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Strategy is a pervasive and consequential practice in mostWestern societies. We respond to strategy’s importance by drawing an initial map of strategy as an organizational field that embraces not just firms, but consultancies, business schools, the state and financial institutions. Using the example of Enron, we show how the strategy field is prone to manipulations in which other actors in the field can easily become entrapped, with grave consequences. Given these consequences, we argue that it is time to take strategy seriously in three senses: undertaking systematic research on the field itself; developing appropriate responses to recent failures in the field; and building more heedful interrelationships between actors within the field, particularly between business schools and practitioners.
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Journal of Management Inquiry
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DOI: 10.1177/1056492603258968
2003 12: 396Journal of Management Inquiry
Richard Whittington, Paula Jarzabkowski, Michael Mayer, ElÉonore Mounoud, Janine Nahapiet and Linda Rouleau
Taking Strategy Seriously : Responsibility and Reform for an Important Social Practice
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10.1177/1056492603258968ARTICLEJOURNAL OFMANAGEMENTINQUIRY / December2003Whittington et al. /RESPONSIBILITYAND REFORM
Taking Strategy Seriously
Responsibility and Reform for an Important Social Practice
RICHARD WHITTINGTON
Saïd Business School, University of Oxford
PAULA JARZABKOWSKI
Aston University
MICHAEL MAYER
University of Edinburgh
ELÉONORE MOUNOUD
École Centrale Paris
JANINE NAHAPIET
Templeton College, University of Oxford
LINDA ROULEAU
HEC Montréal
Strategy is a pervasive and consequential practice in most Western societies. We respond
to strategys importance by drawing an initial map of strategy as an organizational field
that embraces not just firms, but consultancies, business schools, the state and financial
institutions. Using the example of Enron, we show how the strategy field is prone to
manipulations in which other actors in the field can easily become entrapped, with grave
consequences. Given these consequences, we argue that it is time to take strategy seri
-
ously in three senses: undertaking systematic research on the field itself; developing
appropriate responses to recent failures in the field; and building more heedful interrela
-
tionships between actors within the field, particularly between business schools and
practitioners.
Keywords: strategy discourse; Enron; social responsibility; organizational field
396
♦ ♦ ♦
DIALOG
JOURNAL OF MANAGEMENT INQUIRY, Vol. 12 No. 4, December 2003 396-409
DOI: 10.1177/1056492603258968
© 2003 Sage Publications
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I
t is time to take strategy seriously. The disci
-
pline is 40 years old, it forms the largest and
most active division of the Academy of Man
-
agement, and it provides capstone courses to the over
-
whelming majority of MBA degrees internationally
(Pettigrew, Thomas, & Whittington, 2002; Rumelt,
Schendel, & Teece, 1994). The discourse of strategy is
called on by a variety of management disciplines,
including human resources, information, and
accounting (Barry & Elmes, 1997; Knights & Morgan,
1991). Its conceptshave penetrated into adjacent social
science disciplines, such as geography and sociology
(Crow, 1989; McGrath-Champ, 1999). Strategy has dif
-
fused from the private sector to the public sector
(Ferlie, 2002; Townley, 2002) and been exported from
its origin in the United Statesaround theworld (Djelic,
1998; Khanna & Palepu, 2000). The discourse of strat
-
egy not only guides firms; as it becomes internalized
by employees, it also increasingly constitutes peoples’
personal identities as purposive and accountable
human agents (Knights & Morgan, 1995).
Strategy has clearly been a success. However strat-
egy has also had its failures. In this article, we focus on
just one such failure, Enron. The world’s biggest bank-
ruptcy, Enron is an extreme case but one that illus-
trates the scale and scope of the strategy field’s poten-
tial vulnerabilities. Enron drew important support
from prominent strategy gurus (Eisenhardt & Sull,
2001; Hamel, 2000). It was, moreover, an important cli-
ent of the world’s most influential and prestigious
strategy consulting firm, McKinsey & Co. (Fusaro &
Miller, 2002). Fortune magazine ranked the company
as the world’s most admired company for innovative-
ness 6 years in a row (Cruver, 2002). In large part, it
was strategy discourse that made Enron’s spectacular
results plausible for so long.
We need to take strategy seriously because it has
important effects on the world. Here we view strategy
as not simply a property of particular organizations,
but as a social practice with significant and pervasive
effects within contemporary advanced societies
(Knights & Morgan, 1991). This practice is concerned
withall the workinvolved in formulating, implement
-
ing, and communicating corporate strategies (Whit
-
tington, 2003). An important part of this practice is the
production and use by managers, consultants, and
business schools of a strategy discourse in whichfirms
are projected as potentially powerful agents in the
world, able to some degree to choose, control, and
change their environments. The consumption of this
strategy discourse by investors, the media, and regu
-
lators itself transforms the environments within
which firms operate. Taking strategy seriously there
-
fore involves examining and assessing strategy as a
social practice with a wider constituency and wider
repercussions than those of particular organizations.
Strategy as a practice has substantial responsibilities;
just now, we argue, it needs some reflexivity and
reform.
This article starts therefore by mapping strategy as
an organizational field in itself (DiMaggio & Powell,
1983), whose actors include corporations, consulting
firms, financial institutions, and business schools. We
go on to use Abolafia and Kilduff’s (1988) conceptual
-
ization of organizational fields as domains of interac
-
tion in which actors’ manipulative behaviors can
prompt regular cycles of excess, collapse, and correc-
tion. Here we focus on Enron as a particularly skillful
manipulator of the strategy field and as a case already
prompting corrections in adjacent fields, such as
accounting (Gordon, 2002). The article then identifies
a threefold agenda for strategy as a field: research, pol-
icy, and practitioners. For research, we suggest first
the potential for more comparisons between fields
and across nations; second, the scope for internal anal-
ysis of the strategy field’s interactions, shifts in power,
and mechanisms of change. For policy makers, we
make proposals with regard to regulation of the strat
-
egy field and to the field’s expansion into new sectors
and countries. Finally, we ask how the strategy field,
and particularly business schools within it, can serve
practitioners better.
