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Strategic Management and Determinism

Author(s): L. J. Bourgeois, III


Source: The Academy of Management Review, Vol. 9, No. 4 (Oct., 1984), pp. 586-596
Published by: Academy of Management
Stable URL: http://www.jstor.org/stable/258482
Accessed: 28-11-2016 12:23 UTC

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?Academy of Management Review, 1984, Vol. 9, No. 4, 586-596.

Strategic Management and Determinism


L. J. BOURGEOIS, III
Stanford University

Contingency theories of management and economic theories of industrial


organization both contribute to a mechanistic view of the strategic manager
as "analyst. " In this view, the secret to managerial effectiveness is through
the application of scientific laws orprinciples, be they "laws of organiza-
tion " or "laws of the marketplace. " This paper argues for a view of strategic
management as a creative activity and suggests a dialectic between free will
and determinism in conceptualizations of strategic behavior.

Three strands of thought seem to relegate "man- policy decisions or goals altogether (Quinn, 1977;
agement" to a reactive-adaptive prison of deter- Wrapp, 1967).
ministic circumstances. On one hand, organization If one is to follow the dicta of most of these
theory evolved to the point that the embracing of schools, then one faces the prospect of having to sug-
open-systems perspectives led to the recent vogue of gest that a management interested in influencing the
contingency theories that posit "one best way" for destiny of its organization may as well resign itself
each of various circumstances (Kast & Rosenzweig, to succumbing to the matrix of deterministic forces
1974) and to population ecology models of organiza- presented by environmental, technical, and human
tion survival based on environmental "fit" (Aldrich, forces that impinge on its freedom of choice. At best,
1975). In this view, the right combination of organi- management becomes a computational exercise. At
zational design variables, matched with particular en- worst, it becomes a reactive waiting game, exploiting
vironmental states (e.g., turbulence), will yield contingencies only as they arise through political
superior performance. forces. Although these views are indispensable for
The tradition of industrial organization economics empirical research purposes, it is argued here that
is similar: industry structure (e.g., concentration their inherent reductionism eliminates much of the
ratio) combines with aggregate firm conduct (combi- richness that characterizes the strategic management
nation of factors of production) to yield some level process, and that they may constrain the advance-
of industry profitability. Application of this view to ment of strategic management as an academic
the individual firm level has led to studies attempt- discipline.
ing to indicate which combination of environmental
Deterministic Imperatives for Management
and firm-specific variables will yield superior perfor-
mance (Hambrick, MacMillan, & Day, 1982; Schen- Determinism in Organization Theory
del & Patton, 1978). The organization theory literature is replete with
On another hand, policy analysts say that policies deterministic contingency theories in which the role
are "really" formed through an incremental and/or of human choice is relegated to a place quite secon-
political process and that attempts at rational plan- dary to the imperatives of environmental turbulence
ning are futile (Braybrooke & Lindblom, 1970; Cyert (Burns & Stalker, 1961; Lawrence & Lorsch, 1967);
& March, 1963). This school suggests that the limits technological processes (Perrow, 1967; Woodward,
to human and organizational rationality relegate the 1965); size and ownership (Blau, 1970; Pondy, 1969);
policymaker to the role of arbiter or reactor, ex- information processing requirements (Galbraith,
ploiting openings as they occur amidst the furor of 1973); or natural selection processes (Aldrich, 1975;
political maneuvering in order to make incremental Hannan & Freeman, 1977). For example, postulated
steps toward some goal; it has even gone so far as relationships regarding "goodness of fit" considera-
to suggest that good managers avoid articulating tions between organizations and environment imply

