Abstract
This essay broadens the conversation on the state of organizational contradictions and paradox research by turning to dialectics—a time-honored, living perspective on social processes and relations, which continues to influence our understanding of the past, present, and future. Dialectics distinctive relational process worldview sets it apart from approaches stressing equilibrium, linearity, and coherence, making it highly relevant to a world in flux. I propose that dialectics is already present in strategy research and in contemporary business, and can become even more central to strategy, addressing core questions in the field and propelling it in new directions. Strategy scholars can draw on dialectics principles as a generative tool kit to construct new theories and managerial tools. Dialectics can also be used as a theoretical lens to understand emerging empirical phenomena such as the rapid advent of artificial intelligence. Finally, dialectics critical stance and philosophical grounding makes it a particularly attractive perspective for challenging existing theoretical models and for considering alternatives.
Introduction
In their thought-provoking commentary, Cunha and Putnam (2018) characterized paradox research as a “paradox of success”: by analogy to the fate of successful firms, aptly explained in Miller’s (1990) “Icarus” paradox, the same practices that have led paradox research to grow and flourish may also lead to narrowness, simplicity, and insulation, and potentially put it on a failure trajectory. Having defined the key problem in these terms, the authors identify the main indicators of this syndrome and offer remedies. Cunha and Putnam’s analysis, insightful as it is, frames both the problem and the solution “from within the community of paradox researchers” (p. 1).
Paradoxes pose interesting and important questions for strategy and organization research and practice to consider, and we need to find better ways for studying them (Schad et al., 2018). Nevertheless, while I follow the lead of the introductory essay, I would like to broaden the conversation it stimulated by turning instead to dialectics. Dating to Greek philosophy, this time-honored perspective on social processes and relations is a living tradition, continuously reinterpreted, reworked, and applied (e.g. Bodrožić and Adler, 2017; Patterson, 2018; Ritzer and Stepnisky, 2017).
I indicate that a dialectics perspective, as particularly developed by Hegel, Marx, and key followers, includes much more than the notion of contradiction. I further propose that dialectics principles hold great potential for addressing core questions in the field of strategy and propel it in new directions. An informed implementation of its ideas to contemporary strategy can profit dialectics too by extending its reach, relevance, and stock of tools. My intent in this essay is to lay the ground for this shared journey.
Dialectics encountered: the origins of great strategies
A group of strategy scholars recently joined to explore the origins of great strategies—a question infused with theoretical and practical significance (Gavetti and Porac, 2018). While not claiming to capture the field’s diversity in its entirety, the set of papers compiled represents a wide range of perspectives on strategy. As they traced the evolution of firms, capabilities, strategies, and industries in contemporary business environments, authors have built on diverse literatures such as complexity theory, evolutionary theory, attention-based view, Weberian sociology, practice theory, institutional logics, relational contracts, social movements, behavioral strategy, and social networks, to name but a few. Curiously, none of the papers explicitly used the word “dialectics” or referred to dialectics as a guiding perspective.
For the more initiated, however, dialectics is highly present in this collection of readings. Dialectics ideas underlie several of the featured theories, particularly complexity theory, practice theory, institutional logics, social movements, and behavioral strategy. The different papers also employ several time-honored dialectics concepts. For instance, the notion of “creative destruction” (Podolny, 2018) has been inspired by Marx; the dialectics of “presence” and “absence” (Powell, 2018) features in Hegel’s writings. Key means for generating creative strategies—combination, contrast, constraint, and intersecting contexts (Brandenburger, 2017)—resonate with dialectics’ notions of synthesis, negation, contradiction, and overlap. Dialectics stress on conflict and opposition is echoed too: it features in the emergence of powerful strategies such as Apple’s, reflecting broader clash between the oppositional movements and cultures of personal and corporate computing (Rao and Datta, 2018); it is illustrated in the concept of Judo strategies in which firms turn their opponents’ strengths against them (Brandenburger, 2017). Finally, in line with dialectics stress on asynchrony as a stimulus for movement and development, effective strategies, such as used in the drone industry, successively built on disequilibria and bottlenecks (Eisenhardt and Bingham, 2017).