THE ORGANIZATIONAL
FIELD OF STRATEGY
This section offers a tentative map of strategy as an
organizational field. One of our proposals later is for
more research on the constitution of this field, but, in
the meantime, our purpose is to establish rough
dimensions as a step toward grasping strategy as a
significant social practice in the contemporary world.
This map then serves as a platform for exploring the
Whittington et al. / RESPONSIBILITY AND REFORM 397
AUTHORS’ NOTE: The authors would like to acknowledge the helpful comments of Tina Dacin on earlier versions of this arti
-
cle. The usual disclaimers apply.
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means by which strategy can be skillfully engaged as a
discursive resource and for developing agendas for
research, policy, and practitioners.
We follow DiMaggio and Powell (1983) in taking
organizational fields to be “those organizations that,
in the aggregate, constitute an area of institutional life;
key suppliers, resource and product consumers, regu
-
latory agencies and other organizations that produce
similar services or products” (pp. 148-149). In demar
-
cating the strategy field in particular, we take Rumelt
et al.’s (1994) broad definition of strategy as being
about the overall direction of organizations, the issues
that concern senior management. As such, strategy
includes the formation of goals, the choice of appro
-
priate levels of scope and diversity, the design of orga
-
nizational structure and systems, and the setting of
policies for the definition and coordination of work.
Given this breadth,strategy is a field that is particu
-
larly likely to be multilevel and have fuzzy bound
-
aries (Greenwood, Suddaby, & Hinings, 2002), over
-
lapping, for instance, with the fields of finance and
education. In drawing our initial map, we are not dif-
ferent from most analysts of organizational fields in
taking a commonsense approach (Scott, 1995).
Our proposition regarding strategy as a field is that,
as for other organizational fields, legitimacy within
the field is a crucial resource, from which many other
more material resources can flow (DiMaggio &
Powell, 1983). The focus here therefore is on how the
ideas, concepts, and representations that make up
strategy discourse can help legitimize certain kinds of
strategies and so influence the allocation of resources
among key actors within the field. Central in strat
-
egy’s organizational field are, on one hand, those
actors who are engaged in making and communicat
-
ing strategic discourse and, on the other hand, those
receiving and consuming this strategic discourse. In
this initial map, we concentrate on eight key sets of
actors within the strategy field: gurus, business
schools, consulting firms, financial institutions, top
management teams, business media, state institu
-
tions, and pressure groups. The different roles and
positions of these actors can be described in terms of
Figure 1.
The horizontal axis of Figure 1 describes the strat
-
egy field’s actors according to thebalance of their roles
between producing and consuming the ideas, con
-
cepts, and representations that make up strategic dis
-
course. The axis represents a continuum: At the left-
hand extreme, there are the producers of new ideas,
concepts, and representations; moving rightward to
the middle, there are those adapting existing ideas to
new contexts—for instance particular firms or indus-
tries, and those primarily disseminating these ideas;
at the right-hand extreme are those who are simply
passive consumers of the discourse. Producers are
strategic “sense givers,” interpreting to the world the
actions of firms in their environments (Gioia &
Chittipeddi, 1991). Consumers of strategy are strate-
gic “sense takers,” drawing on strategic discourse to
understand actions that are often remote and complex
but which are nevertheless important to them. We
should recognize straightaway that the distinctions
are not sharp. Consumers become producers as they
communicate their understandings to other audi
-
ences. Particular actors can moveeasily fromone setto
another. The broad ellipses along Figure 1’s horizontal
axis allow for a wide range of roles within each set of
actors. In reality, the ellipses are less distinct and less
bounded than graphical convenience permits.
Figure 1’s vertical axis positions the eight sets of
actors according to their degree of financial independ
-
ence, as defined by their relative reliance on corpora
-
tions. At the top of the vertical axis, actors are finan
-
cially dependent on particular corporations, as
employers or as clients. Going down the axis, inde
-
pendence increases as corporate relationships become
more diverse or as alternative sources of funding
become increasingly important. Our argument later is
that such independence entails particular obligations
at a time of reflexivity and reform. In the meantime,
this section describes key actors’ roles and positions in
more detail.
398 JOURNAL OF MANAGEMENT INQUIRY / December 2003
Management
Teams
Gurus
Business
Schools
Pressure
Groups
State
Institutions
Producers Consumers
Dependence
Independence
Business
Media
Consulting
Firms
Financial
Institutions
Figure 1: The Organizational Field of Strategy: Producers and
Consumers of Strategy Discourse
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Key producers of strategy ideas, concepts, and rep
-
resentations that enter the strategic discourse are the
strategy gurus, such as Garry Hamel or Michael Por
-
ter (Jackson, 2001). Although such gurus do not pro
-
duce these simply on their own—Hamel drawing on
an emerging resource-based theory of the firm, Porter
drawing on the established structure-conduct-perfor
-
mance paradigm—they can nonetheless claim pre-
eminent roles as innovators within the field. They sup
-
ply the tropes that inform strategic discourses
throughout the business world (Barry & Elmes, 1997).
As such, they are positioned to the left on the horizon
-
tal axis. The gurus are closer to the midpoint on the
vertical axis of financial dependency. Of course, they
generate a very large amount of their income direct
from corporations as consultants: Hamel and Porter,
for instance, have their own consulting firms
(Strategos and Monitor). However, they also retain
their roots in business schools or allied educational
institutions and earn well through publishing and the
media. Although intimate with the business world,
therefore, the gurus are typically not directly depend-
ent either on particular corporations or even on
corporations in general.
University business schools too have an important
role in the production of strategy ideas, concepts, and
representations. The core competence approach drew
on the work of business academics such as Rumelt
(1984) and Wernerfelt (1984); industry structure anal-
ysis had its roots in traditional industrial organization
economics (Porter, 1981). However, the larger role of
the business schools has been in disseminating
received ideas in strategy (Engwall & Zamagni, 1998)
and educating students as skilled readers of its dis
-
course (Barry & Elmes, 1997). As such, business
schools disseminate as well as produce strategy dis
-
course, so that they stretch across the middle of Figure
1. On the vertical axis, business schools are more
clearly placed, their diversity in terms of corporate,
state, alumni, and student relationships giving them
relative independence.
