Abstract
Strategic management as a scholarly field is now more than 40 years old. Generally, strategy research has focused on the questions of how firms create and capture value and why some firms perform better than others. Research in strategy also is inextricably linked with strategy teaching, as scholars aim to make normative recommendations for managers and other decision makers, informed by research.
Strategic Management: State of the Field and Its Future promises an update on the strategic management field, and it succeeds. The book is a rich compendium of useful information about the current state of research in strategic management, and it points to promising avenues for future research. This book is a valuable resource for scholars in strategy, as we pursue research on important strategy topics and even as we prepare and update our research-informed teaching in strategy courses. It is also valuable background reading for Ph.D. students as well as for the non-strategy scholar seeking to understand what, exactly, strategic management is.
The book is big; there is an introduction summarizing the book, followed by 11 parts, roughly corresponding with the interest groups in the Strategic Management Society and with many of the typical topics in an introductory strategic management course (e.g., corporate strategy, competitive strategy, global strategy, and so on). The contributors are scholars we would want to hear from on each topic. Each part includes a lead chapter, followed by additional chapters focusing on specific aspects of the broader topic. The authors of the chapters offer useful reviews of the theoretical perspectives and empirical findings of past research and highlight opportunities and challenges for future research. The book’s structure follows a similar design, with earlier sections covering familiar strategy topics and the last section, “Critical Factors Affecting Strategy in the Future,” considering newer challenges and research opportunities, such as artificial intelligence and sustainability, among others.
As the book editors note, the domain of strategy has expanded considerably since its early years when it was known as business policy and planning and was viewed by many as focused on teaching and practice, not scholarship. Indeed, strategic management research has flourished in the past 40 years, and the field has become more developed and recognized. The strategic management field’s growing and increasingly diverse domain was similarly acknowledged in a recent renaming of the Academy of Management’s strategy division, from “Business Policy and Strategy” to “Strategic Management,” along with a greatly expanded domain statement.
The research domain of strategy has not only broadened but has also deepened within each subdomain, as researchers engage in separate scholarly conversations aimed at distinct audiences. Recognizing this, the book’s editors highlight a growing challenge: the “increasingly specialized nature of research can result in fragmentation, thus slowing the progress of critically important research contributions . . .” (p. 2). Although the editors underscore the need to integrate knowledge, it seems hard for a book with 11 distinct parts focusing on research in separate strategy areas to overcome rather than reinforce the potential for fragmentation. That said, there is promise in the clear overlaps among many topics highlighted as future research opportunities, such as artificial intelligence, sustainability, nonmarket strategy, and others, suggesting opportunities for future conversations across strategy subdomains. In addition, the first part of the book, including the chapters on evolution of theory and methods, provides integrative views that span multiple questions and topics in strategy research.
An important question for strategy research generally is how we conduct and publish research and the nature of the research that is published, i.e., how we know what we know. The chapters on the evolution of research methods (Myles Shaver on quantitative methods and Melissa Graebner on qualitative methods) are particularly relevant to this question; these authors raise consistent, important themes that cut across the book’s many specific subdomains and that have important implications for the field. I highlight a few of the insights from these chapters, followed by some concluding comments.
First, Shaver highlights the marked increase in quantitative research involving deductive hypothesis-testing approaches, larger samples (enabled by wider availability of secondary data), and more use of panel data (rather than cross-sectional data). This trend has been accompanied by a shift away from qualitative approaches. As Graebner notes, although early research like Alfred Chandler’s (1962) study of firms adopting the multidivisional organization form and Joseph Bower’s (1970) study of resource allocation processes involved rich insights from in-depth longitudinal case studies, qualitative studies in strategy are now relatively rare.