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that the design of an organization follows more or Determinism in the Policy Process Literature
less automatically from the degrees of variation and
In the ubiquitous quest for the reduction of uncer-
complexity presented by the environment (Dill, 1958;
tainty, perhaps humans need the variable-reducing
DuBick, 1978; Duncan, 1972a, b). What such theories
function that deterministic theories provide. From
do is assume that these "contextual" constraints are
within the policy literature come explanations of firm
binding in their effects and dramatically reduce the
behavior in which managers seek to reduce the num-
range of organizational response alternatives to those
ber of contingencies and courses of action from
that will produce the proper "fit" with the indepen-
which they must choose to respond (Cyert & March,
dent variable in question.
1963). And although the rational-comprehensive
James Thompson summarizes this view quite suc-
school of policy formulation posits the designing of
cintly in the opening chapter of Organizations in Ac-
organizations as the rational process of implemen-
tion. He argues that "organizations do some of the
ting strategy (Bourgeois & Brodwin, 1984; Galbraith,
basic things they do because they must-or else!"
1977; Uyterhoeven, Ackerman, & Rosenblum, 1977),
(1967, p. 1). Later on, he states that the "variables
organization structures themselves affect future deci-
controlled by the organization are subordinated to
the constraints and contingencies it cannot escape" sions and place constraints on subsequent strategy

(p. 78, italics added). In contrasting closed-system formation. Dye's (1975) analysis of city government
and open-system strategies for studying organiza- presents an institutional model in which policy out-
tions, Thompson allows as how the latter lets in more comes are influenced by which administrative struc-
variables than a person can comprehend at one time, ture (mayor-council or council-manager) is used.
resulting in unpredictability and uncertainty, and the Thus, standardized operating procedures, institu-
former gives the psychological comfort of assuming tionalized roles, personal empires, and power rela-
determinacy. (Although Thompson was referring to tionships interconspire in such a way that only in-
the uncertainties faced by an administrator, if one cremental and marginal decisions arrived at through
looks closely enough, one notices the author's pur- negotiating and sequential attention to goals can suc-
pose of reducing his own analytical uncertainty by ceed in initiating changes. Because massive
seeking determinacy among the conceptual and em- reorganization normally is regarded as impractical
pirical schemes available.) from a cost standpoint, and is severely resisted
Determinism is one characteristic of the organiza- because of its threat to existing power bases and its
tional literature cited. Another is reductionism: the effect of renewing uncertainties inherent in the chang-
studies tend to focus on one independent variable ing of formal relationships, structural inertia gives
(e.g., degree of turbulence) as it causes managers to rise to the incrementalism described by Lindblom
manipulate one dependent variable (e.g., structure). (1959). Similarly, competing coalition groups with
(A sociology of science explanation for this will be uncertainty-reducing standard operating procedures
suggested below.) In addition, the theories generally promote sequentialism in goal attentiveness and serve
are derived from static, cross-sectional correlation as stifling obstacles to comprehensiveness in strategy
studies, which present problems of causal inference: formulation. The "political forces" effect on stra-
these types of analyses assume that the systems be- tegy so aptly described by Cyert and March (1963)
ing studied are in equilibria. In one study that attemp- also function vertically within hierarchies to affect
ted to correct for both of these limitations, Dewar policy outcomes by influencing the transmission of
and Hage (1978) sought theoretical synthesis by ex- information to the policymakers "Carter, 1971).
amining how rates of change of two independent This "political process" view is deterministic in the
variables (size and technology) affect the rates of sense that policy outcomes are determined by forces
change of two dependent variables (complexity and beyond the control or cognition of the policymaker;
structural differentiation). But even with a dynamic outcomes conforming to prior intentions or proac-
analysis, they found that explanations for the effects tion are, at best, accidental. In a review of models
of the two contextual variables together could not of "rational" choice, March (1978) made the distinc-
be developed. Thus, they were reduced to separate tion between models of calculated rationality, in
causal models for each independent variable. As which personal intentions do guide individual (micro)
argued below, perhaps the pursuit of deterministic behaviors, and systemic rationality, in which inten-
explanations forces this reductionism. tions are discovered or learned as organizational ac-