Process, conflict, contradiction, disequilibria, disruption, oppositions, and synthesis are dialectics’ stock in trade. These, and other dialectics’ notions, also bear on several of strategy’s core research streams: they inform the literature on innovation and technological change (Bodrožić and Adler, 2017; Schumpeter, 1942; Tushman and Nelson, 1990), the resource-based view of firm’s growth (Penrose, 1959; Vidal and Mitchel, 2018), and strategy-as-practice research (Jarzabkowski, 2003; Nicolini, 2012); they have also been incorporated into managerial tools such as scenario analysis, system dynamics, and red teams.
I submit that dialectics is more present in strategy that many realize and holds a great potential to become even more central to the field. Dialectics’ distinctive view on social processes and relations is particularly relevant for comprehending and navigating a world in flux, a welcome counterpart to more simplistic, reductionist, and binary models, and an alternative to views on strategy stressing equilibrium, linearity, and coherence. Dialectics holistic stance can serve to counteract the field’s notorious fragmentation (e.g. Durand et al., 2017; Hambrick, 2004). Moreover, dialectics’ philosophical foundations and its stress on critique and reconstruction makes it particularly attractive means for challenging established models, questioning existing ideologies and reconsidering alternatives.
To reassert dialectics in new, promising areas such as competitive advantage and shaping strategies (the “where”), strategy researchers first need to become more familiar with dialectics ideas (the “what”) and with potential ways they can be used (the “how”).
Unpacking dialectics (the “what”)
For scholars unversed in this tradition, dialectics often means a development through conflict process of affirmation, negation, and synthesis. In Hernes’ (1976) description of this endogenous change process, the success of one model reveals its inner shortcomings and contradictions that in turn triggers the development of key alternatives; these retain some of the features of their precedents yet introduce novel elements as well, perhaps by drawing on additional inputs, leading to an ongoing progression. A similar “Hegelian” dynamic inspires research on strategy formation (Denis et al., 2011) and features in the synthetic notion of “dual” strategies (Gulati and Puranam, 2009). It helps differentiate dialectics from evolutionary, teleological, and life-cycle change models (Van de Ven and Poole, 1995), and aligns it with other models of organizational contradictions, paradoxes, and dualities (Farjoun, 2017; Hargrave and Van de Ven, 2017).
These more familiar notions of contradictions and development through conflict are better viewed as parts of an integrated, more encompassing, and living philosophical and theoretical framework. In the following introduction of dialectics, I will mainly regard it as a general view of social life that is abstracted from the ideas of Marx (and indirectly Hegel) and key followers but is not limited to the specific arguments of these scholars. I will specifically draw on Benson’s (1977) synthesis of key principles of dialectical Marxism—totality, social production, praxis, and contradiction—but will also extend it to underscore dialectics relational process philosophy and other of its principles such as recursive relations and transcending dualisms. 1
Dialectics relational process philosophy
According to Benson (1977), “a dialectical view is fundamentally committed to the concept of process … dialectical analysis involves a search for fundamental principles which account for the emergence and dissolution of specific social orders” (p. 3). A major contributor to process philosophy (Langley, 2007; Langley and Tsoukas, 2017), dialectics elaborates a special variant that can be characterized as a relational process philosophy. Consistent with this strand, which partly informed other traditions such as Pragmatism, the institutional economics of Veblen and Commons, Practice theory, and Complexity theory, dialectics views the world as a manifold of nested and interrelated processes (e.g. Nicholson and Dupre, 2018), rather than a configuration of “dead things” (Ollman, 2003). In this view, “things,” such as products or technologies, are no more than transient patterns of stability in the surrounding flux, temporary eddies in the continuous flow of process; a “thing” or an entity can be viewed as an evolving relation (or a process in constant interactions with other processes). Marx viewed capital not merely as economic input (“a thing”) but as a social relation which can change its form over time (Ollman, 2015).
A relational process philosophy invites us to reverse our view of processes as belonging to things to consider instead how entities derive their key properties from processes and interactions. Dialectics stratified ontology, which builds on the interplay of essence and appearance, highlights how potentialities or dispositions, such as latent contradictions, habits, structural arrangements, capacities, and processes, serve as endogenous, generative, and developmental forces that may get realized in specific interactions (Bhaskar, 2009). Penrose’s (1959) process theory of economic growth illustrates dialectics stratified ontology. Just as Hegel and Marx viewed growth and development as leading to the realization of individuals’ creative forces and freedom, Penrose highlights creative potentials within the firm. The existence and continuous generation of resource imbalances and disequilibria, such as unused human skills, directs firms’ evolution to new profitable areas where their services can be better utilized and realized.
