisting of a few high value backbone nodes, say three or four, few sites to visit, and high margin maintenance 104 contracts, represent yesterday's market. Today's market is about connecting Local Area Networks, and Branch Networks, consisting of hundreds or thousands of low cost nodes, and scores of sites. Shaw is also critical of other aspects Sales organisations; back to an direct selling approach in the market; the UK subsidiary having to refer Engineering Business Unit for the price that place; R&D cross a of corporate strategy. In particular separate Service and may be charged in the UK's market Engineering business units performance being measured against P&L; and or charging. According to Shaw the new market requires new service skills (LAN, Advanced Technologies, remote maintenance rather than site visits) which do not currently exist in the Timeplex organisation. A growth strategy in the new low value/high volume market means developing partnerships with the major Carriers (BT, AT&T, MCI, Sprint). Shaw feels that locally he can influence strategy but this does not give him the leverage required to develop partnerships with the major national Carriers. This is the task of Timeplex Corporate, and his ability to influence their thinking is limited. He feels frustrated that his scope for managerial judgement is constrained. He "can't even hire another salesperson without going to authority, to corporate HR or a higher VP World-wide Sales". In his view, private backbone networks are becoming history, virtual networks from Carriers or managed services are establishing as the norm. Service revenue from the old Link product is falling, therefore the service revenue is at risk because Timeplex is a very small player in the new markets. Sales must be innovative in overcoming limitations in the product and service, and we have to be creative to manage the new market environment (Shaw). Today's customers are planning the replacement of their network systems around equipment life. Being late with the next generation product, no backward architecture), integration, means recurring Service some new products offering a migration path to other technologies (i.e. five year product which has open systems that competitors get the new business, both in terms of product and revenue. and very are or no or a In fact although Timeplex is catching good products now, up technologically, and has the market perception remains that Timeplex 'steam driven'. 105 Shaw the corporate strategy as sees different and inconsistent strategies. Although the rhetoric is about building Support, $50M is being spent costs such seem to as better being product driven, and Sales and Service following on R&D, probably most of which is going on business a on infrastructure integrating the Engineering Business Units given that their activities be uncoordinated, and very Shaw's account corporate strategy little on developing the company's Service capability. On is overly driven by Engineering Design, and the key departments of Engineering Design, Sales, and Customer Support, all be operating seem to independently of each other. Shaw challenges the view that Customer Support really is trying to develop global a Customer Support network of Customer Response Centres. From his perspective the Customer Support internal reorganisation and redundancies is due to a preoccupation with reducing the cost of on-site visits, and being reactive rather than progressive. Shaw's UK sales strategy is based on matching customer wants to Service backed product, because he believes in the primacy of Service, and that he has that means than the Customer Support people. This sometimes product patch because the promised substitution is done for Shaw, is an new in relation, and is often used Service is the way better grasp putting in with of what a temporary product is late. The work of patching and by Service engineers and example of how Service means a up charged to Sales cross seems to as a 'cost of sale'. This, be profitable while Sales margins look by Customer Support as poor evidence to support the view that forward for the organisation. Davis, UK Managing Director sees strategy as "a pragmatic way of describing to a customer why he should do business with dialogue should focus on us; as a way issues that of doing business". For example the strategy a customer will be concerned about, like having "an upgrade path, flexibility in what system he [sic] buys, that the technology he is buying is not going to become obsolete [within the next five years], that he to another". Davis numbers game bridge from prefers to talk of 'philosophy' rather than 'strategy' and is dismissive of 'business a can one a platform little plans' in the context of his current job. His job of generating sales is and "you don't have to be a rocket scientist" to work them out. Business 106 plans are for when you have to control not just sales, but also product development, and support services, and he has no control over the latter two. Strategy for Humphries is something that is planned, something that is public, and people understand it, and understand the concepts behind it you've really got a strategy. So part of it is the communication of what you're trying to do. Making pronouncements that go into marketing brochures is not strategy. Richard can say that he has three Centres around the globe but in reality [Richard doesn't have a strategy], unless people make it happen (Humphries). I don't think unless you Humphries reflects on how he went about interpreting Richard's 'move with the Sun' vision; tries to rationalise the process; and generalises about how strategy is formulated and implemented: Maybe it meets in the middle, maybe its something like the message comes down, reflects off the bottom of the organisation, and then they start asking questions to make the changes. And actually it changes, doesn't actually end up with what you'd originally planned, because people's ideas will change things (Humphries). 4,5 STRATEGY PROCESS Little value in formal forums 4.5.1 In common with his "unfortunately we colleagues Braidwood, a Customer Support engineer, feels that don't collectively discuss 'where are we going and what are we doing'". By contrast, Smith, who describes herself as the "multinational document control person" has been with Timeplex for about two months, and her strongest image of how the is that people seems hell bent seem to on "have meetings for just about everything under the meetings. Everywhere I look, people always [especially] the higher level managers Interestingly, Smith also thinks that resolving, is no a team-work, and there is a ticks Everybody be in meetings, and directors". one lack of communication seem to sun. company of the company's big weaknesses, and among staff. People are left to get on one that needs with it, there is lot of "finger pointing". She sees discontentment among staff as 107 a by-product of "their managers doing too much travelling, being losing touch with what is going observation about on from their staff and locally". She reconciles this view with her other people always being in meetings by questioning the value of those meetings. Smith wonders what these to away managers can be discussing since no actions ever seem spring from them. Humphries feels that, quite discrete in the way that we operate. If we have a sticking point it is that we don't communicate enough on group issues. There is a protectionism in there. I'm making very much my own strategy [emphasis added], I don't have the feedback [and] we don't have a forum that says 'right where are we going'. I might have one, Tony might have one, its very much opportunity, 'go here, go there', oh there's some business lets get that. we tend to be During the Spring of 1994 for the first time, meeting a few UK senior staff and key people started Friday to discuss operational issues of the previous week. Topics every revolve around internal issues: the company car implementing a policy, pay, seem to working conditions, progress on staff development scheme, and particular difficulties that individuals want to that the initiative to hold this discuss. It seems Personnel Manager, who needed to discuss weekly meeting a range came of topics that had from Hammond, the a common impact within the UK office. Hammond too is critical of the This is borne out how her peers as far as her quantity and quality of communication within the own in the USA work, department even goes. She has only a vague in terms of what might be regarded company. appreciation of as core HR activities, like appraisal processes. She has never been to the USA offices to find out how they work. Her impression is that the only forum for discussing strategy issues the very apex a European perspective, the mechanisms by which Engineering Design decide product development projects to directly, or be at of Timeplex, and nowhere else. Similarly from what seems to pursue seem ad hoc. Individuals through the European Product Support Manager who has Woodcliff Lake Engineering Design Centre. Beyond this link there 108 a may make requests formal link with the seems to be no formal mechanism, visible to UK personnel, for assessing and prioritising potential product development projects. There is with no formal forum where UK personnel Engineering Design what products 4.5.2 A are can discuss and agree required for Europe. premium on individual initiative and social networks Davis, UK Managing Director, sees his job as creating the right environment for people to feel comfortable to creative a sales challenge the existing thinking. He is pleased to growth of 50% without pa, say ways; an that the current UK working environment is producing with productivity growing at 30%-40% increasing "head count means that you must better". Davis does not control the Customer Nevertheless within the whole significant scope to environment of fear is not conducive to find Having to maintain this pa. innovate, to do things ways to Support staff, with whom he shares Timeplex UK environment individuals seems to a building. have interpret, exercise and develop strategy. Humphries does not know whether his TAC/ENMC strategy, is consistent with Richard's strategy of 'move with the Sun', or whether it would be acceptable to him. However, this has not prevented him implementing his ideas. For Humphries his strategy is development for his department. Meanwhile he takes soundings on a natural the acceptability of his implementation plans by writing to his boss Hurd, the HR Manager, and the Finance Director, outlining his plans and associated costs. It comes as no surprise to Humphries that weeks have passed and still Humphries' view on various forces, some no one the need to create TAC and ENMC expanding, and Humphries or boss to find financial seems to have been shaped by internal and others outwith his department. As noted earlier, he and his colleagues recognised that the for ENMC has responded to his plans. range saw TAC work. There new revenue that was of tasks his department a was handling seemed to be few of his engineers showed also pressure particular talent either in the form of "encouragement" from his streams. External pressure came trading houses, wanting seamless a access to 109 from customers especially the financial markets in North America, Europe, and the Far East. They wanted global telecomms networks 24 hours According to Humphries, Richard's vision provided an "umbrella", a day. every legitimate space for him to realise his TAC/ENMC strategy. Humphries recalls that the first he knew about the strategy of 'move with the Sun' presentation and dinner for senior the whole for presentation was one nothing about it. His which Richard presented his vision. Within managers, at slide about 'moving with the Sun'. This slide Humphries since it bore directly on response was to his was as at a area was interesting of responsibility. Until that moment he knew think, that's interesting, I'll ask him about that. So it was at dinner that night, and I said 'well you know ..., when, how ...'. And he said 'well ..., as soon as possible, and you do the how'. ... I understood from our conversation how important it was to him. It wasn't just one slide, there was a lot more behind it (Humphries). ..., According to Humphries, Richard did not present his 'move with the Sun' vision directive, with names, dates and actions attached. It was as a left to individuals to take up and interpret the vision. For his part Humphries thinks that Richard "is loose at the detail end, he is saying 'everything', but I think he Richard's vision presented an means TAC operation". opportunity for ambitious individuals to make contribution to Richard's vision and their own standing in the company. an outstanding There is no hierarchy of interlocking strategies and sub-strategies, all pointing to to construct a vision. Indeed intention one Humphries' implementation of Richard's vision has implications that stretch beyond Humphries' department. For example, ENMC is an innovative service that the embryonic Professional Services might promote. In pursuing individual initiatives, ordinating their actions. In setting "probably didn't only as There far as seems mean any managers up and engineers his department as seem to have been co¬ TAC/ ENMC Humphries felt that it change to [my peers'] organisation". He therefore involved them asking questions like "should [these changes] to give low priority to no discussion about for go up on the notice board?". example: how Professional Services might promote ENMC; how Professional Services and Sales relate since they could compete; or 110 by Field Services engineers might be affected by how site visits whether he and his peers agreed on the need for "more heads". Indeed more remote monitoring; or the significance of a TAC and ENMC split and therefore Humphries' peers felt that he should just get on with it, and not to seek their involvement. While there on rests on his to as a they police There a are be little interest in co-ordination, individual initiative seems to draw way certain can Timeplex environment because rules rumours more described later on networking in the informal unclear and "they are can dodge and hard to police, and you're trying networking. Hammond notes that Timeplex is full of a lot with people and they will going because they want action". She were to lose their jobs. The saying that "rumours formal processes bring are dodge around the rules because the rules also risks attached to as manager lot of woolly rules". people reported Multinational Projects of working. She thinks that people thrive "constituency builders who network often set as adeptness at using social networks. Hammond acknowledges the utility of and unstructured weave, to social networks. Cecil's job heavily networks seems can person gave as an use that, and they will example a mmour responsible for starting the rumour was become self-fulfilling". She would like to because she believes they would reduce the order to people's behaviour. Hammond's views scope are that see more for networking, and thus probably shaped by her previous work experience with Marks and Spencer, which is commonly regarded as a well organised business. 4.5.3 Flux is normal Many interviewees describe their and such, progress through the company as three months doing such then "Tony asked me if I would be interested in doing so and so". Six months later another job, something else, and everywhere, and 'technician' to one may so on. Opportunities to display personal initiative change jobs two or three times in a year, 'manager', sometimes carrying both functions, 111 are progressing from one as 'engineer' and another as 'manager', as the next example shows. In Timeplex the title of manager negotiable part of the remuneration and reward system, more than an be appears to a immovable part of the organisational infrastructure and systems. A new position, Escalations Manager, was recently created contacting the Timeplex President to complain about UK Customer but this Support organisation does maintain complaint suggested that not enough problems. Hurd that something as was a an as a direct result of a customer on-going installation problem. The log of on-going installation problems, being done to progress installation Director of European Customer Support wanted to act quickly and show was being done to prevent discussions with his managers a repeat. Over the next few days, and and engineers, Hurd appointed Braidwood Manager, reporting directly to him. Braidwood will at the same as some Escalations time continue in his designated engineering role within Multinational Projects. The escalation problem speedily fixed and individual everyone responsibility, as moved on. opposed to brief was Timeplex's review resulted in the creation of another say a rewriting of the established monitoring procedures. 4.5.4 During Local one versus corporate control round of cost cutting to one person. measures about two years ago, the HR function was Hammond, Personnel Manager, has been with Timeplex UK for two and in her present post for the last year. She is re-introducing many reduced years, of the functions of HR, except that this time she is employing external agencies rather than employees. Agencies are being used to manage the more "concrete" tasks of building maintenance and car fleet management. She hopes to extend the same approach to those less easily measurable areas of assessment and training Hammond is also managers programmes. trying to apply a In addition to outsourcing most of the HR function unified corporate policy to the currently control. Traditionally departmental managers areas that departmental enjoy a great deal of autonomy across areas of training, pay scales and performance appraisal schedules, and car 112 policy. She believes that by showing how she "add value" she will win credibility from can the other managers. Hammond's aim is "to put HR is as by seen some key "interfering" in their HR at the centre of strategy formulation and implementation", but managers as very Her areas. the UK Finance Director on the to help business base is regarded as regard her many unclear because she reports to day to day issues, and to the Vice President HR in the USA for policy issues. The latter is known seems power low status in Timeplex UK, and as "Atilla the Hun" for his 'hire and fire' approach, and this managers co-operate to some difficulty of her position, current pressures doing mundane jobs, like booking important, cars degree with Hammond. Compounding on resources means that she spends in for valeting, and less time on time more taking part in what strategic. she regards Her "personal strategy" has been to try to win little battles, like forging a unified car policy. as more She thinks this is having the more necessary bigger gains, pushing for support for Hammond believes that she is Some of her managers. more peers confidence building effect and an slowly but surely wresting control of HR tasks from the acknowledge her contribution, while others view her with suspicion and resent her attempts to control or in any way influence their established as they see fit. organisations have inter-departmental tensions and conflict, but of the three organisations studied in this research, these tensions and conflicts Timeplex; tensions seem to overshadow Manufacturing, and Engineering Design there appears to every in staff seem most intense in discussion. Customer Support, Sales, seem to come be much covert political behaviour into conflict in various among managers. Many ways, see and their People is a certification programme .sponsored by the British government, to encourage companies to invest training. Companies who pass the certification criteria may display the IIP logo. Investors In more even Inter divisional tensions and conflict 4.5.5 ' she is trying for internal Investors In People (IIP) programme.1 right to, for example, reward hard working and enterprising engineers Most now 113 colleagues as being out to get potential but is struggling - a as use claim the of more same as they can for themselves from expensive classes of air travel. At the perks and benefits as a same time no as an the businesses. Many of these tensions of the expression of their standing in the long term strategy that they reorganising. Others talk about leaving the up many accusers right for their hard work in helping shape the question the competences of their peers and senior managers, citing has that has exploitation include the high levels of overtime being claimed, company's survival and growth; and company a company struggle that in their view exists partly because of excessive self interest. Manifestations of this and the much can can see, company, be seen and that the as Many company. evidence that the company is forever taking their know-how with them to set in the New Product Release process and in relationship between Sales and Customer Support. New Product Release tensions New product introductions is one area where conflict is evident. The cycle might start with Sales making promises to customers about the availability of new products, perhaps because sales people feel that customers want to hear that Timeplex is abreast of customers' wants. So there is pressure on can offer the latest solutions, and Sales to make promises about new product availability. In turn, Manufacturing and/or Engineering Design do not want to be seen as failing in their contribution to rejuvenating the experience Customer means that often they will release Support people regard by their European colleagues market The as as new company. The pressure they products to the Sales organisation that the "half baked". Furthermore, Engineering Design are seen designing products without listening to what the European requires. European customer the 'Beta' may get a development stage,2 Support is then called on to fix product which still has known software bugs, or appears to any or is still in be designed for the American market. Customer problems associated with the 2 new product, and in the Alpha and Beta are prototype stages in the company's product development procedure. The former describes in-house product testing, and the latter is product testing done by and with the agreement of a selected customer. 114 early days of a therefore new product this can be mean heavy use of technician time on-site and high costs to Customer Support. If the initial installation problems become protracted and the customer starts to demand that the product be removed, money back, or or wanting their threatening to ring the President of Timeplex, then inter-departmental accusations escalates. Staff feel that because of Ascom's weak financial health, and there is of severe a new pressure to get new products out and earning product, the TX3, highlights the the Customer Timeplex's revenue. own poor state, The recent introduction New product release procedures call for pressure. Support Group to evaluate the TX3 while it is being 'staged', meaning being prepared for release from Manufacturing and Engineering Design. When early in 1994 two engineers from Customer Support arrived they began to test the pulling out powered a up. product's robustness by couple of printed circuit boards from the back plane of the TX 3 product, while The product specification demands that such action shall have product's performance. Unfortunately the product crashed boards. new as a no effect on the result of the removal of the Engineering Design senior staff responded by accusing the Customer Support engineers of being unhelpful and asked them to leave the site. No Engineering Design's reaction, but some reason was given for speculate that Engineering Design do not want any delays in getting the product out. Others suggest that Engineering Design and Customer Support are working from different performance specifications. From Hammond's perspective Timeplex is composed of "little empires" where, People are very busy, involved in their own areas, and they don't believe in giving out information. So Engineering go off and design these products, but there's no two-way feedback [like] well what's the customers asking for at the moment. This box comes out, its not even right for the European market, there's no actual interface, there's no documentation that comes out with it, they're allowed to just go off they have their own Profit and Loss, they're not judged on whether they talk to the Distributor or the Sales operation in the UK. They produce the boxes that their objectives say they have to produce and out it goes (Hammond). ..., Most interviewees share the view that the 'Profit and Loss' Manufacturing and Engineering Design is a major source 115 performance criteria for of conflict between departments and individuals. There is door and sales people are significant pressure equally keen to on this see new group to get new products out of the products in the field. There appears to be a high incidence of products leaving Manufacturing/Engineering with design faults, made worse because formal new products still reach customers weeks procedures for releasing new or months late. Although there products (proto-typing, alpha, beta), these are are being compromised by the fierce financial performance criteria. Hurd believes that product functionality and quality time pressure. are not being subjected to an exhaustive range of conditions, due to As noted earlier, functionality is also biased to meeting the larger USA market requirements. The view of many staff is that since the company has been making heavy losses during the past three or four years, making many people redundant in the process, no one wants to be seen as is of responsible for holding back the company's attempts to turnaround its fortunes. There an ever present threat of being fired for appearing to be unhelpful. Recently the President Timeplex wrote to all employees reminding them that the woods and that there was no room for of the complacency. Many people in the UK who felt that they had put everything into Timeplex these last two be fired", and some of these company was not yet out people have left the or three company years for other read this more as "try harder or tempting and less threatening positions. Product Sales versus Customer Product Sales and Customer Support have separate command and control lines of responsibility which 'meet' at the Sales and the other for Customer local UK level means that Hurd's Davis' Sales team, while Vice President of Support apex of the organisation under two Vice Presidents, one for Support. The relationship between Sales and Support at the Support team must respond to the support requirements of meeting financial performance targets guided by the world wide Support in the USA. 116 The conflict between Sales and Customer Support manifest itself in the seems to areas of performance measurement and managerial control. Sales performance is measured in terms of sales value, and the commission structure appears to encourage discounting. This suggests that remuneration rewards numbers sold and not the value of individual sales. It appears Sales has no responsibility for the quality of sales, for example, whether the product is fit for and delivered purpose, on time. Sales persons' salaries have taking home salaries where sell and more or Customer Support performance contribution to company or are too on unknown, and slow in responding, overheads. As noted earlier, a resources some provided seems to products which are not yet of Customer Support's income is Customer on source come Support, he has no in to pick control over economic transactional rather than hierarchical the current Manufacturing process is up a "hit and run" the pieces". of tension and conflict, certainly within the UK. The means that while Davis relationship to be prefer to report to Davis. Hurd's can and does the function, in particular its budget and generating capability. Both Sales and Customer Support that Hurd would or site. Interviewees admit that available and feel that Sales have independent hierarchies of Sales and Customer Support revenue take too long in solving be having a divisive effect. Support staff complain about the way that Managerial control is another on or value adding activity, the cost of administering the approach to selling while Support always "have to call incentive to possible, without looking back. Typically Sales charging internally for its services, for example charging Sales charging is not Sales sell a very strong many the other hand is formally measured in terms of financial Engineering for time and technical cross bonus element, with that Support fails to understand Sales' priorities. problems, cross a than 30% of it is bonus. There is to the next sale as fast as move on complain that Customer Support from that career managers a find this strain. This does not opportunities are mean better served from relationship, however stressful it might be at times: the prospect of becoming the Vice President for Customer There is also tension offers customers Support is more valued than anything Davis could offer. surrounding the embryonic Professional Services group. This group sophisticated remote monitoring and maintenance services. The Customer 117 Support group see this innovative as an way for them to generate income stream and "meet their numbers". Davis sees it new revenue to slightly differently. He boost their agrees on the potential of Professional Services, but not its ownership: way of [generating new revenue] is Professional Services; to build added value around what you're selling the customer, but that's got to be driven from one Sales, that's not a Service oriented I mean Service has got to deliver it in some but Sales are the people up front in there selling it, pitching it, and in fact giving the customer the comfort factor ... and then that's all supported from behind (Davis). ... cases, The three key people from Professional Services declined to be interviewed. No given, the following observations other so are entirely based on comments reason was made by staff from departments. Most interviewees articulate are people able to refer to Professional Services, but few coherently what work is done by that group. Humphries says seem able to that, its an area that's been under a lot of criticism, because its never clear exactly what they do. I mean I got some information I was reading last night on what they actually do. Their function seems to be one of supporting Sales bids for new business by packaging Timeplex's services against the requirements of a particular customer. They feed the salesman the information he needs to do the deal. (Humphries). This new service seems to have conscious of the need to find emerged during the last two new revenue additional network management streams, years as perceived an opportunity to sell services to customers. To date Professional Services shows promise but has yet to show profit. This department's current status that there seems to be some Customer Support staff, doubt about its function and seems to be in limbo, in exactly where it sits in the organisation, with Sales and Customer Support vying for control. As Braidwood noted, there were a lot of political changes a little while ago. We used to have a European Professional Services Manager, Willis. He reported directly into Richard [AVP International Services], That then changed about four or five months ago. Something broke down within the system, and Willis now reports directly into the UK MD, Davis. So therefore the Professional Services group no longer works outside of the UK (Braidwood). Whatever "broke down within the up system" Professional Services seems to have been broken geographically, with the UK element going to Davis, and the remainder staying in Hurd's 118 Customer Support organisation: the mainland Europe part going to Cecil, Manager of Projects, and the minor Distributor related element going to the Belgium based Multinational Service Manager. Davis is very critical of what he sees as the existence within Timeplex of two different organisations with different motives and directions, forward for the organisation, what skills are a lack of common views about the required, and the associated costs and investments. In his view a way to use better arrangement them, and would be where he Managing Director makes the "arbitrary decisions" than determine the actions of Product Sales and Customer He is way a as combined Support organisation. openly and actively trying to influence anyone who will listen, from the President down, that Customer Support should be "tucked in behind Sales", rather than operating independently. He feels that his scope for realising the full potential of the UK business opportunity is being constrained by not being able to control Support, and to having to make do with products designed with this Davis more his selling organisation as lesser degree for the US market. As noted earlier, handicap he claims to be growing the UK business by 50% sees a even pa. pushing at the frontiers of new applications, for example in the combined WAN-LAN technology, but Service is still behind, working with old technologies. He is critical of the perception that Service is because investment in R&D is revenue is based on more profitable than Sales, being paid for by current product sales. Secondly, Service products sold perhaps ten years ago, and they are barely growing their income at 2% to 3% pa. Some interviewees think that the division within the UK is not example Stubbs, a Product Support engineer, sees as serious as in the USA. For the Service and Sales organisations working together quite well in Europe, with the USA in the difficult position that the UK in five years ago: 119 was we're not too bad here in the UK, and I would say in Europe, but certainly US there's the departmental towers where people don't talk. Sales is sales, Service is service, and there's no bridges between the two. We've had that in the but through a lot of hard work and talking, we now seem to work quite well. We've got a good relationship between Sales and Service, which is the two biggest organisations in the company (Stubbs). The importance ofpolitical behaviour During the period of this research there based in Boston was a new reorganisation but Given the no one, a new Marketing team, they had removed about up existing organisation. Hurd believed that they sweeping out the old broom belief circulating that being established, and that since being set six Assistant Vice Presidents from the like was a ways, that O'Connor including himself, knew any was implementing from his boss Richard (AVP some fired. He not was one was on holiday with his family in Florida, he received call International Services) summoning him to a "heart to heart" entirely surprised by the call, given his relationship with the UK and his group. that Davis felt frustrated at not During a three day "heart to heart" meeting it transpired being able to convince Timeplex's President and other senior executives that the UK should control Customer Support. This being the situation the UK leadership then turned to showing the Customer Support function as being ineffective, employing various devices to undermine its credibility. Davis stressed that it on able to invest in his Hurd. It own seems Customer Professional Services team. One Vice President a other senior executives. It seemed that "others in the UK" wanted Hurd expectations of the Boston personal" attack in the USA UK), Hurd felt that this chilling breeze was slowly coming his way. Some months later while Hurd meeting with a details. difficulty of his position (i.e. the problem of serving two masters; and the other in the were was "not a that by discrediting Customer Support Davis would be Support team, perhaps building possible outcome of the meeting on was his recently acquired that a new position of Europe would be created for Davis, with Hurd reporting to him. For the time being Hurd is safe, but clearly strategy is shaped by political behaviour, without losing its rational pretensions. 120 4.5.6 Planned External change consultants, Booz, Allen, Hamilton carried out two studies period during late 1993 and early 1994, and thought by some to cost over a six to nine month nearly $2M. They surveyed customers for their views of Timeplex and its competitors, and looked range across a of parameters, including quality of product, service, technological sophistication of products, and price. Among other things the findings showed that customers thought Timeplex's technology and customers the saw was getting out of date, service Product Sales and Customer Langley office has at least one copy Support seen summary as reasonable but not outstanding, different organisations. Although of the full report describing Timeplex's competitive position and recommendations for change, almost have was in the UK has no one seen it, though a few presentations of particular aspects. A few staff believe that O'Connor, having accepted the findings of the consultants, asked them to implement its recommendations, starting with the USA organisation. Many believe that the Boston group referred to earlier Since about radical was in fact the consultants reorganising the April 1994 Timeplex has been undergoing changes, to the services to be offered, and the a company. "re-engineering" way process to make that internal departments interface with each other, for example reforming the Product Sales and Customer Support split, European influence on the product design process, and a more product design philosophy that supports remote maintenance. According to Stubbs all departments will be affected as the changes are committees there is a instituted, starting with Customer Support. There co-ordinating change in specific team areas. are various teams or Within Customer Support for example, consisting of five USA and three European members. Stubbs is one of the European contingent; with Oattes representing Field Service management, and Humphries representing the European Customer Response Centre. Stubbs is also on another team looking at the Product Release Cycle. These representatives have been told by the USA leadership not to discuss any of the planned changes with their work colleagues. 121 One radical change will be the bringing together of Sales and Service, joined by a common goal. Exactly how Service and Sales will be brought together is not clear; it still evolving. One possibility is that Davis gets his Support unit, or way and takes control of a UK Customer of the conflicts between Service and Sales, is the creation of Processing Office (CPO) in the USA. The CPO team will comprise personnel, and will be the main interface with and technical be he might become Vice President European Sales. One planned change that is intended to diffuse many Central seems to a customer, a a mix of sales managing the whole of product sales, customer support, project management, customer education. The range activities of this new department will therefore replace the existing situation where Sales, Service, and Professional Services each negotiate individually with the customer. Stubbs is whether there will be unsure a CPO in Europe, but "this will be decided by the Americans in time". Braidwood, where a colleague of Stubbs thinks that the changes Timeplex is weak, member of the UK changes are. as dash of his own Braidwood does and does not know located no Braidwood's knowledge is probably a aimed at addressing those described in the Booz, Allen, Hamilton report. He is not representative team but has representatives, and are fundamental throughout the a hesitation in explaining what he thinks the a mix of informal contact with imagination to fill in any perceived gaps. What highlights the difficulty that senior executives have remotely in their head office in the USA - of maintaining formal control information flows company. areas Braidwood notes that there - over are some organisational changes brewing in the USA, and he imagines this new strategy of changing all of our systems, changing our procedures to work better for our customers is good. Its being kept fairly quiet until someone able to come over and give it to us, and tell us how it is, and what the is improvements have actually been in the States (Braidwood). According to Hurd, the plan is to implement these changes first in the USA, by 1st August, 1994, followed by a European implementation that should be completed early in 1995. All implementation meetings take place in the USA of the initial meetings represented a every few weeks. Stubbs feels that the output good mix of ideas: 122 there has been in the past a sort of them and us, the US and the world, and through the process of re-engineering we're trying to break that down. Traditionally in the past any organisational changes have been decided in the US, and then forced upon you, 'this is how you'll do it', but this time round we've been involved earlier on, we've had the chance to put in some of our ideas, and we've got quite a few of the European ideas in (Stubbs). After the first couple of meetings, the output of meetings seemed increasingly to reflect toward the USA. Stubbs feels that this is because the are in the majority group a bias is based in the USA, and larger home market, whereas the European team must return at intervals to catch with discussions and up developments that have taken place in their absence. Interestingly, although the team managing the formal implementation process is supposed to reflect Timeplex's international status, the informal US network of staff seems to have substantial influence in some setting the pace [decisions] we and agenda for the formal process. can't do anything about because its According to Stubbs: gone beyond the end stop, and its been decided, but the items that are on-going that we still have input [to], then we can look at them constructively and provide input. And some of those have actually been changed following the input provided by the Europeans, and in other cases it hasn't. I would say in about 10-15% of them there's been no additional input required, because they've got quite a good process in place just through the American Stubbs' account suggests way of thinking (Stubbs). that European contributions framed within the USA members' framed to some extent Accounts suggest a are not being ignored so much "way of thinking". European decision choices are as being being by American assumptions and priorities. 'US-centric' view of the world. Braidwood and Stubbs talk about "waiting for the Americans to decide, to give it to us" and about Europeans "having input". Months went by before implementation there seems any process; UK staff questioned the need for the secretive nature of the there are no European meetings to discuss the probable changes; to be a belief that if it works in the USA it will work continue to be located in the USA. During the summer of 1994 a everywhere else; R&D will delegation of senior US executives, from Sales, Engineering, Manufacturing, Customer Support, visited Timeplex UK to find out what new products they wanted. Some respondents saw this as a hollow gesture, where the delegation would go through the motions of listening but nothing would come of the visit. They remember similar visits in the past not producing 123 any change. Writers that see the existence of groups as explained by functional theory (Fincham and Rhodes, 1992) would expect the integration of Sales and Support to reduce conflict through the creation of shared social be goals. This is certainly the expectation may not enough because of the enduring nature of group based perceptions (the difference between and a strong group history of conflict. Whether these changes will break down the Sales and Customer Support divide, behaviour among managers or diminish the individualistic and territorial and engineers, remains open to speculation. Conspiracies 4.5.7 changes Most of the intended are aware that two what these or three are known to only News about are a few senior managers. Most UK personnel people keep disappearing off to the USA people talk about is unclear, organisational changes It interviewees. In contrast, identity theory (Fincham and Rhodes, 1992) suggests that such re-structuring them and us), be among a source published in the forthcoming changes are every few weeks, but of rumour. News about particular company newsletter, usually after the event. shared selectively, usually with those whose jobs will immediately and directly affected. seems that attempts to keep tight control of the implementation process has resulted in greater speculation and conspiracy theories. For example, the TAC staff in the USA and UK have very of a close working relationship and talk to each other daily in carrying out their tasks supporting trans-Atlantic telecommunications networks. They also share information and speculation about what is going have received within the company. phone calls offering them positions in the redundancy because you get a on call about when the response as so Hurd says and so?' In the USA new bound to generate new field engineers order. This heightens the fear of "when field engineers meet are some as they do, questions like 'did questions and breed suspicion is negative". Attempts to control information about the implementation of change in the UK office has resulted in individuals having differing understanding about the changes, and this cuts 124 across hierarchies. For example, Davis' understanding is that the most senior people in Timeplex recognise that something needs to be done about integrating Sales and Customer Support. His criticism is that the solution Support, cutting cost out, rather than seeking Customer company should be adopting the Hammond knows up". Individuals and morale in are general is lower. Apart from notion that there is philosophy a going to be to have reason some heard that as for the in the UK no one over no one admitted that she sense knows the cause too many worry. of conspiracy reasons thought this research up on know people to leave, many However, among a are of whom will be are restricting scarcity of information staff. At all levels they seem to be surrounding the redundancies. was The re-engineering programme improvement rests on sees a (technical author and document controller) using the story of university research the Langley office. Here is already she is suspicious and of strategy pick their shoulder, continually re-assessing their positions. Many have and section seems to is that the responsible USA executives secrecy Some weeks into the interview schedule, Smith checking can part of the changes a few Assistant Vice Presidents were recently made redundant, but next changes from what I specific changes already implemented, and reorganisation afoot, they don't want people to heightened the constantly looking of that some they want to keep. According to Braidwood the USA leadership information because for of merging Sales and Service. thinking behind the re-engineering programme. or afraid that too much information will seems course input from Sales. In his view the looking for signs, speculation is rife, staff are suspicious of each other theory about the staff that any nothing about the changes, but feels that "the fundamental problem is the are a common-sense the overall fundamental more structured, and I think there way we are Stubbs' being implemented is restricted to the internal workings of someone, as a cover barely two months in the company conspiracy. is intended to improve Timeplex's competitive position. Part extending the company's capabilities, examples of enterprising behaviour by individuals as discussed below. In the seem to be an inherent feature practice, coexisting with the politics, tensions and conflict, discussed above. 125 4.6 INNOVATION Extending capabilities 4.6.1 It is perhaps misleading to talk about Timeplex recovering lost market share or position. This static market and technology. Market expectations continue to move on as do technological developments; financial services market developments continue apace and implies a information and communications the other, through a technologies are ever changing. One be shaping seems to bond of spiralling market expectations and growing technological possibilities. As noted earlier, potential customers today see Timeplex products as 'steam driven', and possibly even a spent force in the Wide Area Networking (WAN) arena. They are yet to establish themselves as a credible force in Advanced Technologies. Corporate leaders in the USA see the future market opportunities now that will again position Timeplex 18 months. Meanwhile offering a range UK managers time. on as enthusiastically about fusion of WAN and LAN. Interviewees talk developed Local Area Networking (LAN) and evolving and requiring a new a product being leader, but that it is not due for another as a they must make do with Timeplex being just another competitor, of products, some recognise that the better, company some worse than those of its competitors. Timeplex needs to catch up and move ahead at the same They think that Timeplex is probably spending significantly above the industry average R&D, and that such relatively high spending will depress profits or even generate losses for the next few years further until the new products emerge and are successful in the market. They recognise that Ascom is currently investing heavily in Timeplex, and that that could come to a sudden end for a performance, continued poor are conscious variety of reasons: impatience with Timeplex's Group results, or a good offer from another company for Timeplex. Timeplex staff would probably agree with Georghiou et. al., who observe that sustaining competitive advantage requires continuous post-innovation improvements (see 2.5.4). However, at the moment Timeplex managers and engineers believe that their ability to make 126 a major technological leap underpins long term competitive advantage incremental to maintain to more than being able improvements. Although the original Link product has been updated Link Plus, the market for the Link product range and its associated recurring technical support revenue is vanishing as it faces more sophisticated competitive solutions. The incremental improvements of Link Plus is not either market or seen as sufficient to put Timeplex back as technology leader. Failing to maintain investment in Timeplex's competencies has left the company with a challenge: how to catch up in WAN technology, and how to develop and extend its limited capabilities in LAN and Advanced Technologies. Timeplex's managers familiar to to access an and engineers recognise that extending their capabilities from unfamiliar future technology is problematic, but as a something that must be embraced opportunities. So central is the need to extend capabilities that Hurd, European Customer Support Director, has instituted a training programme with all engineers gradually being trained in Advanced Technologies, while expertise in supporting the old Link product is being managed out of the picture. One problem is that most sales people and engineers are trained and experienced in either WAN or LAN, who according to Davis, UK MD, "know instinctively through experience what to do with a problem". Cross training is on going, but some change, but a people cannot make the transition. He notes that most people want to proportion will not do The intention to so, and will leave. develop Advanced Technologies handed down from the USA executive. No there are mixed one as the way forward questions this as have been seems to the right way ahead, but feelings about how the company's leadership arrived at the decision. Many respondents believe that the management consultants advised the USA executive that the technological way ahead was Advanced Technologies. Others say that the way ahead was clear, and they didn't need consultants to tell them, and anyway the consultants are just feeding back what they have learnt from Timeplex staff. The already become unclear, and so contested. 127 source of the initiative has Enterprise 4.6.2 There is a core product range, and a shared sense of what markets and technologies Timeplex is committed to. However, in addition to this, there for individuals small groups to or with little reference to any Multinational can be significant scope particular initiatives, be seen in the way Projects work, and in particular individual initiatives. distributed globally. For example, Head Office in France, are Italy, Production in Taiwan. Head Office, carry out some such resources to formal sanctioning mechanisms. This Many companies' functions R&D in commit the company's seems to work on say in Paris, might request Timeplex to their Taiwan offices. Multinational Projects companies. It provides one was set up to deal with point of contact for potential customers, and co-ordinates Timeplex's internal communications. Multinational Projects consists of three people: projects co-ordinator, Braidwood as Team Leader, and Cecil as a Multinational Projects Manager. Cecil finds ways of re configuring Timeplex's products and services to satisfy customer requirements, indeed to suggest or a customer need. He gave an against "the Timeplex system". A particular customer wanted generally available. Cecil came involved as a segment finding new some software that of software in one a way of packaging a solution that of Timeplex's products. His negotiations procedures for legitimising the new product, including costing, manufacturing, technical support. According to Braidwood, Cecil's objectives creating forward in new was not back into Timeplex, negotiated with Engineering, Manufacturing, Sales, and Technical Services, to find normally exists example of a recent triumph untapped revenue streams from Professional Services, are or "to go Network he would call them". Services as Another example of individual initiative discussed earlier is Humphries' development of the ENMC unit. vision. He Humphries had complete freedom in interpreting Richard's 'move with the Sun' sees where ENMC his ENMC can as both a be extended. For strategy and as an innovation, and can see other areas example, diversifying into managing high volume low 128 value networks, like Sainsbury's check-out stations, or as a way of enhancing a new Field Management System. Stubbs provides another example where the individual shape work organisation from the Product describes his role processes. Support as or sees no one to ascribe to He sees him are scope to the transfer of technical knowledge nor groups communication between the and the Europe/Africa Service Managers. does he share the job with anyone. Such a position seems 'gatekeeper' role between Europe and the USA. a knowledge the transfer of information, there reporting to him, as channel " of two way "knowledge base" of the Product Support He has his job have unfettered in Clearwater to European Customer Support engineers. He groups "a funnel He seems to as can be seen situations where as more than the co-ordination and delivery of during the first time installation of a something "does not seem new product. For example obvious at the outset until we experience the practical side of doing something". He adds that we can read all the technical documentation, at that stage probably the training all new, if not non-existent. So the first couple of installations are courses are usually ad-hoc, we'll learn as we go along sort of thing. And then following that installation we'd get all the points where we went wrong, what we shouldn't have done, what we should have done, and from that we'll formulate a procedure for the following installations. So there's a certain lack of knowledge at the outset that's rapidly learnt (Stubbs). He feels that in an ideal world there should be knowledge by trial and processes error. accepting the situation due to failed sees over need for the initial scramble to Timeplex is old enough at 25 and systems in place to the first installation. He no the ensure years, acquire with the right people, that the requisite knowledge is known in advance of problem of the initial scramble being due to people time, because that's the co-ordination, rather than an way its been for a long time. It is also unavoidable part of the learning process, in his view. According to Stubbs, contributing to the failure to "get it right" is that Timeplex has Engineering Centres that all work slightly differently, thereby making it impossible to attain one standard product release process. He has taken the initiative to do something about it, and 129 has so "put together few ideas, that special, and put them to that see on a during the next the ISO standard. In managers a some as radical" although he does not think they number of senior managers within the year everyone will move to a common company. are His aim is to product release process, based pursuit of introducing change he has held various meetings with and slowly they are beginning to procedure. This standard is standard regard see the benefit of operating to his proposed being implemented in Europe with the USA now following shortly. When these co-ordinating and procedural issues that the messiness of trial and error will ironed out, he believes are drop out, "because the right documentation will be at hand, and the training courses will be in place before the first installation". In one further initiated and one manual example, Braidwood, Customer Support engineer and Escalation Manager, produced a a Multinational Sales and Service Guide. In it he brought together in global and comprehensive listing of all Timeplex offices, Distributors, the products and technologies installed in their regions, contacts, and other useful information. It complete. This took about nine months to was hailed by his colleagues as a great and useful idea, and will be adopted by all Customer Support and Sales staff. Some customers will also get copies. Stubbs sees this as forming the basis of a computer database using Lotus Notes. Braidwood could do was not asked to create the anything as manual, it and was held presented by as a many initiative. He a novel way, was told that he tacit and codified knowledge that manual, it triggered other ideas from those who impact, but one came was completed into contact with that is diffuse and difficult to measure. help Customer Support and Sales staff by saving them the time previously needed to hunt for information. were own different people around the globe. Even before it Braidwood's work. It has commercial It will his long it did not cost much. In the context of Timeplex's established practices, this work brought together, in hitherto was not answered Very often international telephone for 24 or 48 hours, or or fax calls requesting information days later. It is also a useful directory of Timeplex facilities for customers with international offices, and will encourage understand Timeplex's global scope. For his part Braidwood now has potential customers to a more holistic and comprehensive understanding of Timeplex's web of products, services, and support channels 130 than anyone else in the with customers and Indeed he is 4.7 now company. internally with the development of the suggested computer database. being asked to take part in marketing presentations to potential customers. CONCLUSIONS This account has focused role of on individuals the how Ascom Timeplex's UK staff understand strategy and the innovation, and what they make of their company's strategy and innovative performance to date. What as His knowledge could have important leverage externally emerges interpret and pursue is a strong sense their flavour of the company's strategy. Taken practice of strategy in Ascom Timeplex company of continual tension and often conflict seems as a whole like 'managed chaos' (see 2.3.3). In this it is the personal values and preferences of individuals more than adherence to any formally declared grand plan that shapes the practice of strategy. This differentiation of objectives is particularly clear between Sales and Customer Support. Everyone recognises the divide between Sales and Customer Support conflict, and a as a major source of number of structural changes are in hand to try to remove that division and Nevertheless, the company's history is permeated with changes in with it the conflict. corporate ownership and reorganisations, and it remains an open question whether the current round of continual restructuring will change is change within and an remove conflict or simply redefine it. Contributing to this sense of equally unstable industry. Entrepreneurial activity and technological across telecommunications, information technology, education, entertainment, and other developing areas continue at such a pace that most people engaged with these sectors take change for granted now. The differentiation of values among managers to its leaders' this company, inability to instil a common mission; individualist behaviour is a way of life in it is taken for granted by most staff. At all levels of the hierarchy people encouraged to take the initiative. Individuals peers and engineers in Ascom Timeplex is not due if they show a sense seem more of enterprise rather than 131 a are likely to be valued by superiors and readiness to look for precedent and follow procedure. Staff who have been with Ascom Timeplex a long time (a dozen years seems to be a long time here!) regard the company's entrepreneurial beginnings fondly, and most interviewees company seems requires an identify with that spirit. Understanding why the practice of strategy in this like managed chaos and why individualist behaviour is taken for granted appreciation of an organisation's way of life, and this is the focus of Part III. 132 5 Bank of Scotland 5.1 INTRODUCTION This account is drawn from interviews during the summer of 1994 with ten executives, mostly senior, involved with shaping strategy in the Bank of Scotland. Interviewees represent both the corporate body and the main Divisions of the Bank: Management Services, Branch Banking, International, Card Services, Centrebank. Information available Annual was also taken from publicly Reports and Accounts, plus notes provided by the Bank on its historical achievements, including descriptions of its work organisation arrangements. The story highlights the centrality of the Bank's heritage collective sense that strategy means It shows strategy as a of being strategic Bank's way 5.2 HISTORY AND SIZE as even UK bank to be founded beginnings roots grew of modern by an act though its managers commonly referred opportunistic and flexible. The Bank of Scotland (BoS) can trace its roots Bonnie Prince Charlie and his army of continuity; the 'stewardship', and the endless pursuit of efficiency gains. largely top down affair, to the as a source back 300 years, to 1695, fifty years attempted to regain the British Throne. It was before the only of the Scottish Parliament, and "from these humble the Scottish banking system which was to initiate much that is at the very banking practices today" (A Brief History Of Scotland's First Bank, Public Affairs Department, Form No. 1457). 133 Size and 5.2.1 performance Today BoS Clearing Bank is the biggest over company within the Bank of Scotland Group with 450 branches in Scotland, some 20 offices in the main cities of England, and offers retail banking and clearing services to personal and business customers. Within the Group there is also a merchant bank factoring an company (British Linen Bank), (Kellock), and international dimension. It and in 1995 a a finance house (North West Securities), a regional retail bank (Bank of Wales). The Bank also has wholly owns Countrywide Banking Corporation, New Zealand, acquired 51% of the Bank of Western Australia. It is also represented in the USA, Hong Kong, and Russia. The Group employs about 15,000 people world-wide. The Group's profitability has shown a steady improvement since 1990. Group income is measured in terms of interest and dividends, fees, and commissions. For 1994 the Net Operating Income amounted to approximately £1.14bn, and £269m (1994 a Profit Before Tax of about Report and Accounts). Pre-tax profits represent a 114% increase on 1993 (£125m), with most Divisions showing growth. In particular BoS has been a major factor in the Group's growth. The Bank of Scotland's contribution to Group profits in 1994 £75m to £168m, Clearing Bank, which comprises six (Fig. 5.1). First is UK Banking, which is the biggest Division. It is divided into three businesses: East Scotland, West Scotland, and are: from amounting to about 62% of the Group's Profit Before Tax. The focus of this account is the Bank of Scotland Divisions rose Treasury Services (actually a wholly owned subsidiary), Card Services, Personal Financial Services, Centrebank, International. four central England. The other Operating Divisions Supporting these independent businesses organisations; Accounting & Finance, Compliance & Legal Services, Management Services, Personnel & Property. 134 are Governor & Group CEO I Treasurer & Chief General UK Branch Manager Treasury Services Centrebank Banking Personal Card Services Financial International Services Support Services East Scotland West Scotland 1 Accounting England & Finance Compliance & Legal Management Services Personnel Property & Fig. 5.1: Bank of Scotland Clearing Bank structure (June 1994)5 5.2.2 Tradition The Bank's staff give the impression of feeling proud and respectful of its long history, traditions, and conservative values. There is comfort and the a sense of a sense of continuity with employees drawing identity from the Bank's heritage. For example, for the last 300 Group's Chairman has been known internally as the 'Governor'. Bank staff still affectionately refers to the holder of this title, currently also the Group Chief Executive 'the Governor'. Staff see themselves developing and strengthening l In an as years stewards of the Bank, with as responsibility for further old and valuable heirloom to the next generation of staff. At February 1996 the Governor and Group CEO positions were split, with the latter reporting to the Governor. 135 the same time many managers share a belief in the Bank being at the frontier of banking innovations, and that the Bank encourages and supports 'bottom up' innovative business development proposals among employees. The Bank's head office has always been in Edinburgh and quite early in its history the Bank built its current head office on a offices many seem prominent site in the centre of Edinburgh. These beautiful to offer concrete evidence of the Bank's organisations' head offices continues to be are remote from their customers, the Bank's head office operational through the provision of counter services offices for the Bank's most senior executives above. help noticing the wood panelling decor; there is Executives history and conservative values. While the ground floor, and Anyone entering the building cannot feeling of entering a on a stately home. enjoy stately offices, surrounded by 18th and 19th century style decor and antiques. Browning, General Manager of Accounting and Finance, and the Bank is based here. His office is a very a senior executive of pleasant working environment, spacious, tastefully furnished and decorated, and functional without seeming utilitarian. Browning's visitors are treated with china tableware around a certain amount of ceremony, an that such argue image of the Bank. This building does embody sense of preservation and maturity; a sense lost its roots, nor its close links with the In contrast to the the so environment gives customers a positive much that is the Bank: its longevity; its that whatever else may change, the Bank has not community. many levels down the hierarchy take place in surroundings. The atmosphere and facilities held in any one plastic an palatial surroundings of the head office, meetings with Project Managers in Management Services Division and different from his antique style desk. occasional table, away working in the head office Those with tea and biscuits served in fine of a number of modern common are very meeting cup. 136 very utilitarian with meetings being rooms, and tea served in the usual 5.3 WORK ORGANISATION 5.3.1 Corporate The Bank's governance and managerial control organisational structure and managerial control practices have developed in that reflect its history, while meeting contemporary demands for more ways transparency and accountability at the top layers of management. Indeed, since 1994 the Bank's Annual Report only met but exceeds the recommendations of the and Accounts stresses that it has not Cadbury code for Corporate Governance. Unlike many companies across whole industries today, there has been flattening of hierarchy here. Indeed, in 1981 the Bank introduced an no de-layering or additional layer of control, by forming the Management Board directly beneath the Main Board. The 1993 Report and Accounts dedicate three pages to describing how the Bank's top two layers are organised, and how its executive leaders make decisions. It notes that Directors' interests have been published for many years; that "decisions are not taken hurriedly and all members subject themselves to the discipline of cross-questioning by their peers" (Annual Report and Accounts, 1993: 16). The same Report gives the frequency of Management Board meetings (fortnightly), noting that its detailed minutes are circulated, and to whom (the main Board). It further notes that lending authority increases with seniority; that an important role of the Main Board is to constantly check conclusions reached by the Management Board; and that "strategic decisions are taken by the Main Board only after careful consideration, recommendation of the The way, supported by descriptions, suggest various things. First, that public trust is the Bank, which is also reflected in its stated desire "to maintain its and the Management Board" (Annual Report and Accounts, 1993: 16). spelling out of executive decision making procedures in this interviewees' on very important to reputation for stability integrity" (Report and Accounts, 1994: Corporate Aims). Second, that the Bank's executive wants very much to be seen to be in control of the Bank and its relationships with 137 agencies. Third that it is scrupulously fair in its dealings with outside everyone, measuring its performance against and exceeding legal requirements. Fourth, by publishing these details the Bank hopes to provide transparency and legitimacy for its decision making at executive levels. The organisational structure provides Governor in General a tiered and clearly defined career structure. Below the descending rank are; two Deputy Governors, Group Chief Executive, Treasurer, Manager, Divisional General Manager, Assistant General Manager. This top tier is the Executive. Below this tier Below this second group are are the Managers: Senior Manager, Manager, Project Manager. Supervisors and Clerks. Staff are encouraged to professional banking and other qualifications, and qualified having studied Scotland. This a five year course professionalisation probably leads to goes some way to a process more pursue than 30% of staff are professionally with the Chartered Institute of Bankers in is common across the banking community and high level of homogeneity of banking practices among competitors; it explaining why product differentiation is extremely difficult. The scope for managerial control is prescribed by one's place within the formal hierarchy (Fig. 5.1), and is shaped by professional banking practices. For example, rise with taking, This as mentioned above, lending levels authority levels. Within the UK Banking Division, loans and credit, and deposit are managed as separate business units. hierarchy of control coexists with an espoused belief in "empowerment": The word 'empowerment' neatly encapsulates many of the changes that we have carried through in the past few years. Within the Clearing Bank this theme also lies comfortably alongside our stated policy that wherever possible decisions should be made locally in the community to which those decisions relate (Bruce Pattullo, Chief Executive, 1994 Report and Accounts, pp.-10). It may seem decision incongruous that the Bank has not only introduced another layer of managerial making (The Management Board), but also claims to have empowered staff. Browning argues that the Management Board, consisting of executives, was created "to empower" the executives, whereas the main Board is largely non-executive. To what extent more junior staff do regard themselves as being empowered is another question. The fashion 138 of stripping out layers of managerial control, many of the empowerment claims made by as part organisations is not embraced in the Bank's approach. Inter Divisional structures, comparison suggests that while individual Divisions have differing roles and they share the same overriding concern for creating competitive advantage through continuous improvements in work organisation. This concern is common to UK Banking, the Card Services Division, Centrebank, the International Division, and the Management Services Division. Card Services Division is concern for efficiency and a good example of the extent of Management Services Division, the IT and process management. systems resource of the Bank, provides a good example of the layering of managerial control. The Management Services example also shows the persistence of established work organisation practices and the challenges that such practices present to of working. Card Services Division 5.3.2 Following the Bank's commitment to credit cards it had chosen to card new ways use Barclaycard's credit processing facility. When in the early 1980s Barclaycard announced that it wanted to process another card competitors' cards, the Bank operation at first seemed own cards to longer faced with another strategic choice:2 find processing bureau; drop their credit card altogether; capability. With only 300,000 of its process, or create investing in an its own processing in-house processing a non starter. The Bank's executive not further was no only decided to invest in a card processing technology, but went by committing itself to attracting additional card processing business from other card operators. According to Brobbel, Divisional General Manager, the Bank wanted a card processing operation that would be profitable. Perhaps another influence invest in card processing came from a Some say the decision to learning experience during the 1970s, when the Bank reversed its decision not to invest in Automated Teller Machines 2 on that the Bank decided to pull out from the Barclaycard contract. 