Advancing strategy and organization research in concert: Towards an integrated model?

Abstract

Over the past three decades, two streams of research have grown significantly, both of which aim at understanding the sources and consequences of organizations’ superior abilities to meet or exceed expectations. On the one hand, institutional research has developed an ambitious theory of organizational behaviour based on the analysis of the conformity pressures that constrain decisionmakers, helping explain various types of decisions leading to legitimacy advantages for organizations (DiMaggio and Powell, 1983; Meyer and Rowan, 1977; Zucker, 1977). Depending on their industry standing (status, centrality, or affiliations), their control over resource suppliers, or their positioning relative to regulative and legal processes, firms adopt practices, structures and rules to increase their likelihood of survival (Deephouse, 1999; Deephouse and Suchman, 2008). They can also modify which logics they adopt in the face of changing environmental conditions, which may in turn confer legitimacy on pure players, entrants or hybrids (Battilana and Dorado, 2010; Thornton et al., 2012; Zietsma and Lawrence, 2010). On the other hand, strategy literature focuses on explaining why and how some firms achieve sustained over-performance, i.e. why and how their returns exceed their shareholders’ expectations. Although some attempts at rapprochement between these two perspectives have emerged recently (Ahuja and Yayavaram, 2011; Baum and Dobbin, 2000; Greenwood et al, 2010; Ingram and Silverman, 2002), it seems that more progress and crossfertilization exist between strategy research and the sociological approach to institutionalism. In this essay, I sketch out the conditions by which this might be possible, and what fruitful areas of investigation would then emerge for each stream. I propose a model of how they intersect that would account for many observable economic and social phenomena, and which I (tentatively) call the IOS (Institution, Organization and Strategy) model.