Dialectics stress on process is evolutionary in a historical rather than biological sense. It highlights change, temporality, action, flow, disequilibrium, and emergence. Consistent with this worldview, dialectics focuses on development and transformation, not only reproduction; it views social life as a ceaseless interplay of opposing tendencies (Baxter and Montgomery, 1996) and in a continuous state of becoming—social arrangements which seem fixed and permanent are temporary, arbitrary patterns and any observed social pattern is regarded as one among several possibilities (Benson, 1977). Dialectics would therefore regard a firm’s strategy as historically contingent, less coherent, and more fluid and provisional. While it stresses process, dialectics does not overlook structure, but rather views it as a process, “fixed” in time. Although it recognizes relatively enduring and stable social structures, dialectics also explains other, more temporary and fragile institutions undergoing continuous and more frequent reconstruction (e.g. Farjoun, 2002). This is accomplished by treating processes as nested and regarding stability as manifesting slower evolving processes.
Schumpeter’s work illustrates aspects of this relational process orientation. Schumpeter followed Marx in conceptualizing capitalism as first and foremost a process of change propelled by persistent technological change. Drawing on Marx, he used the notion of “creative destruction” to describe how incessant economic innovation “revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one” (Schumpeter, 1942: 82). Attending to both reproduction and transformation processes, Schumpeter saw development and creative destruction as disrupting the equilibrium and routine reproduction of social and economic structures.
Dissolving dualisms/totality/recursive relations
Dialectics commitment to relationality highlights how “one thing cannot exist without the other, that one acquires its properties from its relation to the other, and that the properties of both evolve because of their interpenetration” (Levins and Lewontin, 1985). This relational sensitivity is elaborated in several dialectical principles.
First, Hegel, as well as other carriers of his dialectical approach, for example, Dewey, Selznick, and Bourdieu, strove to transcend dualisms such as mind and matter, theory and practice, concrete and abstract, necessity and chance, self and community, stability and change, and whole and part. Hegel interpreted these dichotomies as relatively objective aspects of a continuing process and allowed them to overlap and shade into one another (Hook, 1962). Funk and Hirschman (2017) consider such overlap when they discuss firms’ market actions as having non-market influences and conversely, firm’s non-market actions as having market influences. In Schumpeter, the opposing ideas of creation and destruction are unified, or “mediated,” in a single processual term. Similarly, Giddens’ notion of structuration brings together agency and structure within the same organic process.
Second, the dialectical category of “totality,” which resonates with modern notions such as ecology, networks, and complex systems, expresses dialectics commitment to studying social arrangements as complex, interrelated, and nested wholes. Drawing on the holistic stance of totality, Marx analyzed the various subprocesses of the capitalism system, such as production, distribution, exchange, and consumption, not as isolated spheres but as mutually interacting processes within an evolving organic unity. In a dialectics view, organizations are regarded as constituent parts of the wider patterns and forces that unfold in society at large but as also capable of partially autonomous (or flexible) action. Partial autonomy offers agents a degree of heterogeneity; it allows them to adapt to change but also to shape and construct more immediate aspects of their environment (e.g. Levins and Lewontin, 1985).
Third, within dialectics, the interrelatedness of elements is frequently stated in terms of recursive or coevolutionary relationships where an idea or element returns to itself, often in a more complete or developed form. Recursive relations illustrate how the clash between opposites can lead to their co-development without necessarily bringing about a new synthetic form. They are exemplified in how individuals relate to social structures and in the interplay between their cognitions and actions.
Recursive dynamics centrally feature in the business models and strategies of firms such as Apple, Samsung, Amazon, and Nintendo. These firms may increase scale (or product variety) to reduce cost, use the savings to invest in innovation and generate more demand, and increase their scale again. Penrose (1959) further illustrates a recursive logic when she theorizes how a firm’s view of the “external” demand for its products is shaped by its managers’ understanding of the firm’s own internal resources and capabilities. Her insight helps dissolve several traditional dualisms at once: internal and external, subjective and objective, cognitive and material, and resources and products.