139 (ATM) technology. Brobbel started the Card Services Division a clean sheet, invested in the latest processing technologies available, and pursued market share to card Over the next ten years CSD covering three floors of a By 1994 CSD Fife. up (CSD) in 1985 with almost ten was purpose substantial business, with a built building, located in processing 1.7M cards approximately £9M processing business to services from its own processing of their seven departments business park in Dunfermline, a five fold increase since its start per annum, a per day in the form of cheques. CSD handles for the Halifax and National & Provincial (N&P), to take its for the investment.3 previously. McLean, the Deputy Manager of Administration estimates years that CSD processes accounts into grew pay a competitor, FDR, and will Bradford Offices. own cards though the latter has just decided more manage some Apparently N&P feels that they of the customer can manage cheaply than CSD. Card processing is a very the competitive business, where profitability is largely driven by processing efficiency. Brobbel is therefore always looking for ways to increase throughput speed. Approximately 16% of CSD's turnover is accounted for by the new (six months old in June 1994) automatic telephone payment system. Under this new payment system customers can dial a their number and be led through a menu of payment options by pressing various keys on telephone, the whole transaction being carried out without the intervention of any Bank staff. CSD anticipates that this portion of its turnover will increase relative to other forms of transaction. Within CSD, Customer Services consists of about 40 women enquiries across dealing with telephone all of the card accounts processed by CSD. Staff should aim to within 130 seconds. Calls which are too complex to process in this time are process a passed to call a separate group. When transactions with customers warrant written communication, Customer Services staff initiate the letter non standard letters are created by drawing on a database of 300 standard letters. Most other by terminal based editing and cutting and pasting of the standard letters. 3 Fincham et. al., (1994: 85) give an account of those early days of setting up CSD. 140 The database is located remotely on the Management Services Division's mainframe at Sighthill, Edinburgh, and printed out locally within CSD. At present all printers within CSD are located in person to a remote area from the initiator. It then has to be the initiator. The remote printing network is being re-configured future such letters will be and manually delivered by so a post that in the near printed out near to the initiator, available for immediate checking forwarding. This change is intended to reduce the delay and labour involved between letter generation and posting. Another group deals with delinquent payments. Delinquent payments refer to credit card minimum payments not being received by the Bank by the due date. Delinquent payments automatically put into log for chasing the day after the due date. Trained staff generate 2,000-3,000 calls very a a day to card holders with delinquent payment problems, and the automated. Staff sit before a screen, automatically dialled; account details ensuing conversation; a are are process is the customer at the head of the delinquent log is automatically displayed conversation that is guided by a on screen script. There is ready for the a score board for measuring the performance of staff in dealing with these problems: for example, time taken to extract a promise from a customer to send a payment, and payment promises kept each day. There is also process a department of about three people whose job is to work. This department is tasked with looking for and therefore costs; there are various schemes in example, CSD currently use are to be time taken to of reducing processing time development and implementation. For machines which enable customer payment cheques and payment slips to be read and the amount paid keyed in, machines ways measure one at a time and at high speed. These replaced by optical character recognition (OCR) machines which read the cheques and payment slips at high speed. Keying in will then be done separately.4 This change will allow the cheque to be sent to the Bank for clearing immediately rather than 4 Evidently OCR technology has improved because Fincham et. al., (1994: 91) report that in the early days OCR considered, but rejected because of its poor reading capabilities. 141 was being held up cheque value in processing, sometimes overnight. CSD will therefore be able to realise the more quickly. Brobbel feels that the culture and work the other a on knowledge and expertise obtained from the Barclaycard operation, (the card processing software supplier) and other bureaux, with little operational involvement from the Bank's other Divisions. At are years ago, highly automated "white-collar" factory (Fincham et. al., 1994: 90), refining its recipes based FDR different from very Operating Divisions of the Bank. CSD started from scratch just ten developing own organisation practices of CSD is very consistent with those of the Bank as a a different level CSD's aims and whole. CSD's everyday practice is dominated by the pursuit of efficiency gains. Its technology and work organisation Management Services staff who while also being distinctive in their Bank's values to CSD. CSD's career practices was developed by own way also carried the structure is also taken from the Bank. Management Services Division 5.3.3 Management Services is the Division (MSD) responsible for providing computer services to the Bank's Operating Divisions, including R&D and view of all interviewees is that MSD strategy more routine technical services. The should and generally does support Bank strategy. For example, the profitability of all banking services rely heavily on achieving low transaction as processing costs. Minimising human intervention and processing time is regarded key to realising payment receipts. MSD comprises three main sub-divisions of about 800 staff: Research & Development, Systems Development, and Systems Operations. R&D develops such as TAPS. Systems Development implements new new services for the Bank, banking services, for example improvements to links in the Branch network. Systems Operations maintains the Bank's IT infrastructure. Each of these areas is sub-divided. For further sub-divided into four units: Retail example, Systems Development is Banking Systems, Departmental Systems, Development Services, Productivity Services. Each of these in turn is further sub-divided. 142 As noted earlier, increase with positions in the hierarchy seniority. This contained, with its own means ascribed roles. For example, lending limits that each layer of the hierarchy is to some extent self- sub-divisions and specialisations. Delegation can take place within the confines of the ascribed role of each a carry layer without upsetting the whole structure. Duffy, is Project Manager responsible for the design and development of Branch IT systems architecture within the Branch people, and is led by and the Delivery Team. This Branch Delivery Team consists of 50 Senior Manager. Appendix 2 shows the nesting of this specialisation a depth of layering of managerial responsibilities. Duffy feels that many strategic decisions "bottom are While scope up"; he does not feel out of control, that he is being controlled. for individual initiative is circumscribed by one's ascribed role, entirely with the top of the hierarchy. These decisions rest investment, to revenue range any some other from decisions about capital budgets. All strategic and non-strategic projects screening and financial evaluation, before scale or significant resources are through a formal invested in a full go development project. Appendix 3 outlines the stages involved in selecting development projects. Although most projects with MSD are initiated by the Operating Divisions, proposals. While such appraisal schemes are a few do also start intended to support strategy by assessing the viability of alternative developments in products and banking processes, the appraisal has also the unintended capability to shape strategy. As noted above (5.3.2), the Bank had initially rejected investing in ATM technology because a cost-benefit analysis suggested it would be less cost effective than continuing with teller staff. The Bank reversed that decision once they saw a soon competitor, the Royal Bank of Scotland, gaining market share. The supporting IT strategy has increasingly focused transaction (processing on a dual philosophy of centralised processing and distributed branch accounting. Centralised transaction processing money transactions, updating customer accounts, internal personnel records, and managing internal accounts), has been developed and refined, for being technological means Divisions transferred for are a as the appropriate low cost provider of financial services. Transactions by all processing to a mainframe at the MSD Sighthill location. At the 143 same time distributed branch accounting aims to enable and for the staff to be able to call up, at a financial details, processing is terminal, a a customer to any BoS branch complete record of that customer's immediately. Browning and others believe that centralised transaction more appropriate than distributed transaction processing for producer. Indeed in anticipation of the Bank's growth and more visit transactions, the room that houses the mainframe increasingly bigger computers. In fact as process built to accommodate dramatically; the room is has power far larger than now However, according to Browning, no one is wedded to processing centralised transaction was low cost increasing need to Duffy noted, computer processing increased but the size of hardware has reduced it needs to be for the mainframe. ever a as traditionally developed. Many recognise that the of microchips has reduced the need for large mainframes, and local processing power transaction processing would be faster and less vulnerable to disruption than remote processing. Business Divisions' views of their scope developments encouraging are now a for competitive advantage and technological shift in philosophy toward distributed processing. For example, in the Branch network according to Duffy "the Wide Area Network (WAN) rather than on a Bank's business Divisions feels that since resources mainframe". In addition, at least they are one on a of the accountable for their Division's performance then they should have control of their own IT IT would be located resources. Some believe that local capabilities could increase Divisional flexibility in responding to competitive imperatives and own opportunities. CSD for example thinks that local processing could speed operations. At least one Division argues that some of its needs can up some of its be better met by external MSD competitors, and feels uncomfortable with supporting MSD overhead costs without form of some competitive bench mark that indicates whether MSD is giving them value for money. Within MSD there is distributed a debate about the implications of a strategic shift from centralised to processing. For example Miller, those trained and a Senior Manager in MSD notes that many of experienced in centralised processing technology will feel threatened by the 144 emergence notes too of distributed processing, perhaps regarding it that the entire "administrative support as a "competing technology". She philosophy" revolves around "centralised thinking", and that there will have to be adjustments here too. Attempts during the last five years to develop an "open systems network computing paradigm have fallen at various hurdles" according to Duffy. For example, occasions network face of more projects have been raised but then put aside no one that there has not been make low priority in the is clear about what the "new paradigm should look like", and second a champion to drive the issue forward. It is not clear what direction moving in, and will no doubt evolve Clearly IT strategy and its embodiment open to number of pressing and clearly defined project commitments. He thinks this is due to two things: first that the Bank is or on a as over the coming years. MSD both reflects and shapes strategic choices the Divisions. Browning feels that the Bank's strategic options by hardware possibilities than by the need to prioritise projects, based are on less constrained their "inherent profitability, legal requirements, and the Bank's long term strategy". Richardson Deputy General Manager of Management Services is perhaps not surprisingly, adamant that MSD supports rather than leads the Bank's businesses. In his view the Bank's strategy is more about "setting directions", and strategy is more important for us in IT because we're the people who see the need for longer term infrastructural investment to support..., but its to support a flexible strategy, it's to support almost the anti-strategy ..., its putting in place the flexibility to support the entrepreneurialism that will happen out there and won't comply with some great five year plan [that] just doesn't exist. In saying that part of MSD's job is to interpret the future needs of the business Divisions, Richardson is also, perhaps unwittingly, acknowledging that MSD's interpretation of the technological possibilities will contribute to shaping Divisional strategy. 145 5.4 STRATEGIC AIMS Corporate aims 5.4.1 The Bank's corporate aim is provide a range of distinctive financial services throughout the United Kingdom and internationally; to maintain it reputation for stability and integrity and its long record of growth in profits; to be professional, friendly, prompt and imaginative in its dealings with customers; to train, develop, inform, respect and encourage staff so that they can perform an effective and fulfilling role. Through its branch network, the Clearing Bank aims to make a particular contribution to the cultural and economic prosperity of Scotland. (Browning, 1993 paper: 3). to As noted earlier, the 1994 Report and Accounts also state that the Bank aims "to maintain its reputation for stability and integrity" (Corporate Statement, p.2). This and a for stability prudence is evidenced by the growth aims for the Bank's expansion into England. Browning in of concern a paper prepared for City financiers described the Bank's aims further modest number of corporate as "the opening offices [in England] at the rate of some two per annum", while acknowledging that the Bank has only about 5.5% of the UK retail banking market.5 In outlining the Bank's aims and strategy, Browning presents strategy as a guiding principle. The Bank's strategy consists of "expanding in England regional corporate offices; the innovative services from paper: a centralised ... through ... of technology; the provision of Banking operation in Edinburgh; and joint ventures" (Browning 1993 3). He also talks about the Bank aiming to be "an efficient low cost provider of financial services" (p. 3), (1985) view. In writing producer or one on of only four 'generic strategies' a open to the firm in Porter's competitive strategy, Porter prescribes four options: low cost differentiator, and broad strategies is 5 use multi-faceted recipe for mediocrity or narrow or below market focus. In Porter's view mixing generic average performance.6 Browning also talks By 1996 the Bank's share of the UK retail banking market had increased to 7.5%. 6Porter's (1985) become costs view that firms trying to mix generic strategies achieve mediocrity, through being 'stuck in the middle', has increasingly controversial because of apparently contrary examples like Sainsbury supermarket where 'good food less'. 146 about the Bank banking", remaining focused some of which these different terms Division's seems the mean on "retail banking", "community banking", "relationship like attempts at differentiation, although Browning feels that same competitive advantage as thing. Brobbel, General Manager of CSD, resting on being the lowest cost card sees his processor and being able to differentiate itself from other card processing businesses. For the Bank strategy appears to have studies (see a differentiated meaning, an observation Mintzberg (1987) made in other 2.2.2). 'Opportunism' and 'stewardship' 5.4.2 Managers talk confidently about the Bank's aims. They do not need to refer to the written word, indeed some of them are not even sure where it is written down. Campbell, General Manager of International Division could not remember if there and had to check was one through the Bank's latest Annual Report and Accounts. Many managers see the Bank as being 'opportunistic' and 'flexible' in its aims. Richardson, Deputy Divisional General Manager of MSD feels that strategy is selection of things that opportunities as they perhaps expressed business plan as we come will prioritise and re-prioritise in of having "a markets and response to along". He talks about the Bank having "focus and direction", "corporate lending", or strategy. more a case or "retail" rather than a formally articulated By contrast, Duffy, Project Manager in MSD proclaimed strategy of "flexibility" as sees the Bank's "meaningless and empty". He thinks that the real strategy is about being a low cost producer, and differentiating on quality of service. Indeed he thinks that this is a strategy that most financial institutions follow, imposed by the economic recession of the last few years. impossible to maintain, telephone banking as an as Furthermore differentiating competitors will sooner or example. 147 later catch up on and product is almost or pass you. He cites In addition to 'opportunism', employees, particularly 'stewardship', of being entrusted with some very shape and without blemish to their better the centre of managers, see their job as one valuable assets, which must be passed our that at the end of their stewardship the organisation should their successors, in even better health (Browning 1993 Paper). some in culture is the ensure In on successors: recognition that the current generation of management is being entrusted with the financial health of the Bank for the period of time they are in office and that they should use every endeavour to at of be passed on to respects the notion of 'stewardship' seems similar to the way public sector managers and administrators view their role. Bank staff share accountability for carefully. There is moneys a sense of responsibility and which have been entrusted to them, and which they must a concern use for long term growth in capital strength, fee income, and interest margins, underpinned by prudence and stability. It is within this context of steady and progressive growth that short term performance, namely incremental profitability improvements While are sought. stewardship provides everyone with a sense of orientation, of their strategic aims contain dilemmas, for example that many compromise long-term aims, and vice dilemmas as an articulates exercise in some versa. They a managers focus on still recognise the short-term can the task of dealing with these see judgement. Bruce Pattullo, Governor and Chief Executive, potentially inhibitive dilemmas facing the Bank: the Management Board and senior officials right balance at all times. [To] resolve the problems of the day but at the same time not lose sight of longer-term objectives; contain the growth in expenses but continue to invest in projects with a good return; look after the interests of loyal staff without being inhibited about restructuring where this is necessary; be prudent in our decisions [and] not take fright when the outcome of past decisions is not always as anticipated; be sensitive to customers' constructive comment and criticism but not be distracted by misinformed rhetoric; [to] think for ourselves and not get caught up in the fashion of the day (Report and Accounts, 1993; 17). It is the task of the Main Board ... ... to strike the Pattullo's statement raises many questions: What is a good return, and how long is the Bank willing to wait for it? How does the Bank distinguish between constructive criticism and misinformed rhetoric? The Governor is able to articulate dilemmas, but how do strike the right balance? In section 5.3.1 above there is 148 a practitioners glimpse of how, through the ascription of roles and professional training, practitioners of the Bank negotiate and shape future events and process. Meanwhile Pattullo's statement shows that managers do find the time to indulge in reflection. some In relationships. 'Strategy process' below (5.5) also shows aspects of this managing its dilemmas extreme to another, such managers as of the Bank do not appear to be lurching from one from long term to short term concerns. Indeed, as this account shows, the Bank has had 300 years of developing and refining the art of stewardship, its prudence with the Bank's affairs, term a a sense of duty to maintain public trust, and reasonably stable environment. How is this stewardship maintained, and accommodate innovation? The next section reviews processes that the Bank's Bank's way 5.5 over managers a range the long can it of processes that shape strategy, either deploy consciously or believe to be inherent to the of working. STRATEGY PROCESS Formal forums 5.5.1 Strategic choices about the Clearing Bank's future are discussed within committee forums. Most senior is the main Board, which is chaired Pattullo. Almost all main Board members are a limited number of by the Governor, non-executive directors, the only executives being the Governor and Group Chief Executive. According to Browning the Main Board meets once a business policy matters recommended to it by the Executive: developments, large lending proposals and other relevant business". Also reporting to the Main and month to "consider Board are various Local Boards (Aberdeen, East of Scotland, West of Scotland, London), and committees with specific functions (International, Remuneration, Audit). As noted earlier, one level down from the main Board is the Management Board with responsibility for "the day-to-day affairs of the [Clearing ] Bank and the on-going development of its business" (Browning). Like the main Board, there with are various committees specific responsibilities reporting to the Management Board, including Capital 149 Expenditure and Automation Strategy. The Management Board is chaired by Masterton, the Bank's Treasurer and Chief General These formal arrangements suggest causing slow up progress and a brake Manager. decision making to be on very procedural and cumbersome, creativity. It suggests top-down decisions and bottom information flows. According to Browning this rigidity is countered at least senior people by very a meetings. This facilitates communication and the free flow of developments, thoughts and actions between these two bodies. In this There is also an the few consciously determined initiatives. First, all Management Board members attend Main Board affecting the long term among can way proposals or ideas be juxtaposed with day to day issues and ideas. annual three day conference, attended by the Group's executive tier. This is typically the Governor, Deputy Governors, General Managers of the Bank, and senior executives of the principal subsidiaries. The event is for airing ideas, updating each other on plans and current developments, and for discussing "the strategy and policy issues of the day, and future directions" (Browning). Issues that might affect the Bank's future include: trends in financial services and that seem to be technological developments, and broader environmental changes growing in significance, like the possible impacts of a European Each attendee has two tasks: first, some weeks in advance to prepare a subject, and second, to chair a debate on a Burt is adamant that this forum is not for currency. presentation on a colleague's presentation. According to Browning, making decisions; care is taken not to reach agreement on what may be seen as hasty convergence on some issue. 5.5.2 Bottom-up fashionable in the late a 1970s, but this scrapped in the early 1980s. Indeed according to Brobbel of CSD, the Bank has was central strategic planning function, when that The Bank did have was always had "an aversion" to writing (long term) strategic plans. This uncharacteristic of a seems large organisation where caution and deliberation in decision making is stressed; where stewardship is the guiding principle. However, it may reflect and support the 150 'opportunistic' culture that staff believe exits within the Bank. Many think that strategy Divisions are managers appear to in the Bank emerges 'bottom-up' fashion. expected to make their own strategic choices, but as Campbell, General Manager of International, and Brobbel of CSD notes, proposals need to be approved by the Management Board and Main Board. The Management Board's approach to dealing with Divisional proposals is much more murky than the application of codified project selection criteria and financial hurdles. A similar suggestions from all levels are relationship exists within Divisions, where welcome, and channelled toward Divisional senior management for consideration. At Card Services Division the Divisional General Manager and the two Assistant General Managers share the top floor. On the next floor down These managers are space in an area are the six Deputy Managers' offices. clearly separated from the rest of the staff. The allocation of and location of personnel within the building suggests that senior managers are set apart from their subordinates. Senior managers have much more opportunity for meetings among themselves than for meeting their respective staff. Contact with their respective departments requires greater effort to leave their office of their staff, and the amount of contact areas. the informal depends on the time area to go to managers the work area spend in those work According to Colin McLean, Deputy Manager of Administration, strategy is largely province of the Divisional General Manager and his two Assistant General Managers. Deputy Managers and their subordinates contribute to strategy making through their respective hierarchies to the appropriate Assistant General Manager. The example of CSD suggests that the scope for individual contribution to the Bank's strategic development becomes increasingly localised lower down the hierarchy. Such contributions may public reports and or reach senior management through one of the suggestion boxes, internal other local incentive schemes, but the hierarchy acts perhaps 'bottom-up' means two as an information filter, different things. One meaning describes the input to strategy making from Supervisory and Clerical staff, and seems to be focused on localised productivity improvement schemes. Suggestions travelling from 151 anyone within a Division, go through their chain of command to the leadership of their Division. These staff are mixture of junior career people, and part-time staff presumed not to be seeking a a career, for example CSD's "married ladies" (Fincham et. al., 1994: 87). The work force tend to have clearly defined tasks that also define their Duffy of MSD admits, even scope for creative and useful ideas. Indeed project management in MSD tightly defines engineers' as scope for innovative excursions. Another meaning of bottom-up relates to major capital investment proposals (automation, acquisitions, joint ventures, etc.) that are hierarchy where the 'worker bees' have middle management as the very given top-down strategy, levels of the management little influence if any at all. The influence of as as well as not being practised at discussing what is currently hot strategic topics. principle senior management, either at Board level formal strategy upper and junior staff is perhaps further bounded by what they take for granted regarded by senior management In discussed in the development, although as or Divisional level retain full control of has been noted by other researchers, top management often make decisions using information filtered or selected by those with particular expertise ways or positions in the hierarchy. For example MSD define the discussions on can and do in varying technological issues that business Divisions pursuit of efficiency gains the Bank's leadership does not rely solely on engage bright ideas and experience of staff doing the work. As noted earlier (5.3.2) within CSD there main function is to study and the basis for many changes in practice. 5.5.3 measure work processes, in. In the are staff whose and provide information that forms Musical chairs In 1994 Pattullo, the Bank's Chief Executive reshuffled most of the Divisional General Managers. For example, Campbell moved from Centrebank to International, and Mitchell went from scope Treasury to Centrebank. Senior managers believe that such for personal development and promotion, and helps keep them 152 moves generate on real their toes. Mitchell believes that "reshuffles help build relationships, trust, functions, and the movement of new ideas". He General quite sees a broader of how the Bank awareness the reshuffle as a of preventing the way Managers from becoming stale. He noted that most people in senior positions young, typically under 50. Gone the days when seniority meant were plus. He certainly did not look forward to spending another 10 though he enjoyed the high The reshuffle does seem pressure - 20 you years at had to be 50 Treasury, even life that went with it. set to shake up the way the Bank's Divisions work. For example Campbell has been given the objective of broadening International's business spread, from sees the need for a more structured approach to strategy making than currently exists in that Division. Both Mitchell and Campbell experience and familiarity with running different business for the last five peculiarities of their he new as example General a are aware responsibilities; where there assumptions about how their Mitchell for life sees a new are very business should be my decisions taken at of having to reconcile their different working practices compare Monday morning's 10 am run by events this Treasury seems to year, an ocean market conditions and trends. While a job in Treasury was to for ways to shake up be able to respond movements than his concern a or month were very unlikely Mitchell's experience of for responding quickly to recognising that Centrebank is a different business to little too slow and unresponsive. He is looking working practices, and is For the foreseeable future he may even next year. heightened Treasury Mitchell feels that Centrebank is tanker. In Treasury, meeting could be overtaken by midday because possibly not give him new Treasury with Centrebank quickly to market changes. In Centrebank decisions taken this week how to with the run. suggested analogies of a helicopter and of movements in the financial markets. His overtaken years, major difference between his old post in Treasury and the Manager of Centrebank. When asked to agreed with to be away being UK dominated. He plans to improve the International Division's working practices; he and were more eager to see new be inclined to attach predecessor. 153 more product ideas emerge. significance to short-term Major reshuffles like this describe General run a Managers approach their an new number of the General innovation, an personal way to are also likely to contradict or over time. Any conflict with ways and new for innovation; it rings of Schon's (1963) analysis of the nature of issue that is further discussed in sections 7.2.5 and 9..2.5. career engages ways with the embedding of routines Manager's precepts situations creates space actively come practice in their new domain. This bringing together of old established new tasks with different assumptions about the best business, with different dos and don'ts, those invisible barriers to change, including the tendency not to test boundaries that The orderly five yearly rearrangement of the top table. progression of some of these managers reinforces the that the Bank sense in providing room for personal development and setting the conditions for of thinking to emerge. Richardson of MSD has been with the Bank for over 35 In that time he has worked in Branch banking, data processing, internal audit, and years. systems analysis. Browning started his working life with the Bank, left and worked in teaching for some years before rejoining the Bank, where he has held various senior management positions. Movement is not the preserve of senior managers. Supervisors and Clerks move around too. Branch staff from UK Branch Support Team within CSD, and to PhoneLine, the new banking have moved to a Branch telephone based banking service temporarily resident in MSD. However, the Bank is depend on more how effectively than a training ground for professional development. Careers managers assimilate new capabilities and create new opportunities for the Bank. [The promotion] of personnel, at all levels, across divisional boundaries [helps] identify and test "high flyers" as to their individual capacity to grasp the principal features of their new roles in unfamiliar areas and consequently to reaffirm their candidacy for promotion to the most senior echelons of the Bank (Browning, 1993 paper for City financiers, pp. 6). to "High flyers" are those pursuing a career with the Bank, and show their commitment to the banking profession through professional training. All are Members or managers in the Bank's executive tier Fellows of the Chartered Institute of Bankers in Scotland. The 154 "high flyers" are those who demonstrate ways a "tacit ability"7 to synthesise new and assimilated expertise in that reinforce the Bank's professed "instinct for innovation and professionalism" (Browning, 1993 paper: 7). The expectation of the Bank's leadership is that individual competences, and accumulated competences of managers in new posts, whether through reshuffles or individual movement, will contribute to the Bank's and competitive advantage and performance by overseeing novel profitable ideas. These changes stewardship, but they the top seem may invite ideas that push at the boundaries of unlikely to overthrow that guiding principle. The Bank's history, down approach to strategy, and Campbell's account of strategy development described later, together reinforce the sense that stewardship remains a strategic point of reference for all innovative behaviour. Politics and 5.5.4 shaping boundaries have relatively autonomous non-egotistical culture of the organisation and within broad policy guidelines relative to business areas, capital structure, dividend policy etc. (Browning, 1993 paper: 6). The Boards and Executives of each company authorities although each operates within the In saying that the Bank has are not more engaged in political than a "non-egotistical culture" Browning games seems to be saying that staff in pursuit of what he calls "self-grandiosity"; that there enough interesting opportunities for personal development without coming into conflict with others. In Browning's view staff do not have the interest "serious and destructive" or time to spend on in-fighting. Nevertheless, the conditions for political behaviour do exist, and its existence is acknowledged by others. I found two situations where political behaviour is evident. The first, at the individual level, is connected with the reshuffle. It seems reasonable to imagine that comparisons between individual characters would be made in private both 7 Faulkner and Senker, in their research on links between public sector research and industrial innovation found that "research directors [see] formal qualifications as evidence of researchers' tacit ability to acquire and use knowledge in a meaningful are way, and regard this attitude of mind as a most important contribution to innovative RD&D" (1995: 202). 155 before and after a reshuffle. In Division the Bank's top most individual's personality and past performance at managing an interpersonal relations in itself involves making subjective judgements about strengths and weaknesses. Once installed, compare the new even ventured but retracted it a and other colleagues a very quickly as one. an are very individual's likely to This is evident just from of whom jokingly asked what others had said about them. mild criticism of his predecessor's management of his Division, "unfair". Power and influence authority structure. Any deal making to peers General Manager with the outgoing interviews with managers, some One which manage three (Governor, Group Chief Executive, and Treasurer) have the Evaluating influence. selecting which General Manager should or appears to broadly reflect the pursuit of personal interests seem to be subordinate respect for the established pecking order. The second form of political behaviour revolves around the drawing of Divisional Spowart, Divisional General Manager, Branch Banking, East Scotland, does boundaries. acknowledge that politics is inherent and plays an important role in a large and complex organisation like the Bank. He suggests that the juxtaposition of Divisions with potentially overlapping curtail In scope for development leads to "jockeying for position" and that politics "can development" of the Bank. particular Spowart noted that Centrebank is tasked with concentrating remote on developing banking in England, but that it could spread its operation to Scotland, where there is need for telebanking. This however would lead to cannibalisation of the Scottish market Centrebank and the Scottish Branches would compete Centrebank is under orders to keep its focus and leave the domestic Branch PhoneLine was network. It is extension to the as an reason England where it is doing well in any case, Banking Division to develop Scotland. With this in mind being introduced configured on with each other. For this as as a 24 hour available extension to the Scottish Branch extended service to Branch customers, rather than an as existing remote banking infrastructure of Centrebank. The PhoneLine initiative has been forced by both competitive action and internal political developments. Externally, remote banking is well established with First Direct, Centrebank and other 156 a competitors, and the sector continues to grow. Indeed the Bank's domestic Branch Banking losing customers to this segment of the market. Internally, there is risks domestic Branch Banking as a threat to Scottish existing customers of Branch Banking could transfer their banking arrangements to Centrebank. PhoneLine would be Both interpreted and adapted differently by Centrebank and Branch Banking. Spowart and his boss Masterton want PhoneLine to be Division rather than and foremost a see a part of the Branch Banking of Centrebank. Spowart's view is that the Bank is first it become part Banking business, and Scotland is still its main market. Scottish Branch Developing the Scottish market should grow out of the Bank's existing Scottish infrastructure, that is its domestic Branch Banking network. According to Spowart, Masterton who is "the third the in the Bank" being the Deputy Treasurer, is Management Board's decision making, and Masterton installed of man a as an extension to Scottish Branch Banking. The was determined to scope see running on openness adapting the technology to reaffirm and redefine the boundary between Scottish domestic as soon as possible. The suitability of CSD as a being assessed by Brobbel, General Manager of CSD Spowart and Masterton want it located in CSD, not on location for PhoneLine up was and presently behalf of the Management Board. as part of CSD but to "piggy-back" on expertise in telephone based banking services. The Bank does not appear to politely giving be way to everyone a nest of cut-throat individualists, but neither is else. There is political behaviour, and one horizon Spowart also offered a personal view that CSD, Centrebank, and everyone of its manifestations is the reaffirmation of territorial claims between Divisions. With were PhoneLine Banking and Centrebank. Spowart and Masterton want to have PhoneLine Branch CSD's key player in for interpreting the technology, discussed in 2.6.2, suggests that Masterton is intent PhoneLine a now an eye on PhoneLine sufficiently similar to consider reducing the need for three General Managers. They could be brought together, perhaps as one remote banking Division. 157 the Probing 'policy guidelines' and 'opportunism' 5.5.5 Campbell's remit to develop the International Division's business presents him with the problem of deciding what constitutes guidelines". He knows that conflict as some a business that fits within the Bank's broad "policy of his alternatives could generate inter-Divisional tension with PhoneLine above. More fundamentally, developing his ideas involve the probing of both his and his colleagues' understanding of the Bank's policy guidelines business scope colleagues. In thinking about "guidelines" there within 'financial services' guideline states that financial stream. on development. Campbell's experience in the Bank tells him that interpreting his for growing the International Division is Bank's or security, a nor are ways to an experience that he must share with his develop his business he knows that in addition to the other unstated limits. For example, while they may so small as to so big as to between £100m and £500m, but adds that other managers away from his weaken the Bank's make little difference to the Bank's income Campbell's interpretation of this guideline is that there is though probably not far options fall still be unacceptable to the Management Board. One potential acquisition should not be should it be some an acquisition window of would apply different numbers, own. Campbell talks of "flushing out" these unstated limits, of pushing at the invisible boundary. He will float then and an idea with individual interprets the so on. business responses: In this way development colleagues and with the Management Board team. He unfavourable, favourable, not he develops a maybe next tacit understanding of where the acceptable year, avenues of are. Managers of other Divisions, in observing the for the sure, not now, progress of CSD and Centrebank, see lessons development of their own businesses. The Branch Banking Division for example is reorganising various functions of its Branches and is following CSD's automation of paper handling. Brobbel believes that the Bank's executive long term survival in the banking) continues to sense grow, sees CSD as fundamental to the Bank's that 'distance banking' is here to stay. First Direct (phone and the Royal Bank's Direct Line (insurance and mortgage 158 sales) is growing fast. In shaping strategy, individual Divisions seem to be learning from each other and competitors, by reinterpreting each other's technologies and work organisation practices in light of their ideas in old situations, Each year and vice versa own situation. Nevertheless, this juxtaposition of new remain guided by the principle of stewardship. the Report and Accounts present a picture of well thought out and implemented strategy, yet interviewees talk about 'opportunism'. Their accounts suggest that both the process and content of strategy making is shaped through discourse, practice, and is always open to revision within the bounds of what Campbell calls "ground rules [and] unstated prejudices". One guidelines, or reason for this seems to big, too small, not. In or in the right as how deciding whether or wrong sector, or many procedures and a scope particular acquisition target is presenting, arguing, and testing particular views of the future the Bank's shaping its process for multiple whether some technology is strategic ownership of parts of the strategy, and indeed derive take In no matter how well defined the role of individuals, there is still huge interpretations of possible futures, such too be that a sense or managers of identity from their part in and content. taking control of part of the Bank's strategy Campbell sees opportunism as something of a pretence, and an "inefficient way" to develop strategy. Campbell considers his options for generating earnings, and being new different to his new to predecessor's. In reflecting the job his idea of the on the vast range of options is probably of possibilities he concluded that in his "judgement opportunism is too inefficient" because there could ever assess, range are more options than he and anyway the Executive would veto many of those options. For example, mortgage swaps with US banks would deplete the UK risk and increase non UK income in one go, Branch and so "would be a bloody good solution" Campbell thinks. Alas, he predicts that the Banking Division would take This section has a dim view of reducing UK mortgage income. explored the Bank's strategy process, in particular the importance of formal forums, periodic reshuffles, and opportunism. For this bank being innovative is not at odds with good stewardship. Indeed managers are confident that their periodic reshuffling, annual conferences, opportunism, and bottom-up processes serve to blend conservative values with 159 creativity. The next section explores those managers' views about two innovation (HOBS and TAPS), and some successes of the issues surrounding the possibility of exploiting the concept of Affinity cards. 5.6 INNOVATION The Bank's heritage and aims describe being the natural order, and a frame of traditional values, for taking a concern care long term aims. It is within this context that many innovative, as no even a sense of hierarchy of the details of today in the interests of managers talk about the Bank as being the most innovative bank in the UK, although a few managers see the Bank longer being at the forefront of banking innovation. Mitchell, the of Centrebank suggests that the Home Banking innovation (HOBS) accident, and that people in the Bank some are "still dining out on new was a General Manager one-off, an it". Interestingly, Browning disagrees strongly with this assessment of HOBS. In addition to HOBS and TAPS discussed below the Bank cites many recent innovations in its more history:8 The first UK bank to introduce centralised electronic accounting in 1956, and partnerships with the then Nottingham Building Society produced the banking innovation 'Homelink' in 1983. In the interest same cheque account from year the Money Market Cheque Account (the first high a joint-stock clearing bank) was launched, and in 1984 the BankS ave Account. HOBS 5.6.1 Many managers have said that the Bank's reputation for being innovative stems from HOBS (Home and Office Banking System). Home Banking was launched in 1984 and in the following was an year the Office element unwritten agreement the border. The was added to produce HOBS. Until the late 1970s there between the English and Scottish banks, that neither would cross booming North Sea oil business attracted English banks who started moving 8 Bank of Scotland Fact Sheet on Innovation, December 1989. 160 north, thereby breaking the 'no competition' agreement. The Bank's reaction was to look for ways of getting into the English market quickly. Senior resources, found without the a managers looked around at their budding technology which could be used to tackle the English market huge costs of setting up branches, and HOBS was thrust forward as an innovation ahead of its time. Given the a prevailing industry view that banks need to particular market, at some suggested that HOBS could be getting into England. Indeed HOBS addressed two did not want to detach itself from thought that the Bank some action branches if they seen as a concerns as serious about low cost, low risk attempt of the Bank. First, the Bank was good stewardship. Against this, the Bank's leadership in danger of losing control of its competitive position in Scotland, not taken. HOBS was an was attempt to accommodate a threatening situation. Industry commentators hailed the Bank's innovativeness, and staff and themselves are compromise its public trust, reputation for reliability and predictability, and did not want to if open being part of an innovative Bank. However, this feeling off. Richardson of Management Services, is the first to introduce remote banking a seems to managers seems to thought of be wearing little disappointed that the Bank's claim to be have gone from the public's memory, who erroneously credit First Direct with that achievement. Today very few people realise that Centrebank was seven years ahead of First Direct. Perhaps part of the failure to recognise HOBS' place in history is that, like innovations, it more than a many radical with hindsight, initially technically crude. Accessing one's account was was, telephone call. One also had to connect the telephone line and a keyboard to a television, thus turning the whole arrangement into a crude remote terminal. Remote banking had arrived but new entrants commitment to alternative telephone banking, as immediately sought to differentiate themselves through 'design configurations' (Metcalfe and Gibbons, 1989): remote offered by First Direct; and remote terminal based banking, by the Bank of Scotland. The technological agenda is not given but interpretation and action (see 2.6.2). There have been HOBS. For example, the Bank now many post offers what looks like 161 a open to as offered competitive innovation improvements to normal video phone. Alternatively, if one has a computer and modem, the Bank can provide, or advise on, a suitable software programme for interrogating one's designated bank accounts. Browning that HOBS became profitable by its third says banks have been slow to copy it because it is a year of operation, and suspects that other radical departure from conventional banking, with all the attendant risks of failure. TAPS 5.6.2 The Bank's managers recognise that financial success (growth in market share and asset value, and profitability) goes to the organisation that creates or spots an opportunity; and responds to it creatively, through the management of innovations in technology and work organisation. Richardson of Management Services [involving] the ... a sees innovation as "a business led issue, bit of vision and lateral thinking in the business". He quotes as an example development of the Bank's Transcontinental Automated Payment Service (TAPS) business, which involves the international transfer of low value payments. This business grew out of someone in the Bank spotting Security (DSS) thousands of was looking for ways to opportunity. The UK Department of Social an reduce the high cost of administering hundreds of pension payments to UK citizens all over the world, where each payment very small. Meanwhile way that the Bank could exploit this, perhaps by handling the distribution and administration someone of these low payments, on The result was in the International Division asked MSD if there was behalf of the DSS. that in 1987 the Bank developed the DSS to deliver these low value payments processing over 200,000 transactions was a winner. The Bank found costs, pensioners got their learnt from its this concept. It per money offers the view MSD's role in this and won the contract from world-wide. In 1989 International Division of income, the DSS faster, and all at same example a payment system, was month, and the number continues to rise. Everyone a new source experience of developing now was some a a substantially reduced its lower transaction cost. The Bank has niche opportunity and has found a way to broaden service to companies with similar needs. In Richardson's was as a technological enabler, 162 a facilitator. In Richardson's terms innovation is about having "reasonably good ideas which [the Bank] has been able to take to the market". example presents the Bank This as being entrepreneurial, as being the first to opportunity and develop the market. With HOBS the Bank perceived rather than creating an opportunity, and reacted to it in a new the competitive anomaly innovative and serendipitous fashion, thus market. The 'technological' in the HOBS and TAPS 'configurations' have grown out the an a see seem to of assimilated technological capabilities following the birth of MSD, itself product of the Bank reversing an earlier decision not to develop ATM technology (Scarborough and Corbett, 1992: 148). The examples of HOBS and TAPS suggest that technological innovation is much the TAPS computer programme, or some a more than telecommunication network. TAPS for example, is competitive innovation and its usefulness does not just rest with the software, but depends on a tangle of hardware and software (computer and telecommunication systems), payment recipients, operating institutional partners (the Bank and the DSS), operational rules (financial transaction and data processing), and held together by the expertise needed to make the whole sociotechnical system some sort of work. This expertise is not centrally held and managed grand plan but is distributed among as the co-operating institutions. The interrelationship and inseparability between the social and the technical in these examples seem comparable to Hughes' (1983) analysis of the influences shaping the development of national electric power interactions 5.6.3 networks as 'sociotechnical systems' joined as a 'seamless web' of (see 2.6.2). Affinity Cards The constant drive to improve profitability and remain competitive translates into a never ending hunt for efficiency gains, often involving technologies and work organisation practices that take competition to ever increasing levels of sophistication. 163 Chris Brobbel, General an Manager of CSD, sees 'the best way to compete in this business' as doing something differently and better than the competition. In Brobbel's view issue of CSD offers a quality service, but doing something different is little to distinguish between the because there is very various financial institutions. They may vary many important issue now an card services available from the by £2 in terms of the annual fee or a couple of percentage points on the interest rate but that's about it. Brobbel sees this as a position that is unacceptable for CSD to be in. The trend towards Affinity cards issue 'affinity cards' is come into being where credit card, for a (HFC), an the a both as a significant threat and financial house and a an opportunity. commercial organisation jointly example, General Motors (GM) and Household Financial Corporation American bank. The benefit to GM is that it lowers the barrier to the purchase of a GM vehicle because up a seen holding a GM credit card removes the time consuming need for setting financing agreement, and checking of credit ratings. GM is further able to benefit from professional and automated credit payment processing facilities of the financial partner. The financial partner also expects to share the profit generated by the purchase of say a GM vehicle, perhaps through a loan to buy the vehicle, and a charge to GM for processing each card transaction. The financial partner which further benefits from increased transaction throughput helps to lower unit costs, and increased market share of card transactions. CSD and GM had been in negotiation to issue an affinity card, but GM chose to tie Although CSD successfully demonstrated their credentials to GM, HFC because GM (USA) are familiar with and have some form of HFC (USA), even The CSD story though HFC is highlights that in for customers. Financial setting for an up of CSD a HFC UK has probably chosen satisfactory relationship with competitive context organisations may also depend on are not having partners, as only competing is suggested by the the basis of getting third party processing contracts, and equipment is but an was with HFC. smaller player in the UK.9 affinity partner. The story also reinforces that automation 9 on success a up one actor in a continual ever 164 the search increasingly sophisticated process arrangement with Living Design and possibly others. now of competitive innovation, involving a shifting pattern of relations between hardware, the Bank staff working with the equipment and systems (routinely raising initiatives to reduce costs/improve productivity), the Bank's managers, customers, partners, of this network both in terms of Even when the least one their own cards competitor is processing account customer more and competitors. Competitors a customer was the pressures enquiries, and they found a competitor to the Bank that would question their strategy, rather such experiences is a ways to reduce processing time continues unremittingly: handling time; reducing the time taken to paper money is in transit. mixture of pursuing productivity levels and growth of market share. Brobbel believes that there is will of improving productivity and telephone based customer enquiries; reducing the time that The CSD strategy CSD new ways competitive. For them these experiences reaffirm the criticality of market share reducing cheque processing and other process process cheaply. productivity. The search for and remain. As mentioned earlier (5.3.2), at lost because the third part decided that they would handle help to make them redouble their efforts, and to find more integral part co-operative relations, and in terms of competitive pressures. These set backs do not make CSD managers being are an a trade off between the two, and this can be seen in most of the competitive innovations. For example increasing throughput and increased automation improve productivity, and enable CSD to offer competitive processing rates to potential users. Equally, competitive rates depend on keeping customers, and pursuit of market share by lowering price will compromise growth in profitability. This situation is not unusual, but the example of CSD does bring out the virtuous and vicious circle qualities of competition. CSD manages the trade-off by extensive use of computer modelling by the planning department where price and demand elasticities "Hopefully", says are assessed. Richardson of MSD, "we'll keep those [good ideas] coming, good business initiatives, and hopefully we'll find the technologies to help support them". 165 5.7 CONCLUSIONS Strategy in the Bank claims by some seems purposive yet incremental (see 2.3.2). This is not at odds with the interviewees that the Bank's strategy is based logical incrementalism involves a readiness to experiment and learn, other innovations show. Consistent with tend to look for consensus among 'opportunism', because on as logical incrementalism senior HOBS, TAPS, and managers in the Bank with their peers, though this does not normally extend to lower ranks. The Bank of Scotland's managers of efficiency gains reinforced concern for the Bank's over share of stewardship, the continual pursuit a strong sense three centuries of operation. They well-being before self-interest, and desire that actions should be above criticism from their for the Bank's managers, public. These and the practice of strategy is concerns can show a and creative use of technology have control in possible their up to a way of life no conflict between the and do complement each other, can managers share, is the Bank, its competitors, and other stakeholder assessing their options for development, and the same must an assumption that they do managing the Bank's relationship with its external environment. Perhaps critically for the Bank, the financial services environment of as long list of innovations to support this view. Underlying the feeling of stewardship that the add far positions of stewardship and innovative behaviour. For them conservative and prudent financial management, and as their embodiment of these influences. an Managers also believe in the Bank's innovative capability, seeing two seem to put time that external environment is seems groups, to room to take a sufficiently stable to allow measured approach in change their minds if necessary. At sufficiently unstable to remind the Bank that it continually hunt for efficiency improvements as well as look for novel and useful ways delivering financial services. This account suggests organisation's and way that the practice of strategy of life, or seems to social reality, incorporating be the embodiment of an a range of 'taken for granted' ideas assumptions. Chapters 7 to 10 explores the ideas and assumptions that shape the practice 166 of strategy and the scope for innovation, including why strategy logically incremental, managed chaos, or some other form. 167 may be characterised as 6 Open Business School 6.1 INTRODUCTION chapter describes strategy practice in the Open Business School, and its relationship This Open University. It draws with the the on interviews with twenty four staff, carried out during spring of 1994. The account is based within the sources The shows how strategy individuals as equals than among or a course 6.2 practice of testing key individuals and access hierarchy. The committees; a process and equal opportunities. It also highlights the strategic options groups numerous a among as possible, whether through scenario and sub-committees, before committing to a particular HISTORY AND SIZE Size and performance Open Business School (OBS) is referred to as the School of business of distance audio tapes, of the Open University's Faculties and is sometimes one Management, or the Business School.1 The OBS is in the learning. It develops and delivers studying at home. Teaching is done 'at ' through social relations of action. 6.2.1 The among as many myriad of working more individuals with ascribed roles within underpinned by its values of open common plays, plans, and public documents. practice is shaped practice of strategy is distributed that is the views of academics and administrators both Open Business School and from other units of the wider Open University. Other include internal memos, case on a courses in management to students distance' via printed course material, video and and assignments which students must write and be assessed Some time after this study the business school changed its name to 168 on, plus the Open University Business School. some television programmes to face group for a teaching which is organised couple of hours course, every on a are business are supported by face some regional basis. Regions appoint tutors who lead course; meeting with them at a a local study centre and generally being accessible to their students by telephone. Most courses an intensive weekend about 150 full time staff at the centre organised elected Dean, These media six weeks; marking their assignments at predetermined intervals require students to attend There are now rare. of about fifteen students through the during the also although these as week long Summer School. or (Walton Hall), under the leadership of an various grades of academics, administrative staff, managers, and development people essentially responsible for sales and marketing. Academics, who may be centrally or regionally based, contribute to both research and course production. including secretaries and Administrators organised around the school's main managers are activity of course production and delivery, including: draft preparation, editing, design, liaison with audio visual Some staff each are providers, summer school planning, and examinations. permanently based in the Open University's (OU) 13 UK Regions. Typically region has a Regional Director whose team is responsible for managing the interface between the OU's Faculties and the student body. Within this regional structure each Faculty, except OBS, is represented by a Staff Tutor who may also contribute to course development at the centre. The OBS is represented by a Management Education Co-ordinator (subsequently renamed Regional Manager), Development Advisors), and perhaps about 1000 or fee income for 1993 typically was stream comes directly from students various The second courses. which grants income promotions assistant. Across all regions there the student population. Tutors work under short term contracts, on sales people (called Management are part-time OBS staff, mostly tutors and student counsellors, providing local academic support to Turnover a one or two are not permanent one year at a about £17m and or comes time. comes from two from sources. One income from employing organisations sponsoring their staff from the Higher Education Funding Council (HEFC) the OBS about £800 for each student registered each comes members of staff; they sponsoring organisations. There 169 are year. About 70% of the fee about 10, 000 students enrolled, and the school estimates its market share of all UK MBA students to be 12%, and 40% of all UK based distance learning in management education. Its growth projections programmes suggest that within the next two years the OBS will account for about 20% of all new UK graduates, which would make the OBS the largest producer of MB As in Britain after MBA only about ten years of operation (Source: The Open Business School In Scotland, Tutor Newsletter, September, 1994). Such rapid growth and market domination has been accompanied by demand for management sector in education, as general has also been spurred education and the range well on as a general growth in increasing competition. The higher education by government initiatives to improve the quality of of professional development channels available to individuals. The degree of competition that OBS is experiencing other Faculties of the OU who now, has never been experienced by the together cater for about 70%-80% of the UK part-time undergraduate population. 6.2.2 The scramble of the The OBS grew out early days of an ad hoc Open University unit, the Centre for Continuing Education (CCE). Although the school formally became a faculty in 1988, it had already been operating for about four years, Lund, an ex courses, under the leadership of RAF management development expert. According to Masterton, School Secretary (like the experimenting and producing short a Company Secretary), the Open University Senate development of courses as long as gave political support to the Continuing Education team could find financial support from outside the University. The CCE were able to raise enough sponsorship money and the first course, When the school was The Effective Manager was produced in 1983. formally achieved status created, and Professor Thomson Salaman, a was as the Faculty of Management a new post of Dean recruited from Glasgow University. According to central academic who chaired the first training, Thomson's primary goal for OBS was course on personnel management and "to locate it institutionally". This involved 170 cementing links with the many bodies "out there" like Management Charter Initiative (MCI), NVQ, HEFC, and representatives of the professions like the British Institute of Management (BIM). At the same time Thomson worked within OBS to rapidly expand both and student numbers. The OBS seemed to be as they could push. Even pushing at a market that had to be produced to make more courses expanding was sure new courses that there options available for those already in the system. As Salaman commented, "there out there, building academic excellence and building market position. One had better chance of being recruited to OBS a more to expertise in teaching and management experience than publications record do research. Within this "customer is priorities were very king" culture, management research very were was a war were very poor at well placed to address those weaknesses. As institutions with which he do with on or the claim of the capacity to was a luxury. much in keeping with Thomson's view that management professionalism and competencies in Britain was fast had to get the stuff out, we weren't too worried about how efficient we were". we Staff recruitment had less to do with These as sought to cement links (he Charter Initiative and Chairman of The British a all levels. He felt that the OBS leading public figure in was some of the Chairman of the Management Academy of Management), he wasted no opportunity in spreading the word about the low level of management education and the OBS's to ability to make breaking point demanded, student numbers escalated, and from Portugal to Russia. expressed the view that, under Thomson, OBS staff experienced such change and activity, that systems and individuals whirlwind of more Along with this growth in the UK, the OBS moved into continental Europe, courses All interviewees impact there. Staff spoke of the OBS organisation being stretched as more courses were writers recruited. promoting its an were fast approaching a a crisis. Masterton, the School Secretary, recalls that "organisationally the place was in a mess. Records were hand there is not a being kept, not general consensus even people's holidays were being recorded". On the other that under Thomson the OBS went from being a minor player to being the biggest UK business school almost overnight. Others suggest that given 171 the Open University's profile, the overall rise in demand for management education and general economic growth, the OBS's destiny Thomson is credited with education, indeed a establishing the OBS few like Henderson, regard him and his predecessor Lund However, as was as a predictable. as a legitimate force in distance management central academic and Deputy Director of OBS, "one of the few strategic thinkers in the School". Thompson approached the end of his term in office it seemed that staff were saying 'enough is enough' and there University rules, after five years was now a desire for change. In accordance with Open the post of Dean was put up senior academic within OBS, won this election on the Asch, was one for internal election. Asch, a promise to restore order to the OBS. of two challengers for the post, and had been with the OBS for about seven years during which he successfully chaired the introduction of a MBA portfolio. Salaman recalls that the election carried overtones of a fight between "the forces of add to the good and evil, the dark days of old and the promise of light in the future". Thomson's term 6.3 new course to came to an end and Asch became Dean around April 1993. WORK ORGANISATION 6.3.1 Bringing order Following his election to the position of Dean, Asch initiated changes to the OBS management structure as a first step to keeping his election promises: to make decision making more the more transparent emphasis career on and democratic; to curb the existing expansionist strategy; to put building up the OBS research rating; and to do something to accommodate aspirations of academics. During the first few months of Asch's term of office, the senior management structure reorganised into two parallel and interwoven decision making tracks, committees (see appendix 4) and the other committee structure consists of five formal which the Dean chairs: the Academic on a management one based was on hierarchy (see appendix 5). The reporting Boards, all reporting to a School Board Board, Business Development Board, Finance, Staffing 172 & Resources Board, Presentation Board, OBS Management Committee. The second decision making track, reporting directly to the Dean consisted of five main functions under management control; Course Presentation, External Affairs, Company Administration, Centres, and Research. According to Cameron, Director of Course Presentation, the biggest changes governance in "the structure" with the introduction of a Presentation Board with equal status to the Academic Board". The rationale for the elevation of Course Presentation of the need to decision were explicitly create some space was in recognition for the Regional staff "out there" to influence making at the centre. As Cameron observes: logically you probably don't need [both a Presentation Board and an Academic Board] because an Academic Board ought by rights to be considering both aspects. But because of the way this institution is structured, and the fact that the Regions are out of sight and therefore out of mind you get a wonderfully isolated view of the world from your ivory tower here. We felt that at least until we changed peoples' perceptions sufficiently, we needed to have a Board with that status; that would have to approve course proposals; that would actually be charged with looking at all these presentation aspects specifically so that they don't fall off the bottom of the agenda of the other Board (Cameron). Many of these changes at the Centre rippled throughout the OU and its Regions. For example, OBS took full responsibility for its central OU resource External Affairs of Business own marketing, rather than continue to use the Development and Marketing (BDMO). With the creation of (a sales and marketing function), Management Education Co-ordinators (MEC) moved from BDMO to OBS. Later another layer of management was introduced between MECs and the centre. 