The consulting firms are significant consumers of
the ideas produced by gurus and business schools
(Kipping & Engwall, 2002; McKenna, 1997). However,
they contribute in their own right to the production of
strategic discourse as they apply strategy ideas to new
contexts. Some consultants, indeed, have substantial
research capabilities of their own—for example
McKinsey & Co., Booz Allen, and Accenture—and
regularly produce new ideas, concepts, and represen
-
tations for clients and other audiences. McKinsey was
responsible for the most influential business book
ever, Peters and Waterman’s (1982) In Search of Excel
-
lence, though this also drew heavily on extant aca
-
demic work (Colville, Waterman, & Weick, 1999).
Consulting firms thus earn a place on both sides of the
production and consumption axis. On the other hand,
consultants are relatively high on the vertical axis,
relying heavily on corporate fees, though typically
enjoying some diversity.
Management teams are clearly purchasers of con
-
sulting and guru services, as well as the employers of
business school graduates. However, they arenot sim
-
ply passive consumers. Strategic discourse needs
active translation and interpretation for effectiveness
in particular contexts (Cziarniawska & Sevon, 1996).
Moreover, the top teams of some corporations are con
-
sistent producers of innovative strategic discourse in
their own right, for instance General Electric’s manag
-
ers in a range of areas from portfolio management to
the notion of boundarylessness (Ashkenas, Ulrich,
Jick, & Kerr, 2002; Pascale, 1991). As Webb and
Pettigrew (1999) showed of the Prudential insurance
company in the United Kingdom, the innovations of
such leading firms are regularly and reliably imitated
by their peers. In the strategy field, top management
teams are producers as well as consumers of strategic
discourse. They are, of course, typically dependent on
a single corporate source of income.
The business media are important consumers and
disseminators of strategy ideas, concepts, and repre-
sentations (Abrahamson, 1996; Mazza & Alvarez,
2000). Particularly significant here are some of the
business media that bridge the academic and the pop
-
ular, the university-endorsed Harvard Business Review,
Sloan Management Review, and California Management
Review. These provide influential channels into the
wider marketplace for business school academics,
whose value is enhanced by the implicit endorsement
of their prestigious sponsoring universities (Harvard,
MIT, and the University of California-Berkeley).
These popular university business journals have con
-
siderable independence, being supported by libraries
and individual purchasers as well as direct sales to
corporations.
The financial institutions are a further important
consumer of strategy ideas, as they struggle to iden
-
tify appropriate business conduct. Their endorsement
of strategies can have a substantial influence on corpo
-
rate behavior, for example when Wall Street first made
possible conglomerate strategies in the 1960s
(Espeland & Hirsch, 1990) and then turned against
Whittington et al. / RESPONSIBILITY AND REFORM 399
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them, promoting focus (Davis, Diekman, & Tinsley,
1994; Zuckerman, 2000). Recent years have seen the
financial institutions endorsing and funding many
innovative and finally disastrous strategies, particu
-
larly in e-commerce and telecoms (Mills, 2002). Finan
-
cial institutions are, of course, partly dependent on
corporate fees but typically must also sell their
products to a wider investing public.
Two final sets of organizations are state institutions
and pressure groups. State institutions tend to
endorse dominant models of appropriate strategy,
however they can enforce change, deliberately in the
case of those promoting strategies based on scale in
postwar Europe (Djelic, 1998) or inadvertently in the
case of U.S. competition legislation promoting con
-
glomerate diversification around the middle of the
past century (Fligstein, 1990). Pressure groups are
also consumers of strategy ideas, but, as in the case of
corporate “greening,” their causes can become incor
-
porated as innovative contributions to the strategy
discourse (Porter & van der Linde, 1995). State institu-
tions and pressure groups normally have a large
degree of independence in terms of relationships with
corporations.
The map of the strategy field in Figure 1 is a simpli-
fied one, underplaying the overlaps between different
sets of actors and omitting other sets, such as middle
managers and employees, who also have important
roles. Part of the research agenda into strategy as a
social practice lies precisely in developing this map. In
the meantime, this first sketch of the organizational
field already raises some intriguing issues for
research, practitioners, and policy makers. There are
comparative issues—how the strategy field varies
across countries and how it compares with other simi
-
lar fields of human activity. There are also internal
issues, concerning the relative power of field partici
-
pants, their interactions, and the engineering of
change. We turn to these comparative and internal
issues later. First, however, we want to give point and
substance to this rather abstract mapping by consider
-
ing the performance of the field in the recent events
surrounding Enron.
ENRON AND THE STRATEGY FIELD
The strategy field is not a passive domain, but a set
of interdependent actors engaging with each other to
pursue a range of objectives. Abolafia and Kilduff
(1988) proposed that bubbles and crises offer particu
-
lar insight into this kind of interdependence because
of the intense vortexes of self-reinforcing interaction
involved in the upswing and the need for deliberate
corrective action following the downswing. The strat
-
egy field has been embroiled in a number of similar
cycles of overenthusiasm followed by abrupt disillu
-
sionment. New strategic ideas around portfolio man
-
agement and the skills of corporate management sup
-
ported the rise of the “go-go” conglomerates of the
late 1960s (Davis etal., 1994; Espeland & Hirsch, 1990).
Peters and Waterman’s (1982) slogan of “stick to the
knitting” promoted a converse return to core busi
-
nesses that produced mixed results even for the origi
-
nal “excellent” companies (“The ‘Excellent,’ Compa
-
nies in trouble,” 1984). The strategy field became
embroiledin thedotcom andtelecom bubbles, endors
-
ing them with notions of virtual companies, network
economics, and first-mover advantage (Mills, 2002;
Porter, 2001).
We focus on Enron in this article because of the
well-documented skill with which it managed to
enlist a wide range of actors within the strategy field
and the important changes to a variety of institutions
that its ultimate failure is now bringing about. As
such, it exemplifies the typical reinforcing cycle of
overenthusiasm and correction described by Abolafia
and Kilduff (1988). Although the support of actors
within the field was crucial to the continuing credibil-
ity of Enron’s strategy in the upswing, we stress that
their involvement was typically unwitting, the result
of thecompany’s skillful fraud.
1
We arguethat someof
these actors can now play an important role in protect
-
ing the field from similar mistakes in the future.