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tion unfolds. In either case, outcomes are the prod- Following this trend of identifying the "forces
uct of (sometimes random) group interaction, not from without" that constrain strategymaking, an-
management. For example, one model of calculated other recent line of research in strategic management
rationality is March's "garbage can" model of or- is represented by the use of industry economics in
ganizational choice (Cohen, March, & Olsen, 1972), analyzing the competitive behavior of firms within
in which decisions are produced "by the apparent particular industrial environments.
tendency for people, problems, solutions, and choices
to be joined by the relatively arbitrary accidents of Determinism in the Strategy Content Literature
their simultaneity rather than by their prima facie Industrial organization economics posits an in-
relevance to each other" (March, 1978, p. 592). Now, dustry "structure" (number and size of firms, level
one implication of determinism is that there are cer- of demand, etc.), which determines the inherent pro-
tain scientific laws (cause-effect relationships) that fitability of a particular industry. Strategic manage-
govern events. Those laws are discoverable through
ment scholars have refined this orientation by at-
experimentation, either by scientists or by practi-
tempting to explain differences in performance of in-
tioners. In this spirit, one systemic model, adaptive
dividual firms within industries. This research
rationality, suggests that "if the world and prefer-
assumes that a set of company actions (strategies) can
ences are stable and the experience prolonged
be matched to industry imperatives to achieve max-
enough, behavior will approach the behavior that
imal performance. The Purdue studies of the beer
would be chosen rationally on the basis of perfect
industry (Hatten, Schendel, & Cooper, 1978; Schen-
knowledge" (March, 1978, p. 592). In other words,
del & Patton, 1978) are prototypical of this orienta-
there are some (deterministic) laws at work which will
tion, which relies on the basic premise that there are
be discovered by managers as accumulated experience
certain technological, legal, operational, and com-
permits them to be revealed.
petitive constraints on organizational activity once
The above policy literature tends to emphasize in-
a firm has entered into a particular competitive
ternal structure or political determinants of policy,
environment.
but other research maintains that strategy often is not
The most articulate exposition of this argumenta-
formulated (within the firm) but is negotiated with
tion was offered by Hofer (1975) in a provocative
external parties in the environment. This is especially
true in government-regulated industries (e.g., utilities) paper entitled, "Toward a Contingency Theory of
in which the "zone of strategic discretion" for top Business Strategy." This paper drew on marketing's
level corporate managers is being reduced (Murray, product life cycle concept to hypothesize the op-
1978). Following this "external constraint" view of timality of situation-specific strategies, and it
the policymaking process, the discovery of new op- represented an exponential increase in conceptual
portunities and alternatives is not necessarily the pro- rigor over the original attempts at situational pre-
duct of rational environmental scanning, as suggested scriptions for strategies initiated by Katz (1970). For
by proponents of strategic planning; these alter- example, Katz proffered four universal "rules" for
natives often are presented to the manager by ele- corporate strategy (e.g., "always lead from
ments in the environment itself. For example, Carter strength," p. 349) plus eight conditional "axioms"
(1971) suggests that not infrequently managers' at- that apply depending on company size relative to ts
tention is called to strategic opportunities by sources industry (e.g., for large firms, "give up the crumbs,"
outside the firm; and this was the basis for Aharoni's p. 362).
(1966) thesis that the foreign investment decisions The product life cycle concept lays out operating
made the American multinational firms were the re- and strategic contingencies for each stage of the cy-
sult of receiving proposals from hard-to-ignore cle. Each of these stages usually is described along
sources in their environments (such as foreign govern- a nominal scale, and each represents the competi-
ments, clients, etc.), rather than from either infor- tive/economic nature of an industry from its incep-
mal or formal search (Aguilar, 1967). Conversely, a tion (invention and introduction of a new product)
"rational" approach to coaligning with the envi- through maturity and decline (the market has been
ronment, such as cooperating or merging with other saturated and the product, through standardization,
organizations, may be blocked, reversed, or other- begins to take on the characteristics of a commodity).
wise thwarted by governmental action. For example, at the growth stage, the environment is