6.3.2 More research and Asch thinks the OBS has be corrected, and career a severe planning imbalance between that the reputation of the school rests on being excellent in both course production (teaching) and research. Consequently five new teaching and research which needs to academics with a new posts were created and filled by strong research background. At the same time, under the leadership of 173 the Director of Research, Professor Pugh,2 research seven groups were created: International Management Research, Strategic Management, Human Resource and Change Management, Distance sized Learning in Management Education, Finance and Accounting, Small and Medium- Enterprise, Voluntary Sector Management, Information Management, Management History. The Research ample scope Groups are expected to contribute to OBS teaching activities. Indeed Pugh sees for developing links between research and distance teaching: because of the nature of the Open University distance learning methods, research results can readily be incorporated in the written material which forms the basis of our teaching. This is an important output of our research work (BAM News, No. 1, 1994). Also initiated at about the time that Asch took office considered to be problem academics' contributions was were that in the hustle and bustle of course writing and research, not being formally acknowledged, and this could affect their development. Academics did not want to surrender their ability to interests, but at the and development structure appropriate to the peculiar nature of the OBS academic collegiate environment. The career was a career same time wanted to feel that there was a pursue mechanism for independent career review promotion. Thus five 'Centres' were created, each electing its own Centre head or manager, covering a number of broad churches: Comparative Management, Development and Financial Management of Organisations, Human Resources and Change Management, Information and Innovation, and Strategy and Policy. Individual academics and administrators were strongly encouraged by Asch to choose share ideas, publish papers, one of the Centres as a home where like minded people could hold seminars, and generally treat their Centre as a resource. regular periods the Centre head would sit down with each academic to discuss including planned or proposed research activity, and course career replace. 174 aims, writing commitments. 2 At the time of this research, Professor Derek Pugh was in the process of retiring. He has been with the school and there is some concern internally that Derek Pugh's reputation as a sort of Elder Statesman of organisational be difficult for the OBS to At since 1988 research will 6.4 STRATEGIC AIMS Open 6.4.1 access At the heart of the OU and the OBS is a belief that it has a a belief in 'open access' and equal opportunity for all; mandate to enrich the lives of ordinary people. Staff see the OU as being eminently qualified to bring higher education to the populace. The Open University Strategic Planning and Resources Committee (SPRC) Academic Board, Plans for Change, 1994-2003 with opens a statement of the Open University's "vision": The Open University's ideals and impact have captured the imagination of the 20th century world. Its ideas and innovations will now lead higher education into the 21st century. Academic vitality and quality teaching will harness evolving information technology to provide convenient and cost-effective courses that will empower an increasing diversity of people to lead fuller lives. The SPRC goes on to this philosophy are a describe the Open University's "philosophy and values". At the number themes: openness, supported open core of learning, research, quality in teaching and research, breadth of course choice, equal opportunities, and co-operation for mutual benefit. issues: "Openness" is described in some detail, and defined in relation to a variety of people, places, methods, ideas. Within this broad direction the Open Business School's mission include the provision of "high quality management education and development education to large numbers of managers" (School of Management mission statement 1994-98). Appendix 6 shows the OBS mission and access, priorities. OBS differentiates itself from its competitors through claims of open practical relevance, and the quality of its teaching material. OBS is also beginning to tell multinational companies that the OBS is accessible internationally, and at a uniformly high standard. 6.4.2 Promoting strategic thinking Peters, OU Pro Vice Chancellor for Strategic Planning sees his job as being to "promote strategic thinking and the articulation of our strategy". His aim is to get the University to be 175 more aware of its own implicit strategy, and to articulate that. To this end he produced the University's first Strategic Plan, consisting of a mission and eight "strategic aims" in which he "tried to get everyone we in the University to come to some agreement held in common, what our values were, what our something that everybody signed He is the first to admit that up philosophy about what it was, to try was that and get to" (see appendix 7). being able to articulate a Strategic Plan does not mean you have a strategy, but feels that the process of putting one together makes those involved more aware and more "working to clear about a common script". He also noted that the process brings together people who probably do not meet normally, and which highlighted how little individuals know about other parts of the University. According to Peters the production of this plan has encouraged other parts of the University to put together local Strategic Plans that fit within the University's overarching Strategic Plan. He also facilitated the "Senior Team" and production of a Development Plan in which the University's budget holders contributed their views about the key issues, themes for change within the University, and priorities for the next five 6.4.3 Defining the OBS strategy Asch describes the OBS strategy as in both years. "positioning", achieving a position that reflects "quality teaching and research". Others describe the OBS strategy as "consolidation": stopping Thomson's expansionist scramble and "taking time out" to put in place organisation systems and decision making processes; of replacing chaotic growth with ordered development. Yet others see the OBS strategy as expanding across Europe. They see a strategy of ordered expansion across the whole of Europe, involving a carefully considered plan for each country. Whether consolidation did start to rethink its did not appear to its or an ordered expansion into Europe, the OBS approach to continental Europe, especially where low student numbers justify the high cost of support, such position vis-a-vis some as Greece and Italy. In re-evaluating of these markets the OBS leadership began to appreciate that 176 many of the assumptions that underpin distance learning in the UK are not necessarily appropriate in other European countries. The OBS would have to tailor its approach for each national market. Some staff within and outwith the OBS Thomson's rein represented one see the strategy debate swinging between two poles. pole, defined in terms of 'the customer is always right'. Thus strategy was about giving the customer what they want. The other pole, perhaps represented by the OU undergraduate or programme, takes the view that people don't know what they want need, and that it is the role of the OU and the OBS to teach them. Salaman, academic sees developing Asch's rein courses that as attempting to strike managers want, balance between the two; between a and at the central a same time guiding the development of those managers. Yet other staff that strategy within see the OBS developing in ad hoc an way. should not only be about infrastructure issues, Europe. Strategy should also include critical debates One element of Asch's election manifesto academic teams were was to remove courses cut. or market development plans on course profile and content. unprofitable with small numbers. By mid 1994, some people were Many shouting for the elimination twelve months later, According to Salaman those demanding the elimination of courses questionable assumption that small courses were possible in his view that large courses highlights the OBS operating on a justify courses. asked, and agreed to, select and drop those courses from their portfolio that seemed uneconomic. Salaman recalls that many of Those holding this view believe could no courses were less profitable than large more had been making the ones. It was quite easily find savings. This example 'recipe' that prescribes the need for large volumes to courses. Henderson, ex-Chair of the OU Institute of Educational Technology (IET), thinks that "happenstance and personal interest" better characterises what is really going on in OBS strategy.3 Indeed he believes that OBS is similar to the other Faculties in having 3 The Institute of Educational is "to Technology (IET) is a unit within the Open University that supports the Faculties. Its mission improve the quality of student learning in the University" (Tim O'Shea, Chair of IET). 177 no strategy at all in the sense that you would recognise a strategy from a commercial organisation say. I mean we've got a mission statement but I don't think anybody really could quote it to you, or even the essence of it to you, other than we're supposed to be the best in the business (Henderson). Henderson is not how academics suggesting that this situation is are a failing of management, rather it reflects "opportunistic". Henderson perceives academics" and those managers between management courses. many are Although Thomson managed to he own never range and relationship oversee some coherence to managed it with the Diploma in still struggling to bring to order. Strategy is about academics "falling into" describes Henderson's struggle between "wayward who want to apply order to the the MBA and Certificate programmes, Management, which a a particular topic through a chance meeting, as entry to management development in the Health Service. I didn't plan, and the School didn't plan on my behalf to get involved with the Health Service. I personally fell into it by accident and therefore the School got connected to it almost for better or worse (Henderson). In addition to being opportunistic academics academics do not move on give is well past, there. He recalls that course on course up commitments was when it is clear to during the late 1980s, shortly after OBS the British about to write. to the warehouse. In "obsessive". Henderson believes that everyone else that the time to either because the market opportunity has evaporated retail management, that he even are another economy Despite this the won some or was never funding to write a slumped and with it the market for the course was written, printed and delivered example, Asch in his very early programme. Probably days with the School fell into the Small Business Colin Grey is the only person who doesn't believe that was a disaster, because David and I appointed him to take it on after David, because of personal contacts with Cranfield, in particular the Professor of Small Business at Cranfield, [managed to sell the programme to Cranfield] (Henderson). The "obsessiveness" desirable some or strong commitment to a particular topic often helps to create a expertise that, for example, the Health Service leadership want to tap into through collaborative relationship. On the other hand, obsessiveness 178 can also cause one to ignore the growing signs that continued investment of time and effort in, say retail management training, is not going to be recovered because "there is no money around". The term 'strategy' is commonly used as part discourse its content is often assumed yet of the day to day vocabulary of work. In such staff find difficulty in articulating that content. For example, Cameron, Director of Course Presentations, says that her responsibilities include "anything to do with teaching strategy", but she was unable to elaborate on what that strategy consists of "because I don't think very many courses are talk to each other about it all that clear about it and they anyway". However, she does recognise it when she sees never it: If for example, '883 and '885 are deciding that they don't want to have residential schools anymore, they want to use day schools, then I think it would be perfectly proper for me to be involved in that transition. Making sure that what they are proposing to replace the residential with is something that the Regions decently deliver, and something that will be at least as effective as the existing system (Cameron). can Clearly an inability to articulate strategic intent, barrier to strategy or an absence of an explicit strategy, is no practice. Cameron's example also shows that although she is responsible for Course Presentations, she shares the development and implementation of teaching strategy with course teams. 6.5 STRATEGY PROCESS 6.5.1 Informal forums and networks The OBS Management Committee mentioned earlier (6.3) is the Heads of the Academic Board, Business an informal body, consisting of Development Board, Finance, Staffing & Resources Board, and Presentation Board. The Management Committee has making function. Its members meet fortnightly and is a no decision forum for airing ideas and discussion: example, we're thinking at the moment of restructuring the MBA programme, of whether we move away from say half credits but whether we should have more elements of the MBA as compulsory. Now, that's being for not in terms discussed in a number of other forums, in MBA committee, in School Board, 179 .... School Board is a body you see that represents all parts of the school and in our sort of business, because after all we are a business, its important that we carry the bodies with us. (Asch). Many questioned the role and need for a Management Committee, remembering the previous "Dean's Team" under Thomson. While the magnitude decisions of any downside was was or informality of the Dean's Team meant that significance could be taken quickly and 'on the hoof', the that communication with the Dean's Team was sporadic and its membership unclear, with consequent feelings of insecurity and frustration among those not in the Deans "kitchen cabinet". Such decision making. It committees were of Asch and the was in a loose arrangement response to made it difficult for many to contribute to this situation that various formal decision making put in place, to reduce any abuse of power by any Dean. With the election disbanding of the Dean's Team, the perceived need for formal control mechanisms around the Dean seemed less acute, nevertheless the notion of an informal committee did While the bring back bad memories. Management Committee's role and not decision, its appears to be clear, that it is a forum for discussion potential for influence is significant yet poorly understood, freely admits. He has come to see its importance as a as Asch communicating medium to the rest of the OBS: I believe in getting the information out because we then get very good feedback in. I'm not saying that we got it right, indeed we still have communication problems, evidenced by the confusion of the role of the management committee. I have to say I'm not always clear what the role of the management committee is myself. I see it in very broad terms as a key communication device (Asch). Even the notion of of the committee a "communication device" seems to carry ambiguity, interpret the communicating opportunity in the as not same way, all members often resulting in patchy feedback: day we then held a session on competences with the differing staff groups within the school, and what became clear then was that the communication process from the Management Committee to all the constituent elements of the Management Committee if you like, so the Centres, the Course the second Managers, the Training Advisors, and so on and 180 so forth, had not been consistent. some groups had spent quite a bit of time working on competences and areas and so on, while other groups this was the first time they'd discussed So that actually made it very clear that these processes were not We found key result .... as I'd imagined. Now, part of that is woolliness with which I was approaching the working The role of was a Management Committee slowly becoming role that was "talking shop" the evolving body the on more seems to down to me, I think because of the Management Committee (Asch). be evolving, through process and feedback. Its role clear in the minds of staff both within and outwith the committee; being shaped through action and interaction. Asch but anymore, use more as an advisory group, as a sees it not so following quotation is processes a as a facilitator. Having reflected of Management Committee Asch thinks that describing it decision making much as an on advising also reflects his personal style of leadership. Captured in glimpse of how this advisory body helps shape strategy: for example, is to say OK, (Management decisions per se, I mean it will do on there chair Boards, School Boards consult with Management Committee, for example.) 'OK this is what we're going to do' having had that consultation. Now, the point is that we then target someone. So, for example, if we are looking at say restructuring the MBA, well obviously what we are trying to do now, Committee doesn't necessarily make occasion because the people who are that's the MBA Director, who would need to address that. So what Management Committee often does is, say, advise on a process. Now, that's a clarification of what we've done before, and now I'm trying as chairman of that Management Committee to say that this is actually very important, please make sure that the Centres, the Course Managers know about it. So that communication starts to work as a methodology for getting stuff, for example, out to the Centres, and so at our last meeting a Centre was feeding back that it wasn't entirely happy with some aspects of our current recruitment process, induction into the school for instance (Asch). Most interviewees agree that although decision making in the OU is formalised through committees, in order to get proposals through committees it is necessary to work around them, getting support from key players at each stage. Also "mavericks", according to Peters Pro Vice Chancellor for afterwards than to get Strategic Planning, recognise that "it is easier to apologise permission before hand". Another tried and tested approach is for the project champion to bypass most of the formal process lobbying, proposal forward. Peters takes in say, the Vice Chancellor to put some and jump in at the last stage by noting that "system manipulators" don't always get their down by legal or financial considerations. 181 way, and are some comfort likely to be slowed 6.5.2 Formal forums Formal strategy formulation in the Open University dates back only about three around 1991, when the Planning. Peters year the Strategic Planning a 10 year process evolving; integrating and locating a five Strategic Plan at the next opportunity; and adding of measuring performance of achieving the Strategic Plan. Peters one from Open University created the post of Pro Vice Chancellor for Strategic Development Plan within ways fold, sees years sees his job as two looking outward the other looking inward. Looking outward, he liaises with statutory funding bodies: National UK Funding Councils and central government departments, European Union Commission and national European funding councils. Looking inward and like Asch, Peters also individuals and groups sees within the University to thinking about what the University's future his role as a encourage may facilitator, working with people and to further develop their be like. For example he initiated workshops called New Directions Workshops, where he takes staff from the For Peters these back into their everyday work environment with parallel with this but not driven by formulation in the a wide range of staff get University's future, and the other is that participants agenda", and to be able to influence at a a more go clear idea about the "University's "grass roots" level what actually changes. any OU strategic planning cycles, formal strategy Open Business School takes place during annual 'away days' and follow meetings which consolidate and generate actions. During the 1994 'away days' strategy meeting about twenty four OBS academics, converged the section of about 30 in 10 years time, and shorter term in order to workshops hopefully achieve two aims. One is that to contribute to the debate about the up of University and tries to get them to do some visioning about what the University will be like then to map that back to what we need to be doing in the move in that direction (Peters). In a cross a range on managers, sales people, and administrators the GEC Management Centre in Rugby to following two days the discussion groups, group divided, came pour over strategic issues. During together, and divided again, into different covering for example strengths and weaknesses, threats and opportunities, 182 of sources competitive advantage. A large part of the time was taken up discussing and evaluating possible scenarios of the future. A lot of flip chart paper, tea and coffee during these days, culminating in consumed a few issues for particular individuals to investigate further. The articulation of these activities did eventually lead to and was a go away School Plan, covering OBS mission, presentation implementation plans, marketing strategies, and production plans. Significantly, there seemed to be course a general feeling among participants that the coming together to explore and share ideas in this fashion value of formal strategy from anywhere in the OU Faculty or where the formulation lay, rather than the production of a plan. School Board meets about three times groups was the a year, and is yet another forum where individuals or raise issues they consider to be significant either for may a for the University. The separate Boards put forward recommendations from their informal and formal sub-committees. breadth of the Perhaps more University's interests, rather than importantly, School Board represents the sectional interests, and is the more narrow final arbiter. From Asch's experience, attendancies of 80 plus is normal, although the vast majority tend to listen and say nothing. If all staff did turn up there would be no room for them.4 There is an general The obvious question about the effectiveness of such response are of life. Asch and others believe that even if OBS is not representative from the Business School must be initiatives aware OU a large decision making body. from staff is that having the forum and opportunity to state one's fundamental to the OU way agenda, a being considered by a group or seen to aware be there. Sometimes there was an issue that the whole of: people would ask questions like 'do we want to be involved with the Defence establishment?', for example. Because if we win the RAF project or tender, then it does open the door to other work of a similar nature for management training, with say the Navy or the Army, or other parts of that establishment. And that does raise interesting philosophical ethical questions about whether or not the so 4 The Open University has about 3500 full time staff, and 7500 part time tutors. 183 is the Faculty that the whole OU body needs to be of. The occasion of the OBS's involvement with the RAF body needed to be made on case School wants to do that, and of course whether or not the it as well! Even if we said we University might did, the University might say ... University wants to do I don't know, but the say that maybe that's something that we don't really want to do. So in terms of a decision as to whether or not to do the RAP, we not only had to share what we knew with the school, but we also had to play it to the wider University, to Faculties, ensure obviously (Asch). Committees, range as that the Vice Chancellor, the University Secretary, other of what was going on. Just in very broad terms for them were aware already noted, are used extensively to air, discuss, and decide of issues. This decision making committees have veto over most process being raised at all. For example, at one half hours, much time was taken up or no wide is public, consensual, and democratic. While decisions, in practice they lack detailed knowledge of individual issues and this is reflected in student numbers. Little on a time questions being superficial or significant issues not OBS School Board meeting, lasting about two and a discussing credit transfer proposals, and projected was taken up discussing broad strategic issues, like the implications for the OBS of the developments taking place within the Open University's 'resource flow model' debate, discussed below. 6.5.3 Inter group relations Peters, Pro Vice Chancellor for OU Strategy, regards the OBS as "a force for change" and believes that the rest of the OU will benefit "as long as the OBS can be kept within the family". Some of the tensions between the OBS and the rest of the University brought to the surface through the University's attempt to develop for teaching and The one being flow models; one for research. design of resource flow models is at the centre of an internal and ongoing discourse within the OU family about what accounting models best reflect income generation and expenses among the University's Faculties. More fundamentally the debate is about what internal behaviour the OU Senate would like to change. There new resource are are see being fostered, for example in attitudes to various external forces driving the need for change, but also making any arrangements full of potential conflict. Externally, the government no longer funds the 184 Open University directly. The OU universities for government now finds itself in competition with all the other funding. The new Higher Education Funding Council (HEFC) gives financial incentives to higher education bodies like OBS to take more students. This represents income to the OBS which it wants to retain control of. Furthermore, the HEFC is also auditing the quality of teaching of higher education establishments, and their assessment will have an impact on funding levels for individual universities. HEFC will be assessing the quality of OBS research provision in 1996, and funds. Success in a of the OU on sources of funds, for example from professional bodies. senior academic within the Institute of Educational Technology (IET) and member Strategic Planning and Resources Committee, readily acknowledges that deciding appropriate resource individual groups flow models unavoidably draws in 'facts' and arguments to which attach differing values. As O'Shea modelling is riven with tensions, should the OU fund the setting generating parts of the OU to financial slack should each The rating of at least 3 is required to attract raising the OBS research rating also determines its attractiveness to other academics, and additional O'Shea, a ... up pay and there of a for new as Faculty? Should there be Faculty be allowed a "the whole so area of resource flow lot of open questions". For example, how directions, new Open University wants OBS to make facilities, such are a says say a tax on all income modern languages? How much that they can experiment? "full contribution" to the cost of corporate the library, examination processing, summer school administration, marketing support, and educational technology support. Apart from the support of a well established administrative bureaucracy, there is also the question of assessing what economic benefit OBS derives from the that it is the reputation of the Open University. The OBS for its part only Faculty that is self financing, and which makes contribution to the corporate whole. While OBS controls its own a argues positive financial direct costs, such as tutor payments, it has little control over indirect costs. These indirect corporate expenses are a source of tension because OBS managers believe that the OU accounting system is antiquated and distorts "real costs", resulting in unacceptably high overhead claims against OBS. Although OBS controls direct costs, even these 185 can be a source of tension. For example, in making ad hoc payments to tutors, OBS is sensitive to complaints from other Faculties that it is setting a dangerous precedent that the rest of the OU cannot follow. This tension between OBS and the parent and other Faculties, also reflects the very markets for management development and undergraduate education. In the former, sell for three times than any more administrators have undergraduate experienced complaining study centres and summer executive and other business courses schools; an course. managers different courses Relatedly, most tutors and who expect a feel of 4-star quality at expectation fuelled by their experience meetings, typically held in 4-star hotels on short or purpose built management development centres. While the positioning of the OBS product is competitive externally, its "market driven" approach sits uncomfortably among business, the other Faculties take the other Faculties' approach. Where OBS is a more run as a altruistic and missionary view, attaching much more importance to providing high quality education at minimum cost to all comers. Not surprisingly this translates into day to day tensions between OBS staff and regional staff, OU support departments at Walton Hall like BDMO (Business Development and Marketing), and student administration services. The tension between OBS and regional staff manifests itself in local arguments, typically revolving around questions about resources, Many regional staff also feel that OBS has their region, and that these tensions BDMO was a source are like "who is going to no strategy, pay for this temp's time?". does not know what is going on clear evidence of those failings. Until recently of tension because, according to OBS staff, it was not entirely accountable to OBS, but this tension seems to have diminished since OBS created its sales and OBS marketing function. BDMO staff for their part, attribute failing to have BDMO say a in any own misunderstanding to clear understanding of what they wanted BDMO to do for them. that this weakness was evident when they research for OBS. 186 were discussing projects like market The diffuse OU administrative systems more other in various ways. A of tension is in the common source administration. In this respect Asch sees and procedures and OBS also bump into each the OU as area of general student failing to take account of the unique needs of OBS: where that buts up against us with some difficulty is that things are generally undergraduate driven in the University, and so we have to continually remind them that 'by the way', (because with Health and Social Work they have a student profile similar to ours, and a course profile that in its own way is similar), 'something like a third of the Open University students are not undergraduate students in the conventional undergraduate way' (Asch). There also tensions born of the autonomy are and the Technology Faculty and the other toward when the Faculty having one a bias toward technology general management. A certain amount of sabre rattling took place own procedures and an this saw as a Technology Faculty's MBA proposal followed the MBA. While the was 'MBA Technology' because OBS passed by the University Senate, Asch suggests that they got with this because Thomson, who was Dean at the time, did not know how to operate University's informal network, and was also away the competitors; Technology faculty introduced direct threat to their correct are that Faculties enjoy within the OU family. OBS more concerned with a different, external issue, that of expanding into Europe. In Asch's view if that 'MBA Technology' threat were to arise now: Technology would ring the Dean of this, me up and say 'Dave, we're thinking about talk about it?', and we'd talk about it, and I'd try and convince him informally that its actually a bad idea. If he decided to pursue it, then you move into something of a quasi-political mode, of flagging concerns in other parts of the University, trying to build support against it, and one would keep the dialogue can we open with Technology, because if you like, we win the debate in as much as the MBA Technology doesn't happen that's OK, but the fact is Technology has more votes that OBS; its a bigger faculty. One would have to keep the doors open if we lost that. You want to create a win-win in the best way that you can, because I don't want to lose (Asch). Neither OBS resolving or nor the Technology Faculty want to preventing such clashes. They being guided by a see see any overarching OU grand plan the development of their respective groups as shared philosophy and values. How they interpret those values is for individual Faculties more than the OU Senate. a matter Nevertheless, in general, OBS staff often 187 see body the OU groups as a brake on their own creative output, while the outside OBS, often feel that OBS is getting 6.5.4 Intra group away more with murder. relations While OBS relations with other groups produce most tension, there difficulties. There is course a established OU tension between are also a few internal production and course presentation. As noted earlier, production refers to the writing and printing of course material, and presentation is its delivery through regionally organised tutoring. Course production and presentation different management structures critical tutor area for both the OBS and the OU. OBS area of tension course teams are and its quality, a responsible for monitoring or remove tutors; they feel blocked by Course Presentation leadership Regional Managers. There is also committee some tension between meetings are regionally based OBS staff and the OBS centre. All held at the centre and regional staff are entitled to attend. However geographical spread of regions tend to produce regular attendancies from staff near to Walton Hall in Milton Keynes, such Scotland England rarely attend. Some of these or south west disenfranchised because to be nor concerns tutor performance, but feel they have little influence in translating that monitoring into taking action to either reward the within OBS. One are as one as from Oxford or Birmingham, while staff from MEC remarked "a lot of more remote opportunities walking past the door of the Dean at the time". This is not to Thomson's informal reference to the and scope on come up but reference to Asch you as have Dean, the shoulder" approach to making appointments. It is feeling that distance from the centre has a real impact on a one's opportunities, for contributing to decision making within OBS. There is also Cameron "tap a staff feel some tension between (Director of Presentation) do not have financial control course says over course teams and course "course teams development for its academic content, while its administration, are or management. While as king in the OU", Course Chairs presentation. They are responsible including financing, is the responsibility of 188 Managers and OU administrators. This tension Course example course over travel show up in unexpected places, for There is also tension due to academics' obligations to write for expenses. teams, and the can exercising of their right to pursue individual research interests, including taking study leave. The existence of so many inter- and intra-group tensions does not suggest the absence of form of government, or some that anarchy is about to break out. Rather these tensions of life that supports diversity of perspectives, roles, research interests, teaching, and way various other activities. The OU be are a guide to internal behaviour a philosophy of open as well as a access and equal opportunities is felt to metric for dealing with the educational needs of the world. At times there is friction when the OBS wants to do the OU. At other times it is useful for the OBS to be according to Peters, "they're paving the people". Interestingly Peters feels way doing things differently because and that more concern something that is vetoed by can create opportunities for other about the rest of the OU family not being sufficiently proactive in taking initiatives, than about the OBS "wanting to plough its own furrow". 6.6 INNOVATION 6.6.1 Models of success: looking back and looking forward According to Masterton, Secretary to the OBS, most of the Open University's innovations have come from the Centre for Continuing Education (CCE). The CCE with initiatives that did not fit into the that a number of now university's undergraduate well established Schools first saw the was a way programme. It of dealing was here light of day: 'in service education for teachers' went toward the School of Education, 'health and social welfare', led to the School of Health, Social welfare and to Masters degrees, and 'management education', developed into the Open Business School. In Masterton's view success Community Education', 'science and technology', led a number of external and internal environmental factors fostered these stories. The first was "top down sponsorship" of innovation, because the Open 189 University was put in the hands of risk takers, especially Walter Perry, the first Vice Chancellor (now Lord Perry). During the early outwith the traditional understanding of 'undergraduate', and labelled 'experimental' were based research to were either encouraged market research on or met 'pilot' clearly or with little internal resistance.5 Most initiatives courses were through the convergence not a some interpreted the market beginning to generate viable courses came courses was five early, and years too flimsy. In Masterton's developed because of any market potential, but came about of two other factors. First, the SERC (Science and Engineering government remit to raise manufacturing and a computing competences in industry. Second, While the two now need for these Council) had funds available and something in this only are he thinks that these two that the evidence in the mid 1980s of a number of OU academics wanted to do area. courses in computing and manufacturing seemed to internal resistance and little market support, a as were justify the development of a course. For example, the two Masters degrees in student numbers. In retrospect Research of the OU, projects that according to Masterton, although computing and manufacturing management view these years come Masterton presents the into being with emergence no of the OBS as struggle against vested interests. The market research evidence of a need for management education initiative on the way same clear, however academics from the undergraduate world were against the was two counts. They questioned the legitimacy of 'management' that for example economics is. They also objected to seeing channelled into what many resistance to the was also due to regarded as the low priority area were perceived within this climate of resistance that the first OBS course, Supported by a as a as discipline in resources of CCE. Perhaps 'management' not being perceived undergraduate world, and therefore funds as a some being of the sufficiently different being misused. It area was The Effective Manager emerged. small internal 'loan' that had to be repaid within three years, and a large 5 An example of the extent of this experimentation is in the development of two short courses: The Pre-School Child and The First Years of Life. A small group of academics, and experts in the production of magazine style publications developed these courses with the aim of presenting complex ideas for a reading age of about 12 years. The idea was to produce something useful for the socially disadvantaged, such as low income and one parent families. The approach broke with the academic tradition of presenting complex ideas as complex; and in the words of Masterton exploited the "Sun headlines" approach to saying something meaningful. These courses continue to sell well nearly ten years later. 190 external grant, the course was launched. It proved to be "hugely successful" according to Masterton, "repaying all of its costs within the first year". Other courses followed, of positive cash flow that within the OU gave no better the CCE seemed to fade a need for something like CCE to foster innovation Beyond personal experiences of working in CCE, analyses were ever about. O'Shea's observation organisations automatically While CCE is lost in very no made to explain why seems grow in to undermine any some OU Senate is from the bad at learning from its or how successes new ways own and failures history. came notion that the knowledge bases of kind of cumulative and rationalistic more effective ways way. of improving the learning resource flow models that facilitate of the biggest constraints according to O'Shea is the OU's become the "IBM of and systematic observations and experience of students. The OU Senate wants to develop one anew history, the OU remains self-conscious about its ability to innovate, for example its ability to continually find change, but At the time of this away. of innovation, and makes the need for CCE redundant. However, thinking. According to O'Shea of LET, the OU is documented lot longer existed. Some suggest that the diversity of Schools within the source others still talk about of a family. research the CCE now a did the barely emerging OBS substantial political independence As the OBS and the other Schools grew so OU is as success; it has higher education". In thinking about what kind of future is desirable, the exploring possible scenarios through computer modelling, based Planning and Budgeting committee and the OU strategic aims as on parameters documented for example under Peters' Plans for Change. A concern for improving students' learning experiences particularly through student feedback. While the OU its distance learning philosophy, it did not have student feedback until the late 1980s. any means being able to was aware assess quality, of the general applause for specific mechanisms for assessing Cowan, Scottish Regional Director brought his expertise in the assessment of quality to the University. As Chair of the University's Working Group on Quality Tuition, Cowan is keen to see quality maintained in innovative curricula: 191 or improved, especially systematic design and redesign of especially innovative curricula is identifying the nature of the learning, and building on the nature of the learning and the learning experience into the next iteration. So I would go for a formative identification of quality during the iterative process of refinement and improvement even before you come into the summative one (Cowan). the to me about The issue of areas, quality continues to gather pace, and is making including: student feedback on tutor explicit an appearance in many quality, residential school learning experience, the quality of the printed material, and end of course evaluations. Curiosity, creativity, and recipes 6.6.2 Much of the OU and OBS the success teaching style of the written workshops offered by IET authors do not go through a course few any is attributed by Henderson, material. Apart from years ago, on Deputy Director of OBS, to number of voluntary how to write distance learning material, formal induction writing authors, whether new or not, there remains OU flavour to all written material, an a a process. new Even though individual do have particular approaches when writing course material, regardless of who is writing. For example, OU material is well know for its 'activities' (practical student centred tasks), and secondary reading and audio visual media used to break Henderson believes that long standing OU authors writing distance learning material; that "the authors from the are way we up and supplement the main text. "imbued with the processes" of do things around here" has influenced all beginning of the OBS, and continues to do so. In the early days, he, Lund, Henry, and other IET academics would have been part of the few time. New authors leam the OU way and trying to make process is not back to one sense some sort through "osmotic" around at that course teams processes; by being in course teams of the OU writing style. Henderson qualifies this by saying that the of "Adam and Eve source". The influences are process at work, where everything varied and many, yet can be tracked there is continuity in all OU material. While the OU distance but "provides a learning style is distinctive, Henderson believes that it is not static, cultural base from which to develop, be creative, and have 192 new ideas about how to do courses things". "Academic curiosity and creativity" contribute to the and market way that particular opportunities unfold. For example, laced with activities of various kinds is similarly laced with activities. The curiosity element tends to come in to say to other people (in conversation, over a cup of coffee, or in the bar, or in the course team for that matter) 'why are we doing this, what is the rationale, how many [activities] do we put in, why do we put them in, are these the best kinds?' The curiosity of academics helps them to explore the rationale behind things as well as just the slavish doing of them. a typical academic who sees our texts are not content to sit down and write a similar text The creativity of many academics will also lead them out of those conversations into a situation where they then say 'but I can see a better way of doing this. I understand why we're doing it but I don't think this is very good, so we ought to do things slightly differently. When you compare different courses, or even different authors who are writing across different courses, you can see considerable differences in the learning technologies they use, as well as in things like their writing style (Henderson). Constraints 6.6.3 on creativity As noted earlier many staff identify the OU and the OBS novel and useful ways of improving students' learning experiences. O'Shea of LET he can think "of hundreds of ways to others radical. One of the taken for improve learning experiences", even a nothing in the OU Charter to prevent it setting Henderson of OBS for useful innovation, a members Other up, say, a have become reified over example believes that fifteen says that incremental and says that there is smaller full time facility. the years years ago of successful growth. the Course Team was a very melting pot; blending subject knowledge with learning technologies; all are so many courses to meet, and less interaction takes now more a some considered option. O'Shea meeting frequently, everybody reading and commenting Today there block to developing granted blocks to change he believes is that the OU's capacity to offer full time education is not A number of other concepts success as a constraint than have contributed to the each other's drafts. be maintained and created that the whole team rarely place. Indeed the Course Team according to Henderson is a source ingrained practices that on of creativity. some now see as University's success constraints, yet whose continual refinement include: student enrolment practices, the concept 193 of the Tutor Marked Assignment, the mix of delivery media (mostly print, and visual), and the linear membership are course production and publishing conscious of these issues and influences and continuance of these runs for new courses many practices, such measured in thousands of process. of them do as a little audio The University's worry about the constraining having to commit to minimum print copies. Critically and usefully according to O'Shea, the University culture is one that facilitates and learns through experimentation by individuals and groups. Peters sees great difficulty in trying to bring ideas into the organisation from beyond the OU boundaries. In a sense the original concept of delivering distance education back in 1970 too successful. The OU has flourished, the fundamental methods of course production and delivery have changed little, and people believe that the OU that other organisations can Peters notes that it is very to be learnt from, for pay way is the best, that there is little teach the OU. difficult to get anyone to investigate whether there serious attention to the London Business School approach to speeding cycle. There is an up equivalent to the OU in country and 30 other such institutions outside Europe. Some of these lessons or to the tutor- every European institutions have used OU material, but the OU has never taken a course from other distance learning institutions adapted it. 6.6.4 In are any example, how First Direct manages its remote banking business, student assessment and feedback and was Managing the inertia of success trying to generate new ways of thinking, Peters sees his mission as, releasing innovation which is pent up within the organisation, the individuals who can see how we could be operating using a different model, who could see ways in which we could act differently, and be more responsive, or achieve some aims more readily (Peters). Some of his Strategic Development activities have been geared toward achieving the liberation of such ideas. Peters' approach to breaking down existing "recipes" is to pick 194 on people "who some that are ripe for change" in the kind and therefore must comes sense that either they change, and also picking from success". He would then suggest on are experiencing pressure of those who have "a bit of flexibility alternative approaches to them. This approach is not having much success real incentives to go to some other models". Even taking this additional step into account, he is and therefore he feels that his next step is to add "some unhappy with the whole approach because it relies giving them other models are, rather than bottom up, The fact that many around for 20 years with this a plus, is chance to experiment". as an inhibitor to innovation, according to Peters. He tries to deal through his Strategic Development activities. He has also set aside £lm "might change the Other initiatives that way are The scheme involves a in which potential the student record system, are we encouraged to apply for do things sources They want changes now, might create a money to a new seem to and in per year as fund projects opportunity". comprehensive overhaul of estimated to cost £10m and likely to take five whole spectrum Technology Faculty or of innovation include years to complete. of activities: defining long term needs, current short comings, looking at how other organisations of the a "a top down view of what these people particularly those in senior positions within the OU have been Strategic Investment Fund and people that on manage. Neither Asch of the OBS nor Hughes have much patience for such long term grand schemes. any case everything will probably have changed again within the next five years. While Peters is Faculties working for change through 'top down' initiatives and incentives, individual also are experimenting. Hughes of the Technology Faculty for example has decided that he cannot wait any and faster course in loose leaf longer for the slow OU machinery to production system. Technology courses come up will now with a comprehensive be increasingly produced binders, with frequent updates. These will be printed or photo copied using equipment designed for producing high quality low volume print. Hughes knows that the OU corporate leaders are aware of his initiative. Indeed he hinted as much to them. Rather than seeing this the as event as a deviant behaviour that must be stopped, those interested learning opportunity. 195 are watching and using Pedagogy and technology 6.6.5 Historically the practice of teaching for the OU in has been based move more to and the more with most educational institutions delivery of 'facts' to students. Peters feels that the OU is aiming to to a position of giving students the skills that will enable them to "learn learn", and providing opportunities for them to leam, rather than the delivery of facts to be learnt. He new on on common sees one way into this new way of thinking as being through the introduction of technologies like CD ROMs and networks. These technologies require more emphasis showing students how to effectively people's skills access the knowledge that they carry. Developing 'how to leam' will probably also develop their ability to draw on the tacit on knowledge and skills of others. Others, such as O'Shea of IET are more up beat about the University's performance on 'learning to learn' teaching philosophy. As examples O'Shea cites the gradual developing a increase of project and portfolio based assessment that there is scope as apposed to examinations. He admits for further development here, for example developing group assessment models. Open University staff are technologies that concern has been seem very concerned about the rapid changes in the development of relevant to educational technology and distance learning. This expressed as numerous information and communication Media committees looking at various dimensions of technologies, and from different perspectives: CIRCE, the Development Committee, the Academic Computing Committee, the Delivery Mechanisms Committee including Subgroup, the Information Systems and Information Technology Strategy (ISIT). ISIT is responsible for co-ordinating various investigative projects, one named the Electronic Strand. While most OBS staff regard themselves unchallenged best in the distance learning grasp game, many as the think that the OBS and the OU must without further delay the emerging opportunities "in learning media, delivery systems and communication networks" (A Preliminary Report from the Advisory Group on a strategy for the Electronic Strand of the University, delivered to the School Board March 15, 1994). 196 The myriad of committees and working groups understanding of all options. However, this which have addition overlapping interests, to a not know are reflects the OU desire for comes at a a comprehensive price. These working groups, some of all producing vast amounts of data and information. In potential information overload what committees exist, nor what many they feel that are a all doing, significant number of people do nor how they relate to each other. The Electronic Strand's preliminary report of March 15, 1994, recognises the need for its work and for the output of the various other committees to be co-ordinated and linked to the University Communications Strategy, but it is unclear how this problems of: information overload and poor multiple committees joined to a the information and communications perhaps two years position itself in the coming decade; mixed or being driven by the school; and the inertia of large administrative bureaucracy. The OU has not been afraid to take time to come, be done given the internal communication; the rich variety of views about how the OBS and the OU should feelings about whether technology is driving can gather, evaluate, and deliberate on technological developments. When the after the first committees went into action, it was comprehensive (see appendix 8). "Open Business" the OBS MBA Alumni its response to response did substantial and newspaper reported that The INSTILL Project, standing for Integrating New Systems and Technologies into Lifelong Learning, was proposed by Sir John Daniel, Vice Chancellor of the OU, in January 1995. The project involves a commitment of £10M of University funds over 3-5 years, to ensure the University takes rapid advantage of new communications media and maintains its leadership in the application of educational technology (Open Business, Issue 4, Autumn/Winter 1995). 6.7 CONCLUSIONS This account has examined how staff in OBS and the OU organise themselves, their understanding of OBS strategy and the role of innovation therein. A few themes stand out. In consent one sense in all quarters seem to strategy seems to be synoptic (see 2.3.2), and involving a striving for of the organisation in advance of action. The OU has 197 a function strategic planning, including the co-ordination of five and ten dedicated to committees spent more numerous one year plans; analysing the strengths and weaknesses of a technologies that might help the OU maintain its lead in distance education; Asch's range 'away days' play annual sense than year that all important part in preparing the OBS Business Plan. There is an strategic options are fully considered before committing to a a particular direction. At the are same time the way encouraged to academics pursue of life in the OU and the OBS seems to their research interests, variety continues to expand, continually experiment with sometimes like Henderson Individuals course new ways developing their own foster diversity. Individuals of producing and teaching courses, niche in the management education market. jealously guard their individual freedom and their collective right to influence OBS strategy, and are proud of their open access and equal opportunity philosophy that underpins the OU relationship with the external environment. In this climate innovation is both a carefully planned and open to individual initiative. Major projects like INSTILL provide framework for innovation, but many initiatives will continue to emerge regardless of overarching frameworks. To some so? Staff extent OBS are aware strategy is both determinate and managed chaos (see 2.3), but why is it of the many they feel that their freedom, or tensions that constitute life in OBS, particularly irritations; are Chapters 7 to 10 explores a range an being a a inherent part of the best of all possible worlds. of factors that shape the practice of strategy, helping to explain why strategy practice tends toward or and when their ability to function effectively, is being constrained. For them such considerations chaos, as a process that may be determinate, managed both. Perhaps more fundamentally the following analyses shows that more than detached instrument in the hands of practitioners, the practice of strategy is shaped by 'taken for granted' world, a social reality. 198 PART III Analysis and Conclusions 7 Empirical and theoretical bases of social reality 7.1 INTRODUCTION The earlier literature review presented three conceptions of strategy: determinate, managed chaos, and socially constructed (ch. 2). The determinate conception presents strategy as regardless of how comprehensive calculative and linear, process practitioners are or incremental it may be. In this continually seeking to control their competitive environment. In the managed chaos conception, strategy is broadly reactive with practitioners adapting to their environment as best they can. The managed chaos metaphor differs from the determinate conception by highlighting the constraints rational and on the collective rationality of practitioners: purposive strategy is constrained by individual cognitive limits to absorb information, and there are limits to the collective's ability to organise and communicate knowledge and information. The social construction metaphor differs from the other two by acknowledging that practitioners act In this on their interpretation of their competitive environment. conception environmental signals are not read off as self evident but the organisation's paradigm. The notion of an organisational paradigm is our understanding of the constrained rationality of strategy, suggesting that perceive the environment in ways are mediated by seen as enriching managers that approximate to the real environment. Within this perspective strategic choice is constrained by managers' socio-cognitive limits of comprehending environmental reality; and contested because of differentiated understanding of the nature of that Three assumptions unstated. reality, and political satisficing born of competing interests. are embedded in these conceptions of strategy that remain largely First, that strategists do to varying degrees control the process and content of strategy. Like overseers, they remain detached from the process, however successful or unsuccessful they are in managing their organisation's relationship with its competitive environment. Second, that knowledge accumulation, and 200 any inseparability of facts and values, are due to limits of time and knowledge available to gather additional knowledge, and practitioners' capacity to separate facts from values. The third assumption is that strategy an interpretive process can be manipulated by an organisation's leaders just as as control systems and structures are open to design. Lengthy and detailed discussions with practitioners about how they practice strategy, in parallel with continual reading and revisiting of the literature research based epistemology has led on an from that me to a as innovation, and different conception of strategy. This conception is understanding of the social construction of reality, which diverges markedly presumed in the literature review (see 2.7). While chapter 2 assumed reality to be 'out there' and culture 'in here' reality on strategy, (within the organisation), the fieldwork evidence points to constructed by practitioners' social interactions; reality is no longer 'out there' waiting to be perceived, it is at the heart of practice. Whatever is out there is put there by practitioners who at the values remain time perceive and negotiate about what is out there. Facts and inseparable, but for different social construction of The same reasons now. That inseparability is due to the facts, rather than to limits of knowledge and time. conception presented here is not meant to overturn the determinate conceptions as somehow whether determinate or wrong. or managed chaos Rather the aim is to suggest that everyday strategy practice, managed chaos, is a process where practitioners routinely engage in seeking and applying patterns to their experiences, rather like the researcher who, in seeking to make sense In this view of the practice of strategy, constructs a particular story from the data available. strategic choice is still contested and constrained, but more than that, it is socially constructed through the differentiated understanding of, and collective commitments indeterminate reality. We might pick out particular features of this to, a discernible yet reality, but these While many are suggestive rather than definitive, and there are always exceptions. writers (Mintzberg, 1978; Smircich and Stubbart, 1985; Child and Smith, 1990) recognise that strategy is socially constructed, they differ in the extent to which they regard the environment as material and independent, or see it as a product of human imagination, perceptual phenomenon (Child and Smith, 1990: 315). Others recognise that people and 201 a organisations construct their collective reality, but without framing the construction in terms of the None to my process of practice of strategy (Berger and Luckmann, 1966; Weick, 1979). knowledge have tried to describe the links between: the nature of constructed reality; how practitioners construct strategy practice; the role of capabilities; the interpretive flexibility of technology; and the possibility of plural realities. These omissions in the literature offer scope for accounts that enrich our understanding of practice and the management of innovation in the context of competitive strategy. The notion of social reality and its construction is central to this thesis and permeates material. This and chapter aims to prepare some the whole analysis of my empirical of the ground for chapters 8 to 10 by introducing exploring the nature of constructed reality. Before describing how practice is socially constructed (chapter 8) there needs to be clarification of what social reality is, and its some relationship with everyday practice; this is the task of this chapter. The main section of this defined as chapter is divided into five sections (7.2). In the first, social reality is granted' in that which is 'taken for unchallenged by those around us our because they are everyday lives; practices that shared and 'that is how around here'. Discussions about the 'taken for granted' assumptions involving of factors: right and an operating and competing; inexhaustible ways range are do things really discussions about shared of dealing with uncertainty; in the world. Section two reviews we go ways wrong ways of co¬ of understanding our place empirical evidence and theoretical ideas that different communities around the world take different change its view of the world things for granted, and shows that the time. This review draws same different community can intellectual disciplines: studies of culture from social anthropology; ideas about culture from over on organisational studies; studies of paradigms and thought styles from the sociology of scientific knowledge claims; and ideas about recipes from interpretive sociology. While these studies have different intellectual communities make sense emphases, they all contribute to the notion that whole of their world in distinctive ways, 'thinking' styles; what they regard truth and as right and wrong ways through their collective of living; what they regard falsity. The 'psychology of the individual' metaphor of 'thinking' 202 seems as appropriate because it gives discernible While the as an a sense entity in its that the social reality of a whole community is right, and is to own some extent previous two sections establish the existence of social reality, the third section that the social reality of a community gives meaning to the practice of strategy, argues reinforcing and extending everyday practice. At the elaborates the social unique to that community. community's social reality. Thus reality, and vice versa, metaphor is useful, there are the individual is the group because writ small, we cannot discuss practice without invoking embodies the other. Having said that the 'thinking' or the group is the individual writ large. Relatedly, the meaningful to conceive of an organisation that engaging in these topics constructed time practice reinforces and difficulties with it. The fourth section considers to what extent fifth section asks whether it is Before one same a can unlearn. few opening remarks about the value of a socially approach, and the relationship between subjective and objective reality seem appropriate. 7.1.1 The value of The works of a social constructivist Burger and Luckmann (1966) interpretive sociology, and Weick (1979) influenced a number of writers on on on analysis the sociology of knowledge, Schutz (1964) the social psychology of organising have strategy. Sociologically informed writers on strategy recognise that practitioners construct their social reality; however they remain from mainstream management thinking it remains implicit, Pettigrew's (1977) work. By remaining implicit, practitioners by presenting business management business set as are in Mintzberg's (1978) denied any or understanding assumptions and implications of a social construction perspective. Indeed Porter a group apart teaching and practice. Even where social construction ideas do feature in mainstream management of the on as a set of rational imperatives, mainstream teaching is itself constructing practice. For example, Knights (1992: 525) shows that (1985) teaches competitive strategy by representing "the business corporation of activities and value chains that are detached from those managers, 203 ... workers, and as a consumers who constitute them". Insofar as practitioners accept Porter's or anyone else's prescriptions, namely these representations of reality, they internalise these ideas, which then guide everyday practice. The socially constructed roots of these representations, their subjectivity, becomes lost, and practitioners take their understanding of reality, and their identity, from "the rational imperatives for controlling uncertainty implicit in [these representations] of competitive strategy" (Knights, 1992: 525). The value of the sense shines more social construction that strategy a new fine interact to at all a light on making is a approach to thinking about strategy is that it makes explicit social rather than computational The approach the dynamics of strategy practice generally, and in particular offers grained analysis of strategy making where shape the process. scope levels of strategy, many a fuzzy aspects human behaviour for innovation. The thesis shows the inevitability of trial and error and that the inescapable heterogeneity of capabilities both within the firm, and between competing firms, contributes to technological change and competitive advantage. Further, these ideas suggest that between claims about a significant proportion of any agreement organisational competitive performance and strategic intent is not necessarily due to that intent. Schon found in his analysis of how professionals decide (drawing on examples from medicine, law, engineering, education, business, and others), that practice is rooted in "technical their rationality" (1983: 21). He argued for practitioners to be more professional knowledge. The perspective offered in this analysis practitioners to question and reflect practice, for example: preferred on ways reflective about encourages their assumptions about various features of strategy of handling uncertainty and risk, and of organising work; the meaning that practitioners attach to each others' views and positions; why they see events, and situations in this way or that; the material and symbolic interpretations; the basis of judgements about what might or consequences might not work in a of those given competitive situation. In arguing for that a socially constructed conception of strategy, Smircich and Stubbart suggests strategists "should learn to act ambivalently about what they know 204 so that they do not strait-jacketed by what they know" (1985: 732). This is good advice if it is become be self-reflexive. However, it also opens up outside, and The human as independent to, a process that exists only as long they remain central to it. as subjectivity that creates knowledge also makes that knowledge unstable. Subjective and objective reality Strategy is a process of social construction environment in blind 'enactment'1, by or an organisation of its co-operation with other organisations. Social reality is constituted of the unceasing interaction between the subjective and objective: interactions between processes experiences, and an of giving meaning to, and drawing identity from, objectified world. I interpret the subjective objectively meaningful, attaching meaning to not such meaning was Smircich and Stubbart possibility that (1985) our an argue enacted interpretation and acting that practitioners should become one, Smircich and Stubbart an - it whether or more aware of the nature and seem source of threats and interpret as threats opportunities. However, we our understanding of the objectify and legitimise reality continuing to be an objective reality that massively real and possibly threatening. Within the socially constructed competitive environment, 1 Weick are no the action" (1985: 726). by attaching meaning and value to streams of events and situations; then also to throw out the makes relationships by bringing connections Conceiving of a socially constructed environment does change ' as environment, just material and symbolic records of action. strategist - determined to find meaning and patterns to we on objectified reality shapes choice. They suggest that "there opportunities out there in a of others intended by the other subjects. independent world with But my everyday our processes our for enacting their competitive environment. However, in replacing the objective and scope or call to the danger that strategists think themselves to be 7.1.2 subjective a a major customer demanding a customer, or a a price cut competitor attempting to take as a away a condition for rival's key customers, (1979: 165) coined 'enactment', to emphasise that people actively create that which they then perceive as real. 205 or technological change within the industry, are all products of people interacting and communicating with each other, of human intersubjectivity, yet the objectified existence of such events also present very real threats and opportunities to Berger and Luckmann (1966) in their thesis on a firm's future. the sociology of knowledge show that 'symbolic records of action' do become massively real, 'objectified' through for example legitimation institutionalised commitments. The often cited statement of the purchasing or executive who bought IBM equipment for his buying IBM' is an regulatory action because 'no one ever got fired for example of the force of that legitimation. Of course competitive and can break competitive position it and commitments in or once erode such commitments. IBM enjoyed, but that does not take no longer has the dominant away the force of legitimation shaping choice. Threats and opportunities environment" but neither as company are customers and may not be "out there in the competitors "a projection of human imagination" Morgan and Smircich (1980: 492) describes the extreme subjectivist approach to social science. 7.2 CONSTRUCTING SOCIAL REALITY The 'taken for 7.2.1 Social granted' reality is that which is taken for granted, and guides everyday strategy practice. Berger and Luckmann in their analysis of social reality explain that: the reality of everyday life is taken for granted as reality. It does not require additional verification over and beyond its simple presence. It is simply there, as self-evident and compelling. I know that it is real. While I am capable of engaging in doubt about its reality, I am obliged to suspend such doubt as I routinely exist in everyday life. This suspension of doubt is so firm that to abandon it, as I might want to do, say, in theoretical or religious contemplation, I have to make an extreme transition (1966: 37). Different terms have been used to define and broadly the same concept, but in different contexts reflecting different intellectual heritages. In Anglo-American sociological tradition "the total set of beliefs, customs or way of life of particular groups" defines 'culture' (Dictionary of Sociology, Penguin). Loveridge (1990: 96), in writing about 'strategies in context' and the 206 management of innovation, refers to 'strategic frame' as "the existence of a stable set of personally held values and orientations by which individual behaviour is structured and, therefore, predictable for others". Hedberg and Jonsson (1977: 90), in discussing the nature of strategy, derives its essence describes a 'myth' strategies during a as "a theory of the world ... certain time interval". There they describe the notion of culture as from which are many an organisation such terms, but in shared meaning and understanding.2 Further, Morgan (1986: 128) notes "in talking about culture we are reality construction". 