The calamitous history of Enron is well known and
need only be briefly summarized (for fuller treat
-
ments, see Fox, 2002; Fusaro & Miller, 2002; Senate
Committee on Governmental Affairs, 2002). Created
by Kenneth Lay in 1985 from a merger of two oil pipe
-
lines, the company rapidly grew to a U.S.$100-billion
revenue company that ranked as the seventh largest
company in the Fortune 500. The company became
known as a strategy pioneer, vaunting its asset-light
business model, the value of its intellectual capital, its
adroit exploitation of deregulated markets, its
innovativeness in Web-based commodity trading, and
its atomization of the value chain. The company fig
-
ured regularly among Fortune’s most admired compa
-
nies. However, during 2001, the company’s strategy
suddenly unwound. From a peak valuation of U.S.$60
400 JOURNAL OF MANAGEMENT INQUIRY / December 2003
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billion in 2000, it crashed to bankruptcy in December
2001. Four thousand employees faced layoff, with
their pensions drastically slashed because of
overinvestment in company stock. Company Vice-
Chairman Cliff Baxter committed suicide. Accusa
-
tions of complicity brought down accounting giant
Arthur Andersen. The power outages that had crip
-
pled California in the preceding years are now traced
to the innovative trading strategies pioneered by
Enron.
This sequence of events was not simply driven by
market forces. Abolafia and Kilduff (1988) applied an
institutionalist lens to an earlier cycle of excess and
collapse, the Hunt brothers’ silver bubble that culmi
-
nated after several years in the 1980 crisis. They
argued that such crises are more than the product of
disorganized behavior by an atomized mass of market
speculators. These crises are actively organized by
speculators, brokers, bankers, media, and regulators
interacting in overlapping and interdependent
domains. For them, the market process “reflects eco-
nomic behavior that is strategic, political and embed-
ded in institutional structure” (Abolafia & Kilduff,
1988, p. 177). It was exactly this kind of strategic
behavior that embroiled the strategy field—and many
others—in the Enron affair.
Within strategy’s organizational field, Enron’s top
management was consumer and producer of innova-
tive ideas. Enron was a much-imitated pioneer in
deregulated markets; it was also an avid consumer of
the leading institutions’ products, ideas, and people.
Just as the Hunt brothers manipulated the silver mar
-
ket, Enron’s managers exploited the institutional
resources of the strategy field—and others—in a
highly deliberate fashion.
First of all, Kenneth Lay enlisted the support of the
world’s leading strategy consultancy,McKinsey & Co.
McKinsey was hired as advisors on the original pipe
-
line merger, and Jeff Skilling, who advised on this
merger as head of McKinsey’s energy practice, actu
-
ally joined Enron’s payroll in 1990. Skilling became
Enron’schief operatingofficer in1997 and finally chief
executive officer in February 2001. Enron employed
McKinsey consultants steadily through the 1990s, for
instance in the construction of its electronic trading
system, and many followed Skilling to join as employ
-
ees. Enron’s innovative practices supplied McKinsey
with exciting publicity materials for its marketing,
and the firm was often extolled by McKinsey for inno
-
vative ideas such as marketization, the war for talent
and knowledge strategies (e.g., Foster & Kaplan,
2001). Between 1994 to 2001, 27 articles in the influen
-
tial McKinsey Quarterly carried approving references
to Enron (source: Business Source Premier).
Business schools too were assiduously courted.
Enron gave more than U.S.$3.5 million to the Univer
-
sity of Texas business schools (Cruver, 2002). Strategy
academics Ghoshal and Bartlett (1998) endorsed
Enron’s shift from a utility company’s traditional
employment profile to a company that deliberately set
out to recruit MBAs exclusively from the top schools.
Skilling was a Harvard Business School graduate;
Enron’s chief financial officer was from Northwest
-
ern. During the 1990s, Enron was recruiting 250 top
MBA graduates each year. According to Ghoshal and
Bartlett (1998): “Enron now competes successfully for
Harvard MBAs against McKinsey, the world’s most
attractive employer” (p. 12). Kenneth Lay’s elite
MBAs enacted and legitimized Enron’s innovative
strategies.
Strategy gurus, such as Garry Hamel and Kathy
Eisenhardt, were also attracted by the apparent suc-
cess story and led into supporting the Enron myth
(Eisenhardt & Sull, 2001; Hamel, 2000). The authority
of their associated institutions—London Business
School and Stanford University—was implicitly
enrolled in these endorsements. These gurus, and
many others, were able to engage the most influential
and prestigious business media in endorsing the com-
pany. It was not just Fortune, with its praise for Enron
as most innovative company. Harvard University’s
Harvard Business Review had 19 separate pieces citing
Enron in the period 1995 to 2001, only two of which
were in a slightly critical context (in both cases, of
Enron’s India venture). MIT’s Sloan Management
Review had 10 articles referring to Enron in the period
1993 to 2001, only one slightly critical (source:
Business Source Premier).
Enronalso engaged key financial institutions. Pow
-
erful investment bank JP Morgan was a lender to
Enron, a merger adviser, an advocate before credit rat
-
ing agencies, an analyst, and an investor in smaller
companies that took part in initiatives pioneered by
Enron(“Editorial Comment: Enron and the Role of the
Banks,” 2002). Stock market analysts supported
Enron’s strategy more widely, notoriously pumping
up the stock with recommendations that flew in the
face of conflicts of interest (Cruver, 2002). Financial
institutions thus both consumed and propagated
Enron’s strategic discourse.
Whittington et al. / RESPONSIBILITY AND REFORM 401
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One last set of organizations enmeshed by Enron
was the complex of state institutions, particularly via
politicians and regulators (Fusaro & Miller, 2002).
Kenneth Lay was an active and skillful networker in
his home state of Texas and at the national level. He
employed two of George H. W. Bush’s cabinet mem
-
bers, James Baker and Robert Mosbacher, as Enron
consultants after the presidential defeat of 1992. He
went on to head George W. Bush’s business council
when Bush was Texas governor. Enron donated sub
-
stantially to the Democratic and Republican parties.