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composed of numerous potential consumers waiting has a few hurdles to surmount. (The irony here is that
for the price to come down and of many competitors Hofer, explicitly set out to reduce the number of "cir-
striving for product standardization in order to cumstances" from a potential of 18 x 1015.) The
achieve the economies of scale necessary for cost foregoing is reminiscent of the criticism surrounding
reductions. Given the competitive nature of the in- the ultimate environmental determinism represented
dustry at this stage and the increasing price elasti- by Skinnerian behaviorism; that is, it relies on the
city of the product, the environment of a firm at this premise that the controller must be in possession of
stage might be characterized as highly volatile and an exhaustive inventory of all the environmental
uncertain. Note that the deterministic imperative here stimuli that serve as reinforcers to the subject being
emanates from classical microeconomic theory: in controlled (Scott & Mitchell, 1972).
order to survive the growth stage, the firm must seek
long run economies to scale; the manufacturing func- Limitations of Deterministic Views
tion must be emphasized in the allocation of finan- There is a more fundamental conclusion to be
cial resources and managerial attention. drawn from the foregoing analysis: the strategy of
Hofer's paper took the product life cycle concept a firm cannot be predicted, nor is it predestined; the
a step further by including a much larger number of strategic decisions made by managers cannot be
environmental variables than illustrated above (e.g., assumed to be the product of deterministic forces in
he includes the type of distribution system, nature their environments. Any such assumption would eli-
of customer motivation to purchase, frequency of minate the very need for management because it im-
purchase, etc.), and it concluded with the bare begin- plies that the strategy of an organization follows
nings of an inventory of hypotheses that posit the more or less automatically from a technical apprecia-
"optimal" business strategy for a given configura- tion of its environmental situation. On the contrary,
tion of contingencies. the very nature of the concept of strategy assumes
It is here that such a deterministic model runs in- a human agent who is able to take actions that at-
to difficulty. If the scholars in the field were to at- tempt to distinguish one's firm from the competitors.
tempt to develop fully this inventory of hypotheses, This is the very foundation of Newman's "propitious
they would still be writing them, for, if each of niche" (Newman, 1971; Newman, Summer, & War-
Hofer's independent environmental variables were to ren, 1972). (Even a literal interpretation of the prod-
be considered in its simplest form-as a dichotomy uct life cycle model implies a "shakeout" from which
of extremes rather than a continuum-the number only a few dominant firms emerge; they must have
of contingencies that would have to be accounted for differed in some way from the failures!)
would be enormous (Table 1). Not only must conceptual attempts such as Hofer's
reduce to purely situational theories of strategy, but
Table 1
the empirical work out of Purdue points in the same
Strategic Contingencies for PLC Stages direction. As anticipated in their modeling of strategy
in the beer industry, it was found that strategies were
Number of Resulting Number not homogeneous, but tended to occur in clusters or
PLC Stage Variablesa of Contingenciesb "strategic groups" of companies (the groups tended
Introduction 6 64 to reflect the national, regional, or local orientations
Growth 13 8,200 of the member brewers). However, from the original
Maturity 21 2,097,000
Saturation 26 67,109,000
sample of 13 firms emerged 6 groups: with an average
Decline 17 131,000 of little more than 2 firms per "group," the attempt
virtually resulted in a case-by-case description (Hat-
aAdopted from Hofer, 1975.
bComputed by 2n, where n =number of variables. ten et al., 1978).
Similar results are produced by research using the
Profit Impact of Market Strategies (PIMS) data base
If, as Einstein (1934) asserted, the "grand object" (Buzzell, Gale, & Sultan, 1975). Originally set up to
of all theory is to explain as large a number of obser- search for the "laws" that govern business profita-
vable phenomena with as few concepts and laws as bility, the only generalizable "law" is that the ma-
possible, then any "contingency theory" of strategy jor determinant of profits is market share. Most
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PIMS-based research starts with reductionist and Origins of Deterministic Views
deterministic goals, but usually ends up with studies
Given the management-process origins of these
whose results can be conveyed only with reference
fields, in which managers were seen as the planners,
to long lists of variables or variable clusters, making
organizers, leaders, and controllers of the firms
it difficult to accumulate knowledge from one study
(Koontz & O'Donnell, 1964; Newman et al., 1972),
to the next.
this development of the state of these administrative
The primary limitations of deterministic theories,
theories is curious. How did this state of affairs come
then, are that they: (1) are reductionist, resulting in about? A plausible speculation is that three streams
losing the richness of both independent variables have converged. First, fields have advanced drama-
(such as the environment) and dependent variables tically in their application of "scientific" methods
(structure, strategy); (2) ignore reciprocal cause- of measurement, observation, and statistical analysis.
effect; (3) if pursued to their extreme, result in hyper- As the degree of empiricism climbs, so do the aspira-
contingency theories or studies of situational cases; tions of the investigators in obtaining scientific
most important; (4) reduce managers to mechanistic "truth"; and in pursuing this ideal they have taken
computers who must apply scientific laws to achieve on some of the values of the "hard" sciences that
results; and (5) relegate managers to a passive role, they are emulating in the application of method. The
constrained by a variety of forces. These "forces" problem is, the physical science model chosen is close