'Social reality' rather than 'culture' really talking about or other terms more a process as of clearly captures the sense that human actions are grounded in particular epistemologies and ontologies. Practitioners of what rarely indulge in reflections they know, and on or discussions about the epistemological certainty those brief occasions when they do so, they see themselves as stepping out of reality. Taken for granted knowledge routinely guides assumptions and decisions ideas for even before rule making sets in. Just as macro societies like nations take granted, for example, the value of institutional competition ownership of resources, realities. Moreover, smaller societies such as of versus common organisations, have different social reality, while discernible, is also indeterminate. It is always only partially available to As discussed earlier so too a set our apprehension, typically through symbols.3 practitioners use symbols to make sense of, and manage, their relationships with each other and the external environment (see 2.3.4). Nevertheless writers and consultants commonly overstate the extent to which practitioners manipulate their social reality. Smircich and Stubbart for example, or their advisers urge managers to can exploit the role of dramas like 2 Writers use differentiating labels to stress a particular perspective, including 'culture', 'belief system', 'system of values', 'ideology', 'life-worlds', 'paradigm', 'recipe', 'cosmology', 'theories of action'. Which term is used also depends on the writers intellectual heritage. Further, while many writers refer to 'culture' in differing contexts, its meaning in that context is often not defined. Perhaps for this reason it seems to have lost its meaning through use and abuse, as a 'catch all' label. 3 It is these symbols that consultants and practitioners try to manipulate in the hope of changing an organisation's culture: introducing mission statements, encouraging empowerment, introducing a formal grape-vine such as the top-down 'cascade' of information, business re-engineering, restructuring, etc. Checklists for the task abound: Johnson's 'cultural web' (1989), Kakabadse et. al. 's 'power levers' (1987), McKinsey 7-S Framework in Peters and Waterman (1982), Leavitt's 'diamond' (1978), Harrison's questionaire (1972). 207 training, the Christmas party, campaigns, big meetings, etc. socialization and managers should realize that they exercise wide discretion in defining what the dramas are and when and how they will occur. Wise strategic managers take advantage of language, metaphors, and stories to convey their messages Strategic (1985: 730, 731). Ascom Timeplex staff take for granted the importance of individual individual initiative in an success through internally and externally competitive and territorial environment. The Bank of Scotland staff take for granted the of order delivered by history and their sense hierarchy. When they discuss strategy in terms of 'stewardship' and 'bottom-up and topdown', it is for them their right of equal a natural framework. The Open Business School staff take for granted access to decision making of the whole Business School. These realities by taken for granted practices. In Timeplex the relative are reinforced are made redundant individual and or ease with which staff re-employed reinforces the reality of competition at both the organisation level. In the Bank the reality of order and prudence is reinforced by the emphasis put on continuous improvement in efficiency, and reflected in cautious recruitment, continuous training, and regular performance evaluation of individuals and operating divisions of the organisation. Over time rules of behaviour become unconscious, taken for organisation's heritage. In this the Bank were sense we can Timeplex's individualist practices log', a a reflects its are seems are rule governed. If unlikely given current social fashions. ingrained, as evidenced by the existence of its move way to compete, accepted way a by¬ on' approach to strategy. The possibility of life mechanism does not enter the consciousness of always been the otherwise. The that organisations register of problem installations awaiting resolution (see 4.3.5). It is product of the 'get the order and without such say starting out today, would it develop the twelve layers of managerial responsibility that it currently carries? It 'escalation also granted, and form part of the and would require a different Timeplex staff. This has way of thinking to be of dealing with these consequential installation problems also practitioners' individualistic approach to business. Although the register is prioritised according to various factors, rearranging the order of dealing with problems is not unusual. The customer that shouts loudest gets priority. 208 As these examples show, "existing practice does guide future practice, determination" ... without logical (Bijker, 1995: 252). Bijker was writing about the social shaping of technological systems, but the point applies equally to strategy practice. Such guidance is mixture of How a dealing with the exigencies of the day, and the unconscious influence of heritage. practitioners deal with the 'day to day' is guided by their constructed social reality. Social realities In the can at any time be threatened or lost, to the individual and the collective alike. Open Business School the taken for granted belief in equal making was felt by most staff to have been lost, first Dean (see on account 6.2.2). Formal structures and procedures access to shared decision of the leadership style of their were subsequently installed to protect and maintain that right of shared access. Moreover, in each organisation there is a sense of continuity between heritage and everyday practice. Engaging in the current do not holder), necessarily new can mean experiences like electing be traumatic, but still a new serves to Dean (and by implication ousting enrich practice. Such major changes dumping the heritage. Although the Bank of Scotland's innovative engagement with remote banking in the form of Home Banking was a major new dimension, this did not undermine its managers' commitment to 'stewardship'. These differing social realities assimilate and structure and process 7.2.2 knowledge in context specific ways, and both the content of knowledge assimilation becomes taken for granted. Conceptions of social reality The notion of social reality is supported from studies of culture in social a variety of different intellectual perspectives: anthropology and organisational behaviour; the examination of scientific knowledge claims within the sociology of knowledge; and philosophical accounts about the relationship between the individual and society. At a common sense level it is recognised that organisations differ culturally. For example, the apparent informality and innovativeness of Microsoft is commonly contrasted with the formality and bureaucracy of IBM. Similarly, banks 209 are stereotyped as very conservative, risk averse, steady, whereas the image of telecommunication service providers, such Timeplex, is that they The stereotype adventurous, risk taking, surviving in are of academic institutions, perhaps less full of ideas, but out of touch with the real people's experiences over so a very as turbulent industry. for Business Schools, is of a place (competitive) world. These images grow out of time of dealing with these organisations, generalisations of industry comparisons, and attempts at conscious image management by the organisations through for example, the way they promote new products and services. These impressionistic stereotypes show something of the variety of ways that organisations are perceived, but is clearly not the basis for making judgements about what factors give rise to social reality, or why there is variety. Existing empirical research particular stream comes on culture is a source of inspiration for this study. A argued that analysis of societies should be based on the cultures, rather than comparing isolated features, such as puberty rites or wedding ceremonies. These two events also features of valuable from social anthropology, and starts with Benedict's (1935) analysis of certain tribal communities. She wholeness of their a are wider social institution. organisation has its own social processes in their own right, but they are Similarly, in the context of this study, each rituals that punctuate strategy practice, whether it is product selection, the budgeting and planning process, or deciding who gets what grade of company car. These processes take their meaning from, and give meaning to, wider social institution. a Understanding how organisations make choices therefore requires presenting these rituals in context. Benedict made cultures: a very a valuable contribution in providing detailed descriptions of three different Appollonian, Dionysiac, Paranoiac. Very crudely, an Appollonian culture describes ordered society "whose delight is in formality and whose measure and of sobriety" (1935: 93). A Dionysiac culture describes 'value of existence' lies in through excess. way of life is the a way of society where the breaking out of the ordinary, to reach for the extraordinary Members of the Paranoiac society [where] suspicion and cruelty" are the norms see existence "as a cut-throat struggle (1935: 124). How Benedict arrived at these 210 archetypes is not clear; she did not offer any underlying rules that helped her to construct them. We may say that the Bank of Scotland seems to have an Appollonian culture, or that practitioner behaviour in Timeplex rings of a Paranoiac culture, but why it is like that cannot be told within this framework. The plurality of organisational culture is acknowledged Harrison's (1972) among management writers; work is probably the most widely quoted.4 For example, Charles Handy's (1976) third edition of his popular paperback Understanding Organisations uses this framework to discuss culture, while some writers use Harrison's work as a context for discussing power cultural types (Kakabadse et. al., 1987). Harrison's 'organisation ideologies' suggest four and matching structures: people culture/web structure, role culture/temple structure, task culture/ net structure, person determine which culture best describes an culture/cluster structure. The key variables that organisation are: history and ownership, size, technology, goals and objectives, the environment, and the staff. Harrison's ideas unconsciously reflect preceding studies in varying respects: Burns and Stalker's (1966) matching of management control and structure to environment; Woodward's (1965) effective organisations using structures appropriate to their technology; Lawrence and Lorsch's (1967) observation of a link between differentiated cultures and work organisation. Essentially Harrison's work suggests that organisational success is contingent on an appropriate mix of cultures. For example, R&D should be 'task', while administration should be 'role', the former encouraging innovation and the latter supporting efficiency. The executive task is then to integrate these differentiated cultures, using an appropriate management style, structure, and control system. Here culture takes its place alongside control systems effective and structure, as variables that the rational manager manipulates in pursuit of organisational performance. As with Benedict's descriptions, it is unclear how Harrison arrived at these archetypes of culture. There are no rules, no underlying analytical framework. 4 Roger Harrison (1972) described 'organisation ideologies', which is commonly interpreted 211 as 'culture'. The history and philosophy of science also contributes to the notion of social reality. Kuhn (1970a) describes the history of science as long periods of 'normal science' punctuated by revolutions in thinking. These revolutions replace a scientific community's world view 'paradigm' with another more 'roomy' version (1970b); a version that offers or a more encompassing account of how the world works. He suggests that scientists' thinking coalesce particular theories around and that these theories or beliefs. Scientists as are a they seek to account for the behaviour of physical phenomena, composite of rational and non-rational intellectual commitments, spend their lives defending and extending their theories, sometimes loosing to rival theories. Kuhn's ideas seem substantially similar to the work of Fleck L. (1979), known scientist.5 Fleck using them as an analysed the development of syphilis and the Wassermann Reaction, vehicles for his account of the historical development of scientific knowledge. (1979: 42) shows how different 'thought styles' of succeeding 'thought collectives' Fleck through the centuries accounted for syphilis. During the middle ages it was reflecting the centrality of astrology and Christianity at the time; later it of its earlier and little treatability by pharmaceutical means, most notably mercury; now 'a carnal scourge' was defined in terms in modern times syphilis is defined in terms of the theory of disease. Kuhn's scientific community of practitioners sharing intellectual commitments 'paradigm' is Kuhn's like Fleck's 'thought collective', and similar to Fleck's 'thought style'. usefully equate Kuhn's scientific community We may shared very seems or Fleck's 'thought collective' with the experiences and expectations of an organisation and its network of customers, competitors, regulators and other stakeholders: for example, 'the banking world' or 'the world of process higher education'. Kuhn's and Fleck's questioning of the sequential and rational of discovery in science is directly relevant to the assumption of managerial rationality. Formal accounts of successes in technological innovation, growth in market share, 5 or profitability are often rational reconstructions of history rather than the achievement Although Kuhn acknowledges Fleck's influence on his thinking the latter remains little known. Perhaps, as Fleck observed own analysis, the world was not ready for his ideas. in his 212 of purposive strategy (A) and Honda (B) juxtapose this rational model with a model of strategy Honda and Pascale's (1983) well known management case studies of processes. learning-by-doing. Pascale shows that Honda (A) is company's account of the managers success an account from Honda's about how they went about developing Honda USA. 'paradigm' of an organisation, often in blinkers 'gut feel' 'after the fact' rationalised in the USA, while Honda (B) is Kuhn's ideas have influenced management the an as research and teaching. It is fashionable to refer to a pejorative sense, as a mindset, preventing the organisation from seeing the real world. Based on a set of cultural his study of Foster Brothers, Johnson suggests that many organisations go through the motions of matching resources fail to the environmental challenge, believing that they are doing the right things, yet (see 2.3.4). Johnson concluded that organisational beliefs and practices act as 'cognitive filters'. from Slowly and imperceptibly over time these cognitive filters prevent the organisation seeing what the environment really needs. On the other hand, taking Grinyer and Spender (1979) suggests that whole industries use managerial belief that help them a way unnecessary manage. Recipes provide positive view, a 'recipes', patterns of of circumscribing the cognitive strain of always having to identify and consciously choose between alternatives. In either case change involves some kind of leap from one set of beliefs to another. Writers on in Kuhn's organisation theory, Burrell and Morgan (1979) and Morgan (1980), found value approach, arguing that social theory social can be analysed in terms of four paradigms reality: functionalist, interpretive, radical-humanist, radical- world views on structuralist. They also offered the rules that support these alternative social realities, showing that a which society particular reality depends may be regarded as on two dimensions. One material and objective, intersubjective experience of individuals. The other is a or concerns is the subjective and sociological continuum from 'regulation' to 'radical change'. On this second dimension individuals order and concepts like capitalism regard such concepts as as useful and as the degree to may regard social something to be preserved, ideological prisons and alienating devices to 213 escape or they from. may or Briefly, the functionalist reality interpretive reality schools believe in assumes a an interpretive school, constraints of that lead to of humans us our as sees socially constructed reality but being alienated from sees any patterning unforgiving, our as sense as practitioners in the three organisations of this study interpret society as are imposing a see as something natural; they live in a functionalist their competitive world, however unpredictable and social order. Their competitive world is enterprising and are willing to pursue tension within their view of the world, between seeing it as alienating; reminds them of the need to also order potential. The radical structuralist shares this a source seen as a of freedom for individual recognition and material gain through competitive action. In the Open Business School there is perhaps are or objectively independent. reality. Timeplex practitioners time as subjectively ordered. The radical-humanist reality, like largely material, and their social order same such order minds, 'glass ceilings' put in place by human minds, self imposed limits Like most individuals, those who material existence, and the existing within 'psychic prisons' but like the functionalist sees the social world material and as sees a a regulated reality, albeit the former reality sees that society has socially constructed reality. Both functionalist and interpretive ordered and objective and the latter the assumes seeing the social order as a more obvious useful, and at the tension inherent in radical structuralism. Competition satisfy customers efficiently, but capitalism and social privilege overwhelming ideologies, causing people to impute limits to their own potential. Overcoming this alienation is at the centre of the Open University's philosophy of open access and equal opportunity; a Morgan's (1980) framework is useful for mission to help people achieve their full potential. as a guide to alternative ontologies, but is less helpful comparing and contrasting alternative constructed realities. 214 Inclusiveness: Social 7.2.3 While Kuhn's reality and strategy practice paradigm has enriched the study of organisation and other fields, its also introduced problems. There literature and among writers on seems to be some confusion, at least in the management evolutionary economics, in the use of language to describe socio-cognitive frameworks. Masterman (1970) noted Kuhn's ambiguous in his first edition (1962), citing twenty one has use of 'paradigm' use different meanings, which she categorises as: metaphysical, sociological, and material. Kuhn (1970b) responded to Masterman's observation by acknowledging that his handicapped me as well as my use of the metaphor is "badly confused critics" (1970b: 234). In a ... which has postscript to his second edition (1970a) Kuhn, "clarifies" the confusion by stating that "a paradigm is what members of a scientific community share, and, conversely, [practitioners] who share as a a scientific community consists of paradigm" (1970a: 176). This community share the "constellation of group commitments" or "disciplinary matrix", and a as paradigm both "shared examples" of practice (1970a: 181, 187). Although Kuhn regards the relationship of learning by doing and learning how the world behaves "a double role [where] the two cannot be as separated"( 1970b: 274), the nature of this interdependence remains obscure. Approaching the field from knowledge" a sociological perspective, Schutz's (1964: 73) notion of "recipe seems to encompass and Luckmann take both metaphysical and material aspects of reality. Berger recipe from Schutz and uses it in both a sociological and a practical sense: pre-theoretical level, however, every institution has a body of transmitted recipe knowledge, that is, knowledge that supplies the institutionally appropriate rules of conduct. Such knowledge constitutes the motivating dynamics of institutionalised conduct. and constructs the roles to be played in the context of the institutions in question (Berger and Luckmann, 1966: 83). on the ... recipe knowledge does not concern anything except what I have to know for my present and possible future pragmatic purposes. a large part of the social stock of knowledge consists of recipes for the mastery of routine problems. I have little interest in going beyond this pragmatically necessary knowledge as long as the problems can indeed be mastered thereby (Berger and Luckmann, 1966: 57). ... ... 215 'paradigm', the nature of the interdependence between the metaphysical and practice As in implicit in 'recipe'. Perhaps this has contributed to remains and of uses 'paradigm' or a flowering of different emphases 'recipe'. Grinyer and Spender acknowledges Schutz's recipe "pattern of managerial belief' (1979: 116), then give examples that Kuhn's seem more as a akin to (1972) 'shared examples'. Fincham et. al. use 'recipe' in a way that suggests a sociological interpretation: "dominant recipes involving precepts about new were gaining currency at a broader level - services, technologies, and organisational practices" [emphasis added] (1994: 301). Many writers terms own assume in seem to a have been inspired by Kuhn's and Schutz's work and introduced their particular context: exemplar, pattern, regime, heuristics, model. Where writers Kuhn's 'shared examples', they refer to different aspects of that research space. For example, Nelson and Winter's (1977) 'regime' emphasises technicians' beliefs, while Georghiou et. al. (1986) take the the economics of same term technological change, for design configuration. Dosi (1982) writing seems to use paradigm in a way on that reflects Kuhn's multiple meanings, referring to exemplars and heuristics, the whole being guided by the invisible hand of engineers' blinkered imagination. For Dosi there is shaping practice, either continuously along no sense of practice in turn shaping theory, might be that the that many a trajectory or or a sense of theory through discontinuous change, but of theory shaping engineers' imagination. It of these writers intend to blur any distinction between the metaphysical, sociological and the practical, but they do not make this explicit. Alternatively, it despite Kuhn's clarification there remains way, the 'paradigm' has developed one can read off in diverse beliefs space can a direct way a life of its a confusion about the own. use may be of concepts. Either Grinyer and Spender seem to imply that managerial beliefs by examining practice: "the pattern of be visualized as a multiplicity of constraints defining a feasible solution within which the firm's strategy must be located" (1979: 130). Mintzberg (1978b) and Morgan (1979) confusion of see the variety of use of paradigm as an abuse and meaning. However while the former calls for its abandonment, the latter emphasises its value. Morgan (1980) uses Masterman's (1970) critique to suggest a hierarchy 216 for organisation theory building in social science. He regards 'paradigm' level at the top, within which there communities of theorists are "metaphors" or the metaphysical as "schools of thought, subscribing to relatively coherent perspectives ... ... those based the upon acceptance and use of different kinds of metaphor as a foundation for enquiry" (Morgan, 1980: 607); within In this metaphors are 'puzzle solving activities'. hierarchy social reality shapes everyday practice. At the taken for same time the routine and granted nature of practice reinforces and elaborates social reality. The notion of inclusivity and inseparability between practice and social reality, and its importance is recognised by Schon (1963) in his discussion technological change. Schon observes that and language to explain or we give meaning to on the role of metaphor in facilitating draw new on metaphors embedded in situations. Furthermore in the application the metaphor might also be developed (elaborated, transformed) as our culture process of it situation. encompasses one more new provides the materials from which our metaphors are made. Our our social system, and, in the informal sense of the term, our theories of the world, provide us with concepts for displacement. They are our 'given'. The new metaphor emerges out of the interaction of the cultural gifts with the Our culture technology, ... demands of the situation (Schon, 1963: 65, 73). Similarly Pondy in his study of the role of myth and metaphor in organisation notes that "metaphor simultaneously facilitates change and reinforces traditional values. capacity of metaphor to carry simultaneous facilitation of several meanings at are suits it ideally to express This the change and continuity" (1983: 164, 165). Bourdieu in his analysis of practice and drawing how the world works once ... on examples from anthropology, observes that theories of implicit in practice: practical logic is able to organize all thoughts, perceptions and actions by means of a few generative principles, which are closely interrelated and constitute a practically integrated whole In other words, symbolic systems owe their practical coherence to the fact that they are the product of practices (1990: .... 86). ... Recognition of this reciprocal relationship between the metaphysical and the practical is important for understanding the nature of practice. Notions like 'best practice' embody 217 shared beliefs about the nature of the organisation's competitive position. Inclusiveness emphasises the "continuity and consistency in behaviour and expressions of belief' (Loveridge and Pitt, 1990: 96). The relationship is one accounting for how the world behaves they independent and distinct principles like are not of inclusivity rather than duality; in good and evil. Taken for granted theories about how to compete in the banking community (eg opening more the inalienable branches), or how experiences should be ordered (hierarchy), equality of individuals' access to or a education, do not guide practice belief in as some mysterious force. Practice is imbued with those theories of how the world behaves; practice is the embodiment of social practice form and and their The some reality. This relationship does not mean that the metaphysical kind of closed system. Practitioners' social reality is not fossilised, practice is not trapped by their shared reality. inclusivity of practice and social reality is of ambiguity and provides for the a source unceasing development (elaboration, transformation) of both practice and social reality. Neither social reality nor practice can be read off like instructions. This ambiguity includes "practical coherence", consisting of "on the Bourdieu's one hand, their unity and their the other, their 'fuzziness' and their irregularities and regularities, and on (1990: 86). This sense of practice being stable, guided and at the provisional is explored in chapter 8. Inclusivity allows us to same time always acknowledge that strategy practice constitutes, and is constituted by, practitioners' social reality. Such relationship goes some way incoherences" even an inclusive toward explaining the profound difficulty, if not futility, of attempts to design organisational culture; and trying to impute a causal relationship between strategic intent and competitive performance (see 9.4). 7.2.4 Individual and group While these ideas about culture, psychology paradigms and recipes are useful in throwing light on the social difficult to compare directly, underlying social reality nevertheless they and strategy practice, albeit from different intellectual perspectives. These ideas also show the are processes difficulty of bounding the indeterminate and provisional character of social 218 processes. Many have tried to make either the For of these socio-cognitive psyche of society and social structure, or processes by investing hegemony in in the psychology of the individual.6 example, Durkheim (1976) in his analysis of religious forms introduced the 'social group' the sense as "a mysterious, super organic group mind" (Douglas, 1987: 14). Fleck L. introduced 'thought collective', to describe the shared practices, experience, expectations of a social network or community of practitioners: The "insistent clamour of public opinion, gathering of collective experience, mutual interaction among ... laboratory practice, ... ... the continuous co-operation and the members achieved the collective experience ... in communal anonymity" (1979: 77,78). Although Fleck's 'thought collective' is made shared up of individuals, the critical focus is their experiences and exchanges. Indeed Douglas, (1987: 16) suggests that 'thought world' better captures this meaning of Fleck's 'denkkollectiv' than 'thought collective'. This meaning of shared experiences and expectations of a thought collective reinforces the sense that an usefully organisation is bounded less by its legal definition, and its social network of stakeholders, it customers, that very more suppliers, competitors, regulators and others together construct their shared reality. The members of a 'thought collective' share different roles at the group a particular 'style' of thinking, and it performs and the individual level. At the level of the group this 'thought style' is "the special carrier for the historical development of any field of thought, for the as mental and objective assimilation of what has been are so perceived" (Fleck L., 179: 159). problems with these ideas. For example, Fleck L. (1979: n. 7, 179) acknowledges that the notion of 'thought collective' is problematic because it invites 6 The as 'thought style' is "the readiness for directed perception, with corresponding However, there a well given stock of knowledge and level of culture" (Fleck L., 1979: 39). For the individual the of by collective psyche that is somehow material. Against this he 'structure-performance-conduct' versus argues that if scientists the 'resources based' model of strategy rings of this tension. 219 a view can attach value and it meaning to statistical data, then why not the concept of thought collective if helps to increase understanding: the boundary line between that which is thought and is too narrowly drawn. Thinking must be accorded a that which is taken to exist certain power to create objects, and objects must be construed as originating in thinking; but, of course, only if it is the style-permeated thinking of a collective (Fleck L., 1979: n. 7, 181). Kuhn is much language as more ambivalent about Fleck's work because he suggesting that the group regards Fleck's whole is the individual writ large. (Fleck L., 1979: Douglas, 1987: 9). In contrast Durkheim thought of the individual as x; society writ small: classifications, logical operations, and guiding metaphors are given to the individual by society. Above all, the sense of a priori Tightness of some ideas and the nonsensicality of others are handed out as part of the social environment ... the reaction of outrage when entrenched judgements are challenged is a gut response directly due to commitment to Debates about the processes For a social group (Douglas, 1987: 10). and direction of causality of socio-cognitive example, questions remain about the relationship between dispositional state giving active an a processes thought style as continues. "a latent enduring character to thought collectives, and thought style as an expression of a thought collective" (Fleck L., 1979: 158). Douglas also asks whether the collective comes before style or vice versa? If style leads then how does that come about? (Douglas, 1987: 18). It seems inappropriate to ask whether individual or group psychology is the more metaphor for examining strategy practice and shared reality. The picture is much complex, involving interactions between individuals experiences and expectations, and individuals 7.2.5 While Does innovation more individuals with distinctive representatives of groups. require "unlearning"? encouraging practitioners to remain self-reflexive (see 7.1.1), Smircich and Stubbart recommend that In as as meaningful practitioners develop the art of "unlearning": "learning compels forgetting. fact, organizational wisdom may require continuous unlearning" (1985: 732). They 220 suggest that 'behavior programs' or recipes get in the way of enacting and testing "one's physical, informational, imaginative, and emotional resources. Without sufficient resources (or without the ability to think imaginatively about what might constitute resources), simply cannot support many one conceivable enactments" (1985: 732). While they acknowledge the constraining influence of recipes, the metaphor of unlearning seems to equate companies with computers; it suggests that, as with computers, companies history and institutional commitments. Berger and Luckmann show that habit their can erase formation is an inescapable part of everyday practice, and that it beneficially provides background that "opens recipes help choice up a a foreground for deliberation and innovation" (1966: 71). Industry managers to cope with the endless variety of ways of competing by narrowing (Grinyer and Spender, 1979). Further, organisational routines play a critical role in facilitating efficiency gains. As routines become established they enable managerial resources to be released over time, resources All three companies studied here, and involves a never of assimilated work many that may create further capabilities. everyday examples, show that innovation ending stream of, and fusion between, deliberate and serendipitous aspects knowledge into new configurations of knowledge, capabilities, artefacts, and organisation. As Schon shows innovation involves interpreting the light of an old theory when we are or new situation in metaphor: intelligent in dealing with the new we deal with it as, on the basis of, through, or in terms of the old, still without reducing it to the old. But what does it mean to do this? We are figurative rather than exact. We use analogy (Schon, Technological change managed in this our intellectual resource. Furthermore, way, as rather than literal. We 1963: 23). consciously or are approximate unconsciously, always enriches argued earlier, the inclusiveness of social reality and strategy practice renders the possibility of unlearning untenable. For practitioners or a community of 'thought collective' to selectively forget aspects of practice requires corresponding regression of social reality, and a some denial of the role of history in shaping practice. 221 7.3 CONCLUSIONS This chapter has explored the constructed nature of social reality from various angles. There are a range of concepts (culture, paradigm, recipe, thought style) that shed light that communities counts as can be identified in terms of 'taken for incrementally over the notion granted' and shared beliefs, what knowledge, and practices. Social reality is not static; view of how the world works, both on a community can change its centuries and through infrequent major intellectual leaps. The review has emphasised the inclusivity between social reality and practice to reinforce the sense that practice reflects a shared theory of how work should be organised; the Bank's guiding principle of stewardship and its practice of looking for efficiency gains in 5). There is a differentiated every quarter of its operations, are inclusive; one reinforcing the other (ch. dynamic and developmental quality to this inclusiveness, due to practitioners' understanding of what constitutes stewardship and what constitutes an opportunity for efficiency gains. Indeed, the inclusiveness of practice and shared reality have implications for how practitioners work together, affecting for example, what is regarded work as rational behaviour, organisation styles and practices, collective decision making styles, attitudes to uncertainty and risk, and preferred styles of economic transaction. Collectively unconscious and uncritical acceptance of metaphysical ideas; ideas that shape how practitioners learn and deal with anomalies thrown up by the exigencies of the day, are reflected in the practice of strategy. The ambiguities and inconsistencies of inclusiveness unavoidably provide practitioners with scope artefacts and ways for novel reinterpretations of their world, expressed as innovative of working. Chapters 8 to 10 stand back from the detailed descriptions of each case study presented in part II, and offers a single coherent account that embraces all three cases. The case study evidence is interpreted in ways that offer an alternative explanation for the complexities of strategic choice and organisational context. It is argued that this alternative explanation provides a richer guide to understanding strategic choice and organisational context by 222 analysing the practice of strategy. Case evidence is mobilised to show both a profound similarity, and important differences between the organisations. In particular the analyses show: that the and the practice of strategy is socially constructed (chapter 8); the role of capabilities interpretive flexibility of technology in shaping reality (chapter 9); the possibility of plural social realities (chapter 10). This argument is supported by comparing and contrasting on publicly available examples where appropriate. The overall aim is to show that in all three organisations the practice of strategy is socially case study evidence, as well as drawing constructed, and that the socially constructed reality of each organisation is different. The analyses also show that innovative behaviour is inherent to the construction, the character of which varies with alternative realities. Chapter 8 suggests that the practice of strategy has both Whereas determinate strategy a spatial and temporal dimension. unfolds in time, moving synchronously from formulation to implementation, practice acknowledges that practitioners deal with the immediate future by assuming the continuity of the immediate past, drawing on their taken for granted and shared meaning. Practitioners rarely interrupt their commitments to the past, and expectations of the immediate future, and they rarely engage in detached contemplation and assessment of all theoretically possible futures. Specific sections examine how practitioners construct strategy, by examining the influence of various features of a shared reality within everyday practice, such as the influence of features of heritage, shared meaning, politics, and how anomalies everyday reality that practitioners do not normally focus on as they are managed; go about their daily practice. Chapter 9 focuses construction of on three areas of deliberate strategy that contribute to the social reality: capabilities, technology, and strategic intent. First, in acquiring and applying their knowledge practitioners have limited conscious social access or control over their reality, nevertheless they contribute to its maintenance and development through dimly conscious recipes of behaviour and the creative interpretation of those recipes, continuous as well as development of new recipes. Second, despite the guiding influence of recipe knowledge, the interpretive flexibility of technology-practice contributes to technological 223 the innovation, through for example the inseparability of facts and values, and serendipity. Third, the assumption that, through strategic intent practitioners control revealed performance, remains unproven. For example revealed performance may be manipulated to reflect intent (9.4). In contrast to chapters 8 and 9, chapter 10 shows that important differences between the organisations suggest that each organisation is host to discernible constructed social realities; few distinctive social realities. Just may as limited number of partially practice in each organisation reflects different communities, whether of only one primitive or a scientific, have distinctive social realities, fieldwork evidence suggests that organisations have distinctive social realities. The very is not heterogeneity of individuals' and collective experiences infinitely variable, rather such variety tends to coalesce limited number of social realities. Practice among distinctive social arrangements, as discernible features of a individual organisations' members reflect assumptions, and ideas of how the world works and how to behave within it; how to co-operate for a and how to compete. Chapter 10 explores comparing alternative and equally viable realities. Strategic choice, 'social choice', and what counts as innovative behaviour, is an a or more framework appropriately integral part of these constructed realities. Accepting that the practice of strategic is constructed, and understanding an generating the social reality that gives meaning to strategy practice, enriches organisation as our understanding of the management of innovation. The meaning and value of innovation and innovative for practitioners and invite further research into, for example the development of analytical tools that be practice is given by practitioners' shared reality. Such insights have implications are developed sensitive to as part a social construction epistemology. Some of these implications will of the conclusions in chapter 11. 224 8 The social construction of 8.1 strategy INTRODUCTION The accounts of the three organisations presented in part II seem to support the notions of strategy as determinate and as managed chaos, concepts discussed earlier in chapter 2 (see also 4.7, 5.7, 6.7). Ascom personal survival; there is thrust of seem to Timeplex spend much more managers no room and engineers are caught reflect both deliberate and for strategising. Bank of Scotland same time individual freedom jealously guarded. In all three organisations there is also practitioners are not that in some seems dispassionate way, but are very framed by their assumptions about what is feasible; they and seem to have a and compete. Their practice, shared experiences, and seem to reflect chapter 7 explored what social reality is, this chapter focuses that reality. It explores the socio-cognitive a collective and picture of the process of charades negotiation go how practitioners that practitioners are a of social construction, by considering its spatial and temporal about agreeing among processes on assumptions that guide practice. Sections two and three paint dimensions. Section two sketches the game that granted view of the world (ch. 7). immersed in, and the shared broad a sense and much part of their strategy. Their expectations about how their organisation should develop construct among managers sitting outside of the practice of strategy, pushing the organisation this collective view of how to co-operate taken for seems to managed chaos metaphors: much time is invested in strategic academics is While managers time contemplating their options and looking to the long term; planning and scenario testing, but at the practice in the cut and guided by analysis and deliberation in advance. The Open Business School action is way or up spatial dimension by describing how players in the on its outcome. It shows the importance of interaction the players; the importance and difficulty of achieving a shared understanding of each other's meanings. Section three then outlines the temporal dimension 225 of organisations constructing their social reality by selecting historical development; how the International Division has speciality within the Bank to being an a slice of the Bank of Scotland's grown from being an oil financing organisation with substantial international interests and autonomy from the Bank. This example shows that the practice of strategy is a never-ending process of practitioners drawing legitimacy for present and future action from their heritage, interpreting the Bank's of working (recipes) in light of the exigencies of the day, and way applying their capabilities in ways that reinforce, and at the same time extend, the Bank's recipes. At a more discusses detailed level of a analysis, and taking examples from all three variety of socio-cognitive processes that practitioners shape everyday strategy practice. Some of these processes are cases, section four engaged in as they give stability and direction to practice: 'shared meaning' (8.4.1); 'enacting intersubjective reality' (8.4.2) hinted at in 'charades' in terms of social interaction and reality' (8.4.4), an negotiation; 'heritage and the ordering of social issue introduced in 7.2.1. While attention to more immediate operational problems contributes to stability through routinised behaviour, practitioners do at the time remain aware of the need to deal with more remote same strategic issues, and is the focus of the 'here and now' (8.4.3). Other how socio-cognitive processes infuse practice with instability: 'politics' (8.4.5) examines political behaviour among practitioners shape practice; 'order and disorder' (8.4.6) shows how information flow can contribute to competing constructions of reality within the organisation, sometimes leading to conflict. Practice both solves problems and generates unexpected situations and events, and 'anomalies' (8.4.7) looks at how practitioners' continually solve but at the both stable and make sense boundaries' does not same provisional at the of their time generate problems. The same sense that strategy practice is time is reinforced by looking at how practitioners competitive reality through 'applying patterns' (8.4.8) and 'constructing (8.4.9). Suggesting that practice is both stable and provisional at the same time mean that practitioners are confused, rather that guided behaviour and novelty 226 are inherent to the practice of strategy; practice reflects the ambiguity that constitutes the inclusivity between social reality and practice (see 7.2.3). 8.2 CHARADES The idea that practitioners construct those who claim to be realists, and a reality seems difficult to communicate, especially to only deal in 'reality'! A simple device is needed to help get the essence of the idea across, or what Benedict calls a "detour" (1935: 39). To help understand the process this section shows how actors construct meaning in the present, and changes focus to sketch that construction the next section as never ending and provisional. 'charades' is often played at parties (Weick, 1979). It involves The game standing before a small audience. The person standing before the audience thinks of a well using action and mime, known title, and then tries to communicate that name to the audience, but not say The speech. To make the films, games or performer has other hand sees a game an actor or actress manageable and interesting they all agree on a theme of books. a clear idea in their mind mixture of as they try to act it out. The audience on the confusing signals and possible interpretations. The performer in turn tries to make sense of the audience's expression of its understanding of the acted-out- title, and adjusts their performance accordingly. At the same time the audience continually try to make sense of the performer's adjusted signals, taking into consideration past selections and and audience rejections. It is encouraging an interactive and constructive process, some interpretations and ignoring or discouraging others. The performer is co-operating with the audience, busily constructing the subject. As the game progresses sections of the audience with both performer a shared understanding of may start to find difficulty in suspending judgement. Slowly they become increasingly committed to thinking about particular book or narrow range more noisily, Now imagine two or of options. They may become quiet, seek clarification. The point is that the audience or or pursue may their beliefs begin to fragment. three performers vying for the audience's attention 227 a .... Replace performer with organisation, and audience with competitive environment. Organisations impose meanings of a new their environment, most obviously during the introduction on product. The organisation then uses the environment's time the environment develops its responses to organise further expectations of what the responses. At the product service should achieve, expectations that the innovating organisation routinely or tries to make same sense of. Unlike the clear idea of what it is novel product or offering, own performer in charades, the organisation or may not have new a what is the most appropriate strategy for delivering their service. Thus they are keen to make modifications in light of customers' developing expectations, and to differentiate it in light of competitive developments. The interactive and constructive process the is further entangled because the organisation, like performer, finds difficulty in selecting clues against the noise of competing interpretations and requests for clarification. Further, cumulative experience among customers and variety, and competitors and other stakeholders leads to differentiated expectations and more regulation. This multi-node dialogue between "relevant social groups" (Bijker, 1987: 4) routinely constructs reality, organised Notions of 'strategic learning' focus objective environment, (i.e. is not an on as internal and external environments. the organisation's ability to interpret signals from an environment, internal and external, whose material existence questioned), and the development of strategy that incorporates this learning. However strategic learning ignores the subjective construction of this reality, the interpretive flexibility of signals, and the fragility of the internal/external distinction. 8.3 THE NEVER ENDING CONSTRUCTION OF REALITY: FROM NORTH SEA PETROCHEMICAL FINANCING TO GLOBAL PAYMENT SYSTEMS This brief story of the development of the Bank of Scotland's (BoS) International Division is used to show the have been temporal dimension of constructing social reality. A similar account could presented about the OBS. The value of the emergence and growth of BoS's Centrebank, or Timeplex, example is in showing that there is temporal continuity of the organisation's social reality, that social reality is not static but developmental, provisional 228 or and uncertain. The maintained example shows that an organisation's socially constructed existence is by its links with its heritage and aspirations for the future, and the interplay of subjective and objective reality over time. It also highlights that the and ending exercise development of the organisation's capabilities demands creative interpretation of decision rules, an issue further developed in 9.2. The BoS International Division gas never currently enjoys social and economic relations with oil and multinationals, UK corporate financing, and more recently the British government's Department of Social Security (DSS). These diverse relations financial risk assessment in are exploration and production of oil and based gas, on and capabilities in more recently capabilities in managing the international transfer of large volumes of low value payments to British pensioners around the world. These socio-economic relations and capabilities have emerged and developed and create over the last 20 new ones. The International Division grew out and gas of BoS' development of its capabilities in North Sea oil financing during the early 1970s. The Bank's engagement with North Sea oil and project financing new new to and the Bank's executive is keen to explore Early beginnings 8.3.1 this years was a natural extension of its Scottish financial services operations because sector fell within their home the Bank, there were common peculiarities of oil and gas market, Scotland. Although the oil and gas sector was features such as risk assessment, between the project financing and the existing project financing capabilities of the Bank. These commonalities meant that in the operational practice drew heavily and commercial gas on early days the International Division the Bank's existing practice, centred on other industrial project financing capabilities. The Bank's entry to this new sector was also driven by an imperative. The Bank regarded the prospect of foreign banks, especially English banks, prospecting for oil related financing opportunities in its own back yard, as massively real (see 5.6.1). The Bank's 229 successes lead to greater involvement in this sector, exposing BoS to the wider financial needs of multinational energy companies. BoS increasing became these international energy a part of the objective reality of companies, quickly becoming institutionalised in the potential customers, competitors and the government as energy sector. as a were distinctive success in this new sector, encouraged its executive greater role in shaping the broader sector of international banking, setting up to pursue a offices first in the USA, then 8.3.2 some useful and justified its position in that sector. The Bank's positive (subjective) experience and (objectified) emerging legitimate provider of In other words, its executive and other operating companies and regulators within the sector believed that the Bank had capabilities that as a Hong Kong, and Moscow. The International Division Recent developments years BoS has been largely successful in assimilating new project financing capabilities; creatively exercising its existing capabilities and developing new situations. The International Division is Centrebank is another. Centrebank Bank's executive to the actions of crystallised as on a new concept new ones objectification of those capabilities, and as a subjective response English banks during the 1970s (5.6.1). That Home Banking, and project financing but one emerged in the mid 1980s The International Division has also on was distinctive entity; part of, yet differentiated from, the Bank of Scotland. During the last 20 in of the UK's first "oil bank".1 Acquiring the status and reputation of "oil bank" marked the Bank project financing in the eyes of 'remote banking' was by the response born. begun to develop other distinctive capabilities, not based international electronic fund transfer capabilities, emerging in the late 1980s with TAPS (Transcontinental Automated Payment Service) (see 5.6.2). It was an innovation, using technological capabilities that the Bank had been elaborating and applying over 1 the years From "A brief in its existing business areas. These existing capabilities were now being history of Scotland's first bank", published by the Bank in 1995 to commemorate its 300th centenary. 230 reinterpreted in a new application; what Abernathy and Clark (1985) might call a 'niche' innovation, and Schon (1963) a 'displacement of concept'. The profitability of the TAPS scheme depends on the Bank's capabilities in managing low value, high volume fund transfers at low cost. This is a task the Bank's executive feel fully able to manage; they have been honing such capabilities for centuries. The International Division continues to shape TAPS, continually monitoring the process, looking for ways of reducing cost, including improvements to the technology and work organisation. The International Division, as manager by the renewal of its contract with the DSS evidenced In this of TAPS, has established credibility with the DSS as since 1987. every year example the capabilities and competitive environments of both BoS and its International Division have been shaped and reshaped throughout the last two decades. This shaping has been due to social and economic relations between the Bank and relevant social groups over the period, including oil and gas many other multinationals and DSS, operating banks around the world, and British citizens depending on co¬ regular fund transfers. Options for growth 8.3.3 Over the last two decades the International Division has created, developed, and established a robust and legitimate role for itself, both in the subjective reality of the Bank's executive, and within the objectified reality of international banking. This is evidenced by the Bank's executive deciding that the International Division needs to increase the proportion of non-UK income relative to UK income. They see the International Division play in international financial services, in its own does not want the Bank to be left behind in the to having a larger role to right. Furthermore, the Bank's executive general trend global, and there is also the threat of competition from The as a among wider companies to become more open European Union. expectations of the Bank's executive continues to elaborate in light of its achievements date, and against anticipations of things to come, in particular the perceived opportunities of the international financing sector. 231 Regardless of the growth of the International Division, the Bank's senior among managers years among competitive world. The the Bank's senior a managers financing is upon capabilities opportunities in different among remains stable a homogeneous of the International Division and develop that conflict with the aims Banking Division. This differentiated subjectivity provides interpreting and acting When managers differentiated rather than Centrebank have ideas about how their divisions should differentiated gas later the majority of its income is still largely from UK importance of the Scottish market it is of the Branch Scottish bank, whose early beginnings in North Sea oil and opportunities. Although the shared reality view of the Bank's a subjectivity, and is reflected in the International Division's competitive performance, where 20 around the dominant but not unanimous view is that BoS is first and foremost home market is Scotland. The Bank's consistent with this a ways; scope for and for the continued creation of the Bank's divisions. Campbell became General Manager of the International Division in 1994, he tasked with was growing the non-UK proportion of the Division's business (see 5.5.3). He recognises that in principle his choices are infinite, he has the authority to do whatever he desires within the confines of financial services; he can be as "opportunistic" as he likes. looking for acquisitions, I could be looking for start-ups, I could be looking for sharing in syndicated deals, I could just go to American banks and say 'lets do asset swaps. You give me your mortgages and I'll give you some of I could be ... ours'. Each of Bank's Campbell's options objective reality should solution to engage of are in asset subjective realities that any swaps carry different consequences for the of them be realised. For example, Campbell's preferred with American banks would be the easiest and fastest way achieving his aims. However, he also recognises that his preference would undermine the reality that the domestic Branch Banking Division has helped shape The Branch Banking Division's domestic mortgages range over the last 300 years. of strategic options do not include depletion of (see 5.5.5). This brief account shows the Bank's future negotiation and compromise among its reality is being shaped by various factors: managers (Cyert and March, 1992), institutions 232 already in place, and attempts by the Bank's with their managers to take action that seems consistent understanding of the Bank's past. The earlier description of the game of charades highlights the spatial dimension of practice: people working together; making 'on the spot' decisions in the heat of the game; applying meaning to gestures, signs, ambiguity; sometimes hesitating, at other times making intuitive leaps. Charades gives a sense of people shaping practice through differentiated understanding, interaction, and negotiation. The account of the development of the International Division highlights for the future; situations a temporal dimension: the influence of history; expectations demanding urgent action interspersed with time for more deliberate and detached decision. The temporal dimension shapes practice, and gives meaning to strategy in the present. The preceding discussion of the spatial and temporal is an analytical convenience to There be can explain in broad terms the socio-economic no processes separation of the spatial and temporal since charades unfolds in time, and the International Division is party to numerous socio-economic relations at following sections explore in greater detail the socio-cognitive processes 8.4 that shape practice. any moment. processes The that shape practice; from which participants draw their identity. EVERYDAY PRACTICE Strategy is repeated, a are social institution, constituted of "practices that sanctioned and maintained by social social structure" regularly and continuously and have a major significance in the (Penguin Dictionary of Sociology, 2nd ed. 1988: 124). Strategy is distinct from strategy as ordinated norms, are as practice determinate (synoptic and rational anticipations determining action) because the former, according to Bourdieu properties, such as irreversibility, that synchronization destroys. Its temporal structure, that is, its rhythm, its tempo, and above all its directionality, is constitutive of its meaning. In short, because it is entirely immersed in the current of time, practice is inseparable from temporality, not only because it is played out in time, but also because it plays strategically with time and especially with tempo (1990: 81). unfolds in time and it has all the correlative ... 233 co¬ Everyday practice constructs, and reflects, social reality experiences. Although its outcomes and processes are as objectified and taken-for-granted perceived as objectively real and overarching, it is produced by collective human enterprise. In this, strategy embodies beliefs organisational world and the competitive environment, and their about both the internal relationship. It is a process the best way to compete, external that is guided by a pattern of ideas, including assumptions about and social interactions drawn from both sides of the 'internal- boundary'. Strategy choice shapes, and is shaped by, everyday knowledge, routines, experiential and reflective learning, and an implicit shared understanding, theories about how the world works. Strategy more than formal overarching 'prescribed practice' (e.g. corporate as planning models, mission statements) punctuates rather than describes practice. It is their shared into understanding that determine the beliefs and values that bind practitioners together organisational wholes. Although a few staff may be attempting to organisation according to some empowerment), that works for everyone constitutes the social turn draw their own about how grand design or or reality the fashionable theory (e.g. total quality, is otherwise attached to that organisation reality of that organisation; identities. That manage a comes reality from which those individuals in from taken for granted social prescriptions they should co-operate and compete; it cannot be read off from organisation designers' blue-prints. What follows is an attempt to sketch out some of the main features of strategy as everyday practice. In this sketch strategy practice is the collective interpretation and expression of shared meaning; where strategy is both routinely guided by and contributes to coherent social and reality. Strategy practice is engaging with the innuendoes and 81). It is at urgency a mixture of making of the immediate future; unspoken implications of gestural once a routinised and a or sense a process a more or less of the immediate past, full of "equivocations, verbal symbolism" (Bourdieu, 1990: creative process, ordered and disordered, reinforcing and elaborating yet being constrained by rules of behaviour of the social reality. 234 8.4.1 Shared Strategy practice is which is a socio-cognitive framework of shared meaning. Both collectively subscribe to staff in BoS, has everyone meaning a managers framework of 'stewardship'. In this a common and their game designated role in the lifelong task of pursuing efficiency, the legitimacy of recognised by all. The senior management of the Bank can be seen performing their allocated role, continually measuring the effectiveness and efficiency of their Divisions and business units. Charts internal notice boards give regular feedback on the Bank's monthly productivity performance. Managers of the Card Services Division automate office will focus transactions are engaged in services generally) and 'back office' tasks on on-going attempt to being changed. The front are selling the Bank's services, with the back office managing all paper (cheques, cash, etc.). Here the Bank's executive is also restructuring its relationship with customers, through the encouragement to or an Similarly in the Branch Banking Division, 'front human intervention processes. office' (counter on use cash machines and telephone computer links for financial transactions, and to use counter services for financial advice and purchasing financial products. The moves carefully in the hunt for ways to managers of Divisions are following each other's improve efficiency of internal processes and relations with customers. In performing their role the Bank's influences outside the Bank. For example suppliers of the Bank's specialised processing technologies keep the Bank's automation. As part For example, - for example, how adventurous or date on on paper developments in managers must pay some financial advice and financial transaction processes that managers up to of being responsible stewards, standards and market pressures. more consciously and unconsciously draw managers attention to regulatory of the above changes reflect the need for security. The robustness of its lending conservative it regulator, the Bank of England. 235 may be - is always of interest to Staff at all levels work within attributed roles, and contribute own work processes when their evidenced and how it could be improved. Individuals suggestions managers are by being reflective about their are are singled out for praise instrumental in these improvements. Perhaps the Bank's senior dominating the staff, but the staff seem happy with the arrangement, by the low turnover of staff. It may be that everyone takes for granted that efficiency is the natural standard that they must work toward. It may imperatives have been shaping everyone's reality, giving rise to a financial as also be that financial shared understanding that efficiency is the right priority, determining how the Bank should behave. It is less question of domination through managerial preferences, and more a general the pursuit of efficiency is in everyone's interests. Individual gain lies in the for an established consensus a that proper respect authority consisting of bounded responsibilities. Everyone knows their place in relation to the authority structure, and "stewardship" is the watchword. Competitive pressures of these ideas and many efficiency. At least customer and practices reinforce the Bank's ideas one are credit card processing account thought it could Services Division search for shared by its rivals and clients who process its own cards are way to compete, equally preoccupied with lost during 1994 because the cheaply than using the Bank's Card efficiency is natural, and of paramount importance. and the relentless is about prudent management of its resources pursuit of cost efficiency. This is reflected in its internal arrangements and relationship with the external environment, and is constructed 'practice and discourse' (Knight and Morgan, 1990) and the best (5.3.2). Managers and staff alike interpret such events as proof that the The Bank's view of the best way to compete its more was on among or accomplished through staff, with customers, suppliers, regulators. The Bank's staff share generalised expectations about what stewardship means, and these expectations help them to express and interpret their relationships internally and with others. This shared everyday practice as an capabilities and rules meaning, the social reality of the Bank, is expressed through ensemble of distinctive capabilities and rules of behaviour. These are only dimly available to the collective consciousness of the Bank's staff, they are pervasive and taken-for-granted. 236 The Bank's decision rules are conditioned by, but also condition, its social reality; one reinforcing yet elaborating the other through continual refinement of decision rules: through the creative staff's interpretation and expression of taken-for-granted practices; drawing on the ability to invoke appropriate tacit knowledge and behaviour to match the social circumstances they perceive themselves to be in. The Bank's orderly progression over the centuries, involving interaction with its customers, regulatory authorities, and its continual improvement of work organisation practices, increasingly based on IT, is succinctly captured by the existence of over 300 'standard letters', covering mail shots, courtesy letters, warning letters to loan defaulters using increasingly strong language, and the outside world, staff may choose from any of these, customised letter. This accumulation of letter formats the Bank's routine refinement of its reflects While interpretation of a an 'stewardship' Timeplex or very Timeplex's small size means 'cut and paste' to make over the decades is are focused on the monthly a similar story for are or power to many also competing for investment, often becoming hostage to created by the competitive drive of among reality where competition the Bank and its competitors, supported by professional governmental regulatory mechanisms. The effect overriding a financing, market share, and profitability. It is a jungle compared to the relatively cordial behaviour and make itself heard above the (products and services), Timeplex and its competitors and financial markets, is imposing scramble for quarterly 'bottom line'. companies in the fast developing on output the fickleness of financial markets. This environment, a crystallisation of ordered world. industry. Apart from competing Timeplex and its competitors is a a routine practice this form of discourse that it lacks the financial competitive clamour. Theirs is telecommunications a In its discourse with financial prudence underpins the practice of strategy in the Bank, and engineers managers recipe. As or so on. concern on Timeplex's internal activities is with the colour of 'the bottom line', whether the ink is black Timeplex is trying to impose meaning on the environment through new or an red. While products and services, it remains exposed to surprises from its investing community, who are major social constructors of the same environment. A loss of confidence in the financial markets quickly translate into a loss of value in Timeplex's parent, Ascom. 237 can very In Timeplex everyone is aware financial markets, and the and profit presentations and critical of the short-term perspective of the industry, the company's leadership. Nevertheless, monthly and quarterly sales are imperatives, trials of strength, and key milestones in the calendar. Everyone tries to show how well they did, smashing the sales record for this month, working well within budget for the second month in Timeplex is all about getting orders, well of them The practice and discourse in quickly as as possible. They have to do against stiff competition, and Ascom's share price is under continuous pressure that bears down promising of as many a row. an fixes. Timeplex to generate unrealistic delivery, development, unrealistic on may cause promise is a or promising a more or pressure, a profit. Bending the rules, by perhaps product that is still in the 'field-trials' stage friction but getting the order is everything. How to satisfy the headache for someone else, who in turn is practised at finding ad-hoc Many established and formal mechanisms are thus bypassed. This individualism promotes a social reality of unbridled entrepreneurialism, which at the same time reinforces individualistic behaviour. 