Second, a particularly notable shift in quantitative empirical strategy research has been the increasing recognition of endogeneity concerns. Most scholars now know that observing a positive and statistically significant coefficient resulting from a regression of firm performance on a strategic choice variable does not warrant a leap to a strategic prescription for managers. However, a key challenge for addressing endogeneity in the strategic management field is that our central strategy questions—including the most important ones—are inherently endogenous. Strategies are not randomly assigned; managers and other decision makers choose them, often explicitly to improve performance, an outcome that strategy scholars frequently study. Unobserved factors also influence these choices, i.e., the firms that choose such strategies are systematically different in important and unmeasurable ways from firms that do not choose such strategies. Knowledgeable researchers seeking better causal identification may focus on contexts in which random assignment to a treatment is possible but the setting and findings are not generalizable to any important strategy questions, limiting the gains in knowledge for the field.
Third, a concern is increasing rigidity in how scholars are advised to conduct their research, in both quantitative and qualitative work. Graebner argues that this rigidity arises as leading scholars use particular methods, and the field narrows in on these as “prescriptive templates . . . to be followed in the name of ‘rigor’ or ‘transparency’” (p. 106). For example, scholars conducting qualitative research are increasingly advised to use the Gioia method even when it is not appropriate. Shaver’s chapter raises an analogous concern, that with the growing awareness of endogeneity, “statistical cures or buzzwords” (p. 89) have increased in quantitative strategy work; authors are encouraged to undertake specific statistical techniques that may have been used in prior work but that are not appropriate for the data and intended research design. One example is the problem of controlling for firm fixed effects to test theories about differences across firms.
Thus even as the strategy field faces new phenomena and important but difficult-to-study questions that might benefit from a range of research methods, we risk moving toward greater rigidity in how we ask and answer questions. Taken together, insights from these chapters suggest three important elements of a path forward.
First, qualitative studies are valuable for providing deeper and richer insights into strategy phenomena and for developing new inductive theory. An openness to qualitative research would allow us to tackle the new, important problems that strategy practitioners and researchers face. Such openness also requires greater understanding among reviewers and editors that different qualitative methods may be suitable for different types of qualitative studies and data. Graebner describes the different types of methods, including multi-case theory building, process research, and deductive qualitative research, that can provide valuable insights into important strategy phenomena and questions.
Second, it may be difficult to achieve causal identification in every paper, but it is possible to work toward achieving causal identification in a cumulative body of work. This requires researchers to be mindful of—and explicit about—how they build from and improve upon earlier studies (e.g., through availability of new data or in research designs that use new exogenous sources of variation). The accumulation of knowledge from research also must include what we have learned from qualitative work on a topic. Researchers will need to be more transparent not only in describing data and methods but in explicit discussions of research design choices and how they align with answering research questions. As Shaver notes, causal identification goes beyond a checklist of statistical fixes; it requires careful work to determine the theoretical mechanisms in operation so that we can better advise managers about the levers at their disposal.
Third, accumulating a body of knowledge requires distinguishing empirical findings from conceptual arguments or assumptions (see Shaver’s chapter for a few examples of literature reviews that confound evidence with arguments); it also requires reducing our insistence on novelty, surprises, or counterintuitive findings that can limit scholarly progress on a question and prevent deeper understanding of what we actually know.
As Robert Hoskisson and Jeffrey Harrison highlight in their lead chapter on the evolution of theory and methods, early scholars in strategy cautioned against adherence to a particular research paradigm, raising concerns that such practice could limit the range of questions and approaches pursued in strategy research and lead to a “normal science straitjacket” (p. 19). The aim was to allow the strategy field to flourish by remaining open to important questions and topics studied using a rich set of theories and methods. Strategic management research has indeed flourished; as noted in this book, the field includes many topics, domains, theoretical perspectives drawn from many disciplines, and approaches to scholarship. But as Shaver’s and Graebner’s chapters suggest, in order to collectively build a body of knowledge focused on “solving the thorniest problems that managers experience” (p. 33), we (authors, reviewers, and editors) will need to remain open to a variety of methods and resist formulaic recommendations for how we do research.