are summarized in Table 2. to that of Newtonian physics, which represents the


ultimate in deterministic explanation for the world
as it is perceived (Sullivan, 1933).
Table 2 A second stream is merely a reflection of the ideal
Summary of Deterministic Views of parsimony in any theory. Under this law, a sim-
ple theoretical solution that explains a set of empirical
Field Managers are Constrained by Reference facts is preferable to a more complex explanation.
Ignoring for a moment that contingency theories, in
the main, were derived from correlational analyses
Organization Size and ownership Blau (1970); of structure rather than process and that the causal
Theory Pondy (1969)
explanations sought were available only through in-
Technology Perrow (1967,
1970); Wood- ference, contingency models give, in fact, the simplest
ward (1965) theoretical solution that can support the data. This
Environmental turbulence Duncan (1 972a,
parsimoniousness, of course, provides the psycholo-
1972b);
Lawrence & gical security alluded to above in describing Thomp-
Lorsch (1967) son's work.
Information requirements Galbraith (1977)
The third stream involves the move from the
Natural selection Aldrich (1975)
"micro" or individual behavior approach to study-
Policy Existing strategy/structure Dye (1975); ing organizational behavior, to the more "macro"
Bourgeois &
or sociological approach, which takes the organiza-
Brodwin (in
press) tion-not the individual actor-as the unit of analy-
Internal political forces Cyert & March sis. As one abstracts away from the individual
(1963); Lind-
blom (1959) towards the collectivity, one runs the risk of personi-
External political forces Murray (1978) fying the collectivity; and even if that trap is avoided,
Environmental impingement Carter (1971)
one has defined away the individual as the prime in-
Strategy Product life cycle Hofer (1975) fluencer of organized activity. With the individual lost
Industry structure Hatten et al. to the aggregate, the explanation of the behavior of
(1978), Schendel
organizations in terms of "causal textures" (Emery
& Patton (1978)
Market share Buzzell et al. & Trist, 1965; Terreberry, 1968), "natural selection"
(1975) (Aldrich, 1975), or other abstract "forces" become
Power of suppliers and buyers Porter (1979a)
Mobility barriers Caves & Porter plausible.
(1977) The blinders imposed by this last stream are most
vivid in organizational sociology. For example, in his

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review of Guest's (1962) study of two consecutive etc.), the manager or the top management coalition
plant managers (a poor one followed by a successful always retain a certain amount of discretion first to
one), Perrow (1970) reinterpreted Guest's data to select the situation, domain, industry in which he/she
argue that the "good" leader succeeded primarily as or they choose to operate, and secondly-and more
a result of having been granted autonomy from head- importantly-to choose goals that are not optimiz-
quaters. That is, success was a function of ing or economically rational, but that merely allow
decentralization-a sociological variable-not just the organization to generate enough "slack" to
managerial skill. In fact, this leader negotiated both engage felicitously in what Simon (1957) would term
the autonomy and a plant-modernizing capital budget "satisficing" behavior. Once performance exceeds
at the time he took over. Perrow reports this, but he this satisficing level, a sufficient margin of surplus
argues that the most important factor was "the situa- may have been generated to accommodate