8.4,2 Enacting intersubjective reality Berger and Luckmann usefully capture the centrality of interaction and communication between the practitioners in the shaping of their reality: reality of everyday life further presents itself to world, a world that I share with others, ... me as an intersubjective I cannot exist in everyday life without continually interacting and communicating with others, I know that I live with them in a common world, Most importantly, I know that there is an ongoing correspondence between my meaning and their meaning in this world, that we share a common sense about its reality (1966: 37). ... ... Although the Bank's history constrains choice by erasing some and facilitating other opportunities, the social construction and precariousness of knowledge may means still "be reinterpreted without necessarily upsetting the institutional order (Berger and Luckmann, 1966: 87). We get the International Division, goes explores his own a that history as a result" glimpse of how Campbell, General Manager of about looking for ways to reinterpret the Bank's history subjectivity and that of his colleagues, through the 238 way as he he presents various alternative of options for growth for the consideration of the executive. There Campbell's account of how he goes are three aspects about deciding what to do that show this search for a forward (see 5.5.5). way his executive colleagues in making strategic choices, rather than The first is that he engages deciding alone and presenting his decision. He seeks out his colleagues to share the decision process have with them, and they expect him to do this. His colleagues are managers who each responsibility for a BoS Division, and collectively share responsibility for the Bank's overall development. Campbell takes it for granted that while the developmental choices open to the International Division is formally his, practically those choices are inter subjectively shared with his colleagues. As Campbell of the one jobs that I see I've got to do over says: the coming months is to try and force my senior colleagues to ... recognise that the canvas they've given me to paint on is far too big, and unless I get some consensus and closer direction ... we're going to be stumbling around all over the place for a long time I'm not just saying 'hey guys tell me what to do. I'm saying here are the objectives you've given me. Here are a number of different ways of going about it'. .... In looking for consensus Campbell is seeking to shape the subjectivity of his colleagues, and at the same too time inform his own subjectivity. From number of strategic possibilities, a vast big for Campbell to contemplate, he organises information around him (events, perceived opportunities, market data, objectives) into constraints and a few strategic options by applying meaning to them in light of his personal experience, what he thinks his colleagues might expect, and what they might reject. When he formally presents his subjective reality a proposal, it is with his peers. of the a proposal that will already have been shaped through informal discussions Their inter subjective reality will be further shaped through formal discussion proposal, subliminal a discussion that is guided by what Campbell calls the "prejudices and strategies" of his colleagues, The second aspect legitimate continual and are way as as well as those of Campbell himself. of Campbell's account that shows him struggling for forward involves constructing experience probing and sense making on - his and his a meaningful and peers - through his part, and talking with others about what they see doing. Campbell is groping and testing for the boundaries of socially acceptable and 239 unacceptable strategy; sensing "where the constraints and barriers that make action 'impossible' and [looking] for self imposed restrictions consider and exercise when confronted with the options that [his colleagues] problems" (Weick, 1979: 150); at other times building into proposals his anticipation of his by spoken and unspoken rules of right and on peers reactions to his suggestions; being guided wrong ways for the Bank to behave internally and compete externally. Campbell reflects on his experience of finding an acceptable way ahead, and says that already going through the process of - almost without them realising it, shall we say - of forcing my Bank Chief Executive and the Group Chief Executive to focus more on these issues by throwing up specific opportunities of the 'opportunistic' type. in I'm a sense ... Campbell referred to banking, he as an a proposal that he put forward recently. Through contacts in merchant came across the option of buying a continental European bank. In presenting this acquisition option for the International Division, Campbell learned where the boundaries of don't like this for the acceptable strategy lay when the executive a came little more about back and said "we following five reasons". He finds probing the boundaries of accepted strategy "very effective in flushing out... subliminal strategies". However for his part, he is also his increasingly internalising those boundaries, making them part of his anticipation of his peers' reaction shows: "I will be putting up next own subjectivity, week this asset as swap idea, and I know already in a sense what ...". The third aspect heuristic to is that through the help him make sense Campbell is 'accomplishing' a process of deciding what to do Campbell is constructing of the boundaries. In the words of Garfinkel (1967) subjective reality by creating new interpretations and expressions of possible future realities for the International Division's, through applying meaning to his colleagues' preferences discussed above, and his own experience. He intends to share this heuristic with his colleagues, Bank's written guidelines for acquisition more tacit knowledge and as a way of making the explicit, in the belief that this will reduce the ambiguity of those guide lines, and thereby make decision making 240 more efficient. a The 'here and now' 8.4.3 Practitioners' attention is dominated temporally remote sources and Luckmann, 1966: to by tasks in the 'here and now', while of experience are spatially and some of less pragmatic interest and urgency (Berger 36). Managers spend most of their time avoiding uncertainty, attending operational detail, sequential conflict reduction, and often being reactive to events (Cyert and March, 1992; Lindblom, 1959). routinely criticise themselves for not taking the time to meet and Timeplex's managers discuss the company's direction. They feel that strategy meetings face of the daily pressures was of their time. They had enough to do without adding existing individual performance supportive culture for airing strategy topics internal are School's research seems to under continual pressure to funding each institution and its them to legitimate talking shop that might not The absence of a forum and facilitate the existing status quo of year depends produce research, because the Business on the volume of publications. Most academics Higher Education fear that quality will suffer Nevertheless academics and its or status. a a was competition and distrust. OBS academics within was a the additional problem of not being familiar with what meetings, the procedures and content, and whether it would be involved in such enhance their desirable, but in the of dealing with customers, both externally and internally, it luxury that had to wait. There use are publish as a result of this emphasis quantity. recognise that they must maintain their standing within their aspirations for future research performance ratings, and this more. on At the same time, the OBS's research reputation ability to attract superior research staff and funds will depend over on pressure drives the long term, the quality more than quantity of its research output. The overriding attention to the 'day to day' might imply that practitioners hide behind the unproblematic, fearing to venture beyond routine, Routine is critical because it cease or taking action in some mechanistic way. gives order, without which BoS, OBS, and Timeplex would to exist. The Bank's relentless pursuit of efficiency and cost reduction is 241 more than simply rule following. It may be ritualised but it is not mechanical. It has always been important to both the Bank and its customers. The Bank's focus reflects accumulated tacit and codified knowledge about achieving efficiency in banking, and how to compete in ordered and regulated environment. Driven by unanticipated competitive English banks that burst into its concern for cosy its customers expect as a it to behave in a from 'here and now' world, yet still consistent with its good stewardship, the Bank has played development of remote banking pressures an a significant role in the early distinct sector (see 5.6.1). The Bank's staff believe that financially accountable way, and actively works at fulfilling and protecting these perceived expectations. The demands of 'the immediate' might suggest that exploiting existing capabilities, and are capabilities for future growth, which in drain so on that managerial effort where a strong respect uncertain process, does not support the preoccupied with unlikely to divert time and effort to developing any case may be difficult to create. There is a new further people have to be trained (Penrose, 1959), and guided they learn and accept unequivocally the Bank's developing While new managers are way of doing things, including for its long history. In short the socialisation of new staff is an expensive, and offers only limited return in the short term. The evidence this view however. practitioners may feel buffeted by the demands of the immediate, they do recognise interdependence between the 'here and now' and their organisations have routinised ways of developing new more remote aspirations. All three capabilities into everyday strategy practice. Customers, competitors, and regulators have for some time been assessing the legitimacy of suppliers' claims to performance standards, for example by measuring their quality procedures, commitment to personnel development, and social responsibility contributions. Part of the competitive performance claims of most suppliers consists of displaying certificates of achievement in ISO 9000, HEFC many of these areas of remote experience, including (quality), Investors In People, and the Institute of Banking professional training. 242 Heritage and the ordering of social reality 8.4.4 Strategy practice then is the practical articulation of an organisation's social reality. It is ordered reality, and one that is not limited to the here and now but informed by an more remote aspirations and the organisation's heritage. Strategy practice is ordered to the extent that taken-for-granted practices artefacts and established are arranged in meaningful patterns. In long organisations these practices pre-date most present practitioners. Until the 1970s, the accepted way of British banks enlarging their business was to open more branches. It accepted practice to was holder. There was a sense in which (always imagined to be a bank's hierarchy middle aged man), ordinary lives. The Bank Manager a seat on cheque accounts without paying interest to the was paternalistic, starting with the extending down to its children, the customers. The Bank Manager 'Governor' at the top, might have a run was probably was held in high esteem, having a power over member of the local Rotary Club, and the Boards of local companies. Individuals gave their loyalty to a particular bank, depositing their savings there, and in return for their association with that bank received required having large attitude. Going back status elevated if as of financial a sense reserves, a security. The banks' role a provider of financial security and showing prudent behaviour, particularly in its investment little further, they had as say thirty years ago, individuals would consider their bank account. In this example the Bank of Scotland's practices role in society, about the natural order of things, and shared by customers and bankers alike. In the following example, it is possible to world should be, see so intimately tied reflected the broad class divisions in British in Scotland. Education practice reflected these divisions, from primary to background, then a with beliefs about its how beliefs and assumptions about how the Higher Education. To put it crudely, if you had to work for City where up produces that world. Until the 1970s the British education system society, less are a degree (preferably a a living, and had the 'right' good one) from Oxbridge would get you into The lot of money could be made without getting dirty. If you had to go to a 243 polytechnic, then something more lowly would be during the 1960s and 1970s Labour governments world where Grammar Schools had course, The Open University was open access different social order, anyone innovation and The two models of a on vision of the a degree the political and ideological principle of previous educational qualifications, day job. You only had to be over 21 realisation of that alternative social were teaching relying on different with are very packaged programmes one the ability to pay, nor old. The Open University reality. years. Co-existence is funded differently, the student population of the Open University tends to be much older methods of years nor Higher Education have co-existed for the last 25 right adjective because, until about 1994 they other could follow a and equal opportunity to higher education, for everyone in Britain. the need to sacrifice the the saw a place, and where founded in 1969, Potential students did not need an offer, like engineering. A succession of regardless of income and background. providing is no on or 'mature students', and the model relying on face to face forums and the delivered remotely. Students moving between traditional universities have their academic credits routinely evaluated by the receiving institution, but for many years traditional institutions viewed the value of Open University academic credits with The current of a scepticism. (Conservative) Government is reforming education, in particular the introduction national curriculum for primary and secondary education, and is attempting to make Higher Education institutions more accountable. It is not impossible to imagine the government developing a model of Higher Education where universities are required to deliver standardised courses like a national curriculum. In other words the extension of The Open University model to the whole of Higher Education. 8.4.5 Power is Politics a key force in the construction of social relationships (Knights and Morgan, 1990) and of the social realities from which individuals and groups 244 draw meaning and identity (Knights and Murray, 1992). Power may come from formal authority, control of capabilities, alliances and informal networks, control over decision processes, gender, boundary management, and other sources (Morgan, 1986). The observation that organisational strategy is political a where for example those with greater power dominate others, is process, common place. Knights and Morgan (1990) suggest that actors construct internal social relations through 'discourse and practice', from which identity. Most Timeplex to thinking up managers everyone derives meaning and and engineers unashamedly devote much time and effort strategies and taking action that will enhance their status, and routinely take soundings to identify potential opportunities and personal threats. One wondered managers rarely produced that discuss a an output discussing but employee always seemed to be in meetings in each other's offices; meetings that was broadcast to others. It is unlikely that they met to organisational strategy since by their should be In why new were not own admission strategy was something they (see 4.5.1). longitudinal study of the management of IT in an insurance company, Knights and Murray show that while practitioners appeal to the needs of markets and the capabilities of technology in their strategy arguments, such 'externalities' and negotiated 'internalities' rather constructed "by the power and practices of key personnel within the organisation" (1992: 225). Nevertheless, practitioners do shrouded in are see constructed externalities as real, albeit uncertainty, and beyond their control. Internal decisions and preferred options mediated reduce the are by their subjectivity, not hard-wired to environmental change; practitioners ambiguity of externalities by applying structure and meaning to them. In their study of IT within the financial services sector, Fincham et. al. concluded that externalities are interpreted according to "the distribution of knowledge and the aspirations and self- images of particular groups The constructive and division of labour, [within the organisation]" (1994: 300). interpretive is further complicated by the organisation's vertically and horizontally. Sales and Marketing, Customer Services, and Information Services construct and process competing realities, based Murray, 1992). As Fincham et. al. note, many on different assumptions (Knights top-down decisions 245 are based on bottom- up information gatekeepers, where for example "top technology, but their choice will be dependent influence and control These findings are met on expert be free to 'choose' advisers and subject to political by such groups" (1994: 10). Who then is constructing whose reality? supported by evidence in all three organisations studied in this research. There is the conflict between control of Customer over managers may Timeplex's Customer Support Division and the Sales Division Support (see 4.5.5). One side claims that customers needs by existing arrangements, and the other argues that a are best fundamental change in Timeplex's organisation is essential in order to better meet those needs. This conflict can be seen as "an attempt to legitimise specific divisional and career interests by couching them in projects which are claimed to be coincident with the corporate objectives" (Knights and Morgan, 1992: 218). Some of the Bank of Scotland's Operating Divisions want control of IT, while not surprisingly its Management Services Division (MSD) defends its role centralised IT School was so resources wide that as provider of (see 5.3.3). The distribution of knowledge in the Open Business some individuals connected to one committee may not findings of another (see 6.6.5). The flows of power in this environment were know the based on a mixture of social networks and local influence, in contrast with the concentration of power at senior management level in the Bank of Scotland or in Knights and Murray's (1992) insurance company. Order and disorder 8,4.6 The practice of strategy is both ordered and muddled at the consciously and collectively directed ordered process. We have same seen time, yet is still a that practitioners live by their shared meanings and experiences. On the other hand, we a have also world seen that politics is endemic in everyday strategy practice, whether through individuals and interest groups vying with each other for control of relationships and consequence resources, or as an unavoidable of distributed expertise and decision making. In addition, individuals and 246 groups within the organisation have a differentiated understanding of their organisation's strategy in practice, and differing views on how the organisation should compete. Timeplex's corporate leaders in the USA sought to their rejuvenation of the through • a very company ensure a successful implementation of by keeping the whole change process under tight control, ordered unfolding of its implementation (see 4.5.6). They believed that the less staff knew the less they would is leaders assuming that they enjoy total control, moving dumb pieces a vision of corporate around, or out worry, and the less disruption there would be generally. It of, the company. Probably due to the tight control of information, the Customer Support the UK Sales as well as Customer leadership had different views about what these changes how the changes were to be effected. Sales Support, while Customer Support saw as in the UK and were meant to the reorganisation themselves saw group the first in as achieve, internal to a company wide reorganisation (see 4.5.7). Apart from this differentiated understanding of what Timeplex's rejuvenation strategy was, as noted above the UK Sales leadership's vision for Timeplex in conflict with that of Customer Customer in was Support (8.4.5). Support and Sales live within a differentiated understanding of Timeplex's strategy practice, and of what Timeplex's strategy should be. This differentiation has existed for many years, differences pre-dating the issues surrounding the particular re-organisation mentioned. Their are ingrained and sustained by their separated structures within Timeplex. Knights'2 observation of strategy seems very pertinent: strategic power [by the organisation's leadership] is not a monolith, and the relations in which it is exercised are not necessarily co¬ ordinated and coherent, one with another. There are gaps, contradictions, and discontinuities, and these can be exploited by members of an organization.... [Equally] subjectivity is not a unified and an integrated whole; individuals are the exercise of often as divided within themselves as they are from one another. Their subjectivity is composed of a complex web of complementary and conflicting as well as coherent and inconsistent meanings, purposes and identities, all of which generate as much tension as stability (1992: 529). very 2 Knights was criticising the positivist epistemology supporting management studies certain and knowable, and for ignoring the political processes that shape strategy. 247 for treating knowledge as inherently While the differentiated exercise of power and differentiated subjectivity contributes significantly to the disorder of strategy practice, such disorder is also internal important competition, creativity and innovation. For example, there is also understanding of what working for Timeplex their USA leaders. UK managers being 'in the a an company means, a spur to differentiated between the UK senior managers and of varying levels criticise their high salaried leaders for for themselves, for what they can get out of it', and hold the view that large proportion of that leadership is of poor quality. This critical assessment of Timeplex's feeling leaders contributed to the among UK engineers and managers that if you are good (i.e. entrepreneurial) you can go places in this company; a belief that there is a serious weakness in Timeplex's leadership that anyone with some talent and commitment could remedy. The bond of order and disorder in strategy Inspite of this the way company practice is inherent in Timeplex's social reality. has not disintegrated, internal differentiation does not get in the of a shared understanding of their reality, directed process. However, the scope Mintzberg's (1978) unintended strategies sense of a collectively goes some way emerge toward explaining why while intended ones are often unrealised. Anomalies Practitioners try to in terms of their make and express the three sense of unexpected and problematic (i.e. anomalous) experiences recipe knowledge 1970: 52). In the search Bloor's does it confuse the for differentiated subjective interpretation and expression of the organisation's social reality 8.4.7 nor or paradigm (Berger and Luckmann, 1966: 38; Kuhn, for effective solutions, individual organisations recipes in novel organisations. A ways. sense Indeed, the way that anomalies are are likely to interpret handled varies among of what these different strategies might be is suggested by description of knowledge creation in mathematics. He suggests that "in the search for plausible explanations, [people] anomalies: are likely to employ different ways of dealing with opportunism, exclusion, accommodation, indifference" (1983: 139). Practitioners do not choose consciously in some detached way, whether to accommodate 248 or behave indifferently to anomalies; they do not leave their everyday reality and its recipes in their approach to solving problems. Chapter 10 characterises and contrasts how practitioners within different social realities deal with While the environment is from within. For of an obvious everyday challenges and opportunities. source of the unexpected, example 'bottlenecks' (Rosenberg, 1982) many anomalies in may emerge can emerge one area as a result efficiency improvements elsewhere. Hunting out and removing bottlenecks is routine to the Bank, and is part of its recipe of continuous efficiency improvement. Relative to Timeplex, the Bank's division of labour is much division is equipped with a gives rise to an a social reality where order transcends formal organisational expectation that anomalies Division's 300 'standard letters' is anomalies source extensive. Each division and sub¬ myriad of heuristics, routines and recipes for dealing with possible situations. Operating in boundaries more an can be anticipated. The Card Services example of the Bank's arsenal of ways for dealing with (see 5.3.2). Occasionally anomalies cannot be anticipated, but can be a powerful of innovation Bank's Home through forcing the creation of new capabilities, as evidenced by the Banking innovation in retaliation to the English banks' unanticipated incursion. In suggesting that anomalies anomalies than are may come from outside or inside there is an inference that independent entities, disconnected from the social construction of reality. More simply emerging from outside or inside, anomalies are an inherent feature of an industry's 'thought collective' and its attendant 'thought style' (Fleck L., 1979), whether its banking, telecommunications services, or distance learning. Anomalies come with the organisation's socio-economic and technological relations and strategy practice, contributing to the provisional nature of those relations and practices. As inherent feature of an an organisation's social reality, anomalies exist through: the organisation's distinctive heritage; the differentiated and changing expectations stakeholder groups (for example among among competitors and customers); the versatility of an organisation's capabilities (further examined in 9.2); and the heterogeneity of inter organisational resources and capabilities, among competitors, collaborators, customers, and 249 regulators (2.6.4). This dynamic character of anomalies underlines the fragility of the socially constructed networks that constitute an organisation's competitive relations. We get a glimpse of this dynamic with the following example from the OBS. Over the last ten years the Open University has experienced situations and events unrelenting generation of anomalous brought about by: changing students' expectations; growing internal dissatisfaction from OBS staff with the recommendations and recent an Open University's administrative machinery;3 the experience of an HEFC quality assessment exercise during the more past, and a growing internally felt sense that there was a danger of technological change leaving the University behind. The on-going generation of anomalies tension with the broad respect developed Open University's sedimented practices; practices that for its accomplishments to date. Indeed, very robust administrative of it, from students, processes over the years are are in continual legitimised by the the Open University has for dealing with the variety of demands made competitors, regulators, and staff, and its teaching material has been incorporated into the courses of many well respected universities and other educational establishments. During the last three to four capabilities and creating years the University has been stretching and straining its existing new ones, attempting to accommodate new situations and events yet to emerge, including: the introduction of a comprehensive Information System to existing and incompatible systems; the opening up as replace of the student conferencing system (CoSy) to all students, sensitive to the rapidly expanding development of the internet; and the implementation of INSTILL (Integrating New Systems and Technologies in Life-long Learning), the University's initiative to create new capabilities and give it competitive advantage for the coming millennium (see 6.6.5).4 3 In meeting changing customer expectations and OBS requirements the Open University has had to develop new capabilities in administration, particularly in work organisation practices and information systems: the facility for students to pay for courses by credit card, including staged payments; more flexibility in the eligibility of students for fee refunds; and more customer oriented behaviour (rather than student oriented) from the University's student support machinery. In addition, as the OBS has sought to create new linkages with non UK markets, all new courses are being written to reflect that wider environment, through for example, European case studies and practical examples. Local tutorial facilities and tutors fluent in other European languages, have also become necessary. 4 The Open University has budgeted £10M and recruited 33 new academic staff to implement INSTILL. 250 Anomalies then are social constructs. In addition to environment anomalies are also inherent to strategy being a feature of a constructed practice, and are typically the product of practice. For example, Timeplex Customer Support engineers and Salespeople are engaged in the single-minded pursuit of new business, and it is taken for granted that a significant customer support machinery is needed to make new problems that emerge as a technical support within machinery is a any direct result of the overriding socio-cognitive commitment cost'. Problem generation is built into the company's practice.5 Further, while the accounting philosophy of Timeplex regards this large technical support an result of the initial installation design, or during installation. This Timeplex to 'sales at strategy installations work, fixing bugs and other additional customer machinery resource for as a necessary overhead, most managers and engineers it as generating additional business through the sale of sophisticated support contracts. As Knights and Morgan says "strategy as a constitutes the see problems which it then claims to have an discourse ... also exclusive expertise in solving" (1991: 267). 8.4.8 Applying patterns Practitioners also routinely apply patterns to their relationships with customers, competitors, regulators, and other potential stakeholders. Professional market research constructs market segments; they apply patterns on the premise that groups of people share certain hold similar views. Plans and activities built the strength of those characteristics, or 'resemblances' (Berger and Luckmann, 1966). Thus the everyday practice of strategy is ordered not are on only by shared meaning, recipes and routines, but also by patterns. Ascribed patterns develop over time, sometimes gradually, at other times radically. Banking was for centuries from insurance and a much more homogeneous industry than the last decade, insulated Building Societies. Regulatory interventions in the form of various 5 Fundamentally different ways of competing are not recognised as valid. For example, selling only robust product designs, taking greater care over customer requirements in designing networks, including installation time scales and costs. In effect the concept of designing quality in at the beginning rather than fitting it at the end, something that Toyota is regarded as having developed into a fine art, and sets it apart from its competitors. The development of such a concept would reduce sales volume, but would also reduce the need for technical fixes that result from the current sales philosophy. 251 Financial Services Acts by has produced consumer groups recipes are during the 1980s, and constant lobbying of the British government a shake up emerging in anticipation of new of the traditional patterns. New competitive consumer patterns continually being experienced by organisations, based customers, and new individual competitors. For example, pension schemes, a as a on and in changing relationships with result of government encouragement for number of insurance companies and banks introduced products during the 1980s that subsequently had to be modified aimed at particular high income products were terms of exploiting an a number of groups, or withdrawn. These mean and that new substantial subsequently and successfully lobbied the government to 'loop holes' in the tax laws. Perhaps because of a shared internal commitment that is also strong, organisations not aware new whose needs competitors defined in ambiguity in the tax laws. Recognising that this could lost revenue, the Inland Revenue close response to patterns they are in turn being 'made sense of or are often apprehended in terms of expectations perceptions about their capabilities and social relations. For example, customers and stakeholders evaluate telecommunication network systems expectations of what through their own customers, and a providers, like Timeplex, against good provider should be like, expectations that have come about experiential learning and socio-economic relations with providers, other regulators. Critically, many organisations routinely fail to recognise the implications of others applying patterns to their behaviour. Some organisations fail to recognise that they constitute situation a as are slowly painting themselves out of the landscape, major part of the landscape, like IBM. Janis describes suffering from 'groupthink', a malady where there is a many on the bright side, many those that organisations in this collective "illusion of invulnerability, [and] self-censorship of deviations from the apparent Looking even group consensus". innovations would not materialise without groupthink (1972: 197). There seem to be three mechanisms shared commitments of the involves the whereby the enacted external world intervenes in the organisation's practitioners to their strategy-in-practice. One periodic global soundings that organisations take. For example, Timeplex, BoS, 252 and OBS have all commissioned research during the last three years to find out what various parts of the outside world think of them. The weakness of this mechanism is that the organisation may be asking the feedback. The second is at wrong questions, potentially missing localised level, for a more a lot of valuable example the dialogue between Salesperson and Buyer. Thirdly, those stakeholders constituting the organisation's competitive world for may dramatically remodel that organisation's competitive performance, example when customers stop buying products and services from the organisation, either suddenly slowly. or When the President of one of Timeplex's customers, in a state of desperation, telephoned the President of Timeplex, demanding financial compensation and the removal of Timeplex's products, he was exercising his capacity to redefine his company's social relations with Timeplex (see 4.5.3). This example also suggests that "the key distinction is not between 'inside' and 'outside' organisations, or between 'subjective' and 'objective' relationships, but between the networks of interaction which are more or players" (Fincham et al., 1994: 13). Drawing on less amenable to local their study of 'sectoral influences strategy' in financial services they suggest that individuals, more or less scope for modifying their own behaviour, interact. One constraint within the on such scope negotiation by or groups, and organisations have influencing those with whom they is the extent to which behaviour is routinised, both organisation and within the sector. Such routine behaviour then acts impersonal or 8.4.9 Constructing boundaries as an objective constraint. The internal/external distinction of practitioners on use to on a convention that organise their experiences. The distinction is itself a social construction, product of social relations networks based organisations and their environments is among a practitioners. The building and maintenance of social professional training, membership of industry technical standards committees, knowledge flows between organisations and academia, joint ventures and alliances, all undermine any boundary building and further reinforce the socially constructed 253 organisation's boundaries. Many boundaries exist through political and nature of an economic definition; boundaries that often national change through trading relations. For example there change in government a are attempts to or regulate the boundaries between terrestrial and satellite broadcast, and what kinds of services cable network operators may legally engage stakeholders in. Technological change is also shaping and being shaped by potential redefining industry boundaries, for example 'edutainment' and 'multimedia'. Further evidence of the enacted nature of boundaries within and around, say, can be seen when contemporaries the IT industry attempt to define it. The Bank of Scotland's IT staff probably have more allegiance to their profession than to the Bank, especially while there is a general shortage of IT capabilities and banks have to compete for access to that pool of capabilities. The mobility of staff within Timeplex's environment while not a seems even more exaggerated, with it high turnover of employees. Arguably, Timeplex and its competitors may general shortage of that labour but be competing for skilled labour, the critical issue is an environment where key skills redefinition, and where all kinds of boundaries from attempts to merge are are under continual in constant re-definition, such as result Local Area Network (LAN) and Wide Area Network (WAN) technologies. The general tendency to recruit people with 'relevant industrial experience' is based existence of and further challenges the substance of a distinction between the organisation and its common break-down motivated 1992: Banking qualifications and banking regulations knowledge, capabilities, and practices among individuality between banks. Individual mobility by the scope to 222), in which technicians of that the industry wide strategies and practices (Huff, 1982; Grinyer and Spender, 1979) 'external' environment. The Institute of develop on case Timeplex Timeplex is as good exercise take a on significant degree be are incidental. Managers and utilitarian approach to employment opportunities, place to practice their craft the Bank and the Business School may to a and "the pursuit of identity" (Knights and Morgan, formal organisational boundaries seem to a power banks, further helping to the other hand 254 as any so another company. Their peers in seem more attached to the norms and organisation. Nevertheless, in all values of their well as the uncertainty of success or cases career opportunities and prestige (as failure) extends beyond the formal organisational boundary. As noted above, organisational boundaries are also shaped through collaborative ventures, and localised social networks. The Bank's collaboration with its customer NCR to the next generation of cash machines, is for the Bank Since the nine month experiment in 1993 was an regarded particular venture will become increasingly routinised innovation in management practice. as a success, as the form of that both parties try to work out commonly acceptable routines and heuristics, and develop boundaries of a common sense co-operation lie. For example, the Bank's representative NCR to another UK bank, but visiting a develop some of where the visit with may not foreign bank is acceptable. Richardson, the Bank's 'entrepreneurial broker' in this project, noted what an eye opener it was to see NCR's corporate planning process, and how formal it all was compared to his Bank's. He noted that he picked up a few ideas from NCR's planning process that he intends to share with his colleagues in the Bank. The collaborative learning experience has shown both parties a novel way for them to significantly influence their competitive environment through local social networks. It is innovation in management considerable practice that both parties recognise as creating socially constructed. This is not the case. non a hard Even the Board of Directors is construction. Indeed the NCR/BoS collaboration and his for competitive advantage. Talking in terms of 'boundaries' might suggest that the organisation has not scope an came that is social about because NCR's Chief Executive executive director from BoS discussed the idea. 255 a core 8.5 CONCLUSIONS The practice of strategy is socially constructed through socio-economic relations; relations that are spatially and temporally. Practice is distributed a stable pattern of relationships between practitioners, and between the organisation and its competitive environment. This stability comes from: an intersubjective reality organisation's heritage; shared meanings; the enacting of an among practitioners. At the same time the pattern of relationships is provisional due to: political behaviour; distributed expertise and decision making; differentiated understanding of what the organisation's strategy is and how to heterogeneity among of a tension between organisations in a sector. go a about it; the The practice of strategy is further constituted dealing with the immediate and more remote issues, and between order and disorder. Socially stable patterns also remain more or less provisional because they constituted of are anomalous situations and events. Practitioners deal with anomalies in terms of their often resulting in the elaboration and creation of new capabilities and yet more recipes, anomalies. Chapter 9 explores the role of capabilities and recipes in reinforcing yet at the same elaborating everyday practice and reality. The stable yet provisional that is practice constitutes social processes time practitioners' 'taken for granted' reality, their social reality. Indeed, it is this reality that shapes the practice of strategy, and elaborates a shared imperceptibly over practice that at the same time reinforces reality. The tensions inherent in the whole industries may a guided yet provisional nature of everyday practice suggests why be overturned or fade into obscurity in just a few years, or change only generations. In exploring how practitioners shape practice there is a suggestion that the everyday reality of each organisation in this study is different. For example in discussing shared meaning the notions of 'stewardship' in BoS and 'individualism' in Timeplex emerged. The extent to which each organisation characterised in terms of a different may be socially constructed reality is systematically examined in chapter 10. 256 9 Accomplishing social reality: applying capabilities, interpreting technology-practice, imputing strategic intent 9.1 The INTRODUCTION general introduction to Part III (7.1), noted three assumptions made in the earlier literature review of process chapter 2: strategists enjoy of strategy; practitioners interpret knowledge and values can a more or less control real world with over more or less the content and accuracy; be separated given enough time and previous knowledge. Chapters 7 and 8 argue against the first two assumptions by suggesting that far from being dispassionate overseers events they seek to of their future, practitioners manage. This chapter argues was very came bound up with the situations and against the third assumption by showing that knowledge is socially conditioned; facts and values interpretation of knowledge are are inseparable. This different about during the fieldwork. There were clear that the reported financial performance of the organisation constructed. Facts were instances where it was socially being defined through political negotiation and work organisation preferences, for example a share of the declared profitability of the Customer Support Division, and by extension the whole of Ascom Timeplex, depended on cross charging the Sales Division for any University were technical support provided (4.4.2). Senior struggling to agree on a department's were or acutely aware of the Open 'resource flow model', recognising that their choice of model would define the future relative financial Practitioners managers performance of Faculties (6.5.3). that published results carried implications for their organisation's future prospects. It became clear that this observation of the subjectivity of knowledge underpinned generally how practitioners use innovation knowledge to apply and develop capabilities; interpret practitioners use more knowledge in their practice of strategy. In managing technology in different and novel ways; define revealed performance and construct its links 257 with strategic intent. The strategic significance of these three technological innovation is regarded seen as areas is widely accepted: critical to wealth creation (1.2); capabilities are as widely where organisations must invest to remain competitive (introduced in 2.4); as areas strategy teaching stresses the importance of defining clear targets in advance of investment. This chapter explores the roles of these three distinct yet related dimensions of strategy practice in creating social and material reality. Each topic is treated separately to examine its distinctive role. In assessing the role of capabilities the analysis draws on the socially constructed nature of knowledge, the importance of legitimation and tradability of capabilities, and examines the extent to which the exercise and development of capabilities involves rule following, creativity, and taken for granted knowledge (9.2). Section 9.3 takes a broad interpretation of technology and examines three aspects that contribute to the interpretive flexibility of technology-practice: the indeterminacy of facts and human values; whether technology has hard core, or is a configurable and meaningful only in light of the exigencies of the immediate; the commitment to heritage and practitioners' anticipation of the future. In examining strategic intent section 9.4 considers the degree to which practice is guided by goal seeking or goal setting, and the centrality of heuristics to practice. The extent to which revealed performance is the product of control through strategic intent, assessments and these three politics, and self-fulfilling strategic areas are processes distinct they have in or is the result of differentiated is also assessed in 9.4. Clearly while common the social condition of knowledge. Practitioners and their organisations shape social and material reality through their engagement with applying capabilities, interpreting technology, and imputing strategic intent. 258 9.2 EXERCISING AND CREATING CAPABILITIES 9.2.1 The rise of firm capabilities, building on the notion that knowledge is knowledge exists within and rules of behaviour, and as a social construction; that such socio-cognitive structures. While such structures give rise to organisational capabilities describe the creative interpretation, expression unceasing development of those rules of behaviour.1 As noted earlier writers to of industry structure expense practitioners construct their reality through the exercise and creation This section shows that of capabilities at the on strategy increasingly identify resources and capabilities as central competitive advantage (resource based theory of the firm), representing the 'structure-conduct-performance' traditional theory of the firm as a shift away from popularised by Porter (1980, 1985) (see 2.4). Teece for example argues that "the production and utilizations of technological and organisational knowledge is scope firms need to be existing ones. 'stretch' and managers of doing things" (1985: that in the dynamics of a competitive environment more than the exploitation Similarly, Hamel and Prahalad (1993) suggest that the strategic concepts of are too static, and argue instead for a perspective that stresses 'leverage' of resources.2 While the focus are argue ways preoccupied with the creation of new capabilities, 'fit' and 'resource allocation' reality central economic activity" giving for "some degree of innovative improvement in existing 37). Further, Teece et. al. (1994) of a on capabilities is important, it risks ignoring that subjective and objective interlocking processes; one shaping the other in a context of their own making (see 7.1.2). Individual organisational capabilities and industry structure, which includes the 1 Many writers on management studies and innovation refer variously to 'skills', 'capabilities', 'competences', 'expertise', and 'know-how'. Any differences are not regarded as critical to this analysis, and so the convention used here will regard these terms as largely interchangeable. 2 Organisational capabilities is not a homogeneous whole, more a basket of individual capabilities of varying kinds and Dreyfus and Dreyfus (1986) define differing levels of skill acquisition: novice, advanced beginner, competent, proficient, expert. While recognising the possibility of differing levels of capability such distinctions are not directly relevant to the thrust of this analysis. Further, this analysis assumes organisational capabilities to be more than the sum of its levels. individual skills. 259 heterogeneity of organisations' capabilities, should be regarded as inclusive rather than alternative views of the 9.2.2 It is The competitive dynamic, a as view shared by Coombs et. al. (1992: ll).3 subjectivity of knowledge generally taken for granted that capabilities involve the application of knowledge. If knowledge is socially constructed then so are socio-cognitive relations rather than acquired example, in tracing the changing definition capabilities. Knowledge is constructed through as a over the centuries of syphilis and treatable disease, Fleck L. observed that "the foundation [of syphilis as a carnal scourge] scientific advances in other fields among were stock of inherent 'truths' or as a certainties. For recognisable socio-psychological and historical was so strong that it took four centuries before important enough to establish a definitive distinction these various diseases" (1979: 3) (see also 7.2.2). From his analysis of the process of development of our knowledge of syphilis Fleck concluded that "cognition is the most socially-conditioned activity of man, and knowledge is the paramount social creation" (1979: 42). Relatedly Kaufmann (1944) and Garfinkel (1967) suggests that 'facts' about events owe their validity to unstated social rules rather than in a any ontological characteristics of the event. Again study of scientific controversies Collins (1981a, 1981b) noted the 'interpretive flexibility' of scientific knowledge claims. Collins' observation suggests that scientific 'facts' are socio-cognitive commitments rather than People the world disease) over are can or cannot currently locked into and other national governments 3 a a controversy link is about whether BSE (mad a say cow that there is prerequisite for action. Consumer groups define their 'facts' differently, arguing that proof of no link appropriate test for determining whether Metcalf and Gibbons (1989) and Peteraf (1993) advantage. inherent quality of the scientific event. transfer to humans. The British Government's 'facts' minimal risk and that 'hard evidence' of be the any or not we may safely eat beef. highlight the importance of firm heterogeneity 260 as a source of competitive These studies and observations show that no ontological status. Organisational or knowledge is a socio-cognitive construct, having institutional knowledge develops through its unceasing assimilation and legitimation, within and as socio-cognitive structures. As Berger and Luckmann note, knowledge about society is a realization [in two senses]. In the sense of apprehending the objectivated social reality, and in the sense of ongoingly producing this reality. For example, in the course of the division of labour a body of knowledge is developed that refers to the particular activities involved. In its linguistic basis, this knowledge is already indispensable to the institutional 'programming' of these economic activities. There will be, say, a vocabulary designating the various modes of hunting, the weapons to be employed, the animals that serve as prey, and so on. There will further be a collection of recipes that must be learnt if one is to hunt correctly (1966: 84). ... Berger and Luckmann's example shows the two interdependent strands of knowledge; language, as part of a community's socio-cognitive structure, and capabilities, interpretation and expression of institutional knowledge. In the of the worlds of these worlds or societies is structured a make sense by their language, of which jargon is own one obvious shared view of 'the best way to compete in this business'. Knowledge and capabilities are also socially distributed (Schutz, 1964), where different types knowledge (e.g., tacit, and formal) and capabilities different same way we can banking, telecommunications, and higher education. Knowledge in each of manifestation, and of the as are held by different stakeholders with expertise and interests (Fleck and Tierney 1991). Campbell, as the new General Manager of BoS International Division has only limited knowledge and experience of, and thereby limited appreciation of, that division's capabilities and heritage. He brings his experience and expectations, and actively resource of his colleagues as a socially distributed knowledge of the Bank's heritage and capabilities, in order to suitability of his strategic options; things to engages come. an assessment own assess the informed by his colleagues expectations of He is not just discussing theoretical and possible futures with them, but also inviting them to commit to firm proposals for action. They attributing meaning to the Bank's resources; are engaged in a process of the ongoing interpretation and expression of capabilities in light of the exigencies of their competitive options, in pursuit of undefined yet anticipated new horizons. 261 Socio-cognitive structures and knowledge distribution discourse' (Knights, 1990). In this in "mutual agreement incitement to him as about through 'practice and practitioners of all three organisations are engaged and mutual misunderstanding, mutual concessions and mutual obstinacy" (Fleck L., 179: 120). Notable examples include the co-operation and conflict between tensions process come Timeplex's Customer Support Division and Sales Division; the friction and surrounding Thomson and his informal 'Dean's Team' and the value of that team to he sought to establish the OBS. Even where there knowledge and capabilities are shaped in similar ways as appears to be political harmony, the next example shows. Through the 'practice and discourse' (Knights, 1990) of strategy Campbell plays increasingly critical role in the shaping and distribution of knowledge colleagues expect of him, and as he develops his own as an he learns what his ideas. The International Division's practitioners' early experiences of financing North Sea oil exploration and dealing with multinationals' requirements have been assimilated over the last twenty years with the Bank's other banking expertise. However, while the "oil bank" label is valuable, Campbell and his peers do not want the International Division's identity and capabilities to be circumscribed by that now narrow expertise is broadening - Government's DSS (see As a as label. Indeed to that end the 'International' Division's for example through the TAPS business on behalf of the British 8.3). product of human subjectivity and social relations, knowledge and capabilities remain provisional. Practitioners' subjectivity finds expression in the interpretive flexibility of technology and "philosophical, political, economic, and social dimensions [of reality], which are always in some degree of flux" (Knights, 1992: 520). It is this provisional character of knowledge and its expression through application that gives capabilities. This is not to say 1976), such as we organisation its distinctive that the social nature of knowledge makes it somehow imaginary and thereby worthless, for action. Rather an or that its provisional quality makes it unreliable need to remain critical and reflexive about all 'truth' claims as a basis (Bloor, those claims surrounding management studies and practice. Knowledge is sufficiently stable to lend legitimacy to capabilities, in the form of social and economic 262 value, as evidenced by companies that develop reputations for particular capabilities. Knowledge is not trapped in our evidence of the substantive come subjectivity; our our objectified reality and our capabilities are quality of knowledge. For example, Timeplex engineers do together, design and install telecommunication networks that perform customer identifiable functions, and both parties may measure the performance of such networks against agreed criteria, although without necessarily agreeing on the interpretation of performance results. The never ending assimilation of knowledge within and structure and meaning to both structures are not there and are our closed systems also contradictions, as socio-cognitive structures gives individual and collective biographies. Socio-cognitive of interlocking artefacts of knowledge, orderly arranged; discontinuities, human values and assumptions. However open incomplete these socio-cognitive structures, they nevertheless provide direction for both present and future action. They guide our interpretation and expression appropriate knowledge, capabilities, practices, and "which directions of what constitutes appear most promising, [who] should be selected for prominent positions and [who] should be consigned to oblivion" (Fleck L., 1979: 120). Academics joining the Open Business School do not go through any formal induction with distance new or training in 'the OBS of teaching', and some of them are not learning. Indeed according to Henderson, Deputy Director of the OBS, academics are very poor at familiar some writing distance learning material. Nevertheless Henderson feels that the OU and OBS have a through 'osmosis', working with OBS way distinctive more teaching style; a style that academics learn experienced writers, and being curious about the way teaching works (see 6.6.2). Schutz's description of recipe knowledge captures much of the biographical and taken for granted character of knowledge. Moreover, his notion of 'recipes' show the indeterminacy, diversity, and subjectivity of knowledge that Campbell of BoS and Asch of OBS, along with they concurrently discuss and take action in developing their colleagues, operate within their organisations. Although Schutz his observation seems as was writing about the individual's everyday practice, equally pertinent to collective strategy practice: 263 [recipe knowledge comes] from heritage and education, from the manifold influences of tradition, habits and previous reflection, [and] built up [from one's] store of experiences. It embraces the most heterogeneous kinds of knowledge in a incoherent and confused state. Clear and distinct experiences are intermingled with vague conjectures; suppositions and prejudices cross wellproven evidences; motives, means and ends, as well as causes and effects, are strung together without clear understanding of their real connections. There are everywhere gaps, intermissions, discontinuities. Apparently there is a kind of organization by habits, rules, and principles which we regularly apply with success. But the origin of our habits is almost beyond our control; the rules we apply are rules of thumb and their validity has never been verified (Schutz, 1964: very 72). It cannot be over stressed that while Campbell talks about exposing his colleagues' "prejudices and subliminal strategies" (8.4.2) he is not doing many so as an of their professional prejudices and experiences, and has knowledge is distributed creation of taken for among managers, Fleck L. (1979) as a vocabulary and of his as own. Recipe the exercise and granted knowledge about what constitutes good banking practice. Socio-economic 9.2.3 both some outsider. He shares argues legitimation of knowledge and capabilities that knowledge acquires its status by being 'useful' to a scientific community. Similarly, Barnes' (1974) assessment of scientific practice and the development of science, highlights the role of social institutions in validating and rewarding scientific knowledge claims. Mulkay gives the example where, interpretation of fermentation came to be widely accepted, not due simply to Pasteur's experimental skill or to the validity of his explanation. It was also brought about by the influence of Pasteur's growing reputation by the sponsorship of eminent academicians, and by the vigour with which Pasteur undertook his campaign of persuasion (1972: 13). Pasteur's These observations ... apply equally to the validation of capabilities in the communities of banking, telecommunication services, and higher education. The Bank of Scotland's successes in oil and gas financing was due in part to the oil industry recognising and acknowledging BoS's expertise, eventually crediting it as the first 'oil bank' (see 8.3.1). Again, Ascom, Timeplex's parent recognises the importance of legitimation, and "reinforce the so seeks to group's reputation" in developing telecommunication networks by "continuing 264 to invest a proportion of its turnover in research and development" (Ascom: A substantial Company Profile). During the early years of both BoS's International Division and the OBS they drew their credibility from their relationship with the parent organisation. It is of this an indication of the value credibility that although the OBS leadership often considered using a name that distanced itself from the parent Open University, the general remains that there is gained by exploiting the link with the parent. Indeed equivocation on more to be the value of the relationship seems to 1995 OBS reinforced its belief in the value of that consensus among its staff any have been swept aside recently. In relationship by renaming itself as the 'Open University Business School' (OUBS), in preference to Open Business School. Furthermore, like Pasteur, Thomson the OBS's first Dean exploited his and the Open University's reputation to the full in his campaign to "locate the OBS institutionally", according to Without hard at one member of the Open University (see 6.2.2). legitimation organisational capabilities would perish, and organisations have to work maintaining them. Through Timeplex's previous owner's (UNISYS) policy of minimal R&D investment deteriorated. during the early 1980s Timeplex's expertise gradually Subsequently potential customers and competitors increasingly regarded Timeplex's products as "steam driven", a label that Timeplex is still fighting to shake off, despite significant investment since the late 1980s by the 9.2.4 Ascom. Trading capabilities As noted earlier Fleck and new owners knowledge and capabilities exist within and Tiemey (1991) note, these structures are as socio-cognitive structures. As also differentiated political structures, investing capabilities not just with social value but also economic value. Knowledge and capabilities derive much of their legitimacy and usefulness by being tradable between the individual and the its organisation, and between the organisation and other institutions that share experiences and anticipations. 265 Timeplex along with its competitors take for granted the high turnover of staff. As Fincham et. study of the "tradability" of expertise in the financial services sector, al. observed in their "if skilled them a practitioners know they power opportunities can sell their expertise to another organisation, this gives base within their immediate places of work" (1994: 241). However, can be a career double edged sword, because for Timeplex's executive it also provides support for their 'hire and fire' philosophy since there is a ready supply of career opportunists in and around the industry. In contrast to Timeplex, the OBS leadership problem: how to increase the turnover of its academic staff, and get see a some different 'new blood' into the Business School. Timeplex's taken for granted practice of acquiring capabilities through market transactions more than internal development is not confined to employment practices. Strategy practice through market transactions (Williamson, 1975) rather than hierarchical control is the taken for granted way of operating for Timeplex generally. Most of Timeplex UK's personnel, administration, and accounting functions rely on contract labour and agencies. Even its core Support depends activities of Sales and Customer on a proportion of third party arrangements (see 4.3.3). In contrast the BoS makes very little use of market transactions, preferring to grow its own capabilities. There is no question of its Management Services Division being put into the market to compete for the Bank's services. It is regarded as a strategic asset, and a source of many of the Bank's capabilities. The Business School's material and a on teaching philosophy relies heavily the competences mix of market transaction and terms and conditions courses for devolved to as the quality of its written of part-time tutors. The relationship with part-time tutors is hierarchy. Part-time tutors do not have the same full-time staff. Part-time tutors enter contracts to tutor particular student groups. Furthermore, managerial control regional offices, where the relationship is voluntary workers. Part-time tutors give available on up a more over employment specific part-time tutors is akin to dealing with a network of lot of their time to support students: being by telephone to give advice and encouragement, attending regional training days, pursuing problems on behalf of students. 266 Strategy in practice is not so much the result of detached valuation of market transactions versus practitioners believe in them for a Practitioners may an executive to Timeplex believe for example that an be based on an some economic others political. in house IT division is strategic and above such managing a hierarchy justify making redundancies. Indeed, seems to priori periodic economic managerial control. Particular practices exist because mixture of reasons, evaluation. In contrast the cost of a as was often used by Timeplex's noted above strategy practice in unstated preference for market transactions, but which is always under slow erosion through incremental employment commitments by semiautonomous managers. From time to time Timeplex's executives would interpret their unsatisfactory financial performance remedying such over Guided 9.2.5 being due to an over commitment to hierarchy, commitments by redundancies and reorganisation. practice, creativity, and taken for granted knowledge The extent to which further as practitioners construct or accomplish reality through capabilities can be explored by examining the roles of rule following, creativity, and taken for knowledge. Guided practice Individual biographies and those of communities, are structured by a number of orienting and organising metaphors including: 'recipes' (Schutz, 1964), 'paradigms' (Kuhn, 1970), 'thought styles' (Fleck, 1979), 'norms and values', (Parsons, 1937), 'decision rules' (Garfinkel, 1967). While these metaphors are loose and held together by ambiguities, they help individuals and Practitioners of BoS, worth and the the groups to make sense of their separate and collective biographies. Timeplex, and OBS draw both their individual and collective sense of meaning and value they attach to their capabilities (i.e. their identities) from meaning they invest in these metaphors. 267 Implicit in these metaphors is the sense following Kuhn (1970) for example about a practice number of as non that everyday action is rule governed. Barnes sees normal scientific practice as "concretely organised exemplary models of procedure" (1974: 86). He regards rule governed reflective action, behaviour that is so ingrained that it ceases to be problematic for the practitioner, and "comes naturally" (Barnes, 1974: 86). It is within this framework that he thinking, which sees are capabilities as unfolding; capable of being applied in circumstances and how these circumstances capabilities for as guided practice is widespread are a as "a number of routines, of acting and limitless number of ways, depending upon perceived" (Barnes, 1974: 84). This view of among writers on innovation and management, example Nelson and Winter's 'heuristics' (1977), and Grinyer and Spender's 'industry recipes' (1979). In trying to "flush out prejudices and subliminal strategies " of his colleagues (8.4.2), Campbell seems to be in search of Barnes' 'ingrained behaviour'. Interpreting Barnes, Campbell is looking for the Bank's rules that provide a strong guide to future practice. This might imply denies the some kind of programmed behaviour among the executive; a programme that possibility for such rules of behaviour to develop and change through challenges from stakeholders like Campbell. These subliminal strategies preferences, institutionalised social practices built up over are ingrained social decades if not centuries of banking practice, and reinforced through social and economic legitimation. These preferences have emerged and developed through a collective and temporally transmitted belief in what the Bank stands for and how it does business; its 300 year economic investment existence is testimony to the social and by the Bank's staff, past and present, and by the Scottish commercial community. Creativity and synthesis Nevertheless, in a competitive economic context capabilities adequately account for innovation, innovation processes as as 'rule following' do not evidenced by the profound unpredictability of and outcomes. Something additional is required. Barnes similarly 268 recognises rule following as a limiting description of normal science, noting that "routine developments in scientific sub-cultures do not suffice to account for the overall pattern of ... change in science" (1974: 86). He suggests two other processes at work: is the way in which patterns of culture may be combined and reordered by social processes; routines and procedures may be transferred from one sub¬ culture to another, or differentiation may occur and establish new clusters of normal practice. The other is the transformation of patterns of normal practice, one not by rearrangement, but by authentic creative activity (1974: 86). In Barnes' view the former it as ... process is one of "rearrangement" and he seems to regard relatively less challenging than the latter process involving "authentic creative activity the product of effort and imagination" (1974: 86). In analysis of the two change use similar a of metaphor and analogy in innovation way processes Schon (1963) in his distinguishes between metaphors of development, the 'radical function' and the 'conservative' function. In the former bringing an old theory to a new situation transforms both the situation and the old theory, while in the 'conservative function' only the new situation changes, leaving the old theory unchanged. In developing practice through 'rearrangement' and 'transformation' practitioners seem to go beyond rule following. The value of this observation is not that Barnes and Schon offer categories of change, but that they acknowledge practice. As the colleagues in new a new role for creativity in the development of General Manager of the International Division Campbell is engaging his situation. In seeking competitive situation they are drawing banking practice. Similarly Cecil routinely seeks out a new ways meet or create new customer as new on interpretations and expressions of the Bank's their collective and assimilated knowledge of Timeplex's Manager of Multinational Programmes of configuring Timeplex's technologies and capabilities to applications (see 4.6.2). Weick in writing psychology of organisation regards such a process as on the social both evolutionary and creative: evolutionary systems are creative systems, and creativity usually means putting old things into new combinations and new things into old combinations. In either case, novel relations between pairs of things are the essence of creativity (1979: 253). 