George W. Bush appointed Brett Perlman, a former
McKinsey consultant on Enron’s electronic trading
system, a commissioner of the Public Utility Commis
-
sion of Texas. The Texas Utility Regulator Patrick
Wood was appointed chairman of the Federal Energy
Regulatory Commission with a supporting reference
from Kenneth Lay. Beyond any particular favors,
these powerful political connectionsgave Enron an air
of legitimacy that could be useful in its more general
business dealings.
As Abolafia and Kilduff (1988) observed, the social
construction of a bubble such as Enron’s takes strate-
gic action among the range of interdependent actors
that make up a field. The various actors in the strategy
field were all pursuing their own purposes. Typically,
these purposes were entirely legitimate—the promo-
tion of innovative ideas in strategy or the employment
of business school graduates. What made their inter-
actions so destructive was Enron’s duplicity. Gary
Hamel responded to criticism: “Do I feel like an idiot?
No. If I misread thecompany in some way, I was oneof
a hell of a lot of people who did that” (“The Fall of
Enron”, 2001, p. 36). The success of Enron’s bubble
was in the extent to which it managed to engage the
unwitting cooperation of so many other members of
the field in its own strategic manipulation. The point
now is to promote the kinds of understanding and
change that might make these kinds of mistakes less
likely in the future.
Abolafia and Kilduff (1988) pointed out that crises
are normally followed by regulation. The accounting
and the investment banking communities have
responded to the events surrounding the Enron crisis
with new regulative initiatives. One of the policy
issues that we discuss is how the strategy field should
respond after its failures with Enron and the dotcom
and the telecom debacles of the past few years. Not
enough dogs barked. The following section picks up
issues for research, policy, and practitioners.
A THREEFOLD AGENDA
FOR THE STRATEGY FIELD
Strategy’s success as a social practice—and its fail
-
ures such as Enron—indicate a threefold agenda that
embraces researchers, policy makers, and practitio
-
ners. This section examines these three agendas in
turn. The research agenda could be summarized as
turning institutionalist theory on ourselves. The pol
-
icy agenda is concerned with setting up dogs that
bark. The practitioner agenda is about the creation of
more heedful interrelating.
The Research Agenda
Considering strategy as an organizational field
raises equivalent issues as for any other organiza
-
tional field within institutional theory. First of all,
there is a comparative research agenda; second, an
internal one.
The comparative perspective. A starting point for the
comparative agenda is systematic comparison of the
strategy field with other fields of similar knowledge
production and consumption. Our earlier mapping of
the strategy field was preliminary; however, at this
point, a comparison with accounting (Burchell,
Chubb, & Hopwood, 1980) or finance (Lounsbury,
2002) for instance, suggests one significant gap in the
strategy field. Strategy lacks an equivalent profes
-
sional body, and commensurate apparatus for self-
regulation,to thoseof accounting andfinance. Neither
the Academy of Management nor the Strategic Man
-
agement Society has the inclusive membership, the
policing mechanisms, or the sanctions to regulate the
strategy field in the way that, for instance, accounting
aspires to. We explore possible responses to this regu
-
latory gap as we consider the policyagenda. However,
in the meantime, we observe that further systematic
comparisons between strategy and other professional
fields have the potential to uncover more significant
differences.
A second comparative issue follows the broader
institutionalist agenda in seeking comparison across
countries (Dacin, Goodstein, & Scott, 2002). We know
already that institutional fields, in general, vary
widely and enduringly between different national
business systems (Whitley, 1999). However, we do not
know muchabout how the strategy field, in particular,
differs internationally and with what consequences.
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Nonetheless, there is some evidence that strategy con
-
sulting has varied across national contexts, with Ger
-
many, Spain, and Japan, for instance, traditionally less
deeply penetrated by the Anglo-Saxon strategy con
-
sulting ethos representedby McKinsey (Guillén, 1994;
Kipping, 1999). According to some accounts, the dif
-
ferential penetration of McKinsey has had material
effects on the relative diffusion of the multidivisional
form of organization (Guillén, 1994; Whittington &
Mayer, 2000). The role of business schools varies
widely internationally also, with Germany and Japan
much smaller producers of MBA graduates than
Anglo-Saxon economies. In the mid-1990s at least,
Robert Locke (1996) could attribute German and Japa
-
nese economic success, in part, to their relatively low
reliance on MBAs. We need more systematic compari
-
son of the strategy field across different national con
-
texts, but it is clear that differences exist, with possibly
significant effects.
Looking inside the field. The internal agenda for
research on the strategy field reflects issues of power
(DiMaggio & Powell, 1991), interaction (Kenis &
Knoke, 2002) and change (Greenwood et al., 2002) that
are general to institutional theory. These issues are
particularly pressing for the strategy field given the
success with which a corporation such as Enron could
impose itself as a model on the field, the networks of
dependence and misinformation that existed between
Enron and other actors, and the need now to harness
influential actors within the field to bring about
reform.
Aprimary issue for research is mapping more thor
-
oughly the interactions among field members. Afield,
after all, only exists through its interactions. Here a
crucial dimension is to understand the different types
of interaction that might operate in the field: for exam
-
ple, information transmissions, resource exchanges,
and power relations (Kenis & Knoke, 2002). Business
schools, for instance, might be important in informa
-
tion transmission, whereas corporations are sources of
financial resources, and the state may exercise some
kinds of regulative authority. At this point, though, we
cannot put numbers or proportions on any of these
roles or track them over time. Mapping the networks
and types of feasible interaction will be critical to
understanding relative power within the field
(DiMaggio & Powell, 1991).