tion in which the two leaders... operated" (1970, p. managerial styles, organizational structures, or oth
13, italics added). The net effect of this sociological courses of action that do not "fit" the prescriptions
view downplays the ability of a manager to create of deterministically and rationally derived theories
his or her own situation.
of management. It is in this context that manage-
ment's values and preferences override any dicta. For
The Alternative to Determinism: if, as in most definitions, strategy making includes
the choice of organizational goals, and to the extent
Strategic Choice
that these goals reflect managerial preferences, then
Thus, one comes full circle and notes that the prob- unless these goals are coincidentally identical for all
lem with many of these theories is that they downplayfirms the deterministic views break down. These
the role played by the human agent-that stubborn- choices of goals, domains, technologies, and struc-
ly unpredictable human actor-who has the power tural variables are what Child (1972) has referred to
to direct the organization; they fail to acknowledge as strategic choices. Given the power for these choices
the way in which organizational actors, in fact, make to influence organizational contexts and performance
strategic choices that determine how an organization criteria, it is of no small consequence that the prop-
finds itself within a particular context in the first ositions of contingency theory have been found to
place. This acknowledgement has been making its be less than faithful explainers of the empirical data
(Pennings, 1975).
stubborn infiltration into current thinking, sparked
The direct influence of industrial organizations in
initially by John Child's heretical voice in a sociology
shaping their own environments, of course, was the
journal (Child, 1972), but which subsequently has re-
central theme of John Kenneth Galbraith's New In-
ceived the enthusiastic attention of policy scholars.
dustrial State. Economists, like latter-day organiza-
The seeds for this refreshing challenge to deter-
tion theorists, are wont to posit environmental forces
minism can be found, interestingly enough, in
under the rubric of the "market" or Adam Smith's
Thompson's (1967) work. For, in discussing "co-
"invisible hand." But Galbraith dismissed the "myth
alignment" as the basic administrative function, he
of the system... [in which] the market is a force of
asserts:
transcendent power" (1971, p. 356.) Instead, the
We must emphasize that organizations are not simp- market is steadily being replaced by planning, in
ly determined by their environments. But if the
which output, prices, and consumer demand is in-
organization is not simply the product of its environ-
ment, neither is it independent. The configuration creasingly under the control of the corporations.
necessary for survival comes ... from finding the So it is contended that the top management or
strategic variables... which are available to the dominant coalition always retain a certain amount
organization and can be manipulated in such a way of discretion to choose courses of action that serve
that interaction with other elements will result in a
to coalign the organization's resources with its en-
variable coalignment (1967, p. 148).
vironmental opportunities, and to serve the values
That is, although there always are some constraints
and preferences of management. As has been argued
present in any situation, whether they be external to
elsewhere, this relegates the independent (usually con-
the organization (governmental, economic, indus-
textual) variables of contingency views
trial, etc.) or internal (human needs, power struc- to the status of elements which may, or may not, be
tures, information systems, technological processes, taken into consideration in strategic choice. In this