Social construction/production and praxis
In a dialectical view of organizations, the interactions between individuals gradually build social patterns and establish institutional arrangements (Benson, 1977: 3). These structures are then reproduced and modified by further interactions, but these processes of social construction and production are themselves constrained by existing social structures, and by established interests and attachments. Studies of strategy formation within large organizations illustrate similar dynamics (Burgelman, 1983; Jarzabkowski, 2008). Dialectics also stresses the unintended consequences of social action (Hargrave and Van de Ven, 2016), a theme elaborated in McKay and Chia’s (2013) study of strategic change in the automotive industry. This specifically occurs when people construct social structures that at a later point constrain their behaviors in ways they could not have predicted (Panayiotou et al., 2018).
As people reproduce existing social and economic/material structures, their efforts to transcend their present limits bring them eventually into conflict with established arrangements which then lead, under some conditions, to social and institutional transformation and change. Benson (1977) refers to this reformative stance through the principle of “praxis”: “the free and creative reconstruction of social arrangements on the basis of a reasoned analysis of both the limits and the potentials of present social forms” (p. 5). Dialectical critical analytical stance contributes to this process in part by pointing out the arbitrary character of existing arrangements, undermining their sense of inevitability, uncovering the contradictions and limits of the present order, and revealing the mechanisms of transformation. In the process of “praxis,” people consciously act on the world, change it and test it, and deepen their understanding of it at the same time (Ollman, 2003).
Contradiction
Finally, dialectics highlights the notion of contradiction, regarding it as the root of all movement and life. Although this category can refer more loosely to any kind of dissonance, strain, imbalance, tension, constraint, and conflict (Schneider, 1971), it often carries a more specific meaning—as “the dynamic interplay between unified oppositions” (Baxter and Montgomery, 1996), or as a union of two or more processes that are simultaneously supporting and undermining one another (Ollman, 2003). An example of contradiction is the relation of production and consumption in which each side both presupposes and opposes the other (Lebowitz, 1976).
While it recognizes multiple sources of contradictions, internal and external to the firm, dialectics particularly stresses their structural and temporal origins. Some contradictions are reproduced within the existing order; others provide latent potentialities for its transformation. In Marx’s analysis, the central contradiction between the forces of production (e.g. technology) and the established system of economic relations leads to social conflicts, dislocations, and crises, thus marks history as a succession of economic systems.
Applying dialectics in strategy: a menu of choices (the “how”)
Strategy researchers can draw on dialectics in several, complementary ways. First, dialectics is indispensable when it comes to constructing new research questions (e.g. Abbott, 2001, 2004), theoretical perspectives (Astley and Van de Ven, 1983), or managerial frameworks (e.g. Brandenburger, 2017), or making them more dynamic, surprising, and interesting. Strategy scholars can therefore leverage dialectics as a tool kit comprising ideas, concepts, insights, and suggestions, which can be applied and recombined in different ways. For instance, when theorizing about the construction of new capability or industry, scholars may highlight the operation of several sources of contradictions; focus strategically on a central contradiction or constraint, as Marx practiced in his analysis of capitalism (Ilyenkov, 1960); or consider emergence as an unanticipated outcome of latent developments. When they draw on dialectics as a generative tool kit, strategy scholars essentially abstract from the ideas of key scholars without necessarily committing to their specific theoretical arguments. This enables them to converse with other carriers of dialectics such as Simmel, Dewey, or Bourdieu, and reproduce dialectics’ key themes.
Dialectics abstract principles provide a distinctive outlook on strategy-related questions and can go a long way in describing and explaining them. However, they may sometimes need to be enriched by other views, particularly those broadly compatible with its relational process perspective. For instance, though both Hegel and Marx offered unique views on human nature, strategy scholars interested in micro-foundations can also turn to pragmatists such as Dewey and Mead whose elaborated and processual models of agency have been inspired by dialectics (e.g. Winter, 2013). Strategy scholars who draw on this second approach can complement dialectics with other disequilibrium-based models (Chiles et al., 2007; Mathews, 2006), extant evolutionary models (e.g. Barnett and Levinthal, 2017), and historical strategy research (Argyres et al., 2017).