269 Labelling much of technological or arbitrary. The transformational is organisational change process as either rearrangement or of exercising of capabilities may be guided practice, but the process of interpreting and expressing recipes and routines creative process. same driven are situation almost of new configurations of Timeplex's capabilities. In a new even having moved from Centrebank, and is expected to bring acquired expertise of developing Centrebank to Bank new as a Even if we regard the practice" for the International Division, and demands "effort and imagination" (1974: 86). Over the coming elaborate the 'incremental' years Campbell will both develop his division, and meaning of the Bank's conception of international banking. example also these a new context. homogeneous culture, Campbell's task requires what Barnes calls "establish[ing] clusters of normal This so Barnes' 'rearrangement' demands creativity. Campbell of BoS 'sub-culture' a new sake (6.6.2). This is not situations to apply Timeplex products, which includes conceiving by looking for competitive context own and engineers of Timeplex. Cecil's function is the generation of new income his a routinely. According to Henderson of OBS, by curiosity and creativity for its different from managers finds himself in also be Numerous practitioners at various levels within the three organisations find themselves in the academics can serves to highlight the difficulty of distinguishing 'rearrangement' and change from 'revolutionary' and 'transformational' change. However we label changes, we are for the most part talking about degrees of change, usually rational reconstructions, with the form and severity of change being defined subjectively with respect to the observer's location in space Creativity and guided practice transformational social or and time. are not divided according to whether change processes are rearrangement. The inherent ambiguity of the inclusiveness between reality and practice facilitates the concurrent reinforcement and elaboration of practice and social reality (see 7.2.3). Stewardship at BoS continues to be reinforced yet is also being elaborated over the the centuries. Hierarchy remains and has been elaborated by the addition of Management Board during the last decade, but quill and electronic mail. Taken over the whole pens have given history of the Bank the 270 way to computers concern for stewardship has not changed, but the meaning of that metaphor has been continuously and routinely elaborated. Indeed Kuhn suggests that the whole 300 years over a scientist facing a new of the Bank that metaphor has been transformed. situation is guided by practice, through "ostension, the direct exposure to a series of [similar] situations" (1970b: 273). Schon argues however that in the context of innovation and proposes come new as out of 'similarity relations' 'after-the-fact view', are an instead 'symbolic relations' where "new solutions - hypotheses or 'ideas' our - attempts to find projective equivalents for aspects of the old theory in the situation" (Schon, 1963: xi). He describes the process of finding projective equivalents guided by various factors: the the gifts of the various overlapping cultures involved, the metaphors underlying ready-made theories in terms of which the new situations are already partly structured, and the demands of those 'Projective equivalents' are not new labelled in the practitioner. Rather practitioners subjectively and situations (1963: xi). new situation waiting to be plucked out by the with the engage new situation; they construct synthesise patterns from the material. Furthermore, there must be the patterns that practitioners are some capable of imputing and the patterns that overlap between may be imputed to the material. In seeking to 'put OBS Dean for his and on the map' the Open University Senate selected Thomson due to him not recognising development is or a grow a business school. Thomson's demise is partly attaching significance to the collective expectation of staff that shared creative 'lead from the front' and individualistic process. Were he in Timeplex he might find approach to developing the company very keeping with his peers' expectations. If subliminal strategies and prejudices interpretive flexibility, then the possibility that the Bank's executive express the Bank's contexts, in its first experience, social network in management education, professional legitimacy, ready made theories about how to the OBS's as own are much in carry any able to interpret and rules of behaviour creatively, and develop its capabilities in socially and economically viable ways, is constructed nature of rules of behaviour makes them 271 an innovative inherently process. open to a new The socially interpretation, expression, and development, and Thomson's (OBS), Campbell's (BoS), or Cecil's (Timeplex) challenges represent just three drivers of such revision. We cannot say that should the executive reject Campbell's proposals for developing the International Division, then there is no of forcing them to think of, and accept change in the Bank's development. Rather his action or reject, new possibilities has shaped their experience, and subsequent proposals from Campbell or others may benefit from that shaping of experience. Similarly, although Thomson of OBS was not re-elected as Dean partly because many many thought that he over-stretched the OBS' study centres in Europe - his actions did expose challenges and opportunities. Although Asch the new resources - the OBS to for example opening too new and unanticipated Dean, champions a more restrained expansion, he and his colleagues draw on the OBS' earlier experiences under Thomson, developing their capabilities in dealing with different markets, languages, media, and an expanding support infrastructure. Taken for There are a few granted knowledge explicit guidelines that Campbell themselves carry states that acquired an can draw on, but these guidelines the weight of interpretive flexibility. For example, acquisition should not be company failed, nor so should it be Bank's income stream. The absence of big so as to put at small as to one codified guideline risk the Bank's survival if the make no significant difference to the specific financial criteria leaves a lot of scope for defining suitable acquisition candidates. Attaching quantifiable financial hurdles to such guide paradoxically increases the arbitrariness of the guide. There considerations surrounding any are many a interlinked potential acquisition that have to be weighed against each other, for example excluding a candidate on asset size in the face of other favourable factors. Even explicit guidelines leave space for applying capabilities creatively. Garfinkel (1967) suggests that we "accomplish" (construct, render intelligible) our every-day reality through the application of taken for granted skills or competences, skills that draw on tacit and 272 contingent knowledge and guidelines on go beyond written guidelines.4 In interpreting the Bank's written acquisitions Campbell and his colleagues are drawing not just on their collective rules of behaviour, but also on their individual and collective taken for granted knowledge and expertise. In drawing out his colleagues' taken for granted knowledge Campbell's aim in the coming months is: try and distil these views and point out the inconsistencies and look for the consistencies, and say "unless I'm very much mistaken the way you want me to go ahead is this, and we're concentrating on... (I don't want to prejudge the issue but) we're concentrating on acquisitions, we're concentrating on English to speaking countries... In a study of how jurors make legal judgements, Garfinkel (1967) shows that when Jurors 'decide' often they construct rather than discover the 'facts'. They give meaning to evidence that is conflicting and incomplete, and their decision making is guided by inter subjective rules that clinical could they create, within which the 'official line' is practice Garfinkel found that never be sufficient to is without taken for Morgan in writing no matter one small part. Similarly, in studies of how codified or detailed the instructions, they explain clinicians' actions without "ad hoc considerations", that granted skills (Garfinkel, 1967: 23). on organisation processes, draws on David Sudnow's observations on aspects of the American criminal justice system. Morgan notes that: of human activity where action is supposed to be determined by clearly defined rules, the application of a specific law calls upon background knowledge on the part of the legal officer or judge that goes well beyond what is stated in the law itself. Cases of child molesting or burglary, for example, are typically assigned to legal categories on the basis of images and judgements as to what constitutes a 'normal crime' in these areas. A series of subjective decisions are thus made on the nature of the case before any rule is applied. Lawyers and judges do not follow the rules. Rather, they invoke rules as a means of making a particular activity or judgement sensible and meaningful to themselves and others (1985: 129). even in the administration of justice, an area The sentiment of this example is caught by Davis, Timeplex UK Managing Director who in arguing that he should head both Sales and Customer Support Divisions talk about the role of management as having "the right to make arbitrary decisions" (see 4.5.5). 4 Garfinkel (1967: 77) uses 'competence' to describe the right to exercise skill in managing and communicating decisions of meaning, fact, method, and causal texture without interference. 273 Section conclusions 9.2.6 application of capabilities The and within grounded in knowledge, and this knowledge exists both as socio-cognitive structures. Knowledge is shaped by practitioners' subjectivity and therefore remains their are provisional. Practitioners construct their social and material reality through interpretation and expression of knowledge; through their capabilities. Metaphors guide the interpretation, expression, and unceasing development of capabilities. At the the ambiguity of metaphors provide elaborate their social space same for practitioners to reinforce and at the time same time reality through the exercise and development of organisational capabilities. It is practitioners' creative interpretation of the exigencies of their reality, whether anomalous are invoked in their taken for or not, that shapes what rules of behaviour (routines, recipes, heuristics) ordering those experiences. In the process practitioners unconsciously draw on granted knowledge, previous socialisation, and their expectations for the future. 9.3 THE INTERPRETIVE FLEXIBILITY OF TECHNOLOGY-PRACTICE While organisations accomplish their social and material reality through the exercise and development of capabilities, the interpretive flexibility of technology technology-practice also plays a significant role in this process. or more broadly This section explores the inseparability of facts and values, the interplay of subjective and objective reality in realising new configurations of technology-practice, and the temporal continuity of technology- practice. 9.3.1 Bounding the 'technology' in innovation As noted in chapter one technological innovation is widely seen as a key to competitive advantage. Porter for example believes that technological change is "among the most prominent" drivers of competition and advantage (1985: 164). Innovation in "technology 274 based" or "technology-intensive" industries is recognised the determinant of as "the basis for competition and industry evolution" (Grant, 1995: 287). Traditionally mainstream management teaching treats technology be controlled within the strategy process. technological change perspective the some as as Grant's (1995, 1991) texts industry specific and revolving around industries are as a inherently more prone to change of technology within those industries. Porter meaning of technology by what he regards as new neutral instrument to on strategy treat artefacts. From Grant's disruption than others because of sees himself as opening up the taking "a rather broad view of technology" (1985: 165). He shows how technology pervades every corner of the organisation's "value chain", not just those directly associated with the product. These writers treat regard the direction of technological change technology as an artefact, as an profoundly uncertain. They as instrumental input to the creation of competitive advantage, something that is asocial and value free, whose meaning is taken for granted. This view is widespread in management teaching and practice. The periodic tabloid discussions about the impact of new technologies is testimony to the exogenous technology: displacing jobs, creating the paperless office, giving technology to manufacture life, the fear that robots will take The limitations of too is narrow an character invested in us more over our interpretation of technology, or an leisure time, the lives. uncritical use of the term highlighted by the three organisations studied. Deciding what the Business School's technology is reveals education. a distinction between the technology of education and the technology in According to Percival and Ellington (1988: 13) writing educational on the nature of technology, it is "the 'gadgetry' of education and training, such as television, language laboratories and the various projected media" that is commonly associated with educational technology. They suggest that these artefacts are the technology in education. Encompassing these artefacts is the technology of education which 275 concerns: improving the efficiency of the process of learning, done on the basis of learning process, involving the design of teaching/learning situations and the use of whatever methods and techniques are judged to be appropriate in order to achieve one's desired objectives (Percival and Ellington, 1988: 20-21). ... research into the nature of the Staff in both the the Open University and the OBS spend a lot of time and over case the last 20-25 years; are on-going debates about the relative strengths study teaching, the placing of student centred 'activities' throughout teaching texts, the value of face-to-face tuition. Some believe that the to some answer Those of these technology in education range deliver concerns: what to do about the of communication and computer technologies, like CD-ROM and Internet; deciding how much of this tutorials can questions. occupied with the technology in education have other burgeoning might make effective; CD-ROM an new technology should be adopted; assessing how virtual reality effective contribution to student learning, and whether it is cost seems like a fast and effective then students will have to have CD-ROM drives to are thinking about how to increase the quality of learning; how to develop in ability to learn to leam. There students the the energy technology o/education: what distance learning means in the 1990s and how it has changed of ... concerned that the way of delivering access technology in should not get in the course material, but the material sent to them. way of, or Many lead pedagogic development. Percival and Ellington's proposition about the nature of educational technology seem to apply equally to banking and telecommunication network management. The technology of banking describes the methods, capabilities or repertoire of competences involved in managing financial transactions, and the technology in banking is its Information Technology resource (Management Services Division), containing yet other methods and capabilities. The continuing development of remote banking draws across a on, and continues to develop capabilities spectrum of technologies, in and of banking. For example, socially acceptable and legal methods of conducting remote financial transactions, and to provide and more more sophisticated equipment features, including the apparently contradictory requirements of ease-of-use security. 276 Timeplex wide uses area network (WAN) and local area network (LAN) telecommunication technologies to support its business, the technology of managing global enterprise networks, on behalf of financial and work trading houses. Timeplex staff continually blend methods, artefacts, organisation routines to deliver their unique flavour of Enterprise Network Management. In all three organisations artefacts derive their value and relevance from the more encompassing technology of: education, banking, and telecommunication networks. Clearly, on the Bijker (1995: 231) has noted, deciding which technology is the right as depends questions asked. Is the correct focus 'artefact', 'method', 'work organisation', 'technology in' or 'technology of, or some other concept? Many organisations invest in particular technologies because they label them technology is strategic as one artefact or or not organisations are as 'strategic', and in deciding whether forced to take a a broader view than technology technique. When the BoS executive revised their expectations of competition in the future ATM technology became 'strategic' (see 5.3). This example also shows the difficulty of, if not futility in, doing market research and cost/benefit analyses of an unconstituted future. Could BoS about the ever hope to come up with meaningful answers to shape of a future competitive dynamic whose shape would depend strategic actions BoS took, along with other socially relevant customers, groups, on regulators? 'technology of', 'strategic' and 'non strategic' importance of the social processes can or produce arbitrary outcomes, and masks the that give meaning to artefacts. As Bijker observes, distinctions between artefacts, methods, and work [and] where such distinctions hold they are organisation "seem to be rather spurious, the result of technologists' work rather than being intrinsic properties of the technologies themselves" (1995: 231). His account of Dutch coastal diverse what primarily competitors, Distinguishing between artefacts, methods, work organisation, 'technology in', based upon questions engineering and dike building between the 1950s and 1980s show how a interpretation of technology gives meaning to, and derive meaning from, their interrelationship in context. His example also shows that the interaction of these diverse meanings of technology is an on-going source of innovation. 277 An interpretation of technology that reflects the quest to better understand the technologies are would distort one because as Rosenberg productivity under an useful in giving meaning to the other in context. Separating them "in says a fundamental extremely diverse range an sense, is inseparable from the history of civilization itself, dealing efforts to raise more of managing innovation. In the above examples, the understanding of technological change. Technology is social processes, progress interdependent, process diversity of meanings would be a extricable part of the history of technical as it does with human of environmental conditions" (1982: 3). Similarly Goransson in his examination of the success of new industries in developing countries suggests that "no society could exist without applying at least minimum of technology" (1993: 4). A useful way a of capturing the social dimension and thereby the interpretive flexibility of technology is provided by Pacey's (1983) 'technologypractice' . Technology-practice 9.3.2 Pacey (1983) also considers such distinctions to be problematic, and offers organising our he suggests a the narrow useful way of thinking about technology. In arguing that technology is not culturally neutral, distinction between 'technology' and 'technology-practice'. The former reflects meaning, and includes knowledge, skills, technique, and people. The latter describes an reality' to 'culture'. Technology-practice is large scale technological developments sociotechnical system resources including interrelationship between two additional "aspects" of technology: culture and organisation, though sees a as an discussed in 7.2.1 this thesis prefers 'social inclusive concept in the are being more (2.6.2). Pacey's distinction allows same way that Hughes meaningfully understood us to as discuss the broadly similar yet relatively distinct practices of technology in each organisation; all three organisations depend on some form of information and communication technology, but in very different competitive settings. In these broader terms technological change includes aspects of organisation and culture. 278 In support of 'technology-practice' as a useful concept, Pacey draws notion of 'medical on the established practice', where the broader meaning allows "vigorous discussion to take place about different ways of serving the community" (1983: 4). He gives examples where (snowmobiles and water pumps) have to be modified to work effectively in different artefacts environments. Such environments are not just physically different; they communities with different social and economic values. technology-practice allows us to examine how, as an are different Similarly in this analysis, integral part of strategy practice, its interpretive flexibility contributes to differing socially constructed realities. The notion of technology-practice also helps explore the different ways that strategy is shaped by, and shapes, technology-practice. Indeed this way of thinking about technology-practice in turn seems us to to resonate with the notion of 'fit', a concept at the heart of prescriptive strategic management.5 Technology-practice, like 'fit', addresses the interdependence of values, creative activity, economic activity, organisation, and productive relationships with other relevant social groups like customers, collaborators, and regulators. Relating strategy and technology-practice in this danger of saying that the two the purposes are way, as indistinguishable, and of this analysis there is an overlapping even processes, opens up the that strategy is technology. For important difference between the two. Whatever else strategy may be, it is also a social process for the legitimate expression of preferences about the organisation's development. Technology-practice and technological innovation largely a realisation of that expression. Strategy is directed process. this way This is not to say a purposive process are while technology is a that technology-practice is entirely plastic, being pushed and that according to the whims of strategists. The relationship is socially constructed, not unidirectional. Strategy leads but in ways that are at the same time shaped by previously assimilated knowledge and technology-practice. Miller and Duffy, two managers within the Bank of Scotland's Management Services Division, suggest that internal IT strategy discussions about changing the Bank's information 5 Strategic management teaches the centrality of 'fit', telling managers to match their resources to the external opportunities and threats, and to seek a 'fit' internally between strategy, structure, and culture. environment's 279 processing architecture from centralised to distributed processing were being hampered by ingrained 'administrative philosophy', and long established capabilities based processing (5.3.3). Miller's and Duffy's observations gives a on an centralised glimpse of how the Bank's history, culture, technological practices, and administrative philosophy have shaped, and continue to shape thinking; today. The sense of a history that is embedded in the work organisation practice of of technology, organisation, and culture being interrelated in this way rings Pacey's (1983) 'technology-practice', rather than discrete components of banking practices, organisation structure, and technological artefacts all bumping into each other. How the Bank's IT strategy will develop over the coming years is already being influenced by existing technology-practice. The technology-practice of each organisation is in remains as ideas. For distinct sociotechnical systems example, form their future as a state of flux, yet at the of people, knowledge, things, noted earlier various committees within OBS are same processes, agonising values, over what technology-practice should take: what technology, how should they be organised, whether their values and beliefs about progress are helping or hindering technological development. Some departments, impatient with what they regard and time as the slow lumbering decision making machinery of the broader Open University structure, have either committed to particular changes Most of these excursions and or started to experiment with different technologies. developments hierarchy and academic freedom. as a tension between administrative The Technology Faculty has introduced its loose leaf possible because the Open University exists are teaching material (6.6.4). They own see a small scale printing and copying facility and future where the demand for course variety is greater, with each course consequently attracting fewer people. In addition, they see a competitive advantage in being able to update than infrequent major changes with everyone course material as a continuous activity, rather having to live with material becoming progressively out of date. Such excursions, experiments, and independent actions represent technology-practice in flux and development. At the the broader same time the social reality of OBS and Open University remains supported by, and continues to support, 280 a stable technology-practice. Courses continue to take almost two bound units, and because of the about five years or more. produce today than even suggest fifteen say ten or delivered that as years on a as life of the Open University bureaucracy has courses take longer to ago! In defence of the establishment, others offer fifteen is years ago a argue fraction of what is today. Interpretive flexibility of technology-practice 9.3.3 Clearly, social process is explicit in technology-practice. To has been broad agreement for some time writers among technology, that the separation of technology and social of are large investment in time and production, must have variety and quantity of courses available write, production time has also expanded. Some think that grown, course that the Some years to on press the argument further, there the sociology of science and is inappropriate for the study process technological innovation. In their study of the historical development of the bicycle, Pinch and Bijker (1984) suggest that technology carries interpretive flexibility. People may have facts, and how artefacts are designed. Implicit in this view is that artefacts and technological development generally are perspectives: the alternative way they think, what they regard co-operative social the outcome of competing embodiment of particular social preferences, and in this determined or processes. Indeed sense there is given artefact is no an technologically Thompson (1990: 15), in their study of national technology policy development practices, note three assumptions that underpin most studies making: that technology has processes. any core. Schwarz and substantive as a substantive quality of technology has In their view this exogenous to social narrow processes, on core; on technological decision that choice centres society; that technology is interpretation of technology, as on the impacts that the exogenous to social somehow inelastic and is undermined by at least three related factors. First, technology-practice, like medical practice, reflects socio-cognitive commitments; 'facts' socially defined. Second, technological change also grows out of the convergence are of subjectively available capabilities and the exigencies of an enacted reality, both social and 281 material. Third, technology-practice in the 'here and now' reflects historical commitments to particular developmental directions, the currently perceived needs of the business, and expectations for the future. These three 9.3.4 The indeterminacy of facts and values The distinction between Where detailed consideration. areas warrant some technological facts and social values is indeterminate and arbitrary. begins and the other stops is impossible to define; it is slippery one or "inchoate" (Schwarz and Thompson, 1990: 149). Thus facts are always incomplete, reflecting evaluations open to involving knowledge claims, social and personal assumptions, and always multiple interpretations and revision. The indeterminacy of facts and values discussed here is distinct from Simon's (1957) values are are inseparability because of limits inseparability rests on the idea that facts on are position. Whereas Simon argues that facts and time and information available, here their necessarily value laden and socially defined. The impossibility of separating facts from values is evident in that strategic choices about the future do not can be seen leap out when as practitioners try to technical difficulties of to a self evident, using an as inescapable truths that practitioners read off. This assess the potential of a new market, unfamiliar technology, or or try to define the seek to estimate the cost and time generate the first production unit. BoS's actions over its ATM commitment presents this as strategic dilemma. The 'facts' in the form of a 'correct' decision stabilised for the BoS executive As the ATM very while but subsequently revised the value of those facts in light of competitive action. example shows, practitioners of BoS and the Royal Bank of Scotland different anticipations of the future, depending information a they use, on flexibility of facts and values are can different organisations. However the be found within the have what assumptions they make, what and how they interpret it. Having different anticipations reasonable since the two banks can same same may seem interpretive organisation. For example, it was abundantly clear to Shaw, Timeplex's UK Sales Director, that their customers' future internal financial transactions and information flows would require their telecommunication installations to consist of thousands of low value modems. Further, in the scenario of Shaw 282 and his sales colleagues, income streams would depend on Service with "the products tucked in behind". He could not understand the continued commitment by his leaders in the USA, to high value modems for low volume applications. Nor could he understand why they investing billions of dollars in new products, and relatively little in developing oriented infrastructure. The commitment of his leaders is rooted in different about how the future will look, and about the best way to compete a were Service assumptions in that world. He did not share those commitments. Subjectively available capabilities and enacted reality 9.3.5 In addition to a particular organisation's technology-practice being embedded with particular assumptions, such practice also implicit commitments to multiple developmental carry options that transcend organisational boundaries. As noted above (9.3.2) all three organisations studied use fundamentally different information and telecommunications technologies, but in ways. Move one line of telecommunication and computer level down, so to speak, from this laid down in the aftermath of BoS's decision Banking capability emerged and factors. First, anomalies in the base technologies, and look within the Bank's existing technology-practice. We find that the basis of a remote banking capability The Home common was in large part during the 1970s to invest in ATM technology. was given meaning by the juxtaposition of three competitive environment, in the form of the English banks entering Scotland. Second, subjectively available technical and organisational elements that could be or reconfigured to constitute "accident and an appropriate technological response. Third, serendipity sagacity" (Remer, 1965); the Bank executives' judgement in successfully marrying the first two factors.6 The Bank's success in its response can be measured as the degree of usefulness that potential customers, other banks, and BoS itself derived from the convergence 6 From the of these three factors. Observers hailed Home Banking as an innovation. This fairy tale 'The Three Princes of Serendip' "As their highnesses travelled they were always making discoveries by sagacity of things they were not in quest of'. Remer's (1965: 6) English translation. accident and 283 recognition lent legitimacy to BoS's financial institutions to formulating In committed to develop a response and at the response, same time encouraged other banking capability. a remote to the threat to their home market, the Bank's executive remained 'stewardship', but they recognised that the banking industry's traditional recipe growth of increasing the Branch network, would be too costly, and would take too long. for Something had to be done. The General Manager of Centrebank said "when the English banks came across the Scottish border, we scratched around to see how we could We could not afford to open lying around, Branches all over many ways, depending exigencies of their reality. In dealing with Bank's strategy we had most of the technology decided to try it". This example suggests that the Bank's technology- so we practice could be configured in the England, and respond. a new on how the Bank's executive interpret competitive scenario, the success of the practice has been its ability to create relationships and meanings from its technology-practice that did not exist before, and "to integrate and motivate [its resources and capabilities] in order to exploit their inherent potential for innovation" (Grant, 1995: 288).7 Traditionally within Timeplex's technology-practice, many services are unintentionally provided freely with the product, particularly technical advice. During the last decade, of the fashion of 'downsizing', 'de-integration', and generally looking for as part ways to cut overheads, many companies have been contracting suppliers like Timeplex to take over the management of their telecommunication networks. Timeplex Customer Support recognises this opportunity to expand its existing as an charge for emerging a broader as a response to the creation of In these an enacted Grant new ones, of technical support capabilities, and to of services. In addition the Professional Services department the possibility of taking whether based on over Timeplex's was and charging for these services and or other competitors' products. examples the development of technology-practice is conditioned by the interplay of applying n range range reality of the 'here and now', and the collective's creativity in formulating and new was configurations of its technology-practice. The capabilities of technology- describing the role of innovation in competitive advantage in technology-intensive industries. 284 practice is not simply a box of pre determined technical choices based knowledge. These capabilities are on accumulated composed of various "aspects" (Pacey, 1983: 6) of practice: technical, economic (for example experience curve gains), and social commitments. Heritage, exigencies, and expectations 9.3.6 of a combination of the ongoing assimilation of Particular technology-practices also collective experience (Fleck L., 1979) and capabilities, rather than being logical extensions of some inherent trajectory', qualities of artefacts, or an grow out as may be implied by the notion of 'technological independent technological agenda (2.6.1). The Bank uses its Management Services Division (MSD) to support its banking enterprise, and since strategy practice is progressive, subsequent demands MSD build and structures that reflect earlier theories about what constitutes and control systems. on on previously established banking expertise developments of technology-practice: taken for granted good banking practice, artefacts, methods, work organisation, While practice is being guided by heritage, the ongoing assimilation of experience and capabilities keeps the development of practice For open to new configurations. example, although Browning of BoS, maintains that the Bank remains committed to centralised processing, others are exploring an open systems architecture (5.3.3). Although Richardson, Deputy General Manager of MSD, is adamant that MSD's role is to support divisional business needs, some Operating Divisions want more control over their information, because individually they see their Divisions competing in increasingly divergent competitive environments, and feel that inflexible and costly. For example, they than it would cost MSD to can buy a centralised support system is often too some software off-the-shelf more cheaply develop. As the cost of computer processing power continues to fall, and individual Divisions develop in technologically diverse directions, meeting their different play an expectations may increasingly become a constraint on their growth, increasingly diminished role within the Bank, different and currently unanticipated ways. 285 or MSD's role may or MSD develop in may Nevertheless, current thinking among the Bank's executive is that allowing each division too much autonomy could lead to duplication of IT those divisions that do centralised work use resources MSD. Furthermore the Bank's and increased overhead cost for capabilities and structures in processing far outweighs its capabilities in distributed processing. The existing organisation, reporting and control methods, and repertoire of competences and tacit knowledge are all rooted in centralised processing, and have been refined over decades. The development of the Bank's technology-practice is being guided by historical commitments in tension with differentiated divisional rather than any The logically determined perspectives on consequences today's and tomorrow's business needs, of hardware choices. technology-practice of OBS is inherited from the Open University. The socially constructed reality of OBS is at the same time shared with, yet quite distinct from, that of the Open University. An important difference is the OBS's sense of being market driven, as is reflected in its marketing and sales organisation and competitive pricing of courses. The OBS technology-practice is at the same time legitimised by the usefulness that the management education sector attaches to its courses, and the existence of an enterprise culture that supports management education and training. Evidence of the legitimacy of the OBS approach is its claim to account for 40% of all UK distance learning programmes (6.2.1), and the public appetite for new all kinds of management books, videos, television topics seems to programmes, and executive courses on continue unabated. Suggesting that technology-practice has interpretive flexibility does not mean that all possible futures are obtainable. The development of technology-practice is shaped by: constructed boundaries between facts and values; available by the convergence of subjectively capabilities and the objectified exigencies of 'the here and now'; and by the perceived needs of tomorrow's business environment in tension with heritage. 286 9.3.7 Failure Failure like anomalies is an technology-practice. Failure is, what the facts conflict over and feature of the interpretive flexibility of unavoidable prospect may occur when stakeholders cannot what the problem agree on and what method should be used to deal with it. Witness the continuing are, British 'mad cow disease' within the European Union. Failure may be due to technical, organisational or taken for granted theories of good practice. Timeplex's 'escalation log' exists installation problems exists because there install all new as an organisational solution to a resource problem. This register of enough engineers available to successfully are not systems as fast as the sales people are able to generate orders, organisational failure in itself. This solution fails from time to time that their system reasons: even promises to customers as will be 'up and running by next Tuesday' cannot be met for engineers available; are committed to other projects; replacement products priority of their work. These failures can are not yet Timeplex to managers, all share a maintenance of the mundane. The escalation or new of rearrange the commitment to the pursuit of novelty and interesting technical and commercial opportunities, sense variety of be understood in terms of the company's shared reality. In Timeplex engineers, sales people, and shared a if products are available, major network bugs continue to frustrate engineers' efforts. In addition, sometimes customer dissatisfaction forces opportunities an more than log represents mundane work compared to sales technical fixes, and in Timeplex this log sits uncomfortably with their entrepreneurialism. Sometimes failure in technology-practice is due to resistance to change, where the resistance is rooted in taken for granted theories of good practice, but disguised concerns editing (Pacey, 1983: 11). Traditionally there is courses a as more practical division of labour between writing and (the author's job), and the formatting of text (the secretary's job). This division of labour is supported through union and 'civil service rules'. The increasing sophistication of computer software makes it possible for authors to write within prepared formats, and for secretaries to manage some aspects of editing and develop a broader 287 production management function. The advent of electronic mail also makes the production of hard In copies and disk copies during drafting administrative burden. an unnecessary light of these technical and organisational possibilities the continuance of the division of labour between author and secretary working practices express concern are proving difficult because of ingrained practices. Many academics about giving and the latter voice their These about are fears about looks increasingly spurious. However changes in any concern editorial function to secretarial and administrative staff, that their traditional roles new competences in developmental state. Theories of good practice the new course in danger of disappearing. loosing control of existing competences and responsibilities, and fears being able to develop what the are a are publishing context that is itself in being rewritten, but no rules should look like. Nevertheless, the OBS one a is clear about leadership is intent on reducing production time, to which end the OBS leadership and union representatives (administrative and academic) have for difficulty. In this negotiated process some time been negotiating a route through this the OBS leadership seeks changes to existing working practices, including the adoption of appropriate software and hardware, while protectors of existing technology-practice aim to wring concessions from the proponents of the new practice. Section conclusions 9.3.8 A narrow interpretation of technology increases the possibilities of failure because it ignores the 'seamless web' character of the sociotechnical technology-practice on the other hand (2.6.2). The broader definition of goes some way toward anticipating the constellation of opportunities and interesting dilemmas that underpin innovation practice when crystallised as well as reflect as particular artefacts Technology- work organisation arrangements do shape particular social and economic preferences. In designing the next iteration of software and hardware, or in start or processes. reshuffling the Customer Support organisation, practitioners from the sociotechnical commitments they have. Even when they decide to major leap (for example for BoS to embrace open systems 288 networking, or a make a for Timeplex to successfully develop their Advanced Technologies), they still start with substantive elements, but substantiveness that itself has a More broadly, practitioners also create their social reality through the interpretive nature of technology-practice, but there leaps, such as Home Banking, likely to require such a 9.4 If as provide the are a limits. While each organisation has made technological switch from banking to telecommunications networking is fundamental change of technology-practice that switch of social realities. well interpretive flexibility. scope we might talk of a Chapter 10 explores how alternative social realities constrain as for innovative behaviour. STRATEGIC INTENT practitioners construct their shared reality through practice, a reality that at the same guides practice, then within this context strategic intent and revealed performance are time also socially constructed. This section examines the nature of intent in terms of goal seeking goal setting behaviour, and the extent to which revealed performance is computational The notion of essence of the consequence of strategic intent, strategic intent ignores or masks rationality of choice, such as is socially shaped. a range of issues that undermine the very is widespread. Following Simon (1957), the assumptions of rational choice show that individuals and groups logical and the presumption that decision is detached and value free. Criticism of rationalistic strategy limitations and or a or are widely recognised. For example, they work within limits of cognition, communication, incomplete knowledge, and habits (see also 2.3.3). Moreover, in constructing social reality, practitioners also 'bracket' the flow of their individual and collective experiences (James, 1950;Weick, 1979). They selectively organise and give meaning to the morass of data and information that is part of their everyday experience. People in organisations try to sort this chaos into items, events, and parts which are then connected, threaded into sequences, serially ordered, and related. When we create serial orders we often find relations that were never presented to the senses at all (Weick, 1979: 148, 149). 289 The construction of the analytical story of this thesis is a good example of bracketing; deciding what is and is not relevant, and imposing connections The intended outcome in the present, and seems to many become clear seems the empirical evidence. through attaching meaning to experiences seemingly reasonable meanings foregoing analyses, it this basis and the more on may be imposed that strategic intent is on open to the present. On negotiation. 'Emergent strategies' do not depose 'intended strategies' (Mintzberg, 1978a) because they are better, but because of the scope for alternative interpretations and expressions of heritage, the exigencies of the present, and anticipations of things to is itself and In come. The process of bracketing 'accomplishment' (Garfinkel, 1967), something involving taken for granted skills, an probably contribute to the creation of new organising metaphors. bracketing and ordering their flow of experiences, the practitioners in this study everyday reality around orient their sub-section assesses a seem to mixture of intent and rules of thumb. The following the extent to which strategic intent is about goal seeking or goal setting, and the role of heuristics therein. Goal 9.4.1 Schwarz and making as seeking, goal setting, and heuristics Thompson reject "goal seeking" or rational maximisation theories of decision being "too tidy [because they] ignore the dynamics and ambiguity involved in policy processes" (1990: 50). They equally reject the 'garbage can' model of decision making (March and Olsen, 1976) as being too relativistic, too anarchistic because it ignores the political and economic imperatives that give strategy its purposive character. Organisations do have to account for their actions, and since many household names Schwarz and they must be having some success Thompson (1990: 52) suggest a sort do survive long enough to become in justifying their continued existence. of mid-way model of 'constrained relativism', which replaces 'goal seeking' with 'goal setting'. In this they are moving the focus from evaluating performance in terms of degrees of maximisation achieved, to evaluative criteria that measure more fuzzy variables: sharability, credibility, and 290 accountability.8 These criteria are unlikely of an organisation, but they do to cover the diversity of performance dimensions toward reflecting the profoundly social nature of go some way strategy practice. While 'goal setting' account There is seems to account for the fundamental a sense for political legitimation of strategy choice, it does not uncertainty and interpretive flexibility of technological change.9 of rational selection from a range of alternatives, based the on access to 'facts', albeit politically legitimised. Goal setting (and certainly goal seeking) seems to ignore the extent to which choice is intentionally or unintentionally delegated to elaborate procedures and rules of thumb (Nelson and Winter, 1977). In this default reduced to risk assessment, and scope programmed out. This flow model' The can be seen in the Open University's attempts to develop more attention to detail and to be a success a variety of ways. The BoS as achievable outcomes stewardship is maintained. The OBS also long as as continuous seems to pay greater goal setting, something that is enshrined in its equal opportunities philosophy, and distributed self 'resource importance to goal setting (procedural rationality), with goal seeking (substantive rationality) being regarded and open a or (6.5.3), and discussed below. give attention to uncertainty is by for interpretive flexibility is closed down organisations studied here evaluated their decisions in Divisions way access to decision making. Against this position, goal seeking seems imposed discipline, with revealed performance (including income generating and student registration numbers, research rating) used independence of the parent Open University, and as as symbols of the OBS's evidence of being a major force in the competitive environment. Although BoS claims to have abandoned formal strategic planning reality carries 8 many many years ago, its social vestiges of those times of top down control; further evidence of the evaluating strategy making exist: Johnson and Scholes' (1989) Suitability, Feasibility, Acceptability; (Mintzberg et. al., 1995: 92) Consistency, Consonance, Advantage, Feasibility; the Civil Service 'four Es' (efficiency, economy, effectiveness, equity). Various criteria for Rumelt's 9 MacKenzie (1992) suggests that uncertainty and 'interpretive flexibility' relate to similar concerns. 291 temporal continuity of social reality discussed in 8.3 and 8.4. Divisional autonomy and 'opportunism' are commonly presented by Bank staff as unique characteristics of the Bank. Despite this, Campbell of the International Division remains well aware of the importance of legitimation from the Management Board division. Also as he considers his options for growing his Browning's statement that the Bank remains committed to centralised data processing, whatever divergent views individual divisions down may have, is reminiscent of top strategic planning. Heuristics labelled are as also an important and very visible aspect of BoS strategy practice. Projects 'non-strategic' by the Management Board routinely Services Division's elaborate and formal cost/benefit assessment and selection process shapes strategy choice as much is as very through the Management analysis procedure. The project sophisticated and it seems choice shapes the procedure, of the decision not to invest in ATM pass as capabilities. More formally, likely that the procedure evidenced by the reversal a decision that is labelled 'strategic' in BoS acquires that status from the Bank's formal executive, the Management Board. 'Strategic' labelling involve judgements in advance of any rule following, (1967) 'accomplishment' (9.2.5). akin to Garfinkel's strategic actions In OBS seems to may by proposed by its executive, but closing a decision rests on from the breadth of OBS and sometimes from the Open University's getting consensus Senate. Achieving this closure takes place formally and informally, with the latter being the critical mechanism words of one as individuals posture, member), coerce the politically weak, and co-operate with each other prior to and after formal decisions. Whatever their very In differences, political legitimation seems to be a important element of goal setting for both BoS and OBS. Timeplex 'goal seeking' be accommodated focused in bargain with the "movers and shakers" (in the on seems to be more prominent, with 'goal setting' being during the good times. Timeplex the colour of the 'bottom line', both in managers are luxury to much more pursuit of individual hidden agendas and pursuit of company financial targets. These targets may and engineers a are often imposed on managers, and bear little relation to formal submissions of budgetary requirements and sales forecasts. 292 How these targets are achieved are including firing staff at short notice to senior While or or forecast holder, entering promising commercial deals without recourse executives. Timeplex organisations, may be characterised with what they 'goal seeking' and OBS see as are an 'goal setting', in both integral part of strategic choice. The sense the arbitrariness and distorting effects in the parent organisation's 6.5.3). Indeed the basis of the allocation has been lost in history, believe they have not been revised governing travel as shape strategy choice is reflected in the OBS's growing dissatisfaction allocation of overheads (see and many as with BoS, 'rules of thumb' as that such heuristics do the entirely at the discretion of the budget expenses is one as the university has developed. The rules example of this: one may claim business travel costs from University's site in Milton Keynes to anywhere, but not from one's home address to the same destination. Like most large organisations Timeplex has many manuals of procedures. However, from strategy choice perspective probably the most influential heuristic is 'anything a goes'.10 As Hammond, Human Resources Manager of Timeplex says, there are a lot of "constituency builders" in the company looking for alliances and who "thrive in an opportunity; people who are always looking for [this] environment, they love this sort of environment because it isn't structured" (see 4.5.2). If strategy practice in BoS is likened to governance to is underpinned by the wild west, 10 and statute law, strategy practice in Timeplex is akin up the rules as they go. Having strategic intent goal seeking and goal setting, the next sub-section the extent to which revealed determinate old and well ordered metropolis, where populated with frontier people who make discussed the nature of assesses common an performance is driven by strategic intent in a sense. Some might argue that 'any thing goes' is not a heuristic because it is not deliberate. The response to that challenge is that, in the context of this organisation's social reality, 'anything goes' is a meaningful guide to action. 9.4.2 Revealed performance Rational accounts of firm behaviour claim a direct link between strategic intent and revealed performance. Corporate reports give details of annual financial performance, new product introductions, growth in market share and assets. These 'facts and figures' are all provided as evidence of the performance of strategic intent. Ascom, Timeplex's parent, for example, describes its influence on the telecommunications market: a substantial proportion of its turnover in research and development. This reinforces the group's reputation for high quality products and service which have been built up over many years (Ascom: A company profile, ref AUK/4/93). Ascom continues to invest The promotional literature new data transmission system that system. goes on to describe how during the 1980s Ascom introduced a for connection to the ISDN, and that British Telecomm bought It became the "backbone" of BT's KiloStream transmission system. In this example, Ascom has collaborated with BT to shape part of the telecommunications environment, which at the same time has shaped its own subjective view about the value of its R&D investment. Such accounts suggest the successful accomplishment of an intended strategy, but is it so? The evidence is that this is studies suggest others suggest resources make a and that a far from success comes straightforward question. As discussed earlier, some from industry structure and competitive positioning, while that superior profitability depends on how individual business use their capabilities (see 2.4 and 9.2.1). In concluding that practitioners' actions do difference, Rumelt speculates that this might be due to "product-specific reputation, team-specific learning, a variety of first-mover advantages, causal ambiguity that limits effective imitation, and other special conditions" (1991: 180). Beyond Rumelt's speculation there is little evidence that this computational In support success is due to strategic intent in any deterministic and sense. of Rumelt's suggestion there is evidence of learning and contingent adaptation. Mintzberg and Waters (1985) longitudinal study of decision making in Volkswagen and the 294 National Film Board of Canada shows that regardless of intent. In the an different context Fleck J. (1992), and Fleck et, al,. (1990) shows that implementation of CAM, robotics and other technologies involve innovation to get the a quite often different 'realised' strategies 'emerge' a significant amount of them to work, rather than the unproblematic realisation of intent. However, following accounts show that revealed performance is objective reality. Political more than learning and adapting to accounting practices, self-fulfilling prophecies, and processes, socio-cognitive commitments also shape practitioners' revealed performance and strategic intent. Constructing performance 9.4.3 As argued earlier political behaviour plays Knights and Morgan argue that there is no a significant role in shaping strategy (8.4.5). correlation between strategy intent and outcomes "except in the rationalised accounts of strategists whose identities privileges are tied to Since those that are an interpretation of the accountable for success of Timeplex managers to achieve managers keep a or critical a material as a vested interest in showing favourable stories are eye on a competitive game. a positive unavoidable. Senior adept at 'sand-bagging', moving budgets around in expected performances. It is also has laid claim to bagging' are well of strategic management" (1990: 482). performance have correlation then conscious attempts to construct as space and time Some of Timeplex's senior each other's financial forecasts. At least one senior manager colleague's job and department claiming that the colleague is 'sand¬ submitting unrealistically low forecasts to make his quarterly financial performance look good. During the last two common method of years the Open University's Faculties have been unable to accounting for income and go), because each possible model carries each a expenses agree on a ('resource flow models' package of differentiated costs and benefits for Faculty. All parties recognise that their future performance will be defined by the they configure the university's resource reflects its financial contribution to the and come flow model today. The OBS wants university, and wants 295 more control a way model that over the use of its income. OBS also wants the current method of reviewed because it claims to be use. Some other or as a whole is a more important and perhaps overheads should be spread according to ability to contribution for the veiled reference to OBS' In this disproportionate share of the costs against actual relative income levels between Faculties. Some others suggest Faculties should make a a Faculty representatives feel that the University than its individual parts, contribute carrying calculating overhead allocation to be that individual exploitable value of the University's reputation; performance being due to its parent's reputation. example and the 'cross charging' between Divisions within Timeplex (4.5.5), practitioners are how extent on well aware that their value to the organisation depends to profit and costs attract more resources are (engineers, defined: Timeplex's Customer Support Division will managers, investment) if they the whole developed; and the design of model will shape the can on scope whatever resource for innovation across "channel innovation" (1992: 37) toward reshaping revealed and unsatisfactory cost structures. Where labour intensive operations resource show income growth University. As MacKenzie shows, the meaning of profit changes with accounting practice, and automated can profitable depending from their activities; OBS will look more or less flow model is lesser a greater or operations this is often flow model the consequences seen as a reason to are regarded as higher than increase automation. In choosing a Open University leadership cannot know in advance the of its decision, even with the most sophisticated scenario testing techniques. Nevertheless, future strategic choices will be shaped by the design of resource flow model, encouraging and discouraging particular innovation opportunities that cannot be determined in advance. 9.4.4 Virtuous circles Strategic intent is also often imputed to what is a virtuous circle (Knights and Morgan, 1990; MacKenzie, 1992). For example, organisations may perceive the market developing in a new way, that and develop strategies to facilitate that perceived development. The market then reflects anticipation back to its suppliers. 296 Timeplex has formed the view that technology (Advanced Technologies) based a new synthesis of LAN and WAN is needed if they developing new products and training staff to exploit this that this is the way customers telecommunication network ahead. Customers in turn suppliers on in the future. They new are are technology, and telling evaluating competing the basis of their progress in this new direction. In Timeplex and its competitors' intended strategy is part of a self-fulfilling loop other words, of are to compete on a anticipating certain market expectations, persuading customers and themselves that Advanced Technologies is the next technological step, selecting confirmatory evidence, refining strategy to meet those anticipated expectations that they helped create. Timeplex's Advanced Technologies is not gathering momentum or following some technological trajectory because of any inherent technical superiority but "because of the interests that develop in its continuance and the belief that it will continue. Its continuance becomes embedded in actors' frameworks of calculation and routine behaviour, and it continues because it is thus embedded" (MacKenzie, 1992: 34). Nelson and Winter (1977: 57) suggests that where heuristics facilitate successful technological development, such incremental argue a learning reinforces the continued use of those heuristics. Like MacKenzie they that it is technicians' beliefs about what is feasible that maintains their commitment to particular line of technological development. Relatedly, Rosenberg (1982) and David (1975) in their studies of technical progress found that future choices are shaped by localised learning-by-doing rather than by In managers optimising from all possible options. suggesting that strategic intent exhibits self-fulfilling properties is not to practitioners are deluding themselves. Social groups reality by buying into the same house prices in Britain progressively alarming rate. Home investment opportunity, moving house every two or three of home loans, confirmed the rise in house the main source quarterly surveys. a particular presumption of logic. During the 1970s and 1980s social an that (buyers, suppliers, regulators, competitors) define their relevance to, and contribute to the construction of, rose at a say owners saw years or their home as less. Building Societies, prices through their monthly and House prices continued to rise because buyers, loan providers, and estate 297 agents believed they would rise. Similarly, the financial markets maintain their growth through the same loop of anticipation, confirmation, and reinforced anticipation, crashing when confidence in the continuance of that Self-fulfilling circles. In processes are not growth evaporates. always virtuous circles. Sometimes they may be vicious Timeplex Hammond's "constituency builders" actively and consciously seek to manipulate the company's 'grapevine'. As described earlier one person had started a rumour that others were about to be made redundant, saying that "rumours can become self- fulfilling"(4.5.2)! Section conclusions 9.4.5 Whether strategic intent takes the form of goal seeking or goal setting, it is bound up with heuristics; 'rules of thumb' that shape choice, formally or informally, and give legitimacy to strategic choice. Heuristics whether or not an The evidence suggests their be taken for granted, surviving unchanged over time, organisation has formally changed its strategic planning in BoS, revealed may or way and that there is for example no deterministic relationship from strategic intent to owe their success to how they use capabilities, rather than it being at the whim of industry structure, there is weak evidence that that success performance is a as as accounting practices in OBS. performance. While there is evidence that firms resources of working, much is due to determinate control of their destiny. Revealed product of practitioners bracketing their flow of experiences, often retrospectively, politics, self-fulfilling prophecies, and shared commitments and expectations among 9.5 In competitors, customers, and other relevant social MAIN CONCLUSIONS conceiving of strategy than groups. as a resource for solving problems 'rational' practitioners get more they bargain for. Practitioners of OBS, BoS, and Timeplex, necessarily if unknowingly accomplish not only their material reality but also their social reality through the creative 298 exercise and choices remain are development of their capabilities. In this process practitioners' judgements and unceasingly shaped by diverse streams of spatial and temporal only dimly aware of. Individual and collective judgements are resources that they imbued with taken for granted skills and practices, heritage, and their anticipation of 'things to come'; shared meaning and at the same time differentiated social values, shared capabilities and differentiated assessments of those capabilities. Capabilities shape social and material reality through various factors including: the creation and assimilation of knowledge that is rooted in social values; knowledge that the interaction between our subjectivity and an enacted reality; the openness grows out of of socio- cognitive structures to interpretation and expression; the interpretive flexibility of technology and technology-practice. These considerations boundary, but bound up are not defined by the formal organisational with the tradability of capabilities, managerial socio-economic preferences, and institutionalised relationships, both formal and informal, between sectoral stakeholders, and including managers, of shareholders, employees, customers, suppliers, regulators. Debates about whether economic factors are trajectories reflect institutional commitments technological or inseparable. Practitioners construct boundaries between facts and values; shape knowledge creation, and the crystallisation of that knowledge cognitive structures and heuristics. Growth, whether corporate same reason that it is maintained: commitments to 'the way we the obvious socio- sectoral, evaporates for the a wavering of socio-cognitive do things around here', rather than through clarity of facts. Revealed performance processes or as through increasingly differentiated economic and technological assessments of situations and events, and complex or imperatives, obscure the extent to which social, economic, and technological boundaries that or a range can some be accounted for technical veto more by these than by the imputed computational force of strategic intent. There is evidence in this analysis that the three organisations approach the practice of strategy differently. For example, differences in trading capabilities (9.2.4), the expected practice for the creative development of the organisation (9.2.5), and the different 299 assumptions about strategic intent (9.4.1). Chapter 10 explores these differences, comparing and contrasting their approaches to practice as alternative social realities. 300 10 Plural Social Realities 10.1 INTRODUCTION Chapters 8 and 9 show that for all three organisations strategy practice constructs and reflects a reality about how to co-operate and compete; shared remains a reality that while stable always provisional because of the interplay of a host of socio-cognitive The influence of these processes processes (ch. 8). transcends practitioners' attempts to order and systematise strategy temporally into the elements of analysis, evaluation of possible options, followed by implementation. Indeed for this reason strategic choice is better described as 'social choice'. Making sense of social choice means understanding the social reality that gives meaning to choice. Fieldwork evidence suggests A sense of this difference has surfaced in various Scotland the that social reality is constructed differently in each organisation. seems places: strategy practice in the Bank of to have a lot in common with the 'determinate' 'managed chaos' metaphor seems a more metaphor of strategy, while appropriate description of practice in Timeplex (see 4.7 and 5.7); practitioners in the Bank of Scotland were found to share a belief in stewardship, seeing themselves more as caretakers of the Bank, while those in Timeplex share territorial and individualistic outlook (see Scotland seems gains, against a to be concerned with 8.4.1); strategic intent in the Bank of refining routines and procedures in pursuit of efficiency tendency in the Open Business School to seek broad consensus in strategy making and implementation (see 9.4.2). Indeed the social reality of each organisation to have distinctive and discernible make sense of their a appears characteristics, just as Benedict's primitive communities reality in fundamentally different systematic exploration of these differences, providing organisations' social reality. 301 ways a (see 7.2.2). This chapter offers comparative analysis of the three a As a argued in chapters 7 and 8 the practice of strategy in of life for its practitioners; practitioners' way shared organisation is the embodiment of of value and relevance reality. Understanding why the practice of strategy is the determinate for sense an or managed chaos, requires understanding the way way comes it is, why it from their seems of life that practitioners take granted. The general framework used to analyse these differences in social reality emerged while looking for ways to organise my thinking about how practitioners in the three organisations seemed to interpret and use the concepts of strategy and innovation differently. Bloor's 'Wittgenstein: A social theory of knowledge' offered a way forward, in particular his analysis of Wittgenstein's 'language games' and 'forms of life', using Douglas' group/grid framework to show that scientific the world. From this I The ways of seeing explored Douglas' work further, harnessing and adapting it to the following analysis because it three knowledge creation is shaped by different offer seems to ways of making sense of the differences in the organisations' social reality. chapter is organised as four parts. First an analytical framework for comparing organisational social reality is introduced. Second, a few other themes that seem to lend support to the analytical framework are introduced. Then, the behaviour of each organisation's membership is discusses in terms of this framework. This is followed by comparative discussion of practitioner behaviour, drawing on a the preceding analysis. 10.2 CHOICE AND SOCIAL REALITY 10.2.1 A typology of social realities Many writers have developed descriptive frameworks to offer comparative accounts of various societies and communities, for example cultures (Douglas, 1982a, 1982b), and political regimes (Swanson, 1967).1 Douglas, 'group/grid' construct to describe and a compare social anthropologist, developed her cultures of entire communities. Her ideas (1982) has usefully tried to collapse many of these accounts into one framework, although some would argue resulting generalisation does some violence to the nuances of individual accounts. 1 Ostrander that the are 302 based on of studying the cultures of societies, both 'primitive' and industrial, and many years her work has been very influential in a number of different contexts, and at different levels of aggregation. For example as a tool for assessing the experiences of research scientists moving from academia to industry (Bloor and Bloor, 1982), and for explaining the rationalities and engaged in conflicts macro technological policy development (Schwarz and Thompson; 1990: 7). The analytical framework below (Fig. 10.1) draws on the work of Douglas (1982b). Her 'group/grid' construct provides the basis for comparing organisational social reality. It is useful structure because it accommodates the the way sense that a people construct their reality through they work together, their taken for granted practices, and through adherence to collectively sanctioned rules of behaviour. Social control hi Hierarchy Atomistic Prison Bank of Scotland Social commitment lo hi - Egalitarian Individualist Ascom Timeplex Open Business School lo Fig. 10.1. Social choice: The a typology of social realities degree to which people organisation depends on may legitimately work alone or whose contribution to their working collectively, influences the form of an organisation's social reality. This dimension is labelled 'social commitment'. Juxtaposed with these working is the degree of constraint that rules of behaviour impose 303 on ways of how people work together, rules of behaviour that the organisation's members taken for are only dimly of and aware are granted. This dimension is labelled 'social control'. These considerations produce four discernible 10.2.2 archetypal social realities: Individualist, Egalitarian, Hierarchy, Atomistic. Social commitment This defines the importance of group membership and the extent to which boundaries group represent constraints to the free movement of individuals in and out of a group. It describes the degree of commitment that individuals give to department or a group, such as their functional the whole organisation. It is about the balance between the calculated acceptance of practices, and the internalisation of social values, norms and rules. The individual's guiding of their the transactional process own actions to comply with a perceived expectation of others; between individual and organisation. The rules of admission to a group, and its continued support of its members, may be strong or weak, explicit and implicit, making membership more or less exclusive. Group commitment can be rooted in a variety of common assessed in terms of a common 'stewardship' is needed to share an almost comers. It is the on common can be view that norm that staff give open access to some education, and equal of their time freely seems or at very ephemeral, to 'the budget performance, and looking after 'number one'. New the basis of their claims to particular expertise and appropriate 'track- record'. New staff do not have to for commitment the continuity of that heritage. Staff of the Business School Timeplex's employee commitment bottom line', this months sales of selected group pride in its ancient lineage and the ensure low financial cost. In contrast, are The Bank's evangelical commitment to providing opportunity to all people concerns. 'buy in' to Timeplex's mission getting the job. 304 or philosophy as a condition Social control 10.2.3 This defines the extent of prescriptive behaviour and social control, regulation and formal controls, both within and outwith the group. Some of these 'dos and don'ts' are abstract, others definite rules. Choice more over one's actions range from 'freedom of choice' (civilian) to highly regulated behaviour (military or prison). At one end of the spectrum relationships and compliance are negotiable, while at the other end everyone knows their place in the institutional order. The degree of influence organisation's socialised membership to ensure or power that members exerted by the use their knowledge and expertise, and fulfil their commitments to the organisation. 10.2.4 Individualist Low group commitment and low social control interest, to networks. to pursue cross group They have that individuals are free to pursue self boundaries in pursuit of establishing and taking part in social a great deal of freedom to negotiate contracts, as is individual mobility whatever is currently in fashion for gaining influence and prestige within their informal network, among peers within and outwith the organisation. Individuals together primarily to discuss topics that There is much scope Information and groups individual or very narrow group and individuals, within and across interests. the organisational boundary. knowledge flows follow informal and social networks reporting structures. Such flows environment serve come for individual entrepreneurial activity and competitiveness characterises relationships between 10.2.5 means are more than formal minimally inhibited by the formal organisation/ external boundary. Egalitarian Whereas the Individualist social individuals, an constituencies reality describes Egalitarian social reality is a more an loose 'association' of 'elements' association of groups or or semi-autonomous (Swanson, 1969). Individual independence depends on membership of a 305 constituency. Commitment to a group is strong, and is more regulatory Social Control. Internal intra-group boundaries driven by that commitment than are blurred compared with the organisation/external environment boundary. While commitment to a constituency legitimates individual action, individual status is also quite ambiguous and negotiable. 