The Dynamics of Interrelated Routines: Introducing the Cluster Level

Abstract

This paper explores interrelationships between organizational routines and their effect on routine dynamics. We introduce a more aggregate perspective on routines, the cluster level, and develop a theoretical framework that helps understanding the dynamics of routine clusters. The framework combines thoughts on the division of labor, modularity, and the consequences of complementarities. It explains why single routines are grouped into clusters and how complementarities between the specialized routines of a cluster will affect its evolution. It is the main argument of this paper that, in contrast to the expanding dynamics of single routines, which continuously bring about variations, the dynamics of clusters are restricting, amounting to a selection mechanism in organizational practice. To illustrate and substantiate our argument, we use a historical case study on CEWE, the European market leader in photofinishing. We analyze how the cluster for 35mm photofinishing—the core routines of the analog years—reacted to the upcoming digital revolution in the 1990s. Our paper offers three contributions: First, we theorize on the interrelationship between routines and the anatomy of clusters. Second, we provide a conceptual framework for analyzing the dynamics of routine clusters that builds on complementarities and the related misfit costs. Third, by elaborating on these dynamics, our findings contribute to a multilevel theory of organizational routines by adding the meso level of the routine cluster to the micro level of single routine dynamics.