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view of things, the independent variables of con- tum physics, in the principle of indeterminacy:
tingency theory comprise only one subset of the multi- This principle is the negation of the strict determinism
ple points of reference which constitute the total frame that has hitherto reigned in science. Until quite recent-
of reference of decision makers. As such they act ly science has assumed that a knowledge of the pres-
merely as partial constraints which may potentially ent is sufficient to enable us to determine the future.
affect decision making if the decision maker believes We have hitherto believed that every event in nature
they are important. Contextual factors are therefore
is an example of strict cause and effect. The possible
subsumed as premises within the more global process exceptions are provided by those of our own actions
of strategic decision making. The advantage of this
which are, we say, the result of "free will." But many
shift in the level of analysis is that it identifies other
have thought that the strict determinacy found in
important referents which enter and influence the
nature would ultimately be extended to our mental
decision making process. Most significantly, it allows
processes, and that our consciousness of free will is
for a consideration of the part played by premises
which reflect the goals and interests of those who an illusion. The principle of indeterminacy has pro-
make the decisions. . . Viewed from this angle, the par-
foundly changed this outlook (Sullivan, 1933, pp.
69-70).
ticular environment, size, and technology which en-
sue from these decisions are artifactual manifestations What, then, becomes of determinism?
of managerial policy, rather than immutable con- It becomes a useless principle... A determinist may
straints determining what is possible (Bourgeois & say, as some of them do, that indeterminacy is un-
Astley, 1978, pp. 9-10). thinkable. Strict cause and effect, they may say, is
Although the argument presented so far might risk a necessity of thought. This is the old problem of free-
dismissal as a metaphysical discourse legitimizing the will and determinism... When Eddington says that
something analogous to free-will must be put at the
role of management, one must consider the alter-
basis of physical phenomena, he means that the prin-
native: if organizational action is determined by im- ciple of indeterminacy... belongs to as fundamental
mutable forces, then the management of organiza- a category of thought as does the notion of strict
tions may as well be abdicated to mechanics. Other- causality. Both alternatives are equally possible. The
wise, strategy is downgraded to the status of serving question is, which of these principles does nature
obey? And the answer we have obtained so far is that
merely to reduce managerial uncertainty by giving
the ultimate processes of nature are not strictly deter-
managers "something to do" while they await the mined (Sullivan, 1933, pp. 71-72).
contingencies to which they must respond. As in physics, so in social science. Economists,
psychologists, and organization theorists are all vic-
The Role of Strategic Choice:
tims of linear thinking, in which the reduction of a
Determinism versus Free Will
chaotically large number of phenomena into a one-
As stated earlier, one possible source for deter- way sequence of cause and effect allows the
ministic biases in theoretical schemes derives from psychological security of the illusion of "prediction,"
their methodology being modeled on that of the but which disallows the strategist as a "cause" and
physical sciences. Ironically, the debate between the ignores the real possibility of a cycle in which cause
proponents of determinism versus free will began and effect are mutually interacting. But from its
among physical scientists two centuries ago when Aristotelian roots, modern physics thinking has
biological developments (and biology was not yet a emerged as dialectical, entertaining notions of mutual
''science") introduced the concept of "organism" in causation between the factors under consideration.
opposition to the doctrine of materialistic mechanism If the theoretical development of the behavioral and
(Whitehead, 1925). The root of the conflict lies in policy sciences is to continue to parallel that of the
that theoretical physics was erected to explain and physical sciences, it is suspected that the debate bet-
predict the characteristics, properties, locations, and ween the believers in organizational "free will," or
motions of inanimate matter. It was not equipped the power to enact unique strategies, and the pro-
to handle the issue of "life." Likewise macro-orga- ponents of contingency views has just begun. It is
nization and industrial economic theories are uneasy speculated, however, that any emergent theory of
with individual actors making the strategic choices organizational functioning will have to yield a cen-
that give "life" to their organizations. tral position to strategic choice and to consider the
Whereas physics was designed to ignore concepts possibility of reciprocal causation among external
such as life, a challenge to determinism emerged from (environmental or "contextual") factors, strategic
its own ranks, following the introduction of quan- decisions, and internal (structural, power and re-
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sources distribution) factors. So, though environmen- bine quantitative and clinical research methods.
tal and internal forces act as constraints, strategy
Adopt a Dialectical View
making often selects and later mzodifies the sets of
constraints. Dialectical thinking will be required to Most strategic management researchers undoub-
countenance this state of affairs, which might be tedly are sympathetic to the argument that it is the
described as an interactive tension between the iner- "degrees of strategic freedom" that are important
tia of environmental and internal forces and the rather than an absolute choice between determinism
kinetics of strategic choice. and free will. Yet, research tradition frames think-
A recent approach that exemplifies this dialectical ing in deterministic logic. It is argued that a
thinking was proposed by Bourgeois (1980a), in philosophical stance should be adopted that allows
which "domain definition" and "domain naviga- for free will and creativity when models are con-
tion" are conceptualized as the more or less free-will
structed from empirical data. An example of this kind
and determined components of strategic manage-
of inductive thinking is found in Burgelman's (1983)
ment, respectively. In this view, the initial selection
work, in which he conceptualizes the (free-will) no-
and definition of domain, termed primary strategy,
tion of "autonomous strategic behavior" taking
constitutes the process through which managers
place within (otherwise bureaucratic) firms.
creatively "enact" (Weick, 1969) their environments
This does not mean that dialectic logic should oc-
and define their own requisite levels of performance.
cur only within the minds of individual researchers;
It is subsequent to the domain definition that
it can and should proceed among strategic manage-
managers, in effect, set up administrative and
ment researchers whose training comes from different
technological arrangements to "navigate" through
disciplines (Jemison, 1981). As March reports, the
their chosen domains, presumably according to the
latter has precedent in the development of theories
prescriptions of contingency theory or the dictates
of choice, in which "behavioral [descriptive] and nor-
of industry economics.
mative theories have developed as a dialectic rather
Implications for Research on than separate domains" (1978, p. 588).
Strategic Management Recognize Reciprocal Causality
Whereas the need for this type of dialectical think- Adopting a dialectic view should facilitate dealing
ing is clear, in order to enhance understanding of with reciprocal causality in research designs. There
strategic management, the implications for research are at least two ways of doing this. One is to let both
are less so. Those academic brethren who espouse the "causes" and "effects" (e.g., contexts, administra-
"hard science" values of the physical sciences in their tive arrangements, strategies) vary together without
choice of research methods will be uncomfortable imputing any direction of causality a priori, as Miller
with such intractable notions as free will, en- and Friesen (1978) did using the Q-factor method to
vironmental enactment, domain definition, creativi- derive strategy archetypes. The other is to provide
ty, and the like, and their influence on the evalua- dual-direction interpretations of correlational data
tion and choice of method is not insignificant. On analyses when making causal inferences, as was done
the other hand, no one would deny that it is the by Bourgeois (1980b, 1982) in his studies of environ-
experimentation and risk taking of creative entrepre- mental turbulence, goals and means consensus, and
neurs that provide the data through which the "laws" economic performance.
are discovered in the first place.
Given both the limitations of deterministic theories Combine Research Perspectives
and their advantages (they do explain variance among Both the recognition of reciprocal causality and a
a wide array of variables and they do call attention dialectical view can be enhanced if research perspec-
to some critical areas of inquiry), what research tives are combined in designs. For example, Jemison
recommendations might be made? Four are suggested (1981) has suggested that strategy outcomes (content)
here: adopt the dialectical view argued above; and process (decision behavior) be examined simul-
recognize reciprocal causality and deal with it in taneously. Although causal inferences are not drawn,
research; combine research perspectives; and com- much of Mintzberg's historical research is of this