10.2.6 Hierarchy Commitment to the organisation's values and traditions is strong, with strong social control. Loyalty is prized and rewarded, hierarchy is respected. Individuals roles and ascribed authority. Judicial and legislative functions executives with ascribed The exercised by many formal layers of managerial control, and strong internal resulting internal compartments channel (some would environment. Social networks Individualist are much say few more group group control boundaries. 'interfere' with) the flow of as a whole and its external stratified than either the reality. The decision makers of this organisation seek links with the external environment Douglas one or a authority. knowledge between compartments and between the organisation As bound securely by constraining effect of a highly regulated work environment and strong produces The are are Egalitarian ways or of improving its by trying to extend control, using ordered mechanisms. says be discharged by entrepreneurial brokers of but who are trusted representatives, honoured for their successes in pioneering work or delicate negotiations with outsiders (1982b: 8). some important functions information who 10.2.7 are Atomistic Here the social framework is do as they are an fully regulated. Like those in told, and individuals have little manual worker in life in can not full members of the central group a 'sweat HRM Prison. A or no group a Hierarchical society, people here affiliation. This might be life as a shop' manufacturing enterprise where union influence is nil, or reality of social domination 306 seems very appropriate here. Attempts to manage prisons as a form of private enterprise is an innovation. One may speculate that the attempt also produces a clash of realities, resulting in anomalies whose resolution is a common learning experience for both realities. The problems of Group-4 and its contract with the Government to manage various aspects of the prison service comes to mind. 10.3 RESONANCE BETWEEN THIS FRAMEWORK AND OTHER THEMES There is of a sense resonance between these exemplars, and ideas that have developed quite independently in different intellectual disciplines. Schwarz and Thompson (1990) has attempted a very useful correlation between these exemplars and various separate streams of ideas. Some of these reinforce 10.3.1 or help to shed additional light and the outside world. Williamson's 'clans' support Individualist Hierarchist the analysis. Economic transactions Some writers have studied the economic transactional an on relationships between the organisation (1975) markets and hierarchies, and Ouchi's (1980) the main thrust of each social reality. Transactions based reality, a preference for internal transactions over on markets support markets supports a reality, and the notion of 'clans' supports the thrust of Egalitarian reality. Although Ouchi (1980) offers economic transaction, not a coherent framework to account for the three types of surprisingly his chosen variables do not social choice framework above. Care is essential in map directly unto the interpreting the correlation between these ideas, and further work is needed to relate the two ideas, but there is at least an impressionistic correlation between the two. 10.3.2 Rationality Rationality is generally used to describe work organisation, typically to justify its formal structure, and decision making in terms of its members' interests. Arguably, what is 'rational' 307 has more to do with taken for result of work granted ideas about how the world works than being organisation. Rationality is a direct feature of social reality. Particular work organisation configurations reflect and reinforce is a an ensemble of features of which rationality one. Further, social realities Weber's (1964) formal paradigm', are are supported by distinctive 'styles' of rationality (Wettersten, 1995). or procedural rationality and Allison's (1971) 'organisation process consistent with the Hierarchist's overriding concern with rules and roles. Following procedures will deliver acceptable outcomes. Substantive rationality (Allison's 'rational actor paradigm') puts outcomes first, 'the bottom line' matters above all else. How 'the bottom line' is achieved is of secondary importance. Schwarz and Thompson's critical rationality describes the Egalitarian concern with "communal and voluntaristic co-operation" (1990: 7). Both outcome and process are important. Here Allison's 'governmental politics' describes the negotiated and political dimension of rational choice, and complements the 'co¬ operative' perspective of 'critical' rationality. 10.4 ALTERNATIVE SOCIAL REALITIES: THREE CASES The preceding arguments suggest that the practice of strategy is characterised by socially constructed commitments that individuals share. means Understanding the practice of strategy understanding the institutional commitments of its practitioners. This section will compare and contrast features that give a social reality its meaning and distinctiveness. It describes how alternative realities coalesce effect of a as a result of the tension between the constraining body of ideas, social prescriptions, and reconstructive effects of social interaction. The aim here is to reinforce the ideas put account of each forward in 10.2 and 10.3, by giving organisation studied. 308 a detailed 10.4.1 Timeplex Timeplex is old company, providing electronic networks (products and a twenty year services) to globally distributed businesses, mainly in the financial services industry. It is one Division of Swiss based parent, a and along with the parent is experiencing financial difficulty. Its products have been left behind in the competitive is striving to race, a position from which it recover. Legitimate decisions interest than as transactional are routinely made among participants acting representatives of departments. Individuals relationships with individual and immediate anyone, are within and outwith the more out of individual free to negotiate and enter company, even between an superior. For example, Hurd talked about how he and his boss, Richard, regularly discussed how they would leave the company to set up their own networking would go how they would finance it, and that with them. Their justification individuals, one company, more was some of Timeplex's customers that customers invested trust in them as than in Timeplex. There was a lot of money to be made in this business if worked hard, so why not claim it for themselves rather than the (ungrateful) At another level, the USA Customer Support leadership entered into a contract company. with a video conferencing system provider, involving world-wide technical support of up to five different types of system. This deal was made with minimal UK involvement, who are responsible for providing European and Middle Eastern Customer Support. Many UK staff were critical of the agreement, example, who wondering how they was going to would be needed and who In this and other committed to the examples pay was were going to support five different systems. For for training the UK support engineers, and what spares going to finance that. one can see how managers and engineers alike are more 'exciting gamble for big prizes' (Douglas, 1982). This attitude is pervasive, implicit in the practice of strategy, taken for granted. Richard had been head hunted to conceive of, and Humphries, a implement, senior a grand plan for world-wide co-ordinated customer support. manager, saw Richard's vision in terms of the 309 career opportunities that he could into see for himself, waiting to be opened up. He imagined himself turning that vision reality. Richard did not have to point the finger at anyone, and say "Fred will do this bit, responsible for this area". He defined the future, and it and Sarah will be was up to the audience to realise that future. Internal competitiveness characterises individuals' belief in the scope to shape niche for themselves; Davis could or carve out a through individual enterprise they would determine the order of things. barely disguise his belief that he could do his boss' job more effectively. After all, in his previous company he had held a more senior position than his current boss. He often shared ideas with the President of the company on how he (Davis) could really make this company grow. The on-going tension between Sales and Customer Support is another example of this competitiveness. Sales try to show Customer Support as ineffective; that Sales can satisfy customers needs more company comprehensively; that Sales would make continually having to pick unrealistic one for the if it had control of Customer Support. Customer Support in turn defends the 'acquisition' attempts by showing how well it be more money up its budget, and how they the pieces after sales people have committed the promises. The carving lost battle in the manages up are company to of the European Support Manager's function seems to ongoing skirmishes. There is also tension between Sales and Support to control the embryonic Professional Services Department. Both Customer perceive it as a major business opportunity, Services is still loss even though after three years groups Professional making. Those few not committed to the pursuit of glory and gain for self, like Blewitt or Oattes, complain that the organisation lacks strategy and direction. They criticise their superiors for taking what they can get out from his twenty years These critics fail to of it; that to see they are of the company. Blewitt's perspective is in the military, where he progressed in see that in this a very probably inherited programmed career structure. organisation's reality strategy is what the individual makes not being subjected to some form of organisational psychosis. They are apt Timeplex's loose integration as anarchy. 310 Respondents stressed the irregularities and instabilities of the telecomms competitive environment rather than its order. The special skills of individuals who pay competitive environment is seen as responsive to the attention to it. Managers and engineers move among competitors almost at will. Stubbs talked about how the industry is rich with opportunities because new new products are companies. There is firms in this sector. always appearing, a constant turnover as well as chances of promotion in growing and of staff in Timeplex, in many Managers and engineers justify this turnover in terms of career opportunities within the sector, the 'hire and fire culture', and the need for remain with common competitive. The risk of redundancy is constant, and is one of the blood to new more unpleasant aspects of working at Timeplex, but that's how things are. Anyway, the attractions of entrepreneurialism with seems to overshadow such fears, in that staff are much creating and exploiting opportunities. Redundancy is just one more preoccupied expression of the risk and uncertainty that characterises the environment. Knowledge is traded through personal networks. It's about knowing how useful individuals are to to you, personal recognition and prestige novelty. The marketability of novelty is on more highly prized. Routine work is subordinate interesting, and tends to reflect much the individual that the collective, and there is considerable scope Braidwood's the are more for individual initiative. Directory of Timeplex's global operations, and Stubbs' attempt to harmonise company's new-product introduction procedures needing to be done, and initiated them. No one were tasks that they identified as allocated these projects to them. The Directory took about nine months of part-time effort, while the harmonisation project is likely to take much longer. Timeplex transact seems oriented toward market economic transactions, where individuals freely with the market rather than internally. That is, via Contractors. Their management accounts, literature done by are an carried out many of their services are bought in and the writing of technical and publicity by contract workers. Management of their fleet of company external agent. The purchase rather than internal development of a management information system to replace their existing system. 311 new cars is long term planning, and devices such There is minimal activities. Such devices may as a an example of this. Although there is that has the greatest Projects with a favoured, then financial muscle, or a shouts the loudest gets priority. being about offering customers solutions by 'cherry picking' company. He does this himself, through exploiting and extending his informal network. Once the solution has leaving his subordinate to sort out the details and administration. been defined, he moves on, Cecil years are the next interesting problem. Cecil sees his job (Multinationals move on to as recorded priority procedure, typically the technological and commercial solutions from anywhere within the work are clear beginning and ending, with time scales of months rather than Programmes Manager) sequence have less to do with organising the future than recording history: (Langley, 1988). The 'escalation log' where problem installations progressed, is customer flow charts to order and therapy and communication, and public relations that everything is record of activities, under control and as organises his work so that this happens. His subordinate, an engineer, chides his boss gently for not being interested in the detail, and for rushing hither and thither, but praises him for being good at manipulating the system in getting The attraction of attention, a ... business. opportunities and the relative disinterest in the routine is new institutionalised in the form of the essentially new company's 'escalation' framework. The escalation log is basket full of tedium, and relegated to routine work. It receives no special until the unhappy customer (their new installation was still not working after months) called the President of Timeplex to demand an immediate solution or else Timeplex senior managers projects, to make sure decided that it needed that such eruptions are a named individual to police the status of avoided in future. An Escalations Manager was designated (Braidwood) reporting directly to the Director of Customer Support. Braidwood was at the same time The individual in an engineer in Cecil's department. Timeplex is expected to be dynamic, entrepreneurial, this with the Bank of Scotland where managers conscientious and engineers are go getting. Contrast valued for their endeavour, attention to cost and detail, where respect goes with good 312 'stewardship'. The escalation problem produced a fast fix. Learning through mistakes is natural here. Bloor and Bloor academia to their his (1982) studied the extent to which industrial scientists, in moving from industry, had selected their niche organisation. In colleagues important issue was to had adapted to the culture that they found in organisation they found the scientist's commercial relationship with one was one or of not being afraid to experiment with technical solutions. The find a solution that worked and move on to the next deal Bloor and Bloor's assessment of their industrial scientists' attitudes to risk applicable to Timeplex's waste of time to inevitable" In cover managers oneself too seem project. equally and engineers: "it is beneficial to take risks [and] is fully against the possibility of failure, for some a failures are (1982: 97). Timeplex's world rewards whatever it takes, seniority or are based on demonstrating competences in getting results, and being competitive. Formulas and privileges based on heritage, such as or age are minimal. When one of Davis' administrators asked him what to do with a returned modem, Davis offered him £400 if he could sell it. While self interest reigns, the group is held together by a common and the notion of market forces. This commitment is shared belief in 'the bottom line', by its competitors. Its motto could be 'survival of the fittest', and the 'invisible hand of the market'. This is reinforced by customers' eagerness to exercise their right to choose between competing alternatives, and to demand value for money. Customers and competitors alike minimal-interference in the market alternatives that come and go, computing industries, and the constant on Conspiracy theories abound and From within, senior managers place. This is apparent by the vast array the principle of of technical the fierce price and service competition within most segments of the telecommunications and in Britain to break BT's hold appear to support pressure from OFTEL the British market. everyone is suspicious of threats, from within and without. in the USA try to confine within the formal reporting structure, information flows about intended re-organisations. However, informal networks undermine 313 such attempts. share their to For example Customer Response Centre staff in the UK and USA routinely knowledge and speculate about what changes are afoot, who is doing what with or whom, etc. Through networks like this sales staff and engineers heard that at least one of in the USA had received their peers re-organisation. The implication probably on the way out. 'confidential' phone call, offering him a was that if you did not get such commitment and weak social control, argue call then position in the you were Only time would tell. Douglas would expect such conspiracy theories from probably a a that stronger group an organisation with strong group for example OBS, rather than Timeplex. She would boundaries make passage into and out of the group more difficult, encouraging differentiated knowledge flows and internal distrust. However, within Timeplex there is a very strong commitment to unbridled entrepreneurialism is common to all staff, that division between Support and Sales breeds distrust and conspiracy theories. Customer In boundary between Customer Support and Sales. So while the Timeplex there are very high levels of internal distrust, political manoeuvring and negotiation. Some information flow is impeded by the UK/USA geographical boundary, typically related to sales and technical issues, where 'strategic' decisions are taken in the USA, and handed down to the UK executive. The Customer Support Division is not structured in the Sales and different that it was same way, so that there is also differentiated information flows between Support. The UK Sales Director and UK based Support engineers had perspectives was on internal to the what the current round of re-organisation about. One thought Support Division, while the other though that the whole company being re-organised, starting with the Support Division. These boundary issues encouraged speculation about what inherent feature in this Individualist Generally, and was very a group barriers are weak, was really going on, so that conspiracy theories remain reality. as is group support. This is because informal networks, shared commitment to individual freedom to contract, weakens barriers. and go from Timeplex, redundancy and recruitment Customer an Support, individuals like Braidwood may 314 are People come regular and taken for granted. Within have two or three different responsibilities, cutting node' as seen as much as an functional barriers, thus defining individuals across element in contestable. UK Sales a as 'a network hierarchy. The boundary around Customer Support itself is leadership take any opportunity to chip away at the Customer Support boundary, and they have had some success to-date. A European Support function was broken up, with part going to Sales and part staying with Customer Support. One for its break-up respondent suggested that the reason Timeplex is dominated by Individualist reality, with Hierarchy and an was 'political'. some faint signs of Egalitarianism in the background. When the unhappy customer roused the President, internal protocol was observed, in that he used the chain of command to allocate the problem. Also, Hierarchy exerts influence through the handing down of decisions, and the attempts to control information flow from the USA to the UK, the 'hire and fire' centralisation of R&D. There is also is a meritocracy. Engineers and success, or how recalling how quickly some of them have UK head office managers 10.4.2 an atmosphere of informality and managers many everyone having of them have progressed from an raw acquired multiple responsibilities in just two equal chance of engineer to or three manager, years. At the and engineers intermingle, moving freely between offices. provides clearing bank services to the whole UK community, and claims to be the first bank to offer remote bank'. In 1995 it celebrated 300 years are talk about belief that Timeplex a Bank of Scotland The Bank of Scotland Staff philosophy, and the content to rely on banking services, and of being the first UK 'oil of banking practice. It is comfortably profitable. the existing pattern of role allocation within a complex business. They look for satisfactory hierarchical principles to guide decision making. In contrast with Timeplex staff, in BoS there is little individual freedom to transact reference to a or negotiate without higher authority. If a Divisional General Manager wanted to purchase an air ticket, s/he must get written authorisation from the Bank's General Manager. The validity of 315 the hierarchy principle is reflected in staff at various levels expressing the uniform view that many strategies are The Bank is a There least are at much 'bottom up'. The Hierarchy is taken for granted. more seven layered and compartmentalised society than Timeplex and OBS. layers of managerial titles, and the degree of specialisation is partly reflected in the Divisional structure. There is considerable interdependence between the Management Services Division (MSD) and the Operating Divisions. Scope for disorder and individual independent action is strongly circumscribed by the protocol of hierarchy, formal rules of title, There is a banking qualifications, and the pride of staff in upholding the Bank's traditions. strong belief that there are correct methods of work and if properly followed these practices will automatically produce desired results. The Bank's procedure is like necessary of its that a ritual to maintain purity, rather than for establishing a a concern mechanical ritual. It is seen as 'proper' relationship with its competitive environment, in terms reliability, and financial prudence. As mentioned above, all by senior with following managers, must overseas travel, including be authorised by the Bank's General Manager. There are procedures for project selection, lending procedures, procedures that guide financial prudence. These procedures to are pervasive, covering all activities, from routine administrative entrepreneurial initiatives. These formulae seek to ensure that all routines have been meticulously followed. Staff do not feel restricted many or describe the Bank's approach to strategy dismissal of the follow a by the 'the way things are'. Indeed, 'opportunism', as a reference to their somehow circumscribed as rigid strictures of corporate planning. In fact at least detailed one Division does planning framework, including the publication of strategic plans. 'Opportunism' in their terms is not at odds with unity. All opportunities 'Opportunism' also are means subject to the same very can be seen group project evaluation and selection framework. identifying and pursuing efficiency and effectiveness. This regulated work practices, and ways for improving the Bank's in the Bank's preoccupation with the need for continual cost control. In the Card Services Division, there are detailed instructions and 316 scripts for guiding telephone conversations with customers, and formulas for measuring the productivity of every call. In MSD the notice boards carry graphs of individual departments' cost performance. 'Opportunism' must also be seen in the context of the Bank's attitude to risk. This Bank, in common a with most traditional banks, regulatory authorities, and user expectations, constructs reality where risk taking is generally rejected by the public with deposits in the Bank, and this is reflected in the Bank's attitude to risk. The Bank's Corporate Statement (Report and Accounts, 1994), restates its commitment to financial stability. Where risk is taken the Bank must satisfy stakeholders, including regulatory forces, that it can afford to suffer can absorb that risk. The Bank's that public trust depends risk means that with This showing the exercise of strong control. The Bank's attitude to accepting risk (1982) calls an means goes with giving up as little control having a great Such possible. orderly fashion, to anticipate 'entrepreneurial broker', Richardson (Deputy General Manager, MSD) to now continue and extend to two way regulated entrepreneurialism Individualist an as deal of control. The Bank recently sent what Douglas spend nine months sharing knowledge with NCR, both initiative will loss, that it prudence and reliability explicitly recognises preferred 'way of being' is to be opportunistic in The Bank's outcomes. on concern a can as customer and supplier. This exchanges between NCR and The Bank. be contrasted with its 'unbridled' cousin in the reality of Timeplex. The events that led to this initiative also show the stratification of the bank's social networks. The Bank is NCR's banker, and one of the Bank's Directors is a non-executive Director on NCR's Board. At might send one one Board meeting the NCR Chief Executive suggested that the Bank of their senior people to spend time with NCR, to help NCR better understand what the Bank, as its customer, wanted from NCR. The pattern depend on a of innovation in the Bank is less likely to be revolutionary because it does not balance of power among groups; the distribution of power is stable and not negotiable, in contrast with Timeplex. When the Bank perceived 317 a major environmental anomaly, such as the threat from the English banks or the Royal Bank's introduction of ATMs, it accommodated those anomalies through a considered and orderly internal change with little disruption to the functioning of the company. Revolutionary change and response, likely because institutional is also less stable and did power relations within the banking sector is largely regulated. The government's initiatives during the 1980s to deregulate the sector produce few significant anomalies, such a as removing competition between building societies and banks, but these anomalies more commitment is the norm, the pattern extensions to any "transformation" of its banking practices. of innovation is more group likely to be incremental, existing practice. The 'entrepreneurial brooking' between the bank and NCR will enrich rather than disrupt that process. The Bank's 300 change. For this organisation, progressive change means year having history is a one of progressive relatively high expectation anticipated outcomes will be realised. There would be little tolerance here for Timeplex's 'trial and error' approach. The creation of Computer Services move an here the Bank accommodated organisation where the combination of strong social control and strong an that even of the barriers to akin to Barnes' (1974: 86) "rearrangement... of the of change in science" than overall pattern In through changes some by the Bank, taken incremental move, over as a Division of the bank in 1974 might suggest the bank's long history. However, it entirely consistent with a of many even "major cultural change small deviations from routine, can or also be tradition of prudence. There is parallel between the Bank's progressive development, and the Barnes notes that can progress a radical seen more as a useful of 'normal science'. be brought about not just by the accumulation extensions of routine, over a period of time, but by activity carried out in meticulous conformity of routine" (1982: 86). In presenting his argument, Barnes feels that "perhaps Kuhn's own conviction of the necessity of revolutions arises from an incorrect appraisal of what is possible under the rubric of normal science" (1982: 86). Nevertheless, this does not rule out the possibility of major technological shifts. 318 An example of a major shift, from the Bank's perspective, is Home Banking, introduced in 1984, becoming Home and Office Banking or HOBS one year later, and held up by the Bank as an and example of a major innovation. The Bank sought to accommodate or 'absorb' (Schwarz Thompson, 1990: 67) the unanticipated and undesirable situation of English banks moving into Scotland. The Bank looked around for a way of retaliating, for a way of getting into the English market quickly, where it had available IT expertise and launched a remote no branches. It carefully cobbled together its telephone banking service, aimed at the English market. There was no followed on providing major investment in infrastructure, and therefore low financial risk. Investment incrementally a remote as the Bank learnt the technical and commercial implications of banking service. It nevertheless regarded the enterprise as a risk to its reputation. The competitive threat of the English banks delivered a risk to the Bank. Doing nothing presented this as an threat than accommodating that risk. The press at the time hailed (Deputy General Manager of MSD) perspective the innovation. From Richardson's Bank took an before First Home a greater innovation lead and were the first bank to offer a remote banking service, even Direct, the main operator in that sector today. Banking, and then HOBS represents an extension of existing technologies and knowledge within the Bank, but involved little organisational change. Financially there is evidence that HOBS staff was ever a success. cling to this experience as Its value is more no symbolic than commercial, since evidence of the Bank's innovativeness, perhaps because it supports the 'opportunism as strategy' view shared among senior staff and managers. This does not devalue any banking service or claims that along the internal way competitive advantage that these innovations with the other Scottish and a mover, in some new improvement. However, looking at the Bank's history process On the UK scale the Bank is still it has been the first small banks), with more gave have been eroded, at times very player in the competitive environment (in any quickly. common localised social network than the NatWest Bank Barclays Bank. This is reflected in the Bank being 'surprised' by the English banks coming north in pursuit of oil related business. However, this environmental change did have 319 a lasting effect the Bank's work organisation, first through Home Banking, then the on development of remote banking as a major feature of the Bank's operations, the Centrebank Division. Abernathy and Clark's (1985) 'transilience map' describes different kinds of innovation, based on the interaction between internal Unfortunately, their 'internal' dimension dichotomises existing competences environment. 'disrupt/ obsolete'. In relation to the Bank this into 'conserve/entrench' and simplistic. The Bank has been conserving extending others, on 'competences' and 'linkages' with the external as far as new for most of its 300 years. some aspects The Bank's Home Banking innovation 1974) of knowledge and its application to Banking innovation market considered it This innovation a was a new technologically are was a new shaped by and a emerge technological from social 'rearrangement' (Barnes, and constituted competitive situation. The an increment to existing competences, but the radical innovation. might have created banking services with on of its banking know-how but organizational exigencies" (Fleck J., 1993: 27). It involved Home overly Financial Services legislation allow, and this has been going configuration wherein "new technological artefacts and seems many a niche initially, but it has led to a whole new sector of competitors. How Home Banking is characterised today depends one's time frame and what rational re-construction is used. In Abernathy and Clark's (1985) framework it could be 'regular' because it is now an established technology serving an established market, or it new market sector where for remote Focusing might be 'architectural' because it has led to the development of a competitors have evolved particular and appropriate competences banking services. on individual extensions to practice because those extensions extensions to practice are over (apparently) so may imply that the Bank is not innovative, insignificant. However, looking at the Bank's its history, it is clear that the practice of strategy has undergone major change. It has shared with its competitors, suppliers, customers, and regulators, in the development and exploitation of banking technologies. Rosenberg's historiography of technical progress offers a strong historical precedent, showing most technical change 320 as evolutionary rather than revolutionary. He found technical progress consensus among many writers that consists less of Schumpeter's discontinuous change and accretion of innumerable minor more improvements and modifications, with only very of "a steady infrequent major innovations" (1982: 7). The a banking industry during the 1970s cartel ordered and regulated, with banks operating was very by virtue of government legislation. In these conditions anomalies were likely to be few and memorable. Anomalous bloomed experiences, and thus potential sources of innovation during the 1980s. During this period the divisions between banking, building societies, and insurance providers were redrawn through legislation. Most financial institutions introduced (or were forced through competitive pressures to introduce) new products (savings plans, mortgages, turmoil of the financial services legislation, privatisation even loans to foreign governments). To add to the industry there programmes, were opportunities afforded by private pension and the relaxation of acquisition rules. Many financial institutions found the financial burden of diversity too great, and began to withdraw from agency. At the traditionally unfamiliar territory such same time both the amount of paper a many and the cost of transactions. The Bank developed prudence, and constant search for In general are a result of one may domestic mortgages and estate of them increased their investment in IT, in order to reduce significant level of expertise in IT. This expertise innovations as ways grew out of the Bank's over the decades concern for of reducing cost. The majority of the Bank's seeing cost anomalies within the Bank's internal regard the regulated environment with internal order, and vice versa. The Bank, its as an processes. extension of the bank's concern competitors, and customers support the principle of a regulated environment, in the right of the state to do so, in what Schwarz and Thompson call "Leviathan governance" (1990: 67). While the financial services industry has been 'deregulated', relative to Timeplex it is still highly regulated. The rate of interest that banks may charge, the size of loans they and assets secure they Government control are may offer, and the relatively high level of liquidity required to maintain are not through The Bank of England. 321 driven by 'market forces' but by direct Open Business School 10.4.3 Open Business School provides distance learning management courses, and is perhaps The the first organisation to apply the Open University's distance learning innovation to the management education field. Although market leader, the OBS now shares the distance learning market with others. Perhaps more threatening is that other innovations in the provision of education mean that OBS is competing with to the student. Its own definition of distance a wider of options available range learning, which has for 30 years guided thinking (both within and outwith the University) is being overtaken by an even broader definition. There is for open example the Southampton Institute 'MBA on the Internet', and the Heriot Watt ended distance learning MBA that leaves students not only to study at their but also to take the exam whenever they are ready. These challenges regulatory changes in the provision of higher education that An assessment of OBS's social the reality demands more than a are being facilitated by encourages greater competition. passing reference to its parent, Open University, because of the bond between the two. The Open University Labour Government sponsored innovation. It was an assault own pace, on was a privilege and class that in Douglas' terms sought "to reject pointless rituals and to preach direct to men's [sic] hearts" (1987:7). From its beginnings in the early 1980s, OBS has had to pay its way. It shares most of the high ideals of its parent, except that it charges market rates for its reflects the The pragmatic demands of operating in a courses, and this competitive environment. Open University, like the Bank of Scotland, is characterised by procedures. Unlike the Bank many of these procedures uphold the egalitarian spirit and factionalism, rather than extending ascribed hierarchy. For example, the equal opportunity principle is enshrined in formal selection procedures, and written and audio visual guidance information for staff and students. This continuous output manifests itself as of information and prescriptions is institutionalised and part of the structure of the Open University, and includes the 'Equal Opportunities Unit' and 'Faculty Equal Opportunities groups'. These 322 groups may be seen as forming part of the Open University's "strategic rationale" (Fincham et. al., 1994: 133), reflected in the Team effort is 'Open University's Equal Opportunities Strategic Action Plan'. highly regarded. Although the Open University has formal procedures for everything, these prescriptions generally subordinate to are group action. There is a high tolerance of deviant behaviour among the academic community. Individual freedom is negotiable and determined much by more group commitments than example, at least producing material, rather than wait for the Open University's senior sort course own way' regulatory mechanisms. For one Faculty has 'gone its any on alternative ways managers of 'to themselves out'. While deviance from norms. prescription is tolerated, there is less tolerance of deviance from group Thus the first Director of the embryonic Business School, and his successor the first Dean, Thomson, arguably contributed to their own demise through failing to recognise that negotiable freedom does not unfettered freedom, but mean a freedom given by colleagues through consensual decision making. The current Dean's 'Godfathers' career. popularity has perceiving him His social network is Thomson's, nor is he a more to as a team do with staff, player, than any peers, and the University claims to a distinguished academic probably less connected with funding and validating bodies than Professor. However, the University collective seem to feel that the Open Business School's credibility is secured, through the efforts of his predecessors, and that they want a return to consensual decision making. Asch, the current Dean, has invested consolidation. This creates more a a lot of time telling staff about his strategy of feeling of direction and formal committees and 'Centres' of excellence of future Deans.2 This represents a reaction to what many academics far they remember it. The creation of are meant strengthening of internal saw as to circumscribe the freedom group boundaries, and was a Thompson's individualistic and favour ridden 2 'Centres' forum for so are career development homes for groups of like minded academics and administrators. Centres would be a developing personal or collective agendas, and for discussing personal development with the 'Centre Head'. 323 approach. Although Asch's election manifesto promised to establish such many staff initially resisted joining Compartmentalisation way as a way a 'Centre', seeing it of strengthening as a a mechanism, layer of managerial control. group support was acceptable, but not of greater regulatory control. In Bloor's (1982: 142) terms these 'Centres' as a are "secondary elaborations" to enhance the protection of the Open University's Egalitarian reality. This new pattern is sufficiently distinct from Thomson's to satisfy staff that here is a strategy. Only history will tell whether staff eventually substitute 'stagnation' for 'consolidation' and again complain about the lack of strategy. Will pockets of dissent will remove Asch? The University has a grow into a revolution that social prescription in the form of 'Dean by open election'; the Dean's post is an elected one, and lasts for five years. This mechanism supports group commitment, and has the effect of defusing much of the destructive force of a revolution. Douglas (1982b) suggests that example, Thomson was an Egalitarian culture carries with it some scapegoating. For criticised for his management style and for overexposing OBS, and a slowing of growth. He lost the leadership election to Asch. Although the right to 'study leave' is enshrined in the the Open University's terms and conditions University's social prescription - individual academics feel - in other words it is part of a strong tension between taking their study leave and showing commitment to writing for course teams. Those taking the study leave risk being marked time the School's research as not being team spirited and unsupportive. At the standing depends on the Many academics do not want to do research, and workload who do There as a reason so. are It is as if for not they also strong are sum may same of individual publishing records. cite heavy course teaching and writing taking study leave, and also question the commitment of others jealous of each other's preparedness to take study leave. compartmental lines drawn (not hierarchy) in terms of secretaries and administrators, Course Managers, Academics. Within these groups pay scales, benefits and titles, although clearly defined are often argued over. Unlike the Bank of Scotland, decision making is not based on Hierarchy, but on the interdependence of groups, expressed 324 as a myriad of committees and teams. Staff are shared expertise, and a very conscious of a group identity, a sense of keen appreciation of the OBS and University's boundary with the external environment. Strong boundaries are suggested where a differential of expertise claims and practice exists, between the outside and the inside, even within the same industry. The Chair of one of the Business School's courses, talked about being 'trapped' by the peculiar characteristics of the Open University system, compared with a remembered an being told by a member of staff that it takes about twelve established member of the concerns organisation. He had only been in three between the outside world and the staff in the Business School to be no years at a strong of academics the time. The Open University. every facet of working life in the Bank of Scotland, very broad parameters of teaching interests. In contrast with the Bank of Scotland, can band together to develop a course around a looking in from the outside, there was an booming. For those inside the Business School it being spread increasingly thinly, and could not keep courses up Business School from the new course idea. impression that creative output problematic in that resources were that do not make economic income is a sense, feature that distinguishes the Open University. Despite arguments about market forces and appeals from the Dean (Asch), many of these uneconomic courses still exist. This freedom to plasticity of obstacles, and the relative subordination of rules to commitments projects. A with the creative output. reflect academic interest, there are many and for OBS this is essential. Courses that generate create, the was new subject that they consider interesting, and lobby individuals and the School Board to support the While all be considered differentiating boundary comprehensive analytical mechanism for screening and selecting Under Thomson, was of identity, enjoy significant freedom within the the School's declared research and group sense procedures and formulae reach there is years to expressed by the Chair, and the experience of the senior academic reflects the feeling of most staff, that of a strong While conventional university. Another senior academic group controlling all aspects of behaviour, is shared with Timeplex. 325 The practice for their in, own or new niches. which academics joining OBS, including Teaching Associates, is that they find Although Teaching Associates have mentors, what directions they develop they contribute writing for, is their decision. A courses new academic will certainly have been recruited because of their achievements and interests, but they exercise considerable control groups over their own assimilation newcomer. circumscribed role. In contrast, There is also staff joining the Bank do so to fulfil a predefined and largely Timeplex staff join to fulfil considerable scope to University particular function, but differential between the Business School and a seems to and the flow of example, a points of contact with its parent. making body and other one side was gaining at the on within the expense of the other. their resources, while the Business School's central staff suspect regions of being obstructive. The Business School cannot nor on groups regional offices complain that the Business School is making unreasonable demands a common in has have generated feelings of inequality in terms of financial transactions knowledge and ideas, that some once shape their role. Relations between OBS's executive decision some they adjust to what they find, and existing following particular interests adjust where there seems to be some common ground with the For as agree with the University on 'resource flow model' that describes the Business School's financial contribution, how to measure the School's overhead allocation from the produce heated and defensive discussion, also force the parties to while they think practice. The University Senate regards the Business School may learning, albeit wants to go a some University. These tensions, deviant. Equally, the Business School, with in, and the other eye on as a valuable one eye on source re¬ of the direction it its knowledge of how its parent works, pulls the University in unfamiliar directions. In his sociological analysis of 'patterns of life' and how each pattern deals with anomalies, Bloor suggests that an Egalitarian social life cannot support diversity of world view.3 3 In his attempt to elaborate on Wittgenstein's notion of 'language games' and 'patterns of life', Bloor (1983) adapted Douglas' 'group/grid' scheme to link distinct 'patterns of life' with particular strategies for dealing with anomalies. Although Bloor seems to be focused on the sociology of scientific knowledge, it is written in an 'open' style that allows interpretation in other disciplines. 326 themes will be reiterated and the applied time after time. Accepted pieces of culture will become surrounded by a high wall of protective definitions and secondary elaborations. The result will be that all parts of the cosmology of such groups will resemble all other parts, resonating with one another and reinforcing the sense of unity (1983: 142). The same Bloor's observation seems true, to a same ideas degree, with respect to the Business School. A good example of this is the foundations on which the Open University stands. The University has commitment to always expressed a technologies, and an open access education through distance teaching equal opportunities philosophy. In more recent years the equal opportunity pillar has been elaborated, partly due to changing societal attitudes and partly due to a desire to push back its own frontiers. As mentioned above there is generation of material; staff dedicated to the memos, standing orders, case a small team of studies and guidance notes, leaflets. While the a few staff (typically part-time) feel that the expression of this commitment is 'over top', without exception all staff subscribe to the University's commitment. The University's recruitment and promotional literature present this educational philosophy distinguishing feature. Disabled job applicants cassette, large print, or computer a receive application information disk. Summer School locations facilities for disabled students. Part of the Summer School is can are on selected partly as a audio on their welcoming address given to students attending warning about discrimination and harassment of any kind. However, "secondary elaborations" do not necessarily support all parts of the Egalitarian social world equally. The actions described above support equal opportunity, while the creation of 'Centres' discussed earlier, will any contest areas for where the resources sense of these two elaborations may come into conflict. There supporting courses through tax payer other subsidy. The Business recognises the notion of 'paying customers', and this creates behaviour within the Business School. Practices within the with the Business are unity is being strained. The Business School charges market rates for its courses, rather than School strengthen academic research and teaching. In a search for appropriate University, including those shared School, do not recognise the subtle difference between the existing practices of administering students' needs and that demanded for supporting 'paying 327 customers'. The unity of view is fragmenting. Interestingly, The University's social reality adjusts to, such fragmentation. In contributes to and Bloor's of innovation in an sense, and contrary to organisation dominated by an Egalitarian reality is predicted periods of normal strategy interrupted by revolutionary discontinuity (Bloor, 1983). Increasingly during the last two environment this has views threatening the as years staff have viewed developments in the external of its distance teaching technologies. Internally supremacy generated much heated debate and division. An increasingly fragmented are of cross-faculty and 'within-faculty' committees have invested considerable time and energy, for action. At the own range emerging about the nature of the threat, and how the University should deal with it. A Senate Committee, their important (1983) view, Egalitarianism supports diversity. The pattern to be an same responses, gathering information, disseminating it, and making proposals time at least one Faculty has been experimenting and implementing distrustful of the University's ability to move as quickly as it feels is necessary. Some need for any see no significant change, which seems to mean should seriously look at adding CD-ROM capabilities. Others radical change, putting forward ideas that feel threatened by. Many would like to many see are that the University suggesting the need for conservatives do not understand and even the University develop its technology of education, like developing explicit methodologies to deliver 'learning to learn' rather than 'distance teaching or learning'. According to Bloor, these external threats leading to internal disorder can be understood responses to anomalies (1983: 142). Such anomalies will accumulate and Revolution will depend that "the revolutionaries wonderful new itself' (1983: on the balance of power between the relevant might win and beginning and, for 142). While Bloor scientific social life, the a sweep away lead to crisis. may groups. as Bloor predicts the old guard. They will proclaim a while, all will be well. Then the whole pattern will repeat sees homogeneity as a central feature of an Egalitarian Open University's social life is better characterised as heterogeneous. Furthermore, the defining limits of revolution is problematic at least in the 328 case Open University of the or the Open Business School. Such definition depends choice of time scale and what substantive seems scope to revolutionary. In addition, there as conceive of different kinds of revolution, for example those within the social reality, and those from The power changes count one social reality to another. balance has tipped in favour of the University central planning function. It has INSTILL (Integrating New Systems and Technologies in Life¬ allocated £10M to support long Learning). "The Open University is taking recruitment drives since it up just over was set on 25 33 new years staff in what extent it reflects the views and of its largest came into being. For example, to findings of all those committees, and how conflicting resolved. The initials of the acronym were one ago" (Times Higher Education Supplement, May 19, 1995: 2). It is not clear how INSTILL directions the on do suggest In this respect it a very broad church, that unfair to talk about balance of there is something here for power. Rather, preferences have been expressed. Some ideal standard has not been applied, nor have groups While everyone. seems fragmented to the point of everyone doing their own thing. longitudinal study of the University's development might shed a a more light on Bloor's proposition about revolutionary change, it is clear that there has been internal disorder the future of the 'disorder' is sustained an University. In an important inherent feature of the sense over the OBS evidence suggests that this Egalitarian social reality. This social reality is by the tension between order and disorder, between the fluidity of Individualism and the orderliness of Hierarchy. Nevertheless, there is increasing tension between a pull toward Individualism from OBS, against a pull toward Hierarchy from the Open University. Within the Business School academic freedom to create increasingly under between a seems to be under pressure to ensure justification based that academics work within budget. It is also on respect procedures, and a justification based increasing scrutiny, and administrators on tension for history and elaborated social prescriptions and the freedom to generate new knowledge and teaching regulate creativity and bring status differentials, while the second practices. The first can dissipate through extreme factionalism. resources a are 329 can There various tensions in the education sector, but one characterisation revolves around are freedom of institutional choice against regulatory governance. For example, the current government would like to see Higher Education (HE) institutions become financially independent while achieving measurable academic standards. Traditionally the institutions wanted funding and the right to set their programme own own academic standards. The government's is redefining 'the way things are'. Many institutions are keen to generate their income, and to have their academic quality compared with others. While the government has initiated the change, leaders in the H E community have played key roles in the shape of the new environment. For example, the two independent quality assessment bodies have reduced to one. The environment continues to be different interests of government and the H E community, and the learning that usually evolving situation. The amount and of debate (sometimes heated), accompanies an highlights Egalitarian spirit in the H E sector generally. There is quality, a an process a shared concern with fear of creeping inequalities between institutions, in terms of knowledge, wealth, and status. Its 'Jeffersonian principles are more in tune with what Schwarz and Thompson (1990) call governance' (ideal socialism, or parliamentary or referendum democracy). Disagreements between the H E community and the Government agree on shaped by the what the goals of HE should be, and what the problems are are, rooted in a and what is failure to an appropriate framework for moving forward. The Government's notion of 'consultation' fall outwith the HE expectation of 'Jeffersonian governance', so that a may clash of realities remain. 10.5 GENERAL DISCUSSION: DRAWING COMPARISONS 10.5.1 Introduction The framework provides a means for systematically comparing different kinds of strategy practice and patterns of innovative behaviour as socially constructed realities. These realities yield alternative guiding principles and assumptions for sanctioned behaviour "that 330 are also used forjudging others and justifying [oneself] against others" (Douglas, 1982b: 5). They describe the assumptions that tend to underline "the natural order, and yet which, since distinguish four kinds of natural order, interaction" not a all natural but strictly are not at (Douglas, 1982b: 5). These natural orders are a product of social stable. Individual organisations jumble of choices and preferences, moving freely and collectively from another. All decisions commitment to a are framed we one are reality to by the existing practice of strategy, which in turn reflects a package of assumptions and social prescriptions about how to behave in the organisation's environment. A number of more specific observations may be drawn from the foregoing analysis, regarding differences in the practice of strategy: forms of collective control; taken for granted strategic rationality, the nature and scope for change; boundary management within the organisation; individual mobility and social reality. These differences they highlight that various features of strategy practice they give a sense are are not exhaustive; discernible rather than definitive; that social reality is plastic and developmental, while at the same time shaping choice and reinforcing existing practice. 10.5.2 Collective control Organisations to the right of the framework (the Open Business School and the Bank of Scotland) tend to have strong control over the behaviour of its members, demanding conformity on Prison, least able to perceive alternatives. For them "the situation of being closely are pain of expulsion. Those toward the top of the framework, such controlled and insulated from free social intercourse stabilises a as BoS and perception of having no options" (Douglas, 1982b: 6). Increasing or relaxing the criteria for entry to the organisation results in more or less distinct compartments. The flow of ideas and knowledge may depend on personal networks, as in Timeplex; or a regulated, as mixture of personal networks and group sanction, such as OBS; or be highly in BoS. When the Bank's 'top management' 'empower' (the Bank's term) their 331 staff but still retain control, they are reinforcing and extending hierarchy through 'responsible autonomy' rather than 'empowerment'. While many ideas are 'bottom up', in the interests of being efficient and prudent, higher authority must be given before contract can be entertained. As control centres to flood Douglas says, warnings. Hierarchy "to once open small gates any on commitment or control desensitizes the installed develops self-reinforcing moral arguments that enable more unequal steps in status to be tolerated" (1982b: 6). Decisions to the give up control of both content and results in separation, regulatory chains that hold the organisation together. This tension between control describes the the process see the loosening of more or see Open University OBS as as pulling toward Individualism, while those in OBS pulling them toward Hierarchy. the right of The Individualism of Timeplex and the Egalitarianism of OBS, have in individuals to pursue their particular interests. They differ in the form of socialisation necessary for doing so: loose integration of individuals or sanction. The reality of both OBS and BoS share group unbridled Individualism which the force of 10.5.3 less relationship between OBS and its parent the Open University. Many in Open University would would a as a basis for an common individual autonomy granted by intolerance for Timeplex's choosing alternatives. They differ in the degree to regulatory mechanisms guide choice. Strategic rationality Strategic rationality refers to both the interpretation and expression of problem-solution judgements. As Fincham et. al. noted in their study of IT development and implementation in the financial services sector, strategic rationality is not just a way of interpreting problems If an expert group is to sustain claims to control an area of work, it must be able to substantiate its diagnosis of the problem with solutions which make sense to an audience of powerful groups within and outside the organization - solutions which, in some agreed sense, actually work (1994: 146). .... The strategic rationality of each social reality comprises including: attitudes to risk and uncertainty, preferred 332 an way inexhaustible ensemble of issues, of organising, attitudes to learning, ideas about what constitutes fairness, preferred form of economic transaction, preferred form of governance. The attitudes to risk and Schwarz and uncertainty of the three organisations differ, seeming akin to Thompson's proposed categories for explaining how policy makers, like government bodies, deal with technological risk: anticipatory, opportunism, resilience (1990: 105). In this respect the Bank may be characterised as 'anticipatory'. Its members like to prepare for every eventuality, and this is built into all of its methods and work organisation. The mainframe computer fully backed up, in a in MSD (the heart of the bank's centralised processing network), is bomb proof room. In designing its IT facilities, possibility of a bomb dropping on the building and the damage such managers an event considered the would do to its capabilities! In contrast, most Timeplex is characterised of their colleagues always keep as 'opportunistic'. Cecil, Humphries, Hurd, Davis, and an eye open for the unexpected. Sticking their necks out makes the adrenaline flow and is often rewarded. The Business School's members critical or 'resilient' in their risk taking attitudes. They do not go out of their were more way to "court danger" (Schwarz and Thompson, 1990: 105), but equally, prescriptive social control applies minimal constraints Anomalies present them on the evaluation of options. risks and opportunities for innovation, and each organisation handles differently (see 8.4.7). Timeplex staff seize them eagerly as opportunities to demonstrate substantive outcomes, wherein trial and error with its attendant risk of failure are taken for granted. The Bank through its ordered and seemed to way of life sought to anticipate anomalies, put a premium on accommodating or absorbing those anomalies within its existing order. Anticipating external anomalies remain feasible through the professional banking social network, co-operative relationships with some competitors (such as between the Bank of Scotland's VISA and Barclays Bank VISA), social relations with financial regulators, and the formal role the Boards of many customers. on 333 The OBS membership seem to engage in prolonged debate and consideration of its options, including evaluations and implications of different future scenarios; what Schwarz and Thompson might call the "trial without error" of "critical rationality" (1990: 66). Examples include the myriad of advisory groups, spent about two years investigating committees, sub-committees, and working the University's options leading up to that groups INSTILL (see 6.6.5), and the central place of future scenario building during the Business School's annual 'away days' strategy meetings (see 6.5.2). specialisation is Division of labour, or for innovation, and differentiating mechanism that increases the paradoxically, increases the Specialisation also puts a greater burden The Bank is the most stratified and a a scope scope for routinisation of tasks. the need for integrating the resulting diversity. on compartmentalised of the three organisations, and it number of discrete mechanisms that could be described as uses integrative: 'entrepreneurial broking', annual non-decision making senior executive get-togethers to discuss fashionable areas, and monthly management meetings. Burns and Stalker's (1961) 'mechanistic' organisation seems to captures the sense that the Bank enjoys an ordered relationship with its competitive environment. Specialisation among individuals who are expert in their particular field of interest. The administrative and managerial members teams because the academic community of the Business School rests with the are more there is a general acknowledgement that this maintains continuity of social relations and administrative critical to the 'interchangeable' but tend to work with particular academic knowledge bases. Informal networks and committee forums are development, transmission and exploration of innovative problem-solution configurations. Timeplex's division of labour seems much more organisations. Customer Support engineers and move from one responsibility to another, or fluid in comparison to the other two managers, take on for example, multiple roles, demonstrated technical and commercial competences, and a on are encouraged to the basis of both willingness to be enterprising. Timeplex's approach to dealing with the fiercely competitive and technologically dynamic 334 telecommunications environment adds form of organisation. Davis had if he could sell a meaning to Burns and Stalker's (1961) 'organic' hesitation in offering no returned modem. new one of his administrative staff £400 Strategy practice comprises significant individual autonomy and reliance on informal networks within and outwith Timeplex to express and interpret innovation opportunities. Strategic development is not guided by 'make considerations do inform strategy economic transaction that or buy' decisions. Rather, while such practice, it is the 'thought collective's' preferred style of guides practice (Fleck L., 1979). Timeplex's broad commitment to market transactions in both the labour market and in its Bank of Scotland's commitment to the in-house result of own competitive relations; or the development of IT technologies, is not the managerial dispassionate economic evaluations of 'make or buy' strategic alternatives (see 9.2.4). 10.5.4 Plural realities and As outlined in this strategic change chapter, there are a socially constructed reality features and a largely complementary range a discernible and limited number of social realities. Each distinctive style of reasoning, based on an inexhaustive of taken for granted ideas. Each alternative reality, taken as whole, appears to be incommensurate with others, in that their features cannot be measured against some common standard, and these features have meaning only reality. For example, they do not have more or Rather, embedded in these social realities 1995). Wettersten and seek to or less argues that we are as part of a particular less of 'rationality' relative to each other. alternative 'styles of rationality' (Wettersten, should accept the possibility of different rationality styles integrate them, rather than try to evaluate alternative rationalities as being more developed. Different styles of reasoning produce "new interesting problems and permits reconciling differences better than [trying to banish alternatives to] the absent unique standard" (1995: 87, 89). 335 While these social realities appear cannot be host to features of a more social than one incommensurable, it does not at the same time, or mean that there is no that scope organisation an for particular reality to develop in particular directions. This plasticity can be seen in on-going tensions between a growing Business School and its much more mature and the the Open University. While they differ in important ways, they are held stable parent, together by a common commitment of providing open access to higher education. Staff working in these two organisations, engaged in conventional activities, committed to a common each other while However for an social they have this are unconsciously reality. There is little chance in the two becoming alien to common commitment. organisation to substitute one social reality, taken whole collection of as a features, for another archetype involves a 'revolutionary' transformation (Kuhn, 1970) or 'alternation' taken for (Berger and Luckmann, 1966: 176). Its membership must give granted for another set of values, changing from resource a norms, beliefs, expectations, taken-for-granted National Health Service (NHS) insulated from financial considerations, to becoming an as a up all that is It is like commonly owned organisation that must justify its existence against market testing and financial performance criteria. of generalised expectations to another, (switching social reality) is Moving from one group also of innovation. Fundamental a source changes to the NHS are throwing interesting problems from which the private sector is learning. NHS are also interpreting private sector recipes in new ways. managers what is of perceived on the on may be going unfolding of users' understanding of what they want, achievable with any given human and financial resources, the interests competing providers, and whether existing technologies afford multiple developmental directions. This a as and clinicians How the transition unfolds anything from incremental to revolutionary, and its nature will depend interaction between the constructed up many strategic change from one reality to another is not the given reality. Strategic change, whether revolutionary switch of social reality, from one or same as change within incremental, does not necessitate 'metaphysical paradigm' to another (Masterman, 1972). 336 a The Business School has experienced at least one revolution, reflected in the change of Dean from Thomson to Asch. The an a elected office and change possibility for such change is institutional in that the Dean holds can to some extent be anticipated. The new promise of sweeping changes to work organisation, decision making, research in opposition to the previous emphasis 'consolidation' strategy on Dean a new elected was emphasis on on teaching, and the introduction of a for OBS in place of the previous aggressive market development strategy. The change was immediate, with the outgoing Dean accepting a new role in a committee studying Information Systems and Information Technology strategy, committee in the Open University's archipelago of committees. There one different were now people in key positions, and 'practice and discourse' changed accordingly. There was "a rupture in the subjective biography of the individual" (Berger and Luckmann, 1966: 179) so that individuals would reflect bad old on their experiences during Thomson's reign days. For example, they would say that "then there was confusion, but order". Over the long term these changes of leadership and all that insignificant, small steps as or as goes if it the were now we with them have may look incremental changes in OBS's history. Timeplex has experienced strategic change that is both revolutionary and incremental, depending on UNISYS and one's perspective. The change subsequent sale, was Change was at the was same incremental in that their acquisition by akin to the experience of a predator slowly but systematically sucking the life out of its product development was prey and leaving it for dead. Investment in stopped and productivity of the existing business was new maximised. time revolutionary in that before the acquisition Timeplex was a significant competitor in its sector, and after the experience with UNISYS which lasted about five years, enacted it struggling to survive. Timeplex went from being the major part of the reality of its sector to being incidental to that sector's development. The amount of erosion of its still was legitimacy among customers is reflected in the label 'steam driven products' being applied by customers (see 4.2.4). There is anything else other than an no Individualistic social reality. 337 evidence that Timeplex was ever Even obvious upheavals do not mean that social reality is being reformulated. Rather it plasticity of, and shows the feels that it is at has spent with its a cross scope for innovation within roads in the a given reality. The Business School development of distance education, and as noted above the last couple of years researching and evaluating different scenarios. Consistent strategic rationality, OBS has designed to encompass as conceive of, now started implementing an approach that much of their technology's interpretive flexibility by recruiting expertise to cover a broad range as seems they can of possibilities. Timeplex is hurrying from 'steam driven' modems to Advanced Technologies (AT), 'trying to come from behind to being in front' within eighteen months. It is trying to do this as fast as possible, recruiting and firing staff, further re-organising, and promising both themselves and customers overly optimistic availability. Change within Timeplex is incessant that new completed. The Bank has work organisation schemes overtake preceding been moving from counter based to remote financial transactions, and turning counter services into sales ones before they so are operations. Compared to Timeplex, its transition is relatively smooth, ordered, and incremental. Of the three organisations, the Bank is moving incrementally, Timeplex is trying to change in such a way as to accommodate Political arguments may and about the need in a of any Information or forward in potential revolution. be about whether boundaries should be tightened not for more rules. These discussions and Systems (MIS), and about centralised that being customer responsive means or relaxed, arguments are justified in are such choices versus distributed data processing. They having control of these resources. Some would like the right to choose between the internal MIS - provided by Management Services Division (MSD) on group argument about the extent to which they should control their own Management Divisional managers veto move perceived demands of the external environment. Many of the Bank's Divisions constant argue hurry, and the Business School is trying to Boundary management 10.5.5 terms a as - and external competitors of MSD. Others accept the necessary to support an internal MSD. However, there is 338 some flexibility in the veto. One Division has bought in software because MSD cannot offer effective a cost equivalent. Timeplex Customer Support and Sales are constantly arguing about redrawing the boundary between them, as if it were placed to serve the customer; from their opposing positions each side feels that they hold the 'natural' vantage point. Arguments income and expenses within the resource the market own place Faculties, a or rage among for teaching and research the Open University's Faculties about how can be separated; arguments that flow model debate. The Business School as tax on points to its evidence that it should have greater control income within the innovation: something that is negotiable. The protagonists claim to be better Open University. There Faculties, or are over own are framed performance in the distribution of its wider debates about how to support central control of funds distribution, or more autonomy for ...? These arguments about where group boundaries should be drawn are attempts to effect competing interpretations and expressions of strategic change. In the process practitioners construct an innovation space, whether or not the argument is resolved. The constant threat to and political legitimacy creates space for innovative problem-solution configurations. Innovation (of which projects are a crystallisation) each group's competitive constituted, and build on scope are thus Fincham et. al. 