Patrick Regnér

The unique attributes of the internal and external contexts of multinational corporations (MNCs) make effective management of organizational change not only a necessity but also a challenge for these firms. The key to success lies in ensuring that the content, context, and process of change efforts are aligned and coherent. In this chapter, we will review each of these change dimensions with a particular focus on the specific issues and concerns faced by MNCs.

Introduction Although strategy-as-practice research has thrived during the last decade, the resource-based view (RBV: Barney 1991; Peteraf 1993; Wernerfelt 1984) and capabilities perspectives (Dosi, Nelson and Winter 2000; Eisenhardt and Martin 2000; Winter 2003) have continued to dominate mainstream strategic management research. Recent work has also started to show an increased interest in the micro aspects of strategy, emphasizing micro-foundations as essential in understanding organizational capabilities and resources and their origins (Abell, Felin and Foss 2008; Felin and Foss 2005; Gavetti 2005; Teece 2007). There have been repeated calls for examinations at the intersection between these research directions and SAP research (Jarzabkowski and Kaplan 2010; Johnson et al. 2007; Johnson, Melin and Whittington 2003; Regnér 2012; Vaara and Whittington 2012), but surprisingly little of this nature has materialized so far, with a few exceptions (for example, Ambrosini 2003; Ambrosini, Bowman and Burton-Taylor 2007; Kaplan 2008; Regnér 2003; 2008; Salvato 2003; 2009). This chapter examines the intersection between strategy as practice and perspectives that have dominated strategy content research during the last couple of decades. Specifically, it examines differences and commonalities, potential relationships and synergies between strategy as practice and the RBV, capabilities perspectives and the micro-foundations approach. It further investigates extant strategy-as-practice research at this intersection and identifies potential future research opportunities. What can possibly be gained from investigating this intersection? There are four points that are of particular importance. First, besides underlining the importance of strategy practices and activities generally for strategic management, it may provide insights into how practices, praxis and practitioners underlie resources and capabilities that maintain competitive advantage. If we accept that there is a relationship between what managers do and strategy content and outcomes, a key issue is determining how practices both enable and impede managers in their strategy praxis concerning resources and capabilities. By linking strategy as practice to resource-based, capabilities and micro-foundations research, it is thus possible to demonstrate the prominence of practices, social contexts and interactions for strategy. This is, of course, in contrast to extant assumptions in these strategy content research areas that often primarily emphasize rational top managers and individuals. The link to the resource-based and capabilities views may thus strengthen the main theoretical traits of the SAP approach and consolidate it. 

Strategic management theory has failed to explain the underlying principles of strategy processes and the relationships between strategy process and strategy content. There seems to be no theory of strategy logic, i.e. the general process and management characteristics generating a certain strategy outcome. Strategy content research has presented a systematic analysis on the basis of competitive advantage, and strategy process research has provided careful in-depth descriptions and examinations of strategy making. However, the basic strategy logic, including the underlying procedures, activities and reasoning that generate a particular type of strategy, has been less commonly evaluated. In particular, principles and details of strategy making in complex situations seem less clear.

The notion of competitive advantage is a core aspect of strategic management research and originates from firms implementing strategies that extant or potential competitors ignore or are unable to exploit. Strategic management theories explain these competitive advantages once recognized, but it is not clear what process characteristics generate these. The properties of competitive advantage have been examined at length, but its origins have been less discussed. This chapter focuses on the sources of strategy, and particularly the pre-history of strategy processes.

This chapter attempts to integrate various strategy perspectives. It is argued that strategy resides in complexity and is best studied in terms of a multiple rationality set tied to the firm's capability to learn. Strategy is interpreted in terms of adaptive and alterable learning mechanisms that could potentially allow superior knowledge to be used in strategic capabilities and be a source of competitive advantage. These strategic learning mechanisms, based on both calculated and systemic rationalities, emerge through knowledge assimilation and integration by means of human assets where the firm's resources and market forces meet. Four strategic learning modes are presented as an illustration of interacting learning practices in strategy processes and as an outline for empirical research and implications for management.

Contemporary strategic management models appear to include two striking paradoxes. First, strategies are assumed to emanate from the centre of firms (most often referring to the upper echelons). However, in reality the centre often opposes strategy change and creation and peripheral sections play the active and primary role. An examination of successful strategies in several Swedish multinational corporations (MNCs) reveals that peripheral sections were decisive for the strategies, while the corporate centres opposed them. A case that illustrates this is the development of the blockbuster drug Losee by Astra (Johanson and Vahlne 1992). It was developed by a peripheral section of Astra against the will of corporate management. A second anomaly is that factors peripheral to and outside a company’s traditional industry and resource spheres often play a crucial role in the creation of new strategies.