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type: he traces both decisions and decision processes search for the laws revealed through statistical
over time (Mintzberg & Waters, 1982). Longitudinal analyses of the aggregate data-the study of confor-
statistical techniques, such as cross-lagged correla- mity, as Starbuck (1976) terms it-and supplement
tions, can aid in analyzing this type of data. these with a clinical understanding of how the stra-

Porter (1979b) has suggested that perspectives from tegists of the firms created their strategies and
industrial organization and strategic choice be com- organizations in the first place-Starbuck's (1976)
bined in aiding understanding of strategic manage- "anatomy of deviance." The former will allow an

ment. In a somewhat different vein, Van de Ven explanation of statistical variance among populations
(1979) suggested that strategic choice and environ- of firms, and the latter will permit explanation of the
mental constraints be treated as two separate dimen- unexplained variance by understanding particular (in-
sions, each of which may vary on a unique con- dividual firm) behaviors and situations.
tinuum, rather than as polarities in a single scale. In
Conclusions
essence, Miles and Snow (1978) did this when they
examined organizations in four industries and inter- This paper has argued for a shift in the way re-
preted why the strategic behavior of successful search in strategy is conducted in order to encom-
organizations varied within industries or domains. pass the creative activity implied in its management.
Another way to combine perspectives is to com- This entails a suspension of traditional linear think-
bine data sources. For example, Bourgeois and Singh ing and the adoption of a dialectical point of view.
(1983) combined economic (financial) and behavioral This is not a unique perspective; in fact, the seeds
(questionnaire) data to study organizational slack and are already present:
political behavior among top management. Because Cause and effect, means and ends, seed and fruit can-
slack has been hypothesized to facilitate creative (i.e., not be severed; for the effect already blooms in the
nondeterministic) strategic behavior (Child, 1972), cause, the end preexists in the means, the fruit in the
seed.
this method could be extended to study the mediating
[Ralph Waldo Emerson]
effects of slack on environmental constraints and
In the case in study here, what comes first, the
strategic choices.
strategist? The strategy? The social and political
structure? Or the environmental context in which
Combine Quantitative and Qualitative Research
these are found? Through the types of thinking and
Wherever possible, large sample "quantitative" methods of research outlined above, strategic
research should be combined with good historical or behavior can be considered as the mutual and reci-
clinical analyses. In this manner, the researcher can procal influence of all of these.

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L. J. Bourgeois, III, is Assistant Professor of Business


Policy in the Graduate School of Business, Stanford
University.

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