Power is important because of the need to bring
about change to the strategy field. Abolafia and
Kilduff (1988) pointed to how power shifts among
actors during the cycle of excess to correction. In the
early stages of bubbles, power accretes to skillful
actors as the readiness of other field members to par
-
ticipate in their success allows them to construct coali
-
tions of support. As bubbles collapse, these coalitions
explode, and previously complacent regulatory agen
-
cies reawake. The same process is likely true in the
strategy field. Consultancies, business schools, and
the media become easily complicit in the early stages
because of their desire to “sell success.” The collective
power of correction is only discovered too late, after
the crisis. There is a role for increased research on the
interactions producing earlier cycles of overhyped
success followed by failure within the strategy field:
not only the go-go conglomerates of the late 1960s
(Davis et al., 1994), or the “in search of excellence”
companies of the 1980s (“The ‘Excellent’ Companies
in Trouble,” 1984), but also the more recent dotcom
and telecom phenomena. Exposing the interactions
driving such cycles would discourage complicity in
the bubble stage and facilitate the mobilization of cor-
rective forces before the pressures for a crisis accumu-
lated. As in the field of environmental reform, this
kind of change is likely to rely on not just a single force
but also the complex interaction of many kinds of
actors within the strategy field (Hoffman, 2001). The
ways in which actors in the strategy field can jointly
act to inhibit manipulative bubble phenomena in the
future are the subject of the next two sections.
The Policy Agenda
The strategy field did not perform well during the
recent bubbles, whether those around Enron, the
dotcoms, or telecoms. The policy agenda is twofold:
first, concerning regulation of the strategy field as it
stands; second, ensuring appropriate reflection and
adaptation as the strategy field spreads into new
countries and sectors.
Regulating the strategy field. We have noted already
the relative weaknesses of regulation in the strategy
field. It took almost 20 years and an unprompted con
-
fession to reveal that Peters and Waterman had “faked
the data” for In Search of Excellence (Peters, 2001). As to
Enron, we have seen that Fortune endorsed the com
-
pany as among its most admired into 2001, whereas
even the university-sponsored popular business jour
-
nals, such as the Harvard Business Review and the Sloan
Management Review, carried barely any criticism.
Among the financial institutions, UBS Paine Webber
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fired an analyst for labeling Enron stock a “sell,” a
week after CEO Skilling had resigned (Cruver, 2002).
The field is not yet good at protecting itself from
manipulation.
Strategy is too important to allow dubious research
and mistaken endorsements to circulate so easily. As
in Abolafia and Kilduff’s (1988) silver bubble, crisis
does, however, provide an opportunity for reform.
The accountancy field is currently undergoing this
final stage of regulative correction in response to
Enron and other recent scandals (Gordon, 2002).
Although actors in the strategy field were not neces
-
sarily deliberately duplicitous in the Enron case, they
weretoo easily duped. There were few alarm bells. We
believe that influential policy makers in the strategy
field should look to how strategy too should regulate
itself.
As we have already observed, the strategy field is
missing some of the regulative mechanisms of older
fields, such as accountancy. We do not believe that
such mechanisms are necessarily practical in a new
and more diffuse profession such as strategy. How-
ever, the field does need effective substitutes. New
regulative mechanisms are best developed through
wide debate, but we can offer three initial proposals
here.
First, editors of influential university-sponsored
business journals should more robustly assert the
independent and critical stance implied by their aca-
demic connections. Their endorsements shape mar-
kets. To the credit of Harvard Business Review, it did
publish Michael Porter’s (2001) highly critical article
on strategy and the Internet, but only when the
dotcom bubble had already begun to burst. More and
earlier devil’s advocacy in the journals would make
for exciting debate and better safeguarding.
Second, journal editors should insist that authors
declare their interests. In response to growing con
-
cerns about the influence of pharmaceutical compa
-
nies on medical research, the New England Journal of
Medicine has recently demanded that all authors
declarethe sourcesof their funding and any other rele
-
vant interests (“Medicine With an Ulterior Motive,”
2002). We do not see the same yet in business research,
where published case studies are often attached to
consulting and other paid engagements. The point is
not to detach research from practice—that would be
undesirable—but only to make the connections more
transparent.
The third proposal is toenhance debate at academic
conferences. The world’s leading strategy forum, the
Strategic Management Society Conference, now regu
-
larly defines its agenda in collaboration with a single
sponsor each year, for example, McKinsey & Co. or the
Boston Consulting Group. There are benefits from
such sponsorship, however exclusive relationships do
not promote pluralism and debate. The Strategic Man
-
agement Society should continue to foster close rela
-
tions with consulting; but, it should look also for mul
-
tiple conference sponsors, each sponsoring just one of
several streams, and encourage stream chairpersons
to promote the critical as well as the safe.
Strategy in new spheres. As we noted at the start,
strategy as a practice is spreading into new spheres,
particularly the public sector and emerging capitalist
economies. Strategic thinking can bring great gains to
these new spheres, but there may also be distortions
and unintended consequences. Policy makers should
be sensitive to the full repercussions of transferring
practices from one sphere to another.
The development since the 1990s of what is often
called the “new public management” has brought an
increasing and international transfer from private to
public sector of a wide range of strategy techniques,
from business planning to resource-based analyses
(Ferlie, 2002). This transfer has been promoted by
reformist states and facilitated by ambitious consult-
ing firms. As a result, strategizing has become a rou-
tine practice in many public sector organizations
(Oakes, Townley, & Cooper, 1998). Yet the rationalities
of strategic planning can runinto underestimatedcon
-
flict with the practical rationalities of traditional pub
-
lic service. According to Townley (2002), important
values may be imperceptibly lost through the
creeping ascendancy of one rationality over another.
The initial adoption of strategy ideas in the public
spherewas not a cautious processbut guided by a self-
conscious urge for significant and rapid reform. Influ
-
ential actors in the strategy field, in this case the state
and consulting firms, were very confident about the
benefits of simple transfer of the strategy notion from
private to public spheres. A decade later, it is time for
policy makers to reflect carefully on the impact of this
extension of strategy into the public sphere and to
define more subtly the appropriate shape of strategy
therein.
Similar kinds of transfer have been made across
countries (Djelic, 1998; Guillén, 1994). Again, the
transfer of strategy ideas may sometimes be hasty and
inappropriate. Djelic (1998) documented how the
postwar Marshall Plan, promotedby theUnited States
404 JOURNAL OF MANAGEMENT INQUIRY / December 2003
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and clung to by Western European governments, pro
-
moted ideas of scale economies and multidivisional
structures before European businesses were actually
ready for them. Barry and Elmes (1997) suggested that
received notions of competitive advantage, as devel
-
oped in Porter’s (1990) influential The Competitive
Advantage of Nations, have been enlisted to support
doubtful programs of radical national reform. As an
academic discipline, strategic management has been
founded on the positivist ambition of generalization
(Camerer, 1985). Only recently has it begun to recog
-
nize the importance of national contexts for modify
-
ing general relationships (Khanna & Palepu, 2000).