To concretize dialectics principles, strategy scholars can also draw directly on theories developed by dialectics scholars. Marx’s analysis of capitalism—likely the most elaborate application of dialectical analysis—may be particularly useful in its theoretical content. For instance, both Schumpeter and Marx used a recursive process model of innovation–competition–reduction of innovative profits (Elliott, 1980). Working with Marx’s ideas may sometimes require a further creative interpretation. For example, to explain history and institutional change, Marx focused on the class struggle between owners and workers; however, his ideas can be generalized to illuminate how social and economic groups, such as rivals and suppliers, acquire, preserve, leverage, and potentially lose their relative power. Overall, strategy scholars may find Marx’s stress on the material, economic, and technological and his dual appreciation of power and innovation, particularly useful.
A final, related, way of drawing on Marx is to engage with his broader critique of capitalism. Marx clearly recognized capitalism’s many accomplishments; however, his critical and more balanced approach sensitized him to key pathologies and injustices produced by the capitalist system such as in hidden forms of exploitation (Akerlof and Shiller, 2015), growing inequality (Piketty, 2014), and increased concentration (The Economist, 2016). Drawing on dialectics as a form of critique may allow strategy scholars to question capitalism’s social structures, ideology, and practices; consider potential improvements; and imagine new alternatives (Adler, 2009). In addition to studying the “dark” sides of capitalism, scholars may question key assumptions in prevailing strategy models. For instance, in economics-based models, employees are typically conceptualized as relatively fungible assets and as comparable to suppliers of other economic inputs such as raw materials. This view fails to recognize employees as humans, fashioning meaningful worlds for themselves and others (Fligstein and McAdam, 2012). Similarly, questioning the meaning of “great” or superior strategies, dialectics-inspired strategy researchers may ask whether “great” carries the same meaning for different stakeholders or masks a contest over fair value distribution.
Dialectics abstract categories also highlight some areas where Benson’s scheme needs to be further adapted to strategy-related questions. Much of modern strategy theory has been developed after Benson’s (1977) synthesis. In the interim, the field has shifted its focus from firm’s survival to sustained competitive advantage, and from viewing organizational arrangements as means for implementing strategy to considering them as potential sources of competitive advantage. Furthermore, while powerful and foundational, the sociological agency–structure question to which Benson largely attends is somewhat different from strategy’s quest to explain firm’s differential advantage and performance. As a result, Benson’s framework may need to be further extended to incorporate power asymmetries, resource heterogeneity, and material/economic considerations. Furthermore, whereas strategy concerns itself with inter-firm relationships, Benson’s focus is at the level of an organization. To develop a fuller dialectical perspective on strategy, future work can supplement Benson’s scheme in several ways: it can incorporate the Marx–Schumpeter thread on innovation, consider Bourdieu’s (2014) work on heterogeneous sources of capital, and consult Fligstein and McAdam’s (2012) discussion of fields’ emergence and transformation.
Dialectics in future strategy (the “where”)
Better aware of the “what” and “how” of dialectics, strategy scholars can draw on this perspective to further explore a broader range of topics and phenomena. To illustrate, I discuss several promising opportunities below.
From modeling change to theorizing competitive advantage
To explain strategy formation and transformation, strategy scholars often turn to a Hegelian development through conflict model. In pursuing these questions, they can also turn to other dialectical change models as well. For instance, Marx’s writings feature both evolutionary and revolutionary modalities of change, and contain several variants of the latter.
An important and relatively unexplored opportunity for extending dialectic analysis in strategy lies in theorizing competitive advantage. Indeed, some of the same categories that enable dialectics to explain novelty and change may also be employed to explain how firms create and sustain competitive advantage. For instance, asynchrony in the way different system elements develop—a type of contradiction—can help theorize how a firm’s control of a bottleneck can be a source of advantage, or how the relative inertia of a firm’s rivals can make it less vulnerable to imitation and substitution.
To explain competitive advantage, strategy scholars can also incorporate more concrete theoretical ideas. For instance, anticipating common practices of several contemporary businesses (e.g. Akerlof and Shiller, 2015), Marx and key followers have theorized how established actors draw on narratives as well as manipulation and disinformation to preserve their positions. As they observed, firms compete over “minds” no less than over material products and services.