's, observation of innovation projects in the financial services sector: innovation provides a critical juncture for the negotiation and reconstruction of the sector, whereby preconceptions and alliances may be challenged, and new avenues of knowledge deployment and occupational mobility opened up (1994: 133). In this reconstruction each argument is presented as a "strategic rationale", comprising assumptions about outcomes, benefits, and drawbacks, and is the basis for economic and technical justification. It reflects the mobilization of arguments about the significance and utility of special knowledge for the success of an organization as a whole - that is, the adoption of a discourse about strategy (Fincham et. al., 1994: 133). 339 The outcome of more some have short-term of these arguments long-term implications. While the Bank's reality tightening group commitment, or may drift a while others have little by relaxing or regulation, it will remain fundamentally Hierarchical in outlook. Resolution of the Bank's MIS and IT Sales issue in consequences, challenges, or the Customer Support versus Timeplex, does not undermine the stability of the underlying natural order. The justifying arguments and ideas that characterise Timeplex as operating in an essentially Individualist reality are not challenged by internal arguments about where the group boundaries should be drawn. 10.5.6 Individual mobility and social reality For the Bank and the Business School to swap realities, their respective membership must adopt in its entirety the other's social constructions, for what they want to achieve. Meanwhile, the continuity of the existing natural order is maintained by reference to the principles that support the present social construction. As Douglas says, while there are always short-term shifts of opinion, there are certain social choices which have long run effects because they afford tangible rewards and enlist intellectually convincing moral arguments. People who have banded together under a certain rubric or constitution will tend to coerce increasingly to develop the full implications for that style of life, trouble of mustering support for an alternative (1982b: 5). Further evidence of in the selection of a collective drive for new staff. In most individual is like minded depends on or can committing one's continuity of the existing natural order can be seen organisations selectors look for evidence that the become way one another or go to all the so. Continued employment with the organisation of thinking to harmonise with that of the organisation's membership. The penalty for abandoning that commitment is accusations of failure and being encouraged to leave the organisation. For both the individual and the strategies 1982b: are organisation, the theory suggests that different "intellectual useful for survival in ... particular patterns of social relations" (Douglas, 7). At the individual level, the competition inherent in the Individualist environment is not to everyone's liking. Those who stay may find themselves pushed into 340 a 'siding', where options and scope for individual initiative are restricted, perhaps a minor internal administrative function. In effect into Atomistic subordination. Others, finding the internal competitive relations overbearing, may leave to find a home where scope for individual entrepreneurial activity is still high, but where provides support. They individuals may may find the be attracted to the Egalitarian group way group of life. Equally commitment some commitment demanded of the Egalitarian environment stifling, and be attracted to the unrestrained individual freedom offered by the Individualist world. Those moving from a Hierarchical reality to the Individualist world frustrated at the lack of order, and absence of leader who about the a an Egalitarian This group is also inability to influence strategy because of the Individualist overlay. were voiced by Timeplex and the Open Business School. In the former this who wanted more structured and visible decision previous twenty Individualistic group group. new lack of strategy, but this time that frustration is Complaints about the lack of strategy and direction the likely to feel overarching strategy. Then there is the brings their Individualist baggage to likely to feel frustrated, and complain about are years commitment should be strengthened or minority in both expressed by individuals making. One such is Blewitt, who had spent in the Armed Forces. In the latter leadership from the Dean. These was a case concerns are it meant a plea for less also about the extent to which relaxed. 10.6 CONCLUSIONS This chapter has shown that while organisations social units. Each social unit is host to dominant. Social a are economic units, they cocktail of social reality is not bounded by any the same time realities, although one tends to be formal organisational boundary, but is constituted of social relations that include customers, other are at suppliers, competitors, regulators, and stakeholders, much like L. Fleck's (1979) 'thought collective'. The dominant social reality is different in each organisation studied, and is not 341 a product of organisational design. It is as Barnes observed of 'normal' scientific activity and judgements Each social reality describes meaning to the with a are not way a practice: "alternative modes of conventional determined by independent authority" (1982: 64). bundle of features that separately individuals behave. Individuals commitment to one or are not organisations may little, but together give lone atoms, but socialised beings, other social institution. Individuals carry a jigsaw, and strategy practice, while purposive, involves unconsciously made through mean a many piece of a social decisions being routinely and taken for granted strategic rationality. Conflict within be the result of different institutional commitments bumping into each other, like the tensions between OBS and the Open University, or between the outward facing Operating Divisions of BoS and their internal relationship with the inward focused Management Services Division, or the arguments currently raging over 'mad cow disease'. The 'social choice' framework presents a qualitative and useful contrasting the practice of strategy the three organisations. This is not accidental. The framework was across way of comparing and adopted because of its explanatory value in social anthropological settings that, while different from organisational settings, share the sense that the inclusiveness of practice and social reality do vary in distinctive ways. This distinctiveness exists in the practices and beliefs of Benedict's and Douglas' primitive communities, and the knowledge claims within Fleck's and Kuhn's scientific communities (see ch. 7). The framework highlights the complexity and sociality of 'choice', and give flavour of its inaccessibility to practitioners. It is as a Douglas suggests: [In examining] the principles of individual choice and conflict of rights we have way of considering the effect of institutional forms upon moral perception. no Yet something about institutional forms is generated by elementary choices and the resultant institutions incorporate judgements which reciprocally influence further perceptions of choice. Once any of these elementary choices has been made, it entails a package of intricately related preferences and secondary moral judgementsf 1982b: 6). The notion of and within a a socially constructed reality describes individuals and their relationships with relevant commonsense community. The concept shows that when practitioners appeal to and rational judgements as the basis for action, they are invoking a 342 constellation of knowledge claims, rooted in taken for granted expectations and beliefs, heritage, and experiences in the 'here and now'. Kuhn's (1970) practitioners to some set of universal truth. When there are too many exceptions to the rule, they leap from socially constructed rational judgements to another that seem to offer of material never get nearer a one better account reality. The evidence shows that there are multiple and equally valid interpretations of the truth, supported by different styles of reasoning. These different styles go beyond the attributes of 'rational' and 'non rational' judgements, showing that such labels are granted reality. There is also evidence that strategic change labelled 'revolutionary' are 'after the fact' social constructions that perspective (see also 9.2.5). Significant strategic change reality, without upsetting its fundamental nature, realities although this is likely to be Incremental significant It seems between change measured or over a more or an vary may 'incremental' taken for or take place within organisation may a given social switch social traumatic experience for those involved. centuries, such transformational when looked at broad range as a with the observer's as over experienced by BoS, may be labelled as the whole of its history. likely, though not certain, that the social choice framework a grounded in can explain variation of organisations, and at different levels of focus. All three in this study exist in what appears to be a largely individualistic Anglo-American socio-economic setting, yet the three are sufficiently different to suggest that national culture does not blur differences. Even within the reality can same industry it is possible that the same differences in social be shown. For example, it is conceivable for BT, Britain's largest telecommunication services provider, to have a hierarchical profile in contrast to Timeplex's individualism. Business units within BT need not be individualistic, while others framework's explanatory family owned businesses those used in this - some perhaps the research oriented units - be power may homogeneous; in some settings are much more could be more unclear. For example, be hierarchical, yet differentiated in different analysis. Also, whether the framework would throw light in different socio-economic settings, such as companies in Japan 343 egalitarian. The or ways on other than organisations Korea, is unknown. These and other thesis are possible areas for research also discussed, as are the are noted in chapter 11. The main findings of this implications for management practice and teaching. 344 11 Conclusions 11.1 INTRODUCTION The research presented in this thesis aims to further our understanding of the practice of strategy and how it engenders scope for innovation. In particular it has explored shapes strategic choice, and how that shaping The research allowed me within their design adopted to compare own was a process determines the scope how practice for innovation. phenomenological study of three organisations. This different practitioners' understanding of strategy and innovation organisation, and contrast these findings across the three different organisational settings. To maximise the opportunity for comparison and contrast, the organisations chosen for this study all regard innovation as critical to their continued development, but operate in broadly unrelated sectors: banking, telecommunications network management, and distance learning management education. Through in-depth interviews with practitioners in each organisation, I studied the different meanings they attribute to strategy and innovation; what they regard as their technology; how they organise work and interact with each other; how they choose between strategic options and examples of what they consider to be strategic; how they go about developing and implementing strategy; what they consider to be examples of innovation, and why; how they make sense of their competitive environment. Through attempting to understand practitioners' views issues and continuous reading on various topics - of strategy were introduction' took challenged such that the five on a new concerns my assumptions about the raised in significance (see 1.1). This chapter my assesses perspective; it pulls together the main findings of the study, and reflects literature reviewed in discusses these innovation, strategy, research methodology, sociology, social psychology - the initial research questions and nature on chapter two; it also revisits the implications for practice and teaching. 345 concerns 'thesis that change of on the mainstream raised in chapter one and 11.2 DEVIATIONS FROM THE INITIAL INTENTIONS This thesis started as a follow. The journey drawing on experience was were not as a starting point. The most significant development anticipated by the original research focus has been comprehensively define the research judgement and interpretation, provides much previously defined a area construction researched crude with the scope literature review and research a space. for creating Remaining open, new contours suspending within any of research. Second, that the empirical evidence presented in this shaped by the discussions between the researcher and staff of the organisations. Third, if a thesis represents reasonable to expect some a my engagement perspective. spring from this experience. First, that can never personal my the basis for the research questions for this thesis. As discussed questions proved to be only Three observations thesis is of research questions and directions to has deviated from the original route, taking unexpected turns and outlined social constructivist questions a route map ideas not initially anticipated. In chapter 1 five topics reflecting in 3.5.1, these that journey with a journey change in researcher perspective parallel between the research process of discovery, then it over the journey. One seems may draw and the practice of strategy: whatever the strategic intent, innovative behaviour and novel artefacts often unexpectedly crystallise out of practice. Revisiting the literature review after almost three years, was like being yet foreign land (see ch. 2). Where now I see strategy practice social reality, 'out there'; I one constituting the other, then I regarded organisational culture as saw bound a up practitioners acting visitor in with on a a a familiar constructed reality that the lens through which practitioners was see reality. Over the research period I have switched paradigms and this is reflected in the contrast between chapter 2 and chapters 7 to 10. One could spoke to the researcher, but doing of Pasteur (Remer, so argue that the empirical evidence would deny Ludwik Fleck's (1979) observation and that 1965) before him, that there must also be 346 a readiness on the part of the researcher to see evidence in new ways. My continued engagement with various literature, in parallel with the fieldwork, contributed to that readiness. 11.3 MAIN FINDINGS This thesis offers a structured approach to making judgements about organisations and suggests why we should not look for innovation. There is The more to study shows both three an universal prescriptions for the management of choice than rationalistic strategy metaphors acknowledge. important similarity and differences in the practice of strategy. In all organisations the practice of strategy is socially constructed by practitioners; practice is the embodiment of a 'taken for granted' and shared reality, a social reality; through practice practitioners reinforce and develop their social reality; they reinforce and develop their shared and reality through creatively exercising their capabilities, and through their interpretation expression of technology and technology-practice. In contrast, the study also shows that practitioners working together in one organisation may construct a different shared reality to practitioners of another organisation; each constructed reality is distinctive, discernible yet indeterminate. There seems to be a limited number of such constructed realities. Normal practice in each constructed reality is imbued with different interpretations of rationality, governance, preferred forms of economic transaction, attitudes to risk, and many other factors. 11.3.1 Realism or This thesis presents a view of reality that is best described relativistic side there is commonsense, are relativism? no as constrained relativism. From the ultimate truth and all observation claims, theory dependent. There is no including appeals to ultimately best form of organisation or strategy that supports or gives rise to more innovative behaviour by practitioners. Similarly judgements about the effectiveness relation to a or appropriateness of strategic aims have meaning only in particular social reality. Technological change in higher education carries 347 a different sense of urgency and harbours different social and economic values than technological change in the banking or telecommunication sectors. This relativism is constrained in various ways. their choices novel may are constrained Although practitioners construct their reality by the material and social reality they construct. Firms develop products and services in anticipation of some unspecified opportunity, but their actions influence aspects of their reality in unexpected ways. No matter what the innovator's intentions, potential customers may or may not buy the new product or service; environmental groups may competitors may object to any number of aspects of the innovative offering; successfully imitate the novel product; new competitors may emerge through unanticipated technological change, possibly making one's competitive advantage redundant. Strategic choice is further constrained because the innovating organisation exists as part of a wider social reality of capitalist economics, where competition and the failure to innovate often leads to an organisation's demise; innovation is not survival. This constrained relativism is hand' of recipes and routines; the an option but a necessity for developmental: it is shaped through the 'invisible openness or heterogeneity of resources and capabilities looseness of knowledge bases and recipes; the across organisations, sectors, and whole economies. 11.3.2 The construction of social Strategy practice is and is the a continual of practitioners interpreting and expressing meaning, process product of daily interactions and other stakeholders reality through strategy practice among themselves and with customers, competitors, (see ch. 8). These interactions are shaped by practitioners' everyday interpretation of a shared reality. In the language of social constructivism, practitioners construct their material and social environment which they interpret as through practice and discourse, objectively real. 348 a reality Practice is both stable, guided, and at the same time always provisional. It is guided through heritage, shared meaning, shared expectations of 'things to come', and the application of recipes of how to compete and co-operate. However, it also remains provisional through practitioners' political behaviour; differentiated assessments of situations and events; their construction of unanticipated anomalies. Practice constituted through the interaction of these socio-cognitive processes provides scope for innovative behaviour and novelty. Innovation then is inherent to the construction of social reinforce and extend their shared 9.2). To some extent 'taken for reality through creatively exercising their capabilities (see the expression of these capabilities is guided by recipes for success and granted' routines, but there is indeterminacy of recipes shared reality, such deal with it, and are reality. Further, practitioners as mean more than rule following involved. The that practitioners deciding what constitutes are an necessarily creative in interpreting their anomalous situation or event necessarily creative in exercising their capabilities in ways and how to that seem meaningful to them. Similarly, the inseparability of facts and values and the interpretive flexibility of technology-practice means heritage, shared meaning, recipes), they express are are guided (by necessarily creative in how they interpret and commercial opportunities, and in how they design competitive artefacts, and services (see In that although practitioners' choices processes, 9.3). presenting the management of strategy as discrete elements of analysis, formulation of choice, and implementation, and in seeing the organisation as adapting to its external environment, the mainstream literature about on strategy fails to acknowledge that practice is less sub-systems coherently locked together and more about the crystallisation of a interacting socio-cognitive processes. Treating political behaviour to be contained is to misunderstand its as an range of abhorrent by-product pervasiveness, and entanglement with shared meaning, heritage, and other factors, in shaping practice. Further, by conceiving of the knowledge generated from strategic analysis rationalistic the as being an approximation to some truth, these metaphors fail, fundamentally, to acknowledge the subjectivity of knowledge, inseparability of facts and values, and the interpretive flexibility of the technological 349 agenda (see 2.6). Although the mainstream literature recognises recipes, their on strategy meaning is located within Simon's 'bounded rationality' suggesting that practitioners operate with a simplified model of their world. Practitioners conception of their competitive world, but more may operate with a simplified than that, their conception is socially constructed; they selectively bracket and sequence situations and events from the morass of their everyday experiences, giving relevance and value to their constructions; recipe knowledge is the product of human subjectivity (see 9.2 and 9.4). The heterogeneity among firms as highlighted by the evolutionary metaphor adds explanatory value to the social constructivist perspective because it reinforces the idea of differentiated and events, knowledge between organisations, and their differing assessments of situations without contradicting the conforming influence of industry recipes (see 2.6.4). However, the hegemony invested by the evolutionary metaphor in a Darwinian selection environment seems akin to a deterministic objective reality. Such understate the deliberate behaviour behind the relations between flows and the a notion seems to grossly variety and frequency of socio-economic organisations, for example the influence of local networks on knowledge co-development of novel artefacts and services. Such socio-economic networks shape the competitive environment. The idea of a trajectory does capture the observable tendency for technologies to evolve in predictable directions, but this trajectory is not determined by the technology. Trajectories exist because their practitioners collectively attach relevance and value (social and economic) to knowledge base and its development in particular crystallises as ways. That shared commitment exemplars and heuristics for measuring performance and progress, and it is a wavering of that commitment in light of increasingly differentiated assessments of situations and events that undermine trajectories (see 9.4). Such wavering emergence of alternative exemplars, achievable are or an being reached. Such limits may result from the increasingly shared belief that the limits of the may be defined as a possible, the economically viable, and the socially desirable. 350 composite of the technically The inclusiveness of practice 11.3.3 Mintzberg suggests that strategy may be and social reality any combination of five 'Ps': plan, position, pattern, ploy, and perspective (see 2.2.2). These findings suggest that 'perspective' is a better description of practice than the other 'Ps'. The relationship between practice and social reality is inclusive rather than directional (see 7.2.3). Practice embodies shared beliefs and theories about how to compete and co-operate, and organisation's practice will often show a a rational post hoc reconstruction of an 'pattern'. At the same time that practitioners are reinforcing and extending their social reality through strategy practice, that reality imbues practice as socio-cognitive commitments shared by the membership (see chs. 8 and 10). Inclusiveness also comes from the subjectivity of knowledge and its distribution and as socio-cognitive structures (9.2.2), and the inseparability of facts and values (9.3.5). within The seamless web character attributed to sociotechnical systems inclusiveness by showing that organisational development depends between artefacts, practice, heritage, and shared expectations (see 2.6.2). For example from the Bank of Scotland an The Bank of Scotland's among further contributes to this the Bank's see on among the interrelationship stakeholder institutions 5.6.2. everyday practice of pursuing efficiency gains reflects managers that they are a shared belief custodians of the Bank's heritage, its standing today, and its future direction. The Bank's behaviour is reinforced by its customers' expectation that it should exercise prudence, backed up by various regulatory mechanisms. Timeplex's individualist shared reality is articulated as managers entrepreneurial and territorial practices. Timeplex competes in constant and noticeable customers and the of a environment where technological change and entrepreneurial behaviour are expected by competitors alike. The Open Business School's philosophy of open equal opportunity manifests itself as to an and engineers' a collective sense right to influence the Business School's strategy making. 351 and of mission to provide higher education populace (especially the educationally disenfranchised), and the exercising universal access among staff In seeking to fit the organisation to its external environment, many mainstream strategy thinkers invoke the language of systems, machines, and organisms, with feedback learning loops, internal coherence of structures, and Lamarckian adaptation. These metaphors fail to recognise that learning does not involve tracking some real truth, rather the attachment of meaning and economic value to situations and events. Further, there are ambiguities, inconsistencies, and differentiated assessments of reality everywhere. As noted above, practitioners are necessarily creative in making sense of their relationships and their competitive environment (see 11.3.2). In seeking to apply order to all that is provisional practice (ch. 8), about or in applying categories to their technologies and capabilities (2.6.2), systems strategists are (unknowingly) engaging in the process of social construction. Through invoking economic value a constellation of beliefs, recipes, shared meaning, a sense they attach to accomplishments and expectations, they are of identity, and engaging in making practice and shared reality inclusive. 11.3.4 Social There are a limited number of discernible social realities reality is not infinitely variable; there understood as the are a limited number of possibilities. It we may possibilities, everyday reality is discernible, and at the be discernible features, such as shared identify same various reasons characterised in terms of limited number of may meaning, preferred forms of economic transaction and for this elusiveness. First, while an a a time, indeterminate. There managerial control, attitudes to risk and uncertainty, but these are be product of two variables: socially prescribed rules of behaviour, and how practitioners commit to work together. Although There can are indicative not definitive. organisation particular form of everyday reality, there are may be others in the background, interacting with the dominant reality to provide variation and plasticity. For example, Timeplex's individualism is constrained by aspects of an hierarchical reality, and there are tensions of and 10.4.3). hierarchy and individualism in the Open Business School (see 10.4.1 Second, because of these tensions and the ambiguities and inconsistencies of inclusiveness practice and shared reality is not static but developmental. Managers at the 352 Bank believe that stewardship and prudence has always been the guiding principle of their predecessors, and over the centuries the quill pen and ledger have given without upsetting that principle. Third, particular social reality a may reflect, say, way to the computer certain attitudes to risk and uncertainty, or styles of rationality, but the nature of the link between shared reality and the particular features of practice is not certain due to the ambiguity of the inclusive relationship and the developmental quality of practice and shared reality noted above. Two examples where the relationship between social reality and practice expected: while Douglas would regard conspiracy as was were found found to differ from that consistent with an egalitarian community, I found stronger evidence of this in the individualist reality of Timeplex (see 10.4.1). Similarly, Bloor does not regard an egalitarian society as supportive of diversity of world view, yet there is evidence to the contrary in the Open Business School (see 10.4.3). Fourth, building on the first three points, while the labelling of categories is an important aid to understanding, social reality is not defined simply by the notion of constituent features or categories that can be checked off inventory style. Practitioners' shared reality is maintained by the relevance and value they attach to a constellation of categories their identity from the interrelationship of categories, that and inconsistencies. are as a whole; they draw held together by consistencies Through the interrelationship of these categories, each shared reality gives rise to, and reflects, different kinds of strategy practice, and patterns of innovative behaviour. Some of these patterns collective control, individual way of differences in strategic rationality, strategic change, boundary management, and mobility. Consider the the have been discussed in 10.5 by implications for strategic change. The possibility of plural realities mean that prevailing view that organisations normally experience incremental change interspersed with seem periodic revolutionary change needs possible. Organisations reality. They traumatic may can also leap from some revision (see 10.5.4). Two kinds of upheaval transform themselves without appearing to leave their home one reality to another but this is likely to be a much more experience for the stakeholders concerned. Evidence the difficulties surrounding 353 the privatisation of Britain's health service, rail franchise, and utilities. It also that seems likely although the social construction of practitioners' reality includes its elaboration, this elaboration does not provide incremental steps from one social reality to another. For this type of incremental change to happen practitioners would have to be only loosely connected to their social reality, but as previously noted practitioners routinely and largely unconsciously reinforce their social reality. It is indeed their source of identity. Although the typology presented in chapter 10 and Harrison's 'organisation ideologies' do not share a common heritage, there is 'temple' cultures have some features in realities. Further, while social Harrison's be some overlap (see 7.2.2). For example his 'power' and common with the individualist and hierarchical social reality incorporates the creation and application of knowledge, organisation ideologies do not. Harrison's explanation of his categories entirely based on common sense appear to observations and impressionistic descriptions. Indeed something tautologous about his classification: organisations have these ideologies there is because of their beliefs and values, but where do these beliefs and values come from? In contrast the typology in chapter 10 shows how and why alternative social realities distinctive: the are interplay of social commitment and social control. 11.4 IMPLICATIONS FOR PRACTICE AND MANAGEMENT TEACHING These findings carry implications for the 'personal encounters' in chapter broadly for practice and teaching. These encounters are one (1.1), and those of a practitioner and it more seems appropriate to frame the following discussion around them. 11.4.1 Constrained relativism Practitioners experience their environment as objective, independent of them, and subjectivity is viewed as a as having an human frailty, a ontological status view that, although not stated, underpins all five personal concerns in chapter one. While I regarded the status of reality as an interesting philosophical issue, it seemed remote from the 'real' everyday 354 of concerns strategic management; shows this to be an a view that I imagine most practitioners share. This study overly simplistic view of the world. So much so that the analyses in chapters 7 to 10 stress the central interdependence of the subjective and the objective, because from the perspective of a practitioner (in contrast to reality is constructed in this The way implications for practice about the status of their are a sociologist) the suggestion that is far from obvious. profound. Practitioners need to be much understanding of what constitutes a more self reflexive competitive environment; their relationship with it; and their relationship with each other. The implications for management are no less profound, because it requires that teachers be willing and able to question the basis of the knowledge that they take for granted, and be able to develop this capability in teaching their practitioner-students. The ability to recognise epistemological assumptions is important because as effective Knights argues teachers and students alike tend to internalise prescriptions for practice; prescriptions that invariably Reflexive practice is important because while fail, and for similar failures (see reasons: assume an many objective reality (see 7.1.1). organisations are successful, practitioners impute technical rationality to their 7.1.1). Practitioners are not aware many more successes and that the reality they take for granted is not give but socially constructed. When they analyse their competitive environment using Porter's 'five forces' Porter's 'value chain' same time (1980) (1985), implementing intellectual frameworks, managers or a or even resources using the Boston Matrix consequences that go with the, often tacit, metaphors, and recipes of their shared reality. For example, when an 'added value' strategy, they are probably drawing on the metaphor (this link having been internalised), with its discrete components of purchasing, production, marketing, and sales joined together like beads process a or when they use 'commonsense', practitioners are at the host of practical talk about pursuing 'value chain' analyse their internal little value is added to the product at each stage machine. Practitioners often translate the value chain into it as a passes list of on a string. In this through the operational sausage processes, checking off against each item how their organisation adds value for the customer. Were they to analyse their resources and capabilities in terms of, 355 say, a knowledge base with its socio- cognitive structure and distribution of expertise they would generate a different understanding of how their organisation is adding value. Where practitioners confront their epistemology of practice, they increase the scope are able to for effective and innovative practice. By translating intellectual constructs into taken for granted recipes and problem solving grids (forcing data into boxes and producing checklists), practitioners empty these constructs of their or looseness, ambiguity, and instability. Rather than being able to elaborate transform their intellectual constructs, practitioners' thinking becomes imprisoned by the rationality and objectivity they invest in their models. There are other areas where practitioners need to be able to identify their own recipes and suspend judgement rather than look for checklists. In seeking practitioners draw on ways to be competitive precedents and exemplars, for example successful competitors, and fast growing firms in other industries. More than trying to emulate successful organisations, practitioners might also study the failures. Further, they might try to analyse the socially constructed processes shared that constitute successful and unsuccessful organisations including: assumptions, socio-economic values, metaphors in use, rationality styles, attitudes to uncertainty, approaches to creativity, and preferred forms of governance. They should also look for competing interpretations of these other organisations' behaviour; juxtapose different thinking styles, and shared metaphors and exemplars of good and bad practice; and seek to understand how and why effective and innovative processes vary with different interpretations of good and bad competitive performance. Practitioners should develop ability to be always ambivalent and enquiring about their R&D and market research functions. The researcher and agent provocateur, a the same time a and failures. Firms have place for a socio-cognitive facilitator-practitioner who is engaged in practice and at among colleagues. Perhaps the becoming fashionable could take this role. Rather than are seeking to audit and produce the foregoing suggests facilitating ambivalent and enquiring behaviour 'knowledge managers' that make successes an inventory of the firm's expertise, and more than trying to explicit the tacit knowledge that exists within the organisation (valuable knowledge manager might an engage colleagues in epistemology of practice. 356 ways as this task is), that help them to confront their 11.4.2 Accounting for personal encounters My first, second, third, and fifth concerns in chapter one highlighted: the differentiated meaning of strategy; the existence of conflict, compromise and contradiction; resistance to heterogeneity within the organisation; the importance of politics and informal networks to strategy. These four concerns are grouped together because the analyses confirm the prevalence of these phenomena, and more importantly show that they are interrelated and an inherent part of of the social construction of strategy practice. The stable yet provisional nature practice suggests a range of factors that provide practitioners with both and different assessments of situations and events a stable experience (ch. 8). In addition, the subjectivity of knowledge and the interpretive flexibility of technology-practice creates the opportunity for differentiated meaning, contradiction, and political behaviour (ch. 9). The existence of plural realities within the organisation further contributes to the maintenance of these phenomena (ch. 10). Chapter 8 does not amount to teachers with for a method for an exhaustive framework, but it does provide practitioners and assessing how practitioners construct the practice of strategy, and assessing their organisation's relationship with the 'external' environment. Importantly, these factors show that gloss practitioners put practitioners on strategy provisional socio-cognitive are not detached own of strategy. Whatever rational (2.2, 2.3, and 2.4), it is the interaction of stable and processes among practitioners that shapes practice. Rather than treating differences, contradictions, and resistance understand their overseers as dysfunctional, practitioners might better frustrations, their organisation's frailties and distinctive capabilities, and the critical role of their shared social context, by drawing on the ideas presented in chapters 7 to 10. Part of my third concern was that practitioners, observers, and mainstream teaching on strategy imply or overstate the extent to which the process of strategy is rational, yet 'rules of thumb' and post hoc justification of outcomes seem commonplace. Practitioners do set goals (4.4.1, 5.4.1 and 6.4.1), but the evidence also supports Weick, MacKenzie and other writers 357 that rationality is imputed (9.4). Moreover, justifications who suggest are not randomly applied but form part of a collectively ordered flow of experiences (ch. 8), such ordered experiences coalescing in particular goals drive, or effect link in intent is ways reflect, outcomes is inappropriate because it seeks to establish an inclusive assess My fourth and of the on-going interaction between the subjective and objective, and further illustrates the need for practitioners to be much they a cause relationship between shared reality and practice. The imputation of unavoidable consequence an (ch. 10). The evidence suggests that asking whether more critical in how the relationship between their competitive performance and strategic intent. concern was further that such that practitioners assume the objectivity of their knowledge, and knowledge seemed tacit and poorly understood. The evidence on exercising capabilities and interpreting technology-practice, supports the analyses of Bloor, Pinch and Bijker, and others who show that knowledge claims in science and technology that facts and values are inseparable (ch. 9). Just as are subjective, Collins has noted the centrality of tacit knowledge to scientific research, and Senker has noted its importance to innovation, this study finds tacit and taken for granted knowledge to be fundamental to the practice of strategy. In making strategic judgements of any kind (technological and commercial), practitioners should try to develop a sensitivity to the subjective dimension of those judgements. By recognising and remaining nature and of their more open to the subjective and taken for granted knowledge, practitioners increase their effective ways of configuring their scope resources for conceiving of novel, useful, and capabilities. Designing social reality 11,4.3 These findings underline the profound difficulty of trying to design practice by manipulating social reality. As noted above and in 10.5, alternative social realities invoke and support different taken for granted strategy practices and patterns of innovative behaviour. For example, each social reality reflects distinctive and shared attitudes to how work should be organised, and what constitutes risk and rationality. These findings help explain concern about the my third insensitivity to heterogeneity within organisations, because they show that 358 'anything goes' is defined by the shared reality; once you internalise the rules very you can be creative. Practitioners and consultants who try to social reality, say evaluate the appropriateness of an organisation's for being more innovative, risk making arbitrary judgements. The internal consultant's view is coloured to the extent that commitments, and are outside consultant is work to find, or they share the same socio-cognitive mindful of the range of behaviour that the organisation sanctions. The no more 'objective'. Rather they bring their own recipes for success, and put them, into the target organisation. The patchy success rate of ailing organisations seeking to turnaround their fortunes by changing their chief executive, further highlights the difficulty of remoulding styles are an for In shared reality. This is not to suggest that leadership entity divorced from social reality. Consultative shape social reality, but equally pressure a a an consultative leadership style. appreciate the strategic practice, such an shared authoritarian styles help to egalitarian social reality for example is likely to exert seeking to develop innovative behaviour, artefacts, better or more than the consequences more narrow or work processes, practitioners might of their actions if they focus artefactual technology, as a on technology- unit of analysis because approach brings to the fore the interrelationship between artefacts, work organisation, assumptions and beliefs (9.3). They might find that they do not need to change what they have in order to enhance innovative behaviour, rather that their understanding of their existing assumptions, attitudes to uncertainty, ways of working, and creative capabilities might be the inhibiting factor. Indeed without a resources and better understanding of practice, strategic change is likely to remain hit and miss. Practitioners need to recognise organisation. Environments often reflecting the environment in same are a strong interdependence between the environment and the patterned according to schemes imposed by organisations, internal order or disorder. Organisations seeking to shape the competition with others get ordered environment get a regulated a competitive environment. Those seeking one. 359 an 11.5 FURTHER RESEARCH The findings and ideas presented in chapters 7 to 10 invite further research. Existing forms of business process analysis rely heavily findings here suggest a on an ontologically concrete competitive world. The need for the development of appropriate management tools to help practitioners appreciate the extent to which their practice shapes and reflects social reality. The prescription that practitioners should seek a 'fit' between their organisation and the environment, and the determinate metaphor, does not account for practice, but where such prescriptions are heeded and acted competition. Once upon a we some shaping scope key for industries, some processes of advantage, now some see now it is the route to and further highlights the need for forms of analysis that for reflexive learning. There is better understand process to evaporate. reflexive was was a source swinging to inter-organisational networks (Rothwell, 1992). These movements reflect social retain this action contributes to the evolving locus of time meeting customer needs essential. Once in-house R&D success as upon a social process, a fundamental problem here in that where the action of exploiting that understanding Mindful of this phenomenon, there is a causes that need to conceive of self- analytical approaches that remain sensitive to the evolving locus of competition, and the mutual elaboration and transformation of strategy Further research is needed to test the robustness and other forms of practice and shared reality. applicability of the main findings, in organisation. For example The Health Service, public service agencies, government departments, the legal system, and organisations in other countries and cultural settings. Research in these those organisations, but areas may not may only shed light on the nature of strategy practice in also help the development of analytical ideas presented in chapters 7 to 10. In particular what other factors contribute to the stable yet provisional nature such of strategy as practice (ch. 8). What are the consequences of adding another dimension, 'rationality styles', to the group/grid framework in chapter 10? A framework may more highlight important variations of social reality and practice. 360 complex socio-cognitive schemes The nature of or collective thinking styles and their expression practice needs further development. For example: there are as questions about the validity of using the individual psychology as a metaphor for group processes. Also, how useful is it to talk of much be a collective consciousness? While the sociology of scientific knowledge provides insight to the analysis, its combination with equally fruitful in making sense a study of the sociology of language may of differentiated meaning. To this end can Wittgenstein's 'language games' and 'forms of life' be operationalised? Related to the previous point on language is the role of metaphor and analogy. Schon (1963: 199) in his study of the role of metaphor in facilitating the emergence of novelty, suggests that more work is needed to understand the nature of the "accommodation" between theory and a new mystique that he was critical of in other theories. This thesis suggests that socially constructed, but more as a starting point research is needed here. example, how does creativity and recipe knowledge combine to generate both The links between the alternative transactions and rationality need configurations of social reality and theories of economic more would economic transaction models given social reality example factors new metaphors? artefacts and for old situation. He offers the notion of 'intimation', but this still smacks of the the nature of that accommodation is For an a seems may not investigation and explanation. For example how change if they accommodate social preferences? Any necessarily define, or reflect, a particular collection of factors, particular form of rationality. The interrelationship between a constellation of equally important. How can this relational dimension be characterised? Whipp and Clark (1986) observed the mutual shaping between the firm's capabilities and innovations, and the competitive structure of its sector. Further, many studies show that the firm shares a large part of its reality with others of its sector or industry (Grinyer and Spender, 1979; Huff, 1982; Child and Smith, 1990). While organisations within the sector share relationships and expertise (Fincham et. al., 1994), they probably still have distinctive thinking styles. How do these organisational differences and similarities shape the sector, and 361 can we make sense of the different ways that individual organisations interpret and express industry recipes? There on are similar questions about the influence of national or wider socio-economic settings organisational strategy practice. Much research has been done comparing decision making styles, for example distinguishing Japanese, European, and American firm behaviour as being culturally rooted (Ouchi, 1981). Whittington (1993) also cites a number of such studies. There are British also various concern was performance. There on-going government sponsored initiatives around the world - the noted in chapter seems to be dimensions: to what extent one room - to find ways of improving national innovative for comparing these national programmes on several they incorporate the role of broad cultural dimensions in shaping technological change, and how such change is reinforcing and elaborating cultures; factors considered outcomes important in designing these research programmes, and recommendations of these programmes, and why; comparing the asking why differences and similarities surface. This thesis shows that in the a shared reality; a reality that reflects and at the wrong ways to co-operate remains pursuit of rational strategy practitioners working together invoke same time shapes what counts provisional because of the subjectivity of knowledge. Having spent the last four researching the nature of strategy, in particular the scope for innovative behaviour, transformed. I have become shared right and and compete. This reality, and therefore practice, is stable yet years a as my deeply processes understanding of the practice of strategy has been aware of the plasticity of practice, and its embodiment of reality. More generally practitioners might enrich their organisations, where they are that shape choice and the own lives, and that of willing and able to confront their own epistemology of practice. 362 APPENDICES APPENDIX 1 Schedule of interview questions Differentiated meaning 1 What do you understand by strategy? 2 What is your organisation's strategy? 3 What is your department's strategy? 4 What do you understand by innovation? 5 What, if any, is the relationship between strategy and innovation? 6 How do you go 7 How do you about understanding the future competitive environment? organise in anticipation of the future. What factors markets, technologies, expertise, socio-economic, etc.? 8 How do you try to 9 How do you assess 10 Can you describe 11 How do you keep taken into account: the possibility of different futures? the potential for influencing the competitive environment? your strategy making processes? How intended know that the strategic 12 How do you see your 13 How do you open to are process v. how it seems. is effective and reliable? competitors? view the innovation contribution/role/performance of other groups? 14 How do other groups view your innovation contribution/role/performance? Paradoxes decide between spending on things which generate cash in the short-term and things which generate revenue over the long-term? 15 How do you choose between actions which lead to improvements in competitive performance and actions which lead to sustainable competitive advantage? 16 How do you 17 How do you initiatives? balance predictability and flexibility, operational efficiency and non-routine 364 Heuristics 18 Do you have manuals of standard operating procedures? 19 Do you follow 20 What are the 21 Describe any 22 Do you any practices which generally accepted are not ways covered by the written procedures? of beating the competition in this business? links between business strategy and technical strategy? conceive of different technologies according to any form of strategic significance, eg., core, critical, enabling, strategic? Knowledge creation 23 Are there specific times when When?, Why? 24 What do you 25 What if any contacts? make a conscious decision to create new knowledge? understand by 'know-how' and 'expertise'? is the relationship between know-how and: (a) strategy?; (b) informal 26 How do you go 27 What is the you about acquiring and organising new knowledge? expertise of this organisation? 28 How do you distinguish between different kinds operational, or restricted and 'need to know'? of knowledge, such as strategic and knowledge is a source of competitive advantage: (a) how do you know what you have?; (b) how do you decide that your current knowledge base is good for the long-term? 29 If Informal networks 30 Describe your links with other departments and external bodies, such as suppliers, Formal/informal, frequency, meetings customers, research organisations, personal contacts? location, who meets whom, purpose served. 31 What is the corporate 32 Who are view of informal networks and contacts? the networkers here? 33 What do you think these networkers achieve (a) for the organisation, (b) for themselves? 365 2Apendix Liason Staionery Adminstrao Computer GENRAL SYTEMS OPERATINS MANGER TWEDI ASITN SCOTLAND OFBANK ^ SDSTRIEVURCSVICOEN MANGE T MGAENNGREARL SI.CWOSTt.C SYTEMS 1 D.H. CAevanitlrbtyCImeplentnrtaio CPelanntrigCSeofntwtarre CMeanngtermt CMaenngetmrt 8Service 8Asurance Resource System Security Data DEVLOPMNT GDEIVNSORNAALL MANGER McTAGR 8RESARCH DEVLOPMNT 11(S'SDF9ech'coae8tmlacbntdr), BSooaurncefk: M.N. 367 see 366 BANK OF SCOTLAND RETAIL BANKING SYSTEMS SYSTEMS PLANNING BRANCH DELIVERY CUSTOMER ACCOUNTING DELIVERY AND REPORTING SENIOR MANAGER (ACCOUNT MANAGER) 1 I MANAGER (TRANSACTION PROCESSING) PROJECT MANAGERS Source: Presentation MANAGER (CUSTOMER INFORMATION) MANAGER (TECHNICAL PLATFORM) PROJECT PROJECT MANAGERS MANAGERS by Eileen Miller of Bank of Scotland University Management School April 21, 1994 367 at Edinburgh Appendix 3 BANK OF SCOTLAND PROJECT LIFE CYCLE PROJECT INVESTIGATION REQUEST • RAISED BY THE BUSINESS AREA • PROJECT ASSIGNED TO THE RELEVANT ACCOUNT MANAGER PRELIMINARY ASSESSMENT • SCOPES THE PROJECT • INDICATES COSTS OF THE PROJECT • • COVERS SOFTWARE, HARDWARE THIRD PARTY INVOLVEMENT AND ANY BUSINESS AREA AUTHORISES PROCEEDING TO NEXT STAGE Source: Presentation by Eileen Miller of Bank of Scotland University Management School April 21, 1994 368 at Edinburgh BANK OF SCOTLAND PROJECT LIFE CYCLE PROJECT CHANGE • REQUEST BUSINESS AREA AUTHORISES CHANGES TO THE AGREED SPECIFICATION • ALSO COVERS REVISIONS OF ESTIMATE PROJECT WRITE-OFF • NOTIFIES BUSINESS AREA OF PROJECT COMPLETION PROJECT MANAGEMENT TOOLS • RESOURCE ALLOCATION • TIME RECORDING • MANAGEMENT REPORTING TO ACCOUNT MANAGERS AND BUSINESS AREAS 369 4Apendix COMITMEANGET OBS STRUCCOMEITE OBS BOAPRRESDNTAIO Sub-Grow: GWroorukipng OWroorukipng Schols Group Counselig WoDervklopimnngt OCroo-rdiunatp Informal BOSACRHODL Asemnt Fut res Residntal Working &Teaching Staff Group TQM STAFFININAGCE,BOARERSODUC Sub-Oman; Comite AdPrvomistoinrsy (Academi/Rsrh) ComAdPitrveomisotirnys aMngedmt OPfricoejersc)t Sub-Grow: GTraOopsourtkunipes GSerrovicusp Group Groups MTeetinagsm GMraongeumpt Group MeSecrtais'tings Metings Fen el Budget A Comite (Course Informal and Equal Of ice DEVLOPMNT Comite Group Group BUSINE BOARD Staf ing Sub-Qtops: PArofIensdiunsatlrial (IPComAiCte) PrSogeamcteor AdMvanisgeomryt SulvOrons: DevIlnotpemrantiol implentao GArloiaingctes Formal Informal Advisory Voluntary SBOAACRDDEMI i>-Oroup« DipCloaemrtnifacdae Comite Comite Comite SuIbn-Ofroorpms:al Fgrmtl MBA Res arch Marketing Straegic CoTmraintesfe Credit Staff Admin. Course Centres MECs Staf 1MS9BacOurths4iphnooeeln,f ADbGsaicvveihydn Source: 370 1 5Apendix Directo Dey Deputy STMRAUNCGEET OBS I. Dr. Resofarch Pugh Director DProf. Asch Policy Secrtay Masteron Scho l R. Mr. and of fCoentrre Compartive Mangemnt SAesct. MJMeltosn Sulivan Senior Dr.CMabey Mangem t Organisto J.Rutlerfod Asitan Secretary Mr.M. Promtins Manger S.Brown Mr. Prof. fCoentrre Human Resources Change Mangem t fCoentr Devlopmnt Fiaancdl Mr.Dc R.Kaye and Centre D. and fCeontrre Informatin Inovatin Heads DEAN fC<entre Strategy Prof. Mr.Confth (S1ta0f) Res arch IT Co-rdinato L.Dimock Ms Admin. AfitSaencrUtaies(3) Asitan (2) Ms AExftaerinrsal Sfapleton A. Director, Man ger, Partneship Dr. Market Maon gfer Mr. MCogurrsse Group Director, S. Ms Ms Devlopmnt Manger J.Scaldwe Regional Mangers Presntaio Cameron Adminstrave Secretary Mcanus t.b.a. Regional Academic St(2a4f ) t.b.a. Course Team Certifcate Diploma Progam e Director R.Mole Course Team Dr. and Dr. (10)* Chairs (25)* Chairs 1blitbnhe-matcauohtompyarhrengo.gsjtdiecf, MSBO9uctasphohirnoee4nfl, A b D G s a i v c v e i h y d n (SM1taark3efin)g RSCbACecgahicodnaeaailarnsliDPtroorneegrcamtmossef (23) M(Co1gurr8sse) Linda Harrs Progame Director J.Lewis MBA Secrtaies SAcatdemfi, Source: TCeouarsme treoprt • CTCs 371 Appendix 6 Open University Mission Statement The Open University is: and will play a leading role in the transition to mass higher education by serving an increasingly large and diverse student body; open as to people and will contribute to a widening of educational opportunities by making its programmes, courses and services available throughout the UK and more widely in Europe and the world; open as to places open as to methods and will use distance-teaching methods and new learning and teaching techniques to serve home-based and work-based students; open as to technologies ideas and will be a vibrant academic community dedicated to the expansion, sharing of knowledge. refinement and The University's mission will be achieved by: operation of an open entry policy in which there every assistance is given to students' progress; the are no impediments to access and provision of open-leaming courses of outstanding quality which satisfy the lifelong learning needs of adult students; the the development of local provision, centrally supported, throughout the EC and beyond; the advancement and dissemination of knowledge research; through the pursuit of scholarship and promotion of OU teaching materials and the sharing of expertise in systems and technologies for distance education throughout the world; the the and The development, with other national and international bodies, of frameworks of education training that effectively meet the needs of students and the community at large. University also identified a number of priorities for development over the period for 1993established below as they have a bearing on some of the priorities 1997 and, again, these are within the School. 1 Expansion To increase numbers of students existing courses where places are fully financed, and particularly, in areas of high demand. Source: 'School of on Management School Plan 1994-98' (OBS) 372 2 3 Efficiency To improve organizational efficiency and reduce unit costs annually while maintaining quality. Resilience To increase 4 entrepreneurial and net income and to build up reserves. Quality improve the quality of students' learning experience, and to improve quality assurance To processes. 5 Research To review the 6 University's research policy and strengthen research activity. Admission and Retention To broaden access, improve the preparedness the retention of students once admitted. 7 of new students for OU study and increase Curriculum Enhancement development additional courses and programmes in existing and new subject areas of high demand. To 8 Qualifications To introduce new assessment developing national systems. and accreditation arrangements that are compatible with To support the mission outlined above and the priorities for development, the Plans for Change document outlined a set of new directions which recognise that, in addition to priority setting, University as a whole needed to re-examine its working practices and start to initiate the organization-wide changes that will enable staff at all levels to play a full part in the achievement of the University's strategic objectives. These are set out below and are supported by a University-wide programme whereby information is shared in a variety of ways in order to raise the awareness of individuals and to develop appropriate staff development activities to support the new directions. the Long to Short Response Times improve timeliness and responsiveness in key academic, operational and administrative processes in order to improve the quality of service and to adapt to changing From To circumstances. Complexity to Simplicity simplify the University's operations and seek conformity to agreed standard models in order to reap economies of scale and improve efficiency. From To From Provider-led to Customer-centred Provision expectations of all customers performance in relation to customers' satisfaction. To understand, define and act to meet the needs and (students, clients, etc.) and to assess 373 an Expenditure to an Income Culture recognise that the University now has a greater ability than hitherto to determine its own income and that all units and individuals have the potential to contribute to the generation of net income to sustain and enhance current activities and support new developments. From To From Centralism to Subsidiary To devolve greater executive and managerial authority to the carious loci of activity the University whenever it will improve the quality of decision-making and the within effectiveness of local action. Quality Control to Quality Assurance place greater reliance on quality assurance processes as a means of empowering individuals and reducing management overheads while making explicit quality standards and objectives. From To School of Management Mission Statement To be the leading UK business school in terms of improving the quality of management, by building on the Open University's recognised excellence in distance teaching by: Providing high quality management education and development experiences to large numbers, of managers; Providing high quality student and sponsor support; Advancing the body of knowledge about management by research and scholarship; Creating an resourced.' environment in which all staff are valued, developed and adequately 374 r' e m sto cu 7Apendix CFPOLARNS HANGE 9 hImaklapvUenneivcedrtssty'twtInmohiag-inetfylInnawoovdaitls•cIettnehtuyr-yf.resohanwqasauclnaidlitytpInfovrhimdnatilgythcoaucorsts-eefivdpioInvrlfastiyg VISON Idaenads education vitaly and an Open thcapetured Itwsorld. higher Academic evoling conveit empowr The lifvuelse.r lead will 19DIR3E-CTON7S bireattupo¬sorlisoetnelynoghzap-wrncotidrksingiftunhptapsaaeowelnrlibflyTUbtjivrhcevresgste.iyc'dimimpsnoosoruatomaelmnnn,tsdirechgtive. TRISETMSHPEOONOSRT kianceratismdpoeenvmlydis,tproadvcminstrve tuhaosstdaaoencnanrv.pgdici STIMCPOLMPCLTEYXIY tcUsoanoeinvpnfeerrsrdtkimtyi'sysinaomdloedelsp ficeny. CTUSTPOMREOR-VIDNED-L danttmeaehofenidcsd(tcuolaiustom.le)r,isainfopeclarfotnimanc CIATNUCLEXTOPONNMRDIEEUR hthagantrbehoivintselwersytyiduecotwrmsdmsdnen togthetopnhorarefitebiueial ccnsnvhundtsacdein vlopmnts. STUCBENIDOARRALTIYSM thamoauexngenrgceeuardtiritvliyUwwahvnclvetsiinvtyydecfhaioqctoneu-emsafklitgy AQTSCQUUORUANLANICLRTEIYTLY parqsoocreslianctyinmdraaenvegdemuupcotwlisngringqteamxpaickstitnyg bawotcahchpehieearivonsgfcdehs sonpowmeft-fg,lieinanwsauvtahuclcotidtonlMotpoarpsicfreu.yniydnwurtmoenrndscrincotstohaleedepteoivarrmy.sdtly nneodts its thchaanges oachievfmnt bforliewfing oeanceh LFORNOGM improve aopneratdinl oquaflity FROM thsimeplify standr improve understa, oexpctafions AFRNOM threcoagniz to hinadvvueals intcoome new FROM devole loocfi itmhproeve action. FROM great of wovehrhilaeds objectivs. beonffit aproces manget haavne direocvteonrlsap they NEW OU The examine for wide and □ To □ the To agre d PROVISN FROM and □ as es To □ To hit erto net sup ort □ various To local □ place means To ful through The DFEVOLOPMRNT wceoohsoxuteuridsnetfngiinagparfccduely, curaeoefnodsnrgiatcniiztlyqmuainltt.g bitnucaaoienltmredppdetuil letaaeostudxeoqn'nprnurdiaifcl,igtypaoscusrnc.e Usanptrrieevnnseogrhsadlticych'y ARETNNIDO imsnottpurhpedareowndfevs incturtecnasio ENHACMT iaenapcxanroodgnusadmrittsodeensglhmig. QUALIFCTONS araacsngreeendmitmdtosntevwyliotph.ling integevapuroiroyidodntesvaplohlolcamtffnst,bdewreniaefohilmRttaahnvtaks-ionsrd:e,iglIpgnurkerdcasice.dvwpnlaobnimodvte,laaavsnlubsc.gtrpsehpsrhrooiouovecuidtledsitnahbcjceemis UOnpiveernsty 1lCeh9angae'f3t, PRIOTES staf 19 3- 97 EXPANSIO incnurmeabesrs fualrey demand. EFICNY improve wanhiluealy RESILNC increas resv. QUALITY imthproeve imqpuroavleity RESACH threview arecstivaryc.h ADMISON broaacdeens, astnuddy admite. CURILM devlop oasurebjfecst intrnoeduwce compatible rank-ode construi tarhesnoeudces actives. brooandly ittehmes necsary thre tanceohcievsary 48tprioo.tes To 1 places 2 To 3 To 4 To 5 To 6 To OU for 7 To new 8 To a re that These the in TSohurcee: f'Polanrs provide betwe n beoften first The whet r 375 sAIMS araestnoudcf eav Pithnwlaitshn,quefde fuanoncdsytsrheoalmeyivn buqudipn itmnghooaesls valuc SERVIC infammndge ttshhupeaor imficvney MANGET fuUnivderty' goals. intchre itrnoeuobljnaecditevnrslyig iUtnsehtvnfesaeeurrty ttgashouionmpedlossr approrrficeieantet,y tcwshprtoiaveifde Uittnatnrihohvoelereedsisyr, twmofitenhrociutes EAQACUNIOPMMDDNTTIN latmhanparonndvigddee, atsshtirunmapeedgocr pamocoonstt-efdeirv esta. ATEICNNHFOORMDLAGTY Udntievehvre'lopiwntseyachtyenmsolgyhaaoaoninmlddlpss Untiovheefrsctivteyfn.s AFPUNLNADNDIIGG, bdtroheapvdnrondtelocp, atstianhrmacdeigecv taoermnfesaodcnucivgely eficny. The STRAEGIC fol ws: STAF To as 1 aproite who motivaed. staf To develop their on distncio. treoquired To 3 2 the To of 4 informatin straegic and To 5 tsoaos Universty' base To 6 foUlatnhivwreses:ty itnerhxpodeslierEiUngtloisanhh-anKuefdeEurope. igptsaaurcconeerfstwhapeomdrusticceautnilong,ybed-n. hgopeuw-qlt-u-araly,,,detascmigndnemitfupaoslibsle.y forheulgontdlairsgtetedaru-eocsnalcticvonae.n htawstudicmtedhnhgtoahnrecesoponufdiirrvsse,, vapacnafdtemiillyyl,ytrotecochrohgensapiezndrd aasifceftosmnt, SCHOLARIP tccvapoidgorbnsmuritduvseibnteranoasoctthioolhdyl.arlyip ROLES trtadawucoicrlde-isiegOtotpphrhemnfeindsamacerd-illsrg is: ltpapwaheoodnldl bhisagedeucrnayevtioirng ovadrnsde; pawcwalonidcnribfeulndse bitpmorpogsaratyumnkiesens,gUhraovunKildbet twhoerld; dsuwamen-thiodls letteeaachanroclnhgdiiisngghomsaew-oubrkd-bsd; bavacwbenrilt detaerehxificnpoaamedntsito, knowledg. bba:wmcehisieyivlodn ahwpoarpnoenlti itgaseaoavcvnetenndcsry coopuns-arig lleifatoaenhdruoefilntsgg loscpouceprnavotirsrfteadl,y, beayonndd; kniothworamleundngftd rasecshnoaldcrh;ip OthemaaUecfrhinggfdistoeetcdaahuncnnalrtiogdnis world; eowthitdehlrl ftrahrmaeoadeuniwcntioksg acsnomeedfdusniy oapriinmcfasl STUDENTS leaapdlinyg ecdoucnattiionung itneachg increas contiug tradionly COURSE deavlop curilm, anvoecatsidnl taohpereat devlopmnts provide tthaporoeite qruecaoglnitizyd. ofer arewcognridzsd of achievmnt. ARESNARDCH amke and INTERAOL increas thropourtugnies Unaoivepnrsedtyn' exprtise. To The MIS ON distance To and have To 2 1 learni g 3 To 4 To To sytems To 6 5 resarch To 8 7 UOnpiveernsty taos ttmranoasitson liancrregaseingly taos educationl saernvicd Eaurnopde taos naenwd tteschoenriqvues idtaeoass comunity of Universty' ooperatfin imtpeodns sptuden'roges; oprovisfn swahitcify students; devlopmnt EtthrhoCuget advncemt opursfit oprmtfin isnytem tthhrouget devlopmnt of thmefeectively The open □ iwnidely methods open course open □ □ open sharing □ The the □ the □ quality the □ the □ the the □ exprtise the □ bodies large. 376 Appendix 8 APPOINTMENTS New 9 Technology Initiative CREATING 33 NEW ACADEMIC POSTS ACROSS THE UNIVERSITY TheOpen University Since its foundation in 1969 the Open University has become by far the largest univer¬ sity in the UK, teaching well over 200,000 people every year. It continues to grow and is expanding its activities throughout Europe and beyond. Its materials are used by other institutions in many parts of the world. Open University courses are intended mainly for adults studying part-time in their homes or workplaces, using multi-media learning materials and supported by locally based tutors and counsellors. - OPEN AS TO PEOPLE, PLACES, METHODS AND IDEAS The University is rising to the challenge of technological change in many ways. Our mission statement dedares that we will maintain an openness as to methods, ana will harness evolving technologies to enhance the auality of our teaching. Our strategic aims indude a commitment to operate at the forefront ofeducational and technologi¬ cal developments. THE OPEN UNIVERSITY The University has approved a new programme of development Systems and Technologies Into lifelong Learning. Six of the key • An Institute for R&D in • A New Technology • A satellite Knowledge Media recruitment initiative broadcasting project • to areas be known as INSTILL - Integrating New for investment in this programme are - Technological innovation in course materials eg CD-ROM • Harnessing the Internet for academic purposes • A laboratory to show-case OU technologies The University now seeks to recruit academic staff who can contribute to these developments. Applicants for all posts should nave demonstrable expertise in the application of new technology and a commitment to the educational philosophy of the Open University. Application may be made to one of the following units, or for a joint appointment. Faculty of Arts School of Management Faculty of Mathematics and Computing Centre for Modem Languages Faculty of Science Institute of Educational Technology Faculty of Social Sciences The OU Library Faculty of Technology Academic Computing Service School of Education Regional Academic Services School of Health and Social Welfare The Knowledge Media Institute of the New Technology Recruitment Initiative we plan to additional 33 staff who can combine a high level of academic potential with demonstrated competence in the application of new technology to learning. Most appointments will be mode to academic Faculties, As port appoint an Schools and Institutes, but a number will be to academic service units. Appointments will be made at one of three levels - p.a.(under review) materials or student support systems using diverse media, and undertake innovative research. Research FeAow Grade 1A salary scale £13,941 -£20,953 p.a.(under review) to undertake leading edge research relevant to all new technologies which could support open learning. Protect Officer/Software Designer Academic-related Grade 1/2 salary scale £13,941 -£20,953 p.a. (under review) - to bring advanced software, network or multi-media skills to support learning systems development. Lecturer Grade to conceive A/B starting salary £l4,756-£20,953 and develop quality teaching - Appointments will be made for a period of at least five years, andsomewill be permanent. Most posts will be tenable at the Universit/s headquarters in Milton Keynes, but there may be opportunities for appointment to be based at one of our 13 regional centres, in London, Edinburgh, Cardiff, Belfast, Oxford, Bristol, Binningham, Nottingham, Cambridge, Leeds, Manchester, Newcastle, East Grinstead. Application forms, access details for disabled applicants, and further particulars for all posts (including contacts in each unit) are available from the Personnel Officer (Recruitment), The Open University, Milton Keynes MK7 6AA, by telephone to 01908 654901/654902 or by e-mail to a.kicalukOopen.oc.uk. More information about the OU may be found on http://www.open.ac.uk/. The closing dale for applications is 9 June 1995. Disabled applicants whose skills and experience meet the requirements of the job will be interviewed. Please let us know if you need your copy of the further particulars in large print, on computer disk, or on audio or cassette tape. Equrd Opportunity is University Policy. University education and trwrvng open la al aduks. HE ECONOMIST MAT 20TH 129 1995 Source: The Economist 377 May 20, 1995: 129 Bibliography Abernathy W. J. and Clark K. B. (1985), 'Innovation: Mapping the winds of creative destruction', Research Policy, 14: 3-22. Aiken H. D. 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