Especially in developing economies, national policy
makers should be more cautious in accepting general
strategy prescriptions derived from the experience,
particularly of the large, free-market capitalist econ
-
omy that is the United States. Strategy consulting
firms and academics need to be more active in
exploring the contextual boundaries of their
prescriptions (Whittington & Mayer, 2000).
The Practitioner Agenda
Our emphasis so far has not been on formalistic reg-
ulation of the strategy field, as might be appropriate to
accounting, but instead on debate, pluralism, trans-
parency, and reflection. What this entails for practitio-
ners of all sorts in the strategy field might be summed
up as an extended kind of “heedful interrelating”
(Weick & Roberts, 1993). Here heedfulness substitutes
for formal rules. The key is acknowledging responsi
-
bilities in an interdependent field by acting conscien
-
tiously, studiously, critically, and attentively (Weick &
Roberts, 1993). For this to operate well, actors in the
field need a more developed sense of mutual interde
-
pendence and greater heedfulness to each others’
activities and interests. We focus here on the role that
business schools can play in developing this mutual
heedfulness through teaching and research. Recalling
Figure 1, business schools have particular responsibil
-
ities because of the privilege of their relative
independence from direct corporate funding.
First of all, business schools should acknowledge
their role in creating producers and consumers of
strategy discourse in their students. There is a rela
-
tively simple obligation, and that is to reinforce
through teaching on corporate responsibility stu
-
dents’ awareness of the wider social effects of strategy
(Whetten, Rands, & Godfrey, 2002). However there is a
more subtle task as well, to help these students
become more discerning consumers of strategy dis
-
course. Barry and Elmes (1997) suggested that a major
function of business schools is to make their graduates
into model readers of strategy tools and texts. The evi
-
dence of the recent bubble years is that too many of
these graduates are still credulous readers. The task is
twofold. On one hand, business school students need
to become more aware of the system of actors that
make up the strategy field, their mutual dependen
-
cies, and the possibilities for manipulation through
bubble and faddish phenomena (Abolafia & Kilduff,
1988; Abrahamson, 1996). The further research on the
strategy field we proposed earlier would furnish
additional materials for increasing this awareness. On
the other hand, business schools should be ready to
resist the faddish and insist on the longer view. The
past few years have seen the launch of innumerable e-
commerce courses in business schools. Business his
-
tory meanwhile is nearly extinct as a teaching subject
(Jeremy, 2002). Yet courses in business history, dealing
with railway booms or scientific management, would
have given students a perspective on bubbles, cycles,
and fads that could have saved them much lost money
as investors and many career mishaps as young
professionals.
The second axis for business schools is research.
The current debate here is on the respective roles of
mode 1 research, the traditional detached scientific
model, and mode 2 research, research undertaken in
close collaboration with practice (Huff,2000; Tranfield
& Starkey, 1998). Our response to the recent failures of
the strategy field is not simply to pull researchers back
to their ivory towers, from which to hand down
remotejudgments on the good and the bad inthe strat
-
egy field. It is something of the reverse. Following
Starkey and Madan (2001), we suggest the case for
closer research collaboration in the manner of mode 2.
Here, though, formulating and investigating prob
-
lems jointly with practitioners is not just about ensur
-
ing the relevance of academic research for practice. It
is also, through careful working with academic
researchers, about making practitioners into educated
consumers of strategy discourse, critical and consci
-
entious members of the field. The more involved prac
-
titioners are in the production of scholarly strategy
research, the better they will be at assessing this and
other kinds of knowledge. For business schools, inter
-
relating with the rest of the strategy field as active
coproducersof knowledge is part of creating the heed
-
fulness that will make such episodes as Enron and the
dotcom and telecom bubbles less likely in the future.
Whittington et al. / RESPONSIBILITY AND REFORM 405
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CONCLUSION
Strategy now provides a powerful and pervasive
discourse throughout contemporary societies. This
success brings responsibilities. Strategy discourse is
enrolled to legitimate the actions of organizations
across an increasing range—private sector and public
sector, advanced Western societies and beyond. It is
not clear that this discourse is appropriate in all these
different contexts. Even within the North American
private sector, the example of Enron shows how easily
this discourse can be manipulated and with what
disastrous consequences. Accountants certified
Enron’s fraud; strategy discourse made it credible.
On the model of Abolafia and Kilduff’s (1988)
cycle, the Enron crisis offers an opportunity for reflec
-
tion and reform in the strategy field. It is not the first
such cycle in which strategy has been implicated:
recall the transitory success of the 1960s conglomer
-
ates (Davis et al., 1994) and Peters and Waterman’s
(1982) fading excellent companies. However, Enron
does demonstrate the escalating nature of the
resources involved and the heightened role strategy’s
institutions now play.
In his history of the developing strategy field,
Ghemawat (2002) noted a significant change in recent
years: “Unlike, say, twenty-five or thirty years ago,
truly large amounts of money are at stake, and are
actively competed for, in the development of ‘block-
buster ideas” (p. 73). The market for these ideas is
imperfect, as sellers are reluctant to convey full infor
-
mation before purchase and buyers enhance reputa
-
tions simply by emulating other firms. However, this
market is also working faster and over a wider
domain than ever before. The world’s growing inter
-
connectedness and the isomorphic forces imposed by
international consulting firms, regulatory bodies, the
media, and multinationals accelerate the speed with
which novel strategy models spread across the globe.
Whereas in the immediate postwar period, it could
take 2 decades or so for a concept such as the
multidivisional to be adopted across Europe (Whit
-
tington & Mayer, 2000), the dotcom bubble gripped
the whole world almost instantaneously. The strategy
field has neverbeen so influential nor had so little time
with which to test its ideas. Now more than ever, the
strategy field needs to devote resources to protect
itself and the wider community from the
consequences of another cycle of hype and collapse.
The point of this article, therefore, is not to blame
but to prevent. We have argued here for three kinds of
initiative to protect the field from being embroiled in
another surge of overpromotionin which strategy dis
-
course is allowed to play a central legitimating role.