Shaping strategies and the strategy–institutions nexus
Scholars in strategy and related fields increasingly question researchers’ common focus on firm’s adaptation, as contrasted with how firms shape their industry and institutional environments. For instance, Barley (2016) urged organization and management scholars to begin to focus on the myriad ways that organizations shape our society and to examine problems that organizations, especially profit-making firms, create as they seek to shape their own environments. Similarly, in response to firms’ growing use of lobbying and other influence levers, Zingales (2017) called for developing a political theory of the firm.
Dialectics is well positioned to examine firms’ shaping strategies. Dialectics notion of “construction” has been usefully contrasted with the dominant stress on adaptation (Levins and Lewontin, 1985). Similarly, dialectics highlights how agents actively operate on their environment through praxis. A dialectics perspective would highlight how organizations and other social collectives can (sometimes) reconstruct industry environments, and transcend external limits in their broader economic, social, and political structures. It may particularly examine how, along with, or prior to, entering a new industry, firms actively shape their political and institutional environments, to make them more hospitable to their existing capabilities. Shaping strategies are certainly not limited to innovation; scholars can draw on dialectics to illuminate how corporations overexploit scarce environmental resources, deliver fake news, or promote addictive behaviors.
Dialectics also offers, several, more concrete ideas about shaping strategies. For instance, to theorize various forms of institutional strategies (e.g. Ahuja et al., 2018; Durand, 2012), or ways for shaping the rules of the game (e.g. King and Walker, 2014), scholars can turn to Marx and Engels’ discussion on how to promote their ends capitalists recruit the “ideological superstructure”—societal institutions such as the state, the courts, education system, and media organizations. Marx-inspired scholars such as Gramsci (1971) and Lukes (1974) have also considered how powerful agents draw on “soft” power to shape the beliefs and practices of the less powerful.
Contemporary business environments
As a living tradition, continually applied and reinterpreted dialectics can be fruitfully used to examine emerging empirical phenomena. For instance, when applied to the accelerated advent of Artificial Intelligence (AI), dialectics may highlight the processes and mechanisms by which this technology leads to new and synthetic forms of organization, business models, and competitive advantage, and triggers more intense competition on scarce talent. It may also approach competition and conflict in this space as nested in a larger historical conflict between humans and machines. It can then explore how global issues such as the promise of AI to improve health, safety, and efficiency versus the risks of depriving individuals from the meaning they derive from work. In analyzing these intersecting conflicts, dialectics can provide insight on the interplay between technology and meaning systems and between firms and society, and consider the multiple changes and transformations occurring within or across firms and industries.
Contemporary business environments are complex, shifting, and surprising but are also products of human action. A dialectical view would encourage both strategy scholars and practitioners to recognize their contribution to shaping the future and to assume more responsibility for how it develops. Dialectics would regard strategists as activists, not only analysts or theorists (Bansal and DesJardine, 2014; Rao and Datta, 2018), but it would also inspire strategy scholars to become more activists themselves, and promote a better world rather than only describe and explain it (Whittington, 2012).
Facing a restless world in flux, strategy scholars and practitioners alike often find rescue in watered-down models and in simplistic or “neat” approaches to practice, preferring them over dialectics-inspired modes of thinking and action which they find either complicated or less relevant. To be sure, thinking in loops rather than in lines, and seeing contradiction as a potentially positive force, requires some adjustment. In many quarters, however, the required cognitive shift has already occurred. The pervasiveness of dialectical ways of thinking in contemporary institutional analysis, social networks, and evolutionary and practice theories demonstrates that dialectics is not that difficult to grasp. As we illustrated, dialectical principles have also become native to modern strategists: reflective practitioners understand their firm’s roles in wider ecologies of action, appreciate contrarian and unexpected strategies, and look for entrepreneurial opportunities and threats in the interstices between rigid industry categories and business models.
On reflection, strategy and dialectics are no strangers to each other. The time has come to deepen and reinvigorate their long-standing relationship, making it more explicit and daring and more prosperous as a result.
Footnotes
Acknowledgements
I would like to thank Patrick Reinmoeller, Miguel de Cunha, Jaakko Virkkunen, and Editors Ann Langley and Robert David for their valuable feedback.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
