Path dependence and the stabilization of strategic premises: how the funeral industry buries itself

Abstract

AbstractSeveral studies have shown that path-dependent organizations may pathologically reproduce their paths even in times of crisis. The unchallenged retention of underlying strategic premises seems to play a key role in this self-destructive process. Whereas the previous literature largely assumes that organizational crises provide sufficient impetus for updating strategic premises, recent empirical studies have highlighted that path-dependent organizations may find this highly difficult. In the present study, I explore how path-dependent organizations stabilize strategic premises even in times of crisis. Drawing on a case study of the funeral industry, I theoretically distill four mechanisms that stabilize strategic premises in path-dependent organizations despite the fierce pressures of organizational crises. While these mechanisms constitute either reflexive modes of processing feedback or generative modes of producing market outcomes, they all inhibit a disconfirmation and, thus, an update of strategic premises. Furthermore, the study presents indicative evidence of how this unchallenged retention of strategic premises leads to the pathological reproduction of the path.