First, we need to understand ourselves much better,
with research comparing the strategy field with other
organizational fields and exploring the field’s pro
-
cesses of complicity and correction in previous cycles.
Second, we need to anticipate these cycles more effec
-
tively by encouraging more criticism, transparency,
and pluralism in our journals and our conferences.
Third, business school academics should take advan
-
tage of their relative independence, by defending cer
-
tain ethical standards and historical continuities more
tenaciously in the face of passing enthusiasms and by
working with the practitioner community in research
collaborations that pass on the capacities of critical
judgment and scholarly engagement. No doubt there
is more to be done to protect the strategy field from
future cycles, and very likely such protection will
always be incomplete. Even so, we hope that others
take this opportunity to join in the further research
and debate that will be necessary to taking strategy’s
responsibilities more seriously in the future.
NOTES
1. The first author of this article used Enron as a positive
example in his teaching.
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RICHARD WHITTINGTON is a professor of strategic management at
the Saïd Business School and Millman Fellow in Management at New Col
-
lege, University of Oxford.His currentresearchinterests are in the practice
of organizing and how senior managers learn to strategize. He has pub
-
lished in Organization Science, the Strategic Management Journal,
and Strategic Organization. He has six single or coproduced books,
including The Handbook of Strategy and Management; The Euro
-
pean Corporation: Strategy, Structure and Social Science; and Inno
-
vative Forms of Organizing. He serves on the editorial board of the
Academy of Management Review and several other journals.
PAULA JARZABKOWSKI is a lecturer in strategic management at
Aston Business School and teaches courses on strategic management and
strategyas practice. Her research interests arein strategy as practice, activ-
ity theory approaches to strategy,and using the strategy toolkit in practice.
She is publishing on these topics in the Journal of Management Studies
and Organizations Studies. She also cohosts with Dr. David Seidl a Web
site, www.strategy-as-practice.org, for academics and practitioners inter-
ested in researching and teaching strategy as practice.
MICHAELMAYER is a reader in strategic management at theUniversity
of Edinburgh, UK, and was previously a senior lecturer in strategic and
international management at the University of Glasgow, UK. He is a grad
-
uate of the University of Augsburg, Germany, and the University of
Warwick,UK. He is coauthor of the book The European Corporation and
has published in journals such as the Strategic ManagementJournal and
the Journal of Management Studies. His current research interests
include the relationship between strategy and organization and compara
-
tive and international management. He is a member of the executive com
-
mittee of the UK chapter of the Academy of International Business.
ELÉONORE MOUNOUD is a senior lecturer of business strategy and
management at École Centrale Paris (France) in the Strategy and Technol
-
ogy Research unit. Her research interests are in representations and dis
-
courses, their social dimensions, and their roles in strategy making. Her
fields of interest are the IT business and the “green industry”: She previ
-
ously worked for firms and research agencies as a consultant about envi
-
ronmental issues and technologies. She holds an engineering degree in
agricultural sciences from Institut National Agronomique Paris-Grignon
in Paris, a masters in innovation management from École Centrale Paris,
and a Ph.D. in management science from Hautes Études Commerciales
School of Management (Paris).
JANINE NAHAPIET is a Fellow of Templeton College, University of
Oxford. She specializes in global strategy and organization. She has pub
-
lished on new organizational forms, knowledge management, strategies for
professional service firms, and business start-ups. Her work has received
international recognition, and her Academy of Management Review
408 JOURNAL OF MANAGEMENT INQUIRY / December 2003
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article on social and intellectual capital was selected as the best article of
1998.
LINDA ROULEAU is an associate professor with the Management
Department at HEC Montréal. Having a background in sociology from
Laval University, she received her Ph.D. in administration from HEC-
Montréal. Her research work focuses on microstrategy and strategizing
and on the transformation of control and identity of managers in a context
of organizational restructuring. She belongs to the following research
groups: CRIMT—a Québec-based research center on globalization and
work; DRISSE—a research group on discourses and representations in
strategy based in France; CIRIEC International—a 3-year project on gov
-
ernance in nonprofit organizations. Her teaching activities are concerned
with strategic management, organization theories, and qualitative
methods.
Whittington et al. / RESPONSIBILITY AND REFORM 409
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Now in its second edition, this extended and thoroughly updated handbook introduces researchers and students to the growing range of theoretical and methodological perspectives being developed in the vibrant field of strategy as practice. With new authors and additional chapters, it shows how the strategy-as-practice approach in strategic management moves away from disembodied and asocial studies of firm assets, technologies and practices to explore and explain the contribution that strategizing makes to people working at all levels of an organization. It breaks down many of the traditional paradigmatic barriers in strategy to investigate who the strategists are, what they do, how they do it, and what the consequences or outcomes of their actions are. This essential work summarizes recent developments in the field while presenting a clear agenda for future research.
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Now in its second edition, this extended and thoroughly updated handbook introduces researchers and students to the growing range of theoretical and methodological perspectives being developed in the vibrant field of strategy as practice. With new authors and additional chapters, it shows how the strategy-as-practice approach in strategic management moves away from disembodied and asocial studies of firm assets, technologies and practices to explore and explain the contribution that strategizing makes to people working at all levels of an organization. It breaks down many of the traditional paradigmatic barriers in strategy to investigate who the strategists are, what they do, how they do it, and what the consequences or outcomes of their actions are. This essential work summarizes recent developments in the field while presenting a clear agenda for future research.
Chapter
The Cambridge Handbook of Strategy as Practice provides a comprehensive overview of an emerging and growing stream of research in strategic management. An international team of scholars has been assembled to produce a systematic introduction to the various epistemological, methodological and theoretical aspects of the strategy-as-practice approach. This perspective explores and explains the contribution that strategizing makes to daily operations at all levels of an organization. Moving away from a disembodied and asocial study of firm assets, technologies and practices, the strategy-as-practice approach breaks down many of the traditional paradigmatic boundaries in strategy to investigate who the strategists are, what strategists do, how they do it, and what the consequences or outcomes of their actions are. Including a number of detailed empirical studies, the handbook will be an essential guide for future